Sample Business Contracts

Participation Agreement - Borders Group Inc., Borders Inc., Walden Book Co. Inc., Waldenbooks Properties Inc., Borders Properties Inc., Wilmington Trust Co., PNC Bank NA, The First National Bank of Chicago and Bankers Trust Co.

EXECUTION COPY
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AMENDED AND RESTATED

PARTICIPATION AGREEMENT

AMONG

BORDERS GROUP, INC.,
BORDERS, INC.,
WALDEN BOOK COMPANY, INC.,
WALDENBOOKS PROPERTIES, INC.,
BORDERS PROPERTIES, INC.,

WILMINGTON TRUST COMPANY, NOT IN ITS INDIVIDUAL CAPACITY,
EXCEPT AS EXPRESSLY STATED HEREIN,
BUT SOLELY AS OWNER TRUSTEE,

SAM PROJECT FUNDING CORP. I
AS INVESTOR,

PNC BANK, NATIONAL ASSOCIATION, AS ADMINISTRATIVE AGENT,

THE FIRST NATIONAL BANK OF CHICAGO, AS SYNDICATION AGENT,

BANKERS TRUST COMPANY, AS REAL ESTATE ADMINISTRATIVE AGENT

AND

THE LENDERS PARTY HERETO

______________________________

DATED AS OF NOVEMBER 22, 1995
AMENDED AND RESTATED AS OF OCTOBER 17, 1997

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<PAGE> 2

THIS AMENDED AND RESTATED PARTICIPATION AGREEMENT is dated as
of November 22, 1995 and amended and restated as of October 17, 1997 (this
"Agreement"), among BORDERS GROUP, INC., a Michigan corporation ("BGI" or the
"Company"); BORDERS, INC., a Colorado corporation ("Borders"); WALDEN BOOK
COMPANY, INC., a Colorado corporation ("Walden"); WALDENBOOKS PROPERTIES, INC.,
a Delaware corporation ("WPI"), BORDERS PROPERTIES, INC. a Delaware corporation
("BPI"; and together with BGI, Borders, Walden and WPI, individually, a
"Lessee" and collectively, the "Lessees"); WILMINGTON TRUST COMPANY, not in its
individual capacity (in its individual capacity, the "Trust Company"), except
as expressly stated herein, but solely as Owner Trustee (the "Owner Trustee" or
the "Trust"); PNC BANK, NATIONAL ASSOCIATION, as administrative agent for
Lenders (in such capacity, the "Administrative Agent"); THE FIRST NATIONAL BANK
OF CHICAGO, as Syndication Agent (in such capacity, the "Syndication Agent");
BANKERS TRUST COMPANY, as real estate administrative agent for the Lenders (in
such capacity, the "Real Estate Administrative Agent"); SAM PROJECT FUNDING
CORP. I, a Delaware corporation, as the Investor (the "Investor"); and each of
the financial institutions listed on the signature pages hereof (each, a
"Lender"; collectively, the "Lenders").

WITNESSETH:

WHEREAS, the Lessees, the Owner Trustee, the Real Estate
Administrative Agent, as agent, the Investor and the Lenders (collectively, the
"Prior Agreement Parties") are parties to that certain Participation Agreement
dated as of November 22, 1995 (as heretofore amended, the "Prior Agreement");

WHEREAS, the Prior Agreement Parties, the Administrative Agent
and the Real Estate Administrative Agent desire to amend and restate the Prior
Agreement to (i) increase the aggregate amount of Commitments, (ii) change the
agency role of Bankers Trust Company from Agent to Real Estate Administrative
Agent, (iii) change the agency role of PNC Bank, National Association from
Co-Agent to Administrative Agent and add The First National Bank of Chicago, as
Syndication Agent, (iv) eliminate and add certain financial institutions as
Lenders, and (v) amend certain other terms and conditions of the Prior
Agreement.

NOW, THEREFORE, in consideration of the mutual agreements
herein contained and other good and valuable consideration, receipt of which is
hereby acknowledged, the parties hereto agree as follows:

ARTICLE I.
DEFINITIONS

Capitalized terms used but not otherwise defined in this
Agreement shall have the meanings set forth in Appendix A hereto.
<PAGE> 3

ARTICLE II.
STRUCTURE OF THE TRANSACTION; THE LOANS

2.01. General Structure of the Transaction. The Lessees,
the Owner Trustee, the Investor, the Administrative Agent, the Syndication
Agent, the Real Estate Administrative Agent and the Lenders participate in a
transaction pursuant to which: (a) the Lenders will agree, as more particularly
described below, to make Loans to the Owner Trustee from time to time in an
aggregate principal amount not to exceed $250,000,000, (b) the Owner Trustee is
acting as an agent for the Lessees, the Lessors and the Agree SPCs to obtain
financing on behalf of the Lessors and Agree SPCs, (c) the Guarantors will
unconditionally guarantee certain of the obligations of the Owner Trustee to
the Lenders, (d) the Owner Trustee will use the proceeds of the Loans solely to
make Project Loans to (i) certain special purpose entities acceptable to the
Real Estate Administrative Agent and formed solely for the purpose of paying
the costs of owning, developing and constructing the Properties (each a
"Lessor" and collectively the "Lessors") or (ii) to an Agree SPC as more
particularly described in Article XIV, (e) the Lessors (other than an Agree
Lessor), in turn, will use the proceeds of each Project Loan solely for the
purpose of acquiring, leasing and/or constructing properties to be used by the
Lessees as stores or other facilities, and, with respect to an Agree Project
Loan, the Agree SPC's will use the proceeds of each Project Loan solely for the
purpose of making a capital contribution to the applicable Agree Lessor who
will use such contribution solely for the purpose of acquiring, leasing and/or
constructing properties to be used by the Lessees as stores or other
facilities, (f) the applicable Lessee will unconditionally guarantee to the
Owner Trustee the completion of each Property and (g) upon the acquisition of
each Property, the applicable Lessee will enter into a Lease with respect to
such Property. As security for each Project Loan which is not an Agree Project
Loan, each Lessor will deliver to the Owner Trustee a Mortgage, encumbering the
Lessor's interest in the Property, an Assignment of Development Agency
Agreement and an Assignment of Lease. As security for each Agree Project Loan,
(A) the Agree Lessor will deliver to the Owner Trustee (i) an Assignment of
Leases (in the form attached to the Agree Project Loan Agreement) and (ii) an
Assignment of Development Agency Agreement (in the form attached to the Agree
Project Loan Agreement) and (B) the Agree SPC will deliver to the Owner Trustee
the Agree LLC Pledge, pledging all of the Agree SPC's right, title and interest
in and to the Agree Preferred Return to the Owner Trustee. As security for each
Loan, the Owner Trustee will deliver to the Real Estate Administrative Agent
for the benefit of the Lenders: (i) a security interest in certain assets of
the Owner Trustee as described in the Security Agreement, (ii) a re-assignment
of the Development Agency Agreement, (iii) an assignment of the Completion
Guarantee, (iv) an assignment of all of the Owner Trustee's rights under each
Project Loan Agreement and (v) a re-assignment of each Lease.

2.02. The Loans; General. Pursuant to the terms of the
Credit Agreement, the Lenders have agreed to make loans to the Owner Trustee
from time to time in an aggregate principal amount of up to $250,000,000 in
order for the Owner Trustee to make Project Loans to the Lessors or to the
Agree SPC's, as the case may be, and in consideration of the receipt of the
proceeds of such Loans, the Owner Trustee will issue the Tranche A Notes, the
Tranche B Notes and a Swing Note (together with any note or notes issued in
exchange or substitution therefor in accordance with the Credit Agreement, the
"Notes"). The Loans shall be made and the Notes shall be issued pursuant

<PAGE> 4

to the Credit Agreement. Subject to Section 5.02, the Loans will be made to
the Owner Trustee from time to time at the request of the Owner Trustee with
the consent of the applicable Lessee.

2.03. The Project Loans, Developer Equity; General. (a)
Subject to the terms of the Operative Agreements, and simultaneously with the
making of Loans to the Owner Trustee, the proceeds of the Loans will be used by
the Owner Trustee solely to make Project Loans to the Lessors or to Agree SPCs.
At no time shall the aggregate principal amount of the Project Loan to any one
Lessor or to any one Agree SPC be greater than $15,000,000 and at no time shall
the Project Loan with respect to any Property be greater than 95% of Total
Property Costs of such Property nor shall any Agree Project Loan with respect
to any Property be greater than 89% of the Total Property Costs of such
Property. Each Project Loan shall be advanced to the applicable Lessor
pursuant to a Project Loan Agreement and each Agree Project Loan shall be
advanced to the applicable Agree SPC pursuant to an Agree Project Loan
Agreement. In consideration of the receipt of the proceeds of such Project
Loan, each such Lessor or Agree SPC, as the case may be, will issue a Project
Loan Note to the Owner Trustee.

(b) Pursuant to each Project Loan Agreement, each Lessor
shall contribute the Developer's Equity simultaneously and pro rata with each
Project Loan Advance by the Owner Trustee.

(c) Pursuant to each Agree Project Loan Agreement, each
Agree LLC shall contribute the Developer's Equity simultaneously and pro rata
with each Project Loan Advance by the Owner Trustee of an Agree Project Loan.

2.04. Collateral for the Project Loans; General. (a) As
security for each Project Loan which is not an Agree Project Loan, each Lessor
shall deliver to the Owner Trustee, (i) a Mortgage on the applicable Property;
(ii) an Assignment of Lease and Consent to Assignment; and (iii) with respect
to Construction Projects, an Assignment of Development Agency Agreement from
such Lessor to the Owner Trustee, and a Consent to Assignment of Development
Agency Agreement. As further support for each Project Loan which relates to a
Construction Project, the applicable Lessee shall deliver to the Owner Trustee
a Completion Guarantee to guaranty the completion of the particular
Improvements.

(b) As security for each Agree Project Loan, (i) each
Agree Lessor shall deliver to the Owner Trustee, (X) an Assignment of Lease and
Consent to Assignment; and (Y) with respect to Construction Projects, an
Assignment of Development Agency Agreement from such Lessor to the Owner
Trustee, and a Consent to Assignment of Development Agency Agreement and (ii)
each Agree SPC shall deliver to the Owner Trustee the Agree LLC Pledge. As
further support for each Agree Project Loan which relates to a Construction
Project, the applicable Lessee shall deliver to the Owner Trustee a Completion
Guarantee to guaranty the completion of the particular Improvements.

2.05. Collateral for the Loans; General. The Loans and the
obligations of the Owner Trustee under the Credit Agreement shall be secured by
(a) a re-assignment of each Assignment of Leases and Rents delivered by each
Lessor, and consented to by the applicable Lessee, in each case in the
respective forms set forth on Exhibit H to the Credit Agreement (each,

<PAGE> 5

a "Reassignment of Leases"), (b) a security interest in certain of the assets
of the Owner Trustee, including the right to receive any amount received by the
Owner Trustee pursuant to any Mortgages held by the Owner Trustee granted
pursuant to a Security Agreement in the form set forth on Exhibit G to the
Credit Agreement (the "Security Agreement") which Security Agreement shall be
duly executed by the Owner Trustee and the applicable Lessor, (c)(i) a
re-assignment of all of the right, title and interest of the Owner Trustee in
and to the Assignment of Development Agency Agreement, (ii) an assignment of
all of the Owner Trustee's rights under the Project Loan Agreement and (iii) an
assignment of all of the Owner Trustee's rights under the Completion Guaranty,
if applicable, each of the rights granted in clauses (i), (ii) or (iii) above
shall be granted pursuant to an Assignment of Contracts in the form of Exhibit
I to the Credit Agreement (the "Assignment of Contracts"), which Assignment of
Contracts shall be duly executed by the Owner Trustee and the applicable
Lessor.

2.06. The Guarantee. Certain of the obligations of the
Owner Trustee under the Credit Agreement shall be guaranteed as provided in the
Guarantee made by the Guarantors in favor of the Administrative Agent for the
benefit of the Lenders.

2.07. Property Purchase and Lease. (a) With respect to any
Property other than an Agree Project, on each Property Closing Date and subject
to the terms and conditions of this Agreement, including, Section 5.02 which
sets forth the procedures for funding of the Loans and Project Loans, (i) the
Lenders will make Loans to the Owner Trustee in accordance with Article V and
the terms and provisions of the Credit Agreement, (ii) the Owner Trustee will
lend such funds to the applicable Lessor in accordance with the terms of the
applicable Project Loan Agreement for the purchase and related costs of the
applicable Property (or, if applicable, the Lessor will lease from a Ground
Lessor pursuant to a Ground Lease all right, title and interest in and to each
Property), and (iii) such Lessor will simultaneously lease (or sublease, as the
case may be) all of its right, title and interest in the Property to the
applicable Lessee by executing and delivering a Lease.

(b) With respect to any Agree Project, on each Property
Closing Date and subject to the terms and conditions of this Agreement,
including, Section 5.02 which sets forth the procedures for funding of the
Loans and Project Loans, (i) the Lenders will make Loans to the Owner Trustee
in accordance with Article V and the terms and provisions of the Credit
Agreement, (ii) upon receipt of the proceeds of the Loans, the Owner Trustee
will lend such funds to the applicable Agree SPC in accordance with the terms
of the applicable Agree Project Loan Agreement for the contribution by such
Agree SPC of capital to the applicable Agree Lessor who will use such capital
contribution for the purchase and related costs of the applicable Property (or,
if applicable, the Agree Lessor will lease from a Ground Lessor pursuant to a
Ground Lease all right, title and interest in and to each Property), and (iii)
such Agree Lessor will simultaneously lease (or sublease, as the case may be)
all of its right, title and interest in the Property to the applicable Lessee
by executing and delivering a Lease.

(c) Each Property shall be located in the continental
United States and if the Real Estate Administrative Agent determines in its
sole discretion that satisfactory legal documentation may be created, in the
territories of the United States and Canada.

<PAGE> 6

2.08. Construction of Improvements; Lease of Improvements.
On each Property Closing Date or on the Construction Commencement Date, if
later, for which proceeds of the Project Loan will be used either to construct
Improvements or with respect to an Agree Project Loan, to make a contribution
of capital to an Agree Lessor who will use such capital contribution to
construct Improvements (each, a "Construction Project"), the applicable Lessor
and the applicable Lessee will execute and deliver a Development Agreement
pursuant to which the Lessor will agree to construct such Improvements in
accordance with the Plans and Specifications. On each Property Closing Date or
on the Construction Commencement Date, if later, with respect to a Construction
Project, the applicable Lessor and the applicable Developer will execute and
deliver a Development Agency Agreement pursuant to which such Developer will
agree to construct such Improvements in accordance with the Development
Agreement as the agent for the Lessor for the benefit of the Lessee and in
accordance with the Plans and Specifications. On each Property Closing Date or
on the Construction Commencement Date, if later, with respect to a Construction
Project, such Lessor shall assign its rights under such Development Agency
Agreement to the Owner Trustee as security for the Project Loans, and the Owner
Trustee shall, in turn, assign such rights under the Development Agency
Agreement to the Real Estate Administrative Agent as security for the Loans
pursuant to the Assignment of Contracts. The Lenders acknowledge the Lessee's
right to complete construction of the Improvements using proceeds of a Project
Loan in accordance with the Development Agreement. Upon the Property Closing
Date, provided that the applicable Property Closing Certificate indicates that
the cost of the Land is greater than or equal to 25% of the Property Cost for
such Property (a "Twenty-Five Percent Property"), the Lessor and the Lessee
shall execute and deliver a Lease Supplement pursuant to which the Lessor will
lease (or sublease, as the case may be) all of its right, title and interest in
such Improvements to the Lessee. Notwithstanding that the Improvements on a
Twenty- Five Percent Property (whether existing on the date of acquisition of
the Land or to be constructed pursuant to the Development Agreement) may be
leased by a Lease Supplement to the Lease of the related Land, the term
"Property" shall include the Land and the Improvements. If the Property
Closing Certificate indicates that the cost of the Land is less than 25% of the
Property Cost, no Lease Supplement will be required to be delivered pursuant to
Section 5.04(g) and the Land and the Improvements will be leased on the
Property Closing Date under one Lease and the term "Property" will be deemed to
mean Land and Improvements.

2.09. Non-Construction Projects. For each Project Loan
that does not relate to a Construction Project, the Project Loan Documents will
be appropriately modified to reflect the fact that there will be one Project
Loan Advance which will be made on the Property Closing Date and that no
further Project Loan Advances will be made or requested, and all references to
the Development Documents and the Completion Guarantee herein and in the other
Operative Agreements shall be deemed deleted as they relate to such Properties.

2.10. The Owner Trustee. The Owner Trustee hereby agrees
to act as agent for the Lessees and the Lessors, as designated by the Lessees,
in accordance with the Operative Agreements.

<PAGE> 7

ARTICLE III.
THE CLOSINGS

3.01. Effective Date. (a) On the Effective Date (the
"Effective Date"), each of the respective parties hereto and thereto shall
execute and deliver this Agreement, the Guarantee, the Credit Agreement and
such other documents, instruments, certificates and opinions of counsel as
agreed to by the parties hereto.

