AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT

Exhibit 10.5

AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT

dated effective as of November 21, 2008

by and between

AmREIT
as Borrower

and

WELLS FARGO BANK, NATIONAL ASSOCIATION
as Lender

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EXHIBITS

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SCHEDULES

AMENDED AND RESTATED
REVOLVING CREDIT AGREEMENT

     THIS AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT (this “Agreement”) is entered into effective as of November 21, 2008, by and between AmREIT, a Texas Real Estate Investment Trust (“Borrower”) and WELLS FARGO BANK, NATIONAL ASSOCIATION (“Lender”). This Agreement entirely supercedes, amends, restates and replaces that certain Revolving Credit Agreement between Lender and Borrower dated October 30, 2007 (the “Original Agreement”).

     WHEREAS, Borrower desires to borrow from Lender, on an unsecured revolving credit basis, loans in an aggregate principal sum outstanding from time to time not exceeding Thirty-Five Million Dollars ($35,000,000.00), the proceeds of which shall be used only for the purposes specifically permitted under the terms of this Agreement; and

     WHEREAS, Lender is willing to make loans to Borrower on such basis for such purposes, subject to the terms and conditions hereof.

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

ARTICLE 1.
DEFINITIONS

     Section 1.1 Definitions .

     The following terms, as used herein, have the following meanings:

     “ Adjusted LIBO Rate ” means the rate of interest, rounded upward to the nearest whole multiple of one-hundredth of one percent (.01%), equal to the lesser of (i) the Maximum Lawful Rate, or (ii) sum of: (a) the Applicable Margin plus (b) the LIBO Rate, which rate is divided by one (1.00) minus the Reserve Percentage, as expressed in the following formula:

     “ AFC Inc. ” means the retail property so identified on Schedule 4.1, which is not encumbered by a Lien.

     “ Affiliate ” means any Person (other than Lender): (a) directly or indirectly controlling, controlled by, or under common control with, the Borrower; (b) directly or indirectly owning or holding ten percent (10.0%) or more of any equity interest in the Borrower; or (c) ten percent (10.0%) or more of whose voting stock or other equity interest is directly or indirectly owned or held by the Borrower. For purposes of this definition, “control” (including with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”) means the possession directly or indirectly of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities or by contract or otherwise. In no event shall Lender be deemed to be an Affiliate of the Borrower.

     “ Applicable Law ” means all applicable provisions of local, state, federal and foreign constitutions, statutes, rules, regulations, ordinances, decrees, permits, concessions and orders of all governmental bodies and all orders and decrees of all courts, tribunals and arbitrators.

     “ Applicable Management Fee Percentage ” shall mean, four percent (4.0%) with respect to multi-tenant Properties and one percent (1%) with respect to single-tenant Properties.

     “ Applicable Margin ” means the percentage rate set forth in Chart A below corresponding to the ratio of Total Liabilities to Gross Asset Value as determined in accordance with Section 7.1(c) in effect at such time:

Chart A

The Applicable Margin for Loans shall be determined by Lender based on the ratio of Total Liabilities to Gross Asset Value as set forth in the Compliance Certificate most recently delivered by the Borrower pursuant to Section 7.1(c). Any such adjustment to such Applicable Margin shall be effective as of the first day of the calendar month immediately following the month during which Borrower delivers to Lender the applicable Compliance Certificate pursuant to Section 7.1(c). If the Borrower fails to deliver a Compliance Certificate pursuant to Section 7.1(c) the Applicable Margin shall equal the percentages corresponding to Level 3 Chart A from the date the required Compliance Certificate was due until the date of receipt by Lender of the required Compliance Certificate; however the application of such Level 3 Chart A under such circumstances shall not impair Lender’s ability to declare such failure to deliver the required Compliance Certificate an Event of Default.

     “ Base Rate ” means a rate of interest equal to the lesser of (a) the Daily LIBO Rate and (b) the Maximum Lawful Rate, provided, however, if any of the transactions necessary for the calculation of interest at the Daily LIBO Rate requested or selected by Borrower, or as otherwise required hereunder, should be or become prohibited or unavailable to Lender, or, if in Lender’s good faith judgment, it is not possible or practical for Lender to set the Daily LIBO Rate for a Base Rate Loan, the Base Rate for such Base Rate Loan shall revert to the lesser of (i) the Maximum Lawful Rate or (ii) the greater of (a) the Prime Rate plus one percent (1.00%), and (b) the Federal Funds Rate plus one and one-half percent (1.50%) plus the Applicable Margin. Each change in the Base Rate shall become effective without prior notice to Borrower automatically as of the opening of business on the date of such change in the Base Rate.

     “ Base Rate Loan ” means any portion of the Revolving Loan with respect to which the interest rate is calculated by reference to the Base Rate.

     “ Business Day ” means (a) any day except a Saturday, Sunday or other day on which commercial banks in San Francisco, California are authorized or required to close and (b) with reference to LIBOR Loans, any day (except a Saturday, Sunday or other day on which commercial banks in San Francisco, California are authorized or required to close) on which dealings in Dollar deposits are carried out in the London interbank market.

     “ Capital Expenditures Reserve ” means, for any period and with respect to any Property, an amount equal to the greater of (a) the aggregate square footage of all completed space of such Property times $.25, times a fraction, the numerator of which is the number of days of such period, and the denominator of which is 365 and (b) the amount of capital expenditures actually made in respect of such Property, excluding non-recurring capital expenditures for such period.

     “ Capitalized Lease Obligation ” means Indebtedness represented by obligations under a lease that is required to be capitalized for financial reporting purposes in accordance with GAAP, and the amount of such Indebtedness shall be the capitalized amount of such obligations determined in accordance with GAAP.

     “ Carlsons Restaurants (TGI Fridays) ” means those retail properties so identified on Schedule 4.1, which are not encumbered by a Lien.

     “ Collateral Account ” means Account Number 4945073278 established by Borrower with Lender as a special, interest-bearing, deposit account under Lender’s sole dominion and control.

     “ Commitment ” means, initially, the lesser of (i) Thirty-Five Million and No/100 Dollars ($35,000,000.00) and (ii) the sum of Thirty-Five Million and No/100 Dollars ($35,000,000.00) minus proceeds (net of transaction costs) derived from:

     (a) The sale or issuance by Borrower of Shares, options, warrants or other Equity Interests of any class or character,

     (b) The sale of Unencumbered Pool Property or any other Property owned by Borrower or any Subsidiary of Borrower or the sale by Borrower or any Subsidiary of Borrower of any Equity Interest in a Person owning Unencumbered Pool Property or any such other Property, net of existing Secured Indebtedness, and

     (c) Indebtedness from the financing of Unencumbered Pool Property or refinancing or financing of any other Property owned by Borrower or any Subsidiary of Borrower, net of existing Secured Indebtedness;

provided, however, at such time as the Commitment shall have been reduced to Twenty-Five Million and No/100 Dollars ($25,000,000.00), then, thereafter, the Commitment shall remain at Twenty-Five Million and No/100 Dollars ($25,000,000.00).

     “ Compliance Certificate ” means the certificate described in Section 7.1(c).

     “ Consequential Loss ” means with respect to (a) Borrower’s payment of all or any portion of the then-outstanding principal amount of a LIBOR Loan on a day other than the last day of the Interest Period related thereto or (b) any of the circumstances specified in Section 2.7(d) and (g)

upon which a Consequential Loss may be incurred, any loss (excluding loss of anticipated profits), cost or expense incurred by Lender as a result of the timing of such payment of the LIBOR Loan or in the redepositing, redeploying or reinvesting the principal amount so paid or affected by the timing of such LIBOR Loan or the circumstances described in such Section 2.7(d) and (g), including without limitation, the sum of (i) the interest which, but for the payment or timing of the LIBOR Loan, Lender would have earned in respect of such principal amount, reduced, if Lender is able to redeposit, redeploy, or reinvest such principal amount by the interest earned by Lender as a result of so redepositing, redeploying or reinvesting such principal amount and (ii) any expense or penalty incurred by Lender on redepositing, redeploying or reinvesting such principal amount. All determinations of Consequential Loss shall be made by Lender exercising its reasonable judgment.

     “ Contingent Obligation ” means, for any Person, any commitment, undertaking, Guarantee or other obligation constituting a contingent liability that must be accrued under GAAP.

     “ Continue ,” “ Continuation ” and “ Continued ” each refers to the continuation of a LIBOR Loan from one Interest Period to the next Interest Period pursuant to Section 2.4.

     “ Convert ,” “ Conversion ” and “ Converted ” each refers to the conversion of a Base Rate Loan to a LIBOR Loan or a LIBOR Loan to a Base Rate Loan.

     “ Courtyard at Post Oak ” means those retail properties so identified on Schedule 4.1, which are not encumbered by a Lien.

     “ CVS Pharmacies ” means those retail properties so identified on Schedule 4.1, which are not encumbered by a Lien.

