Documents
Resources
Learning Center
Upload
Plans & pricing Sign in
Sign Out

Participation Agreement - BORDERS GROUP INC - 12-10-1997

VIEWS: 9 PAGES: 231

									EXHIBIT 10.39 EXECUTION COPY

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

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").

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.

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

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

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

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,

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.

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.

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

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.

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

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; (c) attaching the organizational documents of the Lessor and the Agree SPC, if applicable; and (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

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.

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.

(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

(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

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.

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

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

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

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.

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

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. (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 (k) below. (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

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. (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 (k) below. (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.

(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

(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.

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),

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,

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.

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

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.

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.

(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

(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.

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

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.

(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.

(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

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

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

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.

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

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

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

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

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

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.

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

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

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'

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

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

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

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:

(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.

(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.

(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,

(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.

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

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

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

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.

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

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.

(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

(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.

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.

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

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

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.

(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

(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

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;

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,

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

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

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

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.

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.

14.03. 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

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

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.

(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 5.05., 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

(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 5.05., 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:

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

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

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

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

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

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

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

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

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).

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).

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:

WILMINGTON TRUST COMPANY, not in its individual capacity, except as

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:

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:

PNC BANK, NATIONAL ASSOCIATION

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:

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

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

By: Name: Title: FIRST UNION NATIONAL BANK, as a Lender By: Name: Title: FLEET NATIONAL BANK By: Name: Title:

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:

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:

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:

BANK BOSTON, N.A. By: Name: Title: HIBERNIA NATIONAL BANK By: Name: Title: THE NORTHERN TRUST COMPANY By: Name: Title:

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:

THE DAI-ICHI KANGYO BANK, LTD. CHICAGO BRANCH By: Name: Title: FIRST HAWAIIAN BANK By: Name: Title: BANK ONE, NATIONAL ASSOCIATION By: Name: Title:

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:

TABLE OF CONTENTS
ARTICLE I. DEFINITIONS

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

ARTICLE III. THE CLOSINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.01. Effective Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.02. Trust Company Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ARTICLE IV. FUNDING OF PROJECT LOANS; CONDITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.01. Procedures for Selecting Lessors and Agree SPCs . . . . . . . . . . . . . . . . . . . . 4.02. Execution of Lease and Project Loan Documents . . . . . . . . . . . . . . . . . . . . .

TABLE OF CONTENTS
ARTICLE I. DEFINITIONS

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

ARTICLE III. THE CLOSINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.01. Effective Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.02. Trust Company Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ARTICLE IV. FUNDING 4.01. 4.02. 4.03. 4.04.

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

. . . . . . . . . .

. . . . . . . . . .

. . . . . . . . . .

. . . . . . . . . .

. . . . . . . . . .

. . . . . . . . . .

. . . . . . . . . .

. . . . . . . . . .

. . . . . . . . . .

. . . . . . . . . .

. . . . . . . . . .

. . . . . . . . . .

. . . . . . . . . .

. . . . . . . . . .

. . . . . . . . . .

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

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

-i-

(c) (e) (f) (g) (h) (i) (j) (k) 5.04.

5.05.

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

ARTICLE VI. CONDITIONS TO EFFECTIVENESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.01. Conditions to Effectiveness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(c) (e) (f) (g) (h) (i) (j) (k) 5.04.

5.05.

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

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

. . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . .

-ii-

ARTICLE VII. REPRESENTATIONS AND WARRANTIES ON THE EFFECTIVE DATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.01. Representations and Warranties of the Investor . . . . . . . . . . . . . . . . . . . . . (a) Due Organization, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (b) Authorization; No Conflict . . . . . . . . . . . . . . . . . . . . . . . . . . . (c) Enforceability, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.02. Representations and Warranties of the Owner Trustee . . . . . . . . . . . . . . . . . . (a) Due Organization, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (b) Authorization; No Conflict . . . . . . . . . . . . . . . . . . . . . . . . . . . (c) Enforceability, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (d) Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (e) Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (f) No Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (g) Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (h) Chief Place of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (i) Federal Reserve Regulations . . . . . . . . . . . . . . . . . . . . . . . . . (j) Investment Company Act . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.03. Representations and Warranties of the Company . . . . . . . . . . . . . . . . . . . . . (a) Organization and Qualification . . . . . . . . . . . . . . . . . . . . . . . . . (b) Capitalization and Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . (c) Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (d) Power and Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (e) Validity and Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . (f) No Conflict . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (g) Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (h) Title to Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (i) Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

-iii-

7.04.

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

ARTICLE VIII. REPRESENTATIONS AND WARRANTIES ON FUNDING DATES . . . . . . . . . . . . . 8.01. Representations and Warranties on Property Closing Dates . . . . . 8.02. Representations and Warranties Upon Initial Construction Advances 8.03. Representations and Warranties Upon the Date of Each Construction Advance that is not an Initial Construction Advance . . . . . . . ARTICLE IX. PAYMENT 9.01. 9.02. 9.03. 9.04. 9.05.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

OF FEES AND EXPENSES . . . . . Transaction Expenses . . . . . Brokers' Fees and Stamp Taxes Certain Fees and Expenses . . Credit Agreement, Project Loan Fees . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . Agreement . . . . .

. . . . . . . . and . .

. . . . . . . . . . . . . . . . Related . . . .

. . . . . . . . . . . . . . . . . . . . . . . . Obligations . . . . . .

. . . . . .

. . . . . .

. . . . . .

. . . . . .

. . . . . .

. . . . . .

. . . . . .

. . . . . .

. . . . . .

. . . . . .

. . . . . .

. . . . . .

ARTICLE X. OTHER COVENANTS AND AGREEMENTS . . . . 10.01. Cooperation with the Lessees . 10.02. Covenants of the Owner Trustee (a) Discharge of Liens . . (b) Trust Agreement . . . . (c) Successor Trust Company

. . . . and . . . . . .

. . . . the . . . . . .

. . . . . . . . . . Investor . . . . . . . . . . . . . . .

. . . . . .

. . . . . .

. . . . . .

. . . . . .

. . . . . .

. . . . . .

. . . . . .

. . . . . .

. . . . . .

. . . . . .

. . . . . .

. . . . . .

. . . . . .

. . . . . .

. . . . . .

. . . . . .

. . . . . .

. . . . . .

. . . . . .

. . . . . .

7.04.

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

ARTICLE VIII. REPRESENTATIONS AND WARRANTIES ON FUNDING DATES . . . . . . . . . . . . . 8.01. Representations and Warranties on Property Closing Dates . . . . . 8.02. Representations and Warranties Upon Initial Construction Advances 8.03. Representations and Warranties Upon the Date of Each Construction Advance that is not an Initial Construction Advance . . . . . . . ARTICLE IX. PAYMENT 9.01. 9.02. 9.03. 9.04. 9.05.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

OF FEES AND EXPENSES . . . . . Transaction Expenses . . . . . Brokers' Fees and Stamp Taxes Certain Fees and Expenses . . Credit Agreement, Project Loan Fees . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . Agreement . . . . .

. . . . . . . . and . .

. . . . . . . . . . . . . . . . Related . . . .

. . . . . . . . . . . . . . . . . . . . . . . . Obligations . . . . . .

. . . . . .

. . . . . .

. . . . . .

. . . . . .

. . . . . .

. . . . . .

. . . . . .

. . . . . .

. . . . . .

. . . . . .

. . . . . .

. . . . . .

ARTICLE X. OTHER COVENANTS AND AGREEMENTS . . . . . . . . . . . . . . . 10.01. Cooperation with the Lessees . . . . . . . . . . . . 10.02. Covenants of the Owner Trustee and the Investor . . (a) Discharge of Liens . . . . . . . . . . . . . (b) Trust Agreement . . . . . . . . . . . . . . . (c) Successor Trust Company . . . . . . . . . . . (d) Indebtedness; Other Business . . . . . . . . (e) No Violation . . . . . . . . . . . . . . . . (f) No Voluntary Bankruptcy . . . . . . . . . . . (g) Change of Chief Place of Business . . . . . . (h) Operative Agreements . . . . . . . . . . . . 10.03. Modifications Approved by Real Estate Administrative ARTICLE XI. CREDIT AGREEMENT AND PROJECT LOAN AGREEMENT RIGHTS 11.01. Lessee's Credit Agreement Rights . . . . . 11.02. Lessee's Project Loan Agreement Rights. . 11.03. Lessee's Operative Agreement Rights. . . . 11.04. Agent's Project Loan Agreement Rights . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Agent

. . . . . . . . . . . .

. . . . . . . . . . . .

. . . . . . . . . . . .

. . . . . . . . . . . .

. . . . . . . . . . . .

. . . . . . . . . . . .

. . . . . . . . . . . .

. . . . . . . . . . . .

. . . . . . . . . . . .

. . . . . . . . . . . .

. . . . . . . . . . . .

. . . . . . . . . . . .

. . . . . . . . . . . .

. . . . . . . . . . . .

. . . . . . . . . . . .

. . . . .

. . . . .

. . . . .

. . . . .

. . . . .

. . . . .

. . . . .

. . . . .

. . . . .

. . . . .

. . . . .

. . . . .

. . . . .

. . . . .

. . . . .

. . . . .

. . . . .

. . . . .

. . . . .

. . . . .

. . . . .

. . . . .

. . . . .

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

-iv-

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

. . . . . . . . . .

. . . . . . . . . .

. . . . . . . . . .

. . . . . . . . . .

. . . . . . . . . .

. . . . . . . . . .

. . . . . . . . . .

. . . . . . . . . .

. . . . . . . . . .

. . . . . . . . . .

. . . . . . . . . .

. . . . . . . . . .

. . . . . . . . . .

. . . . . . . . . .

. . . . . . . . . .

. . . . . . . . . .

. . . . . . . . . .

. . . . . . . . . .

. . . . . . . . . .

. . . . . . . . . .

. . . . . . . . . .

. . . . . . . . . .

. . . . . . . . . .

. . . . . . . . . .

. . . . . . . . . .

. . . . . . . . . .

. . . . . . . . . .

. . . . . . . . . .

. . . . . . . . . .

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

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

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

. . . . . . . . . .

. . . . . . . . . .

. . . . . . . . . .

. . . . . . . . . .

. . . . . . . . . .

. . . . . . . . . .

. . . . . . . . . .

. . . . . . . . . .

. . . . . . . . . .

. . . . . . . . . .

. . . . . . . . . .

. . . . . . . . . .

. . . . . . . . . .

. . . . . . . . . .

. . . . . . . . . .

. . . . . . . . . .

. . . . . . . . . .

. . . . . . . . . .

. . . . . . . . . .

. . . . . . . . . .

. . . . . . . . . .

. . . . . . . . . .

. . . . . . . . . .

. . . . . . . . . .

. . . . . . . . . .

. . . . . . . . . .

. . . . . . . . . .

. . . . . . . . . .

. . . . . . . . . .

ARTICLE XIV. AGREE PROJECTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.01. Agree Projects Generally . . . . . . . . . . . . . . . . . . . . . . . . . 14.02. Execution of Lease and Agree Project Loan Documents . . . . . . . . . . . 14.03. Additional Conditions to Making of Agree Project Loans to Agree SPCs . . . (a) Representations and Warranties . . . . . . . . . . . . . . . . . . (b) Conditions Precedent in the Agree Project Loan Agreements . . . . . 14.04. Additional Conditions to the Lenders' Obligations to Advance funds in connection with the Acquisition of an Agree Property . . . . . . . . . (a) Representations and Warranties . . . . . . . . . . . . . . . . . . (b) Conditions Precedent contained in the Project Loan Documents . . . (c) Delivery of Agree LLC Pledge . . . . . . . . . . . . . . . . . . . (d) Delivery of Agree LLC Agreement . . . . . . . . . . . . . . . . . . 14.05. Additional Conditions to the Lenders' Obligations to Make Construction Advances for the Commencement of Construction on any Agree Property . . . (a) Representations and Warranties . . . . . . . . . . . . . . . . . . (b) Conditions Precedent contained in the Agree Project Loan Documents 14.06. Additional Conditions to the Lenders' Obligations to Make Construction Advances for the Ongoing Construction on any Agree Property . . . . . . . (a) Representations and Warranties . . . . . . . . . . . . . . . . . . (b) Conditions Precedent contained in the Agree Project Loan Documents ARTICLE XV. MISCELLANEOUS . . . . . . . . . . . . . . . 15.01. Survival of Agreements . . . . . . . 15.02. No Broker, etc. . . . . . . . . . . 15.03. Notices . . . . . . . . . . . . . . 15.04. Counterparts . . . . . . . . . . . . 15.05. Amendments and Termination . . . . . 15.06. Table of Contents and Headings, etc. 15.07. Parties in Interest . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . .

. . . . . . . .

. . . . . . . .

. . . . . . . .

. . . . . . . .

. . . . . . . .

. . . . . . . .

. . . . . . . .

. . . . . . . .

. . . . . . . .

. . . . . . . .

. . . . . . . .

. . . . . . . .

. . . . . . . .

. . . . . . . .

. . . . . . . .

. . . . . . . .

. . . . . . . .

. . . . . . . .

. . . . . . . .

. . . . . . . .

. . . . . . . .

. . . . . . . .

. . . . . . . .

. . . . . . . .

. . . . . . . .

-v-

15.08. 15.09. 15.10. 15.11. 15.12. 15.13. 15.14. 15.15.

GOVERNING LAW . . . . . . . . . . Severability . . . . . . . . . . . Liability Limited . . . . . . . . Further Assurances . . . . . . . . Recordkeeping. . . . . . . . . . . Confidentiality . . . . . . . . . Investor Exculpation . . . . . . . Extension of Lease Maturity Dates

. . . . . . . .

. . . . . . . .

. . . . . . . .

. . . . . . . .

. . . . . . . .

. . . . . . . .

. . . . . . . .

. . . . . . . .

. . . . . . . .

. . . . . . . .

. . . . . . . .

. . . . . . . .

. . . . . . . .

. . . . . . . .

. . . . . . . .

. . . . . . . .

. . . . . . . .

. . . . . . . .

. . . . . . . .

. . . . . . . .

. . . . . . . .

. . . . . . . .

. . . . . . . .

. . . . . . . .

. . . . . . . .

. . . . . . . .

. . . . . . . .

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

. . . .

. . . .

. . . .

. . . .

. . . .

. . . .

. . . .

. . . .

. . . .

. . . .

. . . .

. . . .

. . . .

. . . .

. . . .

. . . .

Appendix A Schedules Schedule 1 Schedule 1(a) Schedule 2 Schedule 3 Schedule 7.03(a)

Definitions and Rules of Usage

Opinion of Dickinson, Wright, Moon, Van Dusen & Freeman, counsel to Lessee Opinon of Baker & McKenzie, U.K., counsel to BGP (UK) Limited Opinion of Loeb & Loeb, counsel to Investor Opinion of Morris, James, Hitchens & Williams, counsel to Owner Trustee and Trust Company Jurisdictions where Lessee does Business

15.08. 15.09. 15.10. 15.11. 15.12. 15.13. 15.14. 15.15.

GOVERNING LAW . . . . . . . . . . Severability . . . . . . . . . . . Liability Limited . . . . . . . . Further Assurances . . . . . . . . Recordkeeping. . . . . . . . . . . Confidentiality . . . . . . . . . Investor Exculpation . . . . . . . Extension of Lease Maturity Dates

. . . . . . . .

. . . . . . . .

. . . . . . . .

. . . . . . . .

. . . . . . . .

. . . . . . . .

. . . . . . . .

. . . . . . . .

. . . . . . . .

. . . . . . . .

. . . . . . . .

. . . . . . . .

. . . . . . . .

. . . . . . . .

. . . . . . . .

. . . . . . . .

. . . . . . . .

. . . . . . . .

. . . . . . . .

. . . . . . . .

. . . . . . . .

. . . . . . . .

. . . . . . . .

. . . . . . . .

. . . . . . . .

. . . . . . . .

. . . . . . . .

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

. . . .

. . . .

. . . .

. . . .

. . . .

. . . .

. . . .

. . . .

. . . .

. . . .

. . . .

. . . .

. . . .

. . . .

. . . .

. . . .

Appendix A Schedules Schedule 1 Schedule 1(a) Schedule 2 Schedule 3 Schedule Schedule Schedule Schedule Schedule Schedule Schedule Schedule Schedule 7.03(a) 7.03(b) 7.03(c) 7.03(h) 7.03(m) 7.03(p) 7.03(t) 7.03(v) 11.02

Definitions and Rules of Usage

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

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

-vii-

EXHIBIT 10.40 Appendix A RULES OF USAGE AND DEFINITIONS The following rules of usage shall apply to this Appendix A and the Operative Agreements (and each appendix, schedule, exhibit and annex to the foregoing) unless otherwise required by the context or unless otherwise defined therein: (a) Except as otherwise expressly provided, any definitions set forth herein or in any other document shall be equally applicable to the singular and plural forms of the terms defined.

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

-vii-

EXHIBIT 10.40 Appendix A RULES OF USAGE AND DEFINITIONS The following rules of usage shall apply to this Appendix A and the Operative Agreements (and each appendix, schedule, exhibit and annex to the foregoing) unless otherwise required by the context or unless otherwise defined therein: (a) Except as otherwise expressly provided, any definitions set forth herein or in any other document shall be equally applicable to the singular and plural forms of the terms defined. (b) Except as otherwise expressly provided, references in any document to articles, sections, paragraphs, clauses, annexes, appendices, schedules or exhibits are references to articles, sections, paragraphs, clauses, annexes, appendices, schedules or exhibits in or to such document. (c) The headings, subheadings and table of contents used in any document are solely for convenience of reference and shall not constitute a part of any such document nor shall they affect the meaning, construction or effect of any provision thereof. (d) References to any Person shall include such Person, its successors and permitted assigns and transferees. (e) Except as otherwise expressly provided, reference to any agreement means such agreement as amended, modified, extended or supplemented from time to time in accordance with the applicable provisions thereof. (f) Except as otherwise expressly provided, references to any law includes any amendment or modification to such law and any rules or regulations issued thereunder or any law enacted in substitution or replacement therefor. (g) When used in any document, words such as "hereunder", "hereto", "hereof" and "herein" and other words of like import shall, unless the context clearly indicates to the contrary, refer to the whole of the applicable document and not to any particular article, section, subsection, paragraph or clause thereof. (h) References to "including" means including without limiting the generality of any description preceding such term and for purposes hereof the rule of ejusdem generis shall not be applicable to limit a general statement, followed by or referable to an enumeration of specific matters, to matters similar to those specifically mentioned. (i) Each of the parties to the Operative Agreements and their counsel have reviewed and revised, or requested revisions to, the Operative Agreements, and the usual rule

of construction that any ambiguities are to be resolved against the drafting party shall be inapplicable in the construing and interpretation of the Operative Agreements and any amendments or exhibits thereto.

EXHIBIT 10.40 Appendix A RULES OF USAGE AND DEFINITIONS The following rules of usage shall apply to this Appendix A and the Operative Agreements (and each appendix, schedule, exhibit and annex to the foregoing) unless otherwise required by the context or unless otherwise defined therein: (a) Except as otherwise expressly provided, any definitions set forth herein or in any other document shall be equally applicable to the singular and plural forms of the terms defined. (b) Except as otherwise expressly provided, references in any document to articles, sections, paragraphs, clauses, annexes, appendices, schedules or exhibits are references to articles, sections, paragraphs, clauses, annexes, appendices, schedules or exhibits in or to such document. (c) The headings, subheadings and table of contents used in any document are solely for convenience of reference and shall not constitute a part of any such document nor shall they affect the meaning, construction or effect of any provision thereof. (d) References to any Person shall include such Person, its successors and permitted assigns and transferees. (e) Except as otherwise expressly provided, reference to any agreement means such agreement as amended, modified, extended or supplemented from time to time in accordance with the applicable provisions thereof. (f) Except as otherwise expressly provided, references to any law includes any amendment or modification to such law and any rules or regulations issued thereunder or any law enacted in substitution or replacement therefor. (g) When used in any document, words such as "hereunder", "hereto", "hereof" and "herein" and other words of like import shall, unless the context clearly indicates to the contrary, refer to the whole of the applicable document and not to any particular article, section, subsection, paragraph or clause thereof. (h) References to "including" means including without limiting the generality of any description preceding such term and for purposes hereof the rule of ejusdem generis shall not be applicable to limit a general statement, followed by or referable to an enumeration of specific matters, to matters similar to those specifically mentioned. (i) Each of the parties to the Operative Agreements and their counsel have reviewed and revised, or requested revisions to, the Operative Agreements, and the usual rule

of construction that any ambiguities are to be resolved against the drafting party shall be inapplicable in the construing and interpretation of the Operative Agreements and any amendments or exhibits thereto. Definitions "Acceleration" shall have the meaning assigned to such term in Article IX of the Credit Agreement. "Acquisition Advance" shall have the meaning assigned to such term in Section 5.03 of the Participation Agreement. "Advance" shall mean a Construction Advance or an Acquisition Advance. "Affiliate" with respect to any Person, any other Person (i) which directly or indirectly controls, is controlled by, or is under common control with such Person, (ii) which beneficially owns or holds 5% or more of any class of the voting or other equity interests of such Person, or (iii) 5% or more of any class of voting interests or other

of construction that any ambiguities are to be resolved against the drafting party shall be inapplicable in the construing and interpretation of the Operative Agreements and any amendments or exhibits thereto. Definitions "Acceleration" shall have the meaning assigned to such term in Article IX of the Credit Agreement. "Acquisition Advance" shall have the meaning assigned to such term in Section 5.03 of the Participation Agreement. "Advance" shall mean a Construction Advance or an Acquisition Advance. "Affiliate" with respect to any Person, any other Person (i) which directly or indirectly controls, is controlled by, or is under common control with such Person, (ii) which beneficially owns or holds 5% or more of any class of the voting or other equity interests of such Person, or (iii) 5% or more of any class of voting interests or other equity interests of which is beneficially owned or held, directly or indirectly, by such Person. Control, as used in this definition, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ownership of voting securities, by contract or otherwise, including the power to elect a majority of the directors or trustees of a corporation or trust, as the case may be. "Administrative Agent" shall mean PNC Bank, National Association, and its permitted successors and assigns, together with its affiliates, as the arranger of the Commitments and as the administrative agent for the Lenders under this Agreement and the other Operative Agreements. "Agents" shall mean the Administrative Agent, the Syndication Agent and the Real Estate Administrative Agent and "Agent" shall mean any one of the foregoing; provided, however, that for purposes of receiving and giving all notices, making all decisions, exercising all remedies and in any other manner relating to the Project Loan Documents, the Security Documents, the Development Documents and the Leases and Lease Supplements, all references to the "Agent" shall be to the Real Estate Administrative Agent, and for purposes of all other Operative Agreements, all references to the "Agent" shall be to the Administrative Agent. "Agree" shall have the meaning assigned to such term in Section 14.01 of the Participation Agreement. "Agree Lessor" shall have the meaning assigned to such term in Section 14.01 of the Participation Agreement.

"Agree LLC Agreement" shall have the meaning assigned to such term in Section 14.04 of the Participation Agreement. "Agree LLC Pledge" shall have the meaning assigned to such term in Section 14.04 of the Participation Agreement. "Agree LLC Preferred Return" shall have the meaning assigned to such term in Section 1.1 of each Agree Project Loan Agreement. "Agree Project" shall have the meaning assigned to such term in Section 14.01 of the Participation Agreement. "Agree Project Loan" shall have the meaning assigned to such term in Section 14.01 of the Participation Agreement. "Agree Project Loan Agreement" shall have the meaning assigned to such term in Section 14.02 of the Participation Agreement. "Agree SPC" shall have the meaning assigned to such term in Section 14.01 of the Participation Agreement. "Aggregate Commitment Amount" shall mean $250,000,000, as such amount may be increased or decreased

"Agree LLC Agreement" shall have the meaning assigned to such term in Section 14.04 of the Participation Agreement. "Agree LLC Pledge" shall have the meaning assigned to such term in Section 14.04 of the Participation Agreement. "Agree LLC Preferred Return" shall have the meaning assigned to such term in Section 1.1 of each Agree Project Loan Agreement. "Agree Project" shall have the meaning assigned to such term in Section 14.01 of the Participation Agreement. "Agree Project Loan" shall have the meaning assigned to such term in Section 14.01 of the Participation Agreement. "Agree Project Loan Agreement" shall have the meaning assigned to such term in Section 14.02 of the Participation Agreement. "Agree SPC" shall have the meaning assigned to such term in Section 14.01 of the Participation Agreement. "Aggregate Commitment Amount" shall mean $250,000,000, as such amount may be increased or decreased pursuant to the Credit Agreement. "After Tax Basis" shall mean, with respect to any payment to be received, the amount of such payment increased so that, after deduction of the amount of all taxes required to be paid by the recipient (less any tax savings realized and the present value of any tax savings projected to be realized by the recipient as a result of the payment) with respect to the receipt by the recipient of such amounts, such increased payment (as so reduced) is equal to the payment otherwise required to be made. "Allocation Request" shall have the meaning assigned to such term in Section 4.03 of the Participation Agreement. "Annual Lease Financing Rent Expense" shall mean on any date the aggregate of all Lease Financing Rent Expense for the immediately preceding four consecutive Fiscal Quarters. "Annual Rent Expense" shall mean on any date the aggregate of all Rent Expense for the immediately preceding four consecutive Fiscal Quarters. "Annual Statements" shall have the meaning assigned to such term in Section 7.03(i) of the Participation Agreement.

"Appraisal Procedure" shall have the meaning given such term in Section 22.3 of a Lease. "Appurtenant Rights" shall mean (i) all agreements, easements, rights of way or use, rights of ingress or egress, privileges, appurtenances, tenements, hereditaments and other rights and benefits at any time belonging or pertaining to the Land or the Improvements, including, without limitation, the use of any streets, ways, alleys, vaults or strips of land adjoining, abutting, adjacent or contiguous to the Land and (ii) all permits, licenses and rights, whether or not of record, appurtenant to the Land. "Assignment of Contracts" shall mean, collectively, the Assignment of Contracts, dated as of each Property Closing Date, by the Owner Trustee in favor of the Real Estate Administrative Agent, substantially in the form of Exhibit I to the Credit Agreement. "Assignment of Development Agency Agreement" shall have the meaning assigned to such term in Section 1.1 of each Project Loan Agreement. "Assignment of Lease" shall have the meaning assigned to such term in Section 1.1 of each Project Loan Agreement.

"Appraisal Procedure" shall have the meaning given such term in Section 22.3 of a Lease. "Appurtenant Rights" shall mean (i) all agreements, easements, rights of way or use, rights of ingress or egress, privileges, appurtenances, tenements, hereditaments and other rights and benefits at any time belonging or pertaining to the Land or the Improvements, including, without limitation, the use of any streets, ways, alleys, vaults or strips of land adjoining, abutting, adjacent or contiguous to the Land and (ii) all permits, licenses and rights, whether or not of record, appurtenant to the Land. "Assignment of Contracts" shall mean, collectively, the Assignment of Contracts, dated as of each Property Closing Date, by the Owner Trustee in favor of the Real Estate Administrative Agent, substantially in the form of Exhibit I to the Credit Agreement. "Assignment of Development Agency Agreement" shall have the meaning assigned to such term in Section 1.1 of each Project Loan Agreement. "Assignment of Lease" shall have the meaning assigned to such term in Section 1.1 of each Project Loan Agreement. "Authorized Officer" shall mean the Chief Executive Officer, President, Chief Operating Officer, Chief Financial Officer, Vice President-Finance, Vice President, Group Planning and Resource Management, Vice President, Planning or Treasurer of any Guarantor. "Available Commitments" shall mean, at any particular time, an amount equal to the difference between (a) the amount of the Commitments and (b) the sum of (i) the aggregate amount of all Loans made pursuant to the Credit Agreement and (ii) the aggregate amount of all Project Loans not yet advanced multiplied by 150%. "BBA shall have the meaning assigned to that term in the definition of Euro-Rate. "BPI" shall mean Borders Properties, Inc., a corporation organized and existing under the laws of the State of Delaware, and its permitted successors and assigns. "Bankers Trust" shall mean Bankers Trust Company, a banking corporation organized and existing under the laws of the State of New York, and its permitted successors and assigns. "Bankruptcy Code" shall mean Title 11 of the United States Code entitled "Bankruptcy," as now or hereafter in effect, or any successor thereto. "Base Rate" shall mean the greater of (i) the interest rate per annum announced from time to time by the Administrative Agent at its Principal Office as its then prime rate, which rate may not be the lowest rate then being charged to commercial borrowers by the Administrative Agent, or

(ii) the Federal Funds Effective Rate plus 1/2% per annum. Such interest rate shall change automatically from time to time effective as of the effective date of each change, as determined by the Administrative Agent in its sole discretion. "Base Rate Borrowing Tranche" shall mean a Borrowing Tranche consisting of all Revolving Credit Loans to which a Base Rate Option applies. "Base Rate Option" shall mean the option of the Borrower to have Revolving Credit Loans bear interest at the rate and under the terms and conditions set forth in Section 4.01(a)(i) of the Credit Agreement. "Basic Rent" shall mean, the sum of (i) the Project Loan Basic Rent and (ii) the Developer Basic Rent, calculated as of the applicable date on which Basic Rent is due.

(ii) the Federal Funds Effective Rate plus 1/2% per annum. Such interest rate shall change automatically from time to time effective as of the effective date of each change, as determined by the Administrative Agent in its sole discretion. "Base Rate Borrowing Tranche" shall mean a Borrowing Tranche consisting of all Revolving Credit Loans to which a Base Rate Option applies. "Base Rate Option" shall mean the option of the Borrower to have Revolving Credit Loans bear interest at the rate and under the terms and conditions set forth in Section 4.01(a)(i) of the Credit Agreement. "Basic Rent" shall mean, the sum of (i) the Project Loan Basic Rent and (ii) the Developer Basic Rent, calculated as of the applicable date on which Basic Rent is due. "Basic Term" shall have the meaning assigned to such term in Section 2.2 of each Lease. "Basic Term Expiration Date" shall mean the Maturity Date. "Benefit Arrangement" shall mean at any time an "employee benefit plan," within the meaning of Section 3(3) of ERISA, which is neither a Plan nor a Multiemployer Plan and which is maintained, sponsored or otherwise contributed to, by the Company or any of its Subsidiaries. "Board" shall mean the Board of Governors of the Federal Reserve System of the United States (or any successor). "Books, Etc." shall mean Books Etc. Limited, company number 1580771, organized and existing under the laws of the United Kingdom, and its permitted successors and assigns. "Borders" shall mean Borders, Inc., a corporation organized and existing under the laws of the State of Colorado, and its permitted successors and assigns. "Borders' Note" shall mean that certain promissory note in the original principal amount of $192,114,261, dated May 23, 1995, executed by Borders and payable to Walden and which has been assigned to WPI. "Borrower" shall mean Wilmington Trust Company, not in its individual capacity, except as expressly stated in the Operative Agreements, but solely as Owner Trustee. "Borrowing Date" shall mean with respect to any Loan, the date for the making thereof or the renewal or conversion thereof to the same or a different Interest Rate Option, which shall be a Business Day.

"Borrowing Request" shall have the meaning specified in Section 2.6 of each Project Loan Agreement. "Borrowing Tranche" shall mean specified portions of Loans outstanding to the Borrower as follows: (i) any Loans to which a Euro-Rate Option applies and which have the same Interest Period shall constitute one Borrowing Tranche and (ii) all Loans to which a Base Rate Option applies shall constitute one Borrowing Tranche. "Business Day" shall mean any day other than a Saturday or Sunday or a legal holiday on which commercial banks are authorized or required to be closed for business in Pittsburgh, Pennsylvania, New York, New York, Wilmington, Delaware or Chicago, Illinois, and if the applicable Business Day relates to any Loan to which the Euro-Rate Option applies, such day must also be a day on which dealings are carried on in the London Interbank market. "Capitalized Lease" as applied to any Person, any lease of property by such Person as lessee which would be capitalized on a balance sheet of such Person prepared in accordance with GAAP. "Capitalized Lease Obligations" as applied to any Person, the amount of the obligations of such Person under

"Borrowing Request" shall have the meaning specified in Section 2.6 of each Project Loan Agreement. "Borrowing Tranche" shall mean specified portions of Loans outstanding to the Borrower as follows: (i) any Loans to which a Euro-Rate Option applies and which have the same Interest Period shall constitute one Borrowing Tranche and (ii) all Loans to which a Base Rate Option applies shall constitute one Borrowing Tranche. "Business Day" shall mean any day other than a Saturday or Sunday or a legal holiday on which commercial banks are authorized or required to be closed for business in Pittsburgh, Pennsylvania, New York, New York, Wilmington, Delaware or Chicago, Illinois, and if the applicable Business Day relates to any Loan to which the Euro-Rate Option applies, such day must also be a day on which dealings are carried on in the London Interbank market. "Capitalized Lease" as applied to any Person, any lease of property by such Person as lessee which would be capitalized on a balance sheet of such Person prepared in accordance with GAAP. "Capitalized Lease Obligations" as applied to any Person, the amount of the obligations of such Person under Capitalized Leases which would be shown as a liability on the balance sheet of such Person prepared in accordance with GAAP. "Capitalized Rent Expense" shall mean an amount equal to four times the sum of Rent Expense and Lease Financing Rent Expense. "Casualty" shall mean, with respect to any Property, any damage or destruction of all or any portion of such Property as a result of a fire or other casualty. "CERCLA" shall mean the Comprehensive Environmental Response, Compensation, and Liability Act of-1980, 42 U.S.C. Section Section 9601 et seq., as amended by the Superfund Amendments and Reauthorization Act of 1986. "Certifying Party" shall have the meaning specified in Section 27.1 of each Lease. "Change in Control" shall mean (a) the direct or indirect acquisition or ownership by any Person or any syndicate or other group formed or existing for the purpose of acquiring, holding or disposing of securities of the Company within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934 of stock of the Company having in the aggregate more than 30% of the voting power in the general election of directors (including securities convertible by their terms into stock having such voting power) or (b) during any period of 12 consecutive calendar months, commencing on the Effective Date, an event or circumstance as a result of which those individuals (the "Continuing Directors") who (i) were directors of the Company on the first day of each such period or (ii) subsequently became directors of the Company and whose initial election or initial nomination

for election subsequent to that date was approved by a majority of the Continuing Directors then on the Board of Directors of the Company, cease to constitute a majority of the Board of Directors of the Company. "Claims" shall mean any and all obligations, liabilities, losses, actions, suits, penalties, claims, demands, costs and expenses (including, without limitation, reasonable attorney's fees and expenses) of any nature whatsoever. "Code" shall mean the Internal Revenue Code of 1986, as amended from time to time, or any successor statute thereto. "Collateral" all assets of the Borrower, now owned or hereafter acquired, upon which a Lien is purported to be created by the Security Documents. "Commencement Date" shall, with respect to each Project Loan, have the meaning assigned to such term in Section 1.1 of each Project Loan Agreement.

for election subsequent to that date was approved by a majority of the Continuing Directors then on the Board of Directors of the Company, cease to constitute a majority of the Board of Directors of the Company. "Claims" shall mean any and all obligations, liabilities, losses, actions, suits, penalties, claims, demands, costs and expenses (including, without limitation, reasonable attorney's fees and expenses) of any nature whatsoever. "Code" shall mean the Internal Revenue Code of 1986, as amended from time to time, or any successor statute thereto. "Collateral" all assets of the Borrower, now owned or hereafter acquired, upon which a Lien is purported to be created by the Security Documents. "Commencement Date" shall, with respect to each Project Loan, have the meaning assigned to such term in Section 1.1 of each Project Loan Agreement. "Commitment" as to any Lender at any date, the obligation of such Lender at such date to (a) make Revolving Credit Loans to the Borrower and (b) participate in Swing Loans made to the Borrower, in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite such Lender's name on Schedule II to the Credit Agreement in the column labeled "Amount of Commitment" as such Schedule may be amended or supplemented from time to time in accordance with the provisions of Section 12.08(a) of the Credit Agreement; collectively, as to all such Lenders, the "Commitments", in either case as such amounts may be reduced or terminated pursuant to Section 2.06 of the Credit Agreement or cancelled pursuant to Article IX of the Credit Agreement. "Company" shall mean Borders Group, Inc., a corporation organized and existing under the laws of the State of Michigan, and its permitted successors and assigns. "Completion" shall mean, with respect to any Improvements, such time as substantial completion of such Improvements has been achieved in accordance with the Plans and Specifications and in compliance with all material Legal Requirements and Insurance Requirements and otherwise in accordance with the Development Agreement. "Completion Guarantee" shall have the meaning assigned to such term in Section 1.1 of each Project Loan Agreement. "Condemnation" shall mean any taking or sale of the use, access, occupancy, easement rights or title to any Property or any part thereof, wholly or partially (temporarily or permanently), by or on account of any actual or threatened eminent domain proceeding or other taking of action by any Person having the power of eminent domain, including an action by a Governmental Authority to change the grade of, or widen the streets adjacent to, any Property or alter

the pedestrian or vehicular traffic flow to any Property so as to result in a change in access to such Property, or by or on account of an eviction by paramount title or any transfer made in lieu of any such proceeding or action. "Consent to Assignment" shall mean the Consent to Assignment of Leases and Rents in the form attached to each Assignment of Leases. "Consent to Assignment of Development Agency Agreement" shall mean the Consent to Assignment of Development Agency Agreement in the form attached to each Assignment of Development Agency Agreement. "Consolidated Cash Flow from Operations" shall mean for any period of determination shall mean the sum of Consolidated Net Income (excluding (i) extraordinary gains, but not losses, and (ii) income or loss of any Person in which the Company owns less than 50% of the shares of capital stock, partnership interests or membership interests), depreciation, amortization, interest expense, Rent Expense, Lease Financing Rent Expense and income tax expense, in each case of the Company and its Subsidiaries for such period determined and consolidated in accordance with GAAP; provided, however, that there shall be excluded in calculating Consolidated Net Income

the pedestrian or vehicular traffic flow to any Property so as to result in a change in access to such Property, or by or on account of an eviction by paramount title or any transfer made in lieu of any such proceeding or action. "Consent to Assignment" shall mean the Consent to Assignment of Leases and Rents in the form attached to each Assignment of Leases. "Consent to Assignment of Development Agency Agreement" shall mean the Consent to Assignment of Development Agency Agreement in the form attached to each Assignment of Development Agency Agreement. "Consolidated Cash Flow from Operations" shall mean for any period of determination shall mean the sum of Consolidated Net Income (excluding (i) extraordinary gains, but not losses, and (ii) income or loss of any Person in which the Company owns less than 50% of the shares of capital stock, partnership interests or membership interests), depreciation, amortization, interest expense, Rent Expense, Lease Financing Rent Expense and income tax expense, in each case of the Company and its Subsidiaries for such period determined and consolidated in accordance with GAAP; provided, however, that there shall be excluded in calculating Consolidated Net Income any losses attributable to the use of a fair value methodology for recognition and measurement of impairment of goodwill not identified with impaired assets in accordance with Accounting Principles Board Opinion No. 17. "Consolidated Funded Indebtedness" shall mean as of any date of determination, the aggregate of the Indebtedness for borrowed money (including any Capitalized Lease Obligations and any Contingent Obligations in respect of borrowed money or Capitalized Lease Obligations of third Persons) of the Company and its Subsidiaries, all as determined and consolidated in accordance with GAAP, plus the amount of the Contingent Obligations arising under Article IX of the Guarantee. "Consolidated Net Income" shall mean for any period the aggregate of the net income of the Company and its Subsidiaries for such period determined and consolidated in accordance with GAAP. "Consolidated Tangible Net Worth" shall mean as of any date of determination total stockholders' equity less intangible assets of the Company and its Subsidiaries as of such date determined and consolidated in accordance with GAAP. "Consolidated Total Capital" shall mean as of any date of determination the sum of (a) total stockholders' equity of the Company and its Subsidiaries as of such date determined and consolidated in accordance with GAAP, plus (b) Consolidated Funded Indebtedness. "Construction Advance" shall mean an advance of funds to pay Project Costs pursuant to any Project Loan Agreement.

"Construction Budget" shall have the meaning assigned to such term in Section 1.1 of each Project Loan Agreement. "Construction Budget Deficit" shall have the meaning assigned to that term in Section 2.3 of each Project Loan Agreement. "Construction Commencement Date" shall mean, with respect to a Property, the date on which construction of the Improvements on such Property commences pursuant to the Development Agreement. "Construction Period" shall mean, with respect to a Property, the period commencing on the Property Closing Date for such Property and ending on the earlier to occur of (a) the Interest Capitalization Termination Date and (b) the Completion of such Property. "Construction Project" shall have the meaning assigned to such term in Section 2.08 of the Participation Agreement. "Consulting Professional" shall have the meaning assigned to such term in Section 1.1 of each Project Loan Agreement.

"Construction Budget" shall have the meaning assigned to such term in Section 1.1 of each Project Loan Agreement. "Construction Budget Deficit" shall have the meaning assigned to that term in Section 2.3 of each Project Loan Agreement. "Construction Commencement Date" shall mean, with respect to a Property, the date on which construction of the Improvements on such Property commences pursuant to the Development Agreement. "Construction Period" shall mean, with respect to a Property, the period commencing on the Property Closing Date for such Property and ending on the earlier to occur of (a) the Interest Capitalization Termination Date and (b) the Completion of such Property. "Construction Project" shall have the meaning assigned to such term in Section 2.08 of the Participation Agreement. "Consulting Professional" shall have the meaning assigned to such term in Section 1.1 of each Project Loan Agreement. "Contingent Obligations" shall mean as to any Person, any obligation of such Person guaranteeing or in effect guaranteeing any liability or obligation of any other Person (other than, if the first Person is a Guarantor, another Guarantor) in any manner, whether directly or indirectly, including any agreement, undertaking or arrangement to indemnify or hold harmless any other Person (other than, if the first Person is a Guarantor, another Guarantor), any performance bond or other suretyship arrangement, any contingent agreement to purchase or provide funds for such liability or obligation, any comfort letter, any take-or-pay contract, and any other form of assurance against loss, except endorsements of negotiable or other instruments for deposit or collection in the ordinary course of business. "Contracts" shall have the meaning assigned to such term in Section 2(c) of each Assignment of Leases. "Contract Rents" shall have the meaning assigned to such term in Section 2(c) of each Assignment of Leases. "Contractual Obligations" shall have the meaning assigned to such term in Section 1.1 of each Project Loan Agreement. "Control" shall mean (including the correlative meanings of the terms "controlled by" and "under common control with"), as used with respect to any Person, the possession directly or indirectly, of the power to direct or cause the direction of the management policies of such Person, whether through the ownership of voting securities or by contract or otherwise.

"Corporate Credit Agreement" shall mean the Amended and Restated Multicurrency Credit Agreement, dated as of March 28, 1995, and amended and restated as of October 17, 1997, by and among each Lessee, BGP (UK) Limited, the lenders party thereto, PNC Bank, National Association, as administrative agent thereunder, The First National Bank of Chicago, as syndication agent thereunder, and Bankers Trust Company, as real estate administrative agent thereunder as the same may be amended, supplemented or otherwise modified from time to time. "Credit Agreement" shall mean the Credit Agreement, dated as of the Effective Date, between the Owner Trustee, the Administrative Agent and the Lenders. "Credit Agreement Account" shall have the meaning assigned to such term in Section 11.01(a) of the Credit Agreement. "Credit Agreement Default" shall mean any event or condition which, with the lapse of time or the giving of notice, or both, would constitute a Credit Agreement Event of Default.

"Corporate Credit Agreement" shall mean the Amended and Restated Multicurrency Credit Agreement, dated as of March 28, 1995, and amended and restated as of October 17, 1997, by and among each Lessee, BGP (UK) Limited, the lenders party thereto, PNC Bank, National Association, as administrative agent thereunder, The First National Bank of Chicago, as syndication agent thereunder, and Bankers Trust Company, as real estate administrative agent thereunder as the same may be amended, supplemented or otherwise modified from time to time. "Credit Agreement" shall mean the Credit Agreement, dated as of the Effective Date, between the Owner Trustee, the Administrative Agent and the Lenders. "Credit Agreement Account" shall have the meaning assigned to such term in Section 11.01(a) of the Credit Agreement. "Credit Agreement Default" shall mean any event or condition which, with the lapse of time or the giving of notice, or both, would constitute a Credit Agreement Event of Default. "Credit Agreement Event of Default" shall mean any event or condition defined as an "Event of Default" in Article IX of the Credit Agreement. "Credit Agreement Interest Rate" shall have the meaning specified in Section 1.1 of each Project Loan Agreement. "Credit Documents" shall mean the Credit Agreement, the Notes, the Guarantee and the Security Documents. "Default" shall mean any event or condition which, with the lapse of time or the giving of notice, or both, would constitute an Event of Default. "Developer" shall mean an entity chosen by a Lessee pursuant to the Participation Agreement to construct and develop a particular Construction Project. "Developer Certificate" shall have the meaning specified in Section 1.1 of each Project Loan Agreement. "Developer Basic Rent" shall mean the amount set forth in a Lease as
"Developer Basic Rent." "Developer Equity" shall have the meaning specified in Section 1.1 of each Project Loan Agreement. "Developer Yield" shall have the meaning specified in Section 1.1 of each Project Loan Agreement.

"Development Agreement" shall mean a Development Agreement, dated as of each Property Closing Date or the Construction Commencement Date, if later, between a Lessor and the Lessee substantially in the form of Exhibit E to the Participation Agreement. "Development Agency Agreement" shall have the meaning specified in Section 1.1 of each Project Loan Agreement. "Development Agreement Default" shall mean any event or condition which, with the lapse of time or the giving of notice, or both, would constitute a Development Agreement Event of Default. "Development Agreement Event of Default" shall mean any default by the Lessor under the Development Agreement, after the expiration of any notice and cure periods, if any. "Development Documents" shall mean the collective reference to the Architect's Agreement, the Development

"Development Agreement" shall mean a Development Agreement, dated as of each Property Closing Date or the Construction Commencement Date, if later, between a Lessor and the Lessee substantially in the form of Exhibit E to the Participation Agreement. "Development Agency Agreement" shall have the meaning specified in Section 1.1 of each Project Loan Agreement. "Development Agreement Default" shall mean any event or condition which, with the lapse of time or the giving of notice, or both, would constitute a Development Agreement Event of Default. "Development Agreement Event of Default" shall mean any default by the Lessor under the Development Agreement, after the expiration of any notice and cure periods, if any. "Development Documents" shall mean the collective reference to the Architect's Agreement, the Development Agreement, the Development Agency Agreement, the Plans and Specifications and the Permits. "Distributions" shall have the meaning assigned to such term in Section 12.05 of the Guarantee. "Dollar Equivalent" shall mean with respect to any amount of any currency, the Equivalent Amount of such currency expressed in Dollars. "Dollars", "U.S. Dollars" and "$" shall mean dollars in lawful currency of the United States of America. "Domestic Joint Venture" shall mean individually and "Domestic Joint Ventures" shall mean collectively any corporation, partnership, limited liability company, joint venture or other entity (i) organized under the laws of any state of the United States of America for the purpose of doing business primarily in the United States of America and (ii) in which the Company and its Subsidiaries own less than 50% of the capital stock, partnership interests, membership interests or other ownership interests. "Domestic Purchase" means any transaction, or any series of related transactions, consummated on or after the Effective Date, by which the Company or any of its Subsidiaries (a) acquires (i) any ongoing business organized under the laws of any state of the United States of America for the purpose of doing business primarily in the United States of America or (ii) all or substantially all of the assets of any Person or division thereof which assets are located primarily in the United States of America, whether through purchase of assets, merger or otherwise, or (b) directly or indirectly acquires (in one transaction or as the most recent transaction in a series of transactions) all or substantially all of the securities of a corporation organized under the laws of any state of the United States of America for the purpose of doing business primarily in the United States

of America, which securities have ordinary voting power for the election of directors (other than securities having such power only by reason of the happening of a contingency) or all or substantially all (by percentage and voting power) of the outstanding partnership interests of a partnership or membership interests of a limited liability company, in either case which partnership or limited liability company is organized under the laws of any state of the United States of America for the purpose of doing business primarily in the United States of America. "Domestic Subsidiary"shall mean individually and "Domestic Subsidiaries" shall mean collectively any Subsidiary of the Company organized under the laws of any state of the United States of America for the purpose of doing business primarily in the United States of America. "Effective Date" shall mean the effective date of the amendment and restatement of the Prior Agreement, which shall occur on October 17, 1997 or, if all the conditions specified in Article VII of the Credit Agreement have not been satisfied or waived by such date, not later than November 30, 1997, as designated by the Company by at least three (3) Business Days' advance notice to the Administrative Agent, or such other date as the Company and the Lenders agree. The closing on the Effective Date shall take place at 10:00 A.M., Chicago time, on the Effective Date at the offices of Schiff Hardin & Waite, 7200 Sears Tower, Chicago, Illinois 60606, or at such other time and place as the parties agree.

of America, which securities have ordinary voting power for the election of directors (other than securities having such power only by reason of the happening of a contingency) or all or substantially all (by percentage and voting power) of the outstanding partnership interests of a partnership or membership interests of a limited liability company, in either case which partnership or limited liability company is organized under the laws of any state of the United States of America for the purpose of doing business primarily in the United States of America. "Domestic Subsidiary"shall mean individually and "Domestic Subsidiaries" shall mean collectively any Subsidiary of the Company organized under the laws of any state of the United States of America for the purpose of doing business primarily in the United States of America. "Effective Date" shall mean the effective date of the amendment and restatement of the Prior Agreement, which shall occur on October 17, 1997 or, if all the conditions specified in Article VII of the Credit Agreement have not been satisfied or waived by such date, not later than November 30, 1997, as designated by the Company by at least three (3) Business Days' advance notice to the Administrative Agent, or such other date as the Company and the Lenders agree. The closing on the Effective Date shall take place at 10:00 A.M., Chicago time, on the Effective Date at the offices of Schiff Hardin & Waite, 7200 Sears Tower, Chicago, Illinois 60606, or at such other time and place as the parties agree. "Environmental Audit" shall mean a phase one environmental audit of each Property to be acquired by a Lessor on any Property Closing Date. "Environmental Complaint" shall mean any written complaint (including but not limited to any complaint alleging a cause of action for personal injury or property damage or natural resource damage or equitable relief), order, notice of violation, citation, request for information issued pursuant to any Environmental Laws by a Governmental Authority, subpoena or other written notice of any type relating to, arising out of, or issued pursuant to any of the Environmental Laws or any Environmental Conditions, as the case may be. "Environmental Conditions" shall mean any conditions of the environment, including the work place, the ocean, natural resources (including flora or fauna), soil, surface water, ground water, any actual or potential drinking water supply sources, substrata or the ambient air, relating to or arising out of, or caused by the use, handling, storage, treatment, recycling, generation, transportation, release, spilling, leaking, pumping, emptying, discharging, injecting, escaping, leaching, disposal, dumping, threatened release or other management or mismanagement of Regulated Substances. "Environmental Laws" shall mean all federal, state, local and foreign Laws and regulations, including permits, licenses, authorizations, bonds, orders, judgments, consent decrees issued, or entered into, pursuant thereto, relating to pollution or protection of human health or the environment or employee safety in the work place.

"Environmental Violation" shall mean any activity, occurrence or condition that violates or threatens to violate or results in or threatens to result in non-compliance with any Environmental Law. "Equipment" shall mean equipment, apparatus, furnishings, fittings and personal property of every kind and nature whatsoever purchased, leased or otherwise acquired by using the proceeds of a Project Loan by the Lessee or the Lessor or the Developer and now or subsequently attached to, contained in or used or usable in any way in connection with any operation or letting of a Property, including but without limiting the generality of the foregoing, all screens, awnings, shades, blinds, curtains, draperies, artwork, carpets, rugs, storm doors and windows, shelving, display cases, counters, furniture and furnishings, heating, electrical, and mechanical equipment, lighting, switchboards, plumbing, ventilation, air conditioning and air-cooling apparatus, refrigerating, and incinerating equipment, escalators, elevators, loading and unloading equipment and systems, stoves, ranges, laundry equipment, cleaning systems (including window cleaning apparatus), telephones, communication systems (including satellite dishes and antennae), televisions, computers, sprinkler systems and other fire prevention and extinguishing apparatus and materials, security systems, motors, engines, machinery, pipes, pumps, tanks, conduits, appliances, fittings and fixtures of every kind and description; provided, however, that Equipment shall not include any inventory acquired by the Lessee in connection with a Property. "Equivalent Amount" shall mean, at any time, as determined by the Administrative Agent (which determination

"Environmental Violation" shall mean any activity, occurrence or condition that violates or threatens to violate or results in or threatens to result in non-compliance with any Environmental Law. "Equipment" shall mean equipment, apparatus, furnishings, fittings and personal property of every kind and nature whatsoever purchased, leased or otherwise acquired by using the proceeds of a Project Loan by the Lessee or the Lessor or the Developer and now or subsequently attached to, contained in or used or usable in any way in connection with any operation or letting of a Property, including but without limiting the generality of the foregoing, all screens, awnings, shades, blinds, curtains, draperies, artwork, carpets, rugs, storm doors and windows, shelving, display cases, counters, furniture and furnishings, heating, electrical, and mechanical equipment, lighting, switchboards, plumbing, ventilation, air conditioning and air-cooling apparatus, refrigerating, and incinerating equipment, escalators, elevators, loading and unloading equipment and systems, stoves, ranges, laundry equipment, cleaning systems (including window cleaning apparatus), telephones, communication systems (including satellite dishes and antennae), televisions, computers, sprinkler systems and other fire prevention and extinguishing apparatus and materials, security systems, motors, engines, machinery, pipes, pumps, tanks, conduits, appliances, fittings and fixtures of every kind and description; provided, however, that Equipment shall not include any inventory acquired by the Lessee in connection with a Property. "Equivalent Amount" shall mean, at any time, as determined by the Administrative Agent (which determination shall be conclusive absent manifest error), with respect to an amount of any currency (the "Reference Currency") which is to be computed as an equivalent amount of another currency (the "Equivalent Currency"); (i) if the Reference Currency and the Equivalent Currency are the same, the amount of such Reference Currency, or (ii) if the Reference Currency and the Equivalent Currency are not the same, the amount of such Equivalent Currency converted from such Reference Currency at the Administrative Agent's spot selling rate (based on the market rates then prevailing and available to the Administrative Agent) for the sale of such Equivalent Currency for such Reference Currency at a time determined by the Administrative Agent on the second Business Day immediately preceding the event for which such calculation is made. "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as the same may be amended or supplemented from time to time, and any successor statute of similar import, and the rules and regulations thereunder, as from time to time in effect. "ERISA Group" shall mean, at any time, the Guarantors and all members of a controlled group of corporations and all trades or businesses (whether or not incorporated) under common control and all other entities which, together with the Guarantors, are treated as a single employer under Section 414 of the Internal Revenue Code. "Euro-Rate" shall mean with respect to the Loans comprising any Euro-Rate Borrowing Tranche for any Interest Period, the interest rate per annum determined by the Administrative Agent by dividing (the resulting quotient rounded upward to the nearest 1/100th of

1% per annum) (i) the rate of interest determined by the Administrative Agent in accordance with its usual procedures (which determination shall be conclusive absent manifest error) to be the average of the London interbank offered rates for Dollars quoted by British Bankers' Association ("BBA") as set forth on Dow Jones Market Service display page 3750 (or appropriate successor or, if BBA or its successor ceases to provide such quotes, a comparable replacement) at approximately 11:00 a.m. London time two (2) Business Days prior to the first day of such Interest Period for an amount comparable to such Borrowing Tranche and having a Borrowing Date and a maturity comparable to such Interest Period by (ii) a number equal to 1.00 minus the Euro-Rate Reserve Percentage. Such Euro-Rate may also be expressed by the following formula:
Average of London interbank offered rates on Dow Jones Market Service display page 3750 quoted by BBA or appropriate successor -----------------------------------------------1.00 - Euro-Rate Reserve Percentage

Euro-Rate =

The Euro-Rate shall be adjusted with respect to any Euro-Rate Borrowing Tranche outstanding on the effective

1% per annum) (i) the rate of interest determined by the Administrative Agent in accordance with its usual procedures (which determination shall be conclusive absent manifest error) to be the average of the London interbank offered rates for Dollars quoted by British Bankers' Association ("BBA") as set forth on Dow Jones Market Service display page 3750 (or appropriate successor or, if BBA or its successor ceases to provide such quotes, a comparable replacement) at approximately 11:00 a.m. London time two (2) Business Days prior to the first day of such Interest Period for an amount comparable to such Borrowing Tranche and having a Borrowing Date and a maturity comparable to such Interest Period by (ii) a number equal to 1.00 minus the Euro-Rate Reserve Percentage. Such Euro-Rate may also be expressed by the following formula:
Average of London interbank offered rates on Dow Jones Market Service display page 3750 quoted by BBA or appropriate successor -----------------------------------------------1.00 - Euro-Rate Reserve Percentage

Euro-Rate =

The Euro-Rate shall be adjusted with respect to any Euro-Rate Borrowing Tranche outstanding on the effective date of any change in the Euro-Rate Reserve Percentage as of such effective date. The Administrative Agent shall give prompt notice to the Borrower of the Euro-Rate as determined or adjusted in accordance herewith, which determination shall be conclusive absent manifest error. "Euro-Rate Borrowing Tranche" shall mean a Borrowing Tranche consisting of all Revolving Credit Loans to which the Euro-Rate Option applies and which have the same Interest Period. "Euro-Rate Margin" shall mean at any time, for any Revolving Credit Loans accruing interest at the Euro-Rate Option, a percentage equal to the greater of (i) "Euro-Rate Margin" set forth in Schedule I to the Credit Agreement opposite the then-current Fixed Charge Coverage Ratio or (ii) the "Euro-Rate Margin" as defined in, and as then in effect under, the Corporate Credit Agreement. "Euro-Rate Option" shall mean the option of the Borrower to have Revolving Credit Loans bear interest at the rate and under the terms and conditions set forth in Section 4.01(a)(ii) of the Credit Agreement. "Euro-Rate Reserve Percentage" shall mean the maximum percentage (expressed as a decimal rounded upward to the nearest 1/100 of 1%) as determined by the Administrative Agent which is in effect during any relevant period, (i) as prescribed by the Board of Governors of the Federal Reserve System (or any successor) for determining the reserve requirements (including supplemental, marginal and emergency reserve requirements) with respect to eurocurrency funding (currently referred to as "Eurocurrency Liabilities") of a member bank in such System; or (ii) to be maintained by a Lender as required for reserve liquidity, special deposit, or a similar purpose by any

governmental or monetary authority of any country or political subdivision thereof (including any central bank), against (A) any category of liabilities that includes deposits by reference to which a Euro-Rate is to be determined, or (B) any category of extension of credit or other assets that includes Loans or Borrowing Tranches to which a Euro-Rate applies. "Event of Default" shall mean a Lease Event of Default, a Development Agency Agreement Event of Default, a Project Loan Agreement Event of Default or a Credit Agreement Event of Default. "Excepted Payments" shall mean: (a) all indemnity payments (including indemnity payments made pursuant to Article XIII of the Participation Agreement), whether made by adjustment to Developer Basic Rent or otherwise, to which the Owner Trustee, the Trust Company, the Investor, or any of their respective Affiliates, agents, officers, directors or employees is entitled;

governmental or monetary authority of any country or political subdivision thereof (including any central bank), against (A) any category of liabilities that includes deposits by reference to which a Euro-Rate is to be determined, or (B) any category of extension of credit or other assets that includes Loans or Borrowing Tranches to which a Euro-Rate applies. "Event of Default" shall mean a Lease Event of Default, a Development Agency Agreement Event of Default, a Project Loan Agreement Event of Default or a Credit Agreement Event of Default. "Excepted Payments" shall mean: (a) all indemnity payments (including indemnity payments made pursuant to Article XIII of the Participation Agreement), whether made by adjustment to Developer Basic Rent or otherwise, to which the Owner Trustee, the Trust Company, the Investor, or any of their respective Affiliates, agents, officers, directors or employees is entitled; (b) any amounts (other than Project Loan Basic Rent, Termination Value, or Purchase Option Price) payable under any Operative Agreement to reimburse the Owner Trustee, the Trust Company, the Investor, or any of their respective Affiliates (including the reasonable expenses of the Owner Trustee, the Trust Company, the Investor, incurred in connection with any such payment) for performing or complying with any of the obligations of any of the Lessees under and as permitted by any Operative Agreement; (c) any amount payable to the Investor by any transferee of the interest of the Investor as the purchase price of the Investor's interest in the Trust Estate (or a portion thereof); (d) any insurance proceeds (or payments with respect to risks self-insured or policy deductibles) under liability policies other than such proceeds or payments payable to the Administrative Agent; (e) any insurance proceeds under policies maintained by the Owner Trustee, the Trust Company, or the Investor other than such proceeds or payments which are payable to the Administrative Agent; (f) Transaction Expenses or other amounts or expenses paid or payable to or for the benefit of the Owner Trustee, the Trust Company or the Investor; (g) any payments in respect of interest to the extent attributable to payments referred to in clauses (a) through (f) above; and

(h) any rights of the Investor, the Owner Trustee, or the Trust Company to demand, collect, sue for or otherwise receive and enforce payment of any of the foregoing amounts. "Excepted Rights" shall mean the rights retained by each Lessor pursuant to Section 9.3(a)(i) of each Project Loan Agreement and all right, title and interest of any such Lessor in the Shared Rights. "Excess Proceeds" shall have the meaning assigned to such term in Section 1.1 of each Project Loan Agreement. "Excess Sale Proceeds" shall have the meaning assigned to such term in Section 9.1(b)(iv) of each Project Loan Agreement. "Facility" shall mean a facility used for the treatment, storage or disposal of Hazardous Substances. "Facility Fee" shall mean the fee referred to in Section 2.07(a) of the Credit Agreement. "Facility Fee Rate" at any time shall mean a rate per annum equal to the greater of (i) the "Facility Fee Rate" set forth on Schedule I to the Credit Agreement opposite the then-current Fixed Charge Coverage Ratio or (ii) the "Facility Fee Rate" as defined in, and as then in effect under, the Corporate Credit Agreement.