(b) All documents and instruments required to be
delivered on the Effective Date shall be delivered at the offices of Schiff
Hardin & Waite, 7200 Sears Tower, Chicago, Illinois, or at such other location
as may be determined by the Administrative Agent and the Lessees.

3.02. Trust Company Authorization. The Investor agrees
that, with respect to the Effective Date and each subsequent Property Closing
Date, the satisfaction or waiver of the conditions contained in Article VI
hereof shall constitute, without further act, authorization and direction by
the Investor to the Trust Company to take on behalf of the Owner Trustee the
actions specified in Section 2.01 of the Trust Agreement.

ARTICLE IV.
FUNDING OF PROJECT LOANS; CONDITIONS

4.01. Procedures for Selecting Lessors and Agree SPCs. At
least fifteen (15) Business Days prior to the execution and delivery of any
Project Loan Documents with a Lessor or the execution and delivery of a
Development Agency Agreement with any Developer, the applicable Lessee shall
deliver to the Real Estate Administrative Agent a certificate signed by an
Authorized Officer:

(a) stating the name and address of the proposed Lessor
and Agree SPC, if applicable, and with respect to a Construction
Project, the proposed Developer;

(b) stating the location and type of Property to be
acquired, developed and/or constructed (if applicable) by such Lessor
and Developer;

(d) with respect to a Construction Project, attaching the
Construction Budget for the Property to be acquired, developed or
constructed by the Lessor and Developer.

Within ten (10) Business Days of receipt by the Real Estate Administrative
Agent of the certificate described above, the Real Estate Administrative Agent
will advise the applicable Lessee whether or not the Real Estate Administrative
Agent requires additional information in order to make a decision regarding
whether the proposed Lessor and Agree SPC, if applicable, are acceptable to the
Real Estate Administrative Agent. Each Lessor and each Agree SPC will be
formed and owned in

<PAGE> 8

accordance with the guidelines and covenants set forth in Exhibit H. If the
Real Estate Administrative Agent requests additional information regarding the
proposed Lessor or Agree SPC, then within ten (10) Business Days of receipt of
such information by the Real Estate Administrative Agent, the Real Estate
Administrative Agent will advise the applicable Lessee whether or not the
proposed Lessor and Agree SPC, if applicable is acceptable to the Real Estate
Administrative Agent, and, if the proposed Lessor or Agree SPC is not
acceptable, a description of the reasons for such decision.

4.02. Execution of Lease and Project Loan Documents. Upon
satisfaction of the requirements described in Section 4.01, (a) the Lessor and
the applicable Lessee shall promptly execute and deliver the Lease and, with
respect to a Construction Project, the Development Agreement with respect to
the proposed Property, (b) the Lessor and the Owner Trustee shall promptly
execute and deliver a Project Loan Agreement, and related Project Loan Note,
with respect to the proposed Property, (c) with respect to a Construction
Project, the Developer and the Lessor shall promptly execute and deliver a
Development Agency Agreement with respect to the proposed Property and (d) with
respect to a Construction Project, the applicable Lessee shall execute and
deliver a Completion Guaranty with respect to the proposed Property.

4.03. Allocations of Available Commitments. Upon the
execution of the Project Loan Documents with any approved Lessor or Agree SPC,
the applicable Lessee shall deliver to the Real Estate Administrative Agent
(and to the Administrative Agent) a written request (an "Allocation Request")
to allocate a portion of the Available Commitments under the Credit Agreement,
in an amount equal to the Project Loan to such Lessor or Agree SPC, to the
Property. Each Allocation Request shall be executed by the applicable Lessee,
specifically identify the Property and be accompanied by any revisions to the
Construction Budget delivered to the Real Estate Administrative Agent in
accordance with Section 4.01. In no event shall 150% of the amount of the
Project Loan in the Allocation Request exceed the amount of the Available
Commitments.

4.04. Conditions to Making of Project Loans to the Lessors.
The obligations of the Owner Trustee to make a Project Loan to a Lessor on any
date are subject to the satisfaction or waiver of the following conditions
precedent:

(a) Conditions of the Owner Trustee's Borrowing. The
Owner Trustee shall simultaneously have satisfied all of the
conditions contained in the Credit Agreement, Article V of this
Agreement and the other Operative Agreements for the making of a Loan
to the Owner Trustee in the amount equal to the requested Project
Loan.

(b) Conditions Precedent in the Project Loan Agreements.
The applicable Lessor shall have satisfied all of the conditions
precedent contained in the applicable Project Loan Agreement for the
making of such Project Loan.

(c) Representations and Warranties. The representations
and warranties of the Owner Trustee, the Lessees and the
Investor contained herein and in each of the other Operative
Agreements shall be true and correct in all material respects.

<PAGE> 9

(d) Performance of Agreements. The parties hereto shall
have performed their respective agreements contained herein and in the
other Operative Agreements on or prior to each such date.

(e) No Default or Event of Default. There shall not have
occurred and be continuing any Default or Event of Default under any
of the Operative Agreements and no Default or Event of Default under
any of the Operative Agreements will have occurred after giving effect
to such Project Loan, other than a Default or an Event of Default
which the Real Estate Administrative Agent has agreed not to declare
pursuant to Section 5.06.

Upon satisfaction of the preceding conditions, the Owner Trustee shall make a
Project Loan to the applicable Lessor in the amount of the requested funds.

ARTICLE V.
MAKING OF LOANS TO THE OWNER TRUSTEE; CONDITIONS

5.01. General. Subject to the terms and conditions of the
Operative Agreements (including Section 5.02), from time to time the Lessees
will request the Lenders to make Revolving Credit Loans to the Owner Trustee
and the Owner Trustee will use the proceeds of such Revolving Credit Loans
solely for the purpose of making Project Loans to the Lessors or to the Agree
SPC's, as the case may be.

5.02. Procedures for Funding. (a) (i) Not less than ten
(10) Business Days prior to the date on which any (A) Acquisition Advance or
(B) any other Project Loan Advance where the Lessee has not waived all of the
conditions precedent to such Project Loan Advance set forth in Schedule 11.02
to the Participation Agreement is to be made and (ii) not less than two (2)
Business Days prior to the date on which any Project Loan Advance (other than
an Acquisition Advance) where the Lessee has waived the conditions precedent to
such Project Loan Advance set forth in Schedule 11.02 to the Participation
Agreement is to be made, the applicable Lessee (i) acting on behalf of the
Lessor pursuant to Section 11.02, shall deliver to the Real Estate
Administrative Agent, as the assignee of the Owner Trustee's rights and
obligations under the applicable Project Loan Agreement pursuant to the
applicable Assignment of Contracts, (with a copy to the Administrative Agent)
the Requisition and (ii) acting on behalf of the Owner Trustee pursuant to
Section 11.01, shall deliver to the Administrative Agent, a Revolving Credit
Loan Request or to the Real Estate Administrative Agent (with a copy to the
Administrative Agent), a Swing Loan Request, as the case may be and as required
pursuant to the Credit Agreement.

(b) Each Requisition and Revolving Credit Loan Request or
Swing Loan Request, as the case may be, shall among other things: (i) be
irrevocable and (ii) request Project Loans and Loans in the same amount, but in
no event (x) less than $50,000 (except if such Loans are made to capitalize
interest) or (y) greater than the lesser of the amount permitted to be drawn
under the applicable Project Loan Agreement or under the Credit Agreement. The
Revolving Credit Loan Request or the Swing Loan Request, as applicable, shall
request that Loans be made for the sole purpose of permitting the Owner Trustee
to make Project Loans and that the funds be transferred

<PAGE> 10

directly to the applicable Lessor, Agree SPC or Developer as so specified in
the Revolving Credit Loan Request or Swing Loan Request, as applicable.

5.03. Conditions to the Lenders' Obligations to Advance
funds in connection with the acquisition of Property. The obligations of the
Lenders to make Loans to the Owner Trustee on any Property Closing Date for the
purpose of providing funds to the Owner Trustee necessary to provide Project
Loans to acquire (for purposes of this Article V, acquisition of a Property
shall mean acquisition by purchasing or ground leasing, as applicable) a
Property (an "Acquisition Advance") are subject to the satisfaction or waiver
of the following conditions precedent:

(a) Representations and Warranties. The representations
and warranties of the Owner Trustee, the Lessees, the Lessors, the
Developers, if applicable and the Investor contained herein and in
each of the other Operative Agreements shall be true and correct in
all material respects; provided, however, with respect to the Lessors
and the Developers, such condition shall only apply to representations
and warranties which relate to the Project Loan for which the
Acquisition Advance is being requested or any other Project Loan as to
which such Developer is involved.

(b) Performance of Obligations. The parties hereto shall
have performed their respective agreements contained herein and in the
other Operative Agreements on or prior to each such Property Closing
Date.

(c) Delivery of the Requisition. The Real Estate
Administrative Agent shall have received a fully executed counterpart
of the Requisition, appropriately completed and the Real Estate
Administrative Agent shall have forwarded a copy to the Administrative
Agent with a certification of receipt and approval by the Real Estate
Administrative Agent of the documents called for in clauses (d)
through (k) below.

(d) Delivery of Property Closing Certificate. The Real
Estate Administrative Agent and the Lessor shall have received a fully
executed counterpart of a certificate (the " Property Closing
Certificate") of an Authorized Officer of the applicable Lessee,
certifying (i) that the value of the Land is or is not greater than
25% of the Total Property Costs, (ii) the amount of the Tranche A
Loans allocated to the particular Property and (iii) the Weighted
Average Maximum Residual Guarantee Percentage for the Properties after
giving effect to the acquisition of the particular Property.

(e) Conditions Precedent contained in the Project Loan
Documents. There shall have been delivered to the Real Estate
Administrative Agent each Project Loan Document, duly executed and
evidence that all of the conditions precedent to making advances
contained in the applicable Project Loan Agreement and other Project
Loan Documents relating to the corresponding Project Loan have been
satisfied.

(f) Lease. There shall have been delivered to the Real
Estate Administrative Agent a true and complete copy of a Lease and
Memorandum of Lease executed by the

<PAGE> 11

applicable Lessee and the Lessor with respect to the Property
being acquired on such Property Closing Date.

(g) Security Agreement Supplement. The Owner Trustee
shall have delivered to the Real Estate Administrative Agent a
supplement to the Security Agreement in the form of Exhibit A to the
Security Agreement executed by the Owner Trustee and the applicable
Lessor with respect to the Property being acquired on such Property
Closing Date.

(h) Reassignment of Leases. The Owner Trustee shall have
delivered to the Real Estate Administrative Agent a Reassignment of
Leases executed by the Owner Trustee, together with the original fully
executed Assignment of Lease to which it relates, with respect to the
Property being acquired on such Property Closing Date.

(i) Assignment of Contracts. The Owner Trustee shall have
delivered to the Real Estate Administrative Agent an Assignment of
Contracts executed by the Owner Trustee with respect to the Property
being acquired on such Property Closing Date.

(j) No Default or Event of Default. There shall not have
occurred and be continuing any Default or Event of Default under any
of the Operative Agreements and no Default or Event of Default under
any of the Operative Agreements will have occurred after giving effect
to the Loan requested by such Requisition, other than a Default or an
Event of Default which the Real Estate Administrative Agent has agreed
not to declare pursuant to Section 5.06.

(k) Weighted Average Maximum Residual Guarantee
Percentage; Maximum Residual Guarantee Amount . (A) The Weighted
Average Maximum Residual Guarantee Percentage after giving effect to
the acquisition and/or construction of such Property and execution of
the Lease, shall be greater than or equal to 85% as of any applicable
Determination Date (as defined in the definition of Weighted Average
Maximum Residual Guarantee Percentage) and (B) the Maximum Residual
Guarantee Amount with respect to such Property shall be greater than
or equal to 80% of the expected Property Costs of such Property upon
the acquisition of such Property.

5.04. Conditions to the Lenders' Obligations to Make
Construction Advances for the Commencement of Construction on any Property.
The obligations of the Lenders to make Loans to the Owner Trustee on any date
for the purpose of providing funds to the Owner Trustee in order to make
Project Loans to a Lessor which will be used to make an Initial Construction
Advance, are subject to the satisfaction or waiver of the following conditions
precedent:

(a) Representations and Warranties. On such
date, the representations and warranties of the Owner Trustee,
the Lessees, the Lessors, the Developers and the Investor contained
herein and in each of the other Operative Agreements shall be true and
correct in all material respects; provided, however, with respect to
the Lessors and the Developers, such condition shall only apply to
representations and warranties which relate to the Project Loan

<PAGE> 12

for which the Initial Construction Advance is being requested
or any other Project Loan as to which such Developer is involved.

(b) Performance of Obligations. The parties hereto shall
have performed their respective agreements contained herein and in the
other Operative Agreements on or prior to such date.

(c) Requisition. The Real Estate Administrative Agent
shall have received a fully executed counterpart of the Requisition,
appropriately completed, and the Real Estate Administrative Agent
shall have delivered a copy thereof to the Administrative Agent with a
certification of receipt and approval by the Real Estate
Administrative Agent of the documents called for in clauses (d)
through (g) below.

(d) Conditions Precedent contained in the Project Loan
Documents. There shall have been delivered to the Real Estate
Administrative Agent evidence that all of the conditions precedent to
making advances contained in the applicable Project Loan Agreement and
other Project Loan Documents relating to the corresponding Project
Loan have been satisfied.

(e) Construction Budget. Based upon the Construction
Budget, the Available Commitments as allocated to such Property
pursuant to Section 4.03 (after taking into consideration the
Developer's Equity for such Property) will be sufficient to complete
the Improvements on such Property.

(f) No Default or Event of Default. There shall not have
occurred and be continuing any Default or Event of Default under any
of the Operative Agreements and no Default or Event of Default under
any of the Operative Agreements will have occurred after giving effect
to the Loans requested by such Requisition, other than a Default or an
Event of Default which the Real Estate Administrative Agent has agreed
not to declare pursuant to Section 5.06.

(g) Lease Supplement. If required pursuant to the terms
of Section 2.08, the Lessor and the Lessee shall have executed and
delivered a Lease Supplement.

5.05. Conditions to the Lenders' Obligations to make
Construction Advances for the Ongoing Construction on any Property. The
obligations of the Lenders to make Loans to the Owner Trustee on any date for
the purpose of providing funds to the Owner Trustee in order to make
Construction Advances to a Lessor which will be used to pay Property Costs with
respect to a Property (other than the Acquisition Advance or the Initial
Construction Advance) are subject to the satisfaction or waiver of the
following conditions precedent:

(a) Representations and Warranties. On such date, the
representations and warranties of the Owner Trustee, the Lessees, the
Lessors, the Developers and the Investor contained herein and in each
of the other Operative Agreements shall be true and correct in all
material respects;provided, however, with respect to the Lessors and
the Developers, such
<PAGE> 13

condition shall only apply to representations and warranties
which relate to the Project Loan for which the Construction Advance is
being requested or any other Project Loan as to which such Developer
is involved.

(b) Performance of Obligations. The parties hereto shall
have performed their respective agreements contained herein and in the
other Operative Agreements on or prior to each such date.

(d) Construction Budget. Based upon the Construction
Budget, the Available Commitments as allocated to such Property
pursuant to Section 4.03 (after taking into consideration the
Developer's Equity for such Property) will be sufficient to complete
the Improvements on such Property.

(e) Conditions Precedent contained in the Project Loan
Documents. There shall have been delivered to the Real Estate
Administrative Agent reasonably acceptable evidence that all of the
conditions precedent to making such advance contained in the
applicable Project Loan Agreement and other Project Loan Documents
relating to the corresponding Project Loan have been satisfied.

(f) No Default or Event of Default. There shall not have
occurred and be continuing any Default or Event of Default under any
of the Operative Agreements and no Default or Event of Default under
any of the Operative Agreements will have occurred after giving effect
to the Loan requested by such Requisition, other than a Default or an
Event of Default which the Real Estate Administrative Agent has agreed
not to declare pursuant to Section 5.06.

(g) Property Related Matters. There shall be no defects
to the Improvements constructed to date including, without limitation,
the plumbing, heating, air conditioning and electrical systems thereof
and all water, sewer, electric, gas, telephone and drainage facilities
and all other utilities required to adequately service such
Improvements for its intended use are available pursuant to adequate
permits (including any that may be required under applicable
Environmental Laws). There is no action, suit or proceeding
(including any proceeding in condemnation or eminent domain or under
any Environmental Law) pending or threatened which adversely affects
the title to, or the use, operation or value of, the Properties. No
fire or other casualty with respect to the Properties shall have
occurred which fire or other casualty has had a material adverse
effect on the Lessees' ability to perform their obligations under the
Operative Agreements.

<PAGE> 14

(h) Lease Requirements. The Improvements constructed to
date comply with all requirements and conditions set forth in the
Lease and all other conditions and requirements of the Operative
Agreements.

(i) Construction of the Improvements. Construction of
the Improvements to date has been performed in a good and workmanlike
manner, substantially in accordance with the Plans and Specifications
and in compliance with all Insurance Requirements and Legal
Requirements.

(j) Consents, etc. All consents, licenses and building
permits required by applicable Legal Requirements for construction,
completion, occupancy and operation of the Improvements constructed to
date have been obtained and are in full force and effect.