     “ Daily LIBO Rate ” means the rate of interest, rounded upward to the nearest whole multiple of one-hundredth of one percent (.01%), equal to the sum of: (a) the Applicable Margin plus (b) the rate of interest, rounded upward to the nearest whole multiple of one-sixteenth of one percent (.0625%) that is quoted by Lender from time to time as the London Inter-Bank Offered Rate for deposits in Dollars at approximately 9:00 a.m., San Francisco time, for a period of one (1) month (“ Daily Rate ”) which Daily Rate is divided by one (1.00) minus the Reserve Percentage, as expressed in the following formula:

The Daily LIBO Rate shall be adjusted daily to reflect changes in the Daily LIBO Rate as determined above. Changes in the Base Rate due to a change in the Daily LIBO Rate shall become effective on the date each such change occurs.

     “ Darden (Smokey Bones) ” means the retail property so identified on Schedule 4.1, which is not encumbered by a Lien.

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

     “ Derivatives Contract ” means any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement. Not in limitation of the foregoing, the term “Derivatives Contract” includes any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement, including any such obligations or liabilities under any such master agreement.

     “ Derivatives Termination Value ” means, in respect of any one or more Derivatives Contracts, after taking into account the effect of any legally enforceable netting agreement relating to such Derivatives Contracts, (a) for any date on or after the date such Derivatives Contracts have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a) the amount(s) determined as the mark-to-market value(s) for such Derivatives Contracts, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Derivatives Contracts (which may include Lender).

     “ Development Property ” means real estate which is then undergoing development or redevelopment; however, such real property shall cease to be “Development Property” on the earlier of (i) twelve (12) full months of operations following completion or (ii) achievement of an Occupancy Rate of 80%. The term “Development Property” shall include real property of the type described in the immediately preceding sentence to be (but not yet) acquired by the Borrower, any Subsidiary or any Unconsolidated Affiliate upon completion of construction pursuant to a contract in which the seller of such real property is required to develop or renovate prior to, and as a condition precedent to, such acquisition.

     “ Dollars ” or “ $ ” means the lawful currency of the United States of America.

     “ EBITDA ” means, with respect to any Person and for any period and without duplication, the sum of (a) net earnings (loss) of such Person for such period (excluding equity in net earnings or net loss of Unconsolidated Affiliates) plus (b) depreciation and amortization expense and other non-cash charges of such Person for such period (but only to the extent deducted in determining net income (loss) for such period) plus (c) the amortized cash portion of direct financing leases (as defined by GAAP) but only to the extent deducted in determining net income (loss) for such period (d) plus interest expense of such Person for such period (but only

to the extent deducted in determining net income (loss) for such period) plus (e) income and franchise tax expense of such Person in respect of such period (but only to the extent deducted in determining net income (loss) for such period) minus (with respect to gains) or plus (with respect to losses) (f) extraordinary gains or losses of such Person, non-recurring items of income or expense relating to mergers and potential acquisitions acceptable to Lender in its reasonable discretion, and gains and losses from sales of assets of such Person for such period plus (g) such Person’s pro rata share of EBITDA of each of such Person’s Unconsolidated Affiliates (determined in a manner consistent with the calculation of such Person’s EBITDA) minus (with respect to gains) or plus (with respect to losses) any net income attributable to partnerships which hold Property in which partnerships such Person has direct or indirect (through a Subsidiary of such Person) ownership interest of not greater than fifty percent (50%).

     “ Effective Date ” means the date this Agreement becomes effective in accordance with Section 5.1.

     “ Effective Rate ” means, for each LIBOR Loan, the lesser of (i) the Maximum Lawful Rate or (ii) the Adjusted LIBO Rate for the applicable Interest Period selected by Borrower with respect to such LIBOR Loan and set in accordance with the provisions hereof, provided , however , if Borrower fails to duly and timely give Lender any Notice of Continuation or Notice of Conversion with respect to any maturing LIBOR Loan, the Effective Rate for such LIBOR Loan shall be the Daily LIBO Rate until Borrower’s due and timely giving of a Notice of Continuation or Notice of Conversion for such LIBOR Loan; provided further , however , if any of the transactions necessary for the calculation of interest at the Adjusted LIBO Rate requested or selected by Borrower should be or become prohibited or unavailable to Lender, or, if in Lender’s good faith judgment, it is not possible or practical for Lender to set the Adjusted LIBO Rate or Daily LIBO Rate for such LIBOR Loan and applicable Interest Period as requested or selected by Borrower, or as otherwise required hereby, the Effective Rate for such LIBOR Loan shall revert to the lesser of (i) the Maximum Lawful Rate and (ii) the greater of (a) Prime Rate plus one percent (1%) and (b) the Federal Funds Rate plus one and one-half percent (1.50%) plus the Applicable Margin.

     “ Eligible Property ” means a Property which satisfies all of the following requirements as determined by Lender: (a) such Property is owned 100% in fee simple by Borrower or a Wholly Owned Subsidiary of Borrower (however the foregoing is not intended to exclude real estate which is ground leased by Borrower or a Wholly Owned Subsidiary of Borrower to a tenant which has constructed and owns the improvements on such ground leased real estate); (b) neither such Property, nor any interest of Borrower or such Wholly Owned Subsidiary therein, is subject to any Lien other than Permitted Liens or to any agreement (other than this Agreement or any other Loan Document) that prohibits the creation of any Lien thereon as security for Indebtedness; (c) if such Property is owned by a Wholly Owned Subsidiary: (i) none of Borrower’s direct or indirect ownership interest in such Wholly Owned Subsidiary is subject to any Lien other than Permitted Liens or to any agreement (other than this Agreement or any other Loan Document) that prohibits the creation of any Lien thereon as security for Indebtedness and (ii) neither such Wholly Owned Subsidiary, nor any other Wholly Owned Subsidiary through which Borrower holds any indirect interest in such Wholly Owned Subsidiary, is subject to any restriction of any kind which would limit its ability to pay or perform its obligations under the Guaranty required to be delivered hereunder prior to its obligation to pay dividends or make any

other distribution on any of such Wholly Owned Subsidiary’s capital stock or other securities owned by Borrower or any other Wholly Owned Subsidiary of Borrower; (d) such Property has an Occupancy Rate of at least 80%; and (e) such Property is free of all structural defects, title defects, environmental conditions or other adverse matters except for defects, conditions or matters individually or collectively which are not material to the profitable operation of such Property.

     “ Eligible Subsidiary ” means any Subsidiary of Borrower other than a Special Purpose Subsidiary.

     “ Eligibility Certificate ” means the certificate described in Section 4.1(b)(iv) and in the Form of Exhibit H.

     “ Environmental Laws ” means any Applicable Law relating to environmental protection or the manufacture, storage, disposal or clean-up of Hazardous Materials including, without limitation, the following: Clean Air Act, 42 U.S.C. § 7401 et seq.; Federal Water Pollution Control Act, 33 U.S.C. § 1251 et seq.; Solid Waste Disposal Act, 42 U.S.C. § 6901 et seq.; Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. § 9601 et seq.; National Environmental Policy Act, 42 U.S.C. § 4321 et seq.; regulations of the Environmental Protection Agency and any applicable rule of common law and any judicial interpretation thereof relating primarily to the environment or Hazardous Materials.

     “ Equity Interest ” means, with respect to any Person, any share of capital stock of (or other ownership or profit interests in) such Person, any warrant, option or other right for the purchase or other acquisition from such Person of any share of capital stock of (or other ownership or profit interests in) such Person, any security convertible into or exchangeable for any share of capital stock of (or other ownership or profit interests in) such Person or warrant, right or option for the purchase or other acquisition from such Person of such shares (or such other interests), and any other ownership or profit interest in such Person (including, without limitation, partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such share, warrant, option, right or other interest is authorized or otherwise existing on any date of determination.

     “ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended, or any successor statute.

     “ ERISA Group ” means all members of a controlled group of corporations and all trades or businesses (whether or not incorporated) under common control that are treated as a single employer under Section 414 of the Internal Revenue Code.

     “ ERISA Plan ” means any employee benefit plan subject to Title I of ERISA.

     “ Event of Default ” means the occurrence of any of the events specified in Section 9.1, whatever the reason for such event and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment or order of any court or any order, rule or regulation of any governmental or nongovernmental body; provided that any requirement for notice or lapse of time or any other condition has been satisfied.

     “ Executive Investment Summary ” means, to the extent available, the set of information provided to the investment committee of the Borrower in connection with the acquisition of a Property. The Executive Investment Summary shall include, at a minimum, the following information relating to such Property: (a) a description of such Property, such description to include the age, location, site plan, color photographs (to the extent reasonably available to Borrower) and current occupancy rate of such Property; (b) the purchase price paid or to be paid for such Property; (c) the capitalization rate for such Property; (d) a summary of the existing tenants of such Property; (e) either current operating statements for such Property for the immediately preceding fiscal year and for current fiscal year through the fiscal quarter most recently ending (to the extent reasonably available to Borrower) or pro forma operating statements for such Property (to the extent reasonably available to Borrower); and (f) other demographics and trade information relating to such Property.

     “ Federal Funds Rate ” means, for any day, the rate per annum (rounded upward, if necessary, to the nearest 1/100th of 1%) equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day, provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate quoted to Lender on such day on such transactions as reasonably determined by Lender.

     “ FIRREA ” means the Financial Institution Recovery Reform and Enforcement Act of 1989, as amended.