(h) any rights of the Investor, the Owner Trustee, or the Trust Company to demand, collect, sue for or otherwise receive and enforce payment of any of the foregoing amounts. "Excepted Rights" shall mean the rights retained by each Lessor pursuant to Section 9.3(a)(i) of each Project Loan Agreement and all right, title and interest of any such Lessor in the Shared Rights. "Excess Proceeds" shall have the meaning assigned to such term in Section 1.1 of each Project Loan Agreement. "Excess Sale Proceeds" shall have the meaning assigned to such term in Section 9.1(b)(iv) of each Project Loan Agreement. "Facility" shall mean a facility used for the treatment, storage or disposal of Hazardous Substances. "Facility Fee" shall mean the fee referred to in Section 2.07(a) of the Credit Agreement. "Facility Fee Rate" at any time shall mean a rate per annum equal to the greater of (i) the "Facility Fee Rate" set forth on Schedule I to the Credit Agreement opposite the then-current Fixed Charge Coverage Ratio or (ii) the "Facility Fee Rate" as defined in, and as then in effect under, the Corporate Credit Agreement. "Fair Market Sales Value" shall mean, with respect to any Property, the amount, which in any event shall not be less than zero, that would be paid in cash in an arm's-length transaction between an informed and willing purchaser and an informed and willing seller, neither of whom is under any compulsion to purchase or sell, respectively, for the ownership of such Property. Fair Market Sales Value of any Property shall be determined based on the assumption that, except for purposes of Section 18.1 of each Lease, such Property is in the condition and state of repair required under Section 8.1 of each Lease and the Lessee is in compliance with the other requirements of the Operative Agreements. "Federal Funds Effective Rate" for any day shall mean the rate per annum (based on a year of 360 days and actual days elapsed and rounded upward to the nearest 1/100 of 1%) announced by the Federal Reserve Bank of New York (or any successor) on such day as being the weighted average of the rates on overnight Federal funds transactions arranged by Federal funds brokers on the previous trading day, as computed and announced by such Federal Reserve Bank (or any successor) in substantially the same manner as such Federal Reserve Bank computes and announces the weighted average it refers to as the "Federal Funds Effective Rate" as of the date of this Agreement; provided, if such Federal Reserve Bank (or its successor) does not announce such

rate on any day, the "Federal Funds Effective Rate" for such day shall be the Federal Funds Effective Rate for the last day on which such rate was announced. "Fee Letters" shall mean those certain letter agreements dated September 1997, between the Company and any or all of the Agents, and all other letter agreements between the Company and any party hereto under which the parties thereto designate that such letter agreement is a fee letter for purposes of the Operative Agreements, as the same may be supplemented or amended from time to time in accordance therewith. "Fees" shall mean the Facility Fee and any fees payable pursuant to the Fee Letters. "Financed Lease" shall mean a lease of real property, improvements on real property or real property and improvements thereon by the Company or any of its Subsidiaries entered into pursuant to the Participation Agreement. "Financial Projections" shall have the meaning assigned to such term in Section 7.03(i)(B) of the Participation Agreement. "Fiscal Quarter" shall mean the 13/14 week period commencing on the day after the last day of the preceding Fiscal Quarter and ending on the Sunday preceding the last Wednesday in each of April (first), July (second), October

rate on any day, the "Federal Funds Effective Rate" for such day shall be the Federal Funds Effective Rate for the last day on which such rate was announced. "Fee Letters" shall mean those certain letter agreements dated September 1997, between the Company and any or all of the Agents, and all other letter agreements between the Company and any party hereto under which the parties thereto designate that such letter agreement is a fee letter for purposes of the Operative Agreements, as the same may be supplemented or amended from time to time in accordance therewith. "Fees" shall mean the Facility Fee and any fees payable pursuant to the Fee Letters. "Financed Lease" shall mean a lease of real property, improvements on real property or real property and improvements thereon by the Company or any of its Subsidiaries entered into pursuant to the Participation Agreement. "Financial Projections" shall have the meaning assigned to such term in Section 7.03(i)(B) of the Participation Agreement. "Fiscal Quarter" shall mean the 13/14 week period commencing on the day after the last day of the preceding Fiscal Quarter and ending on the Sunday preceding the last Wednesday in each of April (first), July (second), October (third) and January (fourth) of each Fiscal Year. "Fiscal Year" shall mean the 52/53 week period commencing on the day after the last day of the preceding Fiscal Year and ending on the Sunday preceding the last Wednesday in January. By way of illustration, the Company's 1996 Fiscal Year ended January 26, 1997. "Fixed Charge Coverage Ratio" shall mean the ratio of Consolidated Cash Flow from Operations to Fixed Charges. "Fixed Charges" shall mean for any period of determination the sum of interest expense, Rent Expense, Lease Financing Rent Expense and scheduled principal installments on Indebtedness (as adjusted for prepayments, and including amortization payments under Capitalized Leases), in each case of the Company and its Subsidiaries for such period determined and consolidated in accordance with GAAP. "Fixtures" shall mean all fixtures relating to the Improvements, including all components thereof, located in or on the Improvements, together with all replacements, modifications, alterations and additions thereto. "Force Majeure Delay" shall have the meaning assigned to such term in Section 1.1 of each Project Loan Agreement.

"Force Majeure Event" shall mean any event beyond the control of the Developer, other than a Casualty or Condemnation, including, but not limited to, strikes, lockouts, adverse soil conditions, acts of God, adverse weather conditions, inability to obtain labor or materials, governmental activities, civil commotion and enemy action; but excluding any event, cause or condition that results from the Developer's or Lessee's financial condition. "Foreign Joint Venture" shall mean individually and "Foreign Joint Ventures" shall mean collectively any corporation, partnership, limited liability company, joint venture or other entity (i) organized under the laws of any jurisdiction other than a state of the United States of America or formed primarily for the purpose of doing business outside of the United States of America and (ii) in which the Company and its Subsidiaries own less than 50% of the capital stock, partnership interests, membership interests or other ownership interests. "Foreign Purchase" means any transaction, or any series of related transactions, consummated on or after the Effective Date, by which the Company or any of its Subsidiaries (a) acquires (i) any ongoing business organized under the laws of any jurisdiction other than a state of the United States of America or formed primarily for the purpose of doing business outside the United States of America or (ii) all or substantially all of the assets of any

"Force Majeure Event" shall mean any event beyond the control of the Developer, other than a Casualty or Condemnation, including, but not limited to, strikes, lockouts, adverse soil conditions, acts of God, adverse weather conditions, inability to obtain labor or materials, governmental activities, civil commotion and enemy action; but excluding any event, cause or condition that results from the Developer's or Lessee's financial condition. "Foreign Joint Venture" shall mean individually and "Foreign Joint Ventures" shall mean collectively any corporation, partnership, limited liability company, joint venture or other entity (i) organized under the laws of any jurisdiction other than a state of the United States of America or formed primarily for the purpose of doing business outside of the United States of America and (ii) in which the Company and its Subsidiaries own less than 50% of the capital stock, partnership interests, membership interests or other ownership interests. "Foreign Purchase" means any transaction, or any series of related transactions, consummated on or after the Effective Date, by which the Company or any of its Subsidiaries (a) acquires (i) any ongoing business organized under the laws of any jurisdiction other than a state of the United States of America or formed primarily for the purpose of doing business outside the United States of America or (ii) all or substantially all of the assets of any Person or division thereof are located outside the United States of America, whether through purchase of assets, merger or otherwise, or (b) directly or indirectly acquires (in one transaction or as the most recent transaction in a series of transactions) all or substantially all of the securities of a corporation organized under the laws of any jurisdiction other than a state of the United States of America or formed primarily for the purpose of doing business outside the United States of America, which securities have ordinary voting power for the election of directors (other than securities having such power only by reason of the happening of a contingency) or all or substantially all (by percentage and voting power) of the outstanding partnership interests of a partnership or membership interests of a limited liability company, in either case which partnership or limited liability company is organized under the laws of any jurisdiction other than a state of the United States of America or formed primarily for the purpose of doing business outside the United States of America. "Foreign Subsidiary" shall mean individually and "Foreign Subsidiaries" shall mean collectively any Subsidiary of the Company organized under the laws of any jurisdiction other than a state of the United States of America or formed primarily for the purpose of doing business outside the United States of America. "Fulfillment" shall mean Borders Fulfillment, Inc., a corporation organized and existing under the laws of the State of Delaware, and its permitted successors and assigns. "GAAP" shall mean generally accepted accounting principles as are in effect in the United States of America from time to time, subject to the provisions of Section 1.02 of the Guarantee, and applied on a basis consistent with the Historical Statements both as to classification of items and amounts.

"Governmental Action" shall mean all permits, authorizations, registrations, consents, approvals, waivers, exceptions, variances, orders, judgments, written interpretations, decrees, licenses, exemptions, publications, filings, notices to and declarations of or with, or required by, any Governmental Authority, or required by any Legal Requirement, and shall include, without limitation, all environmental and operating permits and licenses that are required for the full use, occupancy, zoning and operation of any Property. "Governmental Authority" shall mean any national, federal, state, local or other government or political subdivision or any agency, authority, bureau, central bank, commission, department or instrumentality of either, or any court, tribunal, grand jury or arbitrator, in each case whether foreign or domestic. "Ground Lease" shall mean a ground lease, in form and substance acceptable to the Real Estate Administrative Agent and its counsel, between a Lessor, as ground lessee, and the owner of the fee interest in the Land, as ground lessor. "Ground Lessor" shall mean the ground lessor under a Ground Lease. "Guarantee" shall mean the guarantee to be executed and delivered by each Guarantor, substantially in the form of

"Governmental Action" shall mean all permits, authorizations, registrations, consents, approvals, waivers, exceptions, variances, orders, judgments, written interpretations, decrees, licenses, exemptions, publications, filings, notices to and declarations of or with, or required by, any Governmental Authority, or required by any Legal Requirement, and shall include, without limitation, all environmental and operating permits and licenses that are required for the full use, occupancy, zoning and operation of any Property. "Governmental Authority" shall mean any national, federal, state, local or other government or political subdivision or any agency, authority, bureau, central bank, commission, department or instrumentality of either, or any court, tribunal, grand jury or arbitrator, in each case whether foreign or domestic. "Ground Lease" shall mean a ground lease, in form and substance acceptable to the Real Estate Administrative Agent and its counsel, between a Lessor, as ground lessee, and the owner of the fee interest in the Land, as ground lessor. "Ground Lessor" shall mean the ground lessor under a Ground Lease. "Guarantee" shall mean the guarantee to be executed and delivered by each Guarantor, substantially in the form of Exhibit F to the Credit Agreement. "Guarantors" shall mean the collective reference to the Lessees and such other direct and indirect subsidiaries of the Company as shall have executed and delivered the Guarantee or a letter agreement pursuant to the provisions of Section 11.12 of the Guarantee or the definition of "Unrestricted Subsidiary." "Hazardous Activity" shall mean any activity, process, procedure or undertaking that directly or indirectly (i) produces, generates or creates any Hazardous Substance, (ii) causes or results in (or threatens to cause or result in) the Release of any Hazardous Substance into the environment (including air, water vapor, surface water, groundwater, drinking water, land (including surface or subsurface), plant, aquatic and animal life); (iii) involves the containment or storage of any Hazardous Substance, or (iv) would be regulated as hazardous waste treatment, storage or disposal within the meaning of any Environmental Law. "Hazardous Condition" shall mean any condition that violates or threatens to violate, or that results in or threatens noncompliance with, any Environmental Law. "Hazardous Substance" shall mean any of the following: (i) any petroleum or petroleum product, explosives, radioactive materials, asbestos, formaldehyde, polychlorinated biphenyls, lead and radon gas; (ii) any substance, material, product, derivative, compound or mixture, mineral, chemical, waste, gas, medical waste, or pollutant, in each case whether naturally occurring, man-made or the by-product of any process, that is toxic, harmful or hazardous to the environment or human health or safety; or (iii) any substance, material, product, derivative,

compound or mixture, mineral, chemical, waste, gas, medical waste or pollutant that would support the assertion of any claim under any Environmental Law, whether or not defined as hazardous as such under any Environmental Law. "Historical Statements" shall have the meaning assigned to such term in Section 7.03(i) of the Participation Agreement. "Impositions" shall mean, except to the extent described in the following sentence, any and all liabilities, losses, expenses and costs of any kind whatsoever for fees, taxes, levies, imposts, duties, charges, assessments or withholdings ("Taxes") (including (i) real and personal property taxes, including personal property taxes on any property covered by a Lease that is classified by Governmental Authorities as personal property, and real estate or ad valorem taxes in the nature of property taxes; (ii) sales taxes, use taxes and other similar taxes (including rent taxes and intangibles taxes); (iii) any excise taxes; (iv) real estate transfer taxes, conveyance taxes, stamp taxes and documentary recording taxes and fees; (v) taxes that are or are in the nature of franchise, income, value added, privilege and doing business taxes, license and registration fees; and (vi) assessments on any Property, including all assessments for public improvements or benefits, whether or not such improvements are commenced

compound or mixture, mineral, chemical, waste, gas, medical waste or pollutant that would support the assertion of any claim under any Environmental Law, whether or not defined as hazardous as such under any Environmental Law. "Historical Statements" shall have the meaning assigned to such term in Section 7.03(i) of the Participation Agreement. "Impositions" shall mean, except to the extent described in the following sentence, any and all liabilities, losses, expenses and costs of any kind whatsoever for fees, taxes, levies, imposts, duties, charges, assessments or withholdings ("Taxes") (including (i) real and personal property taxes, including personal property taxes on any property covered by a Lease that is classified by Governmental Authorities as personal property, and real estate or ad valorem taxes in the nature of property taxes; (ii) sales taxes, use taxes and other similar taxes (including rent taxes and intangibles taxes); (iii) any excise taxes; (iv) real estate transfer taxes, conveyance taxes, stamp taxes and documentary recording taxes and fees; (v) taxes that are or are in the nature of franchise, income, value added, privilege and doing business taxes, license and registration fees; and (vi) assessments on any Property, including all assessments for public improvements or benefits, whether or not such improvements are commenced or completed within the Term), and in each case all interest, additions to tax and penalties thereon, which at any time prior to, during or with respect to the Term or in respect of any period for which the Lessee shall be obligated to pay Supplemental Rent, may be levied, assessed or imposed by any Federal, state, city, county or local authority upon or with respect to (a) any Property or any part thereof or interest therein; (b) the financing, refinancing, demolition, construction, substitution, subleasing, assignment, control, condition, occupancy, servicing, maintenance, repair, ownership, possession, activity conducted on, delivery, insuring, use, operation, improvement, transfer of title, return or other disposition of such Property or any part thereof or interest therein; (c) the Notes or the Project Loan Notes or other indebtedness with respect to any Property or any part thereof or interest therein; (d) the rentals, receipts or earnings arising from any Property or any part thereof or interest therein; (e) the Operative Agreements or any payment made or accrued pursuant thereto; (f) the income or other proceeds received with respect to any Property or any part thereof or interest therein upon the sale or disposition thereof; (g) any contract (including the Agency Agreement) relating to the construction, acquisition or delivery of any Improvements or any part thereof or interest therein; (h) the issuance of the Notes or the Project Loan Notes; or (i) otherwise in connection with the transactions contemplated by the Operative Agreements. The term "Imposition" shall not mean or include: (i) Taxes and impositions (other than Taxes that are, or are in the nature of, sales, use, rental, value added, transfer or property taxes) that are imposed on a Tax Indemnitee by the United States federal government that are based on or measured by the net income (including taxes based on capital gains and minimum taxes) of such Person; provided that this clause (i) shall not be interpreted to prevent a payment from being made on an After Tax Basis if such payment is otherwise required to be so made;

(ii) Taxes and impositions (other than Taxes that are, or are in the nature of, sales, use, rental, value added, transfer or property taxes) that are imposed by any state or local jurisdiction or taxing authority within any state or local jurisdiction and that are based upon or measured by the gross or net income or gross or net receipts (including any minimum taxes, withholding taxes or taxes on or measured by capital, net worth, excess profits or items of tax preference or taxes that are capital stock, franchise or doing business taxes) except that this clause (ii) shall not apply to (and thus shall not exclude) any such Taxes imposed on a Tax Indemnitee by the state (or any local taxing authority thereof or therein) where any Property is located, possessed or used under each Lease; provided that this clause (ii) shall not be interpreted to prevent a payment from being made on an After Tax Basis if such payment is otherwise required to be so made; (iii) any Tax or imposition to the extent, but only to such extent, it relates to any act, event or omission that occurs after the termination of a Lease with respect to a Property (but not any Tax or imposition that relates to any period prior to the termination of each Lease); (iv) any Tax or imposition for so long as, but only for so long as, it is being contested in accordance with the provisions of Section 13.02(g) of the Participation Agreement;

(ii) Taxes and impositions (other than Taxes that are, or are in the nature of, sales, use, rental, value added, transfer or property taxes) that are imposed by any state or local jurisdiction or taxing authority within any state or local jurisdiction and that are based upon or measured by the gross or net income or gross or net receipts (including any minimum taxes, withholding taxes or taxes on or measured by capital, net worth, excess profits or items of tax preference or taxes that are capital stock, franchise or doing business taxes) except that this clause (ii) shall not apply to (and thus shall not exclude) any such Taxes imposed on a Tax Indemnitee by the state (or any local taxing authority thereof or therein) where any Property is located, possessed or used under each Lease; provided that this clause (ii) shall not be interpreted to prevent a payment from being made on an After Tax Basis if such payment is otherwise required to be so made; (iii) any Tax or imposition to the extent, but only to such extent, it relates to any act, event or omission that occurs after the termination of a Lease with respect to a Property (but not any Tax or imposition that relates to any period prior to the termination of each Lease); (iv) any Tax or imposition for so long as, but only for so long as, it is being contested in accordance with the provisions of Section 13.02(g) of the Participation Agreement; (v) any interest or penalties imposed on a Tax Indemnitee as a result of the failure of such Tax Indemnitee to file any return or report timely and in the form prescribed by law or to pay any Tax or imposition, except to the extent such failure is a result of a breach by such Tax Indemnitee of its obligations under Section 13.02 of the Participation Agreement; provided that this clause (v) shall not apply (x) if such interest or penalties arise as a result of a position taken (or requested to be taken) by the Lessee in a contest controlled by the Lessee under Section 13.02(g) of the Participation Agreement or (y) to any such interest or penalties that result from such Tax Indemnitee's complying with the reporting procedures set forth in Section 13.02(d) of the Participation Agreement; (vi) any Taxes or impositions imposed on a Lessor that are a result of a Lessor not being considered a "United States person" as defined in Section 7701(a) (30) of the Code; (vii) any Taxes or impositions that are enacted or adopted by their express terms as a substitute for any Tax that would not have been indemnified against pursuant to the terms of Section 13.02 of the Participation Agreement; (viii) any Taxes which are imposed on a Tax Indemnitee as a result of a breach of a covenant or representation by such Tax Indemnitee in any Operative Agreement (unless caused by the Lessee's breach of its representations, warranties and covenants) or as a result of the gross negligence or wilful misconduct of such Tax Indemnitee itself (as opposed to

gross negligence or wilful misconduct imputed to such Tax Indemnitee), but not Taxes imposed as a result of ordinary negligence of such Tax Indemnitee; (ix) any Taxes or impositions imposed on a Lessor to the extent that such Taxes are actually reimbursed to such Lessor by another Person other than an Affiliate of such Lessor; (x) any Taxes or impositions imposed upon a Lessor with respect to any voluntary transfer, sale, financing or other voluntary disposition by a Lessor (other than a transfer contemplated and permitted by the Operative Agreements, including any transfer in connection with (1) the exercise by the Lessee of its Purchase Option, (2) the occurrence of a Lease Event of Default, a Credit Agreement Event of Default, or a Project Loan Agreement Event of Default, or (3) a Casualty or Condemnation affecting any Property) of any interest in any Property or any interest in, or created pursuant to, the Operative Agreements or any voluntary transfer of any interest in a Lessor (other than in connection with the existence of a Lease Event of Default, a Project Loan Agreement Event of Default or a Credit Agreement Event of Default) or any involuntary transfer of any of the foregoing interests resulting from the bankruptcy or insolvency of a Lessor (other than in connection with the existence of a Lease Event of Default or a Credit Agreement Event of Default); (xi) any gift or inheritance Taxes;

gross negligence or wilful misconduct imputed to such Tax Indemnitee), but not Taxes imposed as a result of ordinary negligence of such Tax Indemnitee; (ix) any Taxes or impositions imposed on a Lessor to the extent that such Taxes are actually reimbursed to such Lessor by another Person other than an Affiliate of such Lessor; (x) any Taxes or impositions imposed upon a Lessor with respect to any voluntary transfer, sale, financing or other voluntary disposition by a Lessor (other than a transfer contemplated and permitted by the Operative Agreements, including any transfer in connection with (1) the exercise by the Lessee of its Purchase Option, (2) the occurrence of a Lease Event of Default, a Credit Agreement Event of Default, or a Project Loan Agreement Event of Default, or (3) a Casualty or Condemnation affecting any Property) of any interest in any Property or any interest in, or created pursuant to, the Operative Agreements or any voluntary transfer of any interest in a Lessor (other than in connection with the existence of a Lease Event of Default, a Project Loan Agreement Event of Default or a Credit Agreement Event of Default) or any involuntary transfer of any of the foregoing interests resulting from the bankruptcy or insolvency of a Lessor (other than in connection with the existence of a Lease Event of Default or a Credit Agreement Event of Default); (xi) any gift or inheritance Taxes; (xii) any Taxes or impositions imposed on a Tax Indemnitee, to the extent such Tax Indemnitee actually receives a credit (or otherwise has a reduction in a liability for Taxes) in respect thereof against Taxes that are not indemnified hereunder (but only to the extent such credit is not taken into account in calculating the indemnity payment on an After Tax Basis); (xiii) any Tax or imposition to the extent that such Tax or imposition is imposed on a Tax Indemnitee in respect of a transaction or business in the jurisdiction imposing such Tax other than the transactions arising out of the Operative Agreements; or (xiv) any Tax or imposition imposed on a direct or indirect transferee, successor or assign of a Lessor to the extent of the excess of such Taxes over the amount of such Taxes that would have been imposed had there not been a transfer by the original Lessor of an interest arising under the Operative Agreements; provided that there shall not be excluded under this clause (xiv) any such Tax or imposition if such direct or indirect transferee, successor or assign of a Lessor acquired its interest as a result of a transfer in connection with a Lease Event of Default, a Project Loan Agreement Event of Default or a Credit Agreement Event of Default; provided, further, that there shall not be excluded under this clause (xiv) any amount necessary to make any payment on an After Tax Basis.

Any Tax or imposition excluded from the defined term "Imposition" in any one of the foregoing clauses (i) through (xiv) shall not be construed as constituting an Imposition by any provision of any other of the aforementioned clauses. "Impositions Indemnitee" shall mean each Person entitled to indemnification under Article XIII of the Participation Agreement and their respective successors, assigns, directors, participants, shareholders, partners, officers, employees, agents and Affiliates. "Improvements" shall mean all buildings, structures, Fixtures, Equipment, and other improvements of every kind existing at any time and from time to time (including those constructed pursuant to a Development Agreement or a Development Agency Agreement) on or under the Land, together with any and all appurtenances to such buildings, structures or improvements, including sidewalks, utility pipes, conduits and lines, parking areas and roadways, and including all Modifications and other additions to or changes in the Improvements at any time. "Indebtedness" shall mean as to any Person at any time, any and all indebtedness, obligations or liabilities (whether matured or unmatured, liquidated or unliquidated, direct or indirect, absolute or contingent, or joint or several) of such Person for or in respect of: (i) borrowed money, (ii) amounts raised under or liabilities in respect of any note purchase or acceptance credit facility, (iii) reimbursement or repurchase obligations under any letter of credit, note or accounts receivable financing arrangement, currency swap agreement, interest rate swap, cap,

Any Tax or imposition excluded from the defined term "Imposition" in any one of the foregoing clauses (i) through (xiv) shall not be construed as constituting an Imposition by any provision of any other of the aforementioned clauses. "Impositions Indemnitee" shall mean each Person entitled to indemnification under Article XIII of the Participation Agreement and their respective successors, assigns, directors, participants, shareholders, partners, officers, employees, agents and Affiliates. "Improvements" shall mean all buildings, structures, Fixtures, Equipment, and other improvements of every kind existing at any time and from time to time (including those constructed pursuant to a Development Agreement or a Development Agency Agreement) on or under the Land, together with any and all appurtenances to such buildings, structures or improvements, including sidewalks, utility pipes, conduits and lines, parking areas and roadways, and including all Modifications and other additions to or changes in the Improvements at any time. "Indebtedness" shall mean as to any Person at any time, any and all indebtedness, obligations or liabilities (whether matured or unmatured, liquidated or unliquidated, direct or indirect, absolute or contingent, or joint or several) of such Person for or in respect of: (i) borrowed money, (ii) amounts raised under or liabilities in respect of any note purchase or acceptance credit facility, (iii) reimbursement or repurchase obligations under any letter of credit, note or accounts receivable financing arrangement, currency swap agreement, interest rate swap, cap, collar or floor agreement or other interest rate management device, (iv) Capitalized Lease Obligations, (v) obligations, whether or not assumed, secured by Liens on or payable out of the proceeds or production from Property now or hereafter owned or acquired by such Person, (vi) any other transaction (including forward sale or purchase agreements and conditional sales agreements) having the commercial effect of a borrowing of money entered into by such Person to finance its operations or capital requirements (but not including trade payables and accrued expenses incurred in the ordinary course of business which are not represented by a promissory note or other evidence of indebtedness and which are not more than thirty (30) days past due), or (vii) any Contingent Obligation in respect of borrowed money or Capitalized Lease Obligations of another Person. "Indemnified Person" shall mean the Trust Company, in its individual capacity and its trust capacity, the Agents, the Investor, the Lenders and their respective successors, assigns, participants, directors, shareholders, partners, officers, employees, agents and Affiliates. "Ineligible Security" shall mean any security which may not be underwritten or dealt in by member banks of the Federal Reserve System under Section 16 of the Banking Act of 1933 (12 U.S.C. Section 24, Seventh), as amended. "Initial Construction Advance" shall mean any initial Advance under a Project Loan Agreement to pay for: (i) Project Costs for construction or demolition of the Improvements on any Property; (ii) the Project Costs of restoring or repairing any Property which is required to be restored

or repaired in accordance with Section 11.1 of each Lease; and (iii) the costs of any Modifications in accordance with Section 12.1 of each Lease. "Insolvency Proceeding" shall mean, with respect to any Person, (a) a case, action or proceeding with respect to such Person (i) before any court or any other Governmental Authority under any bankruptcy, insolvency, reorganization or other similar Law now or hereafter in effect, or (ii) for the appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator, conservator (or similar official) of the Company or any of its Subsidiaries or otherwise relating to the liquidation, dissolution, winding-up or relief of such Person, or (b) any general assignment for the benefit of creditors, composition, marshaling of assets for creditors, or other similar arrangement in respect of such Person's creditors generally or any substantial portion of its creditors undertaken under any Law. "Insurance Requirements" shall mean all terms and conditions of any insurance policy either required by a Lease to be maintained by the Lessee or required by the Development Agency Agreement to be maintained by the Developer, and all requirements of the issuer of any such policy.

or repaired in accordance with Section 11.1 of each Lease; and (iii) the costs of any Modifications in accordance with Section 12.1 of each Lease. "Insolvency Proceeding" shall mean, with respect to any Person, (a) a case, action or proceeding with respect to such Person (i) before any court or any other Governmental Authority under any bankruptcy, insolvency, reorganization or other similar Law now or hereafter in effect, or (ii) for the appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator, conservator (or similar official) of the Company or any of its Subsidiaries or otherwise relating to the liquidation, dissolution, winding-up or relief of such Person, or (b) any general assignment for the benefit of creditors, composition, marshaling of assets for creditors, or other similar arrangement in respect of such Person's creditors generally or any substantial portion of its creditors undertaken under any Law. "Insurance Requirements" shall mean all terms and conditions of any insurance policy either required by a Lease to be maintained by the Lessee or required by the Development Agency Agreement to be maintained by the Developer, and all requirements of the issuer of any such policy. "Interest Capitalization Termination Date" shall, with respect to each Project, have the meaning assigned to such term in Section 1.1 of the relevant Project Loan Agreement. "Interest Payment Date" shall mean each date specified for the payment of interest in Section 5.03 of the Credit Agreement. "Interest Period" shall mean with respect to a Euro-Rate Borrowing Tranche, a period of one month commencing on a Business Day selected by the Owner Trustee pursuant to the Credit Agreement. Such Interest Period shall end on (but exclude) the day which corresponds numerically to such date one month thereafter; provided, however, that if there is no such numerically corresponding day in such next succeeding month, such Interest Period shall end on the last Business Day of such next succeeding month. If an Interest Period would otherwise end on a day which is not a Business Day, such Interest Period shall end on the next succeeding Business Day; provided, however, that if said next succeeding Business Day falls in a new calendar month, such Interest Period shall end on the immediately preceding Business Day. "Interest Rate Option" shall mean any Euro-Rate Option or Base Rate Option. "Interim Statements" shall have the meaning assigned to such term in Section 7.03(i) of the Participation Agreement. "Internal Revenue Code" shall mean the Internal Revenue Code of 1986, as the same may be amended or supplemented from time to time, and any successor statute of similar import, and the rules and regulations thereunder, as from time to time in effect.

"Investment Company Act" shall mean the Investment Company Act of 1940, as amended, together with the rules and regulations promulgated thereunder. "Investments" shall have the meaning assigned to such term in Section 12.04 of the Guarantee. "Investor" shall mean SAM Project Funding Corp. I, a corporation organized and existing under the laws of the State of Delaware, and its permitted successors and assigns. "Joint Venture" shall mean any Foreign Joint Venture or Domestic Joint Venture, and "Joint Ventures" shall mean all Foreign Joint Ventures and Domestic Joint Ventures. "Kmart" shall mean Kmart Corporation, a corporation organized and existing under the laws of the State of Michigan. "Kmart Agreements" shall mean the Kmart Indemnity, the Kmart Intercompany Agreement, the Kmart Registration Rights Agreement and the Kmart Tax Agreement. "Kmart Indemnity" shall mean that certain Lease Guaranty, Indemnification and Reimbursement Agreement, dated May 24, 1995, entered into by the Company and/or one or more of the other Guarantors, on the one hand, and Kmart, on the other hand, as the same may be amended, supplemented or otherwise modified from time to time subject to Section 12.18 of the Guarantee. "Kmart Intercompany Agreement" shall mean that certain Intercompany Agreement, dated May 24, 1995, entered into by the Company, on the one hand, and Kmart, on the other hand, as the same may be amended, supplemented or otherwise modified from time to time subject to Section 12.18 of the Guarantee. "Kmart Registration Rights Agreement" shall mean that certain Registration Rights Agreement, dated May 24, 1995, entered into by the Company, on the one hand, and Kmart, on the other hand, as the same may be amended, supplemented or otherwise modified from time to time subject to Section 12.18 of the Guarantee. "Kmart Tax Agreement" shall mean that certain Tax Allocation and Indemnification Agreement, dated May 24, 1995, entered into by the Company, on the one hand, and Kmart, on the other hand, as the same may be amended, supplemented or otherwise modified from time to time subject to Section 12.18 of the Guarantee. "Labor Contracts" shall mean all employment agreements, employment contracts, collective bargaining agreements and other agreements between the Company or Subsidiary of the Company and its employees.

"Land" shall mean a Property consisting of the parcel of real property described on Schedule 1 of a Lease for such Land and all Appurtenant Rights attached thereto. "Law" shall mean any law (including common law), constitution, statute, treaty, regulation, rule, ordinance, opinion, release, ruling, order, injunction, writ, decree or award of any Governmental Authority. "Lease" shall mean a Lease, dated as of a Property Closing Date, between a Lessor and one of the Lessees in the form of Exhibit G to the Participation Agreement. "Lease Commencement Date" for a particular Lease shall mean the Effective Date (as defined in the particular Lease) for the Property subject to such Lease. "Lease Default" shall mean any event or condition which, with the lapse of time or the giving of notice, or both, would constitute a Lease Event of Default. "Lease Event of Default" shall have the meaning given to such term in Section 18.1 of each Lease. "Lease Financing Payment" shall mean any payment by the Company or any of its Subsidiaries (i) under the

"Land" shall mean a Property consisting of the parcel of real property described on Schedule 1 of a Lease for such Land and all Appurtenant Rights attached thereto. "Law" shall mean any law (including common law), constitution, statute, treaty, regulation, rule, ordinance, opinion, release, ruling, order, injunction, writ, decree or award of any Governmental Authority. "Lease" shall mean a Lease, dated as of a Property Closing Date, between a Lessor and one of the Lessees in the form of Exhibit G to the Participation Agreement. "Lease Commencement Date" for a particular Lease shall mean the Effective Date (as defined in the particular Lease) for the Property subject to such Lease. "Lease Default" shall mean any event or condition which, with the lapse of time or the giving of notice, or both, would constitute a Lease Event of Default. "Lease Event of Default" shall have the meaning given to such term in Section 18.1 of each Lease. "Lease Financing Payment" shall mean any payment by the Company or any of its Subsidiaries (i) under the Guarantee in respect of Contingent Obligations described in Section 12.03(h) of the Guarantee (other than in respect of Basic Rent), (ii) to purchase or otherwise acquire all or any portion of any Property subject to any Financed Lease, including, without limitation, all payments pursuant to the exercise by the Company or any of its Subsidiaries of any Purchase Option, or (iii) that constitutes a payment of the Termination Value or the Maximum Residual Guarantee Amount. "Lease Financing Rent Expense" shall mean all Basic Rent payable by the Company and its Subsidiaries, as lessee or sublessee under a Lease. "Lease Rents" shall have the meaning given to such term in each Assignment of Leases. "Lease Supplement" shall mean a Lease Supplement in the form of Exhibit K to the Participation Agreement, whereby a Lessor agrees to lease the Improvements located or to be located upon the Land to the applicable Lessee. "Legal Requirements" shall mean all Federal, state, county, municipal and other governmental statutes, laws, rules, orders, regulations, ordinances, judgments, decrees and injunctions affecting any Property, any Improvements or the demolition, construction, use or alteration thereof, whether now or hereafter enacted and in force, including any that require repairs, modifications or alterations in or to any Property or in any way limit the use and enjoyment thereof (including all building, zoning and fire codes and the Americans with Disabilities Act of 1990, 42

U.S.C. Section 12101 et. seq. and any other similar Federal, state or local laws or ordinances and the regulations promulgated thereunder) and any that may relate to environmental requirements (including all Environmental Laws), and all permits, certificates of occupancy, licenses, authorizations and regulations relating thereto, and all covenants, agreements, restrictions and encumbrances contained in any instruments which are either of record or known to the Lessee affecting any Property, the Appurtenant Rights and any easements, licenses or other agreements entered into pursuant to Section 13.2 of each Lease. "Lender Financing Statements" shall mean UCC financing statements appropriately completed and executed for filing in the applicable jurisdiction in order to perfect a security interest in favor of the Real Estate Administrative Agent in the Equipment located on a Property or in any Improvements on a Property. "Lenders" shall mean the several banks and other financial institutions from time to time party to the Credit Agreement. "Lending Office" shall mean, with respect to each Lender, the office(s) specified for such Lender in Schedule II of the Credit Agreement or such other office(s) as such Lender may specify in writing to the Administrative Agent.

U.S.C. Section 12101 et. seq. and any other similar Federal, state or local laws or ordinances and the regulations promulgated thereunder) and any that may relate to environmental requirements (including all Environmental Laws), and all permits, certificates of occupancy, licenses, authorizations and regulations relating thereto, and all covenants, agreements, restrictions and encumbrances contained in any instruments which are either of record or known to the Lessee affecting any Property, the Appurtenant Rights and any easements, licenses or other agreements entered into pursuant to Section 13.2 of each Lease. "Lender Financing Statements" shall mean UCC financing statements appropriately completed and executed for filing in the applicable jurisdiction in order to perfect a security interest in favor of the Real Estate Administrative Agent in the Equipment located on a Property or in any Improvements on a Property. "Lenders" shall mean the several banks and other financial institutions from time to time party to the Credit Agreement. "Lending Office" shall mean, with respect to each Lender, the office(s) specified for such Lender in Schedule II of the Credit Agreement or such other office(s) as such Lender may specify in writing to the Administrative Agent. "Lessees" shall mean, collectively, the Company, Borders, Walden, BPI and WPI. "Lessor" or "Lessors" shall have the meaning assigned to such terms in Section 2.01 of the Participation Agreement and shall include an "Agree Lessor" unless otherwise indicated. "Lessor Default" shall have the meaning assigned to such term in Section 5.06 of the Participation Agreement. "Lessor Financing Statements" shall mean UCC financing statements appropriately completed and executed for filing in the applicable jurisdiction in order to protect a Lessor's interest under a Lease to the extent such Lease is a security agreement. "Lessor Lien" shall mean any Lien, true lease or sublease or disposition of title arising as a result of (a) any claim against a Lessor, Agree SPC or Developer, (b) any act or omission of a Lessor, Agree SPC or Developer which is not required by the Operative Agreements or is in violation of any of the terms of the Operative Agreements, (c) any claim against a Lessor, Agree SPC or a Developer with respect to Taxes or Transaction Expenses against which Lessee is not required to indemnify Lessor, Agree SPC or a Developer or (d) any claim against a Lessor, Agree SPC or a Developer arising out of any transfer by a Lessor of all or any portion of the interest of a Lessor in a Property , or a transfer by the Investor of its interest in the Trust Estate or the Operative Agreements other than the transfer of title to or possession of any Properties by a Lessor pursuant to and in accordance with a Lease, the Credit Agreement, the Project Loan Agreement or the

Participation Agreement or pursuant to the exercise of the remedies set forth in Article XVIII of a Lease. "Leverage Ratio" shall mean the ratio (expressed as a percentage) of Consolidated Funded Indebtedness to Consolidated Total Capital. "Lien" shall mean any mortgage, deed of trust, pledge, lien, security interest, charge or other encumbrance or security arrangement of any nature whatsoever, whether voluntarily or involuntarily given, including any conditional sale or title retention arrangement, and any assignment, deposit arrangement or lease intended as, or having the effect of, security. "Limited Recourse Amount" with respect to each Property, shall have the meaning assigned to such term in Section 22.1. of the applicable Lease. "Loans" and "Loan" shall mean the collective reference to all Revolving Credit Loans and Swing Loans or separately, any Revolving Credit Loan or Swing Loan. "Marketing Period" shall mean, if the Lessee has not given Purchase Notice in accordance with Section 21.1 of a Lease, the period commencing on the date twelve months prior to the Maturity Date and ending on the Maturity

Participation Agreement or pursuant to the exercise of the remedies set forth in Article XVIII of a Lease. "Leverage Ratio" shall mean the ratio (expressed as a percentage) of Consolidated Funded Indebtedness to Consolidated Total Capital. "Lien" shall mean any mortgage, deed of trust, pledge, lien, security interest, charge or other encumbrance or security arrangement of any nature whatsoever, whether voluntarily or involuntarily given, including any conditional sale or title retention arrangement, and any assignment, deposit arrangement or lease intended as, or having the effect of, security. "Limited Recourse Amount" with respect to each Property, shall have the meaning assigned to such term in Section 22.1. of the applicable Lease. "Loans" and "Loan" shall mean the collective reference to all Revolving Credit Loans and Swing Loans or separately, any Revolving Credit Loan or Swing Loan. "Marketing Period" shall mean, if the Lessee has not given Purchase Notice in accordance with Section 21.1 of a Lease, the period commencing on the date twelve months prior to the Maturity Date and ending on the Maturity Date. "Material Adverse Effect" shall mean (a) a material adverse effect upon the validity or enforceability of any of the Operative Agreements, (b) a material adverse effect on the business, properties, assets, financial condition or results of operations of the Company and its Subsidiaries taken as a whole, (c) a material impairment of the ability of any Guarantor or the Company and its Subsidiaries taken as a whole to duly and punctually pay or perform its or their Indebtedness, or (d) a material impairment of the ability of any of the Agents or any of the Lenders, to the extent permitted, to enforce its legal remedies pursuant the Credit Agreement, the Project Loan Documents or any other Operative Agreement. "Maturity Date" shall mean October 16, 2002, or such later date if such date is extended in accordance with the terms of the Credit Agreement. "Maturity Date Property Cost" shall mean the aggregate amount of the Property Cost for all Properties as of the Maturity Date. "Maximum Purchase Option Amount" shall mean sixty percent (60%) of the highest aggregate amount of the Maximum Property Cost at any time prior to the Maturity Date. "Maximum Property Cost" shall mean the aggregate amount of the Property Costs for the Properties subject to Leases as of the determination date.

"Maximum Residual Guarantee Amount" shall mean an amount equal to the product of the principal amount of the Project Loan allocated to a Property times the applicable Modified Tranche A Percentage or Percentages for such Property. "Memorandum of Lease" shall have the meaning specified in Section 32.7 of each Lease. "Memorandum of Ground Lease" shall mean a memorandum of ground lease executed by the applicable Lessor and Ground Lessor on a Property Closing Date to record the pertinent terms of a Ground Lease. "Modification Amount" shall have the meaning assigned to such term in Section 2.02(b) of the Credit Agreement. "Modification Date" shall have the meaning assigned to such term in Section 2.02(b) of the Credit Agreement. "Modifications" shall have the meaning specified in Section 12.1 of each Lease.

"Maximum Residual Guarantee Amount" shall mean an amount equal to the product of the principal amount of the Project Loan allocated to a Property times the applicable Modified Tranche A Percentage or Percentages for such Property. "Memorandum of Lease" shall have the meaning specified in Section 32.7 of each Lease. "Memorandum of Ground Lease" shall mean a memorandum of ground lease executed by the applicable Lessor and Ground Lessor on a Property Closing Date to record the pertinent terms of a Ground Lease. "Modification Amount" shall have the meaning assigned to such term in Section 2.02(b) of the Credit Agreement. "Modification Date" shall have the meaning assigned to such term in Section 2.02(b) of the Credit Agreement. "Modifications" shall have the meaning specified in Section 12.1 of each Lease. "Modified Tranche A Percentage" shall mean at any date of determination, (i) with respect to any Property consisting of Improvements or Land and Improvements, if the cost of the Land (as shown on the Property Closing Certificate) is less than 25% of the Property Cost, the maximum percentage of the principal amount of the Project Loan in respect of such Property which may be allocated to Tranche A Loans as of such date without causing the Lease to be treated as a Capitalized Lease for the purposes of Statement of Financial Accounting Standards (SFAS) No. 13, as determined in good faith by the applicable Lessee, or any greater percentage specified by the applicable Lessee by written notice to the Administrative Agent as constituting the "Modified Tranche A Percentage" with respect to such Property, (ii) with respect to any Property consisting of Land, the cost of which is greater than or equal to 25% of the Property Cost, 100% and (iii) with respect to any Property which is an Agree Project, 100%; provided that in no event shall the Modified Tranche A Percentage be less than 80%. "Modified Tranche B Percentage" shall mean at any date of determination, with respect to any Property consisting of Improvements, a percentage equal to 100% minus the Modified Tranche A Percentage then in effect with respect to such Property. "More Restrictive Provisions" shall have the meaning assigned to such term in Section 11.10 of the Guarantee. "Mortgage" shall mean, with respect to any Property, a Mortgage and Security Agreement substantially in the form attached as Exhibit D-2 to each

Project Loan Agreement or a Deed of Trust and Security Agreement substantially in the form attached as Exhibit D-2 to each Project Loan Agreement, in each case made by the applicable Lessor in favor of the Owner Trustee in order to create a first priority mortgage lien on such Property. "Multiemployer Plan" shall mean any employee benefit plan that is a "multiemployer plan" within the meaning of Section 4001(a)(3) of ERISA and to which the Company or any member of the ERISA Group is then making or accruing an obligation to make contributions or at any time in the past has made or had an obligation to make such contributions. "Multiple Employer Plan" shall mean a Plan which has two or more contributing sponsors (including the Company or any member of the ERISA Group) at least two of whom are not under common control, as such a plan is described in Sections 4063 and 4064 of ERISA. "Net Proceeds" shall mean all amounts paid in connection with any Casualty or Condemnation, and all interest earned thereon, less the reasonable expense of claiming and collecting such amounts, including all costs and expenses in connection therewith for which the Real Estate Administrative Agent or Lessor are entitled to be reimbursed pursuant to a Lease. "Net Sale Proceeds Shortfall" shall mean the amount by which the proceeds of a sale described in Article XXI of

Project Loan Agreement or a Deed of Trust and Security Agreement substantially in the form attached as Exhibit D-2 to each Project Loan Agreement, in each case made by the applicable Lessor in favor of the Owner Trustee in order to create a first priority mortgage lien on such Property. "Multiemployer Plan" shall mean any employee benefit plan that is a "multiemployer plan" within the meaning of Section 4001(a)(3) of ERISA and to which the Company or any member of the ERISA Group is then making or accruing an obligation to make contributions or at any time in the past has made or had an obligation to make such contributions. "Multiple Employer Plan" shall mean a Plan which has two or more contributing sponsors (including the Company or any member of the ERISA Group) at least two of whom are not under common control, as such a plan is described in Sections 4063 and 4064 of ERISA. "Net Proceeds" shall mean all amounts paid in connection with any Casualty or Condemnation, and all interest earned thereon, less the reasonable expense of claiming and collecting such amounts, including all costs and expenses in connection therewith for which the Real Estate Administrative Agent or Lessor are entitled to be reimbursed pursuant to a Lease. "Net Sale Proceeds Shortfall" shall mean the amount by which the proceeds of a sale described in Article XXI of a Lease (net of all expenses of sale) are less than the Limited Recourse Amount with respect to any Property if it has been determined that the Fair Market Sales Value of the Property at the expiration of the term of such Lease has been impaired by greater than expected wear and tear during the term of such Lease. "Note Put Agreements" shall mean those certain Note Put Agreements, dated as of November 10, 1994, by and among Kmart, the Company and National Tenant Finance Corporation, as such documents may be amended, supplemented or otherwise modified from time to time subject to Section 12.18 of the Guarantee. "Notes" shall mean the collective reference to the Tranche A Notes, the Tranche B Notes and Swing Notes. "Obligations" shall mean any obligation or liability of the Borrower (including any obligation or liability which accrues after the commencement of any Insolvency Proceeding or would accrue but for the operation of Law, whether or not allowed or allowable as a claim in such Insolvency Proceeding) to any of the Agents or any of the Lenders, howsoever created, arising or evidenced, whether direct or indirect, absolute or contingent, now or hereafter existing, or due or to become due, under or in connection with the Credit Agreement or any other Credit Document. "Officer's Certificate" shall mean a certificate signed by any individual holding the office of vice president or higher, which certificate shall certify as true and correct the subject matter being certified to in such certificate. "Operative Agreements" shall mean the following:

(a) the Participation Agreement; (b) the Notes; (c) the Project Loan Note; (d) each Lease; (e) each Lease Supplement; (f) each Assignment of Lease; (g) each Reassignment of Leases and Rents; (h) each Consent to Assignment; (i) the Credit Agreement; (j) each Project Loan Agreement; (k) each Agree Project Loan Agreement; (l) each Ground Lease, if applicable; (m) each Mortgage; (n) each Agree LLC Pledge; (o) each UCC Financing Statement;

(a) the Participation Agreement; (b) the Notes; (c) the Project Loan Note; (d) each Lease; (e) each Lease Supplement; (f) each Assignment of Lease; (g) each Reassignment of Leases and Rents; (h) each Consent to Assignment; (i) the Credit Agreement; (j) each Project Loan Agreement; (k) each Agree Project Loan Agreement; (l) each Ground Lease, if applicable; (m) each Mortgage; (n) each Agree LLC Pledge; (o) each UCC Financing Statement; (p) each Completion Guarantee; (q) each Assignment of Development Agency Agreement; (r) each Development Agency Agreement; (s) the Guarantee; (t) the Security Agreement; (u) each Assignment of Contracts; and (v) the Trust Agreement. "OnLine, Inc." shall mean a corporation organized and existing under the laws of the State of Delaware, and its permitted successors and assigns. "Other Leases" shall have the meaning assigned to such term in Section 2(b) of each Assignment of Leases. "Other Lease Rents" shall have the meaning assigned to such term in Section 2(b) of each Assignment of Leases. "Outlet, Inc." shall mean a corporation organized and existing under the laws of the State of Colorado, and its permitted successors and assigns "Outside Completion Date" shall have the meaning assigned to such term in Section 1.1 of each Project Loan Agreement; provided that such date is prior to the date which is one month prior to the Maturity Date. "Overdue Interest" shall mean any interest payable pursuant to Section 4.06 of the Credit Agreement.

"Overdue Interest Rate" shall mean the interest rate described in Section 4.06 of the Credit Agreement. "Owner Trustee" shall mean Wilmington Trust Company, not in its individual capacity, except as expressly stated in the Operative Agreements, but solely as Owner Trustee under the Trust Agreement. "PBGC" shall mean the Pension Benefit Guaranty Corporation established pursuant to Subtitle A of Title IV of ERISA or any successor. "Participant" shall have the meaning assigned to such term in Section 12.08(b) of the Credit Agreement. "Participation Agreement" shall mean the Amended and Restated Participation Agreement, dated as of November 22, 1995 and amended and restated as of October 17, 1997, among the Lessees, the Owner Trustee, the Lenders, the Investor and the Agents. "Partnership Interests" shall have the meaning assigned to such term in Section 7.03(c) of the Participation Agreement.

"Overdue Interest Rate" shall mean the interest rate described in Section 4.06 of the Credit Agreement. "Owner Trustee" shall mean Wilmington Trust Company, not in its individual capacity, except as expressly stated in the Operative Agreements, but solely as Owner Trustee under the Trust Agreement. "PBGC" shall mean the Pension Benefit Guaranty Corporation established pursuant to Subtitle A of Title IV of ERISA or any successor. "Participant" shall have the meaning assigned to such term in Section 12.08(b) of the Credit Agreement. "Participation Agreement" shall mean the Amended and Restated Participation Agreement, dated as of November 22, 1995 and amended and restated as of October 17, 1997, among the Lessees, the Owner Trustee, the Lenders, the Investor and the Agents. "Partnership Interests" shall have the meaning assigned to such term in Section 7.03(c) of the Participation Agreement. "Payment Date" shall mean any Interest Payment Date. "Permitted Exceptions" shall mean: (i) Liens of the types described in clauses (i), (ii), (v) and (viii) of the definition of Permitted Liens; (ii) Liens for Taxes not yet due and payable; and (ii) all encumbrances, exceptions, restrictions, easements, rights of way, servitudes, encroachments and irregularities in title, other than Liens which, in the reasonable assessment of the Developer or the Lessees, do not materially impair the use of the Property for its intended purpose. "Permitted Investments" shall mean: (i) direct obligations of the United States of America or any agency or instrumentality thereof or obligations backed by the full faith and credit of the United States of America maturing in twelve (12) months or less from the date of acquisition; (ii) commercial paper maturing in 180 days or less rated not lower than A-1 by Standard & Poor's Corporation or P-1 by Moody's Investors Service, Inc. on the date of acquisition;

(iii) demand deposits, time deposits or certificates of deposit maturing within one year in any Lender or any commercial bank whose commercial paper (or that of its parent corporation) is rated not lower than A-1 by Standard & Poor's Corporation or P-1 by Moody's Investors Service, Inc. on the date of acquisition; (iv) adjustable rate preferred stock with an express (or implied) rating not lower than A by Standard & Poor's Corporation or A by Moody's Investors Service, Inc. on the date of acquisition; and (v) investments in any investment company registered under the Investment Company Act of 1940, as amended (or any series thereof) (A) that prices its shares in accordance with Rule 2a-7 under such Act, (B) which holds at least ninety percent (90%) of its assets in the investments itemized in (i) through (iv) above, and (C) which has net asset value exceeding $100,000,000 on the date of acquisition. "Permitted Joint Venture Activity" shall mean (i) any Investment by the Company or any Unrestricted Subsidiary that is a Domestic Subsidiary in any Joint Venture or any Contingent Obligations of the Company or any Unrestricted Subsidiary that is a Domestic Subsidiary in respect of any Indebtedness of any Joint Venture, provided that the aggregate amount of all such Investments and Contingent Obligations does not at any time

(iii) demand deposits, time deposits or certificates of deposit maturing within one year in any Lender or any commercial bank whose commercial paper (or that of its parent corporation) is rated not lower than A-1 by Standard & Poor's Corporation or P-1 by Moody's Investors Service, Inc. on the date of acquisition; (iv) adjustable rate preferred stock with an express (or implied) rating not lower than A by Standard & Poor's Corporation or A by Moody's Investors Service, Inc. on the date of acquisition; and (v) investments in any investment company registered under the Investment Company Act of 1940, as amended (or any series thereof) (A) that prices its shares in accordance with Rule 2a-7 under such Act, (B) which holds at least ninety percent (90%) of its assets in the investments itemized in (i) through (iv) above, and (C) which has net asset value exceeding $100,000,000 on the date of acquisition. "Permitted Joint Venture Activity" shall mean (i) any Investment by the Company or any Unrestricted Subsidiary that is a Domestic Subsidiary in any Joint Venture or any Contingent Obligations of the Company or any Unrestricted Subsidiary that is a Domestic Subsidiary in respect of any Indebtedness of any Joint Venture, provided that the aggregate amount of all such Investments and Contingent Obligations does not at any time exceed 15% of Consolidated Tangible Net Worth, determined as of the last day of the Fiscal Quarter most recently ended and (ii) any Contingent Obligations of the Company or any Unrestricted Subsidiary that is a Domestic Subsidiary, or Indebtedness of the Company or any Unrestricted Subsidiary that is a Domestic Subsidiary constituting reimbursement obligations under letters of credit, relating to leases executed, as lessee, by a Joint Venture, provided, that the portion of such Contingent Obligations and Indebtedness which constitutes current liabilities determined and consolidated in accordance with GAAP is limited to lease payments (whether such amounts are fixed or percentage rent, fees, costs, accelerated payment requirements or otherwise) not in excess of an aggregate of $15,000,000 in any Fiscal Year with respect to all Joint Ventures. "Permitted Lease Contingent Obligations" shall mean all guarantees, sureties or other forms of secondary liability in respect of real property leases which have been assigned (which term shall also include new leases entered into between the landlord and a third Person in respect of real property being vacated by any of the Guarantors) by any of the Guarantors or any Subsidiary of any of the Guarantors to any Person (other than any of the Guarantors or any such Subsidiary), the terms of which assignment, or the landlord's consent therefor, or of any such guarantee, surety or other agreement or instrument, require any of the Guarantors or such Subsidiary to remain liable for rent and other performance in respect of the assigned lease. "Permitted Liens" shall mean: (i) Liens for taxes, assessments, or similar charges, incurred in the ordinary course of business and which are not yet due and payable;

(ii) pledges or deposits made in the ordinary course of business to secure payment of worker's compensation, or to participate in any fund in connection with worker's compensation, unemployment insurance, old-age pensions or other social security programs; (iii) Liens of mechanics, materialmen, warehousemen, carriers, or other like Liens, securing obligations incurred in the ordinary course of business that are not yet due and payable and Liens of landlords securing obligations to pay lease payments that are not yet due and payable or in default; (iv) pledges or deposits made in the ordinary course of business to secure performance of bids, tenders, contracts (other than for the repayment of Indebtedness) or leases, not in excess of the aggregate amount due thereunder, or to secure statutory obligations, or surety, appeal, indemnity, performance or other similar bonds required in the ordinary course of business; (v) encumbrances consisting of zoning restrictions, easements or other restrictions on the use of real property, none of which materially impairs the use of such Property or the value thereof, and none of which is violated in any material respect by existing or proposed structures or land use; (vi) Liens on property leased by the Company or any Subsidiary of the Company under Capitalized Leases

(ii) pledges or deposits made in the ordinary course of business to secure payment of worker's compensation, or to participate in any fund in connection with worker's compensation, unemployment insurance, old-age pensions or other social security programs; (iii) Liens of mechanics, materialmen, warehousemen, carriers, or other like Liens, securing obligations incurred in the ordinary course of business that are not yet due and payable and Liens of landlords securing obligations to pay lease payments that are not yet due and payable or in default; (iv) pledges or deposits made in the ordinary course of business to secure performance of bids, tenders, contracts (other than for the repayment of Indebtedness) or leases, not in excess of the aggregate amount due thereunder, or to secure statutory obligations, or surety, appeal, indemnity, performance or other similar bonds required in the ordinary course of business; (v) encumbrances consisting of zoning restrictions, easements or other restrictions on the use of real property, none of which materially impairs the use of such Property or the value thereof, and none of which is violated in any material respect by existing or proposed structures or land use; (vi) Liens on property leased by the Company or any Subsidiary of the Company under Capitalized Leases permitted under the Guarantee securing obligations of the Company or any such Subsidiary to the lessor under such Capitalized Leases; (vii) any Lien existing on the date of this Agreement and described on Schedule 1 to the Guarantee; provided that the principal amount secured thereby is not hereafter increased and no additional assets become subject to such Lien; (viii) Purchase Money Security Interests; (ix) the following, (A) if the validity or amount thereof is being contested in good faith by appropriate and lawful proceedings diligently conducted so long as levy and execution thereon have been stayed and continue to be stayed or (B) if a final judgment is entered and such judgment is discharged within thirty (30) days of entry, and in either case individually or in the aggregate, they could not reasonably be expected to have a Material Adverse Effect; (1) Liens for taxes, assessments or similar charges due and payable and subject to interest or penalty, provided that the Company maintains such reserves or other appropriate provisions as shall be required by GAAP and pays all such taxes, assessments or charges forthwith upon the

commencement of proceedings to foreclose any such Lien and is otherwise conducted in accordance with the provisions of the Participation Agreement; (2) Liens upon, and defects of title to, Property, including any attachment of Property or other legal process prior to adjudication of a dispute on the merits; or (3) Liens of mechanics, materialmen, warehousemen, carriers, or other statutory nonconsensual Liens; (x) Liens on assets of the Guarantors securing Indebtedness of the Company and its Subsidiaries incurred to refinance the Contingent Obligations arising under the Guarantee as permitted by Section 12.03(g) of the Guarantee; provided, however, that such Liens may only attach to the property previously subject to the Lease being refinanced; and (xi) Liens on assets of the Company and its Subsidiaries not otherwise permitted by clauses (i) through (x) above, so long as any Indebtedness secured thereby is permitted under the terms of Section 12.01 of the Guarantee and the aggregate fair market value of all property secured by such Liens does not at any time exceed 5% of Consolidated Tangible Net Worth (determined as of the last day of the Fiscal Quarter most recently ended).

commencement of proceedings to foreclose any such Lien and is otherwise conducted in accordance with the provisions of the Participation Agreement; (2) Liens upon, and defects of title to, Property, including any attachment of Property or other legal process prior to adjudication of a dispute on the merits; or (3) Liens of mechanics, materialmen, warehousemen, carriers, or other statutory nonconsensual Liens; (x) Liens on assets of the Guarantors securing Indebtedness of the Company and its Subsidiaries incurred to refinance the Contingent Obligations arising under the Guarantee as permitted by Section 12.03(g) of the Guarantee; provided, however, that such Liens may only attach to the property previously subject to the Lease being refinanced; and (xi) Liens on assets of the Company and its Subsidiaries not otherwise permitted by clauses (i) through (x) above, so long as any Indebtedness secured thereby is permitted under the terms of Section 12.01 of the Guarantee and the aggregate fair market value of all property secured by such Liens does not at any time exceed 5% of Consolidated Tangible Net Worth (determined as of the last day of the Fiscal Quarter most recently ended). "Permitted Restricted Subsidiary Activity" shall mean (i) any Investment by the Company or any Unrestricted Subsidiary which is a Domestic Subsidiary in any Restricted Subsidiary or any Contingent Obligations of the Company or any Unrestricted Subsidiary which is a Domestic Subsidiary in respect of any Indebtedness of any Restricted Subsidiary, provided that (a) the aggregate amount of all such Investments and Contingent Obligations does not at any time exceed 20% of Consolidated Tangible Net Worth, determined as of the last day of the Fiscal Quarter most recently ended and (b) the aggregate amount of all such Investments and Contingent Obligations made by the Company or any Unrestricted Subsidiary which is a Domestic Subsidiary with respect to any Restricted Subsidiary which is a Foreign Subsidiary and does not exceed 15% of Consolidated Tangible Net Worth, determined as of the last day of the Fiscal Quarter most recently ended and (ii) any Contingent Obligations of the Company or any Unrestricted Subsidiary which is a Domestic Subsidiary, or Indebtedness of the Company or any Unrestricted Subsidiary which is a Domestic Subsidiary constituting reimbursement obligations under letters of credit, relating to leases executed, as lessee, by a Restricted Subsidiary, provided, that, the portion of such Contingent Obligations and Indebtedness which constitutes current liabilities determined and consolidated in accordance with GAAP is limited to lease payments (whether such amounts are fixed or percentage rent, fees, costs, accelerated payment requirements or otherwise) not in excess of an aggregate of $15,000,000 in any Fiscal Year with respect to all Restricted Subsidiaries.

"Permitted Sutro Refinancing Indebtedness" shall mean Indebtedness of the Company or any other Guarantor which is incurred solely to pay obligations of the Company under Section 2.2 of any of the Note Put Agreements. "Permits" shall have meaning assigned to such term in Section 1.1 of each Project Loan Agreement. "Person" shall mean any individual, corporation, partnership, limited liability company, joint venture, association, joint- stock company, trust, unincorporated organization, governmental authority or any other entity. "Plan" shall mean at any time an employee pension benefit plan (including a Multiple Employer Plan but not a Multiemployer Plan) which is covered by Title IV of ERISA or is subject to the minimum funding standards under Section 412 of the Internal Revenue Code and either (i) is maintained by any member of the ERISA Group for employees or former employees of any member of the ERISA Group or (ii) has at any time within the preceding five years been maintained by any entity which was at such time a member of the ERISA Group for employees or former employees of any entity which was at such time a member of the ERISA Group. "Planet" shall mean Planet Music, Inc., a corporation organized and existing under the laws of the State of North Carolina, and its permitted successors and assigns. "Plans and Specifications" shall have meaning assigned to such term in Section 1.1 of each Project Loan Agreement.

"Permitted Sutro Refinancing Indebtedness" shall mean Indebtedness of the Company or any other Guarantor which is incurred solely to pay obligations of the Company under Section 2.2 of any of the Note Put Agreements. "Permits" shall have meaning assigned to such term in Section 1.1 of each Project Loan Agreement. "Person" shall mean any individual, corporation, partnership, limited liability company, joint venture, association, joint- stock company, trust, unincorporated organization, governmental authority or any other entity. "Plan" shall mean at any time an employee pension benefit plan (including a Multiple Employer Plan but not a Multiemployer Plan) which is covered by Title IV of ERISA or is subject to the minimum funding standards under Section 412 of the Internal Revenue Code and either (i) is maintained by any member of the ERISA Group for employees or former employees of any member of the ERISA Group or (ii) has at any time within the preceding five years been maintained by any entity which was at such time a member of the ERISA Group for employees or former employees of any entity which was at such time a member of the ERISA Group. "Planet" shall mean Planet Music, Inc., a corporation organized and existing under the laws of the State of North Carolina, and its permitted successors and assigns. "Plans and Specifications" shall have meaning assigned to such term in Section 1.1 of each Project Loan Agreement. "Principal Office" shall mean the main lending office of the Administrative Agent in Pittsburgh, Pennsylvania. "Principal Office of the Swing Lender" shall mean the main lending office of the Swing Lender in New York, New York. "Prior Agreement" shall have the meaning assigned to that term in the preamble to the Credit Agreement. "Prior Agreement Parties" shall have the meaning assigned to that term in the preamble to the Credit Agreement. "Prior Revolving Credit Loans" shall have the meaning assigned to that term in Section 2.01(b) of the Credit Agreement. "Prohibited Transaction" shall mean any prohibited transaction as defined in Section 4975 of the Internal Revenue Code or Section 406 of ERISA for which neither an individual nor a class exemption has been issued by the United States Department of Labor.