(k) Encroachments. Except for off-site improvements
provided for in the Construction Budget, the Improvements constructed
to date are located entirely on the related Land and do not encroach
upon or overhang any easement or right-of-way or the land of others
(unless such encroachment or overhang is consented to in writing by
the owner of the affected property). The Improvements are wholly
within any building restriction lines, however established.

5.6. Lessor Defaults. Notwithstanding anything to the
contrary contained in this Agreement or any other Operative Agreement, the
Lenders agree that so long as each Lessee is performing its obligations under
the Leases and no Lease Default or Lease Event of Default has occurred and is
continuing, if a Lessor or an Agree SPC is in default of its obligations under
a Project Loan Agreement, a Lease, a Development Agreement or a Development
Agency Agreement (any of the foregoing defaults, a "Lessor Default"), the
Lenders agree not to declare a Default or an Event of Default pursuant to
Article IX of the Credit Agreement or Article X of a Project Loan Agreement;
provided, however, the Lenders shall not be obligated to refrain from declaring
a Default or an Event of Default with respect to a particular Project Loan
Agreement where a Lessor Default has occurred with respect to such Property if
such Lessor Default (a) is caused by the bankruptcy or similar proceeding being
brought by or against a Lessor or Agree SPC (including the occurrence of the
events described in Section 10.01(e) of each Project Loan Agreement) or (b)
threatens, as determined by the Real Estate Administrative Agent in its sole
discretion, the lien priority of the Mortgage or the right of the Owner Trustee
to receive payments of Project Loan Basic Rent or Supplemental Rent under any
of the Assignment of Leases or the right of the Real Estate Administrative
Agent to receive payments of Project Loan Basic Rent or Supplemental Rent under
a Reassignment of Leases. Upon the occurrence of either of the events
described in clauses (a) or (b) above, the Lessee shall purchase the Project
Loan Note and the Mortgage from the Owner Trustee for the amount of all
outstanding Project Loan Advances relating to such Property plus all accrued
interest and fees. Upon such purchase, the Project Loan Event of Default and
the Credit Agreement Event of Default resulting from such events shall be
deemed cured. In the event of a Lessor Default which is capable of cure by the
related Lessee, the Lessee agrees to attempt diligently to cure such default.

<PAGE> 15

ARTICLE VI.
CONDITIONS TO EFFECTIVENESS

6.1. Conditions to Effectiveness. The agreement of each
Lender to make Loans to the Owner Trustee, and the agreement of the Owner
Trustee to make Project Loans to any Lessor or to any Agree SPC, is subject to
the satisfaction, immediately prior to or concurrently with the Effective Date
of the following conditions precedent:

(a) Operative Agreements. Each of the Operative
Agreements to be entered into on the Effective Date shall have been
duly authorized, executed, acknowledged and delivered by the parties
thereto and shall be in full force and effect, and no default shall
exist thereunder (both before and after giving effect to the
transactions contemplated by the Operative Agreements), and the Agents
shall each have received a fully executed copy of each of the
Operative Agreements (other than the Notes of which the Administrative
Agent shall have received the original Notes).

(b) Project Loan Agreements. Each of the Project Loan
Documents (including the Agree Project Loan Agreements), if any, to be
entered into on the Effective Date shall have been duly authorized,
executed, acknowledged and delivered by the parties thereto and shall
be in full force and effect, and no default shall exist thereunder
(both before and after giving effect to the transactions contemplated
by the Project Loan Documents), and the Real Estate Administrative
Agent shall have received a fully executed copy of such of the Project
Loan Documents.

(c) Conditions Precedent. If any Project Loan is to be
funded on the Effective Date, each of the conditions precedent
contained in Sections 4.04, 5.01 and 5.03 and if the Initial Advance
is for an Agree Project Loan, the additional conditions contained in
Sections 14.03 and 14.04, shall have been satisfied.

(d) Taxes. All taxes, fees and other charges in
connection with the execution, delivery, and, where applicable,
recording, filing and registration of the Operative Agreements shall
have been paid or provisions for such payment shall have been made to
the satisfaction of the Lessor and the Agents.

(e) Governmental Approvals. All necessary (or, in the
reasonable opinion of the Agents and their respective counsel,
advisable) governmental actions in connection with the transactions
contemplated by the Operative Agreements, in each case required by any
law or regulation enacted, imposed or adopted on or after the
Effective Date or by any change in fact or circumstances since the
Effective Date, shall have been obtained or made and be in full force
and effect.

(f) Litigation. No action or proceeding shall have been
instituted, nor shall any action or proceeding be threatened, before
any Governmental Authority, nor shall any order, judgment or decree
have been issued or proposed to be issued by any Governmental
Authority (i) to set aside, restrain or enjoin any Governmental
Action, (ii) to set aside,

<PAGE> 16

restrain, enjoin or prevent the full performance of this Agreement,
any other Operative Agreement or any of the transactions contemplated
hereby or thereby or (iii) which is reasonably likely to have a
Material Adverse Effect.

(g) Legal Requirements. In the reasonable opinion of the
Agents and their respective counsel, the transactions contemplated by
the Operative Agreements and the Project Loan Documents do not and
will not violate any Legal Requirements and do not and will not
subject the Agents or any Lender to any adverse regulatory
prohibitions or constraints, in each case enacted, imposed, adopted or
proposed since the Effective Date.

(h) Corporate Proceedings of the Lessees and the
Guarantors. The Administrative Agent shall have received a copy of
the resolutions, in form and substance satisfactory to the
Administrative Agent and its respective counsel, of the Board of
Directors of each of the Lessees and each of the Guarantors
authorizing the execution, delivery and performance of this Agreement
and the other Operative Agreements to which it is a party, certified
by the Secretary or an Assistant Secretary of each such Lessee or
Guarantor as of the Effective Date, which certificate shall be in form
and substance satisfactory to the Administrative Agent and shall state
that the resolutions thereby certified have not been amended,
modified, revoked or rescinded.

(i) Incumbency Certificates. The Administrative Agent
shall have received a certificate of each of the Lessees and each of
the Guarantors, dated as of the Effective Date, as to the incumbency
and signature of the officers of each of the Lessees and each of the
Guarantors executing any Operative Agreement satisfactory in form and
substance to the Administrative Agent, executed by the President or
any Vice President and the Secretary or any Assistant Secretary of
each of the Lessees and each of the Guarantors.

(j) Corporate Proceedings of the Investor. The
Administrative Agent and the Company shall have received a copy of the
resolutions, in form and substance satisfactory to the Administrative
Agent and the Company, of the Board of Directors of the Investor
authorizing the execution, delivery and performance of the Operative
Agreements to which the Investor is a party, certified by the
Secretary or an Assistant Secretary of the Investor as of the
Effective Date, which certificate shall be in form and substance
satisfactory to the Administrative Agent and the Company and shall
state that the resolutions thereby certified have not been amended,
modified, revoked or rescinded.

(k) Investor Incumbency Certificate. The Administrative
Agent and the Lessees shall have received a certificate of the
Investor, dated as of the Effective Date, as to the incumbency and
signature of the officers of the Investor executing any Operative
Agreement satisfactory in form and substance to the Administrative
Agent and the Company, executed by the President or any Vice President
and the Secretary or any Assistant Secretary of the Investor.

(l) Proceedings of Owner Trustee. The Administrative
Agent and the Lessees shall have received a copy of the resolutions,
in form and substance satisfactory to the Administrative Agent and the
Company, of the Board of Directors of the Trust Company authorizing
the execution, delivery and performance of the Trust Agreement,
certified by the Secretary or an Assistant Secretary of the Trust
Company as of the Effective Date, which certificate shall be in form
and substance satisfactory to the

<PAGE> 17

Administrative Agent and the Company and shall state that the
resolutions thereby certified have not been amended, modified, revoked
or rescinded.

(m) Owner Trustee Incumbency Certificates. The
Administrative Agent and the Lessees shall have received a certificate
of the Owner Trustee, dated as of the Effective Date, as to the
incumbency and signature of the officers of the Owner Trustee
executing any Operative Agreement, satisfactory in form and substance
to the Administrative Agent and the Company, executed by the President
or any Vice President and the Secretary or any Assistant Secretary of
the Owner Trustee.

(n) Corporate Documents of the Lessees, the Guarantors
and the Investor. (i) The Administrative Agent shall have received
true and complete copies of the certificate of incorporation and
by-laws of each of the Lessees and each of the Guarantors, certified
as of the Effective Date as complete and correct copies thereof by the
Secretary or an Assistant Secretary.

(ii) The Administrative Agent and the Lessees shall have
received true and complete copies of the certificate of incorporation
and by-laws of the Investor, certified as of the Effective Date as
complete and correct copies thereof by the Secretary or an Assistant
Secretary of the Investor.

(o) Fees. The Agents shall have received the fees to be
paid on the Effective Date.

(p) Legal Opinions. (i) The Administrative Agent shall
have received the executed legal opinion of Dickinson, Wright, Moon,
Van Dusen & Freeman, counsel to each of the Lessees and each of the
Guarantors, addressed to each of the Lenders and the Investor and
substantially in the form of Schedule 1 hereto and the executed legal
opinion of Baker & McKenzie, U.K., counsel to BGP (UK) Limited,
addressed to each of the Lenders and the Investor and substantially in
the form of Schedule 1(a) hereto.

(ii) The Administrative Agent and the Lessees shall have
received the executed legal opinion of Loeb and Loeb, counsel to the
Investor, addressed to each of the Lenders and substantially in the
form of Schedule 2 hereto.

(iii) The Administrative Agent and the Lessees shall have
received the executed legal opinion of Morris, James, Hitchens &
Williams, counsel to the Trust Company and the Owner Trustee,
addressed to each of the Lenders and substantially in the form of
Schedule 3 hereto.

<PAGE> 18

(q) Actions to Perfect Liens. The Real Estate
Administrative Agent shall have received evidence in form and
substance satisfactory to it that all filings, recordings,
registrations and other actions, including, without limitation, the
filing of duly executed financing statements, (including precautionary
financing statements against the applicable Lessee) on form UCC-1,
necessary or, in the opinion of the Real Estate Administrative Agent,
desirable to perfect the Liens created by the Security Documents shall
have been completed.

ARTICLE VII.
REPRESENTATIONS AND WARRANTIES
ON THE EFFECTIVE DATE

7.1. Representations and Warranties of the Investor. The
Investor hereby represents and warrants to each of the other parties hereto
that:

(a) Due Organization, etc. It is duly organized and
validly existing in good standing under the laws of the jurisdiction
of its organization and has the power and authority to carry on its
business as now conducted and to enter into and perform its
obligations under each Operative Agreement to which it is or is to be
a party and each other agreement, instrument and document to be
executed and delivered by it on or before the Effective Date and each
Property Closing Date in connection with or as contemplated by each
such Operative Agreement to which it is or will be a party.

(b) Authorization; No Conflict. The execution, delivery
and performance of each Operative Agreement to which it is or will be
a party have been duly authorized by all necessary action on its part
and neither the execution and delivery thereof, nor the consummation
of the transactions contemplated thereby, nor compliance by it with
any of the terms and provisions thereof (i) requires or will require
any approval of the shareholders of, or approval or consent of any
trustee or holders of any indebtedness or obligations of such
Investor, (ii) contravenes or will contravene any Legal Requirement
applicable to or binding on it, (iii) does or will contravene or
result in any breach of or constitute any default under, or result in
the creation of any Lien upon any Property or any of the Improvements
(other than Liens created by the Operative Agreements) under its
charter or any indenture, mortgage, chattel mortgage, deed of trust,
conditional sales contract, bank loan or credit agreement or other
agreement or instrument to which it is a party or by which it or its
properties is bound or affected or (iv) does or will require any
Governmental Action by any Governmental Authority.

(c) Enforceability, etc. Each Operative Agreement to
which it is or will be a party has been, or will be, duly executed and
delivered by it and constitutes, or upon execution and delivery will
constitute, a legal, valid and binding obligation enforceable against
it in accordance with the terms thereof.

<PAGE> 19

7.02. Representations and Warranties of the Owner Trustee.
The Owner Trustee, in its individual capacity and as the Owner Trustee as
indicated, represents and warrants to each of the other parties hereto as
follows, provided that the representations in the following paragraphs (f),
(g), (h), (i) and (j) are made solely in its capacity as the Owner Trustee:

(a) Due Organization, etc. It is a corporation duly
organized and validly existing and in good standing under the laws of
the State of Delaware and has the power and authority to enter into
and perform its obligations under the Operative Agreements to which
the Owner Trustee is or will be a party and each other agreement,
instrument and document to be executed and delivered by it on or
before such Effective Date in connection with or as contemplated by
each such Operative Agreement to which the Owner Trustee is or will be
a party.

(b) Authorization; No Conflict. The execution, delivery
and performance of each Operative Agreement to which it is or will be
a party has been duly authorized by all necessary action on its part
and neither the execution and delivery thereof, nor the consummation
of the transactions contemplated thereby, nor compliance by it with
any of the terms and provisions thereof (i) does or will require any
approval or consent of any trustee or holders of any of its
indebtedness or obligations, (ii) does or will contravene any current
law, governmental rule or regulation relating to it, (iii) does or
will contravene or result in any breach of or constitute any default
under, or result in the creation of any Lien upon any of its property
under, its organizational documents, or any indenture, mortgage,
chattel mortgage, deed of trust, conditional sales contract, bank loan
or credit agreement or other agreement or instrument to which it is a
party or by which it or its properties may be bound or affected or
(iv) does or will require any authority, approval or other action by
any Governmental Authority or agency of the state of Delaware or any
federal authority governing the banking or trust powers of the Trust
Company.

(c) Enforceability, etc. Each Operative Agreement to
which it is a party has been, or will be, duly executed and delivered
by it and constitutes, or upon execution and delivery will constitute,
a legal, valid and binding obligation enforceable against it in
accordance with the terms thereof.

(d) Litigation. No litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is
pending or, to the knowledge of the Owner Trustee, threatened by or
against the Owner Trustee (a) with respect to any of the Operative
Agreements or any of the transactions contemplated hereby or thereby,
or (b) which could have a material adverse effect on the business or
financial condition of the Owner Trustee or the validity or
enforceability of any of the Operative Agreements.

(e) Assignment. It has not assigned or transferred, or
granted any lien in respect of, any of its right, title or interest in
or under any Project Loan Agreement, Project Loan Note, Mortgage,
Assignment of Lease or Contract Assignment, except in accordance with
the Operative Agreements.

<PAGE> 20

(f) No Default. The Owner Trustee is not in default
under or with respect to any of its Contractual Obligations in any
respect which could have a material adverse effect on the business or
financial condition of the Owner Trustee or the validity or
enforceability of any of the Operative Agreements. No Default or
Event of Default has occurred and is continuing.

(g) Use of Proceeds. The proceeds of the Loans shall be
applied by the Owner Trustee solely to make Project Loans to Lessors
or to Agree SPCs.

(h) Chief Place of Business. The Owner Trustee's chief
place of business, chief executive office and office where the
documents, accounts and records relating to the transactions
contemplated by this Agreement and each other Operative Agreement are
located at c/o Wilmington Trust Company, Rodney Square North, 1100
North Market Street, Wilmington, Delaware 19890.

(i) Federal Reserve Regulations. No part of the proceeds
of any Loans will be used for "purchasing" or "carrying" any "margin
stock" within the respective meanings of each of the quoted terms
under Regulation G or Regulation U of the Board of Governors of the
Federal Reserve System as now and from time to time hereafter in
effect. If requested by any Lender or the Agent, the Owner Trustee
will furnish to the Agent and each Lender a statement to the foregoing
effect in conformity with the requirements of FR Form G- 1 or FR Form
U-1 referred to in said Regulation G or Regulation U, as the case may
be.

(j) Investment Company Act. The Owner Trustee is not an
"investment company" or a company controlled by an "investment
company" within the meaning of the Investment Company Act.

7.3. Representations and Warranties of the Company. The
Company hereby represents and warrants to each of the other parties hereto
that:

(a) Organization and Qualification. The Company and each
of its Subsidiaries is a corporation or partnership, duly organized,
validly existing and in good standing under the laws of its
jurisdiction of organization. The Company and each of its
Subsidiaries has the lawful power to own or lease its properties and
to engage in the business it presently conducts or proposes to
conduct. The Company and each of its Subsidiaries is duly licensed or
qualified and in good standing in each jurisdiction listed on Schedule
7.03(a) and in all other jurisdictions where the property owned or
leased by it or the nature of the business transacted by it or both
makes such licensing or qualification necessary, except where the
failure to be so licensed, qualified or in good standing individually
or in the aggregate could not reasonably be expected to have a
Material Adverse Effect.

(b) Capitalization and Ownership. All of the issued and
outstanding shares of capital stock of the Company have been validly
issued and are fully paid and nonassessable. There are no options,
warrants or other rights outstanding to purchase any shares of capital
stock of the Company except any options, warrants or other rights
issued

<PAGE> 21

pursuant to stock purchase or option programs established by the Board
of Directors of the Company for the benefit of any of its employees,
officers or directors or as indicated on Schedule 7.03(b).