     “ Fixed Charges ” means, with respect to a Person and for a given period, the sum of (a) the Interest Expense of such Person for such period, plus (b) the aggregate of all scheduled principal payments on Indebtedness made by such Person during such period (excluding balloon, bullet or similar payments of principal due upon the stated maturity of Indebtedness), plus (c) the aggregate of all preferred dividends paid or accrued by such Person during such period, plus (d) the Capital Expenditures Reserve for such period.

     “ 410 and Blanco — Citibank ” means the retail property so identified on Schedule 4.1, which is not encumbered by a Lien.

     “ Funds from Operations ” means, as of any period for a Person, net income (computed in accordance with GAAP), excluding gains (or losses) from sale of property and debt restructuring, plus depreciation and amortization (except for amortization of deferred financing cost), and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures will be calculated to reflect funds from operations on the same basis. “Funds from Operations” shall not include items which are classified as “extraordinary” in accordance with GAAP.”

     “ GAAP ” means, as to a particular Person, such accounting practice as, in the opinion of the independent accountants of recognized national standing regularly retained by such Person

and acceptable to Lender, conforms at the time to Generally Accepted Accounting Principles, consistently applied. “Generally Accepted Accounting Principles” means those principles and practices (a) which are recognized as such by the Financial Accounting Standards Board, (b) which are applied for all periods after the date hereof in a manner consistent with the manner in which such principles and practices were applied to the most recent audited financial statements of the relevant Person furnished to Lender or where a change therein has been concurred in by such Person’s independent auditors, and (c) which are consistently applied for all periods after the date hereof so as to reflect properly the financial condition, and results of operations and changes in financial position, of such Person. If there is a change in such accounting practice as to Borrower, then Borrower shall, unless otherwise consented to by Lender, continue to utilize, for the purpose of this Agreement, the accounting practices applicable to Borrower prior to such change.

     “ Golden Corral ” means those retail properties so identified on Schedule 4.1, which are not encumbered by a Lien.

     “ Governmental Approvals ” means all authorizations, consents, approvals, licenses and exemptions of, registrations and filings with, and reports to, all Governmental Authorities.

     “ Governmental Authority ” means any government (or any political subdivision or jurisdiction thereof), court, bureau, agency or other governmental authority having jurisdiction over Borrower or any Subsidiary, or any of its or their business, operations or properties.

     “ Gross Asset Value ” means, at a given time, the sum (without duplication) of (a) the sum of the Operating Property Values of Borrower and its Subsidiaries on a consolidated basis at such time, plus (b) all cash and cash equivalents (excluding tenant deposits) of the Borrower and its Subsidiaries at such time provided, however, that restricted cash and cash equivalents, including, without limitation, cash deposited in escrow accounts for taxes and insurance, shall only be included in Gross Asset Value to the extent a liability corresponding thereto is included in the determination of Total Liabilities and further provided that accounts receivable and notes receivable owed to Borrower or any of its Subsidiaries by an Affiliate of Borrower or any of its Subsidiaries cannot, in the aggregate, contribute more than the Maximum Intra-Company A/R Amount; plus (c) the current book value of all unimproved real property (other than Development Property) of Borrower and its Subsidiaries on a consolidated basis held for development (provided that the aggregate value of all real property held for development shall not exceed 5% of the Gross Asset Value) plus (d) the current book value of all Development Property of Borrower and its Subsidiaries on a consolidated basis, plus (e) the contractual purchase price of properties subject to purchase obligations, repurchase obligations, forward commitments and unfunded obligations to the extent such obligations and commitments are included in determining Borrower’s Total Liabilities, plus (f) Borrower’s Ownership Share of the Operating Property Value of Unconsolidated Affiliates, plus (g) Borrower’s Ownership Share of the current book value of all unimproved real property (other than Development Property) of Unconsolidated Affiliates (subject to the percentage limitation set forth in [c] above) plus (h) Borrower’s Ownership Share of the current book value of all Development Property of Unconsolidated Affiliates. The “Maximum Intra-Company A/R Amount” means the following amounts for the respective time periods set forth below:

     “ Guarantee ” by any Person means any obligation, contingent or otherwise, of such Person directly or indirectly guaranteeing any Indebtedness or other obligation of any other Person and, without limiting the generality of the foregoing, any obligation, direct or indirect, contingent or otherwise, of such Person (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation (whether arising by virtue of partnership arrangements, by agreement to keep-well, to purchase assets, goods, securities or services, to take-or-pay, or to maintain financial statement conditions or otherwise) or (b) entered into for the purpose of assuring in any other manner the obligee of such Indebtedness or other obligation of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part), provided that the term Guarantee shall not include endorsements for collection or deposit in the ordinary course of business. The term “Guarantee” used as a verb has a corresponding meaning.

     “ Guarantor ” means all Eligible Subsidiaries of Borrower and each other Person who has executed and delivered a Guaranty.

     “ Guaranty ” means the Guaranty executed by each Guarantor in favor of Lender and substantially in the form of Exhibit A.

     “ Hazardous Substances ” means all or any of the following: (a) substances that are defined or listed in, or otherwise classified pursuant to, any applicable Environmental Laws as “hazardous substances,” “hazardous materials,” “hazardous wastes,” “toxic substances” or any other formulation intended to define, list or classify substances by reason of deleterious properties such as ignitability, corrosivity, reactivity, carcinogenicity, reproductive toxicity, “TCLP” toxicity, or “EP toxicity”; (b) oil, petroleum or petroleum derived substances, natural gas, natural gas liquids or synthetic gas and drilling fluids, produced waters and other wastes associated with the exploration, development or production of crude oil, natural gas or geothermal resources; (c) any flammable substances or explosives or any radioactive materials; (d) asbestos in any form; and (e) electrical equipment which contains any oil or dielectric fluid containing levels of polychlorinated biphenyls in excess of fifty parts per million. However, de minimus amounts of substances which would otherwise be classified as Hazardous Substances and are utilized in the ordinary course of the use of Properties and in accordance with Applicable Laws are not Hazardous Substances for the purpose of this Agreement.

     “ IHOP Topeka ” means the retail property so identified on Schedule 4.1, which is not encumbered by a Lien.

     “ Indebtedness ” means, with respect to a Person, at the time of computation thereof, all of the following (without duplication): (a) all obligations of such Person in respect of money borrowed; (b) all obligations of such Person (other than trade debt incurred in the ordinary course of business), whether or not for money borrowed (i) represented by notes payable, or drafts accepted, in each case representing extensions of credit, (ii) evidenced by bonds, debentures, notes or similar instruments, or (iii) constituting purchase money indebtedness, conditional sales contracts, title retention debt instruments or other similar instruments, upon which interest charges are customarily paid or that are issued or assumed as full or partial payment for property; (c) Capitalized Lease Obligations of such Person; (d) all Letter of Credit Liabilities of such Person; (e) all Off Balance Sheet Liabilities of such Person; (f) net obligations under any Derivative Contract in an amount equal to the Derivatives Termination Value thereof; and (g) all Indebtedness of other Persons to the extent (i) such Person has Guaranteed or is otherwise recourse to such Person or (ii) is secured by a Lien on any property of such Person.

     “ Intangible Assets ” means, with respect to any Person (to the extent reflected in determining stockholders’ equity of such Person) (a) deferred charges, (b) the amount of any write-up in the book value of any assets contained in any balance sheet resulting from revaluation thereof or any write-up in excess of the cost of such assets acquired, and (c) the aggregate of all amounts appearing on the assets side of any such balance sheet for franchises, licenses, permits, patents, patent applications, copyrights, trademarks, trade names, goodwill, treasury stock, experimental or organizational expenses and other like intangibles. Notwithstanding the foregoing, “Intangible Assets” shall not include any adjustments required under Financial Accounting Standard (FAS) 141.

     “ Interest Expense ” means, for any Person and for any period, without redundancy, all paid, accrued or capitalized interest expense of such Person (other than capitalized interest funded from a Reserved Construction Loan) for such period and shall include (a) all paid or accrued interest expense in respect of Indebtedness and other liabilities which such Person has Guaranteed or is otherwise obligated whether or not on a recourse basis, (b) such Person’s Ownership Share of all paid or accrued interest expense for such period of Unconsolidated Affiliates of such Person, (c) costs related to Derivatives Contracts, and (d) fees and other expenses related to the issuance of letters of credit.

     “ Interest Period ” means, with respect to any LIBOR Loan, the period commencing on the date of the borrowing, Conversion or Continuation of such LIBOR Loan and ending on the last day of the period selected by Borrower pursuant to the provisions below. The duration of each Interest Period shall be one (1), three (3) or six (6) months, which in each case Borrower may, in an appropriate Notice of Borrowing, Notice of Continuation or Notice of Conversion, select. In no event shall an Interest Period extend beyond the Maturity Date. Whenever the last day of any Interest Period would otherwise occur on a day other than a Business Day, the last day of such Interest Period shall be extended to occur on the next succeeding Business Day; provided, however, that if such extension would cause the last day of such Interest Period to occur in the next following calendar month, the last day of such Interest Period shall occur on the next preceding Business Day. In no event shall an Interest Period have a duration of less than one month, except as specifically provided above.

     “ Interest Rate Hedge ” — A Derivatives Contract which is acceptable to Lender, and pursuant to which Borrower’s Interest Expense relating to the Indebtedness which is outstanding under the Commitment is controlled within parameters acceptable to Lender.