"Project Cost" shall mean the cost to a Lessor to construct any Improvements, Fixtures or Modifications to be used on the Property in accordance with Plans and Specifications and the Operative Agreements. "Project Loan" shall have the meaning assigned to such term in Section 1.1 to each Project Loan Agreement; the term "Project Loan" shall include Agree Project Loans. "Project Loan Advance" shall have the meaning assigned to such term in Section 1.1 of each Project Loan Agreement. "Project Loan Agreement" shall mean, for any given Property, a Project Loan Agreement, dated as of each Property Closing Date in the respective forms of Exhibit B-1 or Exhibit B-2 to the Participation Agreement, as applicable; the term "Project Loan Agreement" shall include Agree Project Loan Agreements unless otherwise indicated. "Project Loan Agreement Default" shall mean any event or condition which, with the lapse of time or the giving of notice, or both, would constitute a Project Loan Agreement Event of Default. "Project Loan Agreement Event of Default" shall mean any event or condition defined as an "Event of Default" in Section 10 of a Project Loan Agreement.

"Project Cost" shall mean the cost to a Lessor to construct any Improvements, Fixtures or Modifications to be used on the Property in accordance with Plans and Specifications and the Operative Agreements. "Project Loan" shall have the meaning assigned to such term in Section 1.1 to each Project Loan Agreement; the term "Project Loan" shall include Agree Project Loans. "Project Loan Advance" shall have the meaning assigned to such term in Section 1.1 of each Project Loan Agreement. "Project Loan Agreement" shall mean, for any given Property, a Project Loan Agreement, dated as of each Property Closing Date in the respective forms of Exhibit B-1 or Exhibit B-2 to the Participation Agreement, as applicable; the term "Project Loan Agreement" shall include Agree Project Loan Agreements unless otherwise indicated. "Project Loan Agreement Default" shall mean any event or condition which, with the lapse of time or the giving of notice, or both, would constitute a Project Loan Agreement Event of Default. "Project Loan Agreement Event of Default" shall mean any event or condition defined as an "Event of Default" in Section 10 of a Project Loan Agreement. "Project Loan Basic Rent" shall mean an amount equal to the interest due on the Project Loans on any Specified Interest Payment Date pursuant to the Project Loan Agreement with respect to the Property that is being leased under the Lease for which the Project Loan Basic Rent is being determined. "Project Loan Commitment" shall have the meaning specified in Section 1.1 of each Project Loan Agreement. "Project Loan Documents" shall have the meaning assigned to such term in Section 1.1 to each Project Loan Agreement. "Project Loan Note" shall have the meaning assigned to that term in Section 2.8 of each Project Loan Agreement. "Property" shall mean (i) with respect to a Twenty-Five Percent Property, a parcel of Land (including all Appurtenant Rights attached thereto) acquired by a Lessor pursuant to the provisions of the Participation Agreement, and from and after the Effective Date of the Lease Supplement (or the Property Closing Date, if Improvements exist on such date), shall include all of the Improvements then or thereafter located on such Land even though such Improvements are being leased pursuant to a Lease Supplement and for purposes of the definition of "Modified Tranche A Percentage" shall be deemed a separate Property from the Land or (ii) Land and Improvements, if,

pursuant to Section 2.08 of the Participation Agreement, the Land and Improvements are leased under one Lease without a Lease Supplement. "Property Acquisition Cost" shall mean the cost to Lessor to purchase a Property or, in the case of a Property subject to a Ground Lease, the initial cost to enter into such Ground Lease, on a Property Closing Date. "Property Closing Certificate" shall have the meaning assigned to such term in Section 5.03(d) of the Participation Agreement. "Property Closing Date" shall mean each date on which a Lessor purchases or ground leases any Property. "Property Cost" shall mean with respect to a Property the aggregate amount of the Project Loan allocated to such Property pursuant to the applicable Project Loan Agreement, plus the Developer Equity for such Property. "Purchase" shall mean any transaction, or any series of related transactions, consummated on or after the date of

pursuant to Section 2.08 of the Participation Agreement, the Land and Improvements are leased under one Lease without a Lease Supplement. "Property Acquisition Cost" shall mean the cost to Lessor to purchase a Property or, in the case of a Property subject to a Ground Lease, the initial cost to enter into such Ground Lease, on a Property Closing Date. "Property Closing Certificate" shall have the meaning assigned to such term in Section 5.03(d) of the Participation Agreement. "Property Closing Date" shall mean each date on which a Lessor purchases or ground leases any Property. "Property Cost" shall mean with respect to a Property the aggregate amount of the Project Loan allocated to such Property pursuant to the applicable Project Loan Agreement, plus the Developer Equity for such Property. "Purchase" shall mean any transaction, or any series of related transactions, consummated on or after the date of this Guarantee, by which the Company or any of its Subsidiaries (a) acquires any ongoing business or all or substantially all of the assets of any Person or division thereof, whether through purchase of assets, merger or otherwise, or (b) directly or indirectly acquires (in one transaction or as the most recent transaction in a series of transactions) all or substantially all of the securities of a corporation, which securities have ordinary voting power for the election of directors (other than securities having such power only by reason of the happening of a contingency) or all or substantially all (by percentage and voting power) of the outstanding partnership interests of a partnership or membership interests of a limited liability company. "Purchase Money Security Interest" shall mean Liens upon tangible personal Property securing loans to any Guarantor or Subsidiary of the Company or deferred payments by such Guarantor or Subsidiary for the purchase of such tangible personal Property. "Purchase Option" shall have the meaning given to such term in Section 21.1 of each Lease. "Purchase Option Price" shall have the meaning given to such term in Section 21.1 of each Lease. "Purchasing Lender" shall have the meaning assigned to such term in Section 12.08(a) of the Credit Agreement. "Ratable Share" shall mean the proportion that a Lender's Commitment bears to the Commitments of all of the Lenders.

"Real Estate Administrative Agent" shall mean Bankers Trust, and its permitted successors and assigns, together with its affiliates. "Reassignment of Leases" shall have the meaning assigned to such term in Section 2.05 of the Participation Agreement. "Refunded Swing Loans" shall have the meaning assigned to such term in Section 3.04(a) of the Credit Agreement. "Register" shall have the meaning assigned to such term in Section 12.09(a) of the Credit Agreement. "Regulated Substances" shall mean any substance, including any solid, liquid, semisolid, gaseous, thermal, thoriated or radioactive material, refuse, garbage, wastes, chemicals, petroleum products, by-products, co products, impurities, dust, scrap, heavy metals, any substance defined as a "hazardous substance," "pollutant," "pollution," "contaminant," "hazardous or toxic substance," "extremely hazardous substance," "toxic chemical," "toxic waste," "hazardous waste," "industrial waste," "residual waste," "solid waste," "municipal waste," "mixed waste," "infectious waste," "chemotherapeutic waste," "medical waste," "regulated substance" or any related materials, substances or wastes as now or hereafter defined pursuant to any Environmental Laws, the generation,

"Real Estate Administrative Agent" shall mean Bankers Trust, and its permitted successors and assigns, together with its affiliates. "Reassignment of Leases" shall have the meaning assigned to such term in Section 2.05 of the Participation Agreement. "Refunded Swing Loans" shall have the meaning assigned to such term in Section 3.04(a) of the Credit Agreement. "Register" shall have the meaning assigned to such term in Section 12.09(a) of the Credit Agreement. "Regulated Substances" shall mean any substance, including any solid, liquid, semisolid, gaseous, thermal, thoriated or radioactive material, refuse, garbage, wastes, chemicals, petroleum products, by-products, co products, impurities, dust, scrap, heavy metals, any substance defined as a "hazardous substance," "pollutant," "pollution," "contaminant," "hazardous or toxic substance," "extremely hazardous substance," "toxic chemical," "toxic waste," "hazardous waste," "industrial waste," "residual waste," "solid waste," "municipal waste," "mixed waste," "infectious waste," "chemotherapeutic waste," "medical waste," "regulated substance" or any related materials, substances or wastes as now or hereafter defined pursuant to any Environmental Laws, the generation, manufacture, extraction, processing, distribution, treatment, storage, disposal, transport, recycling, reclamation, use, reuse, spilling, leaking, dumping, injection, pumping, leaching, emptying, discharge, escape, release or other management or mismanagement of which is regulated by the Environmental Laws. "Regulation U" shall mean Regulation U, T, G or X as promulgated by the Board of Governors of the Federal Reserve System, as amended from time to time. "Release" shall mean any release, pumping, pouring, emptying, injecting, escaping, leaching, dumping, seepage, spill, leak, flow, discharge, disposal or emission of a Hazardous Substance. "Rent" shall have the meaning assigned to such term in Section 3.4 of each Lease. "Rent Commencement Date" shall have the meaning assigned to such term in Section 3.1 of each Lease. "Rent Expense" shall mean all fixed rents payable by the Company and its Subsidiaries, as lessee or sublessee under a lease of Property (other than rents payable under the Leases), but shall be exclusive of any amounts required to be paid by the Company and its Subsidiaries (whether or not designated as rents or additional rents) on account of maintenance, repairs, insurance, taxes, assessments, utilities, operating and labor costs, and similar charges. Fixed rents under any so-called "percentage leases" shall be computed based on the actual amount of rent

paid, and not on the basis of the minimum rents, if any, required to be paid by the lessee regardless of sales volume or gross revenues. The term Rent Expense shall exclude any payments made in respect of any Capitalized Lease. "Reportable Event" shall mean a reportable event described in Section 4043 of ERISA and regulations thereunder with respect to a Plan or Multiemployer Plan. "Repurchase Amount" shall mean $100,000,000 plus (b) the aggregate amount paid to the Company (whether in cash or in shares of the Company's stock), from time to time and at any time since the Effective Date, by officers, employees or directors of the Company or any of its Subsidiaries in connection with the exercise of options to purchase shares of the Company's stock, plus (c) the realized tax benefit (as calculated by the Company in a manner satisfactory to the Administrative Agent), for tax periods after the Effective Date resulting from the exercise of such options or resulting from the lapse of restrictions on (and vesting of rights in) certain shares of the Company's stock subject to the Management Stock Purchase Plan from time to time and at any time since May 1, 1995. For purposes of calculating the Repurchase Amount, to the extent shares of the Company's stock are delivered to the Company in payment of the exercise price of options, or in payment of taxes associated with the

paid, and not on the basis of the minimum rents, if any, required to be paid by the lessee regardless of sales volume or gross revenues. The term Rent Expense shall exclude any payments made in respect of any Capitalized Lease. "Reportable Event" shall mean a reportable event described in Section 4043 of ERISA and regulations thereunder with respect to a Plan or Multiemployer Plan. "Repurchase Amount" shall mean $100,000,000 plus (b) the aggregate amount paid to the Company (whether in cash or in shares of the Company's stock), from time to time and at any time since the Effective Date, by officers, employees or directors of the Company or any of its Subsidiaries in connection with the exercise of options to purchase shares of the Company's stock, plus (c) the realized tax benefit (as calculated by the Company in a manner satisfactory to the Administrative Agent), for tax periods after the Effective Date resulting from the exercise of such options or resulting from the lapse of restrictions on (and vesting of rights in) certain shares of the Company's stock subject to the Management Stock Purchase Plan from time to time and at any time since May 1, 1995. For purposes of calculating the Repurchase Amount, to the extent shares of the Company's stock are delivered to the Company in payment of the exercise price of options, or in payment of taxes associated with the exercise of options or the vesting of restricted shares, such delivered shares are deemed to be repurchased by the Company at fair market value (as defined in the Company's stock option plan) on the date of delivery to the Company. Such delivered share repurchases will serve to reduce the available Repurchase Amount. "Requesting Party" shall have the meaning specified in Section 27.1 of each Lease. "Required Lenders" shall mean (i) Lenders whose Commitments aggregate at least 51% of the Commitments of all of the Lenders, or (ii) if the Commitments shall have been terminated, Lenders whose outstanding Loans aggregate at least 51% of the total principal amount of outstanding Loans hereunder. "Requisition" shall mean the Requisition in the form attached as Exhibit H to Participation Agreement. "Restricted Subsidiary" shall mean individually and "Restricted Subsidiaries" shall mean collectively any Subsidiary of the Company (other than Unrestricted Subsidiaries). "Revolving Credit Loan Request" shall have the meaning assigned to such term in Section 2.02(a) of the Credit Agreement. "Revolving Credit Loans" and "Revolving Credit Loan" shall mean collectively, all Revolving Credit Loans or separately, any Revolving Credit Loan made by the Lenders or one of the Lenders to the Borrower pursuant to Section 2.01 of the Credit Agreement.

"Section 20 Subsidiary" shall mean the Subsidiary of the bank holding company controlling any Lender, which Subsidiary has been granted authority by the Federal Reserve Board to underwrite and deal in certain Ineligible Securities. "Security Agreement" shall mean the Security Agreement, substantially in the form of Exhibit G to the Credit Agreement. "Security Documents" shall mean the collective reference to each Security Agreement, each Reassignment of Leases, each Assignment of Contracts and all other security documents hereafter delivered to the Real Estate Administrative Agent granting a Lien on any asset or assets of any Person to secure the obligations and liabilities of the Borrower under the Credit Agreement and/or under any of the other Credit Documents or to secure any guarantee of any such obligations and liabilities. "Securities Act" shall mean the Securities Act of 1933, as amended, together with the rules and regulations promulgated thereunder. "Shared Rights" shall mean the rights retained by a Lessor, but not to the exclusion of the Owner Trustee, pursuant to Section 9.3(a)(ii) of each Project Loan Agreement.

"Section 20 Subsidiary" shall mean the Subsidiary of the bank holding company controlling any Lender, which Subsidiary has been granted authority by the Federal Reserve Board to underwrite and deal in certain Ineligible Securities. "Security Agreement" shall mean the Security Agreement, substantially in the form of Exhibit G to the Credit Agreement. "Security Documents" shall mean the collective reference to each Security Agreement, each Reassignment of Leases, each Assignment of Contracts and all other security documents hereafter delivered to the Real Estate Administrative Agent granting a Lien on any asset or assets of any Person to secure the obligations and liabilities of the Borrower under the Credit Agreement and/or under any of the other Credit Documents or to secure any guarantee of any such obligations and liabilities. "Securities Act" shall mean the Securities Act of 1933, as amended, together with the rules and regulations promulgated thereunder. "Shared Rights" shall mean the rights retained by a Lessor, but not to the exclusion of the Owner Trustee, pursuant to Section 9.3(a)(ii) of each Project Loan Agreement. "Significant Casualty" shall mean a Casualty that in the reasonable, good faith judgment of the Lessee either (a) renders the Property unsuitable for continued use as commercial or retail property of the type of such Property immediately prior to such Condemnation or (b) is so substantial in nature that restoration of such Property to substantially its condition as existed immediately prior to such Casualty would be impracticable or impossible. "Significant Condemnation" shall mean a Condemnation that in the reasonable, good faith judgment of the Lessee either (a) renders the Property unsuitable for continued use as commercial or retail property of the type of such Property immediately prior to such Condemnation or (b) is such that restoration of such Property to substantially its condition as existed immediately prior to such Condemnation would be impracticable or impossible. "Significant Event" shall mean (i) a Total Condemnation of a Property, (ii) an Environmental Violation with respect to a Property which in the reasonable, good faith judgment of the Developer or the Lessee, as the case may be, (as evidenced by an Officer's Certificate delivered within ten (60) days of such event) will cost in excess of 25% of the Termination Value of such Property to remediate, or (iii) a Condemnation, Casualty or Force Majeure Event with respect to a Property which in the reasonable, good faith judgment of the Lessee (as evidenced by an Officer's Certificate delivered within ten (60) days of such event) is so substantial in nature that achieving Completion of the Improvements on such Property on or prior to the Outside Completion Date would be impracticable or impossible.

"Solvent" shall mean, with respect to any Person on a particular date, that on such date (i) the fair value of the assets of such Person is greater than the total amount of liabilities, including, without limitation, contingent liabilities, of such Person, (ii) the present fair saleable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured, (iii) such Person is able to realize upon its assets and pay its debts and other liabilities, contingent obligations and other commitments as they mature in the normal course of business, (iv) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person's ability to pay as such debts and liabilities mature, and (v) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person's property would constitute unreasonably small capital after giving due consideration to the prevailing practice in the industry in which such Person is engaged. In computing the amount of contingent liabilities at any time, it is intended that such liabilities shall be computed at the amount which, in light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability. "Subordinated Debt" shall mean the Indebtedness of the Company which (x) is subordinated in the right of payment to the monetary obligations of the Company under the Guarantee, (y) provides for an average life (determined on a weighted average basis) of no less than the then remaining term of the Credit Agreement plus 180 days and (z) contains provisions relating to maturity, amortization, covenants, defaults and collateral

"Solvent" shall mean, with respect to any Person on a particular date, that on such date (i) the fair value of the assets of such Person is greater than the total amount of liabilities, including, without limitation, contingent liabilities, of such Person, (ii) the present fair saleable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured, (iii) such Person is able to realize upon its assets and pay its debts and other liabilities, contingent obligations and other commitments as they mature in the normal course of business, (iv) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person's ability to pay as such debts and liabilities mature, and (v) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person's property would constitute unreasonably small capital after giving due consideration to the prevailing practice in the industry in which such Person is engaged. In computing the amount of contingent liabilities at any time, it is intended that such liabilities shall be computed at the amount which, in light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability. "Subordinated Debt" shall mean the Indebtedness of the Company which (x) is subordinated in the right of payment to the monetary obligations of the Company under the Guarantee, (y) provides for an average life (determined on a weighted average basis) of no less than the then remaining term of the Credit Agreement plus 180 days and (z) contains provisions relating to maturity, amortization, covenants, defaults and collateral satisfactory to the Required Lenders, as the same may be modified, amended or supplemented from time to time subject to Section 12.18 of the Guarantee. "Subsidiary" of any Person at any time shall mean (i) any corporation or trust of which 50% or more (by number of shares or number of votes) of the outstanding capital stock or shares of beneficial interest normally entitled to vote for the election of one or more directors or trustees (regardless of any contingency which does or may suspend or dilute the voting rights) is at such time owned directly or indirectly by such Person or one or more of such Person's Subsidiaries, or any partnership of which such Person is a general partner or of which 50% or more of the partnership interests is at the time directly or indirectly owned by such Person or one or more of such Person's Subsidiaries, or any limited liability company of which 50% or more of the membership interests is at the time directly or indirectly owned by such Person or one or more of such Person's Subsidiaries or (ii) any corporation, trust, partnership, limited liability company or other entity which is controlled or capable of being controlled by such Person or one or more of such Person's Subsidiaries. "Subsidiary Shares" shall have the meaning assigned to such term in Section 7.03(c) of the Participation Agreement. "Supplemental Rent" shall mean all amounts, liabilities and obligations (other than Basic Rent) which Lessee assumes or agrees to pay to a Lessor or any other Person under a Lease

or under any of the other Operative Agreements including, without limitation, payments of Purchase Option Price, Termination Value and the Maximum Residual Guarantee Amount. "Swing Facility" shall mean a discretionary line of credit, available in Dollars, offered to the Borrower by the Swing Lender in an aggregate principal amount not to exceed $15,000,000. "Swing Lender" shall mean Bankers Trust, in its capacity as Lender of Swing Loans, and its permitted successors and assigns. "Swing Loans" and "Swing Loan" shall mean collectively, all Swing Loans or separately any Swing Loan made by the Swing Lender to the Borrower pursuant to Section 3.01 of the Credit Agreement. "Swing Loan Participation Certificate" shall mean a certificate, substantially in the form of Exhibit D to the Credit Agreement. "Swing Margin" shall mean the Federal Funds Effective Rate plus 0.30% plus the applicable Euro-Rate Margin plus the applicable Facility Fee Rate.

or under any of the other Operative Agreements including, without limitation, payments of Purchase Option Price, Termination Value and the Maximum Residual Guarantee Amount. "Swing Facility" shall mean a discretionary line of credit, available in Dollars, offered to the Borrower by the Swing Lender in an aggregate principal amount not to exceed $15,000,000. "Swing Lender" shall mean Bankers Trust, in its capacity as Lender of Swing Loans, and its permitted successors and assigns. "Swing Loans" and "Swing Loan" shall mean collectively, all Swing Loans or separately any Swing Loan made by the Swing Lender to the Borrower pursuant to Section 3.01 of the Credit Agreement. "Swing Loan Participation Certificate" shall mean a certificate, substantially in the form of Exhibit D to the Credit Agreement. "Swing Margin" shall mean the Federal Funds Effective Rate plus 0.30% plus the applicable Euro-Rate Margin plus the applicable Facility Fee Rate. "Swing Note" shall have the meaning assigned to such term in Section 3.03 of the Credit Agreement. "Swing Loan Request" shall mean a request for Swing Loans made in accordance with Section 3.02 of the Credit Agreement. "Syndication Agent" shall mean The First National Bank of Chicago (or its Affiliate, First Chicago Capital Markets, Inc.), and its permitted successors and assigns. "Tax Indemnitee" shall mean a Lessor, the Investor, the Owner Trustee, the Trust Company, each Agent and each Lender and their respective successors, assigns, participants directors, shareholders, partners, officers, employees, agents and Affiliates. "Taxes" shall have the meaning specified in the definition of Impositions. "Tenant's Current Plans and Specifications" shall have the meaning specified in Section 16.1(e) of each Lease. "Termination Date" shall have the meaning specified in Section 17.2 of each Lease. "Termination Notice" shall have the meaning specified in Section 17.1 of each Lease.

"Termination Value" with respect to a Property shall mean an amount equal to the sum of (i) the aggregate outstanding principal amount of the applicable Project Loan Note, plus (ii) the Developer Equity, in each case as of the applicable Payment Date. "Title Company" shall have the meaning assigned to such term in Section 1.1 of each Project Loan Agreement. "Total Condemnation" shall mean a Condemnation that involves a taking of a Lessor's entire title to the Property. "Total Facility Usage" shall mean at any time the sum of Revolving Credit Loans outstanding and the Swing Loans outstanding. "Total Property Costs" shall mean the sum of Project Cost and Property Acquisition Cost. "Tranche A Loan" shall mean collectively, the Revolving Credit Loans and the Swing Loans that are deemed to be "Tranche A Loans" pursuant to Sections 2.02(b) and 3.02(b) of the Credit Agreement, respectively.

"Termination Value" with respect to a Property shall mean an amount equal to the sum of (i) the aggregate outstanding principal amount of the applicable Project Loan Note, plus (ii) the Developer Equity, in each case as of the applicable Payment Date. "Title Company" shall have the meaning assigned to such term in Section 1.1 of each Project Loan Agreement. "Total Condemnation" shall mean a Condemnation that involves a taking of a Lessor's entire title to the Property. "Total Facility Usage" shall mean at any time the sum of Revolving Credit Loans outstanding and the Swing Loans outstanding. "Total Property Costs" shall mean the sum of Project Cost and Property Acquisition Cost. "Tranche A Loan" shall mean collectively, the Revolving Credit Loans and the Swing Loans that are deemed to be "Tranche A Loans" pursuant to Sections 2.02(b) and 3.02(b) of the Credit Agreement, respectively. "Tranche A Maximum Amount" shall mean $233,750,000, as such amount may be increased pursuant to the Credit Agreement. "Tranche A Note" shall have the meaning assigned to such term in Section 2.04 of the Credit Agreement. "Tranche A Percentage" shall mean 93.5%. "Tranche B Loan" shall mean collectively, the Revolving Credit Loans and the Swing Loans that are deemed to be "Tranche B Loans" pursuant to Sections 2.02(b) of the Credit Agreement and 3.02(b) of the Credit Agreement, respectively. "Tranche B Maximum Amount" shall mean $16,250,000, as such amount may be increased pursuant to the Credit Agreement. "Tranche B Note" shall have the meaning assigned to such term in Section 2.04 of the Credit Agreement. "Tranche B Percentage" shall mean 6.5%. "Transaction Expenses" shall mean all costs and expenses incurred in connection with the preparation, execution and delivery of the Operative Agreements and the transactions contemplated by the Operative Agreements including:

(a) the reasonable fees, out-of-pocket expenses and disbursements of counsel in negotiating the terms of the Operative Agreements and the other transaction documents, preparing for the closings under, and rendering opinions in connection with, such transactions and in rendering other services customary for counsel representing parties to transactions of the types involved in the transactions contemplated by the Operative Agreements; (b) any other reasonable fee, out-of-pocket expenses, disbursement or cost of any party to the Operative Agreements or any of the other transaction documents; (c) any and all Taxes and fees incurred in recording or filing any Operative Agreement or any other transaction document, any deed, declaration, mortgage, security agreement, notice or financing statement with any public office, registry or governmental agency in connection with the transactions contemplated by the Operative Agreements. "Trust Agreement" shall mean the Trust Agreement, dated as of November 22, 1995, between the Investor and the Trust Company, as such agreement may be amended from time to time. "Trust Company" shall mean Wilmington Trust Company, a Delaware Corporation, in its individual capacity.

(a) the reasonable fees, out-of-pocket expenses and disbursements of counsel in negotiating the terms of the Operative Agreements and the other transaction documents, preparing for the closings under, and rendering opinions in connection with, such transactions and in rendering other services customary for counsel representing parties to transactions of the types involved in the transactions contemplated by the Operative Agreements; (b) any other reasonable fee, out-of-pocket expenses, disbursement or cost of any party to the Operative Agreements or any of the other transaction documents; (c) any and all Taxes and fees incurred in recording or filing any Operative Agreement or any other transaction document, any deed, declaration, mortgage, security agreement, notice or financing statement with any public office, registry or governmental agency in connection with the transactions contemplated by the Operative Agreements. "Trust Agreement" shall mean the Trust Agreement, dated as of November 22, 1995, between the Investor and the Trust Company, as such agreement may be amended from time to time. "Trust Company" shall mean Wilmington Trust Company, a Delaware Corporation, in its individual capacity. "Trust Estate" shall have the meaning specified in the Trust Agreement. "Twenty-Five Percent Property" shall have the meaning assigned to such term in Section 2.08 of the Participation Agreement. "UCC Financing Statements" shall mean collectively the Lender Financing Statements and the Lessor Financing Statements. "Uniform Commercial Code" and "UCC" shall mean the Uniform Commercial Code as in effect in any applicable jurisdiction. "Unrestricted Subsidiary" shall mean individually and "Unrestricted Subsidiaries" shall mean collectively any Subsidiary of the Company (i) of which 80% or more of the outstanding shares of capital stock, partnership interests or membership interests are owned by the Company (whether directly or through one or more Subsidiaries of the Company) and (ii) that has executed and delivered the Guarantee or a letter agreement in form and substance satisfactory to the Administrative Agent under which such Subsidiary agrees to be bound by the provisions of the Guarantee, together with such legal opinions and other documents and instruments as the Administrative Agent may request. "WPI" shall mean Waldenbooks Properties, Inc., a corporation organized and existing under the laws of the State of Delaware, and its permitted successors and assigns.

"Walden" shall mean Walden Book Company, Inc., a corporation organized and existing under the laws of the State of Colorado, and its permitted successors and assigns. "Weighted Average Maximum Residual Guarantee Percentage" shall mean, as of each Determination Date, a fraction, expressed as a percentage, equal to the sum of the aggregate of the Maximum Residual Guarantee Amounts with respect to each of the Leased Properties as of such Determination Date divided by the aggregate of the Property Costs of each of the Leased Properties as of the relevant Test Date. For purposes of this definition, (a) "Test Date" means any proposed date of occurrence of any of the events ("Test Events") described in Sections 5.03 or 16.03 of the Participation Agreement, (b) "Determination Date" means (i) the last day of each month occurring after the relevant Test Date and prior to the Maturity Date and (ii) the Maturity Date, and (c) "Leased Properties" means all Properties subject to a Lease as of the relevant Test Date after giving effect to the relevant Test Event. "Wholly-owned Subsidiary" shall mean individually and "Wholly-owned Subsidiary" shall mean collectively any Subsidiary of the Company of which all of the outstanding shares of capital stock or other equity interests are owned by the Company (whether directly or through one or more Wholly-owned Subsidiaries of the Company).

"Walden" shall mean Walden Book Company, Inc., a corporation organized and existing under the laws of the State of Colorado, and its permitted successors and assigns. "Weighted Average Maximum Residual Guarantee Percentage" shall mean, as of each Determination Date, a fraction, expressed as a percentage, equal to the sum of the aggregate of the Maximum Residual Guarantee Amounts with respect to each of the Leased Properties as of such Determination Date divided by the aggregate of the Property Costs of each of the Leased Properties as of the relevant Test Date. For purposes of this definition, (a) "Test Date" means any proposed date of occurrence of any of the events ("Test Events") described in Sections 5.03 or 16.03 of the Participation Agreement, (b) "Determination Date" means (i) the last day of each month occurring after the relevant Test Date and prior to the Maturity Date and (ii) the Maturity Date, and (c) "Leased Properties" means all Properties subject to a Lease as of the relevant Test Date after giving effect to the relevant Test Event. "Wholly-owned Subsidiary" shall mean individually and "Wholly-owned Subsidiary" shall mean collectively any Subsidiary of the Company of which all of the outstanding shares of capital stock or other equity interests are owned by the Company (whether directly or through one or more Wholly-owned Subsidiaries of the Company).

EXHIBIT 10.41 EXECUTION COPY EXHIBIT A TO THE PARTICIPATION AGREEMENT

AMENDED AND RESTATED CREDIT AGREEMENT among WILMINGTON TRUST COMPANY, NOT IN ITS INDIVIDUAL CAPACITY EXCEPT AS EXPRESSLY STATED HEREIN, BUT SOLELY AS OWNER TRUSTEE, AS BORROWER, THE SEVERAL LENDERS FROM TIME TO TIME PARTIES HERETO AND PNC BANK, NATIONAL ASSOCIATION, as Administrative Agent AND THE FIRST NATIONAL BANK OF CHICAGO, AS SYNDICATION AGENT AND BANKERS TRUST COMPANY, as Real Estate Administrative Agent Dated as of November 22, 1995 Amended and Restated as of October 17, 1997

EXHIBIT 10.41 EXECUTION COPY EXHIBIT A TO THE PARTICIPATION AGREEMENT

AMENDED AND RESTATED CREDIT AGREEMENT among WILMINGTON TRUST COMPANY, NOT IN ITS INDIVIDUAL CAPACITY EXCEPT AS EXPRESSLY STATED HEREIN, BUT SOLELY AS OWNER TRUSTEE, AS BORROWER, THE SEVERAL LENDERS FROM TIME TO TIME PARTIES HERETO AND PNC BANK, NATIONAL ASSOCIATION, as Administrative Agent AND THE FIRST NATIONAL BANK OF CHICAGO, AS SYNDICATION AGENT AND BANKERS TRUST COMPANY, as Real Estate Administrative Agent Dated as of November 22, 1995 Amended and Restated as of October 17, 1997

TABLE OF CONTENTS

ARTICLE I.CERTAIN DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.01 Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.02 Accounting Principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ARTICLE II.AMOUNT 2.01(a) 2.01(b) 2.02 2.03 2.04 2.05 2.06 2.07 2.08 2.09 2.10 AND TERMS OF COMMITMENTS . . . . . . . . . Commitments . . . . . . . . . . . . . . . . Prior Revolving Credit Loans . . . . . . . Revolving Credit Loan Requests . . . . . . Making Revolving Credit Loans . . . . . . . Notes . . . . . . . . . . . . . . . . . . . Nature of Lenders' Obligations with Respect Termination or Reduction of Commitments . . Fees . . . . . . . . . . . . . . . . . . . Use of Proceeds of Revolving Credit Loans . [Reserved] . . . . . . . . . . . . . . . . Advances to Pay Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . to Revolving Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

TABLE OF CONTENTS

ARTICLE I.CERTAIN DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.01 Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.02 Accounting Principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ARTICLE II.AMOUNT 2.01(a) 2.01(b) 2.02 2.03 2.04 2.05 2.06 2.07 2.08 2.09 2.10 AND TERMS OF COMMITMENTS . . . . . . . . . Commitments . . . . . . . . . . . . . . . . Prior Revolving Credit Loans . . . . . . . Revolving Credit Loan Requests . . . . . . Making Revolving Credit Loans . . . . . . . Notes . . . . . . . . . . . . . . . . . . . Nature of Lenders' Obligations with Respect Termination or Reduction of Commitments . . Fees . . . . . . . . . . . . . . . . . . . Use of Proceeds of Revolving Credit Loans . [Reserved] . . . . . . . . . . . . . . . . Advances to Pay Interest. . . . . . . . . . . . . . . Swing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . to Revolving Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

ARTICLE III.AMOUNT AND TERMS OF SWING SUB-FACILITY 3.01 Swing Facility. . . . . . . . . 3.02 Swing Loan Requests and Making of 3.03 Swing Note . . . . . . . . . . . 3.04 Borrowings to Repay Swing Loans . 3.05 Use of Proceeds of Swing Loans .

. . . . . . Loans . . . . . . . . .

ARTICLE IV.INTEREST RATES . . . . . . . . . . . . . . . . . . . . . . . . 4.01 Interest Rate Options on Revolving Credit Loans . . . . 4.02 [Reserved] . . . . . . . . . . . . . . . . . . . . . . 4.03 Euro-Rate Unascertainable; Illegality; Increased Costs; Not Available . . . . . . . . . . . . . . . . . . . . . 4.04 Selection of Interest Rate Options . . . . . . . . . . 4.05 Interest Rates Payable on Swing Loans . . . . . . . . . 4.06 Interest After Default . . . . . . . . . . . . . . . . 4.07 Maximum Interest Rate . . . . . . . . . . . . . . . . . 4.08 Interest Under Project Loan Agreement. . . . . . . . . ARTICLE V.PAYMENTS . . . . . . . . . . . . . . 5.01 Payments . . . . . . . . . . 5.02 Pro Rata Treatment of Lenders 5.03 Interest Payment Dates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5.04 5.05 5.06

Optional Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Mandatory Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Additional Compensation in Certain Circumstances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

ARTICLE VI.REPRESENTATIONS AND WARRANTIES . . 6.01 Due Organization, etc. . . 6.02 Authorization; No Conflict 6.03 Enforceability, etc. . . . 6.04 Litigation . . . . . . . . 6.05 Assignment . . . . . . . . 6.06 No Default . . . . . . . . 6.07 Use of Proceeds . . . . . . 6.08 Chief Place of Business . . 6.09 Federal Reserve Regulations 6.10 Investment Company Act . . 6.11 Liens . . . . . . . . . . . 6.12 Securities Act . . . . . . 6.13 Documentation . . . . . . .

ARTICLE VII.CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.01 Conditions to Effectiveness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.02 Conditions to Each Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ARTICLE VIII.COVENANTS . . . . . . . . . . . . . . . . 8.01 Other Activities . . . . . . . . . . 8.02 Ownership of Properties, Indebtedness 8.03 Disposition of Assets . . . . . . . . 8.04 Compliance with Operative Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5.04 5.05 5.06

Optional Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Mandatory Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Additional Compensation in Certain Circumstances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

ARTICLE VI.REPRESENTATIONS AND WARRANTIES . . 6.01 Due Organization, etc. . . 6.02 Authorization; No Conflict 6.03 Enforceability, etc. . . . 6.04 Litigation . . . . . . . . 6.05 Assignment . . . . . . . . 6.06 No Default . . . . . . . . 6.07 Use of Proceeds . . . . . . 6.08 Chief Place of Business . . 6.09 Federal Reserve Regulations 6.10 Investment Company Act . . 6.11 Liens . . . . . . . . . . . 6.12 Securities Act . . . . . . 6.13 Documentation . . . . . . .

ARTICLE VII.CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.01 Conditions to Effectiveness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.02 Conditions to Each Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ARTICLE VIII.COVENANTS . . . . . . . . . . . . . . . . 8.01 Other Activities . . . . . . . . . . 8.02 Ownership of Properties, Indebtedness 8.03 Disposition of Assets . . . . . . . . 8.04 Compliance with Operative Agreements 8.05 Further Assurances . . . . . . . . . 8.06 Notices . . . . . . . . . . . . . . . 8.07 Discharge of Liens . . . . . . . . . 8.08 Trust Agreement . . . . . . . . . . . ARTICLE IX.EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

ARTICLE X.THE AGENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.01 Appointment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.02 Delegation of Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

- ii <Capiton>

10.03 10.04 10.05 10.06 10.07 10.08 10.09 10.10 10.11 10.12 10.13

Exculpatory Provisions . . . . . . . . . . Reliance by Agents . . . . . . . . . . . . Notice of Default . . . . . . . . . . . . . Non-Reliance on Agents and Other Lenders Indemnification . . . . . . . . . . . . . . Agents in Their Individual Capacity . . . . Successor Agents . . . . . . . . . . . . . [Reserved] . . . . . . . . . . . . . . . . Availability of Funds . . . . . . . . . . . Calculations . . . . . . . . . . . . . . . Beneficiaries . . . . . . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

RTICLE XI.MATTERS RELATING TO PAYMENTS AND COLLATERAL . . . . . . . . . . . . . . . . . . . . . . . . . 11.01 The Credit Agreement Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.02 Proceeds of Collateral; Proceeds Remaining in Credit Agreement Account . . . . . . . . ARTICLE XII.MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . 12.01 Amendments and Waivers . . . . . . . . . . . . . . . . . . 12.02 Notices; Lending Offices . . . . . . . . . . . . . . . . . 12.03 No Waiver; Cumulative Remedies . . . . . . . . . . . . . . 12.04 Survival of Representations and Warranties . . . . . . . . 12.05 Payment of Expenses and Taxes . . . . . . . . . . . . . . . 12.06 Holidays . . . . . . . . . . . . . . . . . . . . . . . . . 12.07 Funding by Branch, Subsidiary or Affiliate . . . . . . . . 12.08 Successors and Assigns. . . . . . . . . . . . . . . . . . 12.09 The Register; Disclosure; Pledges to Federal Reserve Banks 12.10 Adjustments; Set-off . . . . . . . . . . . . . . . . . . . 12.11 Counterparts . . . . . . . . . . . . . . . . . . . . . . . 12.12 Severability . . . . . . . . . . . . . . . . . . . . . . . 12.13 Integration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

<Capiton>

10.03 10.04 10.05 10.06 10.07 10.08 10.09 10.10 10.11 10.12 10.13

Exculpatory Provisions . . . . . . . . . . Reliance by Agents . . . . . . . . . . . . Notice of Default . . . . . . . . . . . . . Non-Reliance on Agents and Other Lenders Indemnification . . . . . . . . . . . . . . Agents in Their Individual Capacity . . . . Successor Agents . . . . . . . . . . . . . [Reserved] . . . . . . . . . . . . . . . . Availability of Funds . . . . . . . . . . . Calculations . . . . . . . . . . . . . . . Beneficiaries . . . . . . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

. . . . . . . . . . .

RTICLE XI.MATTERS RELATING TO PAYMENTS AND COLLATERAL . . . . . . . . . . . . . . . . . . . . . . . . . 11.01 The Credit Agreement Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.02 Proceeds of Collateral; Proceeds Remaining in Credit Agreement Account . . . . . . . . ARTICLE XII.MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . 12.01 Amendments and Waivers . . . . . . . . . . . . . . . . . . 12.02 Notices; Lending Offices . . . . . . . . . . . . . . . . . 12.03 No Waiver; Cumulative Remedies . . . . . . . . . . . . . . 12.04 Survival of Representations and Warranties . . . . . . . . 12.05 Payment of Expenses and Taxes . . . . . . . . . . . . . . . 12.06 Holidays . . . . . . . . . . . . . . . . . . . . . . . . . 12.07 Funding by Branch, Subsidiary or Affiliate . . . . . . . . 12.08 Successors and Assigns. . . . . . . . . . . . . . . . . . 12.09 The Register; Disclosure; Pledges to Federal Reserve Banks 12.10 Adjustments; Set-off . . . . . . . . . . . . . . . . . . . 12.11 Counterparts . . . . . . . . . . . . . . . . . . . . . . . 12.12 Severability . . . . . . . . . . . . . . . . . . . . . . . 12.13 Integration . . . . . . . . . . . . . . . . . . . . . . . . 12.14 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . 12.15 Submission To Jurisdiction; Waivers . . . . . . . . . . . . 12.16 Acknowledgments . . . . . . . . . . . . . . . . . . . . . . 12.17 WAIVERS OF JURY TRIAL . . . . . . . . . . . . . . . . . . . 12.18 Waivers by Borrower . . . . . . . . . . . . . . . . . . . . 12.19 Tax Withholding Forms . . . . . . . . . . . . . . . . . . . 12.20 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . SCHEDULE Schedule I Euro-Rate Margin, Commitment Fee Rate, Facility Fee Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

- iii -

Page
Schedule II EXHIBITS Exhibit Exhibit Exhibit Exhibit Exhibit Exhibit Exhibit Exhibit Exhibit Exhibit Exhibit Exhibit Exhibit A-1 A-2 A-3 B C D E F G H I J K Form of Tranche A Note Form of Tranche B Note Form of Swing Note Form of Revolving Credit Loan Request Form of Swing Loan Request Form of Swing Loan Participation Certificate Form of Renewal/Conversion Notice Form of Guarantee Form of Security Agreement Form of Reassignment of Leases and Rents Form of Assignment of Contracts Form of Assignment and Acceptance Guidelines re: Bankruptcy Remote Entities Commitments and Addresses of Lenders

- iv -

Page
Schedule II EXHIBITS Exhibit Exhibit Exhibit Exhibit Exhibit Exhibit Exhibit Exhibit Exhibit Exhibit Exhibit Exhibit Exhibit A-1 A-2 A-3 B C D E F G H I J K Form of Tranche A Note Form of Tranche B Note Form of Swing Note Form of Revolving Credit Loan Request Form of Swing Loan Request Form of Swing Loan Participation Certificate Form of Renewal/Conversion Notice Form of Guarantee Form of Security Agreement Form of Reassignment of Leases and Rents Form of Assignment of Contracts Form of Assignment and Acceptance Guidelines re: Bankruptcy Remote Entities Commitments and Addresses of Lenders

- iv -

THIS AMENDED AND RESTATED CREDIT AGREEMENT is dated as of November 22, 1995 and amended and restated as of October 17, 1997, among WILMINGTON TRUST COMPANY, not in its individual capacity except as expressly stated herein, but solely as Owner Trustee (the "Owner Trustee" or the "Borrower"), the several banks and other financial institutions from time to time parties to this Agreement (the "Lenders"), PNC BANK, NATIONAL ASSOCIATION, as administrative agent for the Lenders hereunder (the "Administrative Agent"), THE FIRST NATIONAL BANK OF CHICAGO, as syndication agent of the Lenders hereunder (the "Syndication Agent"), and BANKERS TRUST COMPANY, as real estate administrative agent for the Lenders hereunder (the "Real Estate Administrative Agent"; and together with the Administrative Agent and the Syndication Agent, collectively referred to as the "Agents"). WITNESSETH: WHEREAS, the Borrower, the Real Estate Administrative Agent, as agent, the Administrative Agent, as coagent and the Lenders (collectively, the "Prior Agreement Parties") are parties to that certain Credit Agreement dated as of November 22, 1995 (as heretofore amended, the "Prior Agreement"); WHEREAS, the Prior Agreement Parties desire to amend and restate the Prior Agreement to (i) increase the aggregate amount of Commitments and extend the Maturity Date, (ii) change the agency role of PNC Bank, National Association as co-agent to Administrative Agent, (iii) change the agency role of Bankers Trust Company from agent to Real Estate Administrative Agent, (iv) add The First National Bank of Chicago as Syndication Agent, (v) eliminate and add certain financial institutions as Lenders, and (vi) 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 hereby agree as follows: ARTICLE I. CERTAIN DEFINITIONS 1.1 Certain Definitions. Capitalized terms used but not otherwise defined in this Agreement shall have the meanings set forth in Appendix A hereto. 1.2 Accounting Principles. Except as otherwise provided in this Agreement, all computations and determinations as to accounting or financial matters and all financial statements to be delivered pursuant to this Agreement shall be made and prepared in accordance with GAAP (including principles of consolidation where appropriate), and all accounting or financial terms shall have the meanings ascribed to such terms by GAAP; provided, however, that if any change in GAAP or the application thereof occurs hereafter, or if the Company adopts a change to its

THIS AMENDED AND RESTATED CREDIT AGREEMENT is dated as of November 22, 1995 and amended and restated as of October 17, 1997, among WILMINGTON TRUST COMPANY, not in its individual capacity except as expressly stated herein, but solely as Owner Trustee (the "Owner Trustee" or the "Borrower"), the several banks and other financial institutions from time to time parties to this Agreement (the "Lenders"), PNC BANK, NATIONAL ASSOCIATION, as administrative agent for the Lenders hereunder (the "Administrative Agent"), THE FIRST NATIONAL BANK OF CHICAGO, as syndication agent of the Lenders hereunder (the "Syndication Agent"), and BANKERS TRUST COMPANY, as real estate administrative agent for the Lenders hereunder (the "Real Estate Administrative Agent"; and together with the Administrative Agent and the Syndication Agent, collectively referred to as the "Agents"). WITNESSETH: WHEREAS, the Borrower, the Real Estate Administrative Agent, as agent, the Administrative Agent, as coagent and the Lenders (collectively, the "Prior Agreement Parties") are parties to that certain Credit Agreement dated as of November 22, 1995 (as heretofore amended, the "Prior Agreement"); WHEREAS, the Prior Agreement Parties desire to amend and restate the Prior Agreement to (i) increase the aggregate amount of Commitments and extend the Maturity Date, (ii) change the agency role of PNC Bank, National Association as co-agent to Administrative Agent, (iii) change the agency role of Bankers Trust Company from agent to Real Estate Administrative Agent, (iv) add The First National Bank of Chicago as Syndication Agent, (v) eliminate and add certain financial institutions as Lenders, and (vi) 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 hereby agree as follows: ARTICLE I. CERTAIN DEFINITIONS 1.1 Certain Definitions. Capitalized terms used but not otherwise defined in this Agreement shall have the meanings set forth in Appendix A hereto. 1.2 Accounting Principles. Except as otherwise provided in this Agreement, all computations and determinations as to accounting or financial matters and all financial statements to be delivered pursuant to this Agreement shall be made and prepared in accordance with GAAP (including principles of consolidation where appropriate), and all accounting or financial terms shall have the meanings ascribed to such terms by GAAP; provided, however, that if any change in GAAP or the application thereof occurs hereafter, or if the Company adopts a change to its accounting principles or methods with the agreement of its independent certified public accountants, and such change results in a change in the calculation of any financial covenant or restriction set forth herein, then the parties hereto agree to enter into and diligently pursue negotiations in order to amend such

financial covenant or restriction so as to equitably reflect such change, with the desired result that the criteria for evaluating the financial condition and results of operations of the Company and its Subsidiaries shall be the same after such change as if such change had not been made. Pending the resolution of any such negotiations, the Company agrees to provide to each of the Lenders such unaudited financial information and pro forma statements using the accounting methods and principles used in the preparation of the audited financial statements for the fiscal year ended January 26, 1997, as are necessary to enable the Lenders to test the financial covenants contained herein. ARTICLE II. AMOUNT AND TERMS OF COMMITMENTS 2.01(a) Commitments. Subject to the terms and conditions hereof and relying upon the representations and warranties herein set forth, each Lender severally agrees to make Revolving Credit Loans to the Borrower at any time or from time to time from and including the Effective Date but excluding the date which is one month prior to the Maturity Date for the purpose of enabling the Borrower to make Project Loans to the Lessors acceptable to

financial covenant or restriction so as to equitably reflect such change, with the desired result that the criteria for evaluating the financial condition and results of operations of the Company and its Subsidiaries shall be the same after such change as if such change had not been made. Pending the resolution of any such negotiations, the Company agrees to provide to each of the Lenders such unaudited financial information and pro forma statements using the accounting methods and principles used in the preparation of the audited financial statements for the fiscal year ended January 26, 1997, as are necessary to enable the Lenders to test the financial covenants contained herein. ARTICLE II. AMOUNT AND TERMS OF COMMITMENTS 2.01(a) Commitments. Subject to the terms and conditions hereof and relying upon the representations and warranties herein set forth, each Lender severally agrees to make Revolving Credit Loans to the Borrower at any time or from time to time from and including the Effective Date but excluding the date which is one month prior to the Maturity Date for the purpose of enabling the Borrower to make Project Loans to the Lessors acceptable to the Real Estate Administrative Agent for financing the Project Costs or to Agree SPC's acceptable to the Real Estate Administrative Agent who will make capital contributions to Agree Lessors to pay Project Costs, in an aggregate principal amount at any one time outstanding not to exceed the amount of such Lender's Commitment minus in the case of the Swing Lender, the Swing Loans outstanding. After giving effect to any such Revolving Credit Loans and any other Loans made on or before the Borrowing Date of such Revolving Credit Loans, the aggregate amount of the Total Facility Usage shall not exceed the aggregate amount of the Commitments. Within such limits of time and amount and subject to the other provisions of this Agreement, the Borrower may borrow, repay and reborrow pursuant to this Section 2.01. 2.01(b) Prior Revolving Credit Loans. Schedule 2.01(b) lists the Revolving Credit Loans outstanding for each Lender under the Prior Agreement prior to the Effective Date (the "Prior Revolving Credit Loans") and the Revolving Credit Loans to be outstanding for each Lender hereunder as of the Effective Date. On the Effective Date, any such Prior Revolving Credit Loans which are held by a Prior Lender which will continue to be a Lender on and after the Effective Date shall be deemed to continue as Revolving Credit Loans made hereunder. Any principal balance of the Tranche A Notes and Tranche B Notes includes the Borrower's indebtedness under the Prior Revolving Credit Loans evidenced by the original Tranche A Notes and Tranche B Notes (the "Original Notes") and the Amended and Restated Tranche A Notes and Amended and Restated Tranche B Notes executed in connection with this Agreement (i) merely re-evidence the indebtedness evidenced by the Original Notes, (ii) are not given as payment of the Original Notes and (iii) are in no way intended to or shall, constitute a novation of the Original Notes or any obligation of the Borrower thereunder. Any Prior Lender which has determined not to continue to be a Lender after the Effective Date will be repaid its Revolving Credit Loans in full and the Borrower will pay such Prior Lender up to but not including the Effective Date the amount of all interest, Fees and additional costs described in Section 5.06(b) owing to any such Prior Lender. Any Lender hereunder which was not a Prior Lender or any Prior Lender that has increased its Commitment as of the Effective Date shall purchase from Prior Lenders or other Lenders hereunder

such Revolving Credit Loans in an amount such that, after the Effective Date, the amount of outstanding Revolving Credit Loans from each Lender shall equal such Lender's respective Ratable Share, as modified to give effect to the Effective Date, of outstanding Revolving Credit Loans. To the extent that any Prior Revolving Credit Loans bear interest at the Euro-Rate Option, the Borrower shall pay any additional costs described in Section 5.06(b) incurred by any Lender, and the Borrower shall pay any similar additional costs incurred by any Lender which becomes or continues to be a Lender on and after the Effective Date and assumes or funds a portion of any Revolving Credit Loan for the remainder of an Interest Period which is outstanding on the Effective Date. 2.02 Revolving Credit Loan Requests. (a) Except as otherwise provided herein, the Borrower may from time to time prior to the Maturity Date request the Lenders to make Revolving Credit Loans, or renew or convert the Interest Rate Option applicable to existing Revolving Credit Loans, by delivering to the Administrative Agent, not later than 10:00 A.M. Eastern time, ten (10) Business Days prior to the proposed Borrowing Date with respect to the making of each Revolving Credit Loan (provided that, so long as the applicable Lessee shall have waived the conditions precedent set forth in Schedule 11.02 to the Participation Agreement pursuant to Section 11.02

such Revolving Credit Loans in an amount such that, after the Effective Date, the amount of outstanding Revolving Credit Loans from each Lender shall equal such Lender's respective Ratable Share, as modified to give effect to the Effective Date, of outstanding Revolving Credit Loans. To the extent that any Prior Revolving Credit Loans bear interest at the Euro-Rate Option, the Borrower shall pay any additional costs described in Section 5.06(b) incurred by any Lender, and the Borrower shall pay any similar additional costs incurred by any Lender which becomes or continues to be a Lender on and after the Effective Date and assumes or funds a portion of any Revolving Credit Loan for the remainder of an Interest Period which is outstanding on the Effective Date. 2.02 Revolving Credit Loan Requests. (a) Except as otherwise provided herein, the Borrower may from time to time prior to the Maturity Date request the Lenders to make Revolving Credit Loans, or renew or convert the Interest Rate Option applicable to existing Revolving Credit Loans, by delivering to the Administrative Agent, not later than 10:00 A.M. Eastern time, ten (10) Business Days prior to the proposed Borrowing Date with respect to the making of each Revolving Credit Loan (provided that, so long as the applicable Lessee shall have waived the conditions precedent set forth in Schedule 11.02 to the Participation Agreement pursuant to Section 11.02 thereto (other than in connection with an Acquisition Advance), (i) three (3) Business Days prior to the proposed Borrowing Date with respect to the making of Revolving Credit Loans to which the Euro-Rate Option applies and (ii) one (1) Business Day prior to the proposed Borrowing Date with respect to the making of Revolving Credit Loans to which the Base Rate Option applies), of a duly completed request therefor substantially in the form of Exhibit B or a request by telephone immediately confirmed in writing by letter, facsimile or telex in such form (each, a "Revolving Credit Loan Request"), it being understood that the Administrative Agent may rely on the authority of any individual making such a telephonic request without the necessity of receipt of such written confirmation. Each Revolving Credit Loan Request shall be irrevocable and shall specify (i) the proposed Borrowing Date; (ii) the aggregate amount of the proposed Revolving Credit Loans comprising each Borrowing Tranche, which, except as otherwise provided in Section 2.10, shall not be less than $5,000,000, for each EuroRate Borrowing Tranche and shall not be less than the lesser of $1,000,000 or the maximum amount available for borrowing for each Base Rate Borrowing Tranche; (iii) whether the Euro-Rate Option or Base Rate Option shall apply to the proposed Revolving Credit Loans comprising the Borrowing Tranche; and (iv) in the case of a EuroRate Borrowing Tranche an appropriate Interest Period for the proposed Revolving Credit Loans comprising such Borrowing Tranche. (b) A portion of the principal amount of each Revolving Credit Loan made by each Lender equal to the Tranche A Percentage of the principal amount of such Revolving Credit Loan shall be deemed to be a "Tranche A Loan" for the purposes of the Operative Agreements and the remaining portion of the principal amount of such Loan shall be deemed to be a "Tranche B Loan" for the purposes of the Operative Agreements, provided, that payments in respect of the Revolving Credit Loans shall be allocated to reduce the aggregate outstanding principal amount of Tranche A Loans and Tranche B Loans of each Lender in the manner specified in Section 5.02. Notwithstanding the foregoing, on any date (each, a "Modification Date") on which any payment of the Tranche A Loans or Tranche B Loans is to be made and/or on which any Maximum Residual Guarantee Amount with respect to any Property is to be determined, prior to giving effect to such payment or determination, (i) the aggregate principal amount of Tranche B Loans then outstanding

shall be deemed to be increased (or decreased, in the event that the applicable Modification Amount shall be a negative number) by an amount (the "Modification Amount") equal to (x) the Modified Tranche B Percentage with respect to the affected Property minus the Tranche B Percentage multiplied by (y) the outstanding principal amount of the Project Loan with respect to such Property (or, if there shall be more than one affected Property, the sum of all such amounts for all such Properties) and (ii) the aggregate principal amount of Tranche A Loans then outstanding shall be deemed to be reduced or increased, as the case may be, by a corresponding amount. Any such adjustment shall be applied ratably to adjust the outstanding principal amount of the Tranche A Loans and Tranche B Loans deemed to have been made by each Lender. (c) Notwithstanding anything contained in subsection (b) above, the entire principal amount of each Revolving Credit Loan made by each Lender which is allocated to make an Agree Project Loan by the Borrower shall be deemed to be a Tranche A Loan. 2.03 Making Revolving Credit Loans. The Administrative Agent shall, promptly after receipt by it of a Revolving

shall be deemed to be increased (or decreased, in the event that the applicable Modification Amount shall be a negative number) by an amount (the "Modification Amount") equal to (x) the Modified Tranche B Percentage with respect to the affected Property minus the Tranche B Percentage multiplied by (y) the outstanding principal amount of the Project Loan with respect to such Property (or, if there shall be more than one affected Property, the sum of all such amounts for all such Properties) and (ii) the aggregate principal amount of Tranche A Loans then outstanding shall be deemed to be reduced or increased, as the case may be, by a corresponding amount. Any such adjustment shall be applied ratably to adjust the outstanding principal amount of the Tranche A Loans and Tranche B Loans deemed to have been made by each Lender. (c) Notwithstanding anything contained in subsection (b) above, the entire principal amount of each Revolving Credit Loan made by each Lender which is allocated to make an Agree Project Loan by the Borrower shall be deemed to be a Tranche A Loan. 2.03 Making Revolving Credit Loans. The Administrative Agent shall, promptly after receipt by it of a Revolving Credit Loan Request pursuant to Section 2.02(a), notify the Lenders of its receipt of such Revolving Credit Loan Request specifying: (i) the proposed Borrowing Date and the time and method of disbursement of such Revolving Credit Loans; (ii) the aggregate amount and type of such Revolving Credit Loans and the applicable Interest Period (if any); and (iii) the apportionment among the Lenders of the Revolving Credit Loans as determined by the Administrative Agent in accordance with each Lender's Ratable Share. Each Lender shall remit the principal amount of each Revolving Credit Loan to be made by it to the Administrative Agent such that the Administrative Agent is able to, and the Administrative Agent shall, to the extent the Lenders have made funds available to it for such purpose, fund such Revolving Credit Loans to the Borrower in U.S. Dollars and immediately available funds at the Principal Office prior to 2:00 P.M. Eastern time on the Borrowing Date, provided, that if any Lender fails to remit such funds to the Administrative Agent in a timely manner the Administrative Agent may elect in its sole discretion to fund with its own funds the Revolving Credit Loan of such Lender on the Borrowing Date and such Lender shall be subject to the repayment obligation in Section 10.11. 2.04 Notes. The Revolving Credit Loans made by each Lender shall be evidenced by a promissory note of the Borrower, substantially in the form of Exhibit A-1, in the case of Tranche A Loans (each, a "Tranche A Note"), or Exhibit A-2, in the case of Tranche B Loans (each, a "Tranche B Note"), with appropriate insertions as to payee, date and principal amount, payable to the order of such Lender and in a principal amount equal to the lesser of (a) the initial Commitment of such Lender and (b) the aggregate unpaid principal amount of all Tranche A Loans or Tranche B Loans, as the case may be, made by such Lender. Each Lender is hereby authorized to record the date, the Borrowing Tranche and amount of each Revolving Credit Loan made by such Lender, each continuation thereof, each conversion of all or a portion thereof to another Borrowing Tranche, the date and amount of each payment or prepayment of principal thereof and, in the case of Revolving Credit Loans with Euro- Rate Option, the length of each Interest Period with respect thereto, on the schedule annexed to and constituting a part of its Note, and any such recordation shall constitute prima facie evidence of the accuracy of the information so recorded, provided, that the failure to make any such recordation or any error in such recordation shall not affect the Borrower's obligations hereunder or under such Note. Each Note shall (i) be dated the Effective Date, (ii) be

stated to mature on the Maturity Date and (iii) provide for the payment of interest in accordance with Section 4.01. 2.05 Nature of Lenders' Obligations with Respect to Revolving Credit Loans. Subject to the terms of this Agreement (including Article VII), each Lender shall be obligated to participate in each request for Revolving Credit Loans in accordance with its Ratable Share. The obligations of each Lender hereunder are several. The failure of any Lender to perform its obligations hereunder shall not affect the obligations of the Borrower to any other party nor shall any other party be liable for the failure of such Lender to perform its obligations hereunder. The Lenders shall have no obligation to make Revolving Credit Loans hereunder on or after a date which is one month prior to the Maturity Date. 2.06 Termination or Reduction of Commitments. The Borrower shall have the right at any time and from time to time upon five (5) Business Days' prior written notice to the Administrative Agent to permanently reduce, in

stated to mature on the Maturity Date and (iii) provide for the payment of interest in accordance with Section 4.01. 2.05 Nature of Lenders' Obligations with Respect to Revolving Credit Loans. Subject to the terms of this Agreement (including Article VII), each Lender shall be obligated to participate in each request for Revolving Credit Loans in accordance with its Ratable Share. The obligations of each Lender hereunder are several. The failure of any Lender to perform its obligations hereunder shall not affect the obligations of the Borrower to any other party nor shall any other party be liable for the failure of such Lender to perform its obligations hereunder. The Lenders shall have no obligation to make Revolving Credit Loans hereunder on or after a date which is one month prior to the Maturity Date. 2.06 Termination or Reduction of Commitments. The Borrower shall have the right at any time and from time to time upon five (5) Business Days' prior written notice to the Administrative Agent to permanently reduce, in whole multiples of $1,000,000 of principal, or to terminate the Commitments without penalty or premium, except as set forth in Section 5.06(b)(i), provided, that any such reduction or termination shall be accompanied by (i) the payment in full of any Fees then accrued on the amount of such reduction or termination and (ii) prepayment of the Loans, together with the full amount of interest and Fees accrued on the principal sum to be prepaid (and all amounts referred to in Section 5.06), to the extent that the Total Facility Usage exceeds the Commitments as so reduced or terminated, and provided, further, that after giving effect to any reduction of Commitments, the aggregate amount of the Project Loan Commitments shall not exceed the aggregate amount of the Commitments so reduced. If at any time the Commitments are reduced to an amount which is less than the Swing Facility then in effect, the Swing Facility shall automatically, without notice of any kind, be reduced to the amount of the Commitments then in effect. 2.07 Fees. (a) The Borrower hereby agrees to pay to the Administrative Agent for the account of each Lender, as consideration for such Lender's Commitment, a nonrefundable facility fee ("Facility Fee") calculated on a daily basis by multiplying the Facility Fee Rate by such Lender's Commitment (whether used or unused). All Facility Fees shall be payable in arrears on the last Business Day of each March, June, September and December after the Effective Date and on the Maturity Date or upon acceleration of the Obligations. The Facility Fee Rate shall be subject to adjustment quarterly to the percentage, based on the higher of the Fixed Charge Coverage Ratio, as set forth on Schedule I hereto, or the Fixed Charge Coverage Ratio, as set forth on Schedule I to the Corporate Credit Agreement. Each adjustment in the Facility Fee Rate shall be effective on the second Business Day next following delivery to the Administrative Agent of the financial statements or certificate required to be delivered by the Company pursuant to Article XIII of the Guarantee showing the basis for such adjustment. In the event that such financial statements or certificate shall not have been delivered to the Administrative Agent on the date required for such delivery pursuant to Article XIII of the Guarantee, then on the second Business Day following such date, the Facility Fee Rate shall be increased to the highest Facility Fee Rate set forth on Schedule I hereto or Schedule I to the Corporate Credit Agreement, provided, that after delivery of such financial statements or

certificate (effective two Business Days following delivery) the Facility Fee Rate shall be adjusted to the Facility Fee Rate that would have been effective had such financial statements or certificate been timely delivered. (b) All Fees shall be calculated on the basis of a year of 360 days and the actual number of days elapsed. 2.08 Use of Proceeds of Revolving Credit Loans. The Administrative Agent is hereby irrevocably authorized by the Borrower to apply the proceeds of the Revolving Credit Loans to fund any Project Loans as requested by any Lessor under any Project Loan Agreement or by any Agree SPC under any Agree Project Loan Agreement. 2.09 [Reserved] 2.10 Advances to Pay Interest. During the Construction Period for a Project Loan, if any, on each date which is one Business Day prior to any Interest Payment Date (unless otherwise requested by the Borrower at least one Business Day prior to such Interest Payment Date by written notice to the Administrative Agent) the Borrower

certificate (effective two Business Days following delivery) the Facility Fee Rate shall be adjusted to the Facility Fee Rate that would have been effective had such financial statements or certificate been timely delivered. (b) All Fees shall be calculated on the basis of a year of 360 days and the actual number of days elapsed. 2.08 Use of Proceeds of Revolving Credit Loans. The Administrative Agent is hereby irrevocably authorized by the Borrower to apply the proceeds of the Revolving Credit Loans to fund any Project Loans as requested by any Lessor under any Project Loan Agreement or by any Agree SPC under any Agree Project Loan Agreement. 2.09 [Reserved] 2.10 Advances to Pay Interest. During the Construction Period for a Project Loan, if any, on each date which is one Business Day prior to any Interest Payment Date (unless otherwise requested by the Borrower at least one Business Day prior to such Interest Payment Date by written notice to the Administrative Agent) the Borrower shall be deemed to have requested a borrowing pursuant to Section 2.02(a) of a Revolving Credit Loan with a Base-Rate Option in an amount equal to the aggregate amount of interest due and payable on such date with respect to the principal portion of the Loans allocated to the related Project Loan; provided, that if (a) such Interest Payment Date falls upon the same day as the last day of an Interest Period and (b) the Borrower shall have given the Administrative Agent a renewal/conversion notice described in Section 2.02(a) requesting continuation of the Euro-Rate Borrowing Tranche with respect to which the Interest Period is ending on such Interest Payment Date, on the day which is three Business Days prior to such Interest Payment Date, the Borrower shall be deemed to have requested a borrowing pursuant to Section 2.02(a) of a Loan with a Euro-Rate Option in an amount equal to the aggregate amount of interest due and payable on such date with respect to the principal portion of the Loans allocated to the related Project Loan. One Business Day, in the case of a Loan with a Base-Rate Option or three Business Days, in the case of a Loan with a Euro-Rate Option, prior to such Interest Payment Date, the Borrower shall deliver to the Administrative Agent a notice indicating the amount of such interest. The Borrowing Date with respect to any such borrowing shall be the relevant Interest Payment Date; provided, that the making of the Loans pursuant to such borrowing shall be subject to satisfaction of the applicable conditions precedent set forth in Article VII and the proceeds of such borrowing shall be applied solely to pay the aggregate amount of interest due and payable on such date with respect to the Loans. On the relevant Borrowing Date, the aggregate principal amount of the Euro-Rate Borrowing Tranche with respect to which the Interest Period is being continued or the Base Rate Borrowing Tranche, as the case may be, shall be deemed to be increased by the amount of the new Loan made on such day.