(c) Subsidiaries. Schedule 7.03(c) states the name of
each of the Company's Subsidiaries, its jurisdiction of incorporation,
its authorized capital stock, the issued and outstanding shares
(referred to herein as the "Subsidiary Shares") and the owners thereof
if it is a corporation and its outstanding partnership interests (the
"Partnership Interests") if it is a partnership. The Company and each
of its Subsidiaries has good and marketable title to all of the
Subsidiary Shares and Partnership Interests it purports to own, free
and clear in each case of any Lien. All Subsidiary Shares and
Partnership Interests have been validly issued and all Subsidiary
Shares are fully paid and nonassessable. All capital contributions
and other consideration required to be made or paid in connection with
the issuance of the Partnership Interests have been made or paid, as
the case may be. There are no options, warrants or other rights
outstanding to purchase any such Subsidiary Shares or Partnership
Interests except as indicated on Schedule 7.03(c)
.

(d) Power and Authority. The Company and the other
Guarantors have full power to enter into, execute, deliver and carry
out this Agreement and the other Operative Agreements to which they
are a party and to perform their respective Obligations under the
Operative Agreements to which they are a party and all such actions
have been duly authorized by all necessary proceedings on its part
(including any required consent or authorization of stockholders).

(e) Validity and Binding Effect. This Agreement has been
duly and validly executed and delivered by each of the Lessees, and
each of the other Operative Agreements which any Guarantor is required
to execute and deliver on or after the Effective Date will have been
duly executed and delivered by such Guarantor on the required date of
delivery of such Operative Agreement. This Agreement and each of the
other Operative Agreements constitutes or will constitute the legal,
valid and binding obligation of each Guarantor which is or will be a
party thereto on and after its date of delivery thereof, enforceable
against such Guarantor in accordance with its terms, except to the
extent that enforceability of any of such Operative Agreement may be
limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforceability of creditors' rights
generally or limiting the right of specific performance.

(f) No Conflict. Neither the execution and delivery of
this Agreement or the other Operative Agreement by any Guarantor
nor the consummation of the transactions herein or therein contemplated
nor the compliance with the terms and provisions hereof or thereof will
conflict with, constitute a default under or result in any breach of
(i) the terms and conditions of the certificate of incorporation,
by-laws or other organizational documents of any Guarantor or (ii) any
Legal Requirement or any agreement or instrument or order, writ,
judgment, injunction or decree to which any Guarantor is a party or by
which it or any of its properties may be subject or bound, or result in
the creation or enforcement of any

<PAGE> 22

Lien, charge or encumbrance whatsoever upon any property (now or
hereafter acquired) of any Guarantor.

(g) Litigation. There are no actions, suits, proceedings
or investigations pending or, to the knowledge of any Lessee,
threatened against the Company or any of its Subsidiaries at law or
equity before any Governmental Authority or arbitrator which
individually or in the aggregate could reasonably be expected to have
a Material Adverse Effect. None of the Lessees or any of their
Subsidiaries is in violation of any order, writ, injunction or any
decree of any Governmental Authority which individually or in the
aggregate could reasonably be expected to have a Material Adverse
Effect.

(h) Title to Properties. The real property owned or
leased by the Company and its Subsidiaries is described on Schedule
7.03(h) . The Company and its Subsidiaries have good and marketable
title to or valid leasehold interests in all properties and other
rights which they purport to own or lease or which are reflected as
owned or leased on their books and records, free and clear of all
Liens and encumbrances except Permitted Liens, and subject to the
terms and conditions of the applicable leases, except to the extent
that the failure to do so individually or in the aggregate could not
reasonably be expected to have a Material Adverse Effect. All leases
of property of the Company and its Subsidiaries are in full force and
effect without the necessity for any consent which has not previously
been obtained upon consummation of the transactions contemplated
hereby.

(i) Financial Statements. (i) Historical Statements.
The Company has delivered to each of the Lenders copies of its audited
consolidated year-end financial statements for and as of the end of
the Fiscal Year ended January 26, 1997 (the " Annual Statements"). In
addition, the Company has delivered to each of the Lenders copies of
its unaudited consolidated interim financial statements for the Fiscal
Quarter ended July 27, 1997 (the " Interim Statements") (the Annual
Statements and the Interim Statements being collectively referred to
as the "Historical Statements"). The Historical Statements were
compiled from the books and records maintained by the Company'
management, are correct and complete and fairly represent the
consolidated financial condition of the Company and its Subsidiaries
as of their dates and the results of operations for the fiscal periods
then ended and have been prepared in accordance with GAAP consistently
applied (except as disclosed in such financial statements), subject
(in the case of the Interim Statements) to normal year end audit
adjustments.

(ii) Financial Projections. The Company has delivered to
each of the Lenders financial projections of the Company and its
Subsidiaries for the period from January 27, 1997 through January 26,
2003, derived from various assumptions of the Company's management.
There has been no material adverse change to the Company's balance
sheet since the latest fiscal quarter referenced in Section 7.03(i)(i)
above.

(iii) Absence of Undisclosed Liabilities. Neither the
Company nor any of its Subsidiaries has any material liabilities,
contingent or otherwise, or forward or long-term commitments that are
not disclosed in the audited year-end financial statements delivered
to

<PAGE> 23

the Lenders pursuant to subsection (i) above or in the notes thereto,
other than as incurred in the ordinary course of business after the
date of such statements. Except as disclosed therein or on the
Schedules hereto, there are no unrealized or anticipated losses from
any commitments of the Company or any Subsidiary of the Company which
individually or in the aggregate could reasonably be expected to have
a Material Adverse Effect. Since the date of the audited year-end
financial statements delivered to the Lenders pursuant to subsection
(i) above, no circumstances or events have occurred which could
reasonably be expected to have a Material Adverse Effect.

(j) Use of Proceeds; Margin Stock; Section 20
Subsidiaries.

(i) the proceeds of the Loans will be used in
accordance with Section 7.02(g);

(ii) neither the Company nor any of its
Subsidiaries engages or intends to engage principally, or as one of
its important activities, in the business of extending credit for the
purpose, immediately, incidentally or ultimately, of purchasing or
carrying margin stock (within the meaning of Regulation U). No part
of the proceeds of any Loan has been used, immediately, incidentally
or ultimately, to purchase or carry any margin stock (other than
common stock of the Company repurchased in accordance with Section
12.05 of the Guarantee) or to extend credit to others for the purpose
of purchasing or carrying any margin stock or to refund Indebtedness
originally incurred for such purpose, or for any purpose which entails
a violation of or which is inconsistent with the provisions of the
regulations of the Board of Governors of the Federal Reserve System.
Neither the Company nor any of its Subsidiaries holds or intends to
hold margin stock in such amounts that more than 25% of the reasonable
value of the assets of the Company or any of its Subsidiaries are or
will be represented by margin stock; and

(iii) the Borrower does not intend to use any
portion of the proceeds of the Loans, directly or indirectly (i)
knowingly to purchase any Ineligible Securities from a Section 20
Subsidiary during any period in which such Section 20 Subsidiary makes
a market in such Ineligible Securities, (ii) knowingly to purchase
during the underwriting or placement period Ineligible Securities
being underwritten or privately placed by a Section 20 Subsidiary, or
(iii) to make payments of principal or interest on Ineligible
Securities underwritten or privately placed by as Section 20
Subsidiary and issued by or for the benefit of Borrower or any
Affiliate of the Borrower.

(k) Full Disclosure. On the Effective Date, neither this
Agreement nor any other Operative Agreement, nor any certificate,
statement, agreement or other documents furnished to the Agent or any
Lender in connection herewith or therewith, contains any untrue
statement of a material fact or omits to state a material fact
necessary in order to make the statements contained herein and
therein, in light of the circumstances under which they were made, not
misleading. On the Effective Date, there is no fact known to any
Guarantor which could reasonably be expected to have a Material
Adverse Effect and which has not been set forth in this Agreement or
in the certificates, statements, agreements or other

<PAGE> 24

documents furnished in writing to the Agent and the Lenders prior to
or on the Effective Date in connection with the transactions
contemplated hereby.

(l) Taxes. All federal, state, local and other tax
returns required to have been filed with respect to the Company and
each of its Subsidiaries have been filed and payment or adequate
provision has been made for the payment of all taxes, fees,
assessments and other governmental charges which have or may become
due pursuant to said returns or to assessments received except to the
extent that such taxes, fees, assessments and other charges are being
contested in good faith by appropriate proceedings diligently
conducted and for which such reserves or other appropriate provisions,
if any, as shall be required by GAAP shall have been made. There are
no agreements or waivers extending the statutory period of limitations
applicable to any federal income tax return of the Company and its
Subsidiaries for any period. No tax liens have been filed and no
claims are pending or, to the knowledge of the Guarantors, threatened
with respect to taxes which could reasonably be expected to have a
Material Adverse Effect. The charges, accruals and reserves on the
books of the Company and its Subsidiaries in respect of any taxes or
other governmental charges are maintained in accordance with GAAP.
Except as disclosed on Schedule 7.03(1), there are no agreements or
other arrangements with any Person whereby the Company or any of its
Subsidiaries has any obligation to such Person in respect of the
payment of any taxes or other governmental charges. For purposes of
this Section, the Guarantor make no representations with respect to
(i) any tax returns filed by Kmart, (ii) the payment of any fees,
assessments or other governmental charges which have or may become due
pursuant to said returns by Kmart or assessments received by Kmart and
(iii) any agreements or waivers extending the statutory period of
limitations applicable to any said returns of Kmart.

(m) Consents and Approvals. No consent, approval,
exemption, order or authorization of, or a registration or filing with
any Governmental Authority or any other Person is required by Law or
any agreement in connection with the execution and delivery of this
Agreement and the other Operative Agreements by any Guarantor, the
consummation of the transactions herein and therein contemplated and
the compliance with the terms and provisions hereof and thereof,
except as listed on Schedule 7.03(m), all of which shall have been
obtained or made on or prior to the Effective Date except as otherwise
indicated on Schedule 7.03(m)

(n) No Event of Default; Compliance with Instruments. No
Event of Default or Default has occurred and is continuing. Neither
the Company nor any of its Subsidiaries is in violation of (i) any
term of its certificate of incorporation, by-laws, or other
organizational documents or (ii) any agreement or instrument or order,
writ, judgment, injunction or decree to which it is a party or by
which it or any of its properties may be subject or bound where such
violation individually or in the aggregate could reasonably be
expected to have a Material Adverse Effect.

(o) Patents, Trademarks, Copyrights, Licenses, Etc., The
Company and each of its Subsidiaries owns or possesses all the
material patents, trademarks, service marks, trade names, copyrights,
licenses, registrations, franchises, permits and rights necessary to

<PAGE> 25

own and operate its properties and to carry on its business as
presently conducted and planned to be conducted by the Company or such
Subsidiary, without known conflict with the rights of others.

(p) Insurance. Schedule 7.03(p) describes all insurance
policies and other bonds to which the Company or any of its
Subsidiaries is a party, all of which are valid and in full force and
effect. No notice has been given or claim made and no grounds exist
to cancel or avoid any of such policies or bonds or to reduce the
coverage provided thereby. Such policies and bonds provide adequate
coverage from reputable and financially sound insurers in amounts
sufficient to insure the assets and risks of the Company and each of
its Subsidiaries in accordance with prudent business practice in the
industry of the Company and its Subsidiaries.

(q) Compliance with Laws. The Company and its
Subsidiaries are in compliance in all respects with all applicable
Laws in all jurisdictions in which the Company or any of its
Subsidiaries is presently or will be doing business except where the
failure to do so individually or in the aggregate could not reasonably
be expected to have a Material Adverse Effect.

(r) Material Contracts. All contracts which are material
to the business operations of the Company and its Subsidiaries are
valid, binding and enforceable upon the Company and each such
Subsidiary and each of the other parties thereto in accordance with
their respective terms, and there is no default thereunder, to the
Guarantors' knowledge, with respect to parties other than the Company
or its Subsidiaries.

(s) Investment Companies. Neither the Company nor any of
its Subsidiaries is an "investment company" registered or required to
be registered under the Investment Company Act of 1940 or under the
"control" of an "investment company" as such terms are defined in the
Investment Company Act of 1940 and none of them shall become such an
"investment company" or under such "control."

(t) Plans and Benefit Arrangements. Except as set forth
on Schedule 7.03(t):

(1) The Company and each of its
Subsidiaries is in compliance in all material respects with
any applicable provisions of ERISA with respect to all
Employee Benefit Plans. There has been no Prohibited
Transaction with respect to any Employee Benefit Plan that
individually or in the aggregate could reasonably be expected
to have a Material Adverse Effect.

(2) Neither the Company nor any of its
Subsidiaries maintains or contributes to any Plan,
Multiemployer Plan or Multiple Employer Plan.

(3) To the extent that any Employee
Benefit Plan is insured, the Company and all of its
Subsidiaries have paid when due all premiums required to be
paid for all periods except where the failure to make such
payment individually or in

<PAGE> 26
the aggregate could not reasonably be expected to have a
Material Adverse Effect. To the extent that any Employee
Benefit Plan is funded other than with insurance, the Company
and all of its Subsidiaries have made when due all
contributions required to be paid for all periods except where
the failure to make such contribution individually or in the
aggregate could not reasonably be expected to have a Material
Adverse Effect.

(4) All Employee Benefit Plans have been
administered in accordance with their terms and applicable
Legal Requirements except where the failure to do so could not
reasonably be expected to have a Material Adverse Effect.

(5) Neither the Company nor any of its
Subsidiaries maintains or contributes to or otherwise has any
liability under any Employee Benefit Plan under which benefits
are provided to former employees of the Company or any of its
Subsidiaries.

(6) No claims or lawsuits are pending
or, to the knowledge of the Guarantors, threatened with
respect to any Employee Benefit Plan, other than normal claims
for benefits.

(7) As of the Effective Date neither the
Company nor any member of the ERISA Affiliate maintains,
sponsors or contributes to any Plan, Multiemployer Plan or
Multiple Employer Plan.

(u) Employment Matters. The Company and each Subsidiary
of the Company is in compliance with the Labor Contracts and all
applicable federal, state and local labor and employment Laws
including those related to equal employment opportunity and
affirmative action, labor relations, minimum wage, overtime, child
labor, medical insurance continuation, worker adjustment and
relocation notices, immigration controls and worker and unemployment
compensation, where the failure to comply individually or in the
aggregate could reasonably be expected to have a Material Adverse
Effect. There are no outstanding grievances, arbitration awards or
appeals therefrom arising out of the Labor Contracts or current or
threatened strikes, picketing, handbilling or other work stoppages or
slowdowns at facilities of any of the Guarantors which, in any case,
individually or in the aggregate could reasonably be expected to have
a Material Adverse Effect.

(v) Environmental Matters. Except as disclosed on
Schedule 7.03(v):

(1) Neither the Company nor any
Subsidiary of the Company has received any Environmental
Complaint from any Governmental Authority or private Person
alleging that it or any prior or subsequent owner of its
property is a potentially responsible party under CERCLA and
none of the Guarantors has any reason to believe that such an
Environmental Complaint might be received. There are no
pending or, to the Guarantors' knowledge, threatened
Environmental Complaints relating to the Company or any
Subsidiary of the Company or, to the Guarantors'

<PAGE> 27

knowledge, any prior or subsequent owner of their property
pertaining to, or arising out of, any Environmental Violations.

(2) Except for conditions, violations or
failures which individually or in the aggregate could not
reasonably be expected to have a Material Adverse Effect,
there are no circumstances at, on or under the Company's and
its Subsidiaries' property that constitute a breach of or
noncompliance with any of the Environmental Laws, and there
are no past or present Environmental Violations at, on or
under such property or, to the Guarantors' knowledge, at, on
or under adjacent property, that prevent compliance with the
Environmental Laws at such property or that otherwise would
require that any removal, remediation or other corrective
action or cleanup be taken with respect to such property or
any adjacent property.

(3) Neither the property of the Company
and its Subsidiaries nor any structures, improvements,
equipment, fixtures, activities or facilities thereon or
thereunder contain or use Hazardous Substances except in
compliance with Environmental Laws or under circumstances
where any failure to comply with Environmental Laws could not
reasonably be expected, individually or in the aggregate, to
have a Material Adverse Effect. There are no processes,
facilities, operations, equipment or any other activities at,
on or under such property, or, to the Guarantors' knowledge,
at, on or under adjacent property, that have resulted or are
currently resulting in the release or threatened release of
Hazardous Substances onto such property, except to the extent
that such releases or threatened releases are not a breach of
or otherwise not a violation of the Environmental Laws, and
except where such releases or threatened releases individually
or in the aggregate could not reasonably be expected to have a
Material Adverse Effect.

(4) There are no aboveground storage
tanks, underground storage tanks or underground piping
associated with such tanks, used for the management of
Hazardous Substances at, on or under the property of the
Company and its Subsidiaries that (a) do not have a full
operational secondary containment system in place, and (b) are
not otherwise in compliance with all Environmental Laws.
There are no abandoned underground storage tanks or
underground piping associated with such tanks, previously used
for the management of Hazardous Substances at, on or under
such property that have not either been closed in place in
accordance with Environmental Laws or removed in compliance
with all applicable Environmental Laws and no contamination
associated with the use of such tanks exists on such property.