     “ Internal Revenue Code ” means the Internal Revenue Code of 1986, as amended, or any successor statute.

     “ Investment ” means, with respect to any Person, any acquisition or investment (whether or not of a controlling interest) by such Person, whether by means of (a) the purchase or other acquisition of any Equity Interest in another Person, (b) a loan, advance or extension of credit to, capital contribution to, Guaranty of Indebtedness of, or purchase or other acquisition of any Indebtedness of, another Person, including any partnership or joint venture interest in such other Person, or (c) the purchase or other acquisition (in one transaction or a series of transactions) of assets of another Person that constitute the business or a division or operating unit of another Person. Any commitment or option to make an Investment in any other Person shall constitute an Investment. Except as expressly provided otherwise, for purposes of determining compliance with any covenant contained in a Loan Document, the amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment.

     “ Issuing Bank ” means Lender or an affiliate of Lender, as the issuer of Letters of Credit hereunder.

     “ Issuing Bank Fees ” means the Fees payable to the Issuing Bank pursuant to the last sentences of Section 3.1(b) and (c).

     “ L/C Commitment Amount ” means an amount equal to $5,000,000.00.

     “ Lending Office ” means Lender’s office identified as: Wells Fargo Bank, National Association, Disbursement and Operations Center, 733 Marquette Avenue, 10 ^th Floor, Minneapolis, Minnesota 55402, Attention: Jivko Sabev.

     “ Letter of Credit ” has the meaning set forth in Section 2.13(a).

     “ Letter of Credit Documents ” means, with respect to any Letter of Credit, collectively, any application therefor, any certificate or other document presented in connection with a drawing under such Letter of Credit and any other agreement, instrument or other document governing or providing for (a) the rights and obligations of the parties concerned or at risk with respect to such Letter of Credit or (b) any collateral security for any of such obligations.

     “ Letter of Credit Liabilities ” shall mean, without duplication, at any time and in respect of any Letter of Credit, the sum of (a) the Stated Amount of such Letter of Credit plus (b) the aggregate unpaid principal amount of all Reimbursement Obligations of Borrower at such time due and payable in respect of all drawings made under such Letter of Credit.

     “ LIBO Rate ” means, with respect to each LIBOR Loan, the rate of interest per annum, rounded upwards to the nearest whole multiple of 1/16th of 1% (.0625%), quoted by Lender as the London Inter-Bank Offered Rate for deposits in Dollars at approximately 9:00 a.m., San

Francisco time, for an Interest Period for purposes of calculating effective rates of interest for loans or originations making reference thereto for an amount approximately equal to the LIBOR Loan and for a period of time approximately equal to the applicable Interest Period or the time remaining in an Interest Period after the date of a Consequential Loss, as appropriate. Each determination of the LIBO Rate by Lender shall, in absence of demonstrable error, be conclusive and binding.

     “ LIBOR Loan ” means any portion of the Revolving Loan with respect to which the interest rate is calculated by reference to the LIBO Rate for a particular Interest Period.

     “ Lien ” as applied to the real property of any Person means: (a) any security interest, encumbrance, mortgage, deed to secure debt, deed of trust, pledge, lien, charge or lease constituting a Capitalized Lease Obligation, conditional sale or other title retention agreement, or other security interest, security title or encumbrance of any kind in respect of any property of such Person, or upon the income or profits therefrom; (b) any arrangement, express or implied, under which any property of such Person is transferred, sequestered or otherwise identified for the purpose of subjecting the same to the payment of Indebtedness or performance of any other obligation in priority to the payment of the general, unsecured creditors of such Person; (c) the filing of any financing statement under the Uniform Commercial Code or its equivalent in any jurisdiction; and (d) any agreement by any such person to grant, give or otherwise convey any of the foregoing.

     “ Loan ” means a LIBOR Loan or a Base Rate Loan.

     “ Loan Documents ” means this Agreement, the Revolving Note, each Letter of Credit, each of the Guaranties, any agreement evidencing the fees referred to in Section 3.1(c) and each other document or instrument executed and delivered by any Loan Party in connection with this Agreement or any of the other foregoing documents.

     “ Loan Party ” means each of Borrower, each Guarantor, and each other Person who guarantees all or a portion of the Obligations and/or who pledges any collateral security to secure all or a portion of the Obligations.

     “ MacArthur Pads ” means those retail pad sites so identified on Schedule 4.1, which pad sites are not encumbered by a Lien.

     “ Major Agreements ” means, at any time, (a) each Property Management Agreement with respect to a Property and (b) any other agreement which in any way relates to the use, occupancy, operation, maintenance, enjoyment or ownership of a Property, the breach or loss of which would have a Materially Adverse Effect.

     “ Materially Adverse Effect ” means a materially adverse effect on (a) the business, assets, liabilities, financial condition, or results of operations of Borrower and its Subsidiaries taken as a whole, (b) the ability of any Loan Party to perform its obligations under any Loan Document to which it is a party, (c) the validity or enforceability of any of such Loan Documents, (d) the rights and remedies of Lender under any of such Loan Documents or (e) the timely payment of the principal of or interest on the Revolving Loan or other amounts payable in connection therewith. Except with respect to representations made or deemed made by Borrower under

Article 6 or in any of the other Loan Documents to which any Loan Party is a party, all determinations of materiality shall be made by Lender in its reasonable judgment unless expressly provided otherwise.

     “ Maximum Dividends Per Share ” means on a quarterly basis a per share amount for Class “A” shares of $0.1242, for Class “C” shares of $0.1750, and for Class “D” shares of $0.1625.

     “ Maximum Lawful Rate ” has the meaning given to such term in Section 3.2(b) hereof.

     “ Maximum Loan Availability ” means the lesser of (a) the amount of the Commitment and (b) the amount, if any, by which the Unencumbered Pool Value divided by 1.67 exceeds all Unsecured Indebtedness (other than the Commitment) of Borrower and its Subsidiaries.

     “ Mortgage ” means a mortgage, deed of trust or deed to secure debt or similar security instrument made by a Person owning an interest in real estate granting a Lien or such interest in real estate as security for the payment of Indebtedness.

     “ Net Operating Income ” means, for any Property for the period in question, but without duplication, the sum of (a) rents and other revenues received in the ordinary course from such Property (including amounts received from tenants as reimbursements for common area maintenance, taxes and insurance and proceeds of rent loss insurance but excluding pre-paid rents and revenues and security deposits except to the extent applied in satisfaction of tenants’ obligations for rent) minus (b) all expenses paid or accrued related to the ownership, operation or maintenance of such property, including but not limited to taxes, assessments and the like, insurance, utilities, payroll costs, maintenance, repair and landscaping expenses, marketing expenses, and general and administrative expenses (including an appropriate allocation for legal, accounting, advertising, marketing and other expenses incurred in connection with such property, but specifically excluding general overhead expenses of Borrower, Interest Expense on Indebtedness and any property management fees) minus (c) the Capital Expenditures Reserve for such Property as of the end of such period minus (d) the greater of (i) the actual property management fee paid during such period and (ii) an imputed management fee determined by multiplying the Applicable Management Fee Percentage times the gross revenues for such Property for such period, in each case determined in accordance with GAAP; however, non-cash GAAP adjustments, including, but not limited to, straight line rent and over/under market rent, will be excluded.

     “ Non-ERISA Plan ” means any Plan subject to Section 4975 of the Internal Revenue Code.

     “ Notice of Borrowing ” means a notice in the form of Exhibit C to be delivered to Lender by Borrower pursuant to Section 2.2.

     “ Notice of Continuation ” means a notice in the form of Exhibit D to be delivered to Lender by Borrower pursuant to Section 2.4.

     “ Notice of Conversion ” means a notice in the form of Exhibit E to be delivered to Lender by Borrower pursuant to Section 2.5.

     “ Obligations ” means, individually and collectively: (a) the Loans; (b) all Reimbursement Obligations and all other Letter of Credit Liabilities; (c) any and all renewals and extensions of any of the foregoing and (d) all other indebtedness, liabilities, obligations, covenants and duties of Borrower owing to Lender and/or the Issuing Bank of every kind, nature and description, under or in respect of this Agreement or any of the other Loan Documents, whether direct or indirect, absolute or contingent, due or not due, contractual or tortious, liquidated or unliquidated, and whether or not evidenced by any promissory note.

     “ Occupancy Rate ” means, with respect to a Property at any time, the ratio, expressed as a percentage, of (a) the net rentable square footage of such Property actually occupied by tenants paying rent pursuant to binding leases as to which no monetary default has occurred and has been continuing for a period of 90 or more days to (b) the aggregate net rentable square footage of such Property.

     “ Off Balance Sheet Liabilities ” means, with respect to any Person, any obligation or liability that does not appear as a liability on the balance sheet of such Person and that constitutes (a) any repurchase obligation or liability, contingent or otherwise, of such Person with respect to any accounts or notes receivable sold, transferred or otherwise disposed of by such Person, (b) any repurchase obligation or liability, contingent or otherwise, of such Person with respect to property or assets leased by such Person as lessee and (c) all obligations, contingent or otherwise, of such Person under any synthetic lease, tax retention operating lease, off balance sheet loan or similar off balance sheet financing if the transaction giving rise to such obligation (i) is considered indebtedness for borrowed money for tax purposes but is classified as an operating lease or (ii) does not (and is not required pursuant to GAAP to) appear as a liability on the balance sheet of such Person.