ARTICLE III. AMOUNT AND TERMS OF SWING SUB-FACILITY 3.01 Swing Facility. Subject to the terms and conditions hereof (including fulfillment of those conditions set forth in Article VII, as applicable, which conditions may not be waived without the consent of each Lender) and relying upon the representations and warranties herein set forth, and in order to facilitate loans and repayments, the Swing Lender may, at its option, cancelable at any time for any reason whatsoever, make Swing Loans to the Borrower at any time or from time to time after the Effective Date, but not including, the Maturity Date, in an aggregate principal amount at any one time outstanding not to exceed $15,000,000, subject to reduction as provided herein, to be made in accordance with the following provisions, and provided, that the Swing Loans outstanding hereunder shall not exceed the Swing Lender's Commitment minus its outstanding Revolving Credit Loans. Within such limits of time and amount and subject to the other provisions of this Agreement, the Borrower may borrow, repay and reborrow pursuant to this Section 3.01. 3.02 Swing Loan Requests and Making of Swing Loans. (a) Except as otherwise provided herein, the Borrower may from time to time prior to the Maturity Date request the Swing Lender to make Swing Loans by delivery to the Swing Lender (with a copy to the Administrative Agent) not later than 11:00 A.M. Eastern time, ten (10) Business Days prior to the proposed Borrowing Date with respect to the making of each Swing Loan (provided that, so long as the applicable Lessee shall have waived the conditions precedent set forth in Schedule 11.02 to the Participation Agreement pursuant to Section 11.02 thereto (other than in connection with an Acquisition Advance), one (1) Business Day prior to the proposed Borrowing Date), of a duly completed request therefor substantially in the form of Exhibit C hereto or a request by telephone

ARTICLE III. AMOUNT AND TERMS OF SWING SUB-FACILITY 3.01 Swing Facility. Subject to the terms and conditions hereof (including fulfillment of those conditions set forth in Article VII, as applicable, which conditions may not be waived without the consent of each Lender) and relying upon the representations and warranties herein set forth, and in order to facilitate loans and repayments, the Swing Lender may, at its option, cancelable at any time for any reason whatsoever, make Swing Loans to the Borrower at any time or from time to time after the Effective Date, but not including, the Maturity Date, in an aggregate principal amount at any one time outstanding not to exceed $15,000,000, subject to reduction as provided herein, to be made in accordance with the following provisions, and provided, that the Swing Loans outstanding hereunder shall not exceed the Swing Lender's Commitment minus its outstanding Revolving Credit Loans. Within such limits of time and amount and subject to the other provisions of this Agreement, the Borrower may borrow, repay and reborrow pursuant to this Section 3.01. 3.02 Swing Loan Requests and Making of Swing Loans. (a) Except as otherwise provided herein, the Borrower may from time to time prior to the Maturity Date request the Swing Lender to make Swing Loans by delivery to the Swing Lender (with a copy to the Administrative Agent) not later than 11:00 A.M. Eastern time, ten (10) Business Days prior to the proposed Borrowing Date with respect to the making of each Swing Loan (provided that, so long as the applicable Lessee shall have waived the conditions precedent set forth in Schedule 11.02 to the Participation Agreement pursuant to Section 11.02 thereto (other than in connection with an Acquisition Advance), one (1) Business Day prior to the proposed Borrowing Date), of a duly completed request therefor substantially in the form of Exhibit C hereto or a request by telephone immediately confirmed in writing by letter, facsimile or telex (each, a "Swing Loan Request"), it being understood that the Swing Lender (and the Administrative Agent) may rely on the authority of any individual making such a telephonic request without the necessity of receipt of such written confirmation. Each Swing Loan Request shall be irrevocable and shall specify the proposed Borrowing Date and the aggregate amount of the proposed Swing Loans. So long as the Swing Lender elects to make Swing Loans, the Swing Lender shall fund such Swing Loans to the Borrower in U.S. Dollars and immediately available funds at the Principal Office of the Swing Lender prior to 2:00 P.M. Eastern time on the Borrowing Date. (b) A portion of the principal amount of each Swing Loan made by the Swing Lender equal to the Tranche A Percentage of the principal amount of such Swing Loan shall be deemed to be a "Tranche A Loan" for the purposes of the Operative Agreements and the remaining portion of the principal amount of such Swing Loan shall be deemed to be a "Tranche B Loan" for the purposes of the Operative Agreements. The provisions of Section 2.02(b) shall apply mutatis mutandis to the Swing Loans made by the Swing Lender. 3.03 Swing Note. The Swing Loans shall be evidenced by a promissory note of the Borrower substantially in the form of Exhibit A-3, with appropriate insertions (the "Swing Note"), payable to the order of the Swing Lender and representing the obligation of the Borrower to pay the aggregate unpaid principal amount of the Swing Loans, with interest thereon as prescribed

in Section 4.05. The Swing Lender is hereby authorized to record the borrowing date, the amount of each Swing Loan and the date and amount of each payment or prepayment of principal thereof, on the schedule annexed to and constituting a part of the Swing Note and, in the absence of manifest error, any such recordation shall constitute prima facie evidence of the accuracy of the information so recorded, provided, that the failure of the Swing Lender to make such recordation (or any error in such recordation) shall not affect the obligations of the Borrower hereunder or under such Note. The Swing Note shall (i) be dated the Effective Date, (ii) be stated to mature on the Maturity Date and (iii) provide for the payment of interest in accordance with Section 4.05. 3.04 Borrowings to Repay Swing Loans. (a) The Swing Lender, at its option exercisable at any time, may, and so long as there shall be at least $10,000,000 in aggregate principal amount of Swing Loans outstanding, on the last day of any Interest Period immediately following the making of such Swing Loans, shall, on behalf of the Borrower (which hereby irrevocably directs the Swing Lender to act on its behalf) request each Lender, including the Swing Lender, to make a Revolving Credit Loan in an amount equal to such Revolving Credit Lender's Ratable Share of the amount of the Swing Loans, (the "Refunded Swing Loans") outstanding on the date such

in Section 4.05. The Swing Lender is hereby authorized to record the borrowing date, the amount of each Swing Loan and the date and amount of each payment or prepayment of principal thereof, on the schedule annexed to and constituting a part of the Swing Note and, in the absence of manifest error, any such recordation shall constitute prima facie evidence of the accuracy of the information so recorded, provided, that the failure of the Swing Lender to make such recordation (or any error in such recordation) shall not affect the obligations of the Borrower hereunder or under such Note. The Swing Note shall (i) be dated the Effective Date, (ii) be stated to mature on the Maturity Date and (iii) provide for the payment of interest in accordance with Section 4.05. 3.04 Borrowings to Repay Swing Loans. (a) The Swing Lender, at its option exercisable at any time, may, and so long as there shall be at least $10,000,000 in aggregate principal amount of Swing Loans outstanding, on the last day of any Interest Period immediately following the making of such Swing Loans, shall, on behalf of the Borrower (which hereby irrevocably directs the Swing Lender to act on its behalf) request each Lender, including the Swing Lender, to make a Revolving Credit Loan in an amount equal to such Revolving Credit Lender's Ratable Share of the amount of the Swing Loans, (the "Refunded Swing Loans") outstanding on the date such notice is given plus, if the Swing Lender so requests, accrued interest thereon. The Refunded Swing Loans shall bear interest at the Base Rate Option and shall be deemed to have been properly requested in accordance with Section 2.02 without regard to any of the requirements of that provision. Unless any of the events described in paragraph (h) of Article IX shall have occurred (in which event the procedures of paragraph (b) of this Section 3.04 shall apply), the Swing Lender shall provide notice to the Administrative Agent and the Administrative Agent shall provide notice to the Lenders (which may be a telephonic or written notice by letter, facsimile or telex) that such Revolving Credit Loans are to be made under this Section 3.03 and of the apportionment among the Lenders, and the Lenders shall be unconditionally obligated to fund such Revolving Credit Loans (whether or not the conditions specified in Section 7.02 are then satisfied) by the time the Administrative Agent so requests, which shall not be earlier than 12:00 noon Eastern time on the Business Day next succeeding the date the Administrative Agent gives the demand notice to the Lenders. If for any reason a Lender is prohibited from funding its Ratable Share of Revolving Credit Loans to repay the principal amount of the Swing Loans outstanding, such Lender shall purchase a participation in the Swing Loans equal to its Ratable Share of the principal amount of Swing Loans outstanding in accordance with paragraph (b) of this Section 3.04. The proceeds of such Revolving Credit Loans shall be immediately applied to repay the Refunded Swing Loans. (b) If, prior to the making of a Revolving Credit Loan pursuant to paragraph (a) of this Section 3.04, one of the events described in paragraph (h) of Article IX shall have occurred, each Revolving Credit Lender will, on the date such Revolving Credit Loan was to have been made, purchase an undivided participating interest in the Refunded Swing Loan in an amount equal to its Ratable Share of such Refunded Swing Loan. Each Revolving Credit Lender will immediately transfer to the Swing Lender, in immediately available funds, the amount of its participation and upon receipt thereof the Swing Lender will deliver to such Revolving Credit Lender a Swing Loan Participation Certificate dated the date of receipt of such funds and in such amount. (c) Whenever, at any time after the Swing Lender has received from any Revolving Credit Lender such Revolving Credit Lender's participating interest in a Refunded Swing

Loan pursuant to clause (b) above, the Swing Lender receives any payment on account thereof, the Swing Lender will distribute to such Revolving Credit Lender its participating interest in such amount (appropriately adjusted, in the case of interest payments, to reflect the period of time during which such Revolving Credit Lender's participating interest was outstanding and funded) in like funds as received; provided, however, that in the event that such payment received by the Swing Lender is required to be returned, such Revolving Credit Lender will return to the Swing Lender any portion thereof previously distributed by the Swing Lender to it in like funds as such payment is required to be returned by the Swing Lender. (d) Each Lender's obligation to make its Ratable Share of Revolving Credit Loans to repay the principal amount of the Swing Loans outstanding or to purchase its Ratable Share of the principal amount of the Swing Loans pursuant to paragraphs (a) and (b) of this Section 3.04 shall be absolute and unconditional and shall not be subject to any qualification or exception whatsoever and shall be made under all circumstances, including without limitation any of the following circumstances: (i) any lack of validity or enforceability of this Agreement or any of

Loan pursuant to clause (b) above, the Swing Lender receives any payment on account thereof, the Swing Lender will distribute to such Revolving Credit Lender its participating interest in such amount (appropriately adjusted, in the case of interest payments, to reflect the period of time during which such Revolving Credit Lender's participating interest was outstanding and funded) in like funds as received; provided, however, that in the event that such payment received by the Swing Lender is required to be returned, such Revolving Credit Lender will return to the Swing Lender any portion thereof previously distributed by the Swing Lender to it in like funds as such payment is required to be returned by the Swing Lender. (d) Each Lender's obligation to make its Ratable Share of Revolving Credit Loans to repay the principal amount of the Swing Loans outstanding or to purchase its Ratable Share of the principal amount of the Swing Loans pursuant to paragraphs (a) and (b) of this Section 3.04 shall be absolute and unconditional and shall not be subject to any qualification or exception whatsoever and shall be made under all circumstances, including without limitation any of the following circumstances: (i) any lack of validity or enforceability of this Agreement or any of the Credit Documents; (ii) the existence of any claim, setoff, defense or other right which the Borrower may have at any time against any of the Agents, any Lender or any other Person, whether in connection with this Agreement, the transactions contemplated herein or any unrelated transactions (including any underlying transactions between the Company or any of its Subsidiaries); or (iii) the occurrence of any Default, Event of Default, or termination of the Commitments or this Agreement. 3.05 Use of Proceeds of Swing Loans. The proceeds of the Swing Loans hereunder shall be used by the Borrower for any purpose for which the proceeds of Revolving Credit Loans may be used. The Swing Lender and/or Administrative Agent is hereby irrevocably authorized by the Borrower to apply the proceeds of the Swing Loans to fund any Project Loans as requested by any Lessor under any Project Loan Agreement. ARTICLE IV. INTEREST RATES 4.01 Interest Rate Options on Revolving Credit Loans. The Borrower shall pay interest in respect of the outstanding unpaid principal amount of the Revolving Credit Loans as selected by the Borrower from the Base Rate Option or the Euro-Rate Option set forth below applicable to the Revolving Credit Loans, it being understood that, subject to the provisions of this Agreement, the Borrower may select different Interest Rate Options to apply simultaneously to the Revolving Credit Loans comprising different Borrowing Tranches and may convert to or renew one or more Interest Rate Options with respect to all or any portion of the Revolving Credit Loans comprising any Borrowing Tranche; provided, that there shall not be at any one time outstanding more than six (6) Euro-Rate Borrowing Tranches, and provided, further, that from and after one month prior to the Maturity Date, Revolving Credit Loans shall be made only at the Base Rate Option. (a) Interest Rate Option. The Borrower shall have the right to select from the following Interest Rate Options applicable to the Revolving Credit Loans:

(i) Base Rate Option: A fluctuating rate per annum (computed on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed) equal to the Base Rate; (ii) Euro-Rate Option: A rate per annum (computed on the basis of a year of 360 days and actual days elapsed) equal to the Euro-Rate plus the Euro- Rate Margin. The Euro-Rate Margin shall be subject to adjustment quarterly to the percentage, based on the Fixed Charge Coverage Ratio, as set forth on Schedule I. Each adjustment in the Euro-Rate Margin shall be effective on the second Business Day next following delivery to the Administrative Agent of the financial statements or certificate required to be delivered by the Company pursuant to Article XIII of the Guarantee showing the basis for such adjustment. In the event that such financial statements or certificate shall not have been delivered to the Administrative Agent on the date required for such delivery pursuant to Article XIII of the Guarantee, then on the second Business Day following such date, the Euro-Rate Margin shall be increased to the highest Euro-Rate Margin set forth on Schedule I, provided, that after delivery of such financial statements or certificate (effective two Business Days following delivery) the Euro-Rate Margin shall be adjusted to the Euro-Rate Margin that would have been effective had such financial statements or certificate been timely delivered. Each Euro-Rate Borrowing Tranche shall bear interest from and including the first day of the Interest Period applicable thereto, but not including the last day of such Interest Period. No

(i) Base Rate Option: A fluctuating rate per annum (computed on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed) equal to the Base Rate; (ii) Euro-Rate Option: A rate per annum (computed on the basis of a year of 360 days and actual days elapsed) equal to the Euro-Rate plus the Euro- Rate Margin. The Euro-Rate Margin shall be subject to adjustment quarterly to the percentage, based on the Fixed Charge Coverage Ratio, as set forth on Schedule I. Each adjustment in the Euro-Rate Margin shall be effective on the second Business Day next following delivery to the Administrative Agent of the financial statements or certificate required to be delivered by the Company pursuant to Article XIII of the Guarantee showing the basis for such adjustment. In the event that such financial statements or certificate shall not have been delivered to the Administrative Agent on the date required for such delivery pursuant to Article XIII of the Guarantee, then on the second Business Day following such date, the Euro-Rate Margin shall be increased to the highest Euro-Rate Margin set forth on Schedule I, provided, that after delivery of such financial statements or certificate (effective two Business Days following delivery) the Euro-Rate Margin shall be adjusted to the Euro-Rate Margin that would have been effective had such financial statements or certificate been timely delivered. Each Euro-Rate Borrowing Tranche shall bear interest from and including the first day of the Interest Period applicable thereto, but not including the last day of such Interest Period. No Interest Period may end after the Maturity Date. (b) Rate Quotations. The Borrower may call the Administrative Agent on or before the date on which a Revolving Credit Loan Request is to be delivered to receive an indication of the rates then in effect, but it is acknowledged that such projection shall not be binding on the Administrative Agent or the Lenders nor affect the rate of interest which thereafter is actually in effect when the election is made. 4.02 [Reserved] 4.03 Euro-Rate Unascertainable; Illegality; Increased Costs; Deposits Not Available. (a) If on any date on which a Euro-Rate would otherwise be determined, the Administrative Agent shall have determined that: (i) adequate and reasonable means do not exist for ascertaining such Euro-Rate, or (ii) a contingency has occurred which materially and adversely affects the London interbank market or any other applicable interbank market, the Administrative Agent shall have the rights specified in Section 4.03(c).

(b) If at any time any Lender shall have determined that: (i) the making, maintenance or funding of any Revolving Credit Loan to which a Euro-Rate Option applies has been made impracticable or unlawful by compliance by such Lender in good faith with any Law or any interpretation or application thereof by any Governmental Authority or with any request or directive of any such Governmental Authority (whether or not having the force of Law), or (ii) such Euro-Rate option will not adequately and fairly reflect the cost to such Lender of the establishment or maintenance of any such Revolving Credit Loan, or (iii) after making all reasonable efforts, deposits of the relevant amount in Dollars for the relevant Interest Period for a Revolving Credit Loan to which a Euro-Rate Option applies are not available to such Lender in the London interbank market at the effective cost of funding of a proposed Euro-Rate Loan, the Administrative Agent shall have the rights specified in Section 4.03(c). (c) In the case of any event specified in Section 4.03(a) above, the Administrative Agent shall promptly so notify the Lenders and the Borrower thereof and in the case of an event specified in Section 4.03(b) above, such Lender shall promptly so notify the Administrative Agent and enclose a certificate with such notice as to the specific circumstances of such notice and the Administrative Agent shall promptly send copies of such notice and certificate to the other Lenders and the Borrower. Upon such date as shall be specified in such notice (which shall not be earlier than the date such notice is given) the obligation of (A) the Lenders in the case of such notice given by the Administrative Agent or (B) such Lender in the case of such notice given by such Lender, to allow the

(b) If at any time any Lender shall have determined that: (i) the making, maintenance or funding of any Revolving Credit Loan to which a Euro-Rate Option applies has been made impracticable or unlawful by compliance by such Lender in good faith with any Law or any interpretation or application thereof by any Governmental Authority or with any request or directive of any such Governmental Authority (whether or not having the force of Law), or (ii) such Euro-Rate option will not adequately and fairly reflect the cost to such Lender of the establishment or maintenance of any such Revolving Credit Loan, or (iii) after making all reasonable efforts, deposits of the relevant amount in Dollars for the relevant Interest Period for a Revolving Credit Loan to which a Euro-Rate Option applies are not available to such Lender in the London interbank market at the effective cost of funding of a proposed Euro-Rate Loan, the Administrative Agent shall have the rights specified in Section 4.03(c). (c) In the case of any event specified in Section 4.03(a) above, the Administrative Agent shall promptly so notify the Lenders and the Borrower thereof and in the case of an event specified in Section 4.03(b) above, such Lender shall promptly so notify the Administrative Agent and enclose a certificate with such notice as to the specific circumstances of such notice and the Administrative Agent shall promptly send copies of such notice and certificate to the other Lenders and the Borrower. Upon such date as shall be specified in such notice (which shall not be earlier than the date such notice is given) the obligation of (A) the Lenders in the case of such notice given by the Administrative Agent or (B) such Lender in the case of such notice given by such Lender, to allow the Borrower to select, convert to or renew a Euro-Rate Option shall be suspended until the Administrative Agent shall have later notified the Borrower or such Lender shall have later notified the Administrative Agent, of the Administrative Agent's or such Lender's, as the case may be, determination that the circumstances giving rise to such previous determination no longer exist. If at any time the Administrative Agent makes a determination under subsection (a) or (b) of this Section 4.03 and the Borrower has previously notified the Administrative Agent of its selection of, conversion to or renewal of a Euro-Rate Option and such Euro-Rate Option has not yet gone into effect, such notification shall be deemed to provide for selection of, conversion to or renewal of the Base Rate Option. If any Lender notifies the Administrative Agent of a determination under subsection (b) of this Section 4.03, the Borrower shall, subject to the Borrower's indemnification obligations under Section 5.06(b), as to any Revolving Credit Loan of the Lender to which a Euro-Rate Option applies, on the date specified in such notice either convert such Loan to the Base Rate Option or prepay such Loan in accordance with Section 5.04(b). Absent due notice from the Borrower of conversion or prepayment, such Loan shall automatically be converted to the Base Rate Option upon such specified date. 4.04 Selection of Interest Rate Options. Revolving Credit Loans for which the Borrower has selected the Base Rate Option shall continue as such unless and until the Borrower chooses to convert such Revolving Credit Loans to a Euro-Rate Borrowing Tranche. If Borrower

fails to select a new Interest Period to apply to any Borrowing Tranche at the expiration of an existing Interest Period applicable to such Euro-Rate Borrowing Tranche in accordance with the provisions of Section 2.02(a), the Borrower shall be deemed to have converted such Euro-Rate Borrowing Tranche to the Base Rate Option commencing upon the last day of the existing Interest Period. 4.05 Interest Rates Payable on Swing Loans. The Borrower shall pay interest in respect of the outstanding unpaid principal amount of any Swing Loan at a fluctuating rate per annum (computed on the basis of a year of 360 days, as the case may be, and actual days elapsed) equal to the Swing Margin. 4.06 Interest After Default. To the extent permitted by Law, upon the occurrence of an Event of Default and until such time such Event of Default shall have been cured or waived: (a) the rate of interest for each Loan otherwise applicable pursuant to Section 4.01 or 4.05 shall be increased by 2.0% per annum; and

fails to select a new Interest Period to apply to any Borrowing Tranche at the expiration of an existing Interest Period applicable to such Euro-Rate Borrowing Tranche in accordance with the provisions of Section 2.02(a), the Borrower shall be deemed to have converted such Euro-Rate Borrowing Tranche to the Base Rate Option commencing upon the last day of the existing Interest Period. 4.05 Interest Rates Payable on Swing Loans. The Borrower shall pay interest in respect of the outstanding unpaid principal amount of any Swing Loan at a fluctuating rate per annum (computed on the basis of a year of 360 days, as the case may be, and actual days elapsed) equal to the Swing Margin. 4.06 Interest After Default. To the extent permitted by Law, upon the occurrence of an Event of Default and until such time such Event of Default shall have been cured or waived: (a) the rate of interest for each Loan otherwise applicable pursuant to Section 4.01 or 4.05 shall be increased by 2.0% per annum; and (b) each other Obligation hereunder if not paid when due shall bear interest at a rate per annum equal to the sum of the Base Rate plus an additional 2.0% per annum from the time such Obligation becomes due and payable and until it is paid in full. (c) The Borrower acknowledges that such increased rates reflect, among other things, the fact that such Loans or other amounts have become a substantially greater risk given their default status and that the Lenders are entitled to additional compensation for such risk; and, all such interest shall be payable by the Borrower upon demand by the Administrative Agent. 4.07 Maximum Interest Rate. If at any time the designated rate applicable to any Loan made by any Lender exceeds such Lender's highest lawful rate, the rate of interest on such Lender's Loan shall be limited to such Lender's highest lawful rate. 4.08 Interest Under Project Loan Agreement. At such times when the Borrower receives payments of interest on a Project Loan pursuant to a Project Loan Agreement, the Borrower shall promptly deposit such amount with the Administrative Agent who will deposit such payment in the Credit Agreement Account. Such payments shall be applied in accordance with the provisions of Article XI. ARTICLE V. PAYMENTS 5.01 Payments. All payments and prepayments to be made in respect of principal, interest, Fees or other amounts due from the Borrower hereunder shall be payable prior to 2:00 P.M. (Eastern time) on the date when due without presentment, demand, protest or notice of any kind, all of which are hereby expressly waived by the Borrower, and without setoff, counterclaim or other

deduction of any nature, and an action therefor shall immediately accrue. Such payments shall be made to the Administrative Agent at the Principal Office in U.S. Dollars and in immediately available funds, and the Administrative Agent shall promptly distribute such amounts in immediately available funds, provided, that in the event payments are received by 2:00 P.M. (Eastern time) by the Administrative Agent and such payments are not distributed on the same day received by the Administrative Agent, the Administrative Agent shall pay the Federal Funds Effective Rate with respect to the amount of such payments for each day held by the Administrative Agent and not distributed to the Lenders. Unless the Interest Period in respect thereof is continued or converted in accordance with Section 4.02, all Revolving Credit Loans to which a Euro-Rate Option applies shall be due and payable on the last day of the applicable Interest Period. All Loans outstanding on the Maturity Date shall be due and payable in full on the Maturity Date. 5.02 Pro Rata Treatment of Lenders. Each borrowing of Revolving Credit Loans shall be allocated to each Lender according to its Ratable Share, and each selection of, conversion to or renewal of any Interest Rate Option and each payment or prepayment by the Borrower with respect to principal, interest, Fees, or other amounts due with respect to the Revolving Credit Loans (except for Fees payable under the Fee Letter, any

deduction of any nature, and an action therefor shall immediately accrue. Such payments shall be made to the Administrative Agent at the Principal Office in U.S. Dollars and in immediately available funds, and the Administrative Agent shall promptly distribute such amounts in immediately available funds, provided, that in the event payments are received by 2:00 P.M. (Eastern time) by the Administrative Agent and such payments are not distributed on the same day received by the Administrative Agent, the Administrative Agent shall pay the Federal Funds Effective Rate with respect to the amount of such payments for each day held by the Administrative Agent and not distributed to the Lenders. Unless the Interest Period in respect thereof is continued or converted in accordance with Section 4.02, all Revolving Credit Loans to which a Euro-Rate Option applies shall be due and payable on the last day of the applicable Interest Period. All Loans outstanding on the Maturity Date shall be due and payable in full on the Maturity Date. 5.02 Pro Rata Treatment of Lenders. Each borrowing of Revolving Credit Loans shall be allocated to each Lender according to its Ratable Share, and each selection of, conversion to or renewal of any Interest Rate Option and each payment or prepayment by the Borrower with respect to principal, interest, Fees, or other amounts due with respect to the Revolving Credit Loans (except for Fees payable under the Fee Letter, any payments with respect to the Swing Loans, and except as otherwise provided in Section 4.03(b), 5.04(b), 5.06 or Article XI) shall be made in proportion to the applicable Revolving Credit Loans outstanding from each Lender and if no such Loans are then outstanding, in proportion to the Ratable Share of each Lender (it being understood that, except as otherwise provided in Section 5.06 or Article XI, any payment so made in respect of principal of any Lender's Revolving Credit Loans shall be deemed to ratably reduce the outstanding amount of Tranche A Loans and Tranche B Loans of such Lender). 5.03 Interest Payment Dates. Interest on Loans to which the Base Rate Option or the Euro-Rate Option applies shall be due and payable in arrears on the last Business Day of each March, June, September and December after the Effective Date and on the Maturity Date or upon acceleration of the Obligations. Interest on mandatory prepayments of principal under Section 2.06 shall be due on the date such mandatory prepayment is due. Interest on the principal amount of each Loan or other Obligation shall be due and payable on demand after such principal amount or other Obligation becomes due and payable (whether on the stated maturity date, upon acceleration or otherwise). Interest on amounts covered by optional prepayments shall be paid in accordance with Section 5.04(a). 5.04 Optional Prepayments. (a) The Borrower shall have the right at its option from time to time to prepay the Loans in whole or part without premium or penalty (except as provided in subsection (b) below or in Section 5.05 or 5.06): (i) at any time with respect to any Swing Loan or any Revolving Credit Loan to which the Base Rate Option applies; (ii) on the last day of the applicable Interest Period with respect to Revolving Credit Loans to which a Euro-Rate Option applies; and

(iii) on the date specified in a notice by any Lender pursuant to Section 4.03(b) with respect to any Revolving Credit Loan to which a Euro-Rate Option applies. Whenever the Borrower desires to prepay any part of the Loans, the Borrower shall provide a prepayment notice to the Administrative Agent at least one (1) Business Day prior to the date of prepayment of the Loans setting forth the following information: (x) the date, which shall be a Business Day, on which the proposed prepayment is to be made; (y) a statement indicating the application of the prepayment among the Revolving Credit Loans and Swing Loans; and (z) the total principal amount of such prepayment, which shall not be less than $2,500,000. All prepayment notices shall be irrevocable. The principal amount of the Loans for which a prepayment notice is

(iii) on the date specified in a notice by any Lender pursuant to Section 4.03(b) with respect to any Revolving Credit Loan to which a Euro-Rate Option applies. Whenever the Borrower desires to prepay any part of the Loans, the Borrower shall provide a prepayment notice to the Administrative Agent at least one (1) Business Day prior to the date of prepayment of the Loans setting forth the following information: (x) the date, which shall be a Business Day, on which the proposed prepayment is to be made; (y) a statement indicating the application of the prepayment among the Revolving Credit Loans and Swing Loans; and (z) the total principal amount of such prepayment, which shall not be less than $2,500,000. All prepayment notices shall be irrevocable. The principal amount of the Loans for which a prepayment notice is given, together with interest on such principal amount, except with respect to Loans to which the Base Rate Option applies, shall be due and payable on the date specified in such prepayment notice as the date on which the proposed prepayment is to be made. If the Borrower prepays a Loan but fails to specify the applicable Borrowing Tranche which is being prepaid, the prepayment shall be applied (i) first to Swing Loans and then to Revolving Credit Loans; and (ii) after giving effect to the allocations in clause (i) above and in the preceding sentence, first to Loans to which the Base Rate Option applies and then to Loans to which the Euro-Rate Option applies (it being understood that, except as otherwise provided in Section 5.06 or Article XI, any payment so made in respect of principal of any Lender's Revolving Credit Loans shall be deemed to ratably reduce the outstanding amount of Tranche A Loans and Tranche B Loans of such Lender). Any prepayment hereunder shall be subject to the Borrower's obligation to indemnify the Lenders under Section 5.06(b). (b) In the event any Lender (i) gives notice under Section 4.03(b) or Section 5.06(a), (ii) does not fund Revolving Credit Loans because the making of such Loans would contravene any Law applicable to such Lender, (iii) does not approve any action as to which consent of the Required Lenders is requested by the Borrower and obtained hereunder or (iv) becomes subject to the control of an Governmental Authority (other than normal and customary supervision), then, unless an Event of Default shall have occurred and be continuing, the Borrower shall have the right at its option, with the consent of the Administrative Agent, which shall not be unreasonably withheld, to prepay the Loans of such Lender in whole together with all interest accrued thereon and terminate such Lender's Commitment, within ninety (90) days after (w) receipt of such Lender's notice under Section 4.03(b) or 5.06(a), (x) the date such Lender has failed to fund Revolving Credit Loans because the making of such Loans would contravene a Law applicable to such Lender, (y) the

date of obtaining the consent which such Lender has not approved or (z) the date such Lender became subject to the control of an Governmental Authority, as applicable; provided, that the Borrower shall also pay to such Lender at the time of such prepayment any amounts required under Section 5.06 and any accrued interest due on such amount and any related Fees; and provided, further, that the remaining Lenders shall have no obligation hereunder to increase their Commitments. Notwithstanding the foregoing, the Administrative Agent may only be replaced subject to the requirements of Section 10.09. (c) In the event any Lender does not approve any increase in the aggregate Commitments as to which increase the Borrower has obtained the consent of all other Lenders whose Commitments will not otherwise be prepaid and terminated pursuant to this Section 5.04(c), then, unless an Event of Default shall have occurred and be continuing, the Borrower shall have the right at its option, with the consent of the Administrative Agent, which shall not be unreasonably withheld, to prepay the Loans of such Lender in whole together with all interest accrued thereon and terminate such Lender's Commitment (or Lenders' Commitments) within ninety (90) days after the date the Borrower has obtained the consent of all such other Lenders; provided, that the termination of such Lender's Commitment (or Lenders' Commitments) pursuant to this Section 5.04(c) shall only be permitted if the Borrower has identified one or more Assignee Lenders acceptable to the Administrative Agent which Assignee Lenders have agreed to the increase in the aggregate Commitments and such termination is accomplished by

date of obtaining the consent which such Lender has not approved or (z) the date such Lender became subject to the control of an Governmental Authority, as applicable; provided, that the Borrower shall also pay to such Lender at the time of such prepayment any amounts required under Section 5.06 and any accrued interest due on such amount and any related Fees; and provided, further, that the remaining Lenders shall have no obligation hereunder to increase their Commitments. Notwithstanding the foregoing, the Administrative Agent may only be replaced subject to the requirements of Section 10.09. (c) In the event any Lender does not approve any increase in the aggregate Commitments as to which increase the Borrower has obtained the consent of all other Lenders whose Commitments will not otherwise be prepaid and terminated pursuant to this Section 5.04(c), then, unless an Event of Default shall have occurred and be continuing, the Borrower shall have the right at its option, with the consent of the Administrative Agent, which shall not be unreasonably withheld, to prepay the Loans of such Lender in whole together with all interest accrued thereon and terminate such Lender's Commitment (or Lenders' Commitments) within ninety (90) days after the date the Borrower has obtained the consent of all such other Lenders; provided, that the termination of such Lender's Commitment (or Lenders' Commitments) pursuant to this Section 5.04(c) shall only be permitted if the Borrower has identified one or more Assignee Lenders acceptable to the Administrative Agent which Assignee Lenders have agreed to the increase in the aggregate Commitments and such termination is accomplished by means of an assignment pursuant to Section 12.08(a) which does not reduce the aggregate amount of the Commitments after giving effect to the addition of any such Assignee Lenders; and provided, further, that the remaining Lenders shall have no obligation hereunder to increase their Commitments. (d) Each Lender agrees that upon the occurrence of any event giving rise to increased costs or other special payments under Section 4.03 or 5.06 with respect to such Lender, it will if requested by the Borrower, use reasonable efforts (subject to overall policy considerations of such Lender) to designate another Lending Office for any Loans affected by such event, provided that such designation is made on such terms that such Lender and its Lending Office suffer no economic, legal or regulatory disadvantage, as determined by such Lender, with the object of avoiding the consequence of the event giving rise to the operation of such Section. Nothing in this Section 5.04(d) shall affect or postpone any of the Obligations of Borrower or the rights of any Agent or any Lender provided in this Agreement. 5.05 Mandatory Prepayments. If the Borrower shall receive any principal repayment of a Project Loan pursuant to a Project Loan Agreement, the Borrower shall make a deposit of such payment with the Administrative Agent to be applied as a prepayment of the Loans. The Administrative Agent will deposit such payment in the Credit Agreement Account to be applied as a prepayment of the Loans in accordance with Article XI. 5.06 Additional Compensation in Certain Circumstances. (a) Increased Costs or Reduced Return Resulting From Taxes, Reserves, Capital Adequacy Requirements, Expenses, Etc. If any Law, guideline or interpretation or any change in any Law, guideline or interpretation or application thereof by any Governmental Authority charged with

the interpretation or administration thereof or compliance with any request or directive (whether or not having the force of Law) of any central bank or other Governmental Authority: (i) subjects any Lender to any tax or changes the basis of taxation with respect to this Agreement, the other Credit Documents, Loans, or payments by the Borrower of principal, interest, Fees, or other amounts due from the Borrower hereunder or under the other Credit Documents (except for taxes on the net income of such Lender or any Lending Office of any Lender), (ii) imposes, modifies or deems applicable any reserve, special deposit or similar requirement against credits or commitments to extend credit extended by, or assets (funded or contingent) of, deposits with or for the account of, or other acquisitions of funds by, any Lender or any Lending Office of any Lender, or (iii) imposes, modifies or deems applicable any capital adequacy or similar requirement (A) against assets (funded or contingent) of, or letters of credit, other credits or commitments to extend credit extended by, any Lender, or (B) otherwise applicable to the obligations of any Lender or any Lending Office of any Lender under this

the interpretation or administration thereof or compliance with any request or directive (whether or not having the force of Law) of any central bank or other Governmental Authority: (i) subjects any Lender to any tax or changes the basis of taxation with respect to this Agreement, the other Credit Documents, Loans, or payments by the Borrower of principal, interest, Fees, or other amounts due from the Borrower hereunder or under the other Credit Documents (except for taxes on the net income of such Lender or any Lending Office of any Lender), (ii) imposes, modifies or deems applicable any reserve, special deposit or similar requirement against credits or commitments to extend credit extended by, or assets (funded or contingent) of, deposits with or for the account of, or other acquisitions of funds by, any Lender or any Lending Office of any Lender, or (iii) imposes, modifies or deems applicable any capital adequacy or similar requirement (A) against assets (funded or contingent) of, or letters of credit, other credits or commitments to extend credit extended by, any Lender, or (B) otherwise applicable to the obligations of any Lender or any Lending Office of any Lender under this Agreement, and the result of any of the foregoing is to increase the cost to, reduce the income receivable by, or impose any additional expense (including loss of margin) upon any Lender or any Lending Office of any Lender with respect to this Agreement, the other Credit Documents or the making, maintenance or funding of any part of the Loans (or, in the case of any capital adequacy or similar requirement, to have the effect of reducing the rate of return on any Lender's capital, taking into consideration such Lender's customary policies with respect to capital adequacy) by an amount which such Lender in its sole discretion deems to be material, such Lender shall from time to time notify the Borrower and the Administrative Agent of the amount determined in good faith (using any averaging and attribution methods employed in good faith) by such Lender to be necessary to compensate such Lender for such increase in cost, reduction of income or additional expense. Such notice shall set forth in reasonable detail the basis for such determination. Such amount shall be due and payable by the Borrower to such Lender ten (10) Business Days after such notice is given. (b) Indemnity. In addition to the compensation required by subsection (a) of this Section 5.06, the Borrower shall indemnify each Lender against all liabilities, losses or expenses (including loss of margin, any loss or expense incurred in liquidating or employing deposits from third parties and any loss or expense incurred in connection with funds acquired by a Lender to fund or maintain Loans subject to the Euro-Rate Option) which such Lender sustains or incurs as a consequence of any: (i) payment, prepayment, conversion or renewal of any Revolving Credit Loan to which the Euro-Rate Option applies on a day other than the last day of the corresponding Interest Period (whether or not such payment or prepayment is

mandatory, voluntary or automatic, through acceleration or otherwise, and whether or not such payment or prepayment is then due), (ii) attempt by the Borrower to revoke (expressly, by later inconsistent notices or otherwise) in whole or part any Revolving Credit Loan Request under Section 2.02 or, Renewal/Conversion Notice under Section 2.02 or prepayment notice under Section 5.04, or (iii) default by the Borrower in the performance or observance of any covenant or condition contained in this Agreement or any other Credit Document, including any failure of the Borrower to pay when due (by acceleration or otherwise) any principal, interest, Fee or any other amount due hereunder. If any Lender sustains or incurs any such loss or expense it shall from time to time notify the Borrower of the amount determined in good faith by such Lender (which determination may include such assumptions, allocations of costs and expenses and averaging or attribution methods as such Lender shall deem reasonable) to be necessary to indemnify such Lender for such loss or expense. Such notice shall set forth in reasonable detail the basis for such determination. Such amount shall be due and payable by the Borrower to such Lender ten (10) Business Days after such notice is given. (c) Taxes. Any and all payments made by the Borrower hereunder or under the Credit Documents shall be made, in accordance with the provisions hereof, free and clear of and without deduction for any and all present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto, excluding, in the case of each Lender and each Lending Office, taxes on the overall net income of such Lender imposed by the jurisdiction under the Laws of which such Lender is organized or any taxing authority thereof or therein (all of such nonexcluded taxes, levies, imposts, deductions, charges, withholdings and liabilities being hereinafter referred to as "Taxes"). If the Borrower shall be required by Law to deduct any Taxes from or in respect of any sum payable to any Lender or any Agent hereunder or under any Credit Document, (i) the sum payable shall be increased as may be necessary so that, after making all required deductions (including deductions applicable to additional sums payable under this Section 5.06(c)), such Lender or Agent, as the case may be, receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower shall make such deductions, and (iii) the Borrower shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable Law. In addition, the Borrower agrees to pay any present or future stamp, transfer, recording, filing or documentary taxes, fees or any other excise or property taxes, charges, or similar levies which arise from any payment made hereunder or from the execution, delivery, or registration of, or otherwise with respect to, this Agreement. All such Taxes shall be paid by the Borrower prior to the date on which penalties attach thereto or interest accrues thereon; provided, that if any penalties or interest become due, the Borrower may make prompt payment thereof to the appropriate governmental authority. The Borrower shall indemnify each Lender and each Agent for the full amount of such Taxes (including any taxes on amounts payable under this Section 5.06(c)) paid by the Lender or the Agent and any liability (including penalties, interest and expenses) arising therefrom or with respect thereto, whether or not such Taxes were

correctly or legally asserted. Any indemnification payment shall be due and payable to such Lender or Agent ten (10) Business Days after the date the Lender or the Agent makes written demand therefor. Within 30 days after the date of any payment of any Taxes by the Borrower, the Borrower shall furnish to each Lender, at its address referred to herein, the original or a certified copy of a receipt evidencing payment thereof. If no Taxes are payable in respect of any payment by the Borrower, the Borrower shall, if so requested by a Lender, provide a certificate of an Authorized Officer of the Borrower to that effect. (d) Survival. The Obligations of the Borrower under this Section 5.06 shall survive and continue in full force and effect notwithstanding (i) the execution and delivery of this Agreement and the other Credit Documents, (ii) the making of the Loans, (iii) the repayment of the Loans, (iv) the payment in full of all interest, Fees and all other Obligations and (v) the termination of all obligations of the Agents and the Lenders to the Borrower under all Credit Documents. ARTICLE VI. REPRESENTATIONS AND WARRANTIES

correctly or legally asserted. Any indemnification payment shall be due and payable to such Lender or Agent ten (10) Business Days after the date the Lender or the Agent makes written demand therefor. Within 30 days after the date of any payment of any Taxes by the Borrower, the Borrower shall furnish to each Lender, at its address referred to herein, the original or a certified copy of a receipt evidencing payment thereof. If no Taxes are payable in respect of any payment by the Borrower, the Borrower shall, if so requested by a Lender, provide a certificate of an Authorized Officer of the Borrower to that effect. (d) Survival. The Obligations of the Borrower under this Section 5.06 shall survive and continue in full force and effect notwithstanding (i) the execution and delivery of this Agreement and the other Credit Documents, (ii) the making of the Loans, (iii) the repayment of the Loans, (iv) the payment in full of all interest, Fees and all other Obligations and (v) the termination of all obligations of the Agents and the Lenders to the Borrower under all Credit Documents. ARTICLE VI. REPRESENTATIONS AND WARRANTIES To induce the Agents and the Lenders to amend and restate this Agreement and to make and maintain the Loans, the Owner Trustee hereby represents and warrants to the Agents and each Lender as follows (provided that the representations in Sections 6.03, 6.07, 6.09, 6.10, 6.12 and 6.13 are made solely by the Owner Trustee in its capacity as such): 6.01 Due Organization, etc. It is a banking 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 Trust Agreement and (assuming due authorization, execution and delivery of the Trust Agreement by the Investor) has the corporate and trust power and authority to act as the Owner Trustee and to enter into and perform the obligations under each of the other 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 the date this representation is made or deemed made in connection with or as contemplated by each such Operative Agreement to which the Owner Trustee is or will be a party. 6.02 Authorization; No Conflict. The execution, delivery and performance of each Operative Agreement to which it is or will be a party, either in its individual capacity or (assuming due authorization, execution and delivery of the Trust Agreement by the Investor) as the Owner Trustee, as the case may be, 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 (a) does or will require any approval or consent of any trustee or holders of any of its indebtedness or obligations, (b) does or will contravene any current United States or Delaware law, governmental rule or regulation relating to its banking or trust powers, (c) 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 charter or by-laws, 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 (other than as contemplated by the Operative Agreements) or (d) does or will require any Governmental Action by any Governmental Authority of the United States or the State of Delaware regulating its banking or trust powers. 6.03 Enforceability, etc. The Trust Agreement and, assuming the Trust Agreement is the legal, valid and binding obligation of the Investor, each other Operative Agreement to which the Owner Trustee is or will be party have been, or on or before the date this representation is made or deemed made will be, duly executed and delivered by the Owner Trustee and the Trust Agreement and each such other Operative Agreement to which the Owner Trustee is a party constitutes, or upon execution and delivery will constitute, a legal, valid and binding obligation enforceable against the Owner Trustee in accordance with the terms thereof. 6.04 Litigation. There is no action or proceeding pending or, to its knowledge, threatened to which it is or will be a party, either in its individual capacity or as the Owner Trustee, before any Governmental Authority that concerns any Property being purchased on the date this representation is made or deemed made or that, if

properties may be bound or affected (other than as contemplated by the Operative Agreements) or (d) does or will require any Governmental Action by any Governmental Authority of the United States or the State of Delaware regulating its banking or trust powers. 6.03 Enforceability, etc. The Trust Agreement and, assuming the Trust Agreement is the legal, valid and binding obligation of the Investor, each other Operative Agreement to which the Owner Trustee is or will be party have been, or on or before the date this representation is made or deemed made will be, duly executed and delivered by the Owner Trustee and the Trust Agreement and each such other Operative Agreement to which the Owner Trustee is a party constitutes, or upon execution and delivery will constitute, a legal, valid and binding obligation enforceable against the Owner Trustee in accordance with the terms thereof. 6.04 Litigation. There is no action or proceeding pending or, to its knowledge, threatened to which it is or will be a party, either in its individual capacity or as the Owner Trustee, before any Governmental Authority that concerns any Property being purchased on the date this representation is made or deemed made or that, if adversely determined, would materially and adversely affect its ability, in its individual capacity or as Owner Trustee, to perform its obligations under the Operative Agreements to which it is a party, would have a material adverse effect on the financial condition of the Owner Trustee or would question the validity or enforceability of any of the Operative Agreements to which it is or will become a party. 6.05 Assignment. It has not assigned or transferred any of its right, title or interest in or under any Project Loan Agreement, Project Loan Note, Mortgage, Agree LLC Pledge, Assignment of Lease or Contract Assignment, except in accordance with the Operative Agreements and the Credit Documents. 6.06 No Default. It is not in default under or with respect to any of its Contractual Obligations. No Default or Event of Default has occurred and is continuing. 6.07 Use of Proceeds. The proceeds of the Loans shall be applied by the Owner Trustee solely to make Project Loans to the Lessors or to Agree SPC's. 6.08 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 Credit Document are kept are located at Rodney Square North, 1100 North Market Street, Wilmington, Delaware 19890. 6.09 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 as now and from time to time hereafter in effect. If requested by any Lender or the Administrative Agent, the Owner Trustee will furnish to the Administrative 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.

6.10 Investment Company Act. It is not an "investment company" or a company controlled by an "investment company" within the meaning of the Investment Company Act. 6.11 Liens. The Trust Estate shall be free of any Liens attributable to the Owner Trustee in its individual capacity. 6.12 Securities Act. Neither the Owner Trustee nor any Person authorized by the Owner Trustee to act on its behalf has offered or sold any interest in the Trust Estate or the Notes, or in any similar security relating to a Property, or in any security the offering of which for the purposes of the Securities Act of 1933, as amended, would be deemed to be part of the same offering as the offering of the aforementioned securities to, or solicited any offer to acquire any of the same from, any Person other than, in the case of the Notes, the Lenders, and neither the Owner Trustee nor any Person authorized by the Owner Trustee to act on its behalf will take any action which would require the issuance or sale of any interest in the Trust Estate or the Notes to be registered in accordance with the provisions of Article V of the Securities Act of 1933, as amended, or require the qualification of any Operative Agreement under the Trust Indenture Act of 1939, as amended.

6.10 Investment Company Act. It is not an "investment company" or a company controlled by an "investment company" within the meaning of the Investment Company Act. 6.11 Liens. The Trust Estate shall be free of any Liens attributable to the Owner Trustee in its individual capacity. 6.12 Securities Act. Neither the Owner Trustee nor any Person authorized by the Owner Trustee to act on its behalf has offered or sold any interest in the Trust Estate or the Notes, or in any similar security relating to a Property, or in any security the offering of which for the purposes of the Securities Act of 1933, as amended, would be deemed to be part of the same offering as the offering of the aforementioned securities to, or solicited any offer to acquire any of the same from, any Person other than, in the case of the Notes, the Lenders, and neither the Owner Trustee nor any Person authorized by the Owner Trustee to act on its behalf will take any action which would require the issuance or sale of any interest in the Trust Estate or the Notes to be registered in accordance with the provisions of Article V of the Securities Act of 1933, as amended, or require the qualification of any Operative Agreement under the Trust Indenture Act of 1939, as amended. 6.13 Documentation. The only document to which the Owner Trustee, in its trust capacity, is a party are those Operative Agreements (and any other documents delivered in connection with the Operative Agreements) to which the Owner Trustee, in its trust capacity, is a party, together with any instruments appointing one or more co-trustees under the Trust Agreement. ARTICLE VII. CONDITIONS PRECEDENT 7.1 Conditions to Effectiveness. The effectiveness of this Agreement is subject to the satisfaction of all conditions precedent set forth in Article VI of the Participation Agreement required by said Article to be satisfied on or prior to the Effective Date. 7.2 Conditions to Each Loan. The agreement of each Lender to make any Loan requested to be made by it on any date is subject to the satisfaction of the following conditions precedent: (a) No Default. No Default or Event of Default shall have occurred and be continuing on such date or after giving effect to the Loans requested to be made on such date, other than a Default or an Event of Default which the Administrative Agent has agreed not to declare pursuant to Section 5.06 of the Participation Agreement. (b) Participation Agreement Conditions. With respect to each Project Loan and Agree Project Loan, the applicable conditions precedent to the Advance associated therewith specified in Section 4.04, and Articles V and XIV, as applicable of the Participation Agreement shall have been satisfied.

Each borrowing by the Borrower hereunder shall constitute a representation and warranty by the Borrower or the Guarantors, as the case may be, as of the date of such Loan that the conditions contained in this Section 7.02 have been satisfied. ARTICLE VIII. COVENANTS So long as the Commitments remain in effect, any Note remains outstanding and unpaid or any other amount is owing to any Lender or Agent hereunder: 8.01 Other Activities. The Borrower shall not conduct, transact or otherwise engage in, or commit to transact, conduct or otherwise engage in, any business or operations other than the entry into, and exercise of rights and performance of obligations in respect of, the Operative Agreements and other activities incidental or related to the foregoing and shall conduct its business in accordance with the guidelines set forth in Exhibit K. 8.02 Ownership of Properties, Indebtedness. The Borrower shall not own, lease, manage or otherwise operate any properties or assets other than in connection with the activities described in Section 8.01, or incur, create, assume or suffer to exist any Indebtedness or other consensual liabilities or financial obligations other than the

Each borrowing by the Borrower hereunder shall constitute a representation and warranty by the Borrower or the Guarantors, as the case may be, as of the date of such Loan that the conditions contained in this Section 7.02 have been satisfied. ARTICLE VIII. COVENANTS So long as the Commitments remain in effect, any Note remains outstanding and unpaid or any other amount is owing to any Lender or Agent hereunder: 8.01 Other Activities. The Borrower shall not conduct, transact or otherwise engage in, or commit to transact, conduct or otherwise engage in, any business or operations other than the entry into, and exercise of rights and performance of obligations in respect of, the Operative Agreements and other activities incidental or related to the foregoing and shall conduct its business in accordance with the guidelines set forth in Exhibit K. 8.02 Ownership of Properties, Indebtedness. The Borrower shall not own, lease, manage or otherwise operate any properties or assets other than in connection with the activities described in Section 8.01, or incur, create, assume or suffer to exist any Indebtedness or other consensual liabilities or financial obligations other than the Loans and other obligations incurred by the Borrower hereunder or the other Operative Agreements. 8.03 Disposition of Assets. Except to the extent expressly contemplated by the Operative Agreements, the Borrower shall not convey, sell, lease, assign, transfer or otherwise dispose of, or grant Liens on, any of its property, business or assets, whether now owned or hereafter acquired. 8.04 Compliance with Operative Agreements. The Borrower shall at all times observe and perform all of the covenants, conditions and obligations required to be performed by it (whether in its capacity as lender, Owner Trustee or otherwise) under each Operative Agreement to which it is a party. 8.05 Further Assurances. At any time and from time to time, upon the written request of the Administrative Agent, and at the sole expense of the Borrower, the Borrower will promptly and duly execute and deliver such further instruments and documents and take such further action as the Administrative Agent or the Required Lenders may reasonably request for the purpose of obtaining or preserving the full benefits of this Agreement and the other Operative Agreements and of the rights and powers herein or therein granted. 8.06 Notices. If on any date the Borrower shall obtain actual knowledge of the occurrence of a Default or Event of Default, the Borrower will give written notice thereof to the Administrative Agent within five Business Days after such date.

8.07 Discharge of Liens. Neither the Borrower nor the Trust Company on behalf of the Borrower will create or permit to exist at any time, and will, at its own expense, promptly take such action as may be necessary duly to discharge, or cause to be discharged, all Liens attributable to it, provided, that the Borrower and the Trust Company shall not be required to discharge any 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 any of the Liens contemplated by the Security Documents or of the sale, forfeiture or loss of, and shall not materially interfere with the disposition of, any Property or title thereto or any interest therein or the payment of Rent. 8.08 Trust Agreement. Without prejudice to any right under the Trust Agreement of the Owner Trustee to resign, the Owner Trustee (a) agrees not to terminate or revoke the trust created by the Trust Agreement except as permitted by Article VII of the Trust Agreement, (b) agrees not to amend, supplement, terminate, revoke or otherwise modify any provision of the Trust Agreement in any manner which could reasonably be expected to have an adverse effect on the rights or interests of the Agents or the Lenders hereunder or under the other Operative Agreements and (c) agrees to comply with all of the terms of the Trust Agreement except to the extent the failure to so comply could not reasonably be expected to have an adverse effect on the rights or interests of the Agents or the Lenders hereunder or under the other Operative Agreements.