(5) The Company and each Subsidiary of
the Company has obtained all permits, licenses,
authorizations, plans and approvals necessary under the
Environmental Laws for the conduct of its business as
presently conducted except where the failure to do so
individually or in the aggregate could not reasonably be
expected to have a Material Adverse Effect. The Company and
each Subsidiary of the Company has submitted all notices,
reports and other filings required by the

<PAGE> 28

Environmental Laws to be submitted to a Governmental Authority
which pertain to past and current operations on their property
except where the failure to do so individually or in the
aggregate could not reasonably be expected to have a Material
Adverse Effect.

(6) Except for violations which
individually or in the aggregate could not reasonably be
expected to have a Material Adverse Effect, all past and
present on-site generation, storage, processing, treatment,
recycling, reclamation, disposal or other use or management of
Hazardous Substances at, on, or under the property of the
Company and its Subsidiaries and all off-site transportation,
storage, processing, treatment, recycling, reclamation,
disposal or other use or management of Hazardous Substances
has been done in accordance with the Environmental Laws.

(w) Senior Debt Status. The Obligations of the Company
under this Agreement and the Guarantors under each of the other
Operative Agreements to which they are a party do rank and will rank
at least pari passu in priority of payment with all other Indebtedness
of such Person except Indebtedness of such Guarantor to the extent
secured by Permitted Liens. There is no Lien upon or with respect to
any of the properties or income of any Guarantor or Subsidiary of any
Guarantor which secures indebtedness or other obligations of any
Person except for Permitted Liens.

(x) Lease. Upon the execution and delivery of each
Lease, (i) each Lessee will have unconditionally accepted the Property
subject to such Lease, (ii) no offset will exist with respect to any
Project Loan Basic Rent or other sums payable under such Lease (other
than Developer Basic Rent or Developer Equity pursuant to Section
24.01(b) of each Lease) and (iii) no Basic Rent or Supplemental Rent
under any Lease will have been prepaid.

7.4. Updates to Schedules. Should any of the information
or disclosures provided on any of the Schedules attached to the Guaranty become
outdated or incorrect in any material respect, the Company shall promptly
provide the Agent in writing with such revisions or updates to such Schedule as
may be necessary or appropriate to update or correct same; provided that,
except for the amendment of Schedule II to the Credit Agreement as contemplated
by, or pursuant to, Sections 2.09 and 12.08(a) of the Credit Agreement, no
Schedule shall be deemed to have been amended, modified or superseded by any
such correction or update, nor shall any breach of warranty or representation
resulting from the inaccuracy or incompleteness of any such Schedule be deemed
to have been cured thereby, unless and until the Required Lenders, in their
sole and absolute discretion, shall have accepted in writing such revisions or
updates to such Schedule.

ARTICLE VIII.
REPRESENTATIONS AND WARRANTIES ON FUNDING DATES

8.1. Representations and Warranties on Property Closing
Dates. The Company hereby represents and warrants as of each Property Closing
Date (except to the extent such representations and warranties expressly relate
to an earlier date) as follows:

<PAGE> 29

(a) Representations and Warranties. The representations
and warranties of the Lessees set forth in the Operative Agreements
are true and correct in all material respects. The Lessees are in
compliance with their respective obligations under the Operative
Agreements and there exists no Default or Event of Default by any of
the Lessees under any of the Operative Agreements. No Default or
Event of Default will occur under any of the Operative Agreements as a
result of, or after giving effect to, the Loans requested by the
Requisition on such Property Closing Date.

(b) Authorization by the Lessees. The execution and
delivery of each Lease, each Memorandum of Lease and Consent to the
Assignment of Lease delivered by the applicable Lessee on such
Property Closing Date and the performance of the obligations of the
applicable Lessee under each such Lease, each Memorandum of Lease and
each such Consent to Assignment of Lease has been duly authorized by
all requisite corporate action of the applicable Lessee.

(c) Execution and Delivery by the Lessees. Each Lease,
each Memorandum of Lease and each Consent to Assignment delivered on
such Property Closing Date by the Lessee has been duly executed and
delivered by the applicable Lessee.

(d) Valid and Binding Obligations. Each Lease, each
Memorandum of Lease and each Consent to Assignment of Lease delivered
by the relevant Lessee on such Property Closing Date is a legal, valid
and binding obligation of the Lessee, enforceable against the Lessee
in accordance with its respective terms, subject to the effects of
bankruptcy, insolvency, reorganization, moratorium and other similar
laws relating to or affecting creditors' rights generally, general
equitable principles (whether considered in a proceeding in equity or
at law) and an implied covenant of good faith and fair dealing.

(e) Recording of Documents. Each of the Deed or
Memorandum of Ground Lease, the Lease, the Memorandum of Lease, the
Assignment of Lease, the Reassignment of Leases and the Mortgage
delivered on such Property Closing Date will be recorded with the
appropriate Governmental Authorities in the order set forth in this
paragraph, and the UCC Financing Statements with respect to the
Property being acquired will be filed with the appropriate
Governmental Authorities, and upon such recording or filing, the
Assignment of Lease, Reassignment of Leases, the UCC Financing
Statements and the Mortgage will constitute valid and perfected first
priority security interests in the applicable collateral.

(f) Flood Zone. No portion of any Property being
acquired by any Lessor on such Property Closing Date is located in an
area identified as a special flood hazard area by the Federal
Emergency Management Agency or other applicable agency, or if any such
Property is located in an area identified as a special flood hazard
area by the Federal Emergency Management Agency or other applicable
agency, then flood insurance has been obtained for such Property in
accordance with Section 15.02(b) of each Lease and in accordance with
the National Flood Insurance Act of 1968, as amended.

<PAGE> 30

(g) Insurance Coverage. The applicable Lessee or
Developer has obtained insurance coverage for each Property being
acquired by any Lessor on such Property Closing Date which meet the
requirements of Article XV of each Lease and all of such coverage is
in full force and effect.

(h) Legal Requirements. Each Property being acquired by
a Lessor on such Property Closing Date (i) complies in all respects
with all Legal Requirements (including, without limitation, all zoning
and land use laws and Environmental Laws); or (ii) does not comply
with certain state and local land use, zoning and related legal
requirements (other than Environmental Laws) which have been
identified in writing to the Agent and which the Agent has deemed
immaterial.

(i) Consents, etc. All consents, licenses and building
permits required by all Legal Requirements for construction,
completion, occupancy and operation of each Property being acquired on
such Property Closing Date (i) have been obtained and are in full
force and effect; or (ii) have not been obtained (such consents,
licenses and building permits having been identified in writing to the
Agent and which the Agent has deemed immaterial).

(j) Utilities. All utility services and facilities
necessary for the construction of the Improvements existing, or to be
constructed, on each Property being acquired on such Property Closing
Date (including, without limitation, gas, electrical, water and sewage
services and facilities) are available at the boundaries of each such
Property.

8.2. Representations and Warranties Upon Initial
Construction Advances. The Lessees hereby represent and warrant as of each
date on which an Initial Construction Advance is made (except to the extent
such representations and warranties expressly relate to an earlier date) as
follows:

(a) Representations and Warranties. The representations
and warranties of the Lessees set forth in the Operative Agreements
are true and correct in all material respects. The Lessees are in
compliance with their respective obligations under the Operative
Agreements and there exists no Default or Event of Default by any of
the Lessees under any of the Operative Agreements. No Default or
Event of Default will occur under any of the Operative Agreements as
a result of, or after giving effect to, the Loans requested by the
Requisition on such date.

(b) Projected Budget. The cost of construction of the
Improvements on each Property shall not exceed an amount equal to one
hundred fifty percent (150%) of the amount reflected in the initial
Construction Budget delivered on the Property Closing Date.

(c) Security for the Advance. The related Project Loan
(which is not an Agree Project Loan) is secured by the Lien of the
Mortgage, and there have been no Liens placed against the applicable
Property since the recordation of the Mortgage other than Permitted
Liens.

<PAGE> 31

8.3. Representations and Warranties Upon the Date of Each
Construction Advance that is not an Initial Construction Advance. The Lessees
hereby represent and warrant as of each date on which a Construction Advance is
made (except to the extent such representations and warranties expressly relate
to an earlier date), when such advance is not an Initial Construction Advance,
as follows:

(a) Representations and Warranties. The representations
and warranties of the Lessees set forth in the Operative Agreements
(including the representations and warranties set forth in Section
8.02) are true and correct in all material respects. The Lessees are
in compliance with their respective obligations under the Operative
Agreements and there exists no Default or Event of Default by any of
the Lessees under any of the Operative Agreements. No Default or
Event of Default will occur under any of the Operative Agreements as a
result of, or after giving effect to, the Loans requested by the
Requisition on such date on which a Construction Advance is made.

(b) Security for the Advance. The related Project Loan
is secured by the Lien of the Mortgage, and there have been no Liens
placed against the applicable Property since the recordation of the
Mortgage other than Permitted Liens.

ARTICLE IX.
PAYMENT OF FEES AND EXPENSES

9.01. Transaction Expenses. (a) The Lessees agree, for the
benefit of the Investor, the Trust Company, the Owner Trustee, the Agents and
the Lenders, to pay, or cause to be paid, on the Effective Date all reasonable
fees, expenses and disbursements of the Trust Company's and the Agents' counsel
and (ii) the Agents, to the terms and conditions of the Fee Letters) in
connection with the transactions contemplated by the Operative Agreements and
incurred in connection with such Effective Date, including all Transaction
Expenses, and all other reasonable expenses in connection with such Effective
Date, including, without limitation, all expenses relating to all fees, taxes
and expenses for the recording, registration and filing of documents.

(b) The Lessees agree, for the benefit of the Investor,
the Trust Company, the Owner Trustee, the Agents and the Lenders to pay, or
cause to be paid, on each Property Closing Date all reasonable fees, expenses
and disbursements of each of the Trust Company's and the Real Estate
Administrative Agent's counsel and the Administrative Agent's counsel in
connection with the transactions contemplated by the Operative Agreements and
incurred in connection with such Property Closing Date, including, without
limitation, all fees, taxes and expenses for the recording, registration and
filing of documents.

9.02. Brokers' Fees and Stamp Taxes. The Lessees agree,
for the benefit of the Investor, the Trust Company, the Owner Trustee, the
Agents and the Lenders to pay or cause to be paid any brokers' fees and any and
all stamp, transfer and other similar taxes, fees and excises, if any,
including any interest and penalties, which are payable in connection with the
transactions

<PAGE> 32

contemplated by this Agreement and the other Operative Agreements; provided
that the foregoing shall not preclude any contribution for such charges by the
Lessors.

9.03. Certain Fees and Expenses. (a) The Lessees agree,
for the benefit of the Investor, the Trust Company, the Owner Trustee, the
Agents and the Lenders to pay or cause to be paid (i) the initial and annual
Trust Company's fee and the initial and annual fee of Lord Securities
Corporation, as manager of the Investor pursuant to a management agreement
between the Investor and Lord Securities Corporation which has been delivered
to the Lessees and all expenses of the Trust Company and any necessary
co-trustees (including reasonable counsel fees and expenses) or any successor
owner trustee, for acting as Owner Trustee, (ii) all costs and expenses
incurred by the Lessees, the Agents, the Investor or the Trust Company in
entering into any future amendments or supplements with respect to any of the
Operative Agreements, whether or not such amendments or supplements are
ultimately entered into, or giving or withholding of waivers of consents hereto
or thereto and (iii) all costs and expenses incurred by the Agents, the
Lenders, the Owner Trustee or the Trust Company in connection with any purchase
of any Property by the Lessees pursuant to any Lease.

9.04. Credit Agreement, Project Loan Agreement and Related
Obligations. (a) The Lessees agree, for the benefit of the Investor, the Trust
Company, the Owner Trustee, the Agents and the Lenders to pay, on or before the
due date thereof, all costs, expenses and other amounts (other than principal
and interest on the Loans and the Project Loans, but including breakage costs,
interest on overdue amounts and all costs payable pursuant to Sections 5.06 and
12.05 of the Credit Agreement, Section 3.04 of each Project Loan Agreement or
otherwise) required to be paid by the Owner Trustee under the Operative
Agreements to which it is a party.

(b) The Lessees agree, for the benefit of the Owner
Trustee, to pay the Administrative Agent and the Real Estate Administrative
Agent annual administrative fees for services as agent under the Credit
Agreement in the amount agreed upon by the Administrative Agent and the Lessees
in the Fee Letter, payable in advance on the Effective Date and on each
anniversary of the such date prior to the Maturity Date.

9.05. Fees. The Lessees agree to pay to the Administrative
Agent for the account of each Lender, on the due date thereof, the Facility Fee
as set forth in the Credit Agreement.

ARTICLE X.
OTHER COVENANTS AND AGREEMENTS

10.01. Cooperation with the Lessees. The Owner Trustee, the
Investor and the Agents shall, to the extent reasonably requested by the
Lessees (but without assuming additional liabilities on account thereof), at
the Lessees' sole cost and expense, cooperate with the Lessees in connection
with its covenants contained herein including, without limitation, at any time
and from time to time, upon the request of the Lessees, to promptly and duly
execute and deliver any and all such further instruments, documents and
financing statements (and continuation statements related thereto) as the
Lessees may reasonably request in order to perform such covenants.

<PAGE> 33

10.02. Covenants of the Owner Trustee and the Investor.
Each of the parties hereby agree that so long as this Agreement is in effect:

(a) Discharge of Liens. Each of the Investor and the
Owner Trustee (both in its individual capacity and as Owner Trustee) will not
create or permit to exist at any time, and will, at its own cost and expense,
promptly take such action as may be necessary duly to discharge, or to cause to
be discharged, all Liens on the Trust Estate attributable to it or any of its
Affiliates; provided, however, that the Owner Trustee shall not be required to
so discharge any such Lessor Lien while the same is being contested in good
faith by appropriate proceedings diligently prosecuted so long as such
proceedings shall not involve any material danger of impairment of the Liens of
the Security Documents or of the sale, forfeiture or loss of, and shall not
interfere with the use or disposition of, any Property or title thereto or any
interest therein or the payment of Rent or the Trust Estate.

(b) Trust Agreement. Without prejudice to any right
under the Trust Agreement of the Trust Company to resign, or the Investor's
right under the Trust Agreement to remove the institution acting as owner
trustee, the Investor hereby agrees with the Lessees and the Agents (i) not to
terminate or revoke the trust created by the Trust Agreement, (ii) not to
amend, supplement, terminate or revoke or otherwise modify any provision of the
Trust Agreement in such a manner as to adversely affect the rights of any such
party without the prior written consent of such party, (iii) to comply with all
of the terms of the Trust Agreement, the nonperformance of which would
adversely affect such party and (iv) not to remove the Trust Company as Owner
Trustee.

(c) Successor Trust Company. The Trust Company or any
successor may resign as Owner Trustee, a successor Owner Trustee may be
appointed, and a corporation may become the Owner Trustee under the Trust
Agreement, only with the consent of the Lessees and the Agents which consent
shall not be unreasonably withheld or delayed.

(d) Indebtedness; Other Business. Neither the Owner
Trustee, in its capacity as Owner Trustee and not in its individual capacity,
nor the Investor shall contract for, create, incur or assume any indebtedness,
or enter into any business or other activity, other than pursuant to or under
the Operative Agreements.

(e) No Violation. The Investor will not instruct the
Owner Trustee or the Trust Company to take any action in violation of the terms
of any Operative Agreement.

(f) No Voluntary Bankruptcy. Neither the Owner Trustee
nor the Investor shall (i) commence any case, proceeding or other action under
any existing or future law of any jurisdiction, domestic or foreign, relating
to bankruptcy, insolvency, reorganization, arrangement, winding-up,
liquidation, dissolution, composition or other relief with respect to it or its
debts, or (ii) seek appointment of a receiver, trustee, custodian or other
similar official for it or for all or any substantial benefit of its creditors;
and neither the Investor nor the Owner Trustee shall take any action in
furtherance of, or indicating its consent to, approval of, or acquiescence in,
any of the acts set forth in this paragraph.

<PAGE> 34

(g) Change of Chief Place of Business. The Owner Trustee
and the Investor shall give prompt notice to the Lessees and the Administrative
Agent if the Owner Trustee's chief place of business or chief executive office,
or the office where the records concerning the accounts or contract rights
relating to the Properties are kept, shall cease to be located at the location
described in Section 7.02, or if it shall change its name, identity or
corporate structure.

(h) Operative Agreements. Neither the Owner Trustee nor
the Investor shall consent to or permit, and the Investor shall not take any
action for the purpose of permitting the Owner Trustee to consent to or permit,
any amendment, supplement or other modification of the terms and provisions of
the Operative Agreements, in each case without the prior written consent of the
Lessees and the Agents.