     “ Operating Property Value ” means, as of a given date, the sum of (A) Net Operating Income for all Properties (excluding Development Properties) on a trailing twelve month basis for the Borrower and its Subsidiaries, and (B) the Ownership Share of such Person’s Unconsolidated Affiliates, divided by eight percent (8%). For purposes of determining Operating Property Value (i) Net Operating Income from Properties acquired, or disposed of, by the Borrower or any Subsidiary during the trailing twelve months of the Borrower shall be excluded; however, acquired Property will be included initially at a value equal to the purchase price of such Property for the fiscal quarter in which it was purchased and will subsequently be valued based on Net Operating Income by annualizing the trailing Net Operating Income starting in the quarter subsequent to the quarter in which it was purchased until such time as twelve full months are included, at which time Net Operating Income for such trailing twelve-month period will be used to determine value (for example, at the end of the third full operating quarter in which the Property is owned, Net Operating Income for the preceding nine (9) months would be annualized), (ii) Net Operating Income from Development Properties shall be excluded, and (iii) with respect to a Property owned by a Subsidiary that is not a Wholly Owned Subsidiary, only the Borrower’s Ownership Share of the Net Operating Income of such Property shall be used when determining Operating Property Value.

     “ Ownership Share ” means, with respect to any Subsidiary of a Person or any Unconsolidated Affiliate of a Person, the greater of (a) such Person’s relative nominal direct and indirect ownership interest (expressed as a percentage) in such Subsidiary or Unconsolidated

Affiliate or (b) such Person’s relative direct and indirect economic interest (calculated as a percentage) in such Subsidiary or Unconsolidated Affiliate determined in accordance with the applicable provisions of the declaration of trust, articles or certificate of incorporation, articles of organization, partnership agreement, joint venture agreement or other applicable organizational document of such Subsidiary or Unconsolidated Affiliate.

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

     “ Permitted Distributions ” means an amount not exceeding the lesser of (x) the Maximum Dividend Per Share amount and (y) the “Applicable Distribution Percentage” (set forth below) of Borrower’s Funds from Operations for the applicable calendar quarter as follows:

     “ Permitted Liens ” means (a) Liens granted to Lender to secure the Obligations, (b) pledges or deposits made to secure payment of worker’s compensation (or to participate in any fund in connection with worker’s compensation insurance), unemployment insurance, pensions or social security programs, (c) encumbrances consisting of zoning restrictions, easements, or other restrictions on the use of real property, provided that such items do not materially impair the use of such property for the purposes intended and none of which is violated in any material respect by existing or proposed structures or land use, (d) the following to the extent no Lien has been filed in any jurisdiction or agreed to: (i) Liens for taxes not yet due and payable; or (ii) Liens imposed by mandatory provisions of Applicable Law such as for materialmen’s, mechanic’s, warehousemen’s and other like Liens arising in the ordinary course of business, securing payment of Indebtedness the payment of which is not yet due, (e) Liens for taxes, assessments and governmental charges or assessments that are being contested in good faith by appropriate proceedings diligently conducted, and for which reserves acceptable to Lender have been provided, (f) Liens expressly permitted under the terms of the Loan Documents, and (g) any extension, renewal or replacement of the foregoing to the extent such Lien as so extended, renewed or replaced would otherwise be permitted hereunder.

     “ Person ” means an individual, a corporation, a partnership, a limited liability company, an association, a trust or any other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

     “ Plan ” means at any time an employee pension benefit plan which is covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Internal Revenue Code.

     “ Prime Rate ” means a base rate of interest which Lender establishes from time to time and which serves as the basis upon which the effective rates of interest are calculated for those loans making reference thereto (which rate of interest may not be the lowest rate charged by the Lender). Any change in an Effective Rate due to a change in the Prime Rate shall become effective on the day each such change is announced within Lender.

     “ Property ” means real property improved with one or more operating retail properties.

     “ Property Management Agreements ” means, collectively, all agreements entered into by any Person with a Property Manager pursuant to which such Person engages such Property Manager to advise such Person with respect to the management of a Property.

     “ Property Manager ” means any Person engaged under a Property Management Agreement to advise the owner of a Property with respect to the management of such Property.

     “ Regulations T, U and X ” means Regulations T, U and X of the Board of Governors of the Federal Reserve System, as in effect from time to time.

     “ Reimbursement Obligation ” means the absolute, unconditional and irrevocable obligation of Borrower to reimburse the Issuing Bank for any drawing honored by the Issuing Bank under a Letter of Credit.

     “ REIT ” means a Person qualifying for treatment as a “real estate investment trust” under the Internal Revenue Code.

     “ Reserve Percentage ” is at any time the percentage announced within Lender as the reserve percentage under Regulation D for loans and obligations making reference to the Daily LIBO Rate or to an Adjusted LIBO Rate for an Interest Period or time remaining in an Interest Period after the date of a Consequential Loss, as appropriate. The Reserve Percentage shall be based on Regulation D or other regulations from time to time in effect concerning reserves for Eurocurrency Liabilities as defined in Regulation D from related institutions as though Lender were in a net borrowing position, as promulgated by the Board of Governors of the Federal Reserve System, or its successor.

     “ Reserved Construction Loan ” shall mean a construction loan extended to Borrower or any Subsidiary for the purpose of financing construction of a Property in respect of which: (a) no default or event of default exists; (b) interest on such loan has been budgeted to accrue at a rate of not less than the Base Rate at the time the interest reserve account is established; (c) the amount of such budgeted interest has been (i) included in the principal amount of such loan and (ii) segregated into an interest reserve account (which shall include any arrangement whereby loan proceeds equal to such budgeted interest are reserved and only disbursed to make interest payments in respect of such loan); (d) absent an event of default or default, such interest can be paid out of such interest reserve account only for the purpose of making interest payments on such loan; and (e) the amount held in such interest reserve account in respect of such loan, together with the net income, if any, from such Property projected by Lender will be sufficient, as determined by Lender, to pay all Interest Expense on such loan until the date that the Net Operating Income of such Property is anticipated to be sufficient to pay all Interest Expense on such loan.

     “ Restricted Payment ” means cash payments or other distributions on, or in respect of, any class of stock of, or other equity interest in, a Person, or other payments or transfers made in respect of the redemption, repurchase or acquisition of such stock or equity interest, other than any distribution or other payment payable solely in capital stock of such Person.

     “ Revolving Credit Termination Date ” means the earlier to occur of (a) October 30, 2009 or (b) the date on which the Commitment is terminated pursuant to Section 9.2.

     “ Revolving Loan ” means the credit facility evidenced by the Revolving Note.

     “ Revolving Note ” means the promissory note executed by Borrower, payable to the order of Lender, in the amount of the Commitment and substantially in the form of Exhibit B.

     “ Secured Indebtedness ” means, with respect to any Person, any Indebtedness of such Person that is secured in any manner by any Lien on any real property and shall include such Person’s Ownership Share of the Secured Indebtedness of any of such Person’s Unconsolidated Affiliates. The term “Secured Indebtedness” shall not include Indebtedness secured by partnership interests.

     “ Share ” means a transferable unit of beneficial interest in Borrower.

     “ Solvent ” means, when used with respect to any Person, that (a) the fair value and the fair salable value of its assets (excluding any Indebtedness due from any Affiliate of such Person) are each in excess of the fair valuation of its total liabilities (including all contingent liabilities); (b) such Person is able to pay its debts or other obligations in the ordinary course as they mature and (c) that the Person has capital not unreasonably small to carry on its business and all business in which it proposes to be engaged.

     “ Special Purpose Subsidiary ” means any “single-asset” or “single pool” Subsidiary of the Borrower that has been or may hereafter be formed by the Borrower for the exclusive purposes of obtaining permanent financing from a lender, and owning and operating the assets so financed, and which is prohibited by such lender from providing any guaranty of other Indebtedness.

     “ Stated Amount ” means the amount available to be drawn by a beneficiary under a Letter of Credit from time to time, as such amount may be increased or reduced from time to time in accordance with the terms of such Letter of Credit.

     “ Subsidiary ” means, for any Person, any corporation, partnership or other entity of which at least a majority of the securities or other ownership interests having by the terms thereof ordinary voting power to elect a majority of the board of directors or other persons performing similar functions of such corporation, partnership or other entity (without regard to the occurrence of any contingency) is at the time directly or indirectly owned or controlled by such Person or one or more Subsidiaries of such Person or by such Person and one or more Subsidiaries of such Person. “Wholly Owned Subsidiary” means any such corporation, partnership or other entity of which all of the equity securities or other ownership interests (other than, in the case of a corporation, directors’ qualifying shares) are so owned or controlled.

     “ Substantial Amount ” means, at the time of determination thereof, an amount greater than or equal to 15% of the sum of (a) total consolidated assets of Borrower and its Subsidiaries, on a consolidated basis, at such time, plus (b) accumulated depreciation of Borrower and its Subsidiaries, on a consolidated basis, at such time.