8.07 Discharge of Liens. Neither the Borrower nor the Trust Company on behalf of the Borrower will create or permit to exist at any time, and will, at its own expense, promptly take such action as may be necessary duly to discharge, or cause to be discharged, all Liens attributable to it, provided, that the Borrower and the Trust Company shall not be required to discharge any 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 any of the Liens contemplated by the Security Documents or of the sale, forfeiture or loss of, and shall not materially interfere with the disposition of, any Property or title thereto or any interest therein or the payment of Rent. 8.08 Trust Agreement. Without prejudice to any right under the Trust Agreement of the Owner Trustee to resign, the Owner Trustee (a) agrees not to terminate or revoke the trust created by the Trust Agreement except as permitted by Article VII of the Trust Agreement, (b) agrees not to amend, supplement, terminate, revoke or otherwise modify any provision of the Trust Agreement in any manner which could reasonably be expected to have an adverse effect on the rights or interests of the Agents or the Lenders hereunder or under the other Operative Agreements and (c) agrees to comply with all of the terms of the Trust Agreement except to the extent the failure to so comply could not reasonably be expected to have an adverse effect on the rights or interests of the Agents or the Lenders hereunder or under the other Operative Agreements. ARTICLE IX. EVENTS OF DEFAULT Upon the occurrence of any of the following specified events (each an "Event of Default"): (a) The Borrower shall (i) default in the payment when due of any principal of the Loans or (ii) default, and such default shall continue for five or more days, in the payment when due of any interest on the Loans or any other amounts owing hereunder, under any other Credit Document to which it is a party; or (b) The Borrower shall default in the due performance or observance by it of any term, covenant or agreement contained in any Credit Document to which it is a party (other than those referred to in paragraph (a) above), provided, that in the case of any such default under Article VIII, such default shall have continued unremedied for a period of at least 30 days; or the Borrower shall default in the due performance or observance by it of any term, covenant or agreement contained in any Project Loan Document to which it is a party (other than those referred to in paragraph (a) above), and such default shall have continued unremedied for a period of at least 30 days; or (c) Subject to the provisions of Section 5.06 of the Participation Agreement, any "Event of Default" as defined in each Project Loan Agreement shall have occurred and be continuing; or

(d) Any of the Guarantors shall default in the observance or performance by it of (i) any covenant contained in Article XII or Section 13.04 of the Guarantee or (ii) any other covenant, condition or provision hereof or of any other Credit Document to which it is a party and such default shall continue unremedied for a period of 15 Business Days after any Authorized Officer of any Guarantor becomes aware of the occurrence thereof (such grace period to be applicable only in the event such default can be remedied by corrective action of the Guarantors as determined by the Administrative Agent in its sole discretion); or (e) Any representation, warranty or statement made or deemed made by the Borrower herein or in any other Credit Document or by the Borrower or the Lessee in the Participation Agreement, or in any statement or certificate delivered or required to be delivered pursuant hereto or thereto, shall prove to be untrue in any material respect on the date as of which made or deemed made, and in the case of the Borrower, such misrepresentation or breach of warranty shall remain unremedied for a period of at least 35 days after notice to the Borrower by the Administrative Agent or the Required Lenders; or (f) Any representation, warranty or statement made or deemed made by any Guarantor in the Guarantee, or in any statement or certificate delivered or required to be delivered pursuant thereto, shall prove to be untrue in any material respect on the date as of which made or deemed made; or

(d) Any of the Guarantors shall default in the observance or performance by it of (i) any covenant contained in Article XII or Section 13.04 of the Guarantee or (ii) any other covenant, condition or provision hereof or of any other Credit Document to which it is a party and such default shall continue unremedied for a period of 15 Business Days after any Authorized Officer of any Guarantor becomes aware of the occurrence thereof (such grace period to be applicable only in the event such default can be remedied by corrective action of the Guarantors as determined by the Administrative Agent in its sole discretion); or (e) Any representation, warranty or statement made or deemed made by the Borrower herein or in any other Credit Document or by the Borrower or the Lessee in the Participation Agreement, or in any statement or certificate delivered or required to be delivered pursuant hereto or thereto, shall prove to be untrue in any material respect on the date as of which made or deemed made, and in the case of the Borrower, such misrepresentation or breach of warranty shall remain unremedied for a period of at least 35 days after notice to the Borrower by the Administrative Agent or the Required Lenders; or (f) Any representation, warranty or statement made or deemed made by any Guarantor in the Guarantee, or in any statement or certificate delivered or required to be delivered pursuant thereto, shall prove to be untrue in any material respect on the date as of which made or deemed made; or (g) (i) Any Lease Event of Default shall have occurred and be continuing, (ii) the Owner Trustee shall default in the due performance or observance by it of any term, covenant or agreement contained in the Participation Agreement or in the Trust Agreement, provided, that in the case of any such default under Section 10.01, 10.02 (b)(iii) or 10.02(g) of the Participation Agreement or Article II, III, IV, V or VI of the Trust Agreement, such default shall have continued unremedied for a period of at least 30 days; or (iii) the Investor shall default in the due performance or observance by it of any term, covenant or agreement contained in Section 10.02 or 12.01 of the Participation Agreement; or (h) A default or event of default shall occur at any time under the terms of any other agreement involving borrowed money or the extension of credit or any other Indebtedness under which any Guarantor or Subsidiary of any Guarantor may be obligated as a borrower or guarantor in excess of $5,000,000 (or to Kmart in respect of the Kmart Indemnity in excess of $1,000,000) in the aggregate, and such breach, default or event of default consists of the failure to pay (beyond any period of grace permitted with respect thereto, whether waived or not) any Indebtedness when due (whether at stated maturity, by acceleration or otherwise) or if such breach or default permits or causes the acceleration of any Indebtedness (whether or not such right shall have been waived) or the termination of any commitment to lend; (i) Any of the following occurs: (i) an Event of Default shall have occurred under the Kmart Indemnity such that Kmart shall have the right thereunder to exercise the rights granted to it pursuant to Sections 3(c)(ii) or 3(c)(iii) thereof in respect of more than two Premises (as such term is defined therein), (ii) a Triggering Event shall have occurred under

any of the Note Put Agreements (other than a Triggering Event which is "a Rating Decline" or a "Restructuring Event" (as such terms are defined in the Note Put Agreements)) and such Triggering Event shall continue unremedied for a period of sixty (60) days or (iii) any of the Guarantors shall receive a "Put Notice" (as defined in the Note Put Agreements) which states the occurrence of a Triggering Event that is a "Lease/Lease Guaranty Default" or a "Lease Guaranty Termination" (as such terms are defined in the Note Put Agreements), or (iv) any of the Guarantors shall receive a Put Notice which states the occurrence solely of a Rating Decline or a Restructuring Event, and, within five (5) Business Days of receipt of such Put Notice, the Guarantors shall have failed to deliver to the Lenders documentation satisfactory to the Required Lenders showing that the Notes as to which the Put Notice was received will be refinanced on the Tenant Purchase Date with Permitted Sutro Refinancing Indebtedness on the terms permitted under Section 12.01(l) of the Guarantee; (j) Any final judgments or orders for the payment of money in excess of $5,000,000 in the aggregate shall be entered against all or any of the Guarantors by a court having jurisdiction in the premises (other than a judgment or order as to which such Guarantor's insurance company has accepted full liability in writing) which judgment is not discharged, satisfied, vacated, bonded or stayed pending appeal within a period of thirty (30) days from the date of entry;

any of the Note Put Agreements (other than a Triggering Event which is "a Rating Decline" or a "Restructuring Event" (as such terms are defined in the Note Put Agreements)) and such Triggering Event shall continue unremedied for a period of sixty (60) days or (iii) any of the Guarantors shall receive a "Put Notice" (as defined in the Note Put Agreements) which states the occurrence of a Triggering Event that is a "Lease/Lease Guaranty Default" or a "Lease Guaranty Termination" (as such terms are defined in the Note Put Agreements), or (iv) any of the Guarantors shall receive a Put Notice which states the occurrence solely of a Rating Decline or a Restructuring Event, and, within five (5) Business Days of receipt of such Put Notice, the Guarantors shall have failed to deliver to the Lenders documentation satisfactory to the Required Lenders showing that the Notes as to which the Put Notice was received will be refinanced on the Tenant Purchase Date with Permitted Sutro Refinancing Indebtedness on the terms permitted under Section 12.01(l) of the Guarantee; (j) Any final judgments or orders for the payment of money in excess of $5,000,000 in the aggregate shall be entered against all or any of the Guarantors by a court having jurisdiction in the premises (other than a judgment or order as to which such Guarantor's insurance company has accepted full liability in writing) which judgment is not discharged, satisfied, vacated, bonded or stayed pending appeal within a period of thirty (30) days from the date of entry; (k) any final judgments or orders for the payment of money in excess of $100,000 in the aggregate shall be entered against the Borrower or the Investor by a court having jurisdiction in the premises (other than a judgment or order as to which the Borrower's or the Investor's insurance company has accepted full liability in writing) which judgment is not discharged, satisfied, vacated, bonded or stayed pending appeal within a period of thirty (30) days from the date of entry; (l) Any of the Credit Documents shall cease to be a legal, valid and binding agreement enforceable against the party executing the same or such party's successors and assigns (as permitted under the Credit Documents) in accordance with the respective terms thereof or shall in any way be terminated (except in accordance with its terms) or become or be declared ineffective or inoperative in any material respect or shall in any way be challenged or contested or cease to give or provide the respective rights, titles, interests, remedies, powers or privileges intended to be created thereby (except if caused by the event described in Section 10.10); (m) Any Guarantor ceases to be Solvent or admits in writing its inability to pay its debts as they mature; (n) Any of the following occurs: (i) any Reportable Event, which the Administrative Agent determines in good faith constitutes grounds for the termination of any Plan by the PBGC or the appointment of a trustee to administer or liquidate any Plan, shall have occurred and be continuing; (ii) proceedings shall have been instituted or other action taken to terminate any Plan, or a termination notice shall have been filed with respect to any Plan; (iii) a trustee shall be appointed to administer or liquidate any Plan; (iv) the PBGC shall

give notice of its intent to institute proceedings to terminate any Plan or Plans or to appoint a trustee to administer or liquidate any Plan; (v) any Guarantor or its Subsidiary adopts, sponsors, maintains or makes contributions to any Plan, any Multiemployer Plan, any Multiple Employer Plan or any Benefit Arrangement that provides benefits to retirees (other than the Benefit Arrangement of Walden described on Schedule 6.1(t)); and, in the case of each occurrence of (i), (ii), (iii), (iv) above or any occurrence under such Benefit Arrangement of Walden, the Administrative Agent determines in good faith that the amount of the liability of the Company and its Subsidiaries in respect thereof could reasonably be expected to individually or in the aggregate have a Material Adverse Effect; (o) Any Guarantor ceases to conduct its business as contemplated or such Guarantor is enjoined, restrained or in any way prevented by court order from conducting all or any material part of its business and such injunction, restraint or other preventive order is not dismissed within thirty (30) days after the entry thereof; (p) Any Change in Control shall occur; (q) Any circumstances or events shall occur which individually or in the aggregate could reasonably be expected to have a Material Adverse Effect;

give notice of its intent to institute proceedings to terminate any Plan or Plans or to appoint a trustee to administer or liquidate any Plan; (v) any Guarantor or its Subsidiary adopts, sponsors, maintains or makes contributions to any Plan, any Multiemployer Plan, any Multiple Employer Plan or any Benefit Arrangement that provides benefits to retirees (other than the Benefit Arrangement of Walden described on Schedule 6.1(t)); and, in the case of each occurrence of (i), (ii), (iii), (iv) above or any occurrence under such Benefit Arrangement of Walden, the Administrative Agent determines in good faith that the amount of the liability of the Company and its Subsidiaries in respect thereof could reasonably be expected to individually or in the aggregate have a Material Adverse Effect; (o) Any Guarantor ceases to conduct its business as contemplated or such Guarantor is enjoined, restrained or in any way prevented by court order from conducting all or any material part of its business and such injunction, restraint or other preventive order is not dismissed within thirty (30) days after the entry thereof; (p) Any Change in Control shall occur; (q) Any circumstances or events shall occur which individually or in the aggregate could reasonably be expected to have a Material Adverse Effect; (r) A proceeding shall have been instituted in a court having jurisdiction in the premises seeking a decree or order for relief in respect of any Guarantor, the Borrower or the Investor in an involuntary case under any applicable bankruptcy, insolvency, reorganization or other similar law now or hereafter in effect or for the appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator, conservator (or similar official) of any Guarantor, the Borrower or the Investor, as the case may be, for any substantial part of its property, or for the winding-up or liquidation of its affairs, and such proceeding shall remain undismissed or unstayed and in effect for a period of thirty (30) consecutive days or such court shall enter a decree or order granting any of the relief sought in such proceeding; or (s) Any Guarantor, the Borrower or the Investor shall commence a voluntary case under any applicable bankruptcy, insolvency, reorganization or other similar law now or hereafter in effect, shall consent to the entry of an order for relief in an involuntary case under any such law, or shall consent to the appointment or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator, conservator (or other similar official) of itself or for any substantial part of its property or shall make a general assignment for the benefit of creditors, or shall fail generally to pay its debts as they become due, or shall take any action in furtherance of any of the foregoing. then, and in any such event, (A) if such event is an Event of Default specified in paragraphs (m), (r) or (s) above, automatically the Commitments shall immediately terminate and the Loans hereunder (with accrued interest thereon) and all other amounts owing under this Agreement and the Notes shall immediately become due and payable, and (B) if such event is any other Event of Default, either or both of the following actions may be taken: (i) with the consent of the Required Lenders, the Administrative Agent may, or upon the request of the Required Lenders, the Administrative Agent shall, by notice to the Borrower declare the Commitments to be terminated forthwith, whereupon the Commitments shall immediately terminate; and (ii) with the consent of the Required Lenders, the Administrative Agent may, or upon the request of the Required Lenders, the Administrative

Agent shall, by notice to the Borrower, declare the Loans hereunder (with accrued interest thereon) and all other amounts owing under this Agreement and the Notes to be due and payable forthwith, whereupon the same shall immediately become due and payable (any of the foregoing occurrences or actions referred to in clause (A) or (B) above, an "Acceleration"). Except as expressly provided above in this Article IX, presentment, demand, protest and all other notices of any kind are hereby expressly waived. ARTICLE X. THE AGENTS 10.01 Appointment. Each Lender hereby irrevocably designates and appoints the Administrative Agent, the Syndication Agent and the Real Estate Administrative Agent, as the agents of such Lender under this Agreement and the other Operative Agreements, and each such Lender irrevocably authorizes each Agent, in such capacity,

Agent shall, by notice to the Borrower, declare the Loans hereunder (with accrued interest thereon) and all other amounts owing under this Agreement and the Notes to be due and payable forthwith, whereupon the same shall immediately become due and payable (any of the foregoing occurrences or actions referred to in clause (A) or (B) above, an "Acceleration"). Except as expressly provided above in this Article IX, presentment, demand, protest and all other notices of any kind are hereby expressly waived. ARTICLE X. THE AGENTS 10.01 Appointment. Each Lender hereby irrevocably designates and appoints the Administrative Agent, the Syndication Agent and the Real Estate Administrative Agent, as the agents of such Lender under this Agreement and the other Operative Agreements, and each such Lender irrevocably authorizes each Agent, in such capacity, to take such action on its behalf under the provisions of this Agreement and the other Operative Agreements and to exercise such powers and perform such duties as are expressly delegated to each Agent by the terms of this Agreement and the other Operative Agreements, together with such other powers as are reasonably incidental thereto. Notwithstanding any provision to the contrary elsewhere in this Agreement, none of the Agents shall have any duties or responsibilities, except those expressly set forth herein, or any fiduciary relationship with any Lender, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other Operative Agreement or otherwise exist against any Agent. Without limiting the generality of the foregoing, the use of the term "agent" in this Agreement with the reference to the Agents is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable law. Instead, such term is used merely as a matter of market custom and is intended to create or reflect only an administrative relationship between independent contracting parties. 10.02 Delegation of Duties. Each Agent may execute any of its duties under this Agreement and the other Operative Agreements by or through agents or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. None of the Agents shall be responsible for the negligence or misconduct of any agents or attorneys in-fact selected by it with reasonable care. 10.03 Exculpatory Provisions. None of the Agents nor any of their officers, directors, employees, agents, attorneys-in-fact or Affiliates shall be (a) liable for any action lawfully taken or omitted to be taken by it or such Person under or in connection with this Agreement or any other Operative Agreement (except for its or such Person's own gross negligence or willful misconduct) or (b) responsible in any manner to any of the Lenders for any recitals, statements, representations or warranties made by the Borrower or any Guarantor or any officer thereof contained in this Agreement or any other Operative Agreement or in any certificate, report, statement or other document referred to or provided for in, or received by any Agent under or in connection

with, this Agreement or any other Operative Agreement or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Operative Agreement or for any failure of the Borrower or any Guarantor to perform its obligations hereunder or thereunder. None of the Agents shall be under any obligation to any Lender to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or any other Operative Agreement, or to inspect the properties, books or records of the Borrower or any Guarantor. 10.04 Reliance by Agents. Each Agent shall be entitled to rely, and shall be fully protected in relying, upon any Note, writing, resolution, notice, consent, certificate, affidavit, letter, telecopy, telex or teletype message, statement, order or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons and upon advice and statements of legal counsel, independent accountants and other experts selected by the Agents. Each Agent may deem and treat the payee of any Note as the owner thereof for all purposes unless a written notice of assignment, negotiation or transfer thereof shall have been filed with the Administrative Agent. Any Agent shall be fully justified in failing or refusing to take any action under this Agreement or any other Operative Agreement unless it shall first receive such advice or concurrence of the Required Lenders as it deems appropriate or it shall first be indemnified to its satisfaction by the Lenders against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. Each Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement and the other Operative Agreements in accordance with a request of the Required

with, this Agreement or any other Operative Agreement or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Operative Agreement or for any failure of the Borrower or any Guarantor to perform its obligations hereunder or thereunder. None of the Agents shall be under any obligation to any Lender to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or any other Operative Agreement, or to inspect the properties, books or records of the Borrower or any Guarantor. 10.04 Reliance by Agents. Each Agent shall be entitled to rely, and shall be fully protected in relying, upon any Note, writing, resolution, notice, consent, certificate, affidavit, letter, telecopy, telex or teletype message, statement, order or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons and upon advice and statements of legal counsel, independent accountants and other experts selected by the Agents. Each Agent may deem and treat the payee of any Note as the owner thereof for all purposes unless a written notice of assignment, negotiation or transfer thereof shall have been filed with the Administrative Agent. Any Agent shall be fully justified in failing or refusing to take any action under this Agreement or any other Operative Agreement unless it shall first receive such advice or concurrence of the Required Lenders as it deems appropriate or it shall first be indemnified to its satisfaction by the Lenders against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. Each Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement and the other Operative Agreements in accordance with a request of the Required Lenders, and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Lenders and all future holders of the Notes. 10.05 Notice of Default. None of the Agents shall be deemed to have knowledge or notice of the occurrence of any Default or Event of Default hereunder unless the Administrative Agent has received notice from a Lender or the Borrower referring to this Agreement, describing such Default or Event of Default and stating that such notice is a "notice of default". In the event that the Administrative Agent receives such a notice, the Administrative Agent shall promptly give notice thereof to the Lenders, the Syndication Agent and the Real Estate Administrative Agent. Each Agent shall take such action with respect to such Default or Event of Default as shall be directed by the Required Lenders; provided, that unless and until such Agent shall have received such directions, the Agent may (but shall not be obligated to) take such action, or refrain from taking such action with respect to such Default or Event of Default as it shall deem advisable in the best interests of the Lenders. 10.06 Non-Reliance on Agents and Other Lenders. Each Lender expressly acknowledges that none of the Agents nor any of their officers, directors, employees, agents, attorneys-in-fact or Affiliates has made any representations or warranties to it and that no act by any Agent hereinafter taken, including any review of the affairs of the Borrower or any Guarantor, shall be deemed to constitute any representation or warranty by such Agent to any Lender. Each Lender represents to the Agents that it has, independently and without reliance upon any Agent or any Lender, and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, operations, property, financial and other condition

and creditworthiness of the Borrower and the Guarantors and made its own decision to make its Loans hereunder and enter into this Agreement. Each Lender also represents that it will, independently and without reliance upon any Agent or any Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under this Agreement and the other Operative Agreements, and to make such investigation as it deems necessary to inform itself as to the business, operations, property, financial and other condition and creditworthiness of the Borrower and the Guarantors. Except for notices, reports and other documents expressly required to be furnished to the Lenders by the Agents hereunder, none of the Agents shall have any duty or responsibility to provide any Lender with any credit or other information concerning the business, operations, property, condition (financial or otherwise), prospects or creditworthiness of the Borrower or any Guarantor which may come into the possession of any Agent or any of its officers, directors, employees, agents, attorneysin-fact or Affiliates. 10.07 Indemnification. Each Lender agrees to indemnify each Agent in its capacity as such (to the extent not reimbursed by the Borrower or the Guarantors and without limiting the obligation of the Borrower and the Guarantors to do so), ratably according to its Ratable Share in effect on the date on which indemnification is

and creditworthiness of the Borrower and the Guarantors and made its own decision to make its Loans hereunder and enter into this Agreement. Each Lender also represents that it will, independently and without reliance upon any Agent or any Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under this Agreement and the other Operative Agreements, and to make such investigation as it deems necessary to inform itself as to the business, operations, property, financial and other condition and creditworthiness of the Borrower and the Guarantors. Except for notices, reports and other documents expressly required to be furnished to the Lenders by the Agents hereunder, none of the Agents shall have any duty or responsibility to provide any Lender with any credit or other information concerning the business, operations, property, condition (financial or otherwise), prospects or creditworthiness of the Borrower or any Guarantor which may come into the possession of any Agent or any of its officers, directors, employees, agents, attorneysin-fact or Affiliates. 10.07 Indemnification. Each Lender agrees to indemnify each Agent in its capacity as such (to the extent not reimbursed by the Borrower or the Guarantors and without limiting the obligation of the Borrower and the Guarantors to do so), ratably according to its Ratable Share in effect on the date on which indemnification is sought under this Section 10.07 (or, if indemnification is sought after the date upon which the Commitments shall have terminated and the Loans shall have been paid in full, ratably in accordance with its Ratable Share immediately prior to such date), from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, or reasonable out-of- pocket costs, expenses or disbursements, of any kind whatsoever which may at any time (including, at any time following the payment of the Notes) be imposed on, incurred by or asserted against any Agent in any way relating to or arising out of, the Commitments, this Agreement, any of the other Operative Agreements or any documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby or any action taken or omitted by any Agent under or in connection with any of the foregoing; provided, that no Lender shall be liable to an Agent for the payment of any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements (a) if the same results from that Agent's gross negligence or willful misconduct, or (b) if such Lender was not given notice of the subject claim and the opportunity to participate in the defense thereof, at its expense (except that such Lender shall remain liable to the extent such failure to give notice does not result in a loss to the Lender), or (c) if the same results from a compromise and settlement agreement entered into without the consent of such Lender, which shall not be unreasonably withheld. The agreements in this Section 10.07 shall survive the payment of the Notes and all other amounts payable hereunder. 10.08 Agents in Their Individual Capacity. The Agents and their Affiliates may make loans to, accept deposits from and generally engage in any kind of business with the Borrower or any Guarantor as though the Agents were not Agents hereunder and under the other Operative Agreements. With respect to its Loans made or renewed by it and any Note issued to it, the Agents shall have the same rights and powers under this Agreement and the other Operative Agreements as any Lender and may exercise the same as though it were not an Agent, and the terms "Lender" and "Lenders" shall include the Agents in their individual capacity.

10.9 Successor Agents. Any of the Agents (a) may resign as an Agent, or (b) shall resign if such resignation is requested by the Required Lenders (it being understood that the Agent's Loans and Commitment shall be considered in determining whether the Required Lenders have requested such resignation) or required by Section 5.04(b), in either case of (a) or (b) by giving not less than thirty (30) days' prior written notice to the Company. If any Agent shall resign as an Agent under this Agreement and the other Operative Agreements, then either (a) the Required Lenders shall appoint from among the Lenders a successor agent for the Lenders, subject to the consent of the Company (unless and until an Event of Default has occurred and is continuing, after which no consent of the Company shall be required), such consent not to be unreasonably withheld, or (b) if a successor agent shall not be so appointed and approved within the thirty (30) day period following the Agent's notice to the Lenders of its resignation, then the resigning Agent shall appoint, with the consent of the Company (unless and until an Event of Default has occurred and is continuing, after which no consent of the Company shall be required), such consent not to be unreasonably withheld, a successor agent who shall serve as Administrative Agent, Syndication Agent or Real Estate Administrative Agent, as the case may be, until such time as the Required Lenders appoint and the Company consents to the appointment of a successor agent. Upon its appointment pursuant to either clause (a) or (b) above, such successor agent shall succeed to the rights, powers and duties of the Administrative Agent, Syndication Agent or Real Estate Administrative Agent, as

10.9 Successor Agents. Any of the Agents (a) may resign as an Agent, or (b) shall resign if such resignation is requested by the Required Lenders (it being understood that the Agent's Loans and Commitment shall be considered in determining whether the Required Lenders have requested such resignation) or required by Section 5.04(b), in either case of (a) or (b) by giving not less than thirty (30) days' prior written notice to the Company. If any Agent shall resign as an Agent under this Agreement and the other Operative Agreements, then either (a) the Required Lenders shall appoint from among the Lenders a successor agent for the Lenders, subject to the consent of the Company (unless and until an Event of Default has occurred and is continuing, after which no consent of the Company shall be required), such consent not to be unreasonably withheld, or (b) if a successor agent shall not be so appointed and approved within the thirty (30) day period following the Agent's notice to the Lenders of its resignation, then the resigning Agent shall appoint, with the consent of the Company (unless and until an Event of Default has occurred and is continuing, after which no consent of the Company shall be required), such consent not to be unreasonably withheld, a successor agent who shall serve as Administrative Agent, Syndication Agent or Real Estate Administrative Agent, as the case may be, until such time as the Required Lenders appoint and the Company consents to the appointment of a successor agent. Upon its appointment pursuant to either clause (a) or (b) above, such successor agent shall succeed to the rights, powers and duties of the Administrative Agent, Syndication Agent or Real Estate Administrative Agent, as the case may be, and the term "Administrative Agent," "Syndication Agent" or "Real Estate Administrative Agent" shall mean such successor agent, effective upon its appointment, and the former Agent's rights, powers and duties as an Agent shall be terminated without any other or further act or deed on the part of such former Agent or any of the parties to this Agreement or the other Operative Agreements. After the resignation of any Agent hereunder, the provisions of this Article X shall inure to the benefit of such former Agent and such former Agent shall not by reason of such resignation be deemed to be released from liability for any actions taken or not taken by it while it was an Agent under this Agreement. 10.10 [Reserved] 10.11 Availability of Funds. Unless the Administrative Agent shall have been notified by a Lender prior to the date upon which a Loan is to be made that such Lender does not intend to make available to the Administrative Agent such Lender's portion of such Loan, the Administrative Agent may assume that such Lender has made or will make such proceeds available to the Administrative Agent on such date and the Administrative Agent may, in reliance upon such assumption (but shall not be required to), make available to the Borrower a corresponding amount. If such corresponding amount is not in fact made available to the Administrative Agent by such Lender, the Administrative Agent shall be entitled to recover such amount on demand from such Lender (or, if such Lender fails to pay such amount forthwith upon such demand from the Borrower) together with interest thereon, in respect of each day during the period commencing on the date such amount was made available to the Borrower and ending on the date the Administrative Agent recovers such amount, at a rate per annum equal to the applicable Federal Funds Effective Rate if recovered from such Lender or equal to the applicable interest rate in respect of the Loan if recovered from the Borrower.

10.12 Calculations. In the absence of gross negligence or willful misconduct, the Administrative Agent shall not be liable for any error in computing the amount payable to any Lender whether in respect of the Loans, Fees or any other amounts due to the Lenders under this Agreement. In the event an error in computing any amount payable to any Lender is made, the Administrative Agent, the Borrower, each Guarantor and each affected Lender shall, forthwith upon discovery of such error, make such adjustments as shall be required to correct such error, and any compensation therefor will be calculated at the Federal Funds Effective Rate. 10.13 Beneficiaries. Except as expressly provided herein, the provisions of this Article X are solely for the benefit of the Agents and the Lenders, and the Borrower and the Guarantors shall not have any rights to rely on or enforce any of the provisions hereof. In performing their functions and duties under this Agreement, the Agents shall act solely as agent of the Lenders and do not assume and shall not be deemed to have assumed any obligation toward or relationship of agency or trust with or for any of the Borrower. ARTICLE XI. MATTERS RELATING TO PAYMENTS AND COLLATERAL 11.1 The Credit Agreement Account. (a) The Administrative Agent shall establish an account (the "Credit

10.12 Calculations. In the absence of gross negligence or willful misconduct, the Administrative Agent shall not be liable for any error in computing the amount payable to any Lender whether in respect of the Loans, Fees or any other amounts due to the Lenders under this Agreement. In the event an error in computing any amount payable to any Lender is made, the Administrative Agent, the Borrower, each Guarantor and each affected Lender shall, forthwith upon discovery of such error, make such adjustments as shall be required to correct such error, and any compensation therefor will be calculated at the Federal Funds Effective Rate. 10.13 Beneficiaries. Except as expressly provided herein, the provisions of this Article X are solely for the benefit of the Agents and the Lenders, and the Borrower and the Guarantors shall not have any rights to rely on or enforce any of the provisions hereof. In performing their functions and duties under this Agreement, the Agents shall act solely as agent of the Lenders and do not assume and shall not be deemed to have assumed any obligation toward or relationship of agency or trust with or for any of the Borrower. ARTICLE XI. MATTERS RELATING TO PAYMENTS AND COLLATERAL 11.1 The Credit Agreement Account. (a) The Administrative Agent shall establish an account (the "Credit Agreement Account") into which the Administrative Agent and the Real Estate Administrative Agent shall deposit all payments, receipts and other consideration of any kind whatsoever received by the Administrative Agent or the Real Estate Administrative Agent pursuant to the Assignment of Lease or this Agreement or any other Operative Agreement. (b) Payments deposited from time to time in the Credit Agreement Account shall be paid out as follows: (i) Any amount received by the Borrower under Section 9.01(b)(i) of a Project Loan Agreement or an Agree Project Loan Agreement and paid to the Administrative Agent under Section 4.08 shall be paid out of the Credit Agreement Account by the Administrative Agent on the relevant Interest Payment Date and shall be applied ratably to the payment of interest on the Loans which is due and payable on such date (other than Overdue Interest) until such interest has been paid in full. (ii) Except as otherwise provided in Section 11.01(c), any amount received by the Borrower under Section 9.01 (b)(ii) of a Project Loan Agreement and paid to the Administrative Agent under Section 5.05 shall be paid out of the Credit Agreement Account by the Administrative Agent promptly after receipt and shall be applied ratably to the Tranche A Loans and the Tranche B Loans on the date received by the Administrative Agent. (iii) Except as otherwise provided in Section 11.01(c), any amount received by Borrower under Section 9.01(b) (iii) of a Project Loan Agreement and paid to the Administrative Agent under Section 5.05 shall be paid out of the Credit

Agreement Account by the Administrative Agent promptly after receipt and shall be applied ratably to the Tranche A Loans and the Tranche B Loans on the date received by the Administrative Agent. (iv) Except as otherwise provided in Section 11.01(c), any Net Sales Proceeds received by Borrower under Section 9.01(b)(iv) of a Project Loan Agreement and paid to the Administrative Agent under Section 5.05 shall be paid out of the Credit Agreement Account by the Administrative Agent promptly after receipt, and shall be applied, on the date received by the Administrative Agent, first, ratably to the payment of the principal of Tranche B Loans then outstanding in an amount not to exceed the product of (x) the outstanding principal amount of the Project Loan in respect of such Property and (y) the Modified Tranche B Percentage in respect of such Property, and second, to the extent such payment exceeds the maximum amount payable pursuant to the foregoing provisions of this paragraph (iv), ratably to the payment of the principal of Tranche A Loans then outstanding in an amount not to exceed the product of (x) the outstanding principal amount of the Project Loan in respect of such Property and (y) the Modified Tranche A Percentage in respect of such Property. (v) Except as otherwise provided in Section 11.01(c), any Excess Sales Proceeds received by the Borrower under Section 9.01(b)(iv) in a Project Loan Agreement and contained in the Credit Agreement Account on the

Agreement Account by the Administrative Agent promptly after receipt and shall be applied ratably to the Tranche A Loans and the Tranche B Loans on the date received by the Administrative Agent. (iv) Except as otherwise provided in Section 11.01(c), any Net Sales Proceeds received by Borrower under Section 9.01(b)(iv) of a Project Loan Agreement and paid to the Administrative Agent under Section 5.05 shall be paid out of the Credit Agreement Account by the Administrative Agent promptly after receipt, and shall be applied, on the date received by the Administrative Agent, first, ratably to the payment of the principal of Tranche B Loans then outstanding in an amount not to exceed the product of (x) the outstanding principal amount of the Project Loan in respect of such Property and (y) the Modified Tranche B Percentage in respect of such Property, and second, to the extent such payment exceeds the maximum amount payable pursuant to the foregoing provisions of this paragraph (iv), ratably to the payment of the principal of Tranche A Loans then outstanding in an amount not to exceed the product of (x) the outstanding principal amount of the Project Loan in respect of such Property and (y) the Modified Tranche A Percentage in respect of such Property. (v) Except as otherwise provided in Section 11.01(c), any Excess Sales Proceeds received by the Borrower under Section 9.01(b)(iv) in a Project Loan Agreement and contained in the Credit Agreement Account on the Maturity Date shall be applied, on the date received by the Administrative Agent, as follows (which application shall be made immediately prior to any application made on such date of amounts contained in the Credit Agreement Account pursuant to Section 11.02): first, ratably to the payment of the principal of Tranche B Loans then outstanding in an amount not to exceed the product of (x) the outstanding principal amount of the Project Loan in respect of such Property and (y) the Modified Tranche B Percentage in respect of such Property, and second, to the extent such payment exceeds the maximum amount payable pursuant to the foregoing provisions of this paragraph (v), ratably to the payment of the principal of Tranche A Loans then outstanding in an amount not to exceed the product of (x) the outstanding principal amount of the Project Loan in respect of such Property and (y) the Modified Tranche A Percentage in respect of such Property. (vi) Any amount received by the Borrower under Section 9.01(b)(v) of a Project Loan Agreement or an Agree Project Loan Agreement and paid to the Administrative Agent under Section 5.05 shall be paid out of the Credit Agreement Account by the Administrative Agent promptly after receipt and shall be applied ratably, on the date received by the Administrative Agent, to the payment of the principal of Tranche A Loans then outstanding. (vii) Except as otherwise provided in Section 11.01(c), any amount received by the Borrower under Section 9.01(b)(vi) of a Project Loan Agreement and paid to the Administrative Agent under Section 5.05 shall be paid out of the Credit

Agreement Account by the Administrative Agent promptly after receipt and shall be applied ratably, on the date received by the Administrative Agent, to the payment of the principal of Tranche B Loans then outstanding. (viii) Any amount received by the Borrower under Section 9.01(b)(vii) of a Project Loan Agreement or an Agree Project Loan Agreement and paid to the Administrative Agent under Section 5.05 shall be paid out of the Credit Agreement Account by the Administrative Agent promptly after receipt, and shall be applied, on the date received by the Administrative Agent, to the payment of any amounts then owing to the Agents, the Lenders and the other parties to the Operative Agreements (or any of them) (other than any such amounts payable pursuant to the preceding provisions of this Section 11.01(a)) as shall be designated by the Administrative Agent in accordance with the provisions of this Agreement. (c) Any amount received by the Borrower under Sections 9.01(b)(ii), (iii), (iv), (v) and (vi) of an Agree Project Loan Agreement and paid to the Administrative Agent under Section 5.05 shall be paid out of the Credit Agreement Account by the Administrative Agent promptly after receipt thereof and shall be applied to the Tranche A Loans on the date received by the Administrative Agent. (d) Upon the termination of the Commitments and the Swing Commitment and the payment in full of the Loans and all other amounts owing by the Borrower or any Guarantor hereunder or under any other Operative Agreement, any moneys remaining in the Credit Agreement Account shall be paid to the Borrower or such other Person or Persons as the Borrower may designate.

Agreement Account by the Administrative Agent promptly after receipt and shall be applied ratably, on the date received by the Administrative Agent, to the payment of the principal of Tranche B Loans then outstanding. (viii) Any amount received by the Borrower under Section 9.01(b)(vii) of a Project Loan Agreement or an Agree Project Loan Agreement and paid to the Administrative Agent under Section 5.05 shall be paid out of the Credit Agreement Account by the Administrative Agent promptly after receipt, and shall be applied, on the date received by the Administrative Agent, to the payment of any amounts then owing to the Agents, the Lenders and the other parties to the Operative Agreements (or any of them) (other than any such amounts payable pursuant to the preceding provisions of this Section 11.01(a)) as shall be designated by the Administrative Agent in accordance with the provisions of this Agreement. (c) Any amount received by the Borrower under Sections 9.01(b)(ii), (iii), (iv), (v) and (vi) of an Agree Project Loan Agreement and paid to the Administrative Agent under Section 5.05 shall be paid out of the Credit Agreement Account by the Administrative Agent promptly after receipt thereof and shall be applied to the Tranche A Loans on the date received by the Administrative Agent. (d) Upon the termination of the Commitments and the Swing Commitment and the payment in full of the Loans and all other amounts owing by the Borrower or any Guarantor hereunder or under any other Operative Agreement, any moneys remaining in the Credit Agreement Account shall be paid to the Borrower or such other Person or Persons as the Borrower may designate. 11.20 Proceeds of Collateral; Proceeds Remaining in Credit Agreement Account. (a) All moneys collected by the Administrative Agent or the Real Estate Administrative Agent upon any sale or other disposition of the Collateral pursuant to any Security Document, together with all other moneys received by the Administrative Agent or the Real Estate Administrative Agent thereunder (except as otherwise specified in Section 11.01) and (b) all moneys contained in the Credit Agreement Account on the date of an Acceleration or on the Maturity Date (if the Loans have not then been repaid in full), or deposited in the Credit Agreement Account thereafter shall be applied as follows: First, to the payment of (x) any and all sums advanced by the Administrative Agent or the Real Estate Administrative Agent in order to preserve the Collateral or preserve its security interest therein and (y) the expenses of retaking, holding, preparing for sale or lease, selling or otherwise disposing or realizing on the Collateral, or of any exercise by the Administrative Agent or the Real Estate Administrative Agent of its rights under the Security Documents, together with attorneys' fees and court costs; Second, to the amounts then due and unpaid for interest accrued on the Loans, ratably, without preference or priority of any kind, according to the amounts due and payable on the Loans for accrued interest;

Third, to the payment of the amounts then due and unpaid for principal of the Tranche B Loans, ratably, without preference or priority of any kind, according to the amounts due and payable on the Tranche B Loans in respect of principal; Fourth, to the payment of the amounts then due and unpaid for principal of the Tranche A Loans, ratably, without preference or priority of any kind, according to the amounts due and payable on the Tranche A Loans in respect of principal; Fifth, to the payment of any other amounts then due and unpaid in respect of any other obligations of the Borrower to any Agent or any Lender hereunder or under any other Operative Agreement, ratably, without preference or priority of any kind, according to the amounts so due and payable; and Sixth, to the extent moneys remain after application pursuant to clauses First through Fifth above, to the Borrower or to whomever may be lawfully entitled to receive such surplus. ARTICLE XII. MISCELLANEOUS

Third, to the payment of the amounts then due and unpaid for principal of the Tranche B Loans, ratably, without preference or priority of any kind, according to the amounts due and payable on the Tranche B Loans in respect of principal; Fourth, to the payment of the amounts then due and unpaid for principal of the Tranche A Loans, ratably, without preference or priority of any kind, according to the amounts due and payable on the Tranche A Loans in respect of principal; Fifth, to the payment of any other amounts then due and unpaid in respect of any other obligations of the Borrower to any Agent or any Lender hereunder or under any other Operative Agreement, ratably, without preference or priority of any kind, according to the amounts so due and payable; and Sixth, to the extent moneys remain after application pursuant to clauses First through Fifth above, to the Borrower or to whomever may be lawfully entitled to receive such surplus. ARTICLE XII. MISCELLANEOUS 12.01 Amendments and Waivers. Neither this Agreement, any other Credit Document, nor any terms hereof or thereof may be amended, supplemented or modified except in accordance with the provisions of this Section 12.01 and Section 15.05 of the Participation Agreement. The Required Lenders may, or, with the written consent of the Required Lenders, the Administrative Agent may, from time to time, (a) subject to receipt of the written consent of the Lessees, enter into with the Borrower or the Guarantors, as applicable, written amendments, supplements or modifications to the Credit Documents for the purpose of adding any provisions to the Credit Documents or changing in any manner the rights of the Agents, the Lenders, the Borrower or the Guarantors thereunder or (b) waive, on such terms and conditions as the Required Lenders or the Administrative Agent, as the case may be, may specify in such instrument, any of the requirements of the Credit Documents or any Default or Event of Default and its consequences. In addition, the Administrative Agent may from time to time consent in writing to amendments, supplements, modifications or waivers with respect to any Operative Agreement (other than the Credit Documents), subject to receipt of the prior written consent of the Required Lenders. Notwithstanding the foregoing, no such amendment, supplement, modification or waiver shall (i) reduce the amount or extend the scheduled date of maturity of any Note, or reduce the stated rate of any interest payable hereunder (other than as a result of waiving the applicability of any post-default increase in interest rates) or any Fees payable under the Participation Agreement, or extend the scheduled date of any payment of such interest or Fees, or increase the amount or extend the expiration date of any Lender's Commitment, in each case without the consent of each Lender directly affected thereby, or (ii) amend, modify or waive any provision of Sections 5.02, 12.01 or 12.08, or alter any provision regarding the pro rata treatment of the Lenders, or reduce the percentage specified in the definition of Required Lenders, or consent to the assignment or transfer by the Borrower or any Guarantor of any of its right and obligations under the Credit Documents, or release

a material portion of the Collateral, or change any requirement providing for the Lenders or the Required Lenders to authorize the taking of any action hereunder, or increase the aggregate amount of the Commitments of the Lenders to an amount greater than $250,000,000, or release any Guarantor the assets of which represent 5% or 12.2 more of the consolidated total assets of the Company and its Subsidiaries, in each case without the written consent of all the Lenders, or (iii) amend, modify or waive any provision of Article X without the written consent of each affected Agent. Any such waiver and any such amendment, supplement or modification shall apply equally to each of the Lenders and shall be binding upon the Borrower, the Guarantors, the Lenders, the Agents and all future holders of the Notes. In the case of any waiver, the Borrower, the Guarantors, the Lenders and the Agents shall be restored to their former position and rights under the Credit Documents, and any Default or Event of Default waived shall be deemed to be cured and not continuing; but no such waiver shall extend to any subsequent or other Default or Event of Default, or impair any right consequent thereon. Notwithstanding anything to the contrary in this Section 12.01, no Agreement, waiver or consent which would modify the interests, rights or obligations of the Syndication Agent in its capacity as Syndication Agent shall be effective without the written consent of the Syndication Agent, no agreement, waiver or consent which would modify the interests, rights or obligations of the Real Estate Administrative Agent in its capacity as Real Estate Administrative Agent

a material portion of the Collateral, or change any requirement providing for the Lenders or the Required Lenders to authorize the taking of any action hereunder, or increase the aggregate amount of the Commitments of the Lenders to an amount greater than $250,000,000, or release any Guarantor the assets of which represent 5% or 12.2 more of the consolidated total assets of the Company and its Subsidiaries, in each case without the written consent of all the Lenders, or (iii) amend, modify or waive any provision of Article X without the written consent of each affected Agent. Any such waiver and any such amendment, supplement or modification shall apply equally to each of the Lenders and shall be binding upon the Borrower, the Guarantors, the Lenders, the Agents and all future holders of the Notes. In the case of any waiver, the Borrower, the Guarantors, the Lenders and the Agents shall be restored to their former position and rights under the Credit Documents, and any Default or Event of Default waived shall be deemed to be cured and not continuing; but no such waiver shall extend to any subsequent or other Default or Event of Default, or impair any right consequent thereon. Notwithstanding anything to the contrary in this Section 12.01, no Agreement, waiver or consent which would modify the interests, rights or obligations of the Syndication Agent in its capacity as Syndication Agent shall be effective without the written consent of the Syndication Agent, no agreement, waiver or consent which would modify the interests, rights or obligations of the Real Estate Administrative Agent in its capacity as Real Estate Administrative Agent shall be effective without the written consent of the Real Estate Administrative Agent and no agreement, waiver or consent which would modify the interests, rights or obligations of the Swing Lender in its capacity as Swing Lender shall be effective without the written consent of the Swing Lender. 12.02 Notices; Lending Offices. All notices, requests and demands to or upon the respective parties hereto to be effective shall be in writing (including by telecopy), and, unless otherwise expressly provided herein, shall be deemed to have been duly given or made when delivered, or three Business Days after being deposited in the mail, postage prepaid, or, in the case of telecopy notice, when received, addressed as follows in the case of the Borrower and the Agents, and as set forth in Schedule II, in the case of the other parties hereto, or to such other address as may be hereafter notified by the respective parties hereto and any future holders of the Notes:
The Borrower: Wilmington Trust Company Rodney Square North 1100 North Market Street Wilmington, Delaware 19890 Attention: Corporate Trust Department Telecopy: (302) 651-8882 Borders, Inc. 311 Maynard Street Ann Arbor, Michigan 48104 Attention: Edward W. Wilhelm Telecopy: (313) 913-2324

with a copy to:

The Administrative Agent:

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 The Syndication Agent:

The First National Bank of Chicago 14th Floor, Suite 0086 One First National Plaza Chicago, Illinois 60670 Attention: Paul E. Rigby Telecopy: (312) 732-8587

The Real Estate Administrative Agent:

Bankers Trust Company 280 Park Avenue New York, New York 10017

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

The First National Bank of Chicago 14th Floor, Suite 0086 One First National Plaza Chicago, Illinois 60670 Attention: Paul E. Rigby Telecopy: (312) 732-8587

The Real Estate Administrative Agent:

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

provided, that any notice, request or demand to or upon the Agents or the Lenders pursuant to Section 2.02, 2.03, 3.02 or 4.02 shall not be effective until received. The addresses set forth in Schedule II shall be the Lending Offices. Each Lender may change its Lending Office by written notice to the other parties hereto. 12.03 No Waiver; Cumulative Remedies. No failure to exercise and no delay in exercising, on the part of any Agent or any Lender, any right, remedy, power or privilege hereunder or under the other Credit Documents shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law. 12.04 Survival of Representations and Warranties. All representations and warranties made hereunder, in the other Credit Documents and in any document, certificate or statement delivered pursuant hereto or in connection herewith shall survive the execution and delivery of this Agreement and the Notes and the making of the Loans hereunder. 12.05 Payment of Expenses and Taxes. The Borrower agrees to: (a) pay all reasonable out-of-pocket costs and expenses of (i) the Agents, whether or not the transactions herein contemplated are consummated, in connection with the negotiation, preparation, execution

and delivery of the Operative Agreements and the documents and instruments referred to therein and any amendment, waiver or consent relating thereto (including, the reasonable fees and disbursements of Schiff Hardin & Waite, as counsel to the Administrative Agent and Simpson Thacher & Bartlett as counsel to the Real Estate Administrative Agent, and (ii) the Agent and each of the Lenders (A) in connection with the enforcement of the Operative Agreements and the documents and instruments referred to therein (including, the reasonable fees and disbursements of counsel for each of the Agents and for each of the Lenders), (B) relating to any requested amendments, waivers or consents pursuant to the provisions of the Operative Agreements, (C) in connection with the enforcement of the Operative Agreements or collection of amounts due thereunder or the proof and allowability of any claim arising under the Operative Agreements, whether in bankruptcy or receivership proceedings or otherwise, and (D) in any workout, restructuring or in connection with the protection, preservation, exercise or enforcement of any of the terms of the Operative Agreements or of any rights under the Operative Agreements or in connection with any foreclosure, collection or bankruptcy proceedings; and (b) pay and hold each of the Lenders harmless from and against any and all present and future stamp and other similar taxes with respect to the foregoing matters and save each of the Lenders harmless from and against any and all liabilities with respect to or resulting from any delay or omission (other than to the extent attributable to such Lender) to pay such taxes.

and delivery of the Operative Agreements and the documents and instruments referred to therein and any amendment, waiver or consent relating thereto (including, the reasonable fees and disbursements of Schiff Hardin & Waite, as counsel to the Administrative Agent and Simpson Thacher & Bartlett as counsel to the Real Estate Administrative Agent, and (ii) the Agent and each of the Lenders (A) in connection with the enforcement of the Operative Agreements and the documents and instruments referred to therein (including, the reasonable fees and disbursements of counsel for each of the Agents and for each of the Lenders), (B) relating to any requested amendments, waivers or consents pursuant to the provisions of the Operative Agreements, (C) in connection with the enforcement of the Operative Agreements or collection of amounts due thereunder or the proof and allowability of any claim arising under the Operative Agreements, whether in bankruptcy or receivership proceedings or otherwise, and (D) in any workout, restructuring or in connection with the protection, preservation, exercise or enforcement of any of the terms of the Operative Agreements or of any rights under the Operative Agreements or in connection with any foreclosure, collection or bankruptcy proceedings; and (b) pay and hold each of the Lenders harmless from and against any and all present and future stamp and other similar taxes with respect to the foregoing matters and save each of the Lenders harmless from and against any and all liabilities with respect to or resulting from any delay or omission (other than to the extent attributable to such Lender) to pay such taxes. 12.06 Holidays. Whenever any payment or action to be made or taken hereunder shall be stated to be due on a day which is not a Business Day, such payment or action shall be made or taken on the next following Business Day (except as provided in the definition of "Interest Period"), and such extension of time shall be included in computing interest or fees, if any, in connection with such payment or action. 12.07 Funding by Branch, Subsidiary or Affiliate. (a) Notional Funding. Each Lender shall have the right from time to time, without notice to the Borrower, to deem any branch, Subsidiary or Affiliate (which for the purposes of this Section 12.07 shall mean any corporation or association which is directly or indirectly controlled by or is under direct or indirect common control with any corporation or association which directly or indirectly controls such Lender) of such Lender to have made, maintained or funded any Loan to which the Euro-Rate Option applies at any time, provided, that immediately following (on the assumption that a payment was then due from the Borrower to such other office) and as a result of such change the Borrower would not be under any greater financial obligation pursuant to Section 5.06 than they would have been in the absence of such change. Notional funding offices may be selected by each Lender without regard to the Lender's actual methods of making, maintaining or funding the Loans or any sources of funding actually used by or available to such Lender. (b) Actual Funding. Each Lender shall have the right from time to time to make or maintain any Loan by arranging for a branch, Subsidiary or Affiliate of such Lender to make or maintain such Loan subject to the last sentence of this Section 12.07(b). If any Lender causes a branch, Subsidiary or Affiliate to make or maintain any part of the Loans hereunder, all terms

and conditions of this Agreement shall, except where the context clearly requires otherwise, be applicable to such part of the Loans to the same extent as if such Loans were made or maintained by such Lender, provided, that in no event shall any Lender's use of such a branch, Subsidiary or Affiliate to make or maintain any part of the Loans hereunder cause such Lender or such branch, Subsidiary or Affiliate to incur any cost or expenses payable by the Borrower hereunder or require the Borrower to pay any other compensation to any Lender (including any expenses incurred or payable pursuant to Section 5.06) which would otherwise not be incurred. 12.08 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the Borrower, the Lenders, the Agents, all future holders of the Notes and their respective successors and assigns, except that the Borrower may not assign or transfer any of its rights or obligations under this Agreement without the prior written consent of each Lender. Each Lender may, at its own cost, make assignments of or sell participations in all or any part of its Commitment and the Loans made by it to one or more Lenders or other Persons, subject to the terms set forth herein: (a) Assignments. Any Lender may, in the ordinary course of its business and in accordance with applicable law,

and conditions of this Agreement shall, except where the context clearly requires otherwise, be applicable to such part of the Loans to the same extent as if such Loans were made or maintained by such Lender, provided, that in no event shall any Lender's use of such a branch, Subsidiary or Affiliate to make or maintain any part of the Loans hereunder cause such Lender or such branch, Subsidiary or Affiliate to incur any cost or expenses payable by the Borrower hereunder or require the Borrower to pay any other compensation to any Lender (including any expenses incurred or payable pursuant to Section 5.06) which would otherwise not be incurred. 12.08 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the Borrower, the Lenders, the Agents, all future holders of the Notes and their respective successors and assigns, except that the Borrower may not assign or transfer any of its rights or obligations under this Agreement without the prior written consent of each Lender. Each Lender may, at its own cost, make assignments of or sell participations in all or any part of its Commitment and the Loans made by it to one or more Lenders or other Persons, subject to the terms set forth herein: (a) Assignments. Any Lender may, in the ordinary course of its business and in accordance with applicable law, at any time and from time to time assign to any Lender or any affiliate of any Lender or to any Person in accordance with the provisions of Section 2.09, or, with the consents of the Company (unless and until an Event of Default has occurred and is continuing, after which no consent of the Company shall be required) and the Administrative Agent (neither of which shall be unreasonably withheld or delayed), to an additional bank, financial institution or other entity (each, a "Purchasing Lender") all or any part of its rights and obligations under this Agreement and the other Operative Agreements pursuant to an Assignment and Acceptance, substantially in the form of Exhibit J, executed by such Purchasing Lender, such assigning Lender (and, in the case of a Purchasing Lender that is not a Lender or an affiliate thereof, by the Borrower and the Administrative Agent) and delivered to the Administrative Agent for its acceptance and recording in the Register; provided, that (i) no such assignment to a Purchasing Lender (other than any Lender or any affiliate thereof) shall be in an aggregate principal amount less than $5,000,000 (other than in the case of an assignment of all of a Lender's interests under this Agreement and the Notes) and (ii) after giving effect to any such assignment (other than an assignment of all of a Lender's interests under this Agreement and the Notes), the assigning Lender (together with any Lender which is an affiliate of such assigning Lender) shall retain Loans and/or Commitments aggregating not less than $5,000,000. Any such assignment shall be ratable as between the Tranche A Loans and Tranche B Loans of the assigning Lender. Upon such execution, delivery, acceptance and recording, from and after the Effective Date determined pursuant to such Assignment and Acceptance, (x) the Purchasing Lender thereunder shall be a party hereto and, to the extent provided in such Assignment and Acceptance, have the rights and obligations of a Lender hereunder with a Commitment as set forth therein, and (y) the assigning Lender thereunder shall, to the extent provided in such Assignment and Acceptance, be released from its obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all or the remaining portion of an assigning Lender's rights and obligations under this Agreement, such assigning Lender shall cease to be a party hereto). Notwithstanding anything to the contrary in this Agreement, the consent of the Borrower shall not be required, and, unless requested by the relevant Purchasing Lender and/or assigning Lender, new Notes shall not be required to be executed and delivered by the Borrower, for

any assignment which occurs at any time when any of the events described in Section 9(h) shall have occurred and be continuing. Upon its receipt of an Assignment and Acceptance executed by an assigning Lender and a Purchasing Lender (and, in the case of a Purchasing Lender that is not a Lender or an affiliate thereof, by the Borrower and the Administrative Agent) together with payment to the Administrative Agent of a registration and processing fee of $3,500, the Administrative Agent shall (i) promptly accept such Assignment and Acceptance and (ii) promptly after the Effective Date determined pursuant thereto, record the information contained therein in the Register and give notice of such acceptance and recordation to the Lenders and the Borrower. On or prior to such Effective Date, the Borrower, at its own expense, shall execute and deliver to the Administrative Agent new Notes (in exchange for the Notes of the assigning Lender), each in an amount equal to the Commitment assumed by the relevant Purchasing Lender pursuant to such Assignment and Acceptance, and, if the assigning Lender has retained a Commitment hereunder, new Notes to the order of the assigning Lender, each in an amount equal to the Commitment retained by it hereunder. Such new Notes shall be dated the Effective Date and shall otherwise be in the form of the Notes replaced thereby. (b) Participations. Any Lender may, in the ordinary course of its business and in accordance with applicable law,

any assignment which occurs at any time when any of the events described in Section 9(h) shall have occurred and be continuing. Upon its receipt of an Assignment and Acceptance executed by an assigning Lender and a Purchasing Lender (and, in the case of a Purchasing Lender that is not a Lender or an affiliate thereof, by the Borrower and the Administrative Agent) together with payment to the Administrative Agent of a registration and processing fee of $3,500, the Administrative Agent shall (i) promptly accept such Assignment and Acceptance and (ii) promptly after the Effective Date determined pursuant thereto, record the information contained therein in the Register and give notice of such acceptance and recordation to the Lenders and the Borrower. On or prior to such Effective Date, the Borrower, at its own expense, shall execute and deliver to the Administrative Agent new Notes (in exchange for the Notes of the assigning Lender), each in an amount equal to the Commitment assumed by the relevant Purchasing Lender pursuant to such Assignment and Acceptance, and, if the assigning Lender has retained a Commitment hereunder, new Notes to the order of the assigning Lender, each in an amount equal to the Commitment retained by it hereunder. Such new Notes shall be dated the Effective Date and shall otherwise be in the form of the Notes replaced thereby. (b) Participations. Any Lender may, in the ordinary course of its business and in accordance with applicable law, at any time sell to one or more banks, financial institutions or other entities (each, a "Participant") participating interests in any Loan owing to such Lender, any Note held by such Lender, any Commitment of such Lender or any other interest of such Lender hereunder and under the other Operative Agreements; provided, that any such participation shall be ratable as between the Tranche A Loans and Tranche B Loans of such Lender. In the event of any such sale by a Lender of a participating interest to a Participant, such Lender's obligations under this Agreement to the other parties to this Agreement shall remain unchanged, such Lender shall remain solely responsible for the performance thereof, such Lender shall remain the holder of any such Note for all purposes under this Agreement and the Notes, and the Borrower and the Administrative Agent shall continue to deal solely and directly with such Lender in connection with such Lender's rights and obligations under this Agreement and the Notes. In no event shall any Participant have any right to approve any amendment or waiver of any provision of this Agreement or any other Operative Agreement, or any consent to any departure by the Borrower, any Guarantor or any other Person therefrom, except to the extent that such amendment, waiver or consent would (a) reduce the principal of, or interest on, any Loan or Note, or postpone the date of the final maturity of any Loan or Note, or reduce the amount of any Fee, in each case to the extent subject to such participation or (b) release all or substantially all of the Collateral. The Borrower agrees that, while an Event of Default shall have occurred and be continuing, if amounts outstanding under this Agreement and the Notes are due or unpaid, or shall have been declared or shall have become due and payable upon the occurrence of an Event of Default, each Participant shall, to the maximum extent permitted by applicable law, be deemed to have the right of setoff in respect of its participating interest in amounts owing under this Agreement and any Note to the same extent as if the amount of its participating interest were owing directly to it as a Lender under this Agreement or any Note, provided, that in purchasing such participating interest, such Participant shall be deemed to have agreed to share with the Lenders the proceeds thereof as provided in Section 12.10(a) as fully as if it were a Lender hereunder. The Borrower also agrees that each Participant shall be entitled to the benefits of Sections 4.03, 5.06, 12.05 and 12.10 with respect to its participation in the Commitments and the Loans outstanding from time to time as if it was a Lender; provided, that in the case of Section

5.06(c), such Participant shall have complied with the requirements of said Section and provided, further, that no Participant shall be entitled to receive any greater amount pursuant to any such Section than the transferor Lender would have been entitled to receive in respect of the amount of the participation transferred by such transferor Lender to such Participant had no such transfer occurred. (c) Other Provisions. Any Purchasing Lender or Participant which is not incorporated under the Laws of the United States of America or a state thereof shall deliver to the Borrower and the Administrative Agent the form of certificate described in Section 12.21 relating to Federal income tax withholding and the Lender who makes an assignment or sells a participation shall cause the assignee or participant to comply with the provisions of Section 12.21. Each Lender may furnish any publicly available information concerning the Company or its subsidiaries and any other information concerning the Company or its Subsidiaries in the possession of such Lender from time to time to Purchasing Lenders and Participants (including prospective assignees or participants), provided that such assignees and participants agree to be bound by the provisions of Section 12.19.

5.06(c), such Participant shall have complied with the requirements of said Section and provided, further, that no Participant shall be entitled to receive any greater amount pursuant to any such Section than the transferor Lender would have been entitled to receive in respect of the amount of the participation transferred by such transferor Lender to such Participant had no such transfer occurred. (c) Other Provisions. Any Purchasing Lender or Participant which is not incorporated under the Laws of the United States of America or a state thereof shall deliver to the Borrower and the Administrative Agent the form of certificate described in Section 12.21 relating to Federal income tax withholding and the Lender who makes an assignment or sells a participation shall cause the assignee or participant to comply with the provisions of Section 12.21. Each Lender may furnish any publicly available information concerning the Company or its subsidiaries and any other information concerning the Company or its Subsidiaries in the possession of such Lender from time to time to Purchasing Lenders and Participants (including prospective assignees or participants), provided that such assignees and participants agree to be bound by the provisions of Section 12.19. 12.09 The Register; Disclosure; Pledges to Federal Reserve Banks. (a) The Administrative Agent shall maintain at its address referred to in Section 12.02 copy of each Assignment and Acceptance delivered to it and a register (the "Register") for the recordation of the names and addresses of the Lenders, the Commitments of the Lenders, and the principal amount of the Loans owing to each Lender from time to time. The entries in the Register shall be conclusive, in the absence of clearly demonstrable error, and the Borrower, the Agents and the Lenders may treat each Person whose name is recorded in the Register as the owner of the Loan recorded therein for all purposes of this Agreement. The Register shall be available for inspection by the Borrower or any Lender at any reasonable time and from time to time upon reasonable prior notice. (b) Nothing herein shall prohibit any Lender from pledging or assigning any Note to any Federal Reserve Bank in accordance with applicable law. 12.10 Adjustments; Set-off. (a) If any Lender (a "Benefitted Lender") shall at any time receive any payment of all or part of its Loans, or interest thereon, or receive any collateral in respect thereof (whether voluntarily or involuntarily, by set-off, pursuant to events or proceedings of the nature referred to in Section 9(h), or otherwise), in a greater proportion than any such payment to or collateral received by any other Lender, if any, in respect of such other Lender's Loans, or interest thereon, such Benefitted Lender shall purchase for cash from the other Lenders a participating interest in such portion of each such other Lender's Loan, or shall provide such other Lenders with the benefits of any such collateral, or the proceeds thereof, as shall be necessary to cause such Benefitted Lender to share the excess payment or benefits of such collateral or proceeds ratably with each of the Lenders; provided, however, that if all or any portion of such excess payment or benefits is thereafter recovered from such Benefitted Lender, such purchase shall be rescinded, and the purchase price and benefits returned, to the extent of such recovery, but without interest. (b) In addition to any rights now or hereafter granted under applicable law or otherwise, and not by way of limitation of any such rights, upon the occurrence of an Event of Default, each Agent and each Lender is hereby authorized at any time or from time to time, without

presentment, demand, protest or other notice of any kind to the Borrower or to any other Person, any such notice being hereby expressly waived, to set off and to appropriate and apply any and all deposits (general or special) and any other Indebtedness at any time held or owing by such Agent or such Lender (including, by branches and agencies of such Agent or such Lender wherever located) to or for the credit or the account of the Borrower against and on account of the obligations and liabilities of the Borrower to such Agent or such Lender under this Agreement or under any of the other Operative Agreements, including, all interests in obligations of the Borrower purchased by any such Lender pursuant to Section 12.10(a), and all other claims of any nature or description arising out of or connected with this Agreement or any other Operative Agreement, irrespective of whether or not such Agent or such Lender shall have made any demand hereunder and although said obligations, liabilities or claims, or any of them, shall be contingent or unmatured, and regardless of any difference between the currency of the Loans or other Obligations and the currency of such debt owing to or funds held for the account of the Borrower.

presentment, demand, protest or other notice of any kind to the Borrower or to any other Person, any such notice being hereby expressly waived, to set off and to appropriate and apply any and all deposits (general or special) and any other Indebtedness at any time held or owing by such Agent or such Lender (including, by branches and agencies of such Agent or such Lender wherever located) to or for the credit or the account of the Borrower against and on account of the obligations and liabilities of the Borrower to such Agent or such Lender under this Agreement or under any of the other Operative Agreements, including, all interests in obligations of the Borrower purchased by any such Lender pursuant to Section 12.10(a), and all other claims of any nature or description arising out of or connected with this Agreement or any other Operative Agreement, irrespective of whether or not such Agent or such Lender shall have made any demand hereunder and although said obligations, liabilities or claims, or any of them, shall be contingent or unmatured, and regardless of any difference between the currency of the Loans or other Obligations and the currency of such debt owing to or funds held for the account of the Borrower. 12.11 Counterparts. This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts (including by telecopy), and all of said counterparts taken together shall be deemed to constitute one and the same instrument. A set of the copies of this Agreement signed by all the parties shall be lodged with the Borrower and the Administrative Agent. 12.12 Severability. Any provision of this Agreement which 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. 12.13 Integration. This Agreement and the other Credit Documents represent the agreement of the Borrower, the Agents and the Lenders with respect to the subject matter hereof, and there are no promises, undertakings, representations or warranties by any Agent or any Lender relative to subject matter hereof not expressly set forth or referred to herein or in the other Credit Documents. 12.14 GOVERNING LAW. THIS AGREEMENT AND THE NOTES AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. 12.15 Submission To Jurisdiction; Waivers. The Borrower hereby irrevocably and unconditionally: (a) submits for itself and its property in any legal action or proceeding relating to this Agreement and the other Credit Documents to which it is a party, or for recognition and enforcement of any judgement in respect thereof, to the non-exclusive general jurisdiction of the Courts of the State of New York, the courts of the United States of America for the Southern District of New York, and appellate courts from any thereof;

(b) consents that any such action or proceeding may be brought in such courts and waives any objection that it may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient court and agrees not to plead or claim the same; (b) agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to the Borrower at its address set forth in Section 12.02 or at such other address of which the Administrative Agent shall have been notified pursuant thereto; (c) agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law or shall limit the right to sue in any other jurisdiction; and (d) waives, to the maximum extent not prohibited by law, any right it may have to claim or recover in any legal action or proceeding referred to in this Section 12.15 any special, exemplary, punitive or consequential damages. 12.16 Acknowledgments. The Borrower hereby acknowledges that:

(b) consents that any such action or proceeding may be brought in such courts and waives any objection that it may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient court and agrees not to plead or claim the same; (b) agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to the Borrower at its address set forth in Section 12.02 or at such other address of which the Administrative Agent shall have been notified pursuant thereto; (c) agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law or shall limit the right to sue in any other jurisdiction; and (d) waives, to the maximum extent not prohibited by law, any right it may have to claim or recover in any legal action or proceeding referred to in this Section 12.15 any special, exemplary, punitive or consequential damages. 12.16 Acknowledgments. The Borrower hereby acknowledges that: (a) it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the Notes and the other Credit Documents; (b) neither any Agent nor any Lender has any fiduciary relationship with or duty to the Borrower arising out of or in connection with this Agreement or any of the other Credit Documents, and the relationship between Agents and Lenders, on one hand, and the Borrower, on the other hand, in connection herewith or therewith is solely that of debtor and creditor; and (c) no joint venture is created hereby or by the other Credit Documents or otherwise exists by virtue of the transactions contemplated hereby among the Lenders or among the Borrower and the Lenders. 12.17 WAIVERS OF JURY TRIAL. THE BORROWER, THE AGENTS AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN. 12.18 Waivers by Borrower. Except as otherwise provided for in this Agreement and the other Credit Documents, the Borrower waives (i) presentment, demand and protest and notice of presentment, protest, default, non-payment, maturity, release, compromise, settlement, extension or renewal of any or all commercial paper, accounts, contract rights, documents, instruments, chattel paper and guaranties at any time held by the Borrower on which the Borrower may in any way be liable and hereby ratifies and confirms what the Administrative Agent or the Real

Estate Administrative Agent may do in this regard; (ii) the benefit of all valuation, appraisement and exemption laws; and (iii) any right the Borrower may have upon payment in full of its obligations to require any Agent or any Lender to terminate its security interest in any property of the Borrower until termination of this Agreement in accordance with its terms and the execution by the Administrative Agent and the Borrower, and by any Person whose loans to the Borrower are used in whole or in part to satisfy the Obligations, of an agreement indemnifying the Agents and the Lenders from any loss or damage the Agents or the Lenders may incur as the result of dishonored checks or other items of payment received by the Agents from the Borrower and applied to the Obligations. 12.19 Tax Withholding Forms. Each Lender or Purchasing Lender or Participant that is not incorporated under the Laws of the United States of America or a state thereof agrees that it will deliver to each of the Borrower and the Administrative Agent two (2) duly completed copies of the following: (i) Internal Revenue Service Form W-9 or W-8 and 4224 or 1001, or other applicable form prescribed by the Internal Revenue Service, certifying that such Lender, Purchasing Lender or Participant is entitled to receive payments under this Agreement and the other Credit Documents without deduction or withholding of any United States Federal income taxes, or is subject to such tax at a reduced rate under an applicable tax treaty, or (ii) a

Estate Administrative Agent may do in this regard; (ii) the benefit of all valuation, appraisement and exemption laws; and (iii) any right the Borrower may have upon payment in full of its obligations to require any Agent or any Lender to terminate its security interest in any property of the Borrower until termination of this Agreement in accordance with its terms and the execution by the Administrative Agent and the Borrower, and by any Person whose loans to the Borrower are used in whole or in part to satisfy the Obligations, of an agreement indemnifying the Agents and the Lenders from any loss or damage the Agents or the Lenders may incur as the result of dishonored checks or other items of payment received by the Agents from the Borrower and applied to the Obligations. 12.19 Tax Withholding Forms. Each Lender or Purchasing Lender or Participant that is not incorporated under the Laws of the United States of America or a state thereof agrees that it will deliver to each of the Borrower and the Administrative Agent two (2) duly completed copies of the following: (i) Internal Revenue Service Form W-9 or W-8 and 4224 or 1001, or other applicable form prescribed by the Internal Revenue Service, certifying that such Lender, Purchasing Lender or Participant is entitled to receive payments under this Agreement and the other Credit Documents without deduction or withholding of any United States Federal income taxes, or is subject to such tax at a reduced rate under an applicable tax treaty, or (ii) a certificate of the Lender, Purchasing Lender or Participant indicating that no such exemption or reduced rate is allowable with respect to such payments. Each Purchasing Lender or Participant shall deliver such form or certificate on or before the Effective Date of such assignment or participation. Each Lender, assignee or participant which so delivers a Form W-8, W-9, 4224 or 1001 further undertakes to deliver to each of the Borrower and the Administrative Agent two (2) additional copies of such form (or a successor form) on or before the date that such form expires or becomes obsolete or after the occurrence of any event requiring a change in the most recent form so delivered by it, and such amendments thereto or extensions or renewals thereof as may be reasonably requested by the Borrower or the Administrative Agent, either certifying that such Lender, Purchasing Lender or Participant is entitled to receive payments under this Agreement and the other Credit Documents without deduction or withholding of any United States Federal income taxes or is subject to such tax at a reduced rate under an applicable tax treaty or stating that no such exemption or reduced rate is allowable. The Administrative Agent shall be entitled to withhold United States Federal income taxes at the full withholding rate unless the Lender, Purchasing Lender or Participant establishes an exemption or that it is subject to a reduced rate as established pursuant to the above provisions. 12.20 Effective Date Transition Provision. Immediately after the Effective Date, Wells Fargo Bank, N.A., Credit Lyonnais, NationsBank, N.A. (Carolinas), U.S. National Bank of Oregon, Mitsubishi Trust and Banking Corp., The Fuji Bank, Limited, The Sumitomo Bank, Ltd. and The Tokai Bank, Ltd. shall cease to be Lenders under, and shall cease to have any rights, benefits or obligations under, this Agreement or any other Loan Document, except Wells Fargo Bank, N.A., Credit Lyonnais, NationsBank, N.A. (Carolinas), U.S. National Bank of Oregon, Mitsubishi Trust and Banking Corp., The Fuji Bank, Limited, The Sumitomo Bank, Ltd. and The Tokai Bank, Ltd. shall continue to have: (a) obligations arising under Section 10.07 insofar as such obligations relate to events occurring prior to the Effective Date; and (b) rights and benefits arising under Sections 5.06 and 12.05 insofar as such rights and benefits relate to events occurring prior to the Effective Date.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their proper and duly authorized officers as of the day and year first above written. WILMINGTON TRUST COMPANY, not in its individual capacity except as expressly stated herein, but solely as Owner Trustee By: Title:

PNC BANK, NATIONAL ASSOCIATION, as

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their proper and duly authorized officers as of the day and year first above written. WILMINGTON TRUST COMPANY, not in its individual capacity except as expressly stated herein, but solely as Owner Trustee By: Title:

PNC BANK, NATIONAL ASSOCIATION, as Administrative Agent By: Title: THE FIRST NATIONAL BANK OF CHICAGO, as Syndication Agent By: Title: BANKERS TRUST COMPANY, as Real Estate Administrative Agent By: Title: Lenders PNC BANK, NATIONAL ASSOCIATION By: Title: THE FIRST NATIONAL BANK OF CHICAGO By: Title: BANKERS TRUST COMPANY By: Title:

FIRST UNION NATIONAL BANK By: Title:

PNC BANK, NATIONAL ASSOCIATION, as Administrative Agent By: Title: THE FIRST NATIONAL BANK OF CHICAGO, as Syndication Agent By: Title: BANKERS TRUST COMPANY, as Real Estate Administrative Agent By: Title: Lenders PNC BANK, NATIONAL ASSOCIATION By: Title: THE FIRST NATIONAL BANK OF CHICAGO By: Title: BANKERS TRUST COMPANY By: Title:

FIRST UNION NATIONAL BANK By: Title: FLEET NATIONAL BANK By: Title: KEYBANK NATIONAL ASSOCIATION By: Title:

FIRST UNION NATIONAL BANK By: Title: FLEET NATIONAL BANK By: Title: KEYBANK NATIONAL ASSOCIATION By: Title: COMERICA BANK By: Title: MORGAN GUARANTY TRUST COMPANY, OF NEW YORK By: Title: UNION BANK OF CALIFORNIA, N.A. By: Title:

CORESTATES BANK, N.A. By: Title: BANQUE NATIONALE DE PARIS By: Title: SUNTRUST BANK, ATLANTA By: Title: BANK BOSTON, N.A.