10.03. Modifications Approved by Real Estate Administrative
Agent. The Real Estate Administrative Agent shall have the authority, without
obtaining the consent of the Lenders, to agree with the Lessees to make
modifications to the forms of Lease and Project Loan Documents or modifications
to the structure of a Project Loan, if, in the reasonable judgment of the Real
Estate Administrative Agent, such modifications do not materially adversely
effect the rights or remedies of the Lenders, taken as a whole, with respect to
such Project Loan. No such modifications shall have the effect of (a)
extending the Maturity Date of any Project Loan, (b) decreasing the Rent under
a Lease or the Interest Rate under a Project Loan Note, (c) releasing any
Lessee or Lessor from its obligations under a Lease or Project Loan Document or
releasing any collateral, without the consent of each Lender affected thereby,
or (d) waiving in any material respect the guidelines set forth in Exhibit H.

ARTICLE XI.
CREDIT AGREEMENT AND PROJECT LOAN AGREEMENT RIGHTS

11.01. Lessee's Credit Agreement Rights. Notwithstanding
anything to the contrary contained in the Credit Agreement, the Agents, the
Lessees, the Investor and the Owner Trustee hereby agree that, unless and until
a Lease Default or a Lease Event of Default shall have occurred and be
continuing, the applicable Lessee, as agent on behalf of the Owner Trustee,
shall have the right to make all decisions on behalf of the Owner Trustee under
the Credit Agreement.

11.02. Lessee's Project Loan Agreement Rights.
Notwithstanding anything to the contrary contained in any Project Loan
Agreement, the Agents and the Owner Trustee hereby agree that, unless and until
a Lease Default or a Lease Event of Default shall have occurred and be
continuing, the applicable Lessee, (a) shall have the right to waive the
provisions of each of the Project Loan Agreements listed on Schedule 11.02 and
(b) shall have the right to make all requests for Project Loan Advances on
behalf of each Lessor.

11.03. Lessee's Operative Agreement Rights. Each of the
parties hereto agree that, unless and until a Lease Default or a Lease Event of
Default shall have occurred and be continuing, it will not enter into any
amendments or modifications of any of the Operative Agreements without the
prior written consent of the Company and otherwise as permitted by under the
Operative Agreements.

<PAGE> 35

11.04. Agent's Project Loan Agreement Rights.
Notwithstanding anything to the contrary contained in any Project Loan
Agreement or Agree Project Loan Agreement, the Agents, the Lessees, the
Investor and the Owner Trustee hereby agree that the Real Estate Administrative
Agent, as agent on behalf of the Owner Trustee, shall have the right to make
all decisions, receive all payments and take all actions on behalf of the Owner
Trustee under each Project Loan Agreement.

ARTICLE XII.
TRANSFER OF INTEREST

12.01. Restrictions on Transfer. The Investor may not,
directly or indirectly, assign, convey or otherwise transfer any of its right,
title or interest in or to the Trust Estate or the Trust Agreement nor shall
there be any change in Control of the Investor without the consent of the Agent
and the Lessees. Any transfer by the Investor as above provided, shall only be
effected pursuant to an agreement in form and substance reasonably satisfactory
to the Administrative Agent, the Owner Trustee, the Lessees and their
respective counsel.

12.02. Effect of Transfer. From and after any transfer
effected in accordance with this Article XII, the transferor shall be released,
to the extent of such transfer, from its liability hereunder and under the
other documents to which it is a party in respect of obligations to be
performed on or after the date of such transfer. Notwithstanding any transfer
of all or a portion of the Investor's interest as provided in this Article XII,
the transferor shall be entitled to all benefits accrued and all rights vested
prior to such transfer including, without limitation, rights to indemnification
under any such document.

ARTICLE XIII.
INDEMNIFICATION

13.01. General Indemnity. The Lessees, jointly and
severally, whether or not any of the transactions contemplated hereby shall be
consummated, hereby assume liability for and agree to defend, indemnify and
hold harmless each Indemnified Person on an After Tax Basis from and against
any Claims, which may be imposed on, incurred by or asserted against an
Indemnified Person (other than to the extent such Claims arise from the gross
negligence, willful misconduct or willful breach of such Indemnified Person) in
any way relating to or arising or alleged to arise out of the execution,
delivery, performance or enforcement of this Agreement, any Lease or any other
Operative Agreement or on or with respect to any Property or Improvements,
including, without limitation, Claims in any way relating to or arising or
alleged to arise out of (a) the financing, refinancing, purchase, acceptance,
rejection, ownership, design, construction, delivery, acceptance, nondelivery,
leasing, subleasing, possession, use, operation, repair, modification,
transportation, condition, sale, return, repossession (whether by summary
proceedings or otherwise), or any other disposition of a Property or any part
thereof; (b) any latent or other defects in any property whether or not
discoverable by an Indemnified Person or the Lessees; (c) a violation of
Environmental Laws, Environmental Claims or other loss of or damage to any
property or the environment relating to any Property, any Lease, any
Development Agency Agreement or the Lessees; (d) the Operative

<PAGE> 36

Agreements, or any transaction contemplated thereby; (e) any breach by any of
the Lessees of any of their representations or warranties under the Operative
Agreements or failure by any of the Lessees to perform or observe any covenant
or agreement to be performed by them under any of the Operative Agreements; (f)
the transactions contemplated hereby or by any other Operative Agreement, in
respect of the application of Parts 4 and 5 of Subtitle B of Title I of ERISA;
and (g) personal injury, death or property damage, including Claims based on
strict liability in tort; but excluding (i) Claims (except Claims against the
Trust Company) to the extent such Claims arise solely out of events occurring
after the expiration of the Terms of all Leases and after a Lessee's discharge
of all its obligations under the Operative Agreements or (ii) any Taxes
including any Claim (or any portion of a Claim) made upon an Indemnified Person
by a third party that at its origin is based upon a Tax (other than amounts
necessary to make any payments hereunder on an After Tax Basis, where the
Lessees are otherwise specifically required to make such payments on an After
Tax Basis). The Lessees shall be entitled to control, and shall assume full
responsibility for the defense of any Claim; provided, however, that the Owner
Trustee and the Trust Company, the Agents and the Investor named in such Claim,
may each retain separate counsel at the expense of the Lessees; provided,
further, that such parties shall use reasonable efforts to share counsel to the
extent practicable and minimize the fees of counsel being reimbursed hereunder.
The Lessees and each Indemnified Person agree to give each other prompt written
notice of any Claim hereby indemnified against but the giving of any such
notice by an Indemnified Person shall not be a condition to the Lessees'
obligations under this Section 13.01, except to the extent failure to give such
notice prejudices such Lessee's rights hereunder. After an Indemnified Person
has been fully indemnified for a Claim pursuant to this Section 13.01, and so
long as no Event of Default under any Lease shall have occurred and be
continuing, the Lessees shall be subrogated to any right of such Indemnified
Person (except against another Indemnified Person) with respect to such Claim.

13.02. General Tax Indemnity. (a) Indemnification. The
Lessees shall pay and assume liability for, and hereby agree to indemnify,
protect and defend each Property and all Tax Indemnitees, and hold them
harmless against, all Impositions on an After Tax Basis. Each Tax Indemnitee
agrees to use good-faith efforts (but not including increasing liability for
Taxes not indemnifiable hereunder) to minimize the amount of Taxes
indemnifiable by the Lessees during any taxable year; provided that this
sentence shall not be construed to limit or impair any right of the Owner
Trustee set forth in the Operative Agreements. Each Tax Indemnitee further
agrees to comply with recommendations made by the Lessees regarding techniques
to minimize Taxes indemnifiable hereunder, provided that (i) the Lessees agree
to make payments to (or otherwise indemnify) such Tax Indemnitee against any
cost or expense arising from instituting the Lessees' recommendations and (ii)
such Tax Indemnitee determines in its sole discretion that such recommendations
will not have an adverse impact on such Tax Indemnitee.

(b) Refunds. Provided that no Default or Event of
Default has occurred and is continuing, if any Tax Indemnitee obtains a refund
or a reduction in a liability (but only if such reduction relates to a Tax not
otherwise indemnifiable hereunder and has not been taken into account in
determining the amount of a payment on an After Tax Basis) as a result of any
Imposition paid or reimbursed by the Lessees (in whole or in part), such Tax
Indemnitee shall promptly pay to the Lessees the lesser of (x) the amount of
such refund or reduction in liability and (y) the amount previously so paid or
advanced by the Lessees, in each case net of reasonable expenses not already
paid or reimbursed by the Lessees.

<PAGE> 37

(c) Payments. (i) Subject to the terms of Section
13.02(g), the Lessees shall pay or cause to be paid all Impositions directly to
the taxing authorities where feasible and otherwise to the Tax Indemnitee, as
appropriate, and the Lessees shall at their own expense, upon such Tax
Indemnitee's reasonable request, furnish to such Tax Indemnitee copies of
official receipts or other satisfactory proof evidencing such payment.

(ii) In the case of Impositions for which no contest is
conducted pursuant to Section 13.02(g) and which the Lessees pay directly to
the taxing authorities, the Lessees shall pay such Impositions prior to the
latest time permitted by the relevant taxing authority for timely payment. In
the case of Impositions for which the Lessees reimburse a Tax Indemnitee, the
Lessees shall do so within twenty (20) days after receipt by the Lessees of
demand by such Tax Indemnitee describing in reasonable detail the nature of the
Imposition and the basis for the demand (including the computation of the
amount payable), but in no event shall the Lessees be required to pay such
reimbursement prior to thirty (30) days before the latest time permitted by the
relevant taxing authority for timely payment. In the case of Impositions for
which a contest is conducted pursuant to Section 13.02(g), the Lessees shall
pay such Impositions or reimburse such Tax Indemnitee for such Impositions, to
the extent not previously paid or reimbursed pursuant to subsection (a), prior
to the latest time permitted by the relevant taxing authority for timely
payment after conclusion of all contests under Section 13.02(g).

(iii) Impositions imposed with respect to a Property for a
billing period during which a Lease expires or terminates with respect to such
Property (unless the applicable Lessee has exercised the Purchase Option with
respect to such Property) shall be adjusted and prorated on a daily basis
between the applicable Lessee and the applicable Lessor, whether or not such
Imposition is imposed before or after such expiration or termination and each
party shall pay or reimburse the other for each party's pro rata share thereof.

(iv) At the Lessees' request, the amount of any
indemnification payment by the Lessees pursuant to subsection (a) shall be
verified and certified by an independent public accounting firm mutually
acceptable to the Lessees and the Tax Indemnitee. The fees and expenses of
such independent public accounting firm shall be paid by the Lessees unless
such verification shall result in an adjustment in the Lessees' favor of 5% or
more of the payment as computed by the Tax Indemnitee, in which case such fee
shall be paid by the Tax Indemnitee.

(d) Reports and Returns. (i) The Lessees shall be
responsible for preparing and filing any real and personal property or ad
valorem tax returns in respect of each Property. In case any other report or
tax return shall be required to be made with respect to any obligations of the
Lessees under or arising out of Section 13.02(a) and of which the Lessees have
knowledge or should have knowledge, the Lessees, at their sole cost and
expense, shall notify the relevant Tax Indemnitee of such requirement and
(except if such Tax Indemnitee notifies the Lessees that such Person intends to
file such report or return) (A) to the extent required or permitted by and
consistent with Legal Requirements, make and file in its own name such return,
statement or report; and (B) in the case of any other such return, statement or
report required to be made in the name of such Tax Indemnitee, advise such Tax
Indemnitee of such fact and prepare such return, statement or report for filing
by such Tax Indemnitee or, where such return, statement or report shall be
required to reflect items in addition to any obligations of the Lessees under
or arising out of Section 13.02(a), provide

<PAGE> 38

such Tax Indemnitee at the Lessees' expense with information sufficient to
permit such return, statement or report to be properly made with respect to any
obligations of the Lessees under or arising out of subsection (a). Such Tax
Indemnitee shall, upon the Lessees' request and at the Lessees' expense,
provide any data maintained by such Tax Indemnitee (and not otherwise within
the control of the Lessees) with respect to each Property which the Lessees may
reasonably require to prepare any required tax returns or reports;

(e) Income Inclusions. If as a result of the payment or
reimbursement by the Lessees of any expenses of the Owner Trustee or the
payment of any Transaction Expenses incurred in connection with the
transactions contemplated by the Operative Agreements, the Owner Trustee, the
Investor or any of their respective Affiliates, shall suffer a net increase in
any federal, state or local income tax liability, the Lessees shall indemnify
the Owner Trustee, the Investor or their Affiliates (without duplication of any
indemnification required by Section 13.02(a)) on an After Tax Basis for the
amount of such increase. The calculation of any such net increase shall take
into account any current or future tax savings realized or reasonably expected
to be realized by the Owner Trustee, or the Investor or such Affiliate, in
respect thereof, as well as any interest, penalties and additions to tax
payable by the Owner Trustee, the Investor or such Affiliate, in respect
thereof;

(f) Withholding Taxes. As between the Lessees and the
Owner Trustee, the Lessees shall be responsible for, and the Lessees shall
indemnify and hold harmless the Owner Trustee (without duplication of any
indemnification required by Section 13.02(a)) on an After Tax Basis against,
any obligation for United States withholding taxes imposed in respect of the
interest payable on the Notes to the extent, but only to the extent, the Owner
Trustee has actually paid funds to a taxing authority with respect to such
withholding taxes (and, if the Owner Trustee receives a demand for such payment
from any taxing authority, the Lessees shall discharge such demand on behalf of
the Owner Trustee);

(g) Contests of Impositions. (i) If a written claim is
made against any Impositions Indemnitee or if any proceeding shall be commenced
against such Impositions Indemnitee (including a written notice of such
proceeding), for any Impositions, such Impositions Indemnitee shall promptly
notify the Lessees in writing and shall not take action with respect to such
claim or proceeding without the consent of the Lessees for thirty (30) days
after the receipt of such notice by the Lessees; provided, however, that, in
the case of any such claim or proceeding, if action shall be required by law or
regulation to be taken prior to the end of such 30-day period, such Impositions
Indemnitee shall, in such notice to the Lessees, inform the Lessees, and no
action shall be taken with respect to such claim or proceeding without the
consent of the Lessees before the termination of such shorter period; provided,
further, that the failure of such Impositions Indemnitee to give the notices
referred to this sentence shall not diminish the Lessees' obligation hereunder
except to the extent such failure precludes the Lessees from contesting all or
part of such claim.

(ii) If, within thirty (30) days of receipt of such notice
from the Impositions Indemnitee (or such shorter period as the Impositions
Indemnitee is required by law or regulation for the Impositions Indemnitee to
commence such contest), the Lessees shall request in writing that such
Impositions Indemnitee contest such Imposition, the Impositions Indemnitee
shall, at the expense of the Lessees, in good faith conduct and control such
contest (including, without limitation, by pursuit of appeals) relating to the
validity, applicability or amount of such Impositions (provided,

<PAGE> 39

however, that (A) if such contest can be pursued independently from any other
proceeding involving a tax liability of such Impositions Indemnitee, the
Impositions Indemnitee, at the Lessees' request, shall allow the Lessees to
conduct and control such contest and (B) in the case of any contest, the
Impositions Indemnitee may request the Lessees to conduct and control such
contest) by, in the sole discretion of the Person conducting and controlling
such contest, (1) resisting payment thereof, (2) not paying the same except
under protest, if protest is necessary and proper, (3) if the payment be made,
using reasonable efforts to obtain a refund thereof in appropriate
administrative and judicial proceedings, or (4) taking such other action as is
reasonably requested by the Lessees from time to time.

(iii) The party controlling any contest shall consult in
good faith with the non-controlling party and shall keep the non- controlling
party reasonably informed as to the conduct of such contest; provided that all
decisions ultimately shall be made in the sole discretion of the controlling
party. The parties agree that an Impositions Indemnitee may at any time
decline to take further action with respect to the contest of any Imposition
and may settle such contest if such Impositions Indemnitee shall waive its
rights to any indemnity from the Lessees that otherwise would be payable in
respect of such claim (and any future claim by any taxing authority with
respect to other taxable periods that are based, in whole or in part, upon the
resolution of such claim) and shall pay to the Lessees any amount previously
paid or advanced by the Lessees pursuant to this Section 13.02 by way of
indemnification or advance for the payment of an Imposition.