     “ Tangible Net Worth ” means, for any Person and as of a given date, such Person’s total consolidated stockholders’ equity, excluding intangible assets, plus , in the case of the Borrower, increases in accumulated depreciation and amortization accrued after the Effective Date, minus (to the extent contained in determining stockholders’ equity of such Person): (a) the amount of any write-up in the book value of any assets reflected in any balance sheet resulting from revaluation thereof or any write-up in excess of the cost of such assets acquired, and (b) the aggregate of all amounts appearing on the assets side of any such balance sheet for franchises, licenses, permits, patents, patent applications, copyrights, trademarks, service marks, trade names, goodwill, treasury stock, experimental or organizational expenses and other like assets which would be classified as intangible assets under GAAP, all determined on a consolidated basis.

     “ Total Budgeted Costs ” means, with respect to any Development Property, all amounts budgeted with respect to all of the following: (a) acquisition of land and any related improvements; (b) a reasonable and appropriate reserve for construction interest; (c) a reasonable and appropriate operating deficit reserve; (d) tenant improvements, (e) leasing commissions and (f) other hard and soft costs associated with the development or redevelopment of such real property. With respect to any real property to be developed in more than one phase, the Total Budgeted Cost shall exclude budgeted costs (other than costs relating to acquisition of land and related improvements) to the extent relating to any phase for which (i) construction has not yet commenced and (ii) a binding construction contract has not been entered into by the Borrower, any other Subsidiary or any Unconsolidated Affiliate, as the case may be. For purposes of this definition, Total Budgeted Costs shall, with respect to any real property being developed by an Unconsolidated Affiliate, be equal to the greater of (x) Borrower’s or any Subsidiary’s Ownership Share of such Unconsolidated Affiliate times the Total Budgeted Costs determined in accordance with the foregoing or (y) the total amount of Indebtedness related to such real property that Borrower or any Subsidiary has Guaranteed or is otherwise obligated on a recourse basis.

     “ Total Liabilities ” means, as to any Person as of a given date, all liabilities which would, in conformity with GAAP, be properly classified as a liability on a consolidated balance sheet of such Person as of such date, and in any event shall include (without duplication): (a) all Indebtedness of such Person, including without limitation, Capitalized Lease Obligations and reimbursement obligations with respect to any letter of credit, (b) all accounts payable and accrued expenses of such Person; (c) all purchase and repurchase obligations and forward commitments of such Person to the extent such obligations or commitments are evidenced by a binding purchase agreement (forward commitments shall include without limitation (i) forward equity commitments and (ii) commitments to purchase any real property under development, redevelopment or renovation); (d) all unfunded obligations of such Person; (e) all lease obligations of such Person (including ground leases) to the extent required under GAAP to be classified as a liability on a balance sheet of such Person; (f) all contingent obligations of such Person including, without limitation, all Guarantees of Indebtedness by such Person; (g) all liabilities of any Unconsolidated Affiliate of such Person, which liabilities such Person has

Guaranteed or is otherwise obligated on a recourse basis; and (h) such Person’s Ownership Share of the Indebtedness of any Unconsolidated Affiliate of such Person, including Nonrecourse Indebtedness of such Person. For purposes of clauses (c) and (d) of this definition, the amount of Total Liabilities of a Person at any given time in respect of (x) a contract to purchase or otherwise acquire unimproved or fully developed real property shall be equal to (i) the total purchase price payable by such Person under such contract if, at such time, the seller of such real property would be entitled to specifically enforce such contract against such Person, otherwise, (ii) the aggregate amount of due diligence deposits, earnest money payments and other similar payments made by such Person under such contract which, at such time, would be subject to forfeiture upon termination of the contract and (y) a contract relating to the acquisition of real property which the seller is required to develop or renovate prior to, and as a condition precedent to, such acquisition, shall be equal to (i) the maximum amount reasonably estimated to be payable by such Person under such contract assuming performance by the seller of its obligations under such contract, which amount shall include, without limitation, any amounts payable after consummation of such acquisition which may be based on certain performance levels or other related criteria if, at such time, the seller of such real property would be entitled to specifically enforce such contract against such Person, otherwise (ii) the aggregate amount of due diligence deposits, earnest money payments and other similar payments made by such Person under such contract which, at such time, would be subject to forfeiture upon termination of the contract. For purposes of this definition, Total Budgeted Costs shall include the Total Budgeted Costs of Development Properties being developed by third parties with related Indebtedness which such Person Guaranteed or is otherwise obligated.

     “ Type ” with respect to the Revolving Loan, refers to whether the applicable portion of the Revolving Loan is a LIBOR Loan or a Base Rate Loan.

     “ Unconsolidated Affiliate ” shall mean, in respect of any Person, any other Person in whom such Person holds an Investment, which Investment is accounted for in the financial statements of such Person on an equity basis of accounting and whose financial results would not be consolidated under GAAP with the financial results of such Person on the consolidated financial statements of such Person.

     “ Unencumbered Net Operating Income ” means, for any period, the aggregate Net Operating Income for such period for each Property of Borrower or any Subsidiary which satisfies all of the following requirements as determined by Lender: (a) such Property is 100% owned in fee simple by Borrower or a Wholly Owned Subsidiary of Borrower; (b) neither such Property nor any interest of Borrower or such Subsidiary therein, is subject to any Lien other than Permitted Liens or to any agreement (other than this Agreement or any other Loan Document) that prohibits the creation of any Lien thereon as security for Indebtedness; (c) if such Property is owned by a Subsidiary: (i) none of Borrower’s Ownership Share in such Subsidiary is subject to any Lien other than Permitted Liens or to any agreement (other than this Agreement or any other Loan Document) that prohibits the creation of any Lien thereon as security for Indebtedness and (ii) neither such Subsidiary, nor any other Subsidiary through which Borrower holds any indirect interest in such Subsidiary, is subject to any restriction of any kind which would limit its ability to pay or perform its obligations under the Guaranty required to be delivered hereunder prior to its obligation to pay dividends or make any other distribution

on any of such Subsidiary’s capital stock or other securities owned by Borrower or any other Subsidiary of Borrower.

     “ Unencumbered Pool Certificate ” means a report, certified by the chief financial officer of Borrower in the manner provided for in Exhibit G, setting forth the calculations required to establish the Unencumbered Pool Value as of a specified date, all in form and detail satisfactory to Lender.

     “ Unencumbered Pool Properties ” means those Eligible Properties that have been approved pursuant to Article 4 for inclusion when calculating the Maximum Loan Availability.

     “ Unencumbered Pool Value ” means, at any time, the sum of the following amounts as determined for each Unencumbered Pool Property: (a) the Net Operating Income of such Unencumbered Pool Property for the fiscal quarter most recently ended times (b) 4 and divided by (c) the Applicable NOI Percent.

     The “Applicable NOI Percent” shall be:

     (x) 8.5% with respect to the MacArthur Pads, CVS Pharmacies, Woodlands Plaza, Uptown Plaza, Courtyard at Post Oak, and Woodlands Ring Road;

     (y) 9.5% with respect to AFC, Inc., Carlsons Restaurant (TGI Fridays), Golden Corral, IHOP Topeka, Dardin (Smokey Bones) and 410 and Blanco — Citibank; and

     (z) with respect to any additional Unencumbered Pool Properties, the Applicable NOI Percent shall be either 8.5% or 9.5%, as determined by Lender in its sole discretion.

     “ Unsecured Indebtedness ” means, with respect to a Person, all Indebtedness of such Person that is not Secured Indebtedness.

     “ Unsecured Interest Expense ” means, with respect to a Person and for a given period, all Interest Expense for such period attributable to the Unsecured Indebtedness of such Person.

     “ Unused Fee ” means a fee payable by Borrower to Lender in consideration of Lender’s having the Commitment available to be loaned to Borrower, which Unused Fee shall be calculated and paid quarterly based on the portion of the Commitment, determined on a daily basis, not borrowed and outstanding during such preceding calendar quarter.

     “ Uptown Plaza ” means those retail properties so identified on Schedule 4.1 (other than the CVS Site located in Uptown Plaza), which are not encumbered by a Lien.

     “ Woodlands Plaza ” means those retail properties so identified on Schedule 4.1, which are not encumbered by a Lien.

     “ Woodlands Ring Road ” means those retail properties so identified on Schedule 4.1, which are not encumbered by a Lien.

     Section 1.2 Accounting Terms and Determinations; Covenant Calculations .

     Unless otherwise specified herein, all accounting terms used herein shall be interpreted, all accounting determinations hereunder shall be made, and all financial statements required to be delivered hereunder shall be prepared in accordance with GAAP.

     Section 1.3 Subsidiaries .

     Unless explicitly set forth to the contrary, a reference to “Subsidiary” shall mean a Subsidiary of Borrower and a reference to an “Affiliate” shall mean a reference to an Affiliate of Borrower.

     Section 1.4 Interpretation Generally; Times .

     References in this Agreement to “Sections,” “Articles,” “Exhibits” and “Schedules” are to sections, articles, exhibits and schedules herein and hereto unless otherwise indicated. References in this Agreement or any other Loan Document to any document, instrument or agreement (a) shall include all exhibits, schedules and other attachments thereto, as updated from time to time, (b) shall include all documents, instruments or agreements issued or executed in replacement thereof, and (c) shall mean such document, instrument or agreement, or replacement or predecessor thereto, as amended, modified or supplemented from time to time in accordance with its terms and in effect at any given time. Wherever from the context it appears appropriate, each term stated in either the singular or plural shall include the singular and plural, and pronouns stated in the masculine, feminine or neuter gender shall include the masculine, the feminine and the neuter. Unless otherwise indicated, all references to time are references to San Francisco, California time.