CORESTATES BANK, N.A. By: Title: BANQUE NATIONALE DE PARIS By: Title: SUNTRUST BANK, ATLANTA By: Title: BANK BOSTON, N.A. By: Title: HIBERNIA NATIONAL BANK By: Title: THE NORTHERN TRUST COMPANY By: Title:

BANK OF NEW YORK By: Title: MERCANTILE BANK By: Title: THE DAI-ICHI KANGYO BANK, LTD. CHICAGO BRANCH By: Title: FIRST HAWAIIAN BANK

BANK OF NEW YORK By: Title: MERCANTILE BANK By: Title: THE DAI-ICHI KANGYO BANK, LTD. CHICAGO BRANCH By: Title: FIRST HAWAIIAN BANK By: Title: BANK ONE, NATIONAL ASSOCIATION By: Title: LONG TERM CREDIT BANK OF JAPAN By: Title:

WACHOVIA BANK, N.A. By: Title:

SCHEDULE 1.01(A) EURO-RATE MARGIN BASE RATE MARGIN, FACILITY FEE RATE (1)
<Capiton> --------------------------------------------------------------------------------------------------------LEVEL I LEVEL II LEVEL III LEVEL IV LEVEL V --------------------------------------------------------------------------------------------------------If the Company's Fixed Charge Coverage Ratio EXCEEDS 1.80 : 1.00 AND IS LESS THAN OR

If the Company's Fixed

If the Company's Fixed Charge Coverage Ratio EXCEEDS 2.00 : 1.00 AND

If the Company's Fixed Charge Coverage Ratio EXCEEDS 1.60 TO 1.0 AND

If the Company's F Charge Cove

WACHOVIA BANK, N.A. By: Title:

SCHEDULE 1.01(A) EURO-RATE MARGIN BASE RATE MARGIN, FACILITY FEE RATE (1)
<Capiton> --------------------------------------------------------------------------------------------------------LEVEL I LEVEL II LEVEL III LEVEL IV LEVEL V --------------------------------------------------------------------------------------------------------If the Company's Fixed Charge Coverage Ratio EXCEEDS 1.80 : 1.00 AND IS LESS THAN OR EQUAL TO 2.00 : 1.00.

If the Company's F Charge Cove Ratio IS LE THAN OR EQU TO 1.60 TO 1.00. --------------------------------------------------------------------------------------------------------If the Company's Fixed Charge Coverage Ratio EXCEEDS 2.20 : 1.00. Euro-Rate Margin 14.5 17.5 20.0 22.5 32.5 --------------------------------------------------------------------------------------------------------Base Rate Margin 0 0 0 0 0 --------------------------------------------------------------------------------------------------------Facility Fee Rate 8.0 10.0 12.5 15.0 17.5 ---------------------------------------------------------------------------------------------------------

If the Company's Fixed Charge Coverage Ratio EXCEEDS 2.00 : 1.00 AND IS LESS OR EQUAL TO 2.20 : 1.00.

If the Company's Fixed Charge Coverage Ratio EXCEEDS 1.60 TO 1.0 AND IS LESS THAN OR EQUAL TO 1.80 : 1.00.

(1) All prices are expressed in basis points. A basis point is equal to 1/100 of 1%.

SCHEDULE II COMMITMENTS OF LENDERS
NAME OF LENDER PNC Bank, National Association ADDRESS FOR NOTICES National Corporate Banking-Chicago Office 500 West Monroe Street Chicago, IL 60661 FAX: (312) 906-3420 Phone: (312) 906-3426 Attn: Mr. Peter F. Stack 14th Floor, Suite 0086 One First National Plaza Chicago, IL 60670 FAX: (312) 732-8587 Phone: (312) 732-6132 Attn: Mr. Paul E. Rigby 130 Liberty Street, 34th Floor New York, NY 10006 FAX: (212) 250-7218 AMOUNT OF COMMITMENT $ 26,666,666.67

The First National Bank of Chicago

$ 26,481,481.48

Bankers Trust Company

$ 26,481,481.48

SCHEDULE 1.01(A) EURO-RATE MARGIN BASE RATE MARGIN, FACILITY FEE RATE (1)
<Capiton> --------------------------------------------------------------------------------------------------------LEVEL I LEVEL II LEVEL III LEVEL IV LEVEL V --------------------------------------------------------------------------------------------------------If the Company's Fixed Charge Coverage Ratio EXCEEDS 1.80 : 1.00 AND IS LESS THAN OR EQUAL TO 2.00 : 1.00.

If the Company's F Charge Cove Ratio IS LE THAN OR EQU TO 1.60 TO 1.00. --------------------------------------------------------------------------------------------------------If the Company's Fixed Charge Coverage Ratio EXCEEDS 2.20 : 1.00. Euro-Rate Margin 14.5 17.5 20.0 22.5 32.5 --------------------------------------------------------------------------------------------------------Base Rate Margin 0 0 0 0 0 --------------------------------------------------------------------------------------------------------Facility Fee Rate 8.0 10.0 12.5 15.0 17.5 ---------------------------------------------------------------------------------------------------------

If the Company's Fixed Charge Coverage Ratio EXCEEDS 2.00 : 1.00 AND IS LESS OR EQUAL TO 2.20 : 1.00.

If the Company's Fixed Charge Coverage Ratio EXCEEDS 1.60 TO 1.0 AND IS LESS THAN OR EQUAL TO 1.80 : 1.00.

(1) All prices are expressed in basis points. A basis point is equal to 1/100 of 1%.

SCHEDULE II COMMITMENTS OF LENDERS
NAME OF LENDER PNC Bank, National Association ADDRESS FOR NOTICES National Corporate Banking-Chicago Office 500 West Monroe Street Chicago, IL 60661 FAX: (312) 906-3420 Phone: (312) 906-3426 Attn: Mr. Peter F. Stack 14th Floor, Suite 0086 One First National Plaza Chicago, IL 60670 FAX: (312) 732-8587 Phone: (312) 732-6132 Attn: Mr. Paul E. Rigby 130 Liberty Street, 34th Floor New York, NY 10006 FAX: (212) 250-7218 Phone: (212) 250-5175 Attn: Ms. Patricia Hogan One First Union Center, DC5 Charlotte, NC 28288-0745 FAX: (704) 374-2802 Phone: (704) 374-2641 Attn: Ms. Mary Amatore One Federal Street, OF0320 AMOUNT OF COMMITMENT $ 26,666,666.67

The First National Bank of Chicago

$ 26,481,481.48

Bankers Trust Company

$ 26,481,481.48

First Union National Bank

$ 14,814,814.81

Fleet National Bank

$ 14,814,814.81

SCHEDULE II COMMITMENTS OF LENDERS
NAME OF LENDER PNC Bank, National Association ADDRESS FOR NOTICES National Corporate Banking-Chicago Office 500 West Monroe Street Chicago, IL 60661 FAX: (312) 906-3420 Phone: (312) 906-3426 Attn: Mr. Peter F. Stack 14th Floor, Suite 0086 One First National Plaza Chicago, IL 60670 FAX: (312) 732-8587 Phone: (312) 732-6132 Attn: Mr. Paul E. Rigby 130 Liberty Street, 34th Floor New York, NY 10006 FAX: (212) 250-7218 Phone: (212) 250-5175 Attn: Ms. Patricia Hogan One First Union Center, DC5 Charlotte, NC 28288-0745 FAX: (704) 374-2802 Phone: (704) 374-2641 Attn: Ms. Mary Amatore One Federal Street, OF0320 Boston, MA 02110-2010 FAX: (617) 346-0689 Phone: (617) 346-0611 Attn: Mr. Richard M. Seufert 127 Public Square Cleveland, OH 44114-1306 FAX: (216) 689-4981 Phone: (216) 689-3589 Attn: Mr. Thomas Crandell AMOUNT OF COMMITMENT $ 26,666,666.67

The First National Bank of Chicago

$ 26,481,481.48

Bankers Trust Company

$ 26,481,481.48

First Union National Bank

$ 14,814,814.81

Fleet National Bank

$ 14,814,814.81

KeyBank National Association

$ 14,814,814.81

*Ratable Shares used for calculating Required Lenders, but not for loan operation purposes, such as fundings and payments.

NAME OF LENDER Comerica Bank

ADDRESS FOR NOTICES One Detroit Center 500 Woodward Ave. Mail Code 3268 - 9th Floor Detroit, MI 48226-3289 FAX: (313) 222-9514 Phone: (313) 222-5060 Attn: Mr. David C. Bird c/o J.P. Morgan & Company, Inc. 22nd Floor 60 Wall Street New York, NY 10260 FAX: (212) 648-5018 Phone: (212) 648-8063 Attn: Ms. Deborah Broadheim 350 California Street 6th Floor San Francisco, CA 94104-1402 FAX: (415) 705-7085 Phone: (415) 705-7021 Attn: Mr. Timothy P. Streb

AMOUNT OF COMMITMENT $ 14,814,814.81

Morgan Guaranty Trust Company of New York

$ 11,111,111.11

Union Bank of California, N.A.

$ 11,111,111.11

NAME OF LENDER Comerica Bank

ADDRESS FOR NOTICES One Detroit Center 500 Woodward Ave. Mail Code 3268 - 9th Floor Detroit, MI 48226-3289 FAX: (313) 222-9514 Phone: (313) 222-5060 Attn: Mr. David C. Bird c/o J.P. Morgan & Company, Inc. 22nd Floor 60 Wall Street New York, NY 10260 FAX: (212) 648-5018 Phone: (212) 648-8063 Attn: Ms. Deborah Broadheim 350 California Street 6th Floor San Francisco, CA 94104-1402 FAX: (415) 705-7085 Phone: (415) 705-7021 Attn: Mr. Timothy P. Streb 1345 Chestnut Street, FC 1-8-8-14 Philadelphia, PA 19101-7618 FAX: (215) 973-7671 Phone: (215) 973-2318 Attn: Ms. Anne Marie Fitzsimmons Suite 500 209 South LaSalle Street Chicago, IL 60604 FAX: (312) 977-1380 Phone: (312) 977-2211 Attn: Mr. Frederick Moryl 24th Floor 25 Park Place Atlanta, GA 30303 FAX: (404) 588-8505 Phone: (404) 724-3457 Attn: Mr. Roger P. Shreero

AMOUNT OF COMMITMENT $ 14,814,814.81

Morgan Guaranty Trust Company of New York

$ 11,111,111.11

Union Bank of California, N.A.

$ 11,111,111.11

CoreStates Bank, N.A.

$ 9,259,259.26

Banque Nationale de Paris

$

9,259,259.26

SunTrust Bank, Atlanta

$

9,259,259.26

*Ratable Shares used for calculating Required Lenders, but not for loan operation purposes, such as fundings and payments.

NAME OF LENDER Bank Boston, N.A.

ADDRESS FOR NOTICES 100 Federal Street Boston, MA 02110 FAX: (617) 434-6685 Phone: (617) 434-5280 Attn: Ms. Judith Kelly 12th Floor 313 Carondelet Street New Orleans, LA 70130 FAX: (504) 533-5344 Phone: (504) 533-2911 Attn: Mr. Jeffrey Peck Floor B-11 50 South LaSalle Street Chicago, IL 60675 FAX: (312) 444-5055 Phone: (312) 557-8205 Attn: Ms. Nicole R. Kidder One Wall Street, 8th Floor New York, NY 10286 FAX: (212) 635-1483, 1481 Phone: (212) 635-7885 $

AMOUNT OF COMMITMENT 9,259,259.26

Hibernia National Bank

$ 7,407,407.41

The Northern Trust Company

$ 5,555,555.56

The Bank of New York

$

5,555,555.56

NAME OF LENDER Bank Boston, N.A.

ADDRESS FOR NOTICES 100 Federal Street Boston, MA 02110 FAX: (617) 434-6685 Phone: (617) 434-5280 Attn: Ms. Judith Kelly 12th Floor 313 Carondelet Street New Orleans, LA 70130 FAX: (504) 533-5344 Phone: (504) 533-2911 Attn: Mr. Jeffrey Peck Floor B-11 50 South LaSalle Street Chicago, IL 60675 FAX: (312) 444-5055 Phone: (312) 557-8205 Attn: Ms. Nicole R. Kidder One Wall Street, 8th Floor New York, NY 10286 FAX: (212) 635-1483, 1481 Phone: (212) 635-7885 Attn: Mr. Michael V. Flannery 12th Floor 721 Locust Street St. Louis, MO 63101 FAX: (314) 425-2203 Phone: (314) 425-2459 Attn: Mr. Steve Reese 10 S. Wacker Drive 26th Floor Chicago, IL 60606 FAX: (312) 876-2011 Phone: (312) 715-6361 Attn: Mr. Michael Pleasants $

AMOUNT OF COMMITMENT 9,259,259.26

Hibernia National Bank

$ 7,407,407.41

The Northern Trust Company

$ 5,555,555.56

The Bank of New York

$

5,555,555.56

Mercantile Bank

$

5,555,555.56

The Dai-Ichi Kangyo Bank, Ltd.--Chicago Branch

$

5,555,555.56

*Ratable Shares used for calculating Required Lenders, but not for loan operation purposes, such as fundings and payments.

NAME OF LENDER First Hawaiian Bank

ADDRESS FOR NOTICES 999 Bishop Street 11th Floor Honolulu, HI 96813 FAX: (808) 525-6372 Phone: (808) 525-6289 Attn: Mr. Charles Jenkins 7th Floor 100 East Broad Street Columbus, OH 43215 FAX: (614) 248-5518 Phone: (614) 248-6390 Attn: Mr. Larry Christ Suite 800 190 South LaSalle Street Chicago, IL 60670 FAX: (312) 704-8505 Phone: (312) 704-5482 Attn: Mr. Curtis Flammini 28th Floor 191 Peachtree Street Atlanta, GA 30303 FAX: (404) 332-6898 Phone: (404) 332-4036 $

AMOUNT OF COMMITMENT 5,555,555.56

Bank One, National Association

$

5,555,555.56

Long Term Credit Bank of Japan

$

5,555,555.56

Wachovia Bank

$

5,555,555.56

NAME OF LENDER First Hawaiian Bank

ADDRESS FOR NOTICES 999 Bishop Street 11th Floor Honolulu, HI 96813 FAX: (808) 525-6372 Phone: (808) 525-6289 Attn: Mr. Charles Jenkins 7th Floor 100 East Broad Street Columbus, OH 43215 FAX: (614) 248-5518 Phone: (614) 248-6390 Attn: Mr. Larry Christ Suite 800 190 South LaSalle Street Chicago, IL 60670 FAX: (312) 704-8505 Phone: (312) 704-5482 Attn: Mr. Curtis Flammini 28th Floor 191 Peachtree Street Atlanta, GA 30303 FAX: (404) 332-6898 Phone: (404) 332-4036 Attn: Ms. Katie S. Proctor TOTAL $

AMOUNT OF COMMITMENT 5,555,555.56

Bank One, National Association

$

5,555,555.56

Long Term Credit Bank of Japan

$

5,555,555.56

Wachovia Bank

$

5,555,555.56

$250,000,000.00

*Ratable Shares used for calculating Required Lenders, but not for loan operation purposes, such as fundings and payments.

Exhibit A-1 to Credit Agreement FORM OF TRANCHE A NOTE $________________________ New York, New York Dated as of November 22, 1995 Amended and Restated as of October ___, 1997 FOR VALUE RECEIVED, the undersigned, WILMINGTON TRUST COMPANY, not in its individual capacity except as expressly stated in the Credit Agreement, as hereinafter defined, but solely as Owner Trustee (the "Borrower"), hereby unconditionally promises to pay to the order of ________ _______ (the "Lender") at the office of PNC Bank, National Association, located at ______________________________________________, in lawful money of the United States of America and in immediately available funds, on the Maturity Date (as defined in the Credit Agreement referred to below), the principal amount of (a) ____________________ DOLLARS ($____________________), or, if less, (b) the aggregate unpaid principal amount of all Tranche A Loans made by the Lender to the Borrower pursuant to Section 2.01 of such Credit Agreement. The Borrower further agrees to pay interest in like money at such office on the unpaid principal amount hereof from time to time outstanding at the rates and on the dates specified in Section 4.01 of such Credit Agreement. The holder of this Note is authorized to endorse on the schedules annexed hereto and made a part hereof or on a continuation thereof which shall be attached hereto and made a part hereof the date, Interest Rate Option and amount of each Tranche A Loan made pursuant to the Credit Agreement and the date and amount of each payment or prepayment of principal thereof, each continuation thereof, each conversion of all or a portion thereof to another Interest Rate Option and, in the case of Euro-Rate Borrowing Tranche, the length of each Interest Period with respect thereto. Each such endorsement shall constitute prima facie evidence of the accuracy of the information endorsed. The failure to make any such endorsement or any error in such endorsement shall not affect the obligations of the Borrower in respect of such Tranche A Loan.

Exhibit A-1 to Credit Agreement FORM OF TRANCHE A NOTE $________________________ New York, New York Dated as of November 22, 1995 Amended and Restated as of October ___, 1997 FOR VALUE RECEIVED, the undersigned, WILMINGTON TRUST COMPANY, not in its individual capacity except as expressly stated in the Credit Agreement, as hereinafter defined, but solely as Owner Trustee (the "Borrower"), hereby unconditionally promises to pay to the order of ________ _______ (the "Lender") at the office of PNC Bank, National Association, located at ______________________________________________, in lawful money of the United States of America and in immediately available funds, on the Maturity Date (as defined in the Credit Agreement referred to below), the principal amount of (a) ____________________ DOLLARS ($____________________), or, if less, (b) the aggregate unpaid principal amount of all Tranche A Loans made by the Lender to the Borrower pursuant to Section 2.01 of such Credit Agreement. The Borrower further agrees to pay interest in like money at such office on the unpaid principal amount hereof from time to time outstanding at the rates and on the dates specified in Section 4.01 of such Credit Agreement. The holder of this Note is authorized to endorse on the schedules annexed hereto and made a part hereof or on a continuation thereof which shall be attached hereto and made a part hereof the date, Interest Rate Option and amount of each Tranche A Loan made pursuant to the Credit Agreement and the date and amount of each payment or prepayment of principal thereof, each continuation thereof, each conversion of all or a portion thereof to another Interest Rate Option and, in the case of Euro-Rate Borrowing Tranche, the length of each Interest Period with respect thereto. Each such endorsement shall constitute prima facie evidence of the accuracy of the information endorsed. The failure to make any such endorsement or any error in such endorsement shall not affect the obligations of the Borrower in respect of such Tranche A Loan. This Note (a) is one of the Tranche A Notes referred to in the Amended and Restated Credit Agreement dated as of November 22, 1995 and amended and restated as of October _____, 1997 (as amended, supplemented or otherwise modified from time to time, the "Credit Agreement"), among the Borrower, the Lender, the other banks and financial institutions from time to time parties thereto and PNC Bank, National Association, as administrative agent (b) is subject to the provisions of the Credit Agreement and (c) is subject to optional and mandatory prepayment in whole or in part as provided in the Credit Agreement. This Note is secured and guaranteed as provided in the Credit Documents. Reference is hereby made to the Credit Documents for a description of the properties and assets in which a security interest has been granted, the nature and extent of the security and the Tranche A Note

guarantees, the terms and conditions upon which the security interests and each guarantee were granted and the rights of the holder of this Note in respect thereof. Upon the occurrence of any one or more of the Events of Default, all amounts then remaining unpaid on this Note shall become, or may be declared to be, immediately due and payable, all as provided in the Credit Agreement. All parties now and hereafter liable with respect to this Note, whether maker, principal, surety, guarantor, endorser or otherwise, hereby waive presentment, demand, protest and all other notices of any kind. Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement. This Note is made by the Borrower in connection with the Credit Agreement. Any unpaid balance of the indebtedness evidenced by the Original Note remains outstanding as of the Effective Date. Any principal balance

guarantees, the terms and conditions upon which the security interests and each guarantee were granted and the rights of the holder of this Note in respect thereof. Upon the occurrence of any one or more of the Events of Default, all amounts then remaining unpaid on this Note shall become, or may be declared to be, immediately due and payable, all as provided in the Credit Agreement. All parties now and hereafter liable with respect to this Note, whether maker, principal, surety, guarantor, endorser or otherwise, hereby waive presentment, demand, protest and all other notices of any kind. Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement. This Note is made by the Borrower in connection with the Credit Agreement. Any unpaid balance of the indebtedness evidenced by the Original Note remains outstanding as of the Effective Date. Any principal balance of this Note includes the Borrower's indebtedness evidenced by the Original Note and this Note (i) merely reevidences the indebtedness evidenced by the Original Note, (ii) is not given as payment of the Original Note and (iii) is in no way intended to, or shall, constitute a novation of the Original Note or any obligations of Borrower thereunder. THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. WILMINGTON TRUST COMPANY, not in its individual capacity except as expressly stated in the Credit Agreement, but solely as Owner Trustee By: Name: Title: Tranche A Note

Schedule A to Tranche A Note LOANS, CONVERSIONS AND REPAYMENTS OF BASE RATE BORROWING TRANCHE Amount of Base Rate
Amount of Base Rate Borrowing Tranche Amount Converted to Base Rate Borrowing Tranche Amount of Principal of Borrowing Tranche U Base Rate Borrowing Converted to Euro-Rate Ba Tranche Repaid Borrowing Tranche B

Date

------

---------------------- ---------------------

---------------------- ----------------------

-

------

---------------------- ---------------------

---------------------- ----------------------

-

------

---------------------- ---------------------

---------------------- ----------------------

-

------

---------------------- ---------------------

---------------------- ----------------------

-

Schedule A to Tranche A Note LOANS, CONVERSIONS AND REPAYMENTS OF BASE RATE BORROWING TRANCHE Amount of Base Rate
Amount of Base Rate Borrowing Tranche Amount Converted to Base Rate Borrowing Tranche Amount of Principal of Borrowing Tranche U Base Rate Borrowing Converted to Euro-Rate Ba Tranche Repaid Borrowing Tranche B

Date

------

---------------------- ---------------------

---------------------- ----------------------

-

------

---------------------- ---------------------

---------------------- ----------------------

-

------

---------------------- ---------------------

---------------------- ----------------------

-

------

---------------------- ---------------------

---------------------- ----------------------

-

------

---------------------- ---------------------

---------------------- ----------------------

-

------

---------------------- ---------------------

---------------------- ----------------------

-

------

---------------------- ---------------------

---------------------- ----------------------

-

------

---------------------- ---------------------

---------------------- ----------------------

-

------

---------------------- ---------------------

---------------------- ----------------------

-

------

---------------------- ---------------------

---------------------- ----------------------

-

------

---------------------- ---------------------

---------------------- ----------------------

-

=========================================================================================================

Schedule B to Tranche A Note LOANS, CONTINUATIONS, CONVERSIONS AND REPAYMENTS OF EURO-RATE BORROWING TRANCHE
Amount of EuroAmount of Rate Borrowing Un Amount Converted Interest Period Principal of Euro- Tranche Converted Ba to Euro-Rate and Euro-Rate with Rate Borrowing to Base Rate R Borrowing Tranche Respect Thereto Tranche Repaid Borrowing Tranche ----------------- ------------------ ------------------ ------------------ --

Date -----

Amount of Euro-Rate Borrowing Tranche ------------------

-----

------------------

----------------- ------------------ ------------------ ------------------ --

-----

------------------

----------------- ------------------ ------------------ ------------------ --

-----

------------------

----------------- ------------------ ------------------ ------------------ --

-----

------------------

----------------- ------------------ ------------------ ------------------ --

Schedule B to Tranche A Note LOANS, CONTINUATIONS, CONVERSIONS AND REPAYMENTS OF EURO-RATE BORROWING TRANCHE
Amount of EuroAmount of Rate Borrowing Un Amount Converted Interest Period Principal of Euro- Tranche Converted Ba to Euro-Rate and Euro-Rate with Rate Borrowing to Base Rate R Borrowing Tranche Respect Thereto Tranche Repaid Borrowing Tranche ----------------- ------------------ ------------------ ------------------ --

Date -----

Amount of Euro-Rate Borrowing Tranche ------------------

-----

------------------

----------------- ------------------ ------------------ ------------------ --

-----

------------------

----------------- ------------------ ------------------ ------------------ --

-----

------------------

----------------- ------------------ ------------------ ------------------ --

-----

------------------

----------------- ------------------ ------------------ ------------------ --

-----

------------------

----------------- ------------------ ------------------ ------------------ --

-----

------------------

----------------- ------------------ ------------------ ------------------ --

-----

------------------

----------------- ------------------ ------------------ ------------------ --

----- ---------------------------------- ------------------ ------------------ ------------------ -=========================================================================================================

Exhibit A-2 to Credit Agreement FORM OF TRANCHE B NOTE $____________________ New York, New York Dated as of November 22, 1995 Amended and Restated as of October ___, 1997 FOR VALUE RECEIVED, the undersigned, WILMINGTON TRUST COMPANY, not in its individual capacity except as expressly stated in the Credit Agreement, as hereinafter defined, but solely as Owner Trustee (the "Borrower"), hereby unconditionally promises to pay to the order of ________________ (the "Lender") at the office of PNC Bank, National Association, located at ____________________________________________________, in lawful money of the United States of America and in immediately available funds, on the Maturity Date (as defined in the Credit Agreement referred to below), the principal amount of (a) ____________________________ DOLLARS ($___ _________________), or, if less, (b) the aggregate unpaid principal amount of all Tranche B Loans made by the Lender to the Borrower pursuant to Section 2.01 of such Credit Agreement. The Borrower further agrees to pay interest in like money at such office on the unpaid principal amount hereof from time to time outstanding at the rates and on the dates specified in Section 4.01 of such Credit Agreement. The holder of this Note is authorized to endorse on the schedules annexed hereto and made a part hereof or on a continuation thereof which shall be attached hereto and made a part hereof the date, Interest Rate Option and amount of each Tranche B Loan made pursuant to the Credit Agreement and the date and amount of each payment or prepayment of principal thereof, each continuation thereof, each conversion of all or a portion thereof to another Interest Rate Option and, in the case of Eurodollar Loans, the length of each Interest Period with

Exhibit A-2 to Credit Agreement FORM OF TRANCHE B NOTE $____________________ New York, New York Dated as of November 22, 1995 Amended and Restated as of October ___, 1997 FOR VALUE RECEIVED, the undersigned, WILMINGTON TRUST COMPANY, not in its individual capacity except as expressly stated in the Credit Agreement, as hereinafter defined, but solely as Owner Trustee (the "Borrower"), hereby unconditionally promises to pay to the order of ________________ (the "Lender") at the office of PNC Bank, National Association, located at ____________________________________________________, in lawful money of the United States of America and in immediately available funds, on the Maturity Date (as defined in the Credit Agreement referred to below), the principal amount of (a) ____________________________ DOLLARS ($___ _________________), or, if less, (b) the aggregate unpaid principal amount of all Tranche B Loans made by the Lender to the Borrower pursuant to Section 2.01 of such Credit Agreement. The Borrower further agrees to pay interest in like money at such office on the unpaid principal amount hereof from time to time outstanding at the rates and on the dates specified in Section 4.01 of such Credit Agreement. The holder of this Note is authorized to endorse on the schedules annexed hereto and made a part hereof or on a continuation thereof which shall be attached hereto and made a part hereof the date, Interest Rate Option and amount of each Tranche B Loan made pursuant to the Credit Agreement and the date and amount of each payment or prepayment of principal thereof, each continuation thereof, each conversion of all or a portion thereof to another Interest Rate Option and, in the case of Eurodollar Loans, the length of each Interest Period with respect thereto. Each such endorsement shall constitute prima facie evidence of the accuracy of the information endorsed. The failure to make any such endorsement or any error in such endorsement shall not affect the obligations of the Borrower in respect of such Tranche B Loan. This Note (a) is one of the Tranche B Notes referred to in the Amended and Restated Credit Agreement dated as of November 22, 1995 and amended and restated as of October ___, 1997 (as amended, supplemented or otherwise modified from time to time, the "Credit Agreement"), among the Borrower, the Lender, the other banks and financial institutions from time to time parties thereto and PNC Bank, National Association, administrative agent, (b) is subject to the provisions of the Credit Agreement and (c) is subject to optional and mandatory prepayment in whole or in part as provided in the Credit Agreement. This Note is secured and guaranteed as provided in the Credit Documents. Reference is hereby made to the Credit Documents for a description of the properties and assets in which a security interest hasbeen granted, the nature and extent of the security and the guarantees, the terms and conditions upon which the security interests and each guarantee were granted and the rights of the holder of this Note in respect thereof. Tranche B Note

Upon the occurrence of any one or more of the Events of Default, all amounts then remaining unpaid on this Note shall become, or may be declared to be, immediately due and payable, all as provided in the Credit Agreement. All parties now and hereafter liable with respect to this Note, whether maker, principal, surety, guarantor, endorser or otherwise, hereby waive presentment, demand, protest and all other notices of any kind. Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement. This Note is made by the Borrower in connection with the Credit Agreement. Any unpaid balance of the indebtedness evidenced by the Original Note remains outstanding as of the Effective Date. Any principal balance of this Note includes the Borrower's indebtedness evidenced by the Original Note and this Note (i) merely reevidences the indebtedness evidenced by the Original Note, (ii) is not given as payment of the Original Note and

Upon the occurrence of any one or more of the Events of Default, all amounts then remaining unpaid on this Note shall become, or may be declared to be, immediately due and payable, all as provided in the Credit Agreement. All parties now and hereafter liable with respect to this Note, whether maker, principal, surety, guarantor, endorser or otherwise, hereby waive presentment, demand, protest and all other notices of any kind. Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement. This Note is made by the Borrower in connection with the Credit Agreement. Any unpaid balance of the indebtedness evidenced by the Original Note remains outstanding as of the Effective Date. Any principal balance of this Note includes the Borrower's indebtedness evidenced by the Original Note and this Note (i) merely reevidences the indebtedness evidenced by the Original Note, (ii) is not given as payment of the Original Note and (iii) is in no way intended to, or shall, constitute a novation of the Original Note or any obligations of Borrower thereunder. THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. WILMINGTON TRUST COMPANY, not in its individual capacity except as expressly stated in the Credit Agreement, but solely as Owner Trustee By: Name: Title: Tranche B Note

Schedule A to Tranche B Note LOANS, CONVERSIONS AND REPAYMENTS OF BASE RATE BORROWING TRANCHE
Amount Converted to Base Rate Borrowing Tranche Amount of Principal of Base Rate Borrowing Tranche Repaid Amount of Base Rate Borrowing Tranche Converted to Euro-Rate Borrowing Tranche Unp Balan Bor

Date

Amount of Base Rate Borrowing Tranche

---------------------------------------------------------------------------------------------------------

---

-------------------------------------------- ----------------------

----------------------

----

--- -------------------------------------------- ----------------------

----------------------

-----

--- -------------------------------------------- ----------------------

----------------------

-----

--- -------------------------------------------- ----------------------

----------------------

-----

--- -------------------------------------------- ----------------------

----------------------

-----

--- -------------------------------------------- ----------------------

----------------------

-----

Schedule A to Tranche B Note LOANS, CONVERSIONS AND REPAYMENTS OF BASE RATE BORROWING TRANCHE
Amount Converted to Base Rate Borrowing Tranche Amount of Principal of Base Rate Borrowing Tranche Repaid Amount of Base Rate Borrowing Tranche Converted to Euro-Rate Borrowing Tranche Unp Balan Bor

Date

Amount of Base Rate Borrowing Tranche

---------------------------------------------------------------------------------------------------------

---

-------------------------------------------- ----------------------

----------------------

----

--- -------------------------------------------- ----------------------

----------------------

-----

--- -------------------------------------------- ----------------------

----------------------

-----

--- -------------------------------------------- ----------------------

----------------------

-----

--- -------------------------------------------- ----------------------

----------------------

-----

--- -------------------------------------------- ----------------------

----------------------

-----

--- -------------------------------------------- ----------------------

----------------------

-----

Schedule B to Tranche B Note LOANS, CONTINUATIONS, CONVERSIONS AND REPAYMENTS OF EURO-RATE BORROWING TRANCHE
Amount of EuroAmount of Rate Borrowing Principal of Euro- Tranche Converted Rate Borrowing to Base Rate Tranche Borrowing Tranche

Date

Amount of Euro- Amount Converted Rate Borrowing to Euro-Rate Tranche Borrowing Tranche

Interest Period and Euro-Rate with Respect Thereto

--------------------------------------------------------------------------------------------------------------------------------------------------------------- -----------------------------------

----------------------------------------

------------------ ------------------

------------------

---

Schedule B to Tranche B Note LOANS, CONTINUATIONS, CONVERSIONS AND REPAYMENTS OF EURO-RATE BORROWING TRANCHE
Amount of EuroAmount of Rate Borrowing Principal of Euro- Tranche Converted Rate Borrowing to Base Rate Tranche Borrowing Tranche

Date

Amount of Euro- Amount Converted Rate Borrowing to Euro-Rate Tranche Borrowing Tranche

Interest Period and Euro-Rate with Respect Thereto

--------------------------------------------------------------------------------------------------------------------------------------------------------------- -----------------------------------

----------------------------------------

------------------ ------------------

------------------

---

----------------------------------------

------------------ ------------------

------------------

---

----------------------------------------

------------------ ------------------

------------------

---

----------------------------------------

------------------ ------------------

------------------

---

Exhibit A-3 to Credit Agreement FORM OF SWING NOTE $15,000,000 New York, New York Dated as of November 22, 1995 Amended and Restated as of October ___, 1997 FOR VALUE RECEIVED, the undersigned, WILMINGTON TRUST COMPANY, not in its individual capacity except as expressly stated in the Credit Agreement, as hereinafter defined, but solely as Owner Trustee (the "Borrower"), hereby unconditionally promises to pay to the order of BANKERS TRUST COMPANY (the "Swing Lender") at the office of Bankers Trust Company, located at __________________________________________, in lawful money of the United States of America and in immediately available funds, on the Maturity Date (as defined in the Credit Agreement referred to below) the principal amount of (a) FIFTEEN MILLION DOLLARS ($15,000,000), or, if less, (b) the aggregate unpaid principal amount of all Swing Loans made by the Swing Lender to the undersigned pursuant to subsection 3.01 of the Credit Agreement. The Borrower further agrees to pay interest on the unpaid principal amount hereof in like money from time to time from the Effective Date at the rates and on the dates specified in subsection 4.05 of the Credit Agreement. The Swing Lender is authorized to record the information set forth in subsection 3.03 of the Credit Agreement on the schedule annexed hereto and made a part hereof and any such recordation shall constitute prima facie evidence of the accuracy of the information so recorded; provided that the failure of the Swing Lender to make such recordation (or any error in such recordation) shall not affect the obligations of the Borrower hereunder or under the Credit Agreement. This Note is (a) the Swing Note referred to in the Amended and Restated Credit Agreement, dated as of November 22, 1995 and amended and restated as of October ____, 1997 (as amended, supplemented or otherwise modified from time to time, the "Credit Agreement", among the Borrower, the Swing Lender, the other financial institutions from time to time parties thereto and PNC Bank, National Association, as administrative agent, (b) is subject to the provisions of the Credit Agreement and (c) is subject to optional and mandatory prepayment in whole or in part as provided in the Credit Agreement. This Note is secured and guaranteed as

Exhibit A-3 to Credit Agreement FORM OF SWING NOTE $15,000,000 New York, New York Dated as of November 22, 1995 Amended and Restated as of October ___, 1997 FOR VALUE RECEIVED, the undersigned, WILMINGTON TRUST COMPANY, not in its individual capacity except as expressly stated in the Credit Agreement, as hereinafter defined, but solely as Owner Trustee (the "Borrower"), hereby unconditionally promises to pay to the order of BANKERS TRUST COMPANY (the "Swing Lender") at the office of Bankers Trust Company, located at __________________________________________, in lawful money of the United States of America and in immediately available funds, on the Maturity Date (as defined in the Credit Agreement referred to below) the principal amount of (a) FIFTEEN MILLION DOLLARS ($15,000,000), or, if less, (b) the aggregate unpaid principal amount of all Swing Loans made by the Swing Lender to the undersigned pursuant to subsection 3.01 of the Credit Agreement. The Borrower further agrees to pay interest on the unpaid principal amount hereof in like money from time to time from the Effective Date at the rates and on the dates specified in subsection 4.05 of the Credit Agreement. The Swing Lender is authorized to record the information set forth in subsection 3.03 of the Credit Agreement on the schedule annexed hereto and made a part hereof and any such recordation shall constitute prima facie evidence of the accuracy of the information so recorded; provided that the failure of the Swing Lender to make such recordation (or any error in such recordation) shall not affect the obligations of the Borrower hereunder or under the Credit Agreement. This Note is (a) the Swing Note referred to in the Amended and Restated Credit Agreement, dated as of November 22, 1995 and amended and restated as of October ____, 1997 (as amended, supplemented or otherwise modified from time to time, the "Credit Agreement", among the Borrower, the Swing Lender, the other financial institutions from time to time parties thereto and PNC Bank, National Association, as administrative agent, (b) is subject to the provisions of the Credit Agreement and (c) is subject to optional and mandatory prepayment in whole or in part as provided in the Credit Agreement. This Note is secured and guaranteed as provided in the Credit Documents. Reference is hereby made to the Credit Documents for a description of the properties and assets in which a security interest has been granted, the nature and extent of the security interest and the guarantees, the terms and conditions upon which the security interests and each guarantee were granted and the rights of the Swing Lender in respect of this Note. Swing Note

Upon the occurrence of any one or more of the Events of Default, all amounts then remaining unpaid on this Note may become, or may be declared to be, immediately due and payable, all as provided in the Credit Agreement. All parties now and hereafter liable with respect to this Note, whether maker, principal, surety, guarantor, endorser or otherwise, hereby waive presentment, demand, protest and all other notices of any kind. Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement. This Note is made by the Borrower in connection with the Credit Agreement. Any unpaid balance of the indebtedness evidenced by the Original Note remains outstanding as of the Effective Date. Any principal balance of this Note includes the Borrower's indebtedness evidenced by the Original Note and this Note (i) merely reevidences the indebtedness evidenced by the Original Note, (ii) is not given as payment of the Original Note and (iii) is in no way intended to, or shall, constitute a novation of the Original Note or any obligations of Borrower thereunder.

Upon the occurrence of any one or more of the Events of Default, all amounts then remaining unpaid on this Note may become, or may be declared to be, immediately due and payable, all as provided in the Credit Agreement. All parties now and hereafter liable with respect to this Note, whether maker, principal, surety, guarantor, endorser or otherwise, hereby waive presentment, demand, protest and all other notices of any kind. Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement. This Note is made by the Borrower in connection with the Credit Agreement. Any unpaid balance of the indebtedness evidenced by the Original Note remains outstanding as of the Effective Date. Any principal balance of this Note includes the Borrower's indebtedness evidenced by the Original Note and this Note (i) merely reevidences the indebtedness evidenced by the Original Note, (ii) is not given as payment of the Original Note and (iii) is in no way intended to, or shall, constitute a novation of the Original Note or any obligations of Borrower thereunder. THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. WILMINGTON TRUST COMPANY, not in its individual capacity except as expressly stated in the Credit Agreement, but solely as Owner Trustee By: Name: Title: Swing Note

Schedule A to Swing Note LOANS AND REPAYMENT OF SWING LOANS
Amount of Principal Unpaid Principal Notation Made By Date Amount of Loans Repaid Balance of Loans ---------------------------------------------------------------------------------------------------------

----------

---------------------

-----------------------

--------------------

----------------

----------

---------------------

-----------------------

--------------------

----------------

----------

---------------------

-----------------------

--------------------

----------------

----------

---------------------

-----------------------

--------------------

----------------

----------

---------------------

-----------------------

--------------------

----------------

----------

---------------------

-----------------------

--------------------

----------------

----------

---------------------

-----------------------

--------------------

----------------

----------

---------------------

-----------------------

--------------------

----------------

Schedule A to Swing Note LOANS AND REPAYMENT OF SWING LOANS
Amount of Principal Unpaid Principal Notation Made By Date Amount of Loans Repaid Balance of Loans ---------------------------------------------------------------------------------------------------------

----------

---------------------

-----------------------

--------------------

----------------

----------

---------------------

-----------------------

--------------------

----------------

----------

---------------------

-----------------------

--------------------

----------------

----------

---------------------

-----------------------

--------------------

----------------

----------

---------------------

-----------------------

--------------------

----------------

----------

---------------------

-----------------------

--------------------

----------------

----------

---------------------

-----------------------

--------------------

----------------

----------

---------------------

-----------------------

--------------------

----------------

----------

---------------------

-----------------------

--------------------

----------------

----------

---------------------

-----------------------

--------------------

----------------

----------

---------------------

-----------------------

--------------------

----------------

----------

---------------------

-----------------------

--------------------

----------------

----------

---------------------

-----------------------

--------------------

----------------

----------

---------------------

-----------------------

--------------------

----------------

----------

---------------------

-----------------------

--------------------

----------------

----------

---------------------

-----------------------

--------------------

Swing Note

EXHIBIT B FORM OF REVOLVING CREDIT LOAN REQUEST [Date] PNC Bank, National Association as Administrative Agent for the Lenders party to the Credit Agreement referred to below One PNC Plaza, 4th Floor Annex 5th Avenue & Wood Street

EXHIBIT B FORM OF REVOLVING CREDIT LOAN REQUEST [Date] PNC Bank, National Association as Administrative Agent for the Lenders party to the Credit Agreement referred to below One PNC Plaza, 4th Floor Annex 5th Avenue & Wood Street Pittsburgh, Pennsylvania 15265 Attention: Multi-Bank Loan Administration - Arlene Ohler Telecopy (412) 762-8672 Ladies and Gentlemen: The undersigned, Wilmington Trust Company, not in its individual capacity except as expressly stated in the Amended and Restated Credit Agreement, as hereinafter defined, but solely as Owner Trustee (the "Borrower"), refers to the Credit Agreement, dated as of November 22, 1995 and amended and restated as of October ____, 1997 (as amended, modified or supplemented from time to time, the "Credit Agreement", the capitalized terms defined therein being used herein as therein defined), among the Borrower, the financial institutions from time to time party thereto (the "Lenders") and you, as Administrative Agent for such Lenders, and hereby gives you notice, irrevocably, pursuant to Section 2.02 of the Credit Agreement, that the undersigned hereby makes the following Revolving Credit Loan Request, and in that connection sets forth below the information relating to such Borrowing (the "Proposed Borrowing") as required by Section 2.02 of the Credit Agreement: (i) Proposed Borrowing Date (which must be a Business Day) is ______, 19__.(1) (ii) The Proposed Borrowing[s] [is] [are] to consist of [Euro-Rate Borrowing Tranche] [Base Rate Borrowing Tranche]. (iii) The aggregate principal amount of the Proposed Borrowing $_________.

(1) Shall be a Business Day at least one Business Day in the case of Base Rate Options and three Business Days in the case of Euro-Rate Options, in each case, after the date of the Revolving Credit Loan Request.

[(v) The initial Interest Period for the Proposed Borrowing is one month.](2) The undersigned hereby certifies that the following statements are true on the Effective Date, and will be true on the date of the Proposed Borrowing: (a) Each of the representations and warranties made by the Borrower or any Guarantor in or pursuant to the Operative Agreements shall be true and correct in all material respects on and as of such date as if made on and as of such date (except to the extent such representations and warranties expressly relate to an earlier date). (b) No Default or Event of Default shall have occurred and be continuing on such date or after giving effect to the Proposed Borrowing or from the application of the proceeds thereof. (c) With respect to each Project Loan, the applicable conditions precedent to the Advance associated therewith specified in Section 4.04, and Articles V and XIV of the Participation Agreement shall have been satisfied. Very truly yours, WILMINGTON TRUST COMPANY, not in its

[(v) The initial Interest Period for the Proposed Borrowing is one month.](2) The undersigned hereby certifies that the following statements are true on the Effective Date, and will be true on the date of the Proposed Borrowing: (a) Each of the representations and warranties made by the Borrower or any Guarantor in or pursuant to the Operative Agreements shall be true and correct in all material respects on and as of such date as if made on and as of such date (except to the extent such representations and warranties expressly relate to an earlier date). (b) No Default or Event of Default shall have occurred and be continuing on such date or after giving effect to the Proposed Borrowing or from the application of the proceeds thereof. (c) With respect to each Project Loan, the applicable conditions precedent to the Advance associated therewith specified in Section 4.04, and Articles V and XIV of the Participation Agreement shall have been satisfied. Very truly yours, WILMINGTON TRUST COMPANY, not in its individual capacity except as expressly stated in the Credit Agreement, but solely as Owner Trustee By: Title: (2) To be included for a Proposed Borrowing of Euro-Rate Borrowing Tranche.

EXHIBIT C FORM OF SWING LOAN REQUEST [Date] Bankers Trust Company, as Swing Lender Agent for the Lenders party to the Credit Agreement referred to below 280 Park Avenue New York, New York 10017 Attention:_________________________________ Copy to: One PNC Plaza, 4th Floor Annex 5th Avenue & Wood Street Pittsburgh, Pennsylvania 15265 Attention: Multi-Bank Loan Administration - Arlene Ohler Telecopy (412) 762-8672 Ladies and Gentlemen: The undersigned, Wilmington Trust Company, not in its individual capacity except as expressly stated in the Credit Agreement, as hereinafter defined, but solely as Owner Trustee (the "Borrower"), refers to the Amended and Restated Credit Agreement, dated as of November 22, 1995 and amended and restated as of October ____, 1997 (as amended, modified or supplemented from time to time, the "Credit Agreement", the capitalized terms defined therein being used herein as therein defined), among the Borrower, the financial institutions from time to time party thereto (the "Lenders") and PNC Bank, National Association, as Administrative Agent for such

EXHIBIT C FORM OF SWING LOAN REQUEST [Date] Bankers Trust Company, as Swing Lender Agent for the Lenders party to the Credit Agreement referred to below 280 Park Avenue New York, New York 10017 Attention:_________________________________ Copy to: One PNC Plaza, 4th Floor Annex 5th Avenue & Wood Street Pittsburgh, Pennsylvania 15265 Attention: Multi-Bank Loan Administration - Arlene Ohler Telecopy (412) 762-8672 Ladies and Gentlemen: The undersigned, Wilmington Trust Company, not in its individual capacity except as expressly stated in the Credit Agreement, as hereinafter defined, but solely as Owner Trustee (the "Borrower"), refers to the Amended and Restated Credit Agreement, dated as of November 22, 1995 and amended and restated as of October ____, 1997 (as amended, modified or supplemented from time to time, the "Credit Agreement", the capitalized terms defined therein being used herein as therein defined), among the Borrower, the financial institutions from time to time party thereto (the "Lenders") and PNC Bank, National Association, as Administrative Agent for such Lenders, and hereby gives you notice, irrevocably, pursuant to Section 3.02 of the Credit Agreement, that the undersigned hereby makes the following Swing Loan Request, and in that connection sets forth below the information relating to such Borrowing (the "Proposed Borrowing") as required by Section 3.02 of the Credit Agreement: (i) Proposed Borrowing Date (which must be a Business Day) is ______, 19__.(1) (ii) The aggregate principal amount of the Proposed Borrowing is $______________. (iii) The aggregate principal amount of the Proposed Borrowing is $__________.

(1) Shall be a Business Day at least one Business Day after the date of the Swing Loan Request.

The undersigned hereby certifies that the following statements are true on the Effective Date, and will be true on the date of the Proposed Borrowing: (a) Each of the representations and warranties made by the Borrower or any Guarantor in or pursuant to the Operative Agreements shall be true and correct in all material respects on and as of such date as if made on and as of such date (except to the extent such representations and warranties expressly relate to an earlier date). (b) No Default or Event of Default shall have occurred and be continuing on such date or after giving effect to the Proposed Borrowing or from the application of the proceeds thereof. (c) With respect to each Project Loan, the applicable conditions precedent to the Advance associated therewith specified in Section 4.04, and Articles V and XIV of the Participation Agreement shall have been satisfied. Very truly yours,

The undersigned hereby certifies that the following statements are true on the Effective Date, and will be true on the date of the Proposed Borrowing: (a) Each of the representations and warranties made by the Borrower or any Guarantor in or pursuant to the Operative Agreements shall be true and correct in all material respects on and as of such date as if made on and as of such date (except to the extent such representations and warranties expressly relate to an earlier date). (b) No Default or Event of Default shall have occurred and be continuing on such date or after giving effect to the Proposed Borrowing or from the application of the proceeds thereof. (c) With respect to each Project Loan, the applicable conditions precedent to the Advance associated therewith specified in Section 4.04, and Articles V and XIV of the Participation Agreement shall have been satisfied. Very truly yours, WILMINGTON TRUST COMPANY, not in its individual capacity except as expressly stated in the Credit Agreement, but solely as Owner Trustee By: Title:

EXHIBIT D FORM OF SWING LOAN PARTICIPATION CERTIFICATE _________ __, 199_ [Name of Lender] Ladies and Gentlemen: Pursuant to Section 3.04 of the Amended and Restated Credit Agreement, dated as of November 22, 1995 and amended and restated as of October ____, 1997 (as amended, modified or supplemented from time to time, the "Credit Agreement", the capitalized terms defined therein being used herein as therein defined), among the Borrower, you and other financial institutions from time to time party thereto (the "Lenders") and PNC Bank, National Association, as Administrative Agent for such Lenders, the undersigned hereby acknowledges receipt from you of $______________ as payment for a participating interest in the following Swing Loan: Date of Swing Loan: ____________________________ Principal Amount of Swing Loan: _________________ Very truly yours, BANKERS TRUST COMPANY By: Title:

EXHIBIT E

EXHIBIT D FORM OF SWING LOAN PARTICIPATION CERTIFICATE _________ __, 199_ [Name of Lender] Ladies and Gentlemen: Pursuant to Section 3.04 of the Amended and Restated Credit Agreement, dated as of November 22, 1995 and amended and restated as of October ____, 1997 (as amended, modified or supplemented from time to time, the "Credit Agreement", the capitalized terms defined therein being used herein as therein defined), among the Borrower, you and other financial institutions from time to time party thereto (the "Lenders") and PNC Bank, National Association, as Administrative Agent for such Lenders, the undersigned hereby acknowledges receipt from you of $______________ as payment for a participating interest in the following Swing Loan: Date of Swing Loan: ____________________________ Principal Amount of Swing Loan: _________________ Very truly yours, BANKERS TRUST COMPANY By: Title:

EXHIBIT E FORM OF RENEWAL/CONVERSION NOTICE
TO: PNC Bank, National Association, as Administrative Agent One PNC Plaza, 4th Floor Annex 5th Avenue & Wood Street Pittsburgh, Pennsylvania 15265 Attention: Multi-Bank Loan Administration - Arlene Ohler Telecopy (412) 762-8672 Borders Group, Inc. Amended and Restated Credit Agreement (the "Credit Agreement") dated as of November 22, 1995 and amended and restated as of October ____, 1997 by and among Wilmington Trust Company, not in its individual capacity but solely as Owner Trustee, as Borrower, the Lenders, as defined therein, and PNC Bank, National Association, as Administrative Agent. Pursuant to Section 4.02(b) of the Credit Agreement, the

FROM: RE:

undersigned hereby requests conversion of Revolving Credit Loans to a new Interest Rate Option or the continuation of an Interest Rate Option in respect of Revolving Credit Loans. 1. This Notice is for (choose one):
_______ a. Conversion of outstanding Base Rate Borrowing Tranche to Euro-Rate Borrowing

EXHIBIT E FORM OF RENEWAL/CONVERSION NOTICE
TO: PNC Bank, National Association, as Administrative Agent One PNC Plaza, 4th Floor Annex 5th Avenue & Wood Street Pittsburgh, Pennsylvania 15265 Attention: Multi-Bank Loan Administration - Arlene Ohler Telecopy (412) 762-8672 Borders Group, Inc. Amended and Restated Credit Agreement (the "Credit Agreement") dated as of November 22, 1995 and amended and restated as of October ____, 1997 by and among Wilmington Trust Company, not in its individual capacity but solely as Owner Trustee, as Borrower, the Lenders, as defined therein, and PNC Bank, National Association, as Administrative Agent. Pursuant to Section 4.02(b) of the Credit Agreement, the

FROM: RE:

undersigned hereby requests conversion of Revolving Credit Loans to a new Interest Rate Option or the continuation of an Interest Rate Option in respect of Revolving Credit Loans. 1. This Notice is for (choose one):
_______ a. Conversion of outstanding Base Rate Borrowing Tranche to Euro-Rate Borrowing Tranche Continuation of Euro-Rate Borrowing Tranche to a new Interest Period Conversion of outstanding Euro-Rate Borrowing Tranche to Base Rate Borrowing Tranche

_______ b.

_______ c.

2. Proposed date of conversion or continuation (which must be a Business Day and, if 1(b) or 1(c) above is chosen, must be last day of applicable Interest Period) 3. Aggregate principal amount of the Borrowing Tranche which is to be converted or continued $________________ 4. Interest Rate Option applicable to the new Borrowing Tranche and aggregate principal amount of such Borrowing Tranche:

_______ a.

Euro-Rate Option Aggregate principal amount of new Euro-Rate Borrowing Tranche $_______________

______ b.

Base Rate Option Aggregate principal amount of new Base Rate Borrowing Tranche $_______________

_______ a.

Euro-Rate Option Aggregate principal amount of new Euro-Rate Borrowing Tranche $_______________

______ b.

Base Rate Option Aggregate principal amount of new Base Rate Borrowing Tranche $_______________

5. The undersigned hereby certifies that the following statements are true on the Effective Date, and will be true on the date of the conversion or continuation of the Revolving Credit Loans: (a) Each of the representations and warranties made by the Borrower or any Guarantor in or pursuant to the Operative Agreements shall be true and correct in all material respects on and as of such date as if made on and as of such date (except to the extent such representations and warranties expressly relate to an earlier date). (b) No Default or Event of Default shall have occurred and be continuing on such date or after giving effect to the proposed conversion or continuation of the Revolving Credit Loans. (c) The conversion or continuation to a new Interest Rate Option shall not contravene any Law applicable to the Company or any of its Subsidiaries, any of the Agents or any of the Lenders. Capitalized terms used but not defined herein shall have the meanings given to them in Appendix A to the Credit Agreement.

The undersigned certifies to the accuracy of the foregoing. WILMINGTON TRUST COMPANY, not in its individual capacity except as expressly stated in the Credit Agreement, but solely as Owner Trustee By: Its: Date:

Exhibit J to Amended and Restated Credit Agreement FORM OF ASSIGNMENT AND ACCEPTANCE Reference is made to the Amended and Restated Credit Agreement, dated as of November 22, 1995 and amended and restated as of October ____, 1997 (as amended, supplemented or otherwise modified from time to time, the "Credit Agreement"), among WILMINGTON TRUST COMPANY, not in its individual capacity except as expressly stated in the Credit Agreement, but solely as Owner Trustee (the "Borrower"), the Lenders named therein and PNC Bank, National Association, as administrative agent for the Lenders (in such capacity, the "Administrative Agent"). Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement. ____________________ (the "Assignor") and ____________________ (the "Assignee") agree as follows: 1. The Assignor hereby irrevocably sells and assigns to the Assignee without recourse to the Assignor, and the

The undersigned certifies to the accuracy of the foregoing. WILMINGTON TRUST COMPANY, not in its individual capacity except as expressly stated in the Credit Agreement, but solely as Owner Trustee By: Its: Date:

Exhibit J to Amended and Restated Credit Agreement FORM OF ASSIGNMENT AND ACCEPTANCE Reference is made to the Amended and Restated Credit Agreement, dated as of November 22, 1995 and amended and restated as of October ____, 1997 (as amended, supplemented or otherwise modified from time to time, the "Credit Agreement"), among WILMINGTON TRUST COMPANY, not in its individual capacity except as expressly stated in the Credit Agreement, but solely as Owner Trustee (the "Borrower"), the Lenders named therein and PNC Bank, National Association, as administrative agent for the Lenders (in such capacity, the "Administrative Agent"). Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement. ____________________ (the "Assignor") and ____________________ (the "Assignee") agree as follows: 1. The Assignor hereby irrevocably sells and assigns to the Assignee without recourse to the Assignor, and the Assignee hereby irrevocably purchases and assumes from the Assignor without recourse to the Assignor, as of the Effective Date (as defined below), a ___% interest (the "Assigned Interest") in and to the Assignor's rights and obligations under the Credit Agreement with respect to those credit facilities contained in the Credit Agreement as are set forth on SCHEDULE 1 (individually, an "Assigned Facility"; collectively, the "Assigned Facilities"), in a principal amount for each Assigned Facility as set forth on SCHEDULE 1. 2. The Assignor (a) makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with the Credit Agreement or any other Operative Agreement or the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Credit Agreement, any other Operative Agreement or any other instrument or document furnished pursuant thereto, other than that it has not created any adverse claim upon the interest being assigned by it hereunder and that such interest is free and clear of any such adverse claim; (b) makes no representation or warranty and assumes no responsibility with respect to the financial condition of the Borrower, any Guarantor or any other obligor or the performance or observance by the Borrower, any Guarantor or any other obligor of any of their respective obligations under the Credit Agreement or any other Operative Agreement or any other instrument or document furnished pursuant hereto or thereto; and (c) attaches the Notes held by it evidencing the Assigned Facilities and requests that the Administrative Agent exchange such Notes for new Notes payable to the Assignor and (if the Assignor has retained any interest in the Assigned Facility) new Notes payable to the Assignee in the respective amounts which reflect the assignment being made hereby (and after giving effect to any other assignments which have become effective on the Effective Date).