(iv) Notwithstanding the foregoing provisions of this
Section 13.02, an Impositions Indemnitee shall not be required to take any
action and the Lessees shall not be permitted to contest any Impositions in its
own name or that of the Impositions Indemnitee unless (A) the Lessees shall
have agreed to pay and shall pay to such Impositions Indemnitee on demand and
on an After Tax Basis all reasonable costs, losses and expenses that such
Impositions Indemnitee actually incurs in connection with contesting such
Impositions, including, without limitation, all reasonable legal, accounting
and investigatory fees and disbursements, (B) in the case of a claim that must
be pursued in the name of an Impositions Indemnitee (or an Affiliate thereof),
the amount of the potential indemnity (taking into account all similar or
logically related claims that have been or could be raised in any audit
involving such Impositions Indemnitee) for which the Lessees may be liable to
pay an indemnity under this Section 13.02 exceeds $1,000,000, (C) the
Impositions Indemnitee shall have reasonably determined that the action to be
taken will not result in any material danger of sale, forfeiture or loss of any
Property, or any part thereof or interest therein, will not interfere with the
payment of Rent, and will not result in risk of criminal liability, (D) if such
contest shall involve the payment of the Imposition prior to the contest, the
Lessees shall provide to the Impositions Indemnitee an interest-free advance in
an amount equal to the Imposition that the Impositions Indemnitee is required
to pay (with no additional net after-tax cost to such Impositions Indemnitee),
(E) in the case of a claim that must be pursued in the name of an Impositions
Indemnitee (or an Affiliate thereof), the Lessees shall have provided to such
Impositions Indemnitee an opinion of independent tax counsel selected by the
Impositions Indemnitee and reasonably satisfactory to the Lessees stating that
a reasonable basis exists to contest such claim (or, in the case of an appeal
of an adverse determination, an opinion of such counsel to the effect that
there is substantial authority for the position asserted in such appeal) and
(F) no Event of Default shall have occurred and be continuing. In no event
shall an Impositions Indemnitee be required to appeal an adverse judicial
determination to the United State Supreme Court. In addition, an Impositions

<PAGE> 40

Indemnitee shall not be required to contest any claim in its name (or
that of an Affiliate) if the subject matter thereof shall be of a continuing
nature and shall have previously been decided adversely by a court of competent
jurisdiction pursuant to the contest provisions of this Section 13.02, unless
there shall have been a change in law (or interpretation thereof) and the
Impositions Indemnitee shall have received, at the Lessees' expense, an opinion
of independent tax counsel selected by the Impositions Indemnitee and reasonably
acceptable to the Lessees stating that as a result of such change in law (or
interpretation thereof), it is more likely than not that the Impositions
Indemnitee will prevail in such contest.

ARTICLE XIV.
AGREE PROJECTS

14.01. Agree Projects Generally. The Agents and the Lenders
agree that from time to time, any Lessee shall be permitted to enter into a
transaction for the acquisition and leasing of certain properties with
affiliates of The Agree Realty Trust, a Delaware corporation ("Agree") as
follows (each, an "Agree Project"): (a) the Lenders will make Loans to the
Owner Trustee from time to time as described in this Agreement and in the
Credit Agreement, (b) the Guarantors will unconditionally guarantee certain of
the obligations of the Owner Trustee to the Lenders, (c) the Owner Trustee will
use the proceeds of the Loans solely to make Project Loans (each, an "Agree
Project Loan") to special purpose entities, the entire beneficial interest of
which entity shall be owned by another special purpose entity controlled by an
affiliate of Lord Securities, Inc. and which entity otherwise meets the
guidelines and performs the covenants contained in Exhibit H (an "Agree SPC"),
(d) the Agree SPC's will use the proceeds of each Agree Project Loan solely for
the purpose of making a capital contribution to a special purpose entity which
will be a limited liability company and which otherwise meets all of the
requirements of a Lessor under this Agreement and the other Operative
Agreements (an "Agree Lessor") who will use such capital contribution solely
for the purpose of acquiring, leasing and/or constructing properties to be used
by the applicable Lessee as stores or other facilities, (e) the applicable
Lessee will unconditionally guarantee to the Owner Trustee the completion of
each Property and (f) upon the acquisition of each Property, the applicable
Lessee will enter into a Lease with respect to such Property. The aggregate
amount of Agree Project Loans may not exceed $75,000,000 without the prior
consent of each Lender.

14.02. Execution of Lease and Agree Project Loan Documents.
On each Property Closing Date with respect to an Agree Project and upon
satisfaction of the requirements described in Section 4.01, the Agree Lessor
and the applicable Lessee shall promptly execute and deliver a Lease and, with
respect to a Construction Project, the Development Agreement with respect to
the proposed Property, (a) the Agree SPC and the Owner Trustee shall promptly
execute and deliver a Project Loan Agreement in the form of Exhibit B-2 (an
"Agree Project Loan Agreement"), and related Project Loan Note, with respect to
the proposed Property, (b) with respect to a Construction Project, the
Developer and the Agree Lessor shall promptly execute and deliver a Development
Agency Agreement with respect to the proposed Property and (c) with respect to
a Construction Project, the applicable Lessee shall execute and deliver a
Completion Guaranty with respect to the proposed Property.

<PAGE> 41

14.03. Additional Conditions to Making of Agree Project
Loans to Agree SPCs. The obligations of the Owner Trustee to make an Agree
Project Loan to an Agree SPC on any date are subject to the satisfaction or
waiver of the conditions precedent set forth in Section 4.04 as well as the
following conditions precedent:

(a) Representations and Warranties. The representations
and warranties of the Agree SPC and the Agree Lessor contained in the
Agree Project Loan Agreement, the Agree LLC Agreement or in any other
Operative Agreement or certificate delivered by the Agree SPC or the
Agree Lessor shall be true and correct in all material respects.

(b) Conditions Precedent in the Agree Project Loan
Agreements. The applicable Agree SPC shall have satisfied all of the
conditions precedent contained in the applicable Agree Project Loan
Agreement for the making of such Agree Project Loan.

Upon the satisfaction of the preceding conditions precedent
and the conditions precedent contained in Section 4.04., the Owner Trustee
shall, subject to the limitation contained in Section 14.01, make an Agree
Project Loan to the applicable Agree SPC in the amount of the requested funds.

14.04. Additional Conditions to the Lenders' Obligations to
Advance funds in connection with the Acquisition of an Agree Property. The
obligations of the Lenders to make Loans to the Owner Trustee on any Property
Closing Date for the purpose of providing funds to the Owner Trustee necessary
to provide Agree Project Loans to an Agree SPC which shall contribute such
funds to an Agree Lessor to acquire (for purposes of this Section 14.04,
acquisition of a Property shall mean acquisition by purchasing or ground
leasing, as applicable) a Property are subject to the satisfaction or waiver of
the conditions precedent contained in Section 5.03 as well as the following
conditions precedent:

(a) Representations and Warranties. The representations
and warranties of the Agree SPC and the Agree Lessor contained in the
Agree Project Loan Agreement, the Agree LLC Agreement and in any other
Operative Agreement or certificate delivered by the Agree SPC or the
Agree Lessor shall be true and correct in all material respects.

(b) Conditions Precedent contained in the Project Loan
Documents. There shall have been delivered to the Real Estate
Administrative Agent (with a copy to the Administrative Agent)
evidence that all of the conditions precedent to making advances
contained in the applicable Agree Project Loan Agreement and other
Project Loan Documents relating to the corresponding Agree Project
Loan have been satisfied.

(c) Delivery of Agree LLC Pledge. The Agree SPC shall
have delivered to the Owner Trustee a pledge of all of its right,
title and interest in and to the Agree Preferred Return pursuant to
the Pledge Agreement in a form satisfactory to the Real Estate
Administrative Agent (the " Agree LLC Pledge").

(d) Delivery of Agree LLC Agreement. The Real Estate
Administrative Agent shall have received the Limited Liability Company
Agreement of the applicable Agree Lessor

<PAGE> 42

in a form which complies with the requirements for such
Agreement as contained in the Agree Project Loan Agreements and is
otherwise satisfactory to the Real Estate Administrative Agent (the "
Agree LLC Agreement").

Upon the satisfaction of the preceding conditions precedent
and the conditions precedent contained in Section 5.03., the Owner Trustee
shall, subject to the limitation contained in Section 14.01, make an Agree
Project Loan to the applicable Agree SPC in the amount of the requested funds.

14.05. Additional Conditions to the Lenders' Obligations to
Make Construction Advances for the Commencement of Construction on any Agree
Property. The obligations of the Lenders to make Loans to the Owner Trustee on
any date for the purpose of providing funds to the Owner Trustee in order to
make Agree Project Loans to an Agree SPC which shall contribute such funds to
an Agree Lessor to make an Initial Construction Advance, are subject to the
satisfaction or waiver of the conditions precedent contained in Section 5.04 as
well as the following conditions precedent:

(a) Representations and Warranties. On such date, the
representations and warranties of the Agree SPC contained in the Agree
Project Loan Agreement, the Agree LLC Agreement and in any other
Operative Agreement or certificate delivered by the Agree SPC or the
Agree Lessor shall be true and correct in all material respects.

(b) Conditions Precedent contained in the Agree Project
Loan Documents. There shall have been delivered to the Real Estate
Administrative Agent (with a copy to the Administrative Agent)
evidence that all of the conditions precedent to making advances
contained in the applicable Agree Project Loan Agreement and other
Agree Project Loan Documents relating to the corresponding Agree
Project Loan have been satisfied.

Upon the satisfaction of the preceding conditions precedent
and the conditions precedent contained in Section 5.04., the Owner Trustee
shall, subject to the limitation contained in Section 14.01, make an Agree
Project Loan to the applicable Agree SPC in the amount of the requested funds.

14.06. Additional Conditions to the Lenders' Obligations to
Make Construction Advances for the Ongoing Construction on any Agree Property.
The obligations of the Lenders to make Loans to the Owner Trustee on any date
for the purpose of providing funds to the Owner Trustee in order to make Agree
Project Loans to an Agree SPC which shall contribute such funds to an Agree
Lessor to make a Construction Advance other than an Initial Construction
Advance, are subject to the satisfaction or waiver of the conditions precedent
contained in Section 5.05 as well as the following conditions precedent:

(a) Representations and Warranties. On such date, the
representations and warranties of the Agree SPC and the Agree Lessor
contained in the Agree Project Loan Agreement, the Agree LLC Agreement
and in any other Operative Agreement or certificate delivered by the
Agree SPC or the Agree Lessor shall be true and correct in all
material respects.

<PAGE> 43

Upon the satisfaction of the preceding conditions precedent
and the conditions precedent contained in Section 5.05., the Owner Trustee
shall, subject to the limitation contained in Section 14.01, make an Agree
Project Loan to the applicable Agree SPC in the amount of the requested funds.

ARTICLE XV.
MISCELLANEOUS

15.01. Survival of Agreements. The representations,
warranties, covenants, indemnities and agreements of the parties provided for
in the Operative Agreements and the parties' obligations thereunder, shall
survive the execution and delivery of this Agreement, the transfer of any
Property to a Lessor, the construction of any Improvements, any disposition of
any interest of a Lessor in any Property or any Improvements or any interest of
the Investor in the Trust Estate, the payment of the Notes and the Project Loan
Notes and any disposition thereof and shall be and continue in effect
notwithstanding any investigation made by any party and the fact that any party
may waive compliance with any of the other terms, provisions or conditions of
any of the Operative Agreements. Except as otherwise expressly set forth
herein or in other Operative Agreements, the indemnities of the parties
provided for in the Operative Agreements shall survive the expiration or
termination of any thereof.

15.02. No Broker, etc. Each of the parties hereto
represents to the others that it has not retained or employed any
broker, finder or financial adviser to act on its behalf in connection with this
Agreement, nor has it authorized any broker, finder or financial adviser
retained or employed by any other Person so to act. Any party who is in breach
of this representation shall indemnify and hold the other parties harmless from
and against any liability arising out of such breach of this representation.

15.03. Notices. Unless otherwise specifically provided
herein, all notices, consents, directions, approvals, instructions, requests
and other communications required or permitted by the terms hereof to be given
to any Person shall be given in writing by United States mail, by nationally
recognized courier service or by hand and any such notice shall become
effective five (5) Business Days after being deposited in the mails, certified
or registered with appropriate postage prepaid or one (1) Business Day after
delivery to a nationally recognized courier service specifying overnight
delivery or, if delivered by hand, when received, and shall be directed to the
address of such Person as indicated:

<PAGE> 44

If to the Lessees, to them at:

Borders, Inc.
311 Maynard Street
Ann Arbor, Michigan
Attention: Edward W. Wilhelm
Telecopy: (313) 913-2324

If to the Owner Trustee, to it at:

Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
Attn: Corporate Trust Department
Telecopy: (302) 651-8882

If to the Investor, to it at:

c/o Lord Securities
Two Wall Street
New York, New York 10005
Attention: Paul Sorenson
Telecopy: (212) 346-9012

If to the Administrative Agent, to it at:

PNC Bank, National Association
One PNC Plaza, 4th Floor Annex
5th Avenue & Wood Street
Pittsburgh, Pennsylvania 15265
Attention: Multi-Bank Loan Administration - Arlene Ohler
Telecopy: (412) 762-8672

<PAGE> 45

If to the Real Estate Administrative Agent, to it at:

Bankers Trust Company
280 Park Avenue
New York, New York 10017
Attention: Jeffrey Baevsky
Telecopy: (212) 454-1733

If to any of the Lenders, to them at the addresses specified in
Section 12.02 of the Credit Agreement.

From time to time any party may designate a new address for purposes of notice
hereunder by notice to each of the other parties hereto.

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

15.05. Amendments and Termination. Neither this Agreement
nor any of the terms hereof may be terminated, amended, supplemented, waived or
modified except by an instrument in writing signed by the party against which
the enforcement of the termination, amendment, supplement, waiver or
modification shall be sought; provided that, in the case of the Lenders or the
Agents, the action or direction of the Required Lenders shall control, except
as otherwise provided in Section 12.01 of the Credit Agreement or Section 10.03
hereof. This Agreement may be terminated by an agreement signed in writing by
the Owner Trustee, the Investor, the Lessees, the Agents and the Lenders.

15.06. Table of Contents and Headings, etc. The table of
contents and headings of the various Articles and Sections of this Agreement
are for convenience of reference only and shall not modify, define, expand or
limit any of the terms or provisions hereof.

15.07. Parties in Interest. Except as expressly provided
herein, none of the provisions of this Agreement are intended for the benefit
of any Person except the parties hereto.

15.08. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE
STATE OF NEW YORK.

15.09. Severability. Any provision of this Agreement that
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.

15.10. Liability Limited. The Lessees and the Investor each
acknowledge and agree that the Trust Company is (except as otherwise expressly
provided herein or therein) entering

<PAGE> 46

into this Agreement and the other Operative Agreements to which it is a party
(other than the Trust Agreement), solely in its capacity as trustee under the
Trust Agreement and not in its individual capacity and that Trust Company shall
not be liable or accountable under any circumstances whatsoever in its
individual capacity for or on account of any statements, representations,
warranties, covenants or obligations stated to be those of the Owner Trustee,
except for its own gross negligence or willful misconduct and as otherwise
expressly provided herein or in the other Operative Agreements.

15.11. Further Assurances. The parties hereto shall
promptly cause to be taken, executed, acknowledged or delivered, at the sole
expense of the Lessees, all such further acts, conveyances, documents and
assurances as the other parties may from time to time reasonably request in
order to carry out and effectuate the intent and purposes of this Agreement,
the other Operative Agreements and the transactions contemplated hereby and
thereby (including, without limitation, the preparation, execution and filing
of any and all Uniform Commercial Code financing statements and other filings
or registrations which the parties hereto may from time to time request to be
filed or effected). The Lessees, at their own expense and without need of any
prior request from the any other party, shall take such action as may be
necessary (including any action specified in the preceding sentence), or (if
the Owner Trustee shall so request) as so requested, in order to maintain and
protect all security interests provided for hereunder or under any other
Operative Agreement.

15.12. Recordkeeping. (a) On each date on which a Project
Loan is funded or prepaid, the Company shall notify the Real Estate
Administrative Agent and the Administrative Agent of the amount of such
increase or decrease and the identity of the affected Property, (b) on each
Completion Date, the Company shall notify the Real Estate Administrative Agent
and the Administrative Agent of the Completion of the Improvements, identify
the Property on which such Improvements are located and the amount of the
Project Loan with respect to such Property (c) on each Property Closing Date,
the Company shall notify the Real Estate Administrative Agent and the
Administrative Agent of the Modified Tranche A Percentage and the Modified
Tranche B Percentage with respect to each affected Property and (d) on each
Test Date (as defined in the definition of Weighted Average Maximum Residual
Guarantee Amount) the Company shall notify the Real Estate Administrative Agent
and the Administrative Agent of the Weighted Average Maximum Residual Guarantee
Amount as of each Determination Date (as defined in said definition). The
parties acknowledge that as of the Effective Date, the outstanding amount of
Tranche A Loans is $125,313,572.46 and Tranche B Loans is $6,855,014.87.

15.13. Confidentiality. The Agents and the Lenders each
agree to keep confidential all information obtained from the Company or any of
its Subsidiaries which is nonpublic and confidential or proprietary in nature
(including any information the Company or any of its Subsidiaries specifically
designates as confidential), except as provided below, and to use such
information only in connection with their respective capacities under this
Agreement and for the purposes contemplated hereby. Any Agent or any Lender
shall be permitted to disclose such information (i) to Affiliates, outside
legal counsel, accountants and other professional advisors who need to know
such information in connection with the administration and enforcement of this
Agreement or the other Operative Agreements, subject to agreement of such
Persons to maintain the confidentiality, (ii) to Purchasing Lenders and
Participants (including prospective Purchasing

<PAGE> 47

Lenders and Participants) as contemplated by Section 12.08 of the Credit
Agreement, subject to agreement of such Persons to maintain the
confidentiality, (iii) to the extent requested by any bank regulatory authority
or, with notice to the Company, as otherwise required by applicable Law or by
any subpoena or similar legal process, or in connection with any investigation
or proceeding arising out of the transactions contemplated by the Operative
Agreements, (iv) if it becomes publicly available other than as a result of a
breach of this Agreement or becomes available from a source not known to such
Agent or such Lender to be subject to confidentiality restrictions, or (v) if
the Company shall have consented to such disclosure.