ARTICLE 2.
CREDIT FACILITY

     Section 2.1 Making of Revolving Loan .

     (a) Subject to the terms and conditions set forth in this Agreement including, without limitation, Section 2.1(b), Lender agrees to permit Borrower to make borrowings under the Revolving Loan during the period from and including the Effective Date to but excluding the Revolving Credit Termination Date, in an aggregate principal amount at any one time outstanding up to, but not exceeding, the lesser of (a) the Maximum Loan Availability and (b) the Commitment. Each borrowing shall be in an aggregate principal amount of (i) with respect to Base Rate Loans, except with respect to fundings under the Loan for deposits into the Sweep Account (hereinafter defined) pursuant to Section 2.11 hereof, $100,000.00 and integral multiples of $50,000.00 in excess of that amount (except that any such borrowing of Base Rate Loans may be in the aggregate amount of the unused Commitment) and (ii) with respect to LIBOR Loans, $250,000.00 and integral multiples of $100,000.00 in excess of that amount. Within the foregoing limits and subject to the other terms of this Agreement, Borrower may borrow, repay and reborrow the Revolving Loan.

     (b) Notwithstanding any other term of this Agreement or any other Loan Document, at no time may the aggregate principal amount of all outstanding LIBOR Loans, Base Rate

Loans and Letter of Credit Liabilities, exceed the lesser of (a) Maximum Loan Availability at such time or (b) the Commitment.

     Section 2.2 Requests for Borrowings .

     Not later than 10:00 a.m. at least one Business Day prior to a borrowing of Base Rate Loans, except with respect to fundings under the Loan for deposit into the Sweep Account pursuant to Section 2.11 hereof, and not later than 10:00 a.m. at least three Business Days prior to a borrowing of LIBOR Loans, Borrower shall deliver to Lender a Notice of Borrowing. Each Notice of Borrowing shall specify the principal amount of the Revolving Loans to be borrowed, the date such amount is to be borrowed (which must be a Business Day), the use of the proceeds of such borrowing, the Type of the requested borrowing and if such borrowing is to be a LIBOR Loan, the initial Interest Period for such LIBOR Loan. Each Notice of Borrowing shall be irrevocable once given and binding on Borrower. Prior to delivering a Notice of Borrowing, Borrower may (without specifying whether the borrowing will be a Base Rate Loan or a LIBOR Loan) request that Lender provide Borrower with the most recent LIBO Rate available to Lender. Lender shall provide such quoted rate to Borrower on the date of such request or as soon as possible thereafter.

     Section 2.3 Funding .

     Promptly after receipt of a Notice of Borrowing, and upon and subject to fulfillment of all applicable conditions set forth herein, Lender shall make available to Borrower at Lender’s Lending Office, not later than 11:00 a.m. on the date of the requested borrowing, the proceeds of such borrowing.

     Section 2.4 Continuation .

     So long as no Event of Default shall have occurred and be continuing, Borrower may on any Business Day, with respect to any LIBOR Loan, elect to maintain such LIBOR Loan or any portion thereof as a LIBOR Loan by selecting a new Interest Period for such LIBOR Loan. Each new Interest Period selected under this Section shall commence on the last day of the immediately preceding Interest Period. Each selection of a new Interest Period shall be made by Borrower’s giving of a Notice of Continuation not later than 10:00 a.m. on the third Business Day prior to the date of any such Continuation by Borrower to Lender. Such notice by Borrower of a Continuation shall be by telephone or telecopy, confirmed immediately in writing if by telephone, in the form of a Notice of Continuation, specifying (a) the date of such Continuation, (b) the LIBOR Loan and portion thereof subject to such Continuation and (c) the duration of the selected Interest Period, all of which shall be specified in such manner as is necessary to comply with all limitations on Loans outstanding hereunder. Each Notice of Continuation shall be irrevocable by and binding on Borrower once given. If Borrower shall fail to select in a timely manner a new Interest Period for any LIBOR Loan in accordance with this Section, such Loan will automatically, on the last day of the current Interest Period therefore, Convert into a Base Rate Loan notwithstanding failure of Borrower to comply with Section 2.5.

     Section 2.5 Conversion .

     So long as no Event of Default shall have occurred and be continuing, Borrower may on any Business Day, upon Borrower’s giving of a Notice of Conversion to Lender, Convert the entire amount of all or a portion of a Loan of one Type into a Loan of another Type. Any Conversion of a LIBOR Loan into a Base Rate Loan shall be made on, and only on, the last day of an Interest Period for such LIBOR Loan. Each such Notice of Conversion shall be given not later than 10:00 a.m. on the Business Day prior to the date of any proposed Conversion into Base Rate Loans and on the third Business Day prior to the date of any proposed Conversion into LIBOR Loans. Subject to the restrictions specified above, each Notice of Conversion shall be by telephone or telecopy confirmed immediately in writing if by telephone in the form of a Notice of Conversion specifying (a) the requested date of such Conversion, (b) the Type of Loan to be Converted, (c) the portion of such Type of Loan to be Converted, (d) the Type of Loan such Loan is to be Converted into and (e) if such Conversion is into a LIBOR Loan, the requested duration of the Interest Period of such Loan. Each Notice of Conversion shall be irrevocable by and binding on Borrower once given. Each Conversion from a Base Rate Loan to a LIBOR Loan shall be in an amount of not less than $250,000.00 or integral multiples of $100,000.00 in excess of that amount.

     Section 2.6 Interest Rate .

     (a) All Loans. The unpaid principal of each Base Rate Loan shall bear interest from the date of the making of such Loan to but not including the date of repayment thereof at a rate per annum equal to the Base Rate in effect from day to day. The unpaid principal of each LIBOR Loan shall bear interest from the date of the making of such Loan to but not including the date of repayment thereof at a rate per annum equal to the Effective Rate for the Interest Period therefor.

     (b) Default Rate. Notwithstanding the immediately preceding subsection (a), or any other provision of this Agreement to the contrary, effective immediately upon the occurrence and during the continuance of any Event of Default, the outstanding principal balance of the Loans and all Reimbursement Obligations, and to the extent permitted by Applicable Law any interest payments on the Loans not paid when due, shall bear interest payable on demand until paid at the lesser of the Maximum Rate or the Base Rate from time to time in effect plus four percent (4.0%).

     Section 2.7 Special Provisions for LIBOR Loans .

     (a) Inadequacy of LIBOR Pricing. Anything herein to the contrary notwithstanding, if, on or prior to the determination of any LIBO Rate for any Interest Period:

     (i) Lender reasonably determines, which determination shall be conclusive, absent manifest error, that quotations of interest rates for the relevant deposits referred to in the definition of LIBO Rate are not being provided in the relevant amounts or for the relevant maturities for purposes of determining rates of interest for LIBOR Loans as provided herein; or

     (ii) Lender reasonably determines, which determination shall be conclusive, absent manifest error, that the relevant rates of interest referred to in the definition of LIBO Rate upon the basis of which the rate of interest for LIBOR Loans for such Interest Period is to be determined are not likely adequately to cover the cost to Lender of making or maintaining LIBOR Loans for such Interest Period;

then Lender shall give Borrower prompt notice thereof and, so long as such condition remains in effect, Lender shall be under no obligation to, and shall not, make additional LIBOR Loans, Continue LIBOR Loans or Convert Base Rate Loans into LIBOR Loans and Borrower shall, on the last day of each current Interest Period for each outstanding LIBOR Loan, either prepay such Loan or Convert such Loan into a Base Rate Loan in accordance with Section 2.5.

     (b) Number of Interest Periods. Anything herein to the contrary notwithstanding, there shall not be outstanding at any one time more than six (6) Interest Periods.

     (c) Illegality of LIBOR Loans. If, after the date of this Agreement, the adoption of any Applicable Law, rule or regulation, or any change therein, or any change in the interpretation or administration thereof by any Governmental Authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by Lender with any request or directive (whether or not having the force of law) of any such authority, central bank or comparable agency shall make it unlawful or impossible for Lender to make, maintain or fund LIBOR Loans, Lender shall forthwith give notice thereof to Borrower. Before giving any notice pursuant to this subsection, Lender shall designate a different LIBOR lending office if such designation will avoid the need for giving such notice and will not be otherwise materially disadvantageous to Lender (as determined in the reasonable judgment of Lender). Upon receipt of such notice, Borrower shall Convert all then existing LIBOR Loans to Base Rate Loans, on either (i) the last day of the then-current Interest Period applicable to such LIBOR Loan if Lender may lawfully continue to maintain and fund such LIBOR Loan to such day or (ii) immediately if Lender may not lawfully continue to fund and maintain such LIBOR Loan to such day.