3. The Assignee (a) represents and warrants that it is legally authorized to enter into this Assignment and Acceptance; (b) confirms that it has received copies of the Operative Agreements, together with copies of the financial statements delivered pursuant to Sections 13.01 and 13.02 of the Guarantee and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Acceptance; (c) agrees that it will, independently and without reliance upon the Assignor, the Administrative Agent or any other Lender and based on such documents and information as it shall deem

Exhibit J to Amended and Restated Credit Agreement FORM OF ASSIGNMENT AND ACCEPTANCE Reference is made to the Amended and Restated Credit Agreement, dated as of November 22, 1995 and amended and restated as of October ____, 1997 (as amended, supplemented or otherwise modified from time to time, the "Credit Agreement"), among WILMINGTON TRUST COMPANY, not in its individual capacity except as expressly stated in the Credit Agreement, but solely as Owner Trustee (the "Borrower"), the Lenders named therein and PNC Bank, National Association, as administrative agent for the Lenders (in such capacity, the "Administrative Agent"). Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement. ____________________ (the "Assignor") and ____________________ (the "Assignee") agree as follows: 1. The Assignor hereby irrevocably sells and assigns to the Assignee without recourse to the Assignor, and the Assignee hereby irrevocably purchases and assumes from the Assignor without recourse to the Assignor, as of the Effective Date (as defined below), a ___% interest (the "Assigned Interest") in and to the Assignor's rights and obligations under the Credit Agreement with respect to those credit facilities contained in the Credit Agreement as are set forth on SCHEDULE 1 (individually, an "Assigned Facility"; collectively, the "Assigned Facilities"), in a principal amount for each Assigned Facility as set forth on SCHEDULE 1. 2. The Assignor (a) makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with the Credit Agreement or any other Operative Agreement or the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Credit Agreement, any other Operative Agreement or any other instrument or document furnished pursuant thereto, other than that it has not created any adverse claim upon the interest being assigned by it hereunder and that such interest is free and clear of any such adverse claim; (b) makes no representation or warranty and assumes no responsibility with respect to the financial condition of the Borrower, any Guarantor or any other obligor or the performance or observance by the Borrower, any Guarantor or any other obligor of any of their respective obligations under the Credit Agreement or any other Operative Agreement or any other instrument or document furnished pursuant hereto or thereto; and (c) attaches the Notes held by it evidencing the Assigned Facilities and requests that the Administrative Agent exchange such Notes for new Notes payable to the Assignor and (if the Assignor has retained any interest in the Assigned Facility) new Notes payable to the Assignee in the respective amounts which reflect the assignment being made hereby (and after giving effect to any other assignments which have become effective on the Effective Date).

3. The Assignee (a) represents and warrants that it is legally authorized to enter into this Assignment and Acceptance; (b) confirms that it has received copies of the Operative Agreements, together with copies of the financial statements delivered pursuant to Sections 13.01 and 13.02 of the Guarantee and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Acceptance; (c) agrees that it will, independently and without reliance upon the Assignor, the Administrative Agent or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Credit Agreement, the other Operative Agreements or any other instrument or document furnished pursuant hereto or thereto; (d) appoints and authorizes the Administrative Agent to take such action as agent on its behalf and to exercise such powers and discretion under the Credit Agreement, the other Operative Agreements or any other instrument or document furnished pursuant hereto or thereto as are delegated to the Administrative Agent by the terms thereof, together with such powers as are incidental thereto; and (e) agrees that it will be bound by the provisions of the Credit Agreement and will perform in accordance with its terms all the obligations which by the terms of the Credit Agreement are required to be performed by it as a Lender including, if it is organized under the laws of a jurisdiction outside the United States, its obligation pursuant to Section 12.21 of the Credit Agreement. 4. The Effective Date of this Assignment and Acceptance shall be ____________ __, 19___ (the "Effective Date"). Following the execution of this Assignment and Acceptance, it will be delivered to the Administrative Agent for acceptance by it and recording by the Administrative Agent pursuant to Section 12.09 of the Credit

3. The Assignee (a) represents and warrants that it is legally authorized to enter into this Assignment and Acceptance; (b) confirms that it has received copies of the Operative Agreements, together with copies of the financial statements delivered pursuant to Sections 13.01 and 13.02 of the Guarantee and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Acceptance; (c) agrees that it will, independently and without reliance upon the Assignor, the Administrative Agent or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Credit Agreement, the other Operative Agreements or any other instrument or document furnished pursuant hereto or thereto; (d) appoints and authorizes the Administrative Agent to take such action as agent on its behalf and to exercise such powers and discretion under the Credit Agreement, the other Operative Agreements or any other instrument or document furnished pursuant hereto or thereto as are delegated to the Administrative Agent by the terms thereof, together with such powers as are incidental thereto; and (e) agrees that it will be bound by the provisions of the Credit Agreement and will perform in accordance with its terms all the obligations which by the terms of the Credit Agreement are required to be performed by it as a Lender including, if it is organized under the laws of a jurisdiction outside the United States, its obligation pursuant to Section 12.21 of the Credit Agreement. 4. The Effective Date of this Assignment and Acceptance shall be ____________ __, 19___ (the "Effective Date"). Following the execution of this Assignment and Acceptance, it will be delivered to the Administrative Agent for acceptance by it and recording by the Administrative Agent pursuant to Section 12.09 of the Credit Agreement, effective as of the Effective Date (which shall not, unless otherwise agreed to by the Administrative Agent, be earlier than five Business Days after the date of such acceptance and recording by the Administrative Agent). 5. Upon such acceptance and recording, from and after the Effective Date, the Administrative Agent shall make all payments in respect of the Assigned Interest (including payments of principal, interest, fees and other amounts) to the Assignee whether such amounts have accrued prior to the Effective Date or accrue subsequent to the Effective Date. The Assignor and the Assignee shall make all appropriate adjustments in payments by the Administrative Agent for periods prior to the Effective Date or with respect to the making of this assignment directly between themselves. 6. From and after the Effective Date, (a) the Assignee shall be a party to the Credit Agreement and, to the extent provided in this Assignment and Acceptance, have the rights and obligations of a Lender thereunder and under the other Operative Agreements and shall be bound by the provisions thereof and (b) the Assignor shall, to the extent provided in this Assignment and Acceptance, relinquish its rights and be released from its obligations under the Credit Agreement and the other Operative Agreements. 7. This Assignment and Acceptance shall be governed by and construed in accordance with the laws of the State of New York.

IN WITNESS WHEREOF, the parties hereto have caused this Assignment and Acceptance to be executed as of the date first above written by their respective duly authorized officers on Schedule 1 hereto.

SCHEDULE 1 TO ASSIGNMENT AND ACCEPTANCE RELATING TO THE AMENDED AND RESTATED CREDIT AGREEMENT, DATED AS OF NOVEMBER 22, 1995, AND AMENDED AND RESTATED AS OF OCTOBER ____, 1997, AMONG WILMINGTON TRUST COMPANY, NOT IN ITS INDIVIDUAL CAPACITY BUT SOLELY AS OWNER TRUSTEE THE LENDERS NAMED THEREIN AND PNC BANK, NATIONAL ASSOCIATION, AS ADMINISTRATIVE AGENT FOR THE LENDERS

IN WITNESS WHEREOF, the parties hereto have caused this Assignment and Acceptance to be executed as of the date first above written by their respective duly authorized officers on Schedule 1 hereto.

SCHEDULE 1 TO ASSIGNMENT AND ACCEPTANCE RELATING TO THE AMENDED AND RESTATED CREDIT AGREEMENT, DATED AS OF NOVEMBER 22, 1995, AND AMENDED AND RESTATED AS OF OCTOBER ____, 1997, AMONG WILMINGTON TRUST COMPANY, NOT IN ITS INDIVIDUAL CAPACITY BUT SOLELY AS OWNER TRUSTEE THE LENDERS NAMED THEREIN AND PNC BANK, NATIONAL ASSOCIATION, AS ADMINISTRATIVE AGENT FOR THE LENDERS (IN SUCH CAPACITY, THE "ADMINISTRATIVE AGENT")
-------------------------------------------------------------------------------Name of Assignor: Name of Assignee: Effective Date of Assignment: Credit Facility Assigned ----------------Principal Amount Assigned --------------$ ---------------

Commitment Percentage Assigned(1) --------------------------------. % --- ---------------

[Name of Assignee]

[Name of Assignor]

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

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

Title: Title:

(1) Calculate the Commitment Percentage that is assigned to at least 15 decimal places and show as a percentage of the aggregate commitments of all Lenders.

Consented To: BORDERS GROUP, INC. By: Name: Title: PNC BANK, NATIONAL ASSOCIATION as Administrative Agent

SCHEDULE 1 TO ASSIGNMENT AND ACCEPTANCE RELATING TO THE AMENDED AND RESTATED CREDIT AGREEMENT, DATED AS OF NOVEMBER 22, 1995, AND AMENDED AND RESTATED AS OF OCTOBER ____, 1997, AMONG WILMINGTON TRUST COMPANY, NOT IN ITS INDIVIDUAL CAPACITY BUT SOLELY AS OWNER TRUSTEE THE LENDERS NAMED THEREIN AND PNC BANK, NATIONAL ASSOCIATION, AS ADMINISTRATIVE AGENT FOR THE LENDERS (IN SUCH CAPACITY, THE "ADMINISTRATIVE AGENT")
-------------------------------------------------------------------------------Name of Assignor: Name of Assignee: Effective Date of Assignment: Credit Facility Assigned ----------------Principal Amount Assigned --------------$ ---------------

Commitment Percentage Assigned(1) --------------------------------. % --- ---------------

[Name of Assignee]

[Name of Assignor]

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

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

Title: Title:

(1) Calculate the Commitment Percentage that is assigned to at least 15 decimal places and show as a percentage of the aggregate commitments of all Lenders.

Consented To: BORDERS GROUP, INC. By: Name: Title: PNC BANK, NATIONAL ASSOCIATION as Administrative Agent By: Name: Title:

Consented To: BORDERS GROUP, INC. By: Name: Title: PNC BANK, NATIONAL ASSOCIATION as Administrative Agent By: Name: Title: [consents required only to the extent expressly provided in Section 12.08 of the Credit Agreement] Accepted for Recordation in the Register: PNC BANK, NATIONAL ASSOCIATION as Administrative Agent By: Name: Title:

EXHIBIT 10.42 EXECUTION COPY EXHIBIT F TO CREDIT AGREEMENT AMENDED AND RESTATED GUARANTEE AGREEMENT BY AND AMONG BORDERS GROUP, INC., BORDERS, INC., WALDEN BOOK COMPANY, INC., BORDERS PROPERTIES, INC., WALDENBOOKS PROPERTIES, INC., CERTAIN OTHER SUBSIDIARIES OF BORDERS GROUP, INC. AND PNC BANK, NATIONAL ASSOCIATION, as Administrative Agent FOR THE BENEFIT OF CERTAIN LENDERS

EXHIBIT 10.42 EXECUTION COPY EXHIBIT F TO CREDIT AGREEMENT AMENDED AND RESTATED GUARANTEE AGREEMENT BY AND AMONG BORDERS GROUP, INC., BORDERS, INC., WALDEN BOOK COMPANY, INC., BORDERS PROPERTIES, INC., WALDENBOOKS PROPERTIES, INC., CERTAIN OTHER SUBSIDIARIES OF BORDERS GROUP, INC. AND PNC BANK, NATIONAL ASSOCIATION, as Administrative Agent FOR THE BENEFIT OF CERTAIN LENDERS DATED AS OF NOVEMBER 22, 1995 AMENDED AND RESTATED AS OF OCTOBER 17, 1997

TABLE OF CONTENTS Page ARTICLE I. 1.01. 1.02. ARTICLE II. ARTICLE III. ARTICLE IV. ARTICLE V. ARTICLE VI. DEFINITIONS.........................................2 Defined Terms.......................................2 Accounting Principles...............................2 GUARANTEE...........................................2 RIGHT OF CONTRIBUTION...............................3 RIGHT OF SET-OFF....................................3 NO SUBROGATION......................................4 AMENDMENTS, ETC. WITH RESPECT TO THE OBLIGATIONS; WAIVER OF RIGHTS....................................4 GUARANTEE ABSOLUTE AND UNCONDITIONAL................5 REINSTATEMENT.......................................5 PAYMENTS............................................6 REPRESENTATIONS, WARRANTIES AND AGREEMENTS..........6 AFFIRMATIVE COVENANTS...............................6 Preservation of Existence, etc......................6 Payment of Liabilities, Including Taxes, etc........6 Maintenance of Insurance............................7

ARTICLE VII. ARTICLE VIII. ARTICLE IX. ARTICLE X. ARTICLE XI. 11.01. 11.02. 11.03.

TABLE OF CONTENTS Page ARTICLE I. 1.01. 1.02. ARTICLE II. ARTICLE III. ARTICLE IV. ARTICLE V. ARTICLE VI. DEFINITIONS.........................................2 Defined Terms.......................................2 Accounting Principles...............................2 GUARANTEE...........................................2 RIGHT OF CONTRIBUTION...............................3 RIGHT OF SET-OFF....................................3 NO SUBROGATION......................................4 AMENDMENTS, ETC. WITH RESPECT TO THE OBLIGATIONS; WAIVER OF RIGHTS....................................4 GUARANTEE ABSOLUTE AND UNCONDITIONAL................5 REINSTATEMENT.......................................5 PAYMENTS............................................6 REPRESENTATIONS, WARRANTIES AND AGREEMENTS..........6 AFFIRMATIVE COVENANTS...............................6 Preservation of Existence, etc......................6 Payment of Liabilities, Including Taxes, etc........6 Maintenance of Insurance............................7 Maintenance of Properties...........................7 Maintenance of Patents, Trademarks, etc.............7 Visitation Rights...................................7 Keeping of Records and Books of Account.............7 Plans and Benefit Arrangements......................8 Compliance with Laws................................8 Subsequent Credit Terms.............................8 [Reserved]..........................................8 Subsidiary Guarantees...............................8 NEGATIVE COVENANTS..................................8 Indebtedness........................................9 Liens..............................................10 Contingent Obligations.............................10 Loans and Investments..............................11

ARTICLE VII. ARTICLE VIII. ARTICLE IX. ARTICLE X. ARTICLE XI. 11.01. 11.02. 11.03. 11.04. 11.05. 11.06. 11.07. 11.08. 11.09. 11.10. 11.11. 11.12. ARTICLE XII. 12.01. 12.02. 12.03. 12.04.

Page 12.05. 12.06. 12.07. 12.08. 12.09. 12.10. 12.11. 12.12. 12.13. 12.14. 12.15. 12.16. 12.17. 12.18. 12.19. 12.20. 12.21. ARTICLE XIII. 13.01. 13.02. 13.03. 13.04. 13.05. 13.06. Dividends and Related Distributions.............13 Liquidations, Mergers, Consolidations...........14 Dispositions of Assets or Subsidiaries..........14 Affiliate Transactions..........................14 Subsidiaries, Partnerships and Joint Ventures...15 Continuation of or Change in Business...........15 Plans and Benefit Arrangements..................15 Fiscal Year.....................................15 Issuance of Stock...............................15 Changes in Organizational Documents.............16 Minimum Fixed Charge Coverage Ratio.............16 Maximum Leverage Ratio..........................16 Minimum Tangible Net Worth......................16 Modifications of Other Documents................16 Prepayment of Note Put Agreement Obligations....16 Foreign Activities..............................16 Inconsistent Agreements.........................17 REPORTING REQUIREMENTS..........................17 Quarterly Financial Statements..................17 Annual Financial Statements.....................17 Certificates of the Company.....................17 Notice of Default...............................18 Notice of Litigation............................18 Certain Events..................................18

Page 12.05. 12.06. 12.07. 12.08. 12.09. 12.10. 12.11. 12.12. 12.13. 12.14. 12.15. 12.16. 12.17. 12.18. 12.19. 12.20. 12.21. ARTICLE XIII. 13.01. 13.02. 13.03. 13.04. 13.05. 13.06. 13.07. 13.08. 13.09. 13.10. 13.11. ARTICLE XIV. ARTICLE XV. ARTICLE XVI. ARTICLE XVII. ARTICLE XVIII. Dividends and Related Distributions.............13 Liquidations, Mergers, Consolidations...........14 Dispositions of Assets or Subsidiaries..........14 Affiliate Transactions..........................14 Subsidiaries, Partnerships and Joint Ventures...15 Continuation of or Change in Business...........15 Plans and Benefit Arrangements..................15 Fiscal Year.....................................15 Issuance of Stock...............................15 Changes in Organizational Documents.............16 Minimum Fixed Charge Coverage Ratio.............16 Maximum Leverage Ratio..........................16 Minimum Tangible Net Worth......................16 Modifications of Other Documents................16 Prepayment of Note Put Agreement Obligations....16 Foreign Activities..............................16 Inconsistent Agreements.........................17 REPORTING REQUIREMENTS..........................17 Quarterly Financial Statements..................17 Annual Financial Statements.....................17 Certificates of the Company.....................17 Notice of Default...............................18 Notice of Litigation............................18 Certain Events..................................18 Other Reports and Information...................18 Notices Regarding Benefit Arrangements..........19 Access to the Company's Auditors................19 Notices Regarding Corporate Credit Agreement....19 Notices Regarding Repurchases of Stock..........19 AUTHORITY OF ADMINISTRATIVE AGENT...............20 NOTICES.........................................20 COUNTERPARTS....................................20 SEVERABILITY....................................20 INTEGRATION........ ............................21

- ii Page 21 21 21 21 21 22 23

ARTICLE XIX. ARTICLE XX. ARTICLE XXI. ARTICLE XXII. ARTICLE XXIII. ARTICLE XXIV. ARTICLE XXV.

AMENDMENTS IN WRITING; NO WAIVER; CUMULATIVE REMEDIES............. SECTION HEADINGS.................................................. SUCCESSORS AND ASSIGNS............................................ RELEASES OF GUARANTORS, ETC....................................... JURY TRIAL; SUBMISSION TO JURISDICTION; WAIVERS................... INDEMNITY......................................................... GOVERNING LAW.....................................................

SCHEDULE Schedule 1 Schedule 2 Schedule 5 Existing Liens Existing Indebtedness Employee Benefit Plan Disclosures

EXHIBITS Exhibit A Form of Compliance Certificate

ARTICLE XIX. ARTICLE XX. ARTICLE XXI. ARTICLE XXII. ARTICLE XXIII. ARTICLE XXIV. ARTICLE XXV.

AMENDMENTS IN WRITING; NO WAIVER; CUMULATIVE REMEDIES............. SECTION HEADINGS.................................................. SUCCESSORS AND ASSIGNS............................................ RELEASES OF GUARANTORS, ETC....................................... JURY TRIAL; SUBMISSION TO JURISDICTION; WAIVERS................... INDEMNITY......................................................... GOVERNING LAW.....................................................

Page 21 21 21 21 21 22 23

SCHEDULE Schedule 1 Schedule 2 Schedule 5 Existing Liens Existing Indebtedness Employee Benefit Plan Disclosures

EXHIBITS Exhibit A Form of Compliance Certificate

- iii -

AMENDED AND RESTATED GUARANTEE AGREEMENT, dated as of November 22, 1995 and amended and restated as of October 17, 1997, made by BORDERS GROUP, INC., a Michigan corporation (the "Company"), and each of the corporations that is a signatory hereto or to a letter agreement acknowledging that it is bound hereby (collectively, with the Company, the "Guarantors"), in favor of PNC BANK, NATIONAL ASSOCIATION, as administrative agent (in such capacity, the "Administrative Agent") for the lenders (the "Lenders") which are parties to that certain Amended and Restated Credit Agreement, dated as of November 22, 1995 and amended and restated as of the date hereof (as amended, supplemented, extended or otherwise modified from time to time, the "Credit Agreement"), among WILMINGTON TRUST COMPANY, not in its individual capacity except as provided in the Credit Agreement but solely as Owner Trustee (the "Borrower"), the Lenders, certain other agents and the Administrative Agent. W I T N E S S E T H: WHEREAS, pursuant to the Credit Agreement, the Lenders have severally agreed to make or maintain loans (the "Loans") to the Borrower upon the terms and subject to the conditions set forth therein, to be evidenced by the notes issued by the Borrower under the Credit Agreement; WHEREAS, each Guarantor will derive substantial direct and indirect benefit from the making and maintenance of the Loans; and WHEREAS, it is a condition precedent to the obligation of the Lenders to make and maintain their respective Loans to the Borrower under the Credit Agreement that the Guarantors shall have executed and delivered this Guarantee to the Administrative Agent for the ratable benefit of the Lenders. WHEREAS, the Company and certain of the Guarantors entered into the Guarantee Agreement dated November 22, 1995 in favor of Bankers Trust Company as agent for the Lenders (as heretofore amended, the "Prior Agreement"); and WHEREAS, those parties to the Prior Agreement desire to amend and restate the Prior Agreement to (i) substitute PNC Bank, National Association for Bankers Trust Company as the agent for the Lenders; (ii) add certain Guarantors, and (iii) amend certain other terms and conditions of the Prior Agreement. NOW, THEREFORE, in consideration of the premises and to induce the Administrative Agent and the Lenders

AMENDED AND RESTATED GUARANTEE AGREEMENT, dated as of November 22, 1995 and amended and restated as of October 17, 1997, made by BORDERS GROUP, INC., a Michigan corporation (the "Company"), and each of the corporations that is a signatory hereto or to a letter agreement acknowledging that it is bound hereby (collectively, with the Company, the "Guarantors"), in favor of PNC BANK, NATIONAL ASSOCIATION, as administrative agent (in such capacity, the "Administrative Agent") for the lenders (the "Lenders") which are parties to that certain Amended and Restated Credit Agreement, dated as of November 22, 1995 and amended and restated as of the date hereof (as amended, supplemented, extended or otherwise modified from time to time, the "Credit Agreement"), among WILMINGTON TRUST COMPANY, not in its individual capacity except as provided in the Credit Agreement but solely as Owner Trustee (the "Borrower"), the Lenders, certain other agents and the Administrative Agent. W I T N E S S E T H: WHEREAS, pursuant to the Credit Agreement, the Lenders have severally agreed to make or maintain loans (the "Loans") to the Borrower upon the terms and subject to the conditions set forth therein, to be evidenced by the notes issued by the Borrower under the Credit Agreement; WHEREAS, each Guarantor will derive substantial direct and indirect benefit from the making and maintenance of the Loans; and WHEREAS, it is a condition precedent to the obligation of the Lenders to make and maintain their respective Loans to the Borrower under the Credit Agreement that the Guarantors shall have executed and delivered this Guarantee to the Administrative Agent for the ratable benefit of the Lenders. WHEREAS, the Company and certain of the Guarantors entered into the Guarantee Agreement dated November 22, 1995 in favor of Bankers Trust Company as agent for the Lenders (as heretofore amended, the "Prior Agreement"); and WHEREAS, those parties to the Prior Agreement desire to amend and restate the Prior Agreement to (i) substitute PNC Bank, National Association for Bankers Trust Company as the agent for the Lenders; (ii) add certain Guarantors, and (iii) amend certain other terms and conditions of the Prior Agreement. NOW, THEREFORE, in consideration of the premises and to induce the Administrative Agent and the Lenders to enter into, and to amend and restate, the Credit Agreement and to induce the Lenders to make and maintain their respective Loans to the Borrower under the Credit Agreement, the Guarantors hereby agree with the Administrative Agent, for the ratable benefit of the Lenders, as follows:

ARTICLE I. DEFINITIONS 1.01. Defined Terms. Capitalized terms used but not otherwise defined in this Agreement shall have the meanings set forth in Appendix A hereto. 1.02. Accounting Principles. Except as otherwise provided in this Guarantee, all computations and determinations as to accounting or financial matters and all financial statements to be delivered pursuant to this Guarantee shall be made and prepared in accordance with GAAP (including principles of consolidation where appropriate), and all accounting or financial terms shall have the meanings ascribed to such terms by GAAP; provided, however, that if any change in GAAP or the application thereof occurs hereafter, or if the Company adopts a change to its accounting principles or methods with the agreement of its independent certified public accountants, and such change results in a change in the calculation of any financial covenant or restriction set forth herein, then the parties hereto agree to enter into and diligently pursue negotiations in order to amend such financial covenant or restriction so as to equitably reflect such change, with the desired result that the criteria for evaluating the financial condition and results of operations of the Company and its Subsidiaries shall be the same after such change as if such change had not been made. Pending the resolution of any such negotiations, the Guarantors agree to provide to each of the Lenders such unaudited financial information and pro forma statements using the accounting methods and principles used in the preparation of the audited financial statements for the fiscal year ended January 26, 1997, as are necessary to enable the Lenders to test the financial covenants contained herein.

ARTICLE I. DEFINITIONS 1.01. Defined Terms. Capitalized terms used but not otherwise defined in this Agreement shall have the meanings set forth in Appendix A hereto. 1.02. Accounting Principles. Except as otherwise provided in this Guarantee, all computations and determinations as to accounting or financial matters and all financial statements to be delivered pursuant to this Guarantee shall be made and prepared in accordance with GAAP (including principles of consolidation where appropriate), and all accounting or financial terms shall have the meanings ascribed to such terms by GAAP; provided, however, that if any change in GAAP or the application thereof occurs hereafter, or if the Company adopts a change to its accounting principles or methods with the agreement of its independent certified public accountants, and such change results in a change in the calculation of any financial covenant or restriction set forth herein, then the parties hereto agree to enter into and diligently pursue negotiations in order to amend such financial covenant or restriction so as to equitably reflect such change, with the desired result that the criteria for evaluating the financial condition and results of operations of the Company and its Subsidiaries shall be the same after such change as if such change had not been made. Pending the resolution of any such negotiations, the Guarantors agree to provide to each of the Lenders such unaudited financial information and pro forma statements using the accounting methods and principles used in the preparation of the audited financial statements for the fiscal year ended January 26, 1997, as are necessary to enable the Lenders to test the financial covenants contained herein. ARTICLE II. GUARANTEE. (a) Subject to the provisions of Section 2(b), each of the Guarantors hereby, jointly and severally, unconditionally and irrevocably, guarantees to the Administrative Agent, for the ratable benefit of the Lenders and their respective successors, indorsees, transferees and assigns, the prompt and complete payment by the Borrower when due (whether at the stated maturity, by acceleration or otherwise) of the Obligations. (b) Anything herein or in any other Credit Document to the contrary notwithstanding, (i) the Guarantors shall not at any time be required to make any payment hereunder in respect of the principal of any Tranche B Loans unless at such time a Lease Event of Default under any Lease has occurred and is continuing, and (ii) the maximum liability of each Guarantor hereunder shall in no event exceed the maximum amount which can be validly guaranteed by such Guarantor under applicable Laws relating to the insolvency of debtors. An acknowledgment of such limit may be contained in the letter agreement executed after the Effective Date by any additional Guarantor if required by applicable Law. (c) Each Guarantor further agrees, jointly and severally, to pay any and all reasonable expenses (including, without limitation, all fees and disbursements of counsel) which may be paid or incurred by any Agent or any Lender in enforcing, or obtaining advice of counsel in respect of, any rights with respect to, or collecting, any or all of the Obligations and/or enforcing any rights with respect to, or collecting against, any Guarantor under this Guarantee. This Guarantee shall remain in full force and effect until the Obligations and all amounts owing hereunder are paid in full and the Commitments are terminated, notwithstanding that from time to time prior thereto the Borrower may be free from any Obligations.

(d) Each Guarantor agrees that the Obligations may at any time and from time to time exceed the amount of the liability of such Guarantor hereunder without impairing this Guarantee or affecting the rights and remedies of any Agent or any Lender hereunder. (e) No payment or payments made by the Borrower, any of the Guarantors, any other guarantor or any other Person or received or collected by any Agent or any Lender from the Borrower, any of the Guarantors, any other guarantor or any other Person by virtue of any action or proceeding or any set-off or appropriation or application at any time or from time to time in reduction of or in payment of the Obligations shall be deemed to modify, reduce, release or otherwise affect the liability of any Guarantor hereunder which shall, notwithstanding any such payment or payments other than payments made by such Guarantor in respect of the Obligations or payments received or collected from such Guarantor in respect of the Obligations, remain liable for the Obligations up to the maximum liability of such Guarantor hereunder until the Obligations and all amounts owing hereunder are paid in full and the Commitments are terminated.

(d) Each Guarantor agrees that the Obligations may at any time and from time to time exceed the amount of the liability of such Guarantor hereunder without impairing this Guarantee or affecting the rights and remedies of any Agent or any Lender hereunder. (e) No payment or payments made by the Borrower, any of the Guarantors, any other guarantor or any other Person or received or collected by any Agent or any Lender from the Borrower, any of the Guarantors, any other guarantor or any other Person by virtue of any action or proceeding or any set-off or appropriation or application at any time or from time to time in reduction of or in payment of the Obligations shall be deemed to modify, reduce, release or otherwise affect the liability of any Guarantor hereunder which shall, notwithstanding any such payment or payments other than payments made by such Guarantor in respect of the Obligations or payments received or collected from such Guarantor in respect of the Obligations, remain liable for the Obligations up to the maximum liability of such Guarantor hereunder until the Obligations and all amounts owing hereunder are paid in full and the Commitments are terminated. (f) Each Guarantor agrees that whenever, at any time, or from time to time, it shall make any payment to any Agent or any Lender on account of its liability hereunder, it will notify the Administrative Agent in writing that such payment is made under this Guarantee for such purpose. ARTICLE III. RIGHT OF CONTRIBUTION. Each Guarantor hereby agrees that to the extent that a Guarantor shall have paid more than its proportionate share of any payment made hereunder, such Guarantor shall be entitled to seek and receive contribution from and against any other Guarantor hereunder who has not paid its proportionate share of such payment. Each Guarantor's right of contribution shall be subject to the terms and conditions of Article V hereof. The provisions of this Article III shall in no respect limit the obligations and liabilities of any Guarantor to the Agents and the Lenders, and each Guarantor shall remain liable to the Agents and the Lenders for the full amount guaranteed by such Guarantor hereunder. ARTICLE IV. RIGHT OF SET-OFF. In addition to any rights now or hereafter granted under applicable law or otherwise, and not by way of limitation of any such rights, upon the occurrence of a Lease Event of Default or an Event of Default under the Credit Agreement, each of the Agents, each Lender and each Participant is hereby authorized at any time or from time to time, without presentment, demand, protest or other notice of any kind to any Guarantor or to any other Person, any such notice being hereby expressly waived, to set off and to appropriate and apply any and all deposits (general or special) and any other Indebtedness at any time held or owing by the such Agent, such Lender or such Participant (including, without limitation, by branches and agencies of such Agent, such Lender or such Participant wherever located) to or for the credit or the account of any Guarantor against and on account of the obligations and liabilities of such Guarantor hereunder or under any of the other Operative Agreements, and all other claims of any nature or description arising out of or connected with this Guarantee or any other Operative Agreement, irrespective of whether or not such Agent, such Lender or such Participant shall have made any demand hereunder and although said obligations, liabilities or claims, or any of them, shall be contingent or unmatured.

ARTICLE V. NO SUBROGATION. Notwithstanding any payment or payments made by any of the Guarantors hereunder or any set-off or application of funds of any of the Guarantors by any Agent or any Lender, no Guarantor shall be entitled to be subrogated to any of the rights of any Agent or any Lender against the Borrower or any other Person or any collateral security or guarantee or right of offset held by any Agent or any Lender for the payment of the Obligations, nor shall any Guarantor seek or be entitled to seek any contribution or reimbursement from the Borrower or any other Person in respect of payments made by such Guarantor hereunder, until all amounts owing to the Agents and the Lenders by the Borrower on account of the Obligations and all amounts owing hereunder are paid in full and the Commitments are terminated. If any amount shall be paid to any Guarantor on account of such subrogation rights at any time when all of the Obligations and all amounts owing hereunder shall not have been paid in full or the Commitments shall not have been terminated, such amount shall be held by such Guarantor in trust for the Agents and the Lenders, segregated from other funds of such Guarantor, and shall, forthwith upon receipt by such Guarantor, be turned over to the Administrative Agent in the exact form received by such Guarantor (duly indorsed by such Guarantor to the Administrative Agent, if required), to be applied against the Obligations, whether matured or unmatured, in such order as the Administrative Agent may determine.

ARTICLE V. NO SUBROGATION. Notwithstanding any payment or payments made by any of the Guarantors hereunder or any set-off or application of funds of any of the Guarantors by any Agent or any Lender, no Guarantor shall be entitled to be subrogated to any of the rights of any Agent or any Lender against the Borrower or any other Person or any collateral security or guarantee or right of offset held by any Agent or any Lender for the payment of the Obligations, nor shall any Guarantor seek or be entitled to seek any contribution or reimbursement from the Borrower or any other Person in respect of payments made by such Guarantor hereunder, until all amounts owing to the Agents and the Lenders by the Borrower on account of the Obligations and all amounts owing hereunder are paid in full and the Commitments are terminated. If any amount shall be paid to any Guarantor on account of such subrogation rights at any time when all of the Obligations and all amounts owing hereunder shall not have been paid in full or the Commitments shall not have been terminated, such amount shall be held by such Guarantor in trust for the Agents and the Lenders, segregated from other funds of such Guarantor, and shall, forthwith upon receipt by such Guarantor, be turned over to the Administrative Agent in the exact form received by such Guarantor (duly indorsed by such Guarantor to the Administrative Agent, if required), to be applied against the Obligations, whether matured or unmatured, in such order as the Administrative Agent may determine. ARTICLE VI. AMENDMENTS, ETC. WITH RESPECT TO THE OBLIGATIONS; WAIVER OF RIGHTS. Each Guarantor shall remain obligated hereunder notwithstanding that, without any reservation of rights against any Guarantor and without notice to or further assent by any Guarantor, any demand for payment of any of the Obligations made by any Agent or any Lender may be rescinded by such party and any of the Obligations continued, and the Obligations, or the liability of any other party upon or for any part thereof, or any collateral security or guarantee therefor or right of offset with respect thereto, may, from time to time, in whole or in part, be renewed, extended, amended, modified, accelerated, compromised, waived, surrendered or released by any Agent or any Lender, and the Credit Agreement and the other Operative Agreements and any other documents executed and delivered in connection therewith may be amended, modified, supplemented or terminated, in whole or in part, as the Administrative Agent (or the Required Lenders, as the case may be) may deem advisable from time to time, and any collateral security, guarantee or right of offset at any time held by any Agent or any Lender for the payment of the Obligations may be sold, exchanged, waived, surrendered or released. Neither any Agent nor any Lender shall have any obligation to protect, secure, perfect or insure any Lien at any time held by it as security for the Obligations or for this Guarantee or any property subject thereto. When making any demand hereunder against any of the Guarantors, any Agent or any Lender may, but shall be under no obligation to, make a similar demand on the Borrower or any other Guarantor or guarantor, and any failure by any Agent or any Lender to make any such demand or to collect any payments from the Borrower or any such other Guarantor or guarantor or any release of the Borrower or such other Guarantor or guarantor shall not relieve any of the Guarantors in respect of which a demand or collection is not made or any of the Guarantors not so released of their several obligations or liabilities hereunder, and shall not impair or affect the rights and remedies, express or implied, or as a matter of law, of any Agent or any Lender against any of the Guarantors. For the purposes hereof "demand" shall include the commencement and continuance of any legal proceedings.

ARTICLE VII. GUARANTEE ABSOLUTE AND UNCONDITIONAL. Each Guarantor waives any and all notice of the creation, renewal, extension or accrual of any of the Obligations and notice of or proof of reliance by any Agent or any Lender upon this Guarantee or acceptance of this Guarantee; the Obligations, and any of them, shall conclusively be deemed to have been created, contracted or incurred, or renewed, extended, amended or waived, in reliance upon this Guarantee; and all dealings between the Borrower and any of the Guarantors, on the one hand, and any Agent and the Lenders, on the other hand, likewise shall be conclusively presumed to have been had or consummated in reliance upon this Guarantee. Each Guarantor waives diligence, presentment, protest, demand for payment and notice of default or nonpayment to or upon the Borrower or any of the Guarantors with respect to the Obligations. Each Guarantor understands and agrees that this Guarantee shall be construed as a continuing, absolute and unconditional guarantee of payment without regard to (a) the validity, regularity or enforceability of the Credit Agreement or any other Operative Agreement, any of the Obligations or any other collateral security therefor or guarantee or right of offset with respect thereto at any time or from time to time held by any Agent or any Lender, (b) any defense, set-off or counterclaim (other than a defense of payment or performance) which may at any time be available to or be asserted by the Borrower against any Agent or any Lender, or (c) any other circumstance whatsoever (with or without notice to or knowledge of the Borrower or such Guarantor) which constitutes, or might be construed to constitute, an equitable or legal discharge of the Borrower for the Obligations, or of such Guarantor under this Guarantee, in

ARTICLE VII. GUARANTEE ABSOLUTE AND UNCONDITIONAL. Each Guarantor waives any and all notice of the creation, renewal, extension or accrual of any of the Obligations and notice of or proof of reliance by any Agent or any Lender upon this Guarantee or acceptance of this Guarantee; the Obligations, and any of them, shall conclusively be deemed to have been created, contracted or incurred, or renewed, extended, amended or waived, in reliance upon this Guarantee; and all dealings between the Borrower and any of the Guarantors, on the one hand, and any Agent and the Lenders, on the other hand, likewise shall be conclusively presumed to have been had or consummated in reliance upon this Guarantee. Each Guarantor waives diligence, presentment, protest, demand for payment and notice of default or nonpayment to or upon the Borrower or any of the Guarantors with respect to the Obligations. Each Guarantor understands and agrees that this Guarantee shall be construed as a continuing, absolute and unconditional guarantee of payment without regard to (a) the validity, regularity or enforceability of the Credit Agreement or any other Operative Agreement, any of the Obligations or any other collateral security therefor or guarantee or right of offset with respect thereto at any time or from time to time held by any Agent or any Lender, (b) any defense, set-off or counterclaim (other than a defense of payment or performance) which may at any time be available to or be asserted by the Borrower against any Agent or any Lender, or (c) any other circumstance whatsoever (with or without notice to or knowledge of the Borrower or such Guarantor) which constitutes, or might be construed to constitute, an equitable or legal discharge of the Borrower for the Obligations, or of such Guarantor under this Guarantee, in bankruptcy or in any other instance. When pursuing its rights and remedies hereunder against any Guarantor, any Agent and any Lender may, but shall be under no obligation to, pursue such rights and remedies as it may have against the Borrower or any other Person or against any collateral security or guarantee for the Obligations or any right of offset with respect thereto, and any failure by any Agent or any Lender to pursue such other rights or remedies or to collect any payments from the Borrower or any such other Person or to realize upon any such collateral security or guarantee or to exercise any such right of offset, or any release of the Borrower or any such other Person or any such collateral security, guarantee or right of offset, shall not relieve such Guarantor of any liability hereunder, and shall not impair or affect the rights and remedies, whether express, implied or available as a matter of law, of the Agents and the Lenders against such Guarantor. This Guarantee shall remain in full force and effect and be binding in accordance with and to the extent of its terms upon each Guarantor and the successors and assigns thereof, and shall inure to the benefit of the Agents and the Lenders, and their respective successors, indorsees, transferees and assigns, until all the Obligations and the obligations of each Guarantor under this Guarantee shall have been satisfied by payment in full and the Commitments shall be terminated, notwithstanding that from time to time during the term of the Credit Agreement the Borrower may be free from any Obligations. ARTICLE VIII. REINSTATEMENT. This Guarantee shall continue to be effective, or be reinstated, as the case may be, if at any time payment, or any part thereof, of any of the Obligations is rescinded or must otherwise be restored or returned by any Agent or any Lender upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of the Borrower or any Guarantor, or upon or as a result of the appointment of a receiver, intervenor or conservator of, or trustee or similar officer for, the Borrower or any Guarantor or any substantial part of its property, or otherwise, all as though such payments had not been made.

ARTICLE IX. PAYMENTS. Each Guarantor hereby guarantees that payments hereunder will be paid to the Administrative Agent without set-off or counterclaim in U.S. Dollars at the Principal Office of the Administrative Agent. ARTICLE X. REPRESENTATIONS, WARRANTIES AND AGREEMENTS. In order to induce the Lenders to enter into, and to amend and restate, the Credit Agreement and to make and maintain the Loans as provided for therein, each Guarantor makes the representations and warranties contained in Section 7.03 of the Participation Agreement to, and agrees with, the Agents and the Lenders, all of which shall survive the execution and delivery of the Credit Documents and the making of the Loans (with the occurrence of each borrowing under the Credit Agreement being deemed to constitute a representation and warranty that the matters specified in this Article X are true and correct in all material respects on and as of, and after giving effect to, the Effective Date and as of the date of each such borrowing unless such representation and warranty expressly indicates that it is being made as of any specific date in which case such representation and warranty shall be true and correct in all material respects as of such specific date). ARTICLE XI. AFFIRMATIVE COVENANTS. Each Guarantor hereby covenants and agrees that on the

ARTICLE IX. PAYMENTS. Each Guarantor hereby guarantees that payments hereunder will be paid to the Administrative Agent without set-off or counterclaim in U.S. Dollars at the Principal Office of the Administrative Agent. ARTICLE X. REPRESENTATIONS, WARRANTIES AND AGREEMENTS. In order to induce the Lenders to enter into, and to amend and restate, the Credit Agreement and to make and maintain the Loans as provided for therein, each Guarantor makes the representations and warranties contained in Section 7.03 of the Participation Agreement to, and agrees with, the Agents and the Lenders, all of which shall survive the execution and delivery of the Credit Documents and the making of the Loans (with the occurrence of each borrowing under the Credit Agreement being deemed to constitute a representation and warranty that the matters specified in this Article X are true and correct in all material respects on and as of, and after giving effect to, the Effective Date and as of the date of each such borrowing unless such representation and warranty expressly indicates that it is being made as of any specific date in which case such representation and warranty shall be true and correct in all material respects as of such specific date). ARTICLE XI. AFFIRMATIVE COVENANTS. Each Guarantor hereby covenants and agrees that on the Effective Date and thereafter, for so long as this Guarantee is in effect and until the Commitments have terminated and the Obligations and all amounts owing hereunder are paid in full: 11.01. Preservation of Existence, etc. Each Guarantor shall, and shall cause each of its Subsidiaries to maintain its corporate existence and its license or qualification and good standing in each jurisdiction in which its ownership or lease of property or the nature of its business makes such license or qualification necessary; provided that (a) the Guarantors may engage in transactions permitted by Section 12.06, and (b) with respect to Subsidiaries of the Guarantors (other than the Guarantors themselves), such Subsidiaries may fail to do so to the extent that such failure individually or in the aggregate could not reasonably be expected to have a Material Adverse Effect. 11.02. Payment of Liabilities, Including Taxes, etc. Each Guarantor shall, and shall cause each of its Subsidiaries to, duly pay and discharge all liabilities to which it is subject or which are asserted against it, promptly as and when the same shall become due and payable, including all taxes, assessments and governmental charges upon it or any of its Properties, income or profits, prior to the date on which penalties attach thereto, except to the extent that such liabilities, including taxes, assessments or charges, are being contested in good faith and by appropriate and lawful proceedings diligently conducted and for which such reserve or other appropriate provisions, if any, as shall be required by GAAP shall have been made, and except to the extent that failure to discharge any such liabilities individually or in the aggregate could not reasonably be expected to have a Material Adverse Effect; provided that the Guarantors and their Subsidiaries will pay all such liabilities forthwith upon the commencement of proceedings to foreclose any Lien which may have attached as security therefor.

11.03. Maintenance of Insurance. Each Guarantor shall, and shall cause each of its Subsidiaries to, insure its Properties against loss or damage by fire and such other insurable hazards as such assets are commonly insured (including fire, extended coverage, property damage, worker's compensation, public liability and business interruption insurance) and against other risks (including errors and omissions) in such amounts as similar properties and assets are insured by prudent companies in similar circumstances carrying on similar businesses, and with reputable and financially sound insurers, including self-insurance to the extent customary, all as reasonably determined by the Administrative Agent. At the request of the Administrative Agent, the Company shall deliver from time to time a summary schedule indicating all insurance then in force with respect to each of the Guarantors. 11.04. Maintenance of Properties. Each Guarantor shall, and shall cause each of its Subsidiaries to, maintain in good repair, working order and condition (ordinary wear and tear excepted) in accordance with the general practice of other businesses of similar character and size, all Property useful or necessary to its business, and from time to time, each such Guarantor will make or cause to be made all appropriate repairs, renewals or replacements thereof 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. 11.05. Maintenance of Patents, Trademarks, etc. Each Guarantor shall, and shall cause each of its Subsidiaries to, maintain in full force and effect all patents, trademarks, trade names, copyrights, licenses, franchises, permits

11.03. Maintenance of Insurance. Each Guarantor shall, and shall cause each of its Subsidiaries to, insure its Properties against loss or damage by fire and such other insurable hazards as such assets are commonly insured (including fire, extended coverage, property damage, worker's compensation, public liability and business interruption insurance) and against other risks (including errors and omissions) in such amounts as similar properties and assets are insured by prudent companies in similar circumstances carrying on similar businesses, and with reputable and financially sound insurers, including self-insurance to the extent customary, all as reasonably determined by the Administrative Agent. At the request of the Administrative Agent, the Company shall deliver from time to time a summary schedule indicating all insurance then in force with respect to each of the Guarantors. 11.04. Maintenance of Properties. Each Guarantor shall, and shall cause each of its Subsidiaries to, maintain in good repair, working order and condition (ordinary wear and tear excepted) in accordance with the general practice of other businesses of similar character and size, all Property useful or necessary to its business, and from time to time, each such Guarantor will make or cause to be made all appropriate repairs, renewals or replacements thereof 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. 11.05. Maintenance of Patents, Trademarks, etc. Each Guarantor shall, and shall cause each of its Subsidiaries to, maintain in full force and effect all patents, trademarks, trade names, copyrights, licenses, franchises, permits and other authorizations necessary for the ownership and operation of its properties and business, except to the extent that the failure so to maintain the same individually or in the aggregate could not reasonably be expected to have a Material Adverse Effect. 11.06. Visitation Rights. Each Guarantor shall, and shall cause each of its Subsidiaries to, permit any of the officers or authorized employees or representatives of the Administrative Agent or any of the Lenders to visit and inspect any of its properties and to examine and make excerpts from its books and records and discuss its business affairs, finances and accounts with its officers, all in such detail and at such times and as often as any of the Lenders may reasonably request. Each Lender shall provide the Company and the Administrative Agent with reasonable notice prior to any visit or inspection; provided that no such notice shall be required after the occurrence and during the continuation of a Lease Default or a Lease Event of Default. In the event any Lender desires to conduct an audit of any Guarantor, such Lender shall make a reasonable effort to conduct such audit contemporaneously with any audit to be performed by the Administrative Agent. At the request of the Administrative Agent, but not more frequently than once a year, the Guarantors and their respective Authorized Officers shall hold a meeting of the Lenders, at which the Guarantors will present an analysis of the financial performance of the Company and its Subsidiaries during the previous Fiscal Year and a discussion of the expected results of operations for the then current Fiscal Year. 11.07. Keeping of Records and Books of Account. The Company shall, and shall cause each Subsidiary of the Company to, maintain and keep proper books of record and account which enable the Company and its Subsidiaries to issue financial statements in accordance with GAAP and as otherwise required by applicable Laws or any Official Body having jurisdiction over the Company or any Subsidiary of the Company, and in which full, true and correct entries shall be made in all material respects of all its dealings and business and financial affairs.

11.08. Plans and Benefit Arrangements. The Company shall, and shall cause each of its Subsidiaries to, comply with ERISA, the Internal Revenue Code and other applicable Laws applicable to Benefit Arrangements except where failure to comply individually or in the aggregate could not reasonably be expected to have a Material Adverse Effect. Without limiting the generality of the foregoing, the Company shall make, and cause each of its Subsidiaries to make, in a timely manner, all contributions due to Benefit Arrangements. 11.09. Compliance with Laws. Each Guarantor shall, and shall cause each of its Subsidiaries to, comply with all applicable Laws, including all Environmental Laws, in all respects, provided that it shall not be deemed to be a violation of this Section 11.09 if any failure to comply with any Law would not result in fines, penalties, remediation costs, other similar liabilities or injunctive relief which individually or in the aggregate could reasonably be expected to have a Material Adverse Effect.

11.08. Plans and Benefit Arrangements. The Company shall, and shall cause each of its Subsidiaries to, comply with ERISA, the Internal Revenue Code and other applicable Laws applicable to Benefit Arrangements except where failure to comply individually or in the aggregate could not reasonably be expected to have a Material Adverse Effect. Without limiting the generality of the foregoing, the Company shall make, and cause each of its Subsidiaries to make, in a timely manner, all contributions due to Benefit Arrangements. 11.09. Compliance with Laws. Each Guarantor shall, and shall cause each of its Subsidiaries to, comply with all applicable Laws, including all Environmental Laws, in all respects, provided that it shall not be deemed to be a violation of this Section 11.09 if any failure to comply with any Law would not result in fines, penalties, remediation costs, other similar liabilities or injunctive relief which individually or in the aggregate could reasonably be expected to have a Material Adverse Effect. 11.10. Subsequent Credit Terms. The Company shall notify the Administrative Agent in writing not less than ten (10) Business Days prior to any Guarantor entering into any credit agreement or any amendment or modification to any existing credit agreement in either case as otherwise permitted hereunder, pursuant to which any Guarantor agrees to representations, warranties or covenants which are more restrictive, as determined in the sole discretion of the Administrative Agent, than the representations, warranties or covenants contained herein (the "More Restrictive Provisions"). Upon the execution of such new credit agreement, amendment or modification, the corresponding covenants, terms and conditions of this Guarantee shall be and shall be deemed to be automatically and immediately amended to conform with and to include the applicable More Restrictive Provisions of such new credit agreement, amendment or modification; provided, that the foregoing shall not be applicable to or be deemed to affect any provision of this Guarantee if any new credit agreement, amendment or modification is less restrictive. Each of the Guarantors hereby agrees promptly to execute and deliver any and all such documents and instruments and to take all such further actions as the Administrative Agent may, in its sole discretion, deem necessary or appropriate to effectuate the provisions of this Section 11.10. 11.11. [Reserved] 11.12. Subsidiary Guarantees. If (i) any Restricted Subsidiary's total assets determined in accordance with GAAP at the end of any Fiscal Quarter constitute more than 10% of Consolidated Tangible Net Worth determined at the end of such Fiscal Quarter or (ii) any Restricted Subsidiary's net income determined in accordance with GAAP for any rolling four Fiscal Quarter period exceeds 10% of Consolidated Net Income for such four Fiscal Quarters, the Company shall cause such Restricted Subsidiary to execute a letter agreement in form and substance satisfactory to the Administrative Agent pursuant to which such Restricted Subsidiary shall become a Guarantor hereunder and to deliver such legal opinions and other documents and instruments as the Administrative Agent may request. Such letter agreement may include a limitation on amount or a limitation on scope of such Guarantor's obligations, in a form and substance satisfactory to the Administrative Agent to the extent required by law or tax considerations. ARTICLE XII. NEGATIVE COVENANTS. The Guarantors, jointly and severally, covenant and agree that until payment in full of the Loans and interest thereon,

satisfaction of all of the Obligations under the Operative Agreements and termination of the Commitments, the Guarantors shall comply at all times with the following negative covenants: 12.01. Indebtedness. Each of the Guarantors shall not, and shall not permit any of its Subsidiaries to, at any time create, incur, assume or suffer to exist any Indebtedness, except: (a) Indebtedness under the Operative Agreements; (b) Indebtedness existing on the Effective Date as set forth on Schedule 2, including Indebtedness under the Corporate Credit Agreement (and any extensions or renewals thereof provided there is no increase in the amount thereof or other significant change in the terms thereof unless otherwise specified on Schedule 2); (c) Capitalized Lease Obligations;

satisfaction of all of the Obligations under the Operative Agreements and termination of the Commitments, the Guarantors shall comply at all times with the following negative covenants: 12.01. Indebtedness. Each of the Guarantors shall not, and shall not permit any of its Subsidiaries to, at any time create, incur, assume or suffer to exist any Indebtedness, except: (a) Indebtedness under the Operative Agreements; (b) Indebtedness existing on the Effective Date as set forth on Schedule 2, including Indebtedness under the Corporate Credit Agreement (and any extensions or renewals thereof provided there is no increase in the amount thereof or other significant change in the terms thereof unless otherwise specified on Schedule 2); (c) Capitalized Lease Obligations; (d) interest rate swap, cap, collar or floor agreements or other interest rate management devices with any Lender, referencing an aggregate notional amount not to exceed, based on the reasonable business judgment of the Company, the maximum principal amount outstanding at any time of all Indebtedness of the Company and its Subsidiaries on a consolidated basis plus an amount equal to 50% of Capitalized Rent Expense, with such interest rate management devices to be entered into for hedging purposes only and not for speculation; (e) Indebtedness secured by Purchase Money Security Interests, so long as the amount of such Indebtedness does not exceed the purchase price of the property which is subject to such Purchase Money Security Interests; (f) Indebtedness of an Unrestricted Subsidiary which is a Domestic Subsidiary to another Unrestricted Subsidiary which is a Domestic Subsidiary or to the Company; (g) Indebtedness of the Company to an Unrestricted Subsidiary which is a Domestic Subsidiary so long as such Indebtedness is unsecured; (h) Contingent Obligations as and to the extent permitted under Section 12.03; (i) Indebtedness of the Company and its Domestic Subsidiaries in addition to Indebtedness otherwise permitted by clauses (a) to (h) above with an aggregate principal Dollar Equivalent amount outstanding not to exceed 20% of Consolidated Tangible Net Worth (determined as of the last day of the Fiscal Quarter most recently ended); (j) unsecured Indebtedness of Foreign Subsidiaries with an aggregate principal Dollar Equivalent amount outstanding not to exceed $10,000,000 or Indebtedness of one Foreign Subsidiary to another Foreign Subsidiary;

(k) Permitted Sutro Refinancing Indebtedness, so long as (A) the aggregate principal amount of any such Indebtedness outstanding does not exceed $36,000,000, (B) the aggregate principal amount of any such Indebtedness incurred, at the date of incurrence, is at least 85% of the face value of the amount of "Notes" (as defined in the Note Put Agreements) purchased by Borders as required by Section 2.2 of the Note Purchase Agreements, (C) any such Indebtedness is incurred no sooner than the relevant "Tenant Purchase Date" (as defined in the Note Put Agreements), (D) the representations, warranties and covenants contained in the documentation with respect to any such Indebtedness are no more restrictive, as determined in the reasonable discretion of the Administrative Agent, than the representations, warranties or covenants hereof, (E) the maturity of any such Indebtedness is not less than two years from the date of incurrence, and (F) on or before the date of incurrence, the Guarantors shall have delivered to the Lenders proforma financial statements, in form and substance satisfactory to the Lenders, showing that, during the term of such Indebtedness, based on reasonable projections of the financial performance of the Guarantors, the Guarantors will not be in violation of any of the financial covenants contained in this Article XII; (l) Any refinancing of any or all of the Indebtedness of the Guarantors under the Guarantee on substantially the terms described in Section 21.1 of the Form of Lease attached as Exhibit G to the Participation Agreement.