15.14. Investor Exculpation. Notwithstanding any other
provision herein, no recourse under any obligation, covenant, agreement or
instrument of the Investor contained in any Operative Agreement or with respect
hereto shall be had against any incorporator, member, manager, employee or
partner of the Investor or its stockholders (each a "Related Person") whether
arising by breach of contract, otherwise at law or in equity (including any
claim or tort, whether express or implied; it being expressly understood that
the agreements and other obligations of the Investor herein and with respect
hereto are solely its corporate obligations. Any and all personal liability of
any Related Person for breaches of any such obligation, covenant, agreement or
instrument as aforesaid are hereby expressly waived as a condition of and in
consideration of the Investor's execution of this Agreement.

Notwithstanding any other provision herein, the provisions of
this Section 15.14 shall survive the termination of this Agreement.

15.15. Extension of Lease Maturity Dates. In the event that
the definition of Maturity Date in any Lease (other than the Lease between
Borders and CS Atlantic Properties, Ltd. dated May 24, 1996, with respect to
property in Coral Springs, Florida) provides for the extension of such Maturity
Date by agreement of the Lessee under such Lease and the Owner Trustee, Lessees
and the Owner Trustee agree that such Maturity Date is extended to October 16,
2002 and to such further date or dates to which it may subsequently be extended
by the Credit Agreement.

ARTICLE XVI.
PROPERTY PURCHASE OBLIGATIONS

16.01. Lessee's Right to Purchase. Notwithstanding any
provision contained in any Lease or any other Operative Agreement, if a Lease
Default or a Lease Event of Default has occurred and is continuing with respect
to any Lease, the applicable Lessees shall have the right to exercise either:
(a) their respective Purchase Options with respect to all (but not less than
all) of the Properties at any time prior to such time as a foreclosure upon any
of the Properties has been completed or (b) to the extent no Lease Default or
Lease Event of Default will exist following a purchase of one or more
Properties, their respective Purchase Options with respect to such Properties.

16.02. Obligation to Purchase All Properties .
Notwithstanding any provision contained in any Lease or any other Operative
Agreement, if on the date which is two months prior to the Maturity Date the
then Termination Value of all the Properties (other than Properties with

<PAGE> 48

respect to which a Lessee has given notice of its intention to exercise its
Purchase Option) is less than the Maximum Purchase Option Amount, then on the
Maturity Date the Lessees shall be required to exercise their respective
Purchase Options on the Maturity Date with respect to all remaining Properties.

16.03. Weighted Average Maximum Residual Guarantee
Percentage. Notwithstanding any other provision of any Lease or any of the
other Operative Agreements, (i) the applicable Lessee shall not be permitted to
terminate its Lease pursuant to Article XVII thereof or exercise its Purchase
Option with respect to a particular Property pursuant to Section 21.01 of such
Lease and (ii) the applicable Lessee shall not permit a particular Property to
be sold pursuant to Section 22.01(b) of such Lease, and the applicable Lessor
shall not be obligated to accept a bid and sell the Property pursuant to
Section 22.01(b) of a Lease, if, in the case of either clause (i) or (ii)
above, the Weighted Average Maximum Residual Guarantee Percentage, after giving
effect to the termination of such Lease, would be less than 85% as of any
applicable Determination Date (as defined in the definition of Weighted Average
Maximum Residual Guarantee Percentage).

<PAGE> 49

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

BORDERS GROUP, INC.

By:
-----------------------------------
Name:
------------------------------
Title:
-----------------------------

BORDERS, INC.

By:
-----------------------------------
Name:
------------------------------
Title:
-----------------------------

WALDEN BOOK COMPANY, INC.

By:
-----------------------------------
Name:
------------------------------
Title:
-----------------------------

WALDENBOOKS PROPERTIES, INC.

By:
-----------------------------------
Name:
------------------------------
Title:
-----------------------------

BORDERS PROPERTIES, INC.

By:
-----------------------------------
Name:
------------------------------
Title:
-----------------------------

<PAGE> 50

WILMINGTON TRUST COMPANY, not in its
individual capacity, except as
expressly stated herein,
but solely as Owner Trustee

By:
-----------------------------------
Name:
------------------------------
Title:
-----------------------------

SAM PROJECT FUNDING CORP. I, as Investor

By:
-----------------------------------
Name:
------------------------------
Title:
-----------------------------

<PAGE> 51

PNC BANK, NATIONAL ASSOCIATION
as Administrative Agent

By:
-------------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------

THE FIRST NATIONAL BANK OF CHICAGO
as Syndication Agent

By:
-------------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------

BANKERS TRUST COMPANY,
as Real Estate Administrative Agent

By:
-------------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------

PNC BANK, NATIONAL ASSOCIATION, as a Lender

By:
-------------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------

THE FIRST NATIONAL BANK OF CHICAGO, as a Lender

By:
-------------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------

BANKERS TRUST COMPANY, as a Lender

<PAGE> 52

By:
-------------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------

FIRST UNION NATIONAL BANK, as a Lender

By:
-------------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------

FLEET NATIONAL BANK

By:
-------------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------

KEYBANK NATIONAL ASSOCIATION

By:
-------------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------

COMERICA BANK, as a Lender

By:
-------------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------

<PAGE> 53

MORGAN GUARANTY TRUST COMPANY OF
NEW YORK

By:
-------------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------

UNION BANK OF CALIFORNIA, N.A., as a Lender

By:
-------------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------

CORESTATES BANK, N.A.

By:
-------------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------

BANQUE NATIONALE DE PARIS

By:
-------------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------

SUNTRUST BANK, ATLANTA

By:
-------------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------

<PAGE> 54

BANK BOSTON, N.A.

By:
-------------------------------------------
Name:
--------------------------------------
Title:
--------------------------------------

HIBERNIA NATIONAL BANK

By:
-------------------------------------------
Name:
--------------------------------------
Title:
--------------------------------------

THE NORTHERN TRUST COMPANY

By:
-------------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------

BANK OF NEW YORK

By:
-------------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------

MERCANTILE BANK

By:
-------------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------

<PAGE> 55

THE DAI-ICHI KANGYO BANK, LTD. -
CHICAGO BRANCH

By:
-------------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------

FIRST HAWAIIAN BANK

By:
-------------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------

BANK ONE, NATIONAL ASSOCIATION

By:
-------------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------

LONG TERM CREDIT BANK OF JAPAN

By:
-------------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------

WACHOVIA BANK, N.A.

By:
-------------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------

<PAGE> 56

TABLE OF CONTENTS

Page

ARTICLE I.
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

ARTICLE II.
STRUCTURE OF THE TRANSACTION; THE LOANS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.01. General Structure of the Transaction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.02. The Loans; General. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.03. The Project Loans, Developer Equity; General. . . . . . . . . . . . . . . . . . . . . . . . . 3
2.04. Collateral for the Project Loans; General . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.05. Collateral for the Loans; General. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.06. The Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.07. Property Purchase and Lease. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.08. Construction of Improvements; Lease of Improvements. . . . . . . . . . . . . . . . . . . . . . 5
2.09. Non-Construction Projects. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.10. The Owner Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

ARTICLE III.
THE CLOSINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.01. Effective Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.02. Trust Company Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

ARTICLE IV.
FUNDING OF PROJECT LOANS; CONDITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
4.01. Procedures for Selecting Lessors and Agree SPCs . . . . . . . . . . . . . . . . . . . . . . . 6
4.02. Execution of Lease and Project Loan Documents . . . . . . . . . . . . . . . . . . . . . . . . 7
4.03. Allocations of Available Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
4.04. Conditions to Making of Project Loans to the Lessors . . . . . . . . . . . . . . . . . . . . . 7
(a) Conditions of the Owner Trustee's Borrowing . . . . . . . . . . . . . . . . . . . . . . 7
(b) Conditions Precedent in the Project Loan Agreements . . . . . . . . . . . . . . . . . . 7
(c) Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(d) Performance of Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(e) No Default or Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

ARTICLE V.
MAKING OF LOANS TO THE OWNER TRUSTEE; CONDITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
5.01. General. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
5.02. Procedures for Funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
5.03. Conditions to the Lenders' Obligations to Advance funds in
connection with the acquisition of Property . . . . . . . . . . . . . . . . . . . . . . . . . 9
(a) Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
(b) Performance of Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

-i-
<PAGE> 57

Page

(c) Delivery of the Requisition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
(e) Conditions Precedent contained in the Project Loan Documents . . . . . . . . . . . . . 9
(f) Lease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
(g) Security Agreement Supplement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(h) Reassignment of Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(i) Assignment of Contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(j) No Default or Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(k) Weighted Average Maximum Residual Guarantee Percentage;
Maximum Residual Guarantee Amount . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.04. Conditions to the Lenders' Obligations to Make Construction Advances
for the Commencement of Construction on any Property . . . . . . . . . . . . . . . . . . . . . 10
(a) Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(b) Performance of Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(c) Requisition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(d) Conditions Precedent contained in the Project Loan Documents . . . . . . . . . . . . . 11
5.05. Conditions to the Lenders' Obligations to make Construction Advances
for the Ongoing Construction on any Property . . . . . . . . . . . . . . . . . . . . . . . . . 11
(a) Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(b) Performance of Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(c) Requisition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(d) Construction Budget . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(e) Conditions Precedent contained in the Project Loan Documents . . . . . . . . . . . . . 12
(f) No Default or Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

ARTICLE VI.
CONDITIONS TO EFFECTIVENESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
6.01. Conditions to Effectiveness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(a) Operative Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(b) Project Loan Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(d) Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(e) Governmental Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(f) Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(g) Legal Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(h) Corporate Proceedings of the Lessees and the Guarantors . . . . . . . . . . . . . . . . 15
(i) Incumbency Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(j) Corporate Proceedings of the Investor . . . . . . . . . . . . . . . . . . . . . . . 15
(k) Investor Incumbency Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(l) Proceedings of Owner Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(m) Owner Trustee Incumbency Certificates . . . . . . . . . . . . . . . . . . . . . . . . . 16
(n) Corporate Documents of the Lessees, the Guarantors and the Investor . . . . . . . . . . 16
(o) Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(p) Legal Opinions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(q) Actions to Perfect Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

-ii-

<PAGE> 58

Page
----

ARTICLE VII.
REPRESENTATIONS AND WARRANTIES
ON THE EFFECTIVE DATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
7.01. Representations and Warranties of the Investor . . . . . . . . . . . . . . . . . . . . . . . . 17
(a) Due Organization, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(b) Authorization; No Conflict . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(c) Enforceability, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
7.02. Representations and Warranties of the Owner Trustee . . . . . . . . . . . . . . . . . . . . . 18
(a) Due Organization, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(b) Authorization; No Conflict . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(c) Enforceability, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(d) Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(e) Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(f) No Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(g) Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(h) Chief Place of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(i) Federal Reserve Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(j) Investment Company Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
7.03. Representations and Warranties of the Company . . . . . . . . . . . . . . . . . . . . . . . . 19
(a) Organization and Qualification . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(b) Capitalization and Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(c) Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
(d) Power and Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
(e) Validity and Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
(f) No Conflict . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
(g) Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(h) Title to Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(i) Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(i) Historical Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(ii) Financial Projections . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(iii) Absence of Undisclosed Liabilities . . . . . . . . . . . . . . . . . . . . . 21
(j) Use of Proceeds; Margin Stock; Section 20 Subsidiaries . . . . . . . . . . . . . . . . 22
(k) Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
(l) Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
(m) Consents and Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
(n) No Event of Default; Compliance with Instruments . . . . . . . . . . . . . . . . . . . 23
(o) Patents, Trademarks, Copyrights, Licenses, Etc. . . . . . . . . . . . . . . . . . . . . 23
(p) Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
(q) Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
(r) Material Contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
(s) Investment Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
(t) Plans and Benefit Arrangements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
(u) Employment Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
(v) Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

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(w) Senior Debt Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
(x) Lease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
7.04. Updates to Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

ARTICLE VIII.
REPRESENTATIONS AND WARRANTIES ON FUNDING DATES . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
8.01. Representations and Warranties on Property Closing Dates . . . . . . . . . . . . . . . . . . . 27
8.02. Representations and Warranties Upon Initial Construction Advances . . . . . . . . . . . . . . 29
8.03. Representations and Warranties Upon the Date of Each Construction
Advance that is not an Initial Construction Advance . . . . . . . . . . . . . . . . . . . . . 30

ARTICLE IX.
PAYMENT OF FEES AND EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
9.01. Transaction Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
9.02. Brokers' Fees and Stamp Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
9.03. Certain Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
9.04. Credit Agreement, Project Loan Agreement and Related Obligations . . . . . . . . . . . . . . . 31
9.05. Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

ARTICLE X.
OTHER COVENANTS AND AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
10.01. Cooperation with the Lessees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
10.02. Covenants of the Owner Trustee and the Investor . . . . . . . . . . . . . . . . . . . . . . . 32
(a) Discharge of Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
(b) Trust Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
(c) Successor Trust Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
(d) Indebtedness; Other Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
(e) No Violation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
(f) No Voluntary Bankruptcy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
(g) Change of Chief Place of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
(h) Operative Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
10.03. Modifications Approved by Real Estate Administrative Agent . . . . . . . . . . . . . . . . . . 33

ARTICLE XI.
CREDIT AGREEMENT AND PROJECT LOAN AGREEMENT RIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . 33
11.01. Lessee's Credit Agreement Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
11.02. Lessee's Project Loan Agreement Rights. . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
11.03. Lessee's Operative Agreement Rights. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
11.04. Agent's Project Loan Agreement Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

ARTICLE XII.
TRANSFER OF INTEREST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
12.01. Restrictions on Transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
12.02. Effect of Transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

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ARTICLE XIII.
INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
13.01. General Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
13.02. General Tax Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
(a) Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
(b) Refunds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
(c) Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
(d) Reports and Returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
(e) Income Inclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
(f) Withholding Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
(g) Contests of Impositions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

ARTICLE XIV.
AGREE PROJECTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
14.01. Agree Projects Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
14.02. Execution of Lease and Agree Project Loan Documents . . . . . . . . . . . . . . . . . . . . . 39
14.03. Additional Conditions to Making of Agree Project Loans to Agree SPCs . . . . . . . . . . . . . 40
(a) Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
(b) Conditions Precedent in the Agree Project Loan Agreements . . . . . . . . . . . . . . . 40
14.04. Additional Conditions to the Lenders' Obligations to Advance funds
in connection with the Acquisition of an Agree Property . . . . . . . . . . . . . . . . . . . 40
(a) Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
(b) Conditions Precedent contained in the Project Loan Documents . . . . . . . . . . . . . 40
(c) Delivery of Agree LLC Pledge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
(d) Delivery of Agree LLC Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
14.05. Additional Conditions to the Lenders' Obligations to Make Construction
Advances for the Commencement of Construction on any Agree Property . . . . . . . . . . . . . 41
(a) Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
(b) Conditions Precedent contained in the Agree Project Loan Documents . . . . . . . . . . 41
14.06. Additional Conditions to the Lenders' Obligations to Make Construction
Advances for the Ongoing Construction on any Agree Property . . . . . . . . . . . . . . . . . 41
(a) Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
(b) Conditions Precedent contained in the Agree Project Loan Documents . . . . . . . . . . 42

ARTICLE XV.
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
15.01. Survival of Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
15.02. No Broker, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
15.03. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
15.04. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
15.05. Amendments and Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
15.06. Table of Contents and Headings, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
15.07. Parties in Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44

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15.08. GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
15.09. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
15.10. Liability Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
15.11. Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
15.12. Recordkeeping. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
15.13. Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
15.14. Investor Exculpation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
15.15. Extension of Lease Maturity Dates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

ARTICLE XVI.
PROPERTY PURCHASE OBLIGATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
16.01. Lessee's Right to Purchase. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
16.02. Obligation to Purchase All Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
16.03. Weighted Average Maximum Residual Guarantee Percentage. . . . . . . . . . . . . . . . . . . . 47

Appendix A Definitions and Rules of Usage

Schedules

Schedule 1 Opinion of Dickinson, Wright, Moon, Van Dusen & Freeman,
counsel to Lessee
Schedule 1(a) Opinon of Baker & McKenzie, U.K., counsel to BGP (UK) Limited
Schedule 2 Opinion of Loeb & Loeb, counsel to Investor
Schedule 3 Opinion of Morris, James, Hitchens & Williams, counsel to Owner Trustee
and Trust Company
Schedule 7.03(a) Jurisdictions where Lessee does Business
Schedule 7.03(b) Stock options or warrants
Schedule 7.03(c) Subsidiaries
Schedule 7.03(h) Real Properties Owned or Leased
Schedule 7.03(m) Consents and Approvals
Schedule 7.03(p) Insurance Policies
Schedule 7.03(t) Non-Compliance with Employee Benefit Plans
Schedule 7.03(v) Environmental Conditions
Schedule 11.02 Waivable Project Loan Agreement Conditions

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Exhibits

Exhibit A Form of Credit Agreement
Exhibit B-1 Form of Project Loan Agreement
Exhibit B-2 Form of Agree Project Loan Agreement
Exhibit C Form of Reassignment of Leases
Exhibit D Form of Trust Agreement
Exhibit E Form of Development Agreement
Exhibit F Form of Development Agency Agreement
Exhibit G Form of Lease
Exhibit H Guidelines for Lessor and Agree SPC

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