     (d) Consequential Losses. Borrower shall indemnify Lender against any Consequential Loss incurred by Lender as a result of (i) any failure to fulfill, on or before the date specified for such Loan in the applicable Notice of Borrowing, the conditions to such Loan set forth herein, or (ii) Borrower’s requesting that a Base Rate Loan not be Converted into a LIBOR Loan on the date specified for such Conversion in a Notice of Conversion, (iii) Borrower’s requesting that a LIBOR Loan not be Continued on the date specified for such Continuation in a Notice of Continuation or (iv) Borrower’s requesting that a LIBOR Loan not be made on the date specified for such LIBOR Loan in the Notice of Borrowing. A certificate of Lender establishing the amount due from Borrower according to the preceding sentence, together with a description in reasonable detail of the manner in which such amount has been calculated, shall be prima facie evidence thereof.

     (e) Increased Costs for LIBOR Loans. If, after the date hereof, any Governmental Authority, central bank or other comparable authority, shall at any time impose, modify or deem applicable any reserve (including, without limitation, any imposed by the Board of Governors of the Federal Reserve System), special deposit or similar requirement against assets of, deposits

with or for the account of, or credit extended by Lender or shall impose on Lender (or its eurodollar lending office) or the interbank eurodollar market any other condition affecting its LIBOR Loans, the Revolving Note or Lender’s obligation to make LIBOR Loans; and the result of any of the foregoing is to increase the cost to Lender of making or maintaining LIBOR Loans, or to reduce the amount of any sum received or receivable by Lender under this Agreement, or under the Revolving Note, by an amount reasonably deemed by Lender to be material, then, within five days after demand by Lender, Borrower shall pay to Lender such additional amount or amounts as will compensate Lender for such increased cost or reduction. Lender will (i) notify Borrower of any event occurring after the date of this Agreement which will entitle Lender to compensation pursuant to this subsection as promptly as practicable (but in any event within 120 days) after Lender obtains actual knowledge of such event, and Borrower shall not be liable for any such increased costs that accrue between the date such notification is required to be given and the date it was actually given and (ii) use good faith and reasonable efforts to designate a different lending office for Lender’s LIBOR Loans if such designation will avoid the need for, or reduce the amount of, such compensation and will not, in the reasonable opinion of Lender, be materially disadvantageous to Lender. A certificate of Lender claiming compensation under this Section and setting forth in reasonable detail the calculation of the additional amount or amounts to be paid to it hereunder shall be prima facie evidence thereof.

     (f) Effect on Base Rate Loans. If notice has been given pursuant to Section 2.7(a) or (c) requiring LIBOR Loans of Lender to be repaid or Converted, then unless and until Lender notifies Borrower that the circumstances giving rise to such repayment no longer apply, all Loans shall be Base Rate Loans. If Lender notifies Borrower that the circumstances giving rise to such repayment no longer apply, Borrower may thereafter select LIBOR Loans.

     (g) Payments Not at End of Interest Period. If Borrower makes any payment of principal with respect to any LIBOR Loan on any day other than the last day of an Interest Period applicable to such LIBOR Loan, then Borrower shall reimburse Lender on demand the Consequential Loss incurred by Lender as a result of the timing of such payment. A certificate of Lender setting forth in reasonable detail the basis for the determination of the amount of Consequential Loss shall be delivered to Borrower by Lender and shall, in the absence of demonstrable error, be conclusive and binding. Any Conversion of a LIBOR Loan to a Base Rate Loan on any day other than the last day of the Interest Period for such LIBOR Loan shall be deemed a payment for purposes of this subsection.

     Section 2.8 Capital Adequacy .

     If, after the date hereof, Lender shall have reasonably determined that either (a) the adoption of any law, rule, regulation or guideline of general applicability regarding capital adequacy, or any change therein, or any change in the interpretation or administration thereof by any Governmental Authority, central bank or comparable agency charged with the interpretation or administration thereof, or (b) compliance by Lender (or any lending office of Lender) with any request or directive of general applicability regarding capital adequacy (whether or not having the force of law) of any such authority, central bank or comparable agency, has or would have the effect of reducing the rate of return on Lender’s capital as a consequence of its or Borrower’s obligations hereunder to a level below that which Lender could have achieved but for such adoption, change or compliance (taking into consideration Lender’s policies with respect to

capital adequacy) by an amount reasonably deemed by Lender to be material, then from time to time, Lender may notify Borrower, which notice shall include a calculation and a reference to the law, rule or regulation. Within 120 days thereafter, Borrower shall either (i) pay to Lender such additional amount or amounts as will adequately compensate Lender for such reduction effective with the 121 ^st day, or (ii) payoff the Loans. Lender will notify Borrower of any such determination which will entitle Lender to compensation pursuant to this subsection as promptly as practicable (but in any event within 120 days) after Lender obtains actual knowledge of the event or condition prompting Lender to make such determination. A certificate of Lender claiming compensation under this Section and setting forth the additional amount or amounts to be paid to it hereunder, together with the description of the manner in which such amounts have been calculated, shall be prima facie evidence thereof. In determining such amount, Lender may use any reasonable averaging and attribution methods.

     Section 2.9 Repayment of Loans .

     (a) All accrued and unpaid interest on the unpaid principal amount of each Loan shall be payable (i) monthly in arrears on the first day of each month, commencing with the first full calendar month occurring after the Effective Date, (ii) on the Revolving Credit Termination Date and (iii) on any date on which the principal balance of such Loan is due and payable in full.

     (b) The aggregate outstanding principal balance of Revolving Loan shall be due and payable in full on the Revolving Credit Termination Date.

     (c) Except with respect to payments under the Sweep Agreement, Borrower may, upon at least one Business Day’s prior notice to Lender, prepay any Loan in whole at any time, or from time to time in part in an amount equal to $100,000.00 or integral multiples of $50,000.00 in excess of that amount, by paying the principal amount to be prepaid. If Borrower shall prepay the principal of any LIBOR Loan on any date other than the last day of the Interest Period applicable thereto, Borrower shall pay the amounts, if any, due under Section 2.7(d) and (g).

     (d) If at any time the aggregate principal amount of all outstanding principal balances of LIBOR Loans and Base Rate Loans, together with the aggregate amount of Letter of Credit Liabilities, exceeds the aggregate amount of the Commitment, Borrower shall promptly upon demand pay to Lender the amount of such excess. If at any time the aggregate outstanding principal balances of LIBOR Loans and Base Rate Loans together with the aggregate amount of all Letter of Credit Liabilities, exceeds the Maximum Loan Availability, then Borrower shall, within 10 days of Borrower obtaining actual knowledge of the occurrence of such excess, deliver to Lender a written plan acceptable to Lender to eliminate such excess (whether by designation of additional Properties as Unencumbered Pool Properties, by Borrower repaying an appropriate amount of Loans, or otherwise). If such excess is not eliminated within 30 days of Borrower obtaining actual knowledge of the occurrence thereof, then the entire outstanding principal balance of all Loans and all accrued interest thereon, together with an amount equal to all Letter of Credit Liabilities for deposit into the Collateral Account, shall be immediately due and payable in full.

     (e) Except to the extent otherwise provided herein, all payments of principal, interest and other amounts to be made by Borrower under this Agreement, the Revolving Note or any other Loan Document shall be made in Dollars, in immediately available funds, without setoff, deduction or counterclaim, to Lender at its Lending Office, not later than 11:00 a.m. on the date on which such payment shall become due (each such payment made after such time on such due date to be deemed to have been made on the next succeeding Business Day). All payments to be made by Borrower to the Issuing Bank under this Agreement or any other Loan Document shall be made in Dollars, in immediately available funds, without setoff, deduction or counterclaim, to the Issuing Bank, not later than 11:00 a.m. on the date on which such payment shall become due (each such payment made after such time on such due date to be deemed to have been made on the next succeeding Business Day). The parties agree that if Borrower makes any payment due hereunder after 11:00 a.m. but before 5:00 p.m. on the date such payment is due, such late payment shall not constitute a Default under Section 9.1(a) but shall nevertheless for all other purposes, including but not limited to, the calculation of interest and any fees payable pursuant to Section 3.1, be deemed to have been paid as of the next succeeding Business Day as provided in the applicable parenthetical phrase of the preceding sentences. If the due date of any payment under this Agreement or any other Loan Document would otherwise fall on a day which is not a Business Day such date shall be extended to the next succeeding Business Day and interest shall be payable for the period of such extension.

     Section 2.10 Voluntary Reductions of the Commitment .

     Borrower may terminate or reduce the aggregate unused amount of the Commitment (for which purpose use of the Commitment shall be deemed to include the aggregate amount of all Letter of Credit Liabilities) at any time and from time to time without penalty or premium upon not less than three Business Days prior notice to Lender of each such termination or reduction, which notice shall specify the effective date thereof and the amount of any such reduction (which in the case of any partial reduction of the Commitment shall not be less than $100,000.00 and integral multiples of $50,000.00 in excess of that amount) and shall be irrevocable once given and effective only upon receipt by Lender; provided, however, that if Borrower seeks to reduce the Commitment below $5,000,000.00, then the Commitment shall be reduced to zero and except as otherwise provided herein, the provisions of this Agreement shall terminate. The Commitment, once reduced pursuant to this Section, may not be increased. Borrower shall pay all interest and other costs on the Loans accrued to the date of such reduction or termination of the Commitment of Lender.

     Section 2.11 Credit Sweep Account .

     Borrower wishes to establish an automatic debit/credit sweep between the Revolving Loan and Account No. 4