(k) Permitted Sutro Refinancing Indebtedness, so long as (A) the aggregate principal amount of any such Indebtedness outstanding does not exceed $36,000,000, (B) the aggregate principal amount of any such Indebtedness incurred, at the date of incurrence, is at least 85% of the face value of the amount of "Notes" (as defined in the Note Put Agreements) purchased by Borders as required by Section 2.2 of the Note Purchase Agreements, (C) any such Indebtedness is incurred no sooner than the relevant "Tenant Purchase Date" (as defined in the Note Put Agreements), (D) the representations, warranties and covenants contained in the documentation with respect to any such Indebtedness are no more restrictive, as determined in the reasonable discretion of the Administrative Agent, than the representations, warranties or covenants hereof, (E) the maturity of any such Indebtedness is not less than two years from the date of incurrence, and (F) on or before the date of incurrence, the Guarantors shall have delivered to the Lenders proforma financial statements, in form and substance satisfactory to the Lenders, showing that, during the term of such Indebtedness, based on reasonable projections of the financial performance of the Guarantors, the Guarantors will not be in violation of any of the financial covenants contained in this Article XII; (l) Any refinancing of any or all of the Indebtedness of the Guarantors under the Guarantee on substantially the terms described in Section 21.1 of the Form of Lease attached as Exhibit G to the Participation Agreement. 12.02. Liens. Each of the Guarantors shall not, and shall not permit any of its Subsidiaries to, at any time create, incur, assume or suffer to exist any Lien on any of its Property now owned or hereafter acquired, or agree or become liable to do so, except Permitted Liens. 12.03. Contingent Obligations. Each of the Guarantors shall not, and shall not permit any of its Subsidiaries to, at any time, directly or indirectly, become or be liable in respect of any Contingent Obligations, except for: (a) Contingent Obligations of the Company or any Unrestricted Subsidiary which is a Domestic Subsidiary in respect of obligations of the Company or any Unrestricted Subsidiary which is a Domestic Subsidiary; (b) Permitted Lease Contingent Obligations, provided that the portion of all such Permitted Lease Contingent Obligations which constitute current liabilities determined and consolidated in accordance with GAAP (whether such amounts are fixed or percentage rent, fees, costs, accelerated payments or otherwise), shall not exceed Fifteen Million Dollars ($15,000,000) at any one time; (c) Contingent Obligations arising by operation of any applicable law which individually or in the aggregate could not reasonably be expected to have Material Adverse Effect; (d) any Contingent Obligations arising under the Note Put Agreements;

(e) any Contingent Obligations arising under any computer leases with respect to which Kmart is the lessee and any of the Guarantors is the user of such computer equipment; (f) any Contingent Obligations arising under any of the Kmart Agreements; (g) Contingent Obligations arising under this Guarantee, provided, however, that the aggregate amount of Contingent Obligations permitted hereunder shall not exceed $250,000,000; (h) Contingent Obligations constituting a Permitted Joint Venture Activity, provided no Event of Default or Default has occurred and is continuing or would result therefrom and subject to Section 12.20; (i) Contingent Obligations constituting a Permitted Restricted Subsidiary Activity, provided no Event of Default or Default has occurred and is continuing or would result therefrom and subject to Section 12.20; (j) Contingent Obligations of the Company or any Unrestricted Subsidiary which is a Domestic Subsidiary in respect of any obligations (other than operating lease obligations) of any Unrestricted Subsidiary which is a Foreign Subsidiary, subject to Section 12.20; (k) Contingent Obligations of the Company or any Unrestricted Subsidiary which is a Domestic Subsidiary in

(e) any Contingent Obligations arising under any computer leases with respect to which Kmart is the lessee and any of the Guarantors is the user of such computer equipment; (f) any Contingent Obligations arising under any of the Kmart Agreements; (g) Contingent Obligations arising under this Guarantee, provided, however, that the aggregate amount of Contingent Obligations permitted hereunder shall not exceed $250,000,000; (h) Contingent Obligations constituting a Permitted Joint Venture Activity, provided no Event of Default or Default has occurred and is continuing or would result therefrom and subject to Section 12.20; (i) Contingent Obligations constituting a Permitted Restricted Subsidiary Activity, provided no Event of Default or Default has occurred and is continuing or would result therefrom and subject to Section 12.20; (j) Contingent Obligations of the Company or any Unrestricted Subsidiary which is a Domestic Subsidiary in respect of any obligations (other than operating lease obligations) of any Unrestricted Subsidiary which is a Foreign Subsidiary, subject to Section 12.20; (k) Contingent Obligations of the Company or any Unrestricted Subsidiary which is a Domestic Subsidiary in respect of operating lease obligations of any Unrestricted Subsidiary which is a Foreign Subsidiary; provided that the portion of all such Contingent Obligations which constitutes current liabilities determined and consolidated in accordance with GAAP is limited to lease payments (whether such amounts are fixed or percentage rent, fees, costs, accelerated payment requirements or otherwise) not in excess of an aggregate of $15,000,000 in any Fiscal Year with respect to all Unrestricted Subsidiaries which are Foreign Subsidiaries; and (l) Contingent Obligations of any Unrestricted Subsidiary which is a Foreign Subsidiary in respect of the obligations of another Unrestricted Subsidiary which is a Foreign Subsidiary. 12.04. Loans and Investments. Each of the Guarantors shall not, and shall not permit any of its Subsidiaries to, at any time make or suffer to remain outstanding any loan or advance to, or purchase, acquire or own any stock, bonds, notes or securities of, or any partnership interest (whether general or limited) in, or any other investment or interest in, or make any capital contribution to, any other Person, or agree, become or remain liable to do any of the foregoing, (collectively, "Investments"), except: (a) trade credit extended on usual and customary terms in the ordinary course of business;

(b) advances to employees to meet expenses incurred by such employees in the ordinary course of business; (c) Permitted Investments; (d) Investments by the Company in any Unrestricted Subsidiary which is a Domestic Subsidiary or by any Unrestricted Subsidiary which is a Domestic Subsidiary in the Company or an Unrestricted Subsidiary which is a Domestic Subsidiary, so long as any loans or advances are unsecured; (e) Investments by the Company or by any Unrestricted Subsidiary which is a Domestic Subsidiary in any Unrestricted Subsidiary which is a Foreign Subsidiary, so long as any loans or advances are unsecured; provided, however, that any such Investments permitted by this clause (e) plus any Foreign Purchases pursuant to clause (h) below may not exceed in the aggregate 15% of Consolidated Tangible Net Worth (determined as of the last day of the Fiscal Quarter most recently ended) and subject to Section 12.20; (f) a Purchase of Books Etc. and its Subsidiaries (including Books Etc. Properties Limited) corporations organized and existing under the laws of England for a total purchase price (including Indebtedness assumed) not to exceed $75,000,000, so long as no Default or Event of Default has occurred and is continuing or would result therefrom; (g) Domestic Purchases (i) so long as no Default or Event of Default has occurred and is continuing or would

(b) advances to employees to meet expenses incurred by such employees in the ordinary course of business; (c) Permitted Investments; (d) Investments by the Company in any Unrestricted Subsidiary which is a Domestic Subsidiary or by any Unrestricted Subsidiary which is a Domestic Subsidiary in the Company or an Unrestricted Subsidiary which is a Domestic Subsidiary, so long as any loans or advances are unsecured; (e) Investments by the Company or by any Unrestricted Subsidiary which is a Domestic Subsidiary in any Unrestricted Subsidiary which is a Foreign Subsidiary, so long as any loans or advances are unsecured; provided, however, that any such Investments permitted by this clause (e) plus any Foreign Purchases pursuant to clause (h) below may not exceed in the aggregate 15% of Consolidated Tangible Net Worth (determined as of the last day of the Fiscal Quarter most recently ended) and subject to Section 12.20; (f) a Purchase of Books Etc. and its Subsidiaries (including Books Etc. Properties Limited) corporations organized and existing under the laws of England for a total purchase price (including Indebtedness assumed) not to exceed $75,000,000, so long as no Default or Event of Default has occurred and is continuing or would result therefrom; (g) Domestic Purchases (i) so long as no Default or Event of Default has occurred and is continuing or would result therefrom, (ii) so long as the assets or business subject to such Domestic Purchase is in substantially the same or a similar type of business as the Company and its Subsidiaries, (iii) so long as the Board of Directors of any Person to be acquired has approved the terms of the Purchase, and (iv) so long as the Company delivers to the Lenders on or before the date on which it or any of its Subsidiaries agrees to or consummates any Domestic Purchase pro forma financial statements, in form and substance satisfactory to the Administrative Agent, showing that no Default or Event of Default will occur under Sections 12.15, 12.16 or 12.17 over the 12 month period following the effective date of the Purchase, based on reasonable projections of the financial performance of the Company and its Subsidiaries; (h) Foreign Purchases (i) so long as no Default or Event of Default has occurred and is continuing or would result therefrom, (ii) so long as the assets or business subject to such Foreign Purchase is in substantially the same or a similar type of business as the Company and its Subsidiaries, (iii) so long as the Board of Directors of any Person to be acquired has approved the terms of the Foreign Purchase, (iv) so long as the aggregate purchase amount payable in cash for all Foreign Purchases permitted by this clause (h) plus all Investments pursuant to clause (e) above does not exceed 15% of Consolidated Tangible Net Worth (determined as of the last day of the Fiscal Quarter most recently ended) and subject to Section 12.20; and (v) so long as the Company delivers to the Lenders on or before the date on which it or any of its Subsidiaries agrees to or consummates any Foreign Purchase pro forma financial statements, in form and substance satisfactory to the Administrative Agent, showing that no Default or Event of Default will occur under Sections 12.15, 12.16 or 12.17 over the 12 month period following the effective date of

the Purchase, based on reasonable projections of the financial performance of the Company and its Subsidiaries; (i) loans and advances, in addition to those permitted under Section 12.04(b), to employees in an aggregate principal amount not to exceed $10,000,000; (j) Investments constituting Permitted Joint Venture Activities, provided no Event of Default or Default has occurred and is continuing or would result therefrom and subject to Section 12.20; (k) Investments constituting Permitted Restricted Subsidiary Activities, provided no Event of Default or Default has occurred and is continuing or would result therefrom and subject to Section 12.20; (l) repurchases of the Company's common stock in accordance with Section 12.05; and (m) Investments by one Foreign Subsidiary in another Foreign Subsidiary.

the Purchase, based on reasonable projections of the financial performance of the Company and its Subsidiaries; (i) loans and advances, in addition to those permitted under Section 12.04(b), to employees in an aggregate principal amount not to exceed $10,000,000; (j) Investments constituting Permitted Joint Venture Activities, provided no Event of Default or Default has occurred and is continuing or would result therefrom and subject to Section 12.20; (k) Investments constituting Permitted Restricted Subsidiary Activities, provided no Event of Default or Default has occurred and is continuing or would result therefrom and subject to Section 12.20; (l) repurchases of the Company's common stock in accordance with Section 12.05; and (m) Investments by one Foreign Subsidiary in another Foreign Subsidiary. 12.05. Dividends and Related Distributions. The Company shall not, and shall not permit any of its Subsidiaries to, make or pay, or agree to become or remain liable to make or pay, any dividend or other distribution of any nature (whether in cash, property, securities or otherwise) on account of or in respect of its shares of capital stock or partnership interests or on account of the purchase, redemption, retirement or acquisition of its shares of capital stock (or warrants, options or rights therefor) (collectively, "Distributions"), except: (a) the Company may make open market repurchases of shares of its common stock, and it may receive shares of its common stock as payment of the exercise price of options, or as payment of taxes associated with the exercise of options or the vesting of restricted shares, which such delivered shares are deemed to be repurchased by the Company at fair market value (as defined in the Company's stock option plan) on the date of delivery to the Company, so long as the aggregate amount paid by the Company with respect to all such repurchases (including all such deemed repurchases) does not at any time exceed the Repurchase Amount in effect from time to time and no Event of Default or Default has occurred and is continuing or would result therefrom; (b) the Company may engage in stock splits (including reverse stock splits) or pay dividends in stock; (c) Wholly-owned Subsidiaries may make Distributions to the Company or another Wholly-owned Subsidiary; (d) Subsidiaries other than Wholly-owned Subsidiaries may make Distributions so long as (i) the aggregate amount of Distributions made by any such Subsidiary to any Person other than the Company or a Subsidiary of the Company in any Fiscal Year does not exceed 50% of such Person's pro rata share (based on the percentage of stock or other equity interests owned by such Person) of such Subsidiary's net income for such Fiscal Year as determined in accordance with GAAP and (ii) no later than ten (10) days prior to

any such Distribution, the Company shall have given written notice to the Lenders and the Agents thereof, together with calculations demonstrating that such Distribution complies with this clause (d); and (e) the Company may pay dividends on its preferred stock so long as the dividend rate on such preferred stock (after taking into account all other fees and amounts payable on such preferred stock) is less than the interest rate payable on the Loans. 12.06. Liquidations, Mergers, Consolidations. Each of the Guarantors shall not, and shall not permit any of its Subsidiaries to, dissolve, liquidate or wind-up its affairs, or become a party to any merger or consolidation, provided that any Guarantor (other than the Company) may consolidate or merge into another Guarantor and any Subsidiary of a Guarantor may consolidate or merge into any Guarantor or any Wholly-owned Subsidiary of a Guarantor so long as (i) the Guarantor or a Wholly-owned Subsidiary is the surviving corporation of such consolidation or merger and (ii) no Event of Default shall have occurred and be continuing or result therefrom. 12.07. Dispositions of Assets or Subsidiaries. Each of the Guarantors shall not, and shall not permit any of its Subsidiaries to, sell, convey, assign, lease, abandon or otherwise transfer or dispose of, voluntarily or involuntarily, any of its property (including sale, assignment, discount or other disposition of accounts, contract

any such Distribution, the Company shall have given written notice to the Lenders and the Agents thereof, together with calculations demonstrating that such Distribution complies with this clause (d); and (e) the Company may pay dividends on its preferred stock so long as the dividend rate on such preferred stock (after taking into account all other fees and amounts payable on such preferred stock) is less than the interest rate payable on the Loans. 12.06. Liquidations, Mergers, Consolidations. Each of the Guarantors shall not, and shall not permit any of its Subsidiaries to, dissolve, liquidate or wind-up its affairs, or become a party to any merger or consolidation, provided that any Guarantor (other than the Company) may consolidate or merge into another Guarantor and any Subsidiary of a Guarantor may consolidate or merge into any Guarantor or any Wholly-owned Subsidiary of a Guarantor so long as (i) the Guarantor or a Wholly-owned Subsidiary is the surviving corporation of such consolidation or merger and (ii) no Event of Default shall have occurred and be continuing or result therefrom. 12.07. Dispositions of Assets or Subsidiaries. Each of the Guarantors shall not, and shall not permit any of its Subsidiaries to, sell, convey, assign, lease, abandon or otherwise transfer or dispose of, voluntarily or involuntarily, any of its property (including sale, assignment, discount or other disposition of accounts, contract rights, chattel paper, equipment or general intangibles with or without recourse or any shares of capital stock, shares of beneficial interest or partnership interests of a Subsidiary of such Guarantor), except: (a) transactions involving the sale of inventory in the ordinary course of business; (b) any sale, transfer or lease of property, including without limitation any store closures, in the ordinary course of business which are no longer necessary or required in the conduct of the Guarantor's business; (c) any sale or transfer of property in order to concurrently or subsequently lease as lessee such property, so long as such sale and leaseback occurs in the ordinary course of business; (d) any sale, transfer or lease of property, by any Subsidiary of an Unrestricted Subsidiary to such Unrestricted Subsidiary or to another Unrestricted Subsidiary which is a Domestic Subsidiary; (e) any sale, transfer or lease of property, in the ordinary course of business which is replaced by substitute property; and (f) any transfers to Kmart of "Premises" pursuant to the Kmart Indemnity (as such term is defined therein) if and to the extent that any such transfer does not cause an Event of Default under Section 9(i)(i) of the Credit Agreement. 12.08. Affiliate Transactions. Each of the Guarantors shall not, and shall not permit any of its Subsidiaries to, enter into or carry out any transaction (including purchasing

property or services from or selling property or services to any Affiliate of any Guarantor (other than another Guarantor) or other Person) unless such transaction (i) is not otherwise prohibited by this Guarantee, (ii) is entered into in the ordinary course of business upon fair and reasonable arm's-length terms and conditions which are fully disclosed to the Administrative Agent and (iii) is in accordance with all applicable Law. 12.09. Subsidiaries, Partnerships and Joint Ventures. Each of the Guarantors shall not, and shall not permit any of its Subsidiaries to, become or agree to become a general or limited partner, joint venturer or member in any partnership, joint venture or limited liability company, as the case may be, provided that the Company or any of its wholly-owned Subsidiaries may own or create (a) any Wholly-owned Subsidiary, (b) any Unrestricted Subsidiary, (c) any Restricted Subsidiary so long as (1) the aggregate of all Purchases by the Company and its Subsidiaries of or Investments in or to such Restricted Subsidiary is otherwise permitted under this Guarantee, and (2) no such Restricted Subsidiary shall have Indebtedness which is recourse to or guaranteed by the Company or any of its Subsidiaries except as otherwise permitted by this Guarantee and (d) any Foreign Joint Venture so long as (1) the aggregate of all Purchases by the Company and its Subsidiaries of or Investments by

property or services from or selling property or services to any Affiliate of any Guarantor (other than another Guarantor) or other Person) unless such transaction (i) is not otherwise prohibited by this Guarantee, (ii) is entered into in the ordinary course of business upon fair and reasonable arm's-length terms and conditions which are fully disclosed to the Administrative Agent and (iii) is in accordance with all applicable Law. 12.09. Subsidiaries, Partnerships and Joint Ventures. Each of the Guarantors shall not, and shall not permit any of its Subsidiaries to, become or agree to become a general or limited partner, joint venturer or member in any partnership, joint venture or limited liability company, as the case may be, provided that the Company or any of its wholly-owned Subsidiaries may own or create (a) any Wholly-owned Subsidiary, (b) any Unrestricted Subsidiary, (c) any Restricted Subsidiary so long as (1) the aggregate of all Purchases by the Company and its Subsidiaries of or Investments in or to such Restricted Subsidiary is otherwise permitted under this Guarantee, and (2) no such Restricted Subsidiary shall have Indebtedness which is recourse to or guaranteed by the Company or any of its Subsidiaries except as otherwise permitted by this Guarantee and (d) any Foreign Joint Venture so long as (1) the aggregate of all Purchases by the Company and its Subsidiaries of or Investments by the Company and its Subsidiaries in or to any such Joint Ventures is otherwise permitted by this Guarantee, and (2) no such Joint Venture shall have Indebtedness which is recourse to or guaranteed by the Company or any of its Subsidiaries, except as otherwise permitted by this Guarantee. 12.10. Continuation of or Change in Business. Each of the Guarantors shall not, and shall not permit any of its Subsidiaries to, engage in any business other than (a) with respect to the Guarantors, substantially as conducted and operated by such Guarantor during the Fiscal Year 1997 and (b) with respect to any Subsidiary of a Guarantor, substantially as conducted and operated by a Guarantor or in a business reasonably incidental and complementary thereto or in an education-related retail business. 12.11. Plans and Benefit Arrangements. Each of the Guarantors shall not, and shall not permit any of its Subsidiaries to: (a) adopt, sponsor, maintain or make contributions to any Plan, any Multiemployer Plan, any Multiple Employer Plan or except as set forth on Schedule 5, any Benefit Arrangement that provides benefits to retirees; or (b) engage in a Prohibited Transaction with any Benefit Arrangement which, alone or in conjunction with any other circumstances or set of circumstances resulting in liability under ERISA, would have a Material Adverse Effect. 12.12. Fiscal Year. Each of the Guarantors shall not, and shall not permit any of its Subsidiaries to, change its Fiscal Quarter or change its Fiscal Year. 12.13. Issuance of Stock. Each of the Guarantors (other than the Company and any Unrestricted Subsidiary) shall not, and shall not permit any of its Subsidiaries (other than Unrestricted Subsidiaries) to, issue any additional shares of its capital stock or any options, warrants or other rights in respect thereof, except to the Company or any Wholly-owned Subsidiary, provided, however, that the Company shall not issue any preferred stock unless the dividend rate thereon is permitted by Section 12.05(e).

12.14. Changes in Organizational Documents. Each of the Guarantors shall not, and shall not permit any of its Subsidiaries to, amend in any respect its certificate of incorporation (including any provisions or resolutions relating to capital stock), by-laws or other organizational documents in the event such change would be adverse to the Lenders. 12.15. Minimum Fixed Charge Coverage Ratio. The Guarantors shall not permit the Fixed Charge Coverage Ratio, calculated as of the end of each Fiscal Quarter for the previous four Fiscal Quarters then ended, to be less than 1.50 to 1.0. 12.16. Maximum Leverage Ratio. The Guarantors shall not permit the Leverage Ratio (i) calculated as of the end of the third and fourth Fiscal Quarters of Fiscal Year 1997 to exceed 60%, (ii) calculated as of the end of each Fiscal Quarter of the Fiscal Year 1998 to exceed 60%, (iii) calculated as of the end of each Fiscal Quarter of the

12.14. Changes in Organizational Documents. Each of the Guarantors shall not, and shall not permit any of its Subsidiaries to, amend in any respect its certificate of incorporation (including any provisions or resolutions relating to capital stock), by-laws or other organizational documents in the event such change would be adverse to the Lenders. 12.15. Minimum Fixed Charge Coverage Ratio. The Guarantors shall not permit the Fixed Charge Coverage Ratio, calculated as of the end of each Fiscal Quarter for the previous four Fiscal Quarters then ended, to be less than 1.50 to 1.0. 12.16. Maximum Leverage Ratio. The Guarantors shall not permit the Leverage Ratio (i) calculated as of the end of the third and fourth Fiscal Quarters of Fiscal Year 1997 to exceed 60%, (ii) calculated as of the end of each Fiscal Quarter of the Fiscal Year 1998 to exceed 60%, (iii) calculated as of the end of each Fiscal Quarter of the Fiscal Year 1999 to exceed 55%, or (iv) calculated as of the end of each Fiscal Quarter thereafter to exceed 50%. 12.17. Minimum Tangible Net Worth. The Guarantors shall not at any time permit Consolidated Tangible Net Worth to be less than the sum of (i) $430,000,000 plus (ii) 50% of the Consolidated Net Income for each Fiscal Quarter in which net income was earned (with no deduction for a net loss) during the period from July 28, 1997 through the last day of the Fiscal Quarter immediately preceding the date of determination, plus (iii) 100% of the net cash proceeds to the Company of any public or private issuance of equity securities, minus (iv) the aggregate amount paid by the Company with respect to any repurchase of its common stock and (v) in any event, without deduction of the intangible assets arising from the Purchase permitted by Section 12.04(f). 12.18. Modifications of Other Documents. The Guarantors shall not permit or otherwise consent to any amendment to or modification of any of the Kmart Agreements or any of the Note Put Agreements which could reasonably be expected to have a Material Adverse Effect, which would have the effect of materially increasing the obligations of or burdens on the Guarantors or any of their Subsidiaries thereunder or which would have the effect of shortening or deleting any notice or cure period provided for therein. 12.19. Prepayment of Note Put Agreement Obligations. Each of the Guarantors shall not, and shall not permit any of its Subsidiaries to, make any payment or prepayment in respect of Border's obligations under any of the Note Put Agreements at any time before a "Tenant Purchase Date" as defined in the Note Put Agreements. 12.20. Foreign Activities. Notwithstanding anything in this Article XII, the Company shall not, and shall not permit any of its Subsidiaries to (i) incur any Contingent Obligation permitted under Section 12.03(j), or (ii) make any Investment permitted under Section 12.04(e) [Foreign Investments], Section 12.04(h) [Foreign Purchases], Section 12.04(j) in respect of a Foreign Joint Venture [Foreign Joint Venture Activities], or Section 12.04(k) in respect of a Foreign Restricted Subsidiary [Foreign Restricted Subsidiary Activities] if immediately after incurring such Contingent Obligation or making such Investment, the aggregate amount of all such Contingent Obligations and Investments would exceed 25% of Consolidated Tangible Net Worth, determined as of the last day of the Fiscal Quarter most recently ended.

12.21. Inconsistent Agreements. Each of the Guarantors shall not, and shall not permit any of its Subsidiaries to, become or remain subject to any dividend restriction either in its organizational documents or in any agreement or contract to which it is a party (other than restrictions in Section 12.05 hereof and in the Corporate Credit Agreement) nor shall any of them enter into any indenture, agreement, instrument or other arrangement which, (a) directly or indirectly prohibits or restrains, or has the effect of prohibiting or restraining, or could reasonably be expected to impose materially adverse conditions upon, the performance of the Obligations under the Operative Agreements, any provisions of this Guarantee or the amending of any of the Operative Agreements or (b) contains any provision which would be violated or breached by the performance by any Guarantor or any of its Subsidiaries of any of its obligations under any Operative Agreement. ARTICLE XIII. REPORTING REQUIREMENTS. The Guarantors, jointly and severally, covenant and agree that until payment in full of the Loans and interest thereon, satisfaction of all of the Obligations and termination of the Commitments, the Guarantors will furnish or cause to be furnished to the Agents and each of the Lenders:

12.21. Inconsistent Agreements. Each of the Guarantors shall not, and shall not permit any of its Subsidiaries to, become or remain subject to any dividend restriction either in its organizational documents or in any agreement or contract to which it is a party (other than restrictions in Section 12.05 hereof and in the Corporate Credit Agreement) nor shall any of them enter into any indenture, agreement, instrument or other arrangement which, (a) directly or indirectly prohibits or restrains, or has the effect of prohibiting or restraining, or could reasonably be expected to impose materially adverse conditions upon, the performance of the Obligations under the Operative Agreements, any provisions of this Guarantee or the amending of any of the Operative Agreements or (b) contains any provision which would be violated or breached by the performance by any Guarantor or any of its Subsidiaries of any of its obligations under any Operative Agreement. ARTICLE XIII. REPORTING REQUIREMENTS. The Guarantors, jointly and severally, covenant and agree that until payment in full of the Loans and interest thereon, satisfaction of all of the Obligations and termination of the Commitments, the Guarantors will furnish or cause to be furnished to the Agents and each of the Lenders: 13.01. Quarterly Financial Statements. As soon as available and in any event within forty-five (45) calendar days after the end of each of the first three Fiscal Quarters in each Fiscal Year, consolidated financial statements of the Company and its Subsidiaries, consisting of a consolidated balance sheet as of the end of such Fiscal Quarter and related consolidated statements of income, stockholders' equity and cash flows for the Fiscal Quarter then ended and the Fiscal Year through that date, all in reasonable detail and certified (subject to normal year-end audit adjustments) by an Authorized Officer of the Company as having been prepared in accordance with GAAP, consistently applied, and setting forth in comparative form the respective financial statements for the corresponding date and period in the previous Fiscal Year. As soon as available and in any event within forty-five (45) calendar days after the end of each Fiscal Year of the Company, a certificate of the Company signed by an Authorized Officer of the Company setting forth the calculation of the Fixed Charge Coverage Ratio as of the end of such Fiscal Year. 13.02. Annual Financial Statements. As soon as available and in any event within ninety (90) days after the end of each Fiscal Year of the Company, consolidated financial statements of the Company and its Subsidiaries consisting of a consolidated balance sheet as of the end of such Fiscal Year, and related consolidated statements of income, stockholders' equity and cash flows for the Fiscal Year then ended, all in reasonable detail and setting forth in comparative form the financial statements as of the end of and for the preceding Fiscal Year, and certified by independent certified public accountants of nationally recognized standing satisfactory to the Administrative Agent. The certificate or report of accountants shall be free of qualifications (other than any consistency qualification that may result from a change in the method used to prepare the financial statements as to which such accountants concur) and shall not indicate the occurrence or existence of any event, condition or contingency which would materially impair the prospect of payment or performance of any covenant, agreement or duty of any of the Guarantors under any of the Operative Agreements. 13.03. Certificates of the Company. Concurrently with the financial statements of the Company furnished to the Agents and to the Lenders pursuant to Sections 13.01 and 13.02, a certificate of the Company signed by an Authorized Officer of the Company, in the form of

Exhibit A, (i) to the effect that, the representations and warranties of the Guarantors contained in Section 7.03 of the Participation Agreement are true on and as of the date of such certificate with the same effect as though such representations and warranties had been made on and as of such date (except representations and warranties which expressly relate solely to an earlier date or time), the Guarantors have performed and complied with all covenants and conditions hereof, and no Event of Default or Default exists and is continuing on the date of such certificate and (ii) containing calculations in sufficient detail to demonstrate compliance as of the date of the financial statements with all financial covenants contained in Article XII, and (iii) describing any Permitted Joint Venture Activity or Permitted Restricted Subsidiary Activity engaged in, or any Purchase made, during the period covered by such financial statements. 13.04. Notice of Default. Promptly after any officer of any Guarantor has learned of the occurrence of an Event of Default or Default, a certificate signed by an Authorized Officer of the Company setting forth the details of such Event of Default or Default and the action which the Guarantors propose to take with respect thereto.

Exhibit A, (i) to the effect that, the representations and warranties of the Guarantors contained in Section 7.03 of the Participation Agreement are true on and as of the date of such certificate with the same effect as though such representations and warranties had been made on and as of such date (except representations and warranties which expressly relate solely to an earlier date or time), the Guarantors have performed and complied with all covenants and conditions hereof, and no Event of Default or Default exists and is continuing on the date of such certificate and (ii) containing calculations in sufficient detail to demonstrate compliance as of the date of the financial statements with all financial covenants contained in Article XII, and (iii) describing any Permitted Joint Venture Activity or Permitted Restricted Subsidiary Activity engaged in, or any Purchase made, during the period covered by such financial statements. 13.04. Notice of Default. Promptly after any officer of any Guarantor has learned of the occurrence of an Event of Default or Default, a certificate signed by an Authorized Officer of the Company setting forth the details of such Event of Default or Default and the action which the Guarantors propose to take with respect thereto. 13.05. Notice of Litigation. Promptly after the commencement thereof, notice of all actions, suits, proceedings or investigations before or by any Official Body, arbitrator or any other Person against any Guarantor or Subsidiary of any Guarantor which involve a claim or series of claims in excess of $10,000,000 or which if adversely determined could reasonably be expected to have a Material Adverse Effect. 13.06. Certain Events. Written notice of: (a) promptly after the adoption thereof, any amendment to the organizational documents of any Guarantor; (b) promptly, the enactment or adoption of any Law which could reasonably be expected to have a Material Adverse Effect; (c) promptly, and in any event within two (2) Business Days after any Guarantor's receipt thereof, a copy of any notice received by the Guarantors that a default (whether matured or unmatured) has occurred under the Kmart Indemnity (as distinct from a request for reimbursement under Section 2(a) thereof); and (d) promptly, and in any event within two (2) Business Days after any Guarantor's receipt thereof, a copy of any notice received by the Guarantors under any of the Note Put Agreements. 13.07. Other Reports and Information. Promptly upon their becoming available to the Company: (a) any reports, including management letters, submitted to the Company by independent accountants in connection with any annual, interim or special audit; (b) any reports, notices or proxy statements generally distributed by the Company to its stockholders on a date no later than the date supplied to the stockholders;

(c) regular or periodic reports, including Forms 10-K, 10-Q and 8-K, registration statements and prospectuses, filed by the Company with the Securities and Exchange Commission; and (d) such other reports and information as the Lenders may from time to time reasonably request. 13.08. Notices Regarding Benefit Arrangements. Promptly upon becoming aware of the occurrence thereof, notice (including the nature of the event and, when known, any action taken or threatened by the Internal Revenue Service or the PBGC with respect thereto) of: (a) any Reportable Event with respect to the Company or any of its Subsidiaries (regardless of whether the obligation to report said Reportable Event to the PBGC has been waived), (b) any Prohibited Transaction that could subject the Company or any of its Subsidiaries to a civil penalty assessed pursuant to Section 502(i) of ERISA or a tax imposed by Section 4975 of the Internal Revenue Code in connection with any

(c) regular or periodic reports, including Forms 10-K, 10-Q and 8-K, registration statements and prospectuses, filed by the Company with the Securities and Exchange Commission; and (d) such other reports and information as the Lenders may from time to time reasonably request. 13.08. Notices Regarding Benefit Arrangements. Promptly upon becoming aware of the occurrence thereof, notice (including the nature of the event and, when known, any action taken or threatened by the Internal Revenue Service or the PBGC with respect thereto) of: (a) any Reportable Event with respect to the Company or any of its Subsidiaries (regardless of whether the obligation to report said Reportable Event to the PBGC has been waived), (b) any Prohibited Transaction that could subject the Company or any of its Subsidiaries to a civil penalty assessed pursuant to Section 502(i) of ERISA or a tax imposed by Section 4975 of the Internal Revenue Code in connection with any Benefit Arrangement or any trust created thereunder, (c) any change in the coverage or terms of any Benefit Arrangement, where the effect of such change is to materially increase the unfunded liability of any of the Guarantors or any of their Subsidiaries under such Benefit Arrangement, or (d) any claim or lawsuit is commenced or, to the knowledge of any of the Guarantors, threatened with respect to any Plan, Multiemployer Plan or Benefit Arrangement, which, if successful, could result in a material liability of the Company or any of its Subsidiaries. 13.09. Access to the Company's Auditors. The Company hereby irrevocably authorizes all accountants and third parties to disclose and deliver to the Lenders, upon the reasonable request of the Administrative Agent, and at the Company's expense, all financial information, books and records, work papers, management reports and other information in their possession relating to the financial condition of the Company and its Subsidiaries (other than those subject to attorney-client privilege or written confidentiality agreements furnished to the Administrative Agent). 13.10. Notices Regarding Corporate Credit Agreement. (a) promptly, and in any event within five (5) days after the execution thereof, a copy of any amendment or modification to or waiver in respect to the Corporate Credit Agreement; and (b) promptly, and in any event within five (5) days after the occurrence thereof, written notice of any matured or unmatured default under the Corporate Credit Agreement. 13.11. Notices Regarding Repurchases of Stock. Promptly, and in any event within five (5) Business Days, after the repurchase by the Company of any of its common stock, written

notice thereof (including the number of shares repurchased, the amount paid by the Company with respect to such repurchase and the date of such repurchase). ARTICLE XIV. AUTHORITY OF ADMINISTRATIVE AGENT. Each Guarantor acknowledges that the rights and responsibilities of the Administrative Agent under this Guarantee with respect to any action taken by the Administrative Agent or the exercise or non-exercise by the Administrative Agent of any option, right, request, judgment or other right or remedy provided for herein or resulting or arising out of this Guarantee shall, as between the Administrative Agent and the Lenders, be governed by the Credit Agreement and by such other agreements with respect thereto as may exist from time to time among them, but, as between the Administrative Agent and such Guarantor, the Administrative Agent shall be conclusively presumed to be acting as Administrative Agent for the Lenders with full and valid authority so to act or refrain from acting, and no Guarantor shall be under any obligation, or entitlement, to make any inquiry respecting such authority.

notice thereof (including the number of shares repurchased, the amount paid by the Company with respect to such repurchase and the date of such repurchase). ARTICLE XIV. AUTHORITY OF ADMINISTRATIVE AGENT. Each Guarantor acknowledges that the rights and responsibilities of the Administrative Agent under this Guarantee with respect to any action taken by the Administrative Agent or the exercise or non-exercise by the Administrative Agent of any option, right, request, judgment or other right or remedy provided for herein or resulting or arising out of this Guarantee shall, as between the Administrative Agent and the Lenders, be governed by the Credit Agreement and by such other agreements with respect thereto as may exist from time to time among them, but, as between the Administrative Agent and such Guarantor, the Administrative Agent shall be conclusively presumed to be acting as Administrative Agent for the Lenders with full and valid authority so to act or refrain from acting, and no Guarantor shall be under any obligation, or entitlement, to make any inquiry respecting such authority. ARTICLE XV. NOTICES. All notices, requests and demands to or upon any Agent, any Lender or any Guarantor shall be in writing (including by telecopy), and, unless otherwise expressly provided herein, shall be deemed to have been duly given or made when delivered, or three (3) Business Days after being deposited in the mail, postage prepaid, or, in the case of telecopy notice, when received, addressed as follows: (a) if to any Agent or any Lender, at its address or transmission number for notices provided in Section 12.02 of the Credit Agreement; and (b) if to any Guarantor, at its address or transmission number for notices set forth opposite its signature below. Each Agent, each Lender and each Guarantor may change its address and transmission numbers for notices by notice in the manner provided in this Article XV. ARTICLE XVI. COUNTERPARTS. This Guarantee may be executed by one or more of the Guarantors on any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument. A set of the counterparts of this Guarantee signed by all the Guarantors shall be lodged with the Administrative Agent. ARTICLE XVII. SEVERABILITY. Any provision of this Guarantee which 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.

ARTICLE XVIII. INTEGRATION. This Guarantee represents the agreement of each Guarantor with respect to the subject matter hereof and there are no promises or representations by any Agent or any Lender relative to the subject matter hereof not reflected herein. ARTICLE XIX. AMENDMENTS IN WRITING; NO WAIVER; CUMULATIVE REMEDIES. (a) None of the terms or provisions of this Guarantee may be waived, amended, supplemented or otherwise modified except as provided in Section 12.01 of the Credit Agreement. (b) Neither any Agent nor any Lender shall by any act (except by a written instrument pursuant to Section XIX (a) hereof), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any Default or Event of Default or in any breach of any of the terms and conditions hereof. No failure to exercise, nor any delay in exercising, on the part of any Agent or any Lender, any right, power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver by any Agent or any Lender of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy which such Agent or such Lender would otherwise have on any future occasion. (c) The rights and remedies herein provided are cumulative, may be exercised singly or concurrently and are not exclusive of any other rights or remedies provided by law.

ARTICLE XVIII. INTEGRATION. This Guarantee represents the agreement of each Guarantor with respect to the subject matter hereof and there are no promises or representations by any Agent or any Lender relative to the subject matter hereof not reflected herein. ARTICLE XIX. AMENDMENTS IN WRITING; NO WAIVER; CUMULATIVE REMEDIES. (a) None of the terms or provisions of this Guarantee may be waived, amended, supplemented or otherwise modified except as provided in Section 12.01 of the Credit Agreement. (b) Neither any Agent nor any Lender shall by any act (except by a written instrument pursuant to Section XIX (a) hereof), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any Default or Event of Default or in any breach of any of the terms and conditions hereof. No failure to exercise, nor any delay in exercising, on the part of any Agent or any Lender, any right, power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver by any Agent or any Lender of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy which such Agent or such Lender would otherwise have on any future occasion. (c) The rights and remedies herein provided are cumulative, may be exercised singly or concurrently and are not exclusive of any other rights or remedies provided by law. ARTICLE XX. SECTION HEADINGS. The section headings used in this Guarantee are for convenience of reference only and are not to affect the construction hereof or be taken into consideration in the interpretation hereof. ARTICLE XXI. SUCCESSORS AND ASSIGNS. This Guarantee shall be binding upon the successors and assigns of each Guarantor and shall inure to the benefit of the Agents and the Lenders and their successors and assigns. ARTICLE XXII. RELEASES OF GUARANTORS, ETC. Any Guarantor may be released from its obligations hereunder with the consent of the Required Lenders or all the Lenders, as the case may be, as provided in Section 12.01 of the Credit Agreement. At the time of any such sale or disposition or release, the respective Guarantor shall cease to be a Guarantor hereunder and shall have no further liability or obligations arising from this Guarantee. ARTICLE XXIII. JURY TRIAL; SUBMISSION TO JURISDICTION; WAIVERS. (a) EACH GUARANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR

PROCEEDING RELATING TO THIS GUARANTEE OR ANY OTHER OPERATIVE AGREEMENT AND FOR ANY COUNTERCLAIM THEREIN. (B) Each Guarantor hereby irrevocably and unconditionally: (I) submits for itself and its property in all legal action or proceeding relating to this guarantee or any other operative agreement to which it is a party, or for recognition and enforcement of any judgment in respect thereof, to the non-exclusive general jurisdiction of the courts of the State of New York, the courts of the United States for the Southern District of New York, and appellate courts from any thereof; (II) consents that any such action or proceeding may be brought in such courts and waives trial by jury and any objection that it may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in any inconvenient court and agrees not to plead or claim the same;

PROCEEDING RELATING TO THIS GUARANTEE OR ANY OTHER OPERATIVE AGREEMENT AND FOR ANY COUNTERCLAIM THEREIN. (B) Each Guarantor hereby irrevocably and unconditionally: (I) submits for itself and its property in all legal action or proceeding relating to this guarantee or any other operative agreement to which it is a party, or for recognition and enforcement of any judgment in respect thereof, to the non-exclusive general jurisdiction of the courts of the State of New York, the courts of the United States for the Southern District of New York, and appellate courts from any thereof; (II) consents that any such action or proceeding may be brought in such courts and waives trial by jury and any objection that it may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in any inconvenient court and agrees not to plead or claim the same; (III) agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to it at its address set forth herein or at such other address of which the administrative agent shall have been notified pursuant thereto; (IV) agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law or shall limit the right to sue in any other jurisdiction; and (V) waives, to the maximum extent not prohibited by law, any right it may have to claim or recover in any legal action or proceeding referred to in this Article XXIII any special, exemplary, punitive or consequential damages. ARTICLE XXIV. INDEMNITY. The Guarantors jointly and severally agree to (a) indemnify the Administrative Agent, each Lender, and their respective officers, directors, employees, representatives and agents from and hold each of them harmless against any and all losses, liabilities, claims, damages or expenses incurred by any of them as a result of, or arising out of, or in any way related to, or by reason of, any investigation, litigation or other proceeding (whether or not any Agent or any Lender is a party thereto) related to the entering into and/or performance of any Operative Agreement or the use of the proceeds of any Loans or the consummation of any other transactions contemplated in any Operative Agreement, including, without limitation, the reasonable fees and disbursements of counsel incurred in connection with any such investigation, litigation or other proceeding (but excluding any such losses, liabilities, claims, damages or expenses to the extent incurred by reason of the gross negligence or willful misconduct of the Person to be indemnified) and (b) reimburse each Lender for any payments required to be made by such Lender to the Administrative Agent in accordance with Section 10.07 of the Credit Agreement. The agreements in this Article XXIV shall survive repayment of the Notes and all other amounts payable hereunder or under the other Credit Documents.

ARTICLE XXV. GOVERNING LAW. This Guarantee shall be governed by, and construed and interpreted in accordance with, the law of the State of New York.

IN WITNESS WHEREOF, each of the undersigned has caused this Guarantee to be duly executed and delivered by its duly authorized officer as of the day and year first above written. Address for any Guarantor: c/o Borders Group, Inc. 500 East Washington Street Ann Arbor, Michigan 48104 Telecopier No.: (313) 9958265 Attention: Thomas D. Carney Telephone No.: (313) 913-1977 BORDERS GROUP, INC. BORDERS, INC. WALDEN BOOK COMPANY, INC. BORDERS PROPERTIES, INC. WALDENBOOKS PROPERTIES, INC.

ARTICLE XXV. GOVERNING LAW. This Guarantee shall be governed by, and construed and interpreted in accordance with, the law of the State of New York.

IN WITNESS WHEREOF, each of the undersigned has caused this Guarantee to be duly executed and delivered by its duly authorized officer as of the day and year first above written. Address for any Guarantor: c/o Borders Group, Inc. 500 East Washington Street Ann Arbor, Michigan 48104 Telecopier No.: (313) 9958265 Attention: Thomas D. Carney Telephone No.: (313) 913-1977 BORDERS GROUP, INC. BORDERS, INC. WALDEN BOOK COMPANY, INC. BORDERS PROPERTIES, INC. WALDENBOOKS PROPERTIES, INC. PLANET MUSIC, INC. BORDERS ONLINE, INC. BORDERS OUTLET, INC. THE LIBRARY, LTD. By Title: BORDERS FULFILLMENT, INC. By Title: BGP (UK) LIMITED By Title: Exhibit A to the Guarantee FORM OF COMPLIANCE CERTIFICATE [For the quarter ended ____________] Reference is made to that certain Amended and Restated Guarantee Agreement (as amended, the "Guarantee") dated as of November 22, 1997 and amended and restated October ____, 1997 by and among Borders Group, Inc. (the "Company"), Borders, Inc., Walden Book Company, Inc. and certain other subsidiaries of Borders Group, Inc., as Guarantors, the Lenders, as defined therein, and PNC Bank, National Association, as Administrative Agent. Capitalized terms used but not defined herein shall have the meanings given to them in the Guarantee. This certificate is being delivered pursuant to the requirements of Section 13.03 of the Guarantee. The undersigned, an Authorized Officer of the Company, hereby certifies that: 1. The undersigned has reviewed the terms of the Guarantee and the other Operative Agreements and has made, or caused to be made under his supervision, a review of the transactions and conditions of the Guarantors during

IN WITNESS WHEREOF, each of the undersigned has caused this Guarantee to be duly executed and delivered by its duly authorized officer as of the day and year first above written. Address for any Guarantor: c/o Borders Group, Inc. 500 East Washington Street Ann Arbor, Michigan 48104 Telecopier No.: (313) 9958265 Attention: Thomas D. Carney Telephone No.: (313) 913-1977 BORDERS GROUP, INC. BORDERS, INC. WALDEN BOOK COMPANY, INC. BORDERS PROPERTIES, INC. WALDENBOOKS PROPERTIES, INC. PLANET MUSIC, INC. BORDERS ONLINE, INC. BORDERS OUTLET, INC. THE LIBRARY, LTD. By Title: BORDERS FULFILLMENT, INC. By Title: BGP (UK) LIMITED By Title: Exhibit A to the Guarantee FORM OF COMPLIANCE CERTIFICATE [For the quarter ended ____________] Reference is made to that certain Amended and Restated Guarantee Agreement (as amended, the "Guarantee") dated as of November 22, 1997 and amended and restated October ____, 1997 by and among Borders Group, Inc. (the "Company"), Borders, Inc., Walden Book Company, Inc. and certain other subsidiaries of Borders Group, Inc., as Guarantors, the Lenders, as defined therein, and PNC Bank, National Association, as Administrative Agent. Capitalized terms used but not defined herein shall have the meanings given to them in the Guarantee. This certificate is being delivered pursuant to the requirements of Section 13.03 of the Guarantee. The undersigned, an Authorized Officer of the Company, hereby certifies that: 1. The undersigned has reviewed the terms of the Guarantee and the other Operative Agreements and has made, or caused to be made under his supervision, a review of the transactions and conditions of the Guarantors during the accounting period covered by the financial statements being delivered simultaneously herewith; 2. Such review has not disclosed the existence during such accounting period, and the undersigned does not have knowledge of the existence as of the date hereof, of any Event of Default or any Default; and

Exhibit A to the Guarantee FORM OF COMPLIANCE CERTIFICATE [For the quarter ended ____________] Reference is made to that certain Amended and Restated Guarantee Agreement (as amended, the "Guarantee") dated as of November 22, 1997 and amended and restated October ____, 1997 by and among Borders Group, Inc. (the "Company"), Borders, Inc., Walden Book Company, Inc. and certain other subsidiaries of Borders Group, Inc., as Guarantors, the Lenders, as defined therein, and PNC Bank, National Association, as Administrative Agent. Capitalized terms used but not defined herein shall have the meanings given to them in the Guarantee. This certificate is being delivered pursuant to the requirements of Section 13.03 of the Guarantee. The undersigned, an Authorized Officer of the Company, hereby certifies that: 1. The undersigned has reviewed the terms of the Guarantee and the other Operative Agreements and has made, or caused to be made under his supervision, a review of the transactions and conditions of the Guarantors during the accounting period covered by the financial statements being delivered simultaneously herewith; 2. Such review has not disclosed the existence during such accounting period, and the undersigned does not have knowledge of the existence as of the date hereof, of any Event of Default or any Default; and 3. The representations and warranties contained in Article X of the Guarantee are true on and as of the date hereof (except representations and warranties that expressly relate solely to an earlier date or time, which representations and warranties were true on and as of the specific date referred to therein). The undersigned hereby further certifies that the following calculations demonstrate for the Fiscal Quarter ending ____________, _____ (the "Period"), which is the [First] [Second] [Third] [Fourth] Fiscal Quarter, compliance by the Guarantors with the financial covenants contained in Article XII of the Guarantee.

1.

Indebtedness a. Aggregate outstanding principal amount of all Indebtedness Capitalized Rent Expense (i) (ii) (iii) c. Rent Expense Lease Financing Rent Expense 4 x ((I) + (ii)) amount of all interest rate $__________ $__________

b.

Maximum aggregate notional management devices permitted byss.12.01(b) [a + (b x 50%)]

d.

Actual aggregate notional amount of all interest rate management devices. Consolidated Tangible Net Worth (see 8(b)(iii) below Maximum aggregate amount of additional Indebtedness Company and its Domestic Subsidiaries permitted by ss. 12.01(i) [e x 20%] Actual aggregate amount of additional Indebtedness of the Company and its Domestic Subsidiaries Maximum aggregate amount of Indebtedness of Foreign Subsidiaries to third parties permitted byss.12.01(j) Actual aggregate amount of Indebtedness of of the

e.

f.

g.

h.

i.

1.

Indebtedness a. Aggregate outstanding principal amount of all Indebtedness Capitalized Rent Expense (i) (ii) (iii) c. Rent Expense Lease Financing Rent Expense 4 x ((I) + (ii)) amount of all interest rate $__________ $__________

b.

Maximum aggregate notional management devices permitted byss.12.01(b) [a + (b x 50%)]

d.

Actual aggregate notional amount of all interest rate management devices. Consolidated Tangible Net Worth (see 8(b)(iii) below Maximum aggregate amount of additional Indebtedness Company and its Domestic Subsidiaries permitted by ss. 12.01(i) [e x 20%] Actual aggregate amount of additional Indebtedness of the Company and its Domestic Subsidiaries Maximum aggregate amount of Indebtedness of Foreign Subsidiaries to third parties permitted byss.12.01(j) Actual aggregate amount of Indebtedness of Foreign Subsidiaries to third parties of the

e.

f.

g.

h.

i.

2.

Permitted Liens a. Consolidated Tangible Net Worth (See 8(b)(iii) below)

b.

Maximum aggregate fair market value of all property secured by

b.

Maximum aggregate fair market value of all property secured by Liens permitted under clause (xi) of the definition of "Permitted Liens" [a x 10%] Actual aggregate fair market value of all property secured by Liens permitted under clause (xi) of the definition of "Permitted Liens"

c.

3.

Contingent Obligations a. Maximum aggregate amount of current portion of Permitted Lease Contingent Obligations permitted byss.12.03(b) Actual aggregate amount of current portion of Permitted Lease Contingent Obligations Maximum aggregate amount of Contingent Company or any Unrestricted Subsidiary Subsidiary in respect of operating lease Unrestricted Subsidiary which is a Foreign Subsidiary Actual aggregate amount of Contingent Company or any Unrestricted Subsidiary Subsidiary in respect of operating lease Unrestricted Subsidiary which is a Foreign Subsidiary obligations of the which is a Domestic obligations of any

b.

c.

d.

Obligations of the which is a Domestic obligations of any

4.

Loans and Investments a. b. Consolidated Tangible Net Worth (see 8(b)(iii) below) Maximum aggregate amount of all Investments by Company and Domestic Subsidiaries in Foreign Unrestricted Subsidiaries permitted by ss. 12.04(e) plus Foreign Purchases [a x 15%] Actual aggregate amount of all Investments permitted by ss. 12.04(e) by Company and Domestic Subsidiaries in Foreign Unrestricted Subsidiaries

c.

d.

Actual aggregate amount of all Foreign Purchases by Company and Domestic Subsidiaries c + d Maximum aggregate principal amount of all loans to employees Actual aggregate principal amount of all loans to employees

e. f.

g.

5.

Dividends and Distributions a. Maximum permitted aggregate amount of repurchases of the Company's stock i. aggregate amount paid by officers, employees, and directors in connection with the exercise of options realized tax benefit ($100,000 + i + ii )

$__________ $__________

ii. iii. b.

Actual aggregate amounts paid for repurchases of the Company's stock See Schedule 1 hereto

c.

6.

Minimum Fixed Charge Coverage Ratio a. Minimum Fixed Charge Coverage Ratio

d.

Actual aggregate amount of all Foreign Purchases by Company and Domestic Subsidiaries c + d Maximum aggregate principal amount of all loans to employees Actual aggregate principal amount of all loans to employees

e. f.

g.

5.

Dividends and Distributions a. Maximum permitted aggregate amount of repurchases of the Company's stock i. aggregate amount paid by officers, employees, and directors in connection with the exercise of options realized tax benefit ($100,000 + i + ii )

$__________ $__________

ii. iii. b.

Actual aggregate amounts paid for repurchases of the Company's stock See Schedule 1 hereto

c.

6.

Minimum Fixed Charge Coverage Ratio a. b. Minimum Fixed Charge Coverage Ratio Actual Fixed Charge Coverage Ratio: (i) Consolidated Cash Flow from Operations: (A) Consolidated Net income for the preceding four Fiscal Quarters

$_________

(B) (C)

Less Extraordinary gains Plus Income (minus loss) of minority investments Plus Depreciation and amortization Plus Interest expense Plus Rent Expense Plus Lease Financing Rent Expense Plus Income Tax expense Exclude Losses attributable to use of fair value methodology for recognition and measurement of impairment of goodwill in accordance with Accounting Principles Board Opinion No. 17 Consolidated Cash Flow from Operations [A-B-C+ D+E+F+G+H-I]

($________)

$_________

(D)

$_________ $_________ $_________

(E) (F) (G)

$_________ $_________

(H) (I)

$_________

(J)

$_________

(B) (C)

Less Extraordinary gains Plus Income (minus loss) of minority investments Plus Depreciation and amortization Plus Interest expense Plus Rent Expense Plus Lease Financing Rent Expense Plus Income Tax expense Exclude Losses attributable to use of fair value methodology for recognition and measurement of impairment of goodwill in accordance with Accounting Principles Board Opinion No. 17 Consolidated Cash Flow from Operations [A-B-C+ D+E+F+G+H-I]

($________)

$_________

(D)

$_________ $_________ $_________

(E) (F) (G)

$_________ $_________

(H) (I)

$_________

(J)

$_________

(ii)

Fixed Charges: (A) (B) (C) Interest Expense Rent Expense Lease Financing Rent Expense Scheduled principal installments on Indebtedness $_________ $_________

$_________

(D)

$_________

(E)

Fixed charges [A+B+C+D]

$_________

c. 7.

Ratio of (i)(J) to (ii)(E)

Maximum Leverage Ratio (expressed as a percentage) a. Required Leverage Ratio I. third and fourth Fiscal Quarter in Fiscal Year 1997 60% each Fiscal Quarter in Fiscal Year 1998 each Fiscal Quarter in Fiscal Year 1999 each Fiscal Quarter after Fiscal Year 1999

ii.

60%

iii.

55%

iv.

50%

b.

Actual Leverage Ratio: (i) Consolidated Funded Indebtedness (Indebtedness for borrowed money, including Capitalized Lease Obligations ($__________) plus Contingent

(E)

Fixed charges [A+B+C+D]

$_________

c. 7.

Ratio of (i)(J) to (ii)(E)

Maximum Leverage Ratio (expressed as a percentage) a. Required Leverage Ratio I. third and fourth Fiscal Quarter in Fiscal Year 1997 60% each Fiscal Quarter in Fiscal Year 1998 each Fiscal Quarter in Fiscal Year 1999 each Fiscal Quarter after Fiscal Year 1999

ii.

60%

iii.

55%

iv.

50%

b.

Actual Leverage Ratio: (i) Consolidated Funded Indebtedness (Indebtedness for borrowed money, including Capitalized Lease Obligations ($__________) plus Contingent Obligations in respect of borrowed money or Capitalized Lease Obligations ($__________) plus Contingent Obligations arising under ---the Lease Financing Guarantee ($__________)

(ii) (A) (B)

Consolidated Total Capital: Total stockholders equity Consolidated Funded Indebtedness (see (I) above) (A) + (B) $__________

$__________

(C)

(iii) 8.

Ratio of (i) to (ii)(C)

Minimum Tangible Net Worth a. Required Consolidated Tangible Net Worth: (i) (ii)(A) Consolidated Net Income for the period from July 28, 1997 through the end of the Fiscal Quarter immediately preceding the date hereof (B) 50% x (A) (iii) Net cash proceeds of any issuance of equity securities the aggregate amount paid to repurchase stock (i) + (ii)(B) + (iii) - (iv) $430,000,000

$_________ $_________

$_________

(iv)

$_________

(v) b.

Actual Consolidated Tangible Net Worth: (i) Total stockholders' equity as of the end of the Period

$_________

(ii)

Intangible assets of the Company and its Subsidiaries on a consolidated basis as of the end

(iii) 8.

Ratio of (i) to (ii)(C)

Minimum Tangible Net Worth a. Required Consolidated Tangible Net Worth: (i) (ii)(A) Consolidated Net Income for the period from July 28, 1997 through the end of the Fiscal Quarter immediately preceding the date hereof (B) 50% x (A) (iii) Net cash proceeds of any issuance of equity securities the aggregate amount paid to repurchase stock (i) + (ii)(B) + (iii) - (iv) $430,000,000

$_________ $_________

$_________

(iv)

$_________

(v) b.

Actual Consolidated Tangible Net Worth: (i) Total stockholders' equity as of the end of the Period

$_________

(ii)

Intangible assets of the Company and its Subsidiaries on a consolidated basis as of the end of the Period (excluding intangible assets from the Books Etc. Limited Purchase permitted by ss. 12.04(f)) $_________ (i) - (ii)

(iii) 9.

Foreign Activities a. Consolidated Tangible Net Worth (See 8(b)(iii)above)

b.

Maximum permitted aggregate amount of Contingent Obligations permitted under ss. 12.03(j) and Investments permitted under ss.ss. 12.04(e), 12.04(h), 12.04(j) in respect of a Foreign Joint Venture, and ss. 12.04(k) in respect of a Foreign Restricted Subsidiary [a x 25%] Actual aggregate amount of Contingent Obligations permitted under ss. 12.03(j) and Investments permitted under ss.ss. 12.04(e), 12.04(h), 12.04(j) in respect of a Foreign Joint Venture, and ss. 12.04(k) in respect of a Foreign Restricted Subsidiary

c.

10.

Permitted Joint Venture Activity a. Consolidated Tangible Net Worth (See 8(b)(iii) above) Maximum permitted aggregate amount of all Investments in Joint Ventures and Contingent Obligations of the Company or any Unrestricted Subsidiary which is a Domestic Subsidiary in respect of Indebtedness of Joint Ventures [a x 15%] Actual aggregate amount of all Investments in Joint Ventures ($________) and Contingent Obligations of the Company or any Unrestricted Subsidiary which is a Domestic Subsidiary in respect of Indebtedness of Joint Ventures($________)

b.

c.

d.

Maximum permitted aggregate amount of Contingent Obligations of the Company or any Unrestricted Subsidiary which is a

b.

Maximum permitted aggregate amount of Contingent Obligations permitted under ss. 12.03(j) and Investments permitted under ss.ss. 12.04(e), 12.04(h), 12.04(j) in respect of a Foreign Joint Venture, and ss. 12.04(k) in respect of a Foreign Restricted Subsidiary [a x 25%] Actual aggregate amount of Contingent Obligations permitted under ss. 12.03(j) and Investments permitted under ss.ss. 12.04(e), 12.04(h), 12.04(j) in respect of a Foreign Joint Venture, and ss. 12.04(k) in respect of a Foreign Restricted Subsidiary

c.

10.

Permitted Joint Venture Activity a. Consolidated Tangible Net Worth (See 8(b)(iii) above) Maximum permitted aggregate amount of all Investments in Joint Ventures and Contingent Obligations of the Company or any Unrestricted Subsidiary which is a Domestic Subsidiary in respect of Indebtedness of Joint Ventures [a x 15%] Actual aggregate amount of all Investments in Joint Ventures ($________) and Contingent Obligations of the Company or any Unrestricted Subsidiary which is a Domestic Subsidiary in respect of Indebtedness of Joint Ventures($________)

b.

c.

d.

Maximum permitted aggregate amount of Contingent Obligations of the Company or any Unrestricted Subsidiary which is a Domestic Subsidiary relating to Leases of Joint Ventures

e.

Actual aggregate amount of Contingent Obligations of the Company or any Unrestricted Subsidiary which is a Domestic Subsidiary relating to Leases of Joint Ventures

11.

Permitted Restricted Subsidiary Activity a. Consolidated Tangible Net Worth (See 8(b)(iii) above) Maximum permitted aggregate amount of all Investments by the Company or Unrestricted Domestic Subsidiary in Restricted Subsidiaries and Contingent Obligations of the Company or any Unrestricted Subsidiary which is a Domestic Subsidiary in respect of Indebtedness of Restricted Subsidiaries [a x 20%] Actual aggregate amount of all Investments by the Company or Unrestricted Domestic Subsidiary in Restricted Subsidiaries ($_________) and Contingent Obligations of the Company or any Unrestricted Subsidiary which is a Domestic Subsidiary in respect of Indebtedness of Restricted Subsidiaries ($________) Maximum permitted aggregate amount of all Investments by the Company or Unrestricted Domestic Subsidiary and Contingent Obligations of the Company or any Unrestricted Subsidiary which is a Domestic Subsidiary in respect of Indebtedness of Restricted Subsidiaries which are Foreign Subsidiaries [a x 15%] Actual aggregate amount of all Investments by the Company or Unrestricted Domestic Subsidiary and Contingent Obligations of the Company or any Unrestricted Subsidiary which is a Domestic Subsidiary in respect of Indebtedness of Restricted Subsidiaries which are Foreign Subsidiaries

b.

c.

d.

e.

e.

Actual aggregate amount of Contingent Obligations of the Company or any Unrestricted Subsidiary which is a Domestic Subsidiary relating to Leases of Joint Ventures

11.

Permitted Restricted Subsidiary Activity a. Consolidated Tangible Net Worth (See 8(b)(iii) above) Maximum permitted aggregate amount of all Investments by the Company or Unrestricted Domestic Subsidiary in Restricted Subsidiaries and Contingent Obligations of the Company or any Unrestricted Subsidiary which is a Domestic Subsidiary in respect of Indebtedness of Restricted Subsidiaries [a x 20%] Actual aggregate amount of all Investments by the Company or Unrestricted Domestic Subsidiary in Restricted Subsidiaries ($_________) and Contingent Obligations of the Company or any Unrestricted Subsidiary which is a Domestic Subsidiary in respect of Indebtedness of Restricted Subsidiaries ($________) Maximum permitted aggregate amount of all Investments by the Company or Unrestricted Domestic Subsidiary and Contingent Obligations of the Company or any Unrestricted Subsidiary which is a Domestic Subsidiary in respect of Indebtedness of Restricted Subsidiaries which are Foreign Subsidiaries [a x 15%] Actual aggregate amount of all Investments by the Company or Unrestricted Domestic Subsidiary and Contingent Obligations of the Company or any Unrestricted Subsidiary which is a Domestic Subsidiary in respect of Indebtedness of Restricted Subsidiaries which are Foreign Subsidiaries

b.

c.

d.

e.

f.

Maximum permitted aggregate amount of Contingent Obligations of the Company or any Unrestricted Subsidiary which is a Domestic Subsidiary relating to Leases of Restricted Subsidiaries Actual aggregate amount of Contingent Company or any Unrestricted Subsidiary Subsidiary relating to Leases of Restricted Subsidiaries Obligations of the which is a Domestic

g.

11.

Description of any Permitted Joint Venture Activity or Permitted Restricted Subsidiary Activity engaged in, or any Purchase Made, During the Period [Describe transactions, including amounts involved]

IN WITNESS WHEREOF, the undersigned has caused this Compliance Certificate to be executed and delivered this _____ day of _____________, _____. BORDERS GROUP, INC. By: Title: [Authorized Officer]

Schedule 1

Minority

Net Income

Minority Shareholders pro rata Share of Net

Maximum Distribu to Mino Sharehol (50% of

f.

Maximum permitted aggregate amount of Contingent Obligations of the Company or any Unrestricted Subsidiary which is a Domestic Subsidiary relating to Leases of Restricted Subsidiaries Actual aggregate amount of Contingent Company or any Unrestricted Subsidiary Subsidiary relating to Leases of Restricted Subsidiaries Obligations of the which is a Domestic

g.

11.

Description of any Permitted Joint Venture Activity or Permitted Restricted Subsidiary Activity engaged in, or any Purchase Made, During the Period [Describe transactions, including amounts involved]

IN WITNESS WHEREOF, the undersigned has caused this Compliance Certificate to be executed and delivered this _____ day of _____________, _____. BORDERS GROUP, INC. By: Title: [Authorized Officer]

Schedule 1

Subsidiary ----------

Minority Shareholders ------------

Percent Ownership -----------------

Net Income Year to Date ------------

Minority Shareholders pro rata Share of Net Income ---------------------

Maximum Distribu to Mino Sharehol (50% of rata sha --------

STATEMENT OF COMPUTATION OF PER SHARE EARNINGS (dollars in millions except per share data) EXHIBIT 11.1 TO FORM 10-Q REPORT PRIMARY EARNINGS PER COMMON SHARE: 13 WEEKS ENDED 39 WEEKS ENDED October 26, 1997 October 27,1997
Net Income $ 0.4 $ 1.3

Weighted average shares outstanding (000's)

82,361 ------$ 0.00 =======

82,294 --------$ 0.02 ======

Primary E.P.S.

FULLY DILUTED EARNINGS PER COMMON SHARE:
Net Income $ 0.4 $ 1.3

Weighted average shares outstanding (000's) Fully Diluted E.P.S.

82,387 ------$ 0.00

82,500 --------$ 0.02

Schedule 1

Subsidiary ----------

Minority Shareholders ------------

Percent Ownership -----------------

Net Income Year to Date ------------

Minority Shareholders pro rata Share of Net Income ---------------------

Maximum Distribu to Mino Sharehol (50% of rata sha --------

STATEMENT OF COMPUTATION OF PER SHARE EARNINGS (dollars in millions except per share data) EXHIBIT 11.1 TO FORM 10-Q REPORT PRIMARY EARNINGS PER COMMON SHARE: 13 WEEKS ENDED 39 WEEKS ENDED October 26, 1997 October 27,1997
Net Income $ 0.4 $ 1.3

Weighted average shares outstanding (000's)

82,361 ------$ 0.00 =======

82,294 --------$ 0.02 ======

Primary E.P.S.

FULLY DILUTED EARNINGS PER COMMON SHARE:
Net Income $ 0.4 $ 1.3

Weighted average shares outstanding (000's) Fully Diluted E.P.S.

82,387 ------$ 0.00

82,500 --------$ 0.02

=======

======

ARTICLE 5

PERIOD TYPE FISCAL YEAR END PERIOD START PERIOD END CASH SECURITIES RECEIVABLES ALLOWANCES INVENTORY CURRENT ASSETS PP&E DEPRECIATION TOTAL ASSETS CURRENT LIABILITIES BONDS PREFERRED MANDATORY

3 MOS JAN 25 1997 JUL 28 1997 OCT 26 1997 77 0 54 0 988 1,119 635 276 1,622 1,082 0 0

STATEMENT OF COMPUTATION OF PER SHARE EARNINGS (dollars in millions except per share data) EXHIBIT 11.1 TO FORM 10-Q REPORT PRIMARY EARNINGS PER COMMON SHARE: 13 WEEKS ENDED 39 WEEKS ENDED October 26, 1997 October 27,1997
Net Income $ 0.4 $ 1.3

Weighted average shares outstanding (000's)

82,361 ------$ 0.00 =======

82,294 --------$ 0.02 ======

Primary E.P.S.

FULLY DILUTED EARNINGS PER COMMON SHARE:
Net Income $ 0.4 $ 1.3

Weighted average shares outstanding (000's) Fully Diluted E.P.S.

82,387 ------$ 0.00

82,500 --------$ 0.02

=======

======

ARTICLE 5

PERIOD TYPE FISCAL YEAR END PERIOD START PERIOD END CASH SECURITIES RECEIVABLES ALLOWANCES INVENTORY CURRENT ASSETS PP&E DEPRECIATION TOTAL ASSETS CURRENT LIABILITIES BONDS PREFERRED MANDATORY PREFERRED COMMON OTHER SE TOTAL LIABILITY AND EQUITY SALES TOTAL REVENUES CGS TOTAL COSTS OTHER EXPENSES LOSS PROVISION INTEREST EXPENSE INCOME PRETAX INCOME TAX INCOME CONTINUING DISCONTINUED

3 MOS JAN 25 1997 JUL 28 1997 OCT 26 1997 77 0 54 0 988 1,119 635 276 1,622 1,082 0 0 0 0 507 1,622 477 477 355 355 0 0 2 1 0 0 0

ARTICLE 5

PERIOD TYPE FISCAL YEAR END PERIOD START PERIOD END CASH SECURITIES RECEIVABLES ALLOWANCES INVENTORY CURRENT ASSETS PP&E DEPRECIATION TOTAL ASSETS CURRENT LIABILITIES BONDS PREFERRED MANDATORY PREFERRED COMMON OTHER SE TOTAL LIABILITY AND EQUITY SALES TOTAL REVENUES CGS TOTAL COSTS OTHER EXPENSES LOSS PROVISION INTEREST EXPENSE INCOME PRETAX INCOME TAX INCOME CONTINUING DISCONTINUED EXTRAORDINARY CHANGES NET INCOME EPS PRIMARY EPS DILUTED

3 MOS JAN 25 1997 JUL 28 1997 OCT 26 1997 77 0 54 0 988 1,119 635 276 1,622 1,082 0 0 0 0 507 1,622 477 477 355 355 0 0 2 1 0 0 0 0 0 0 .00 .00


								
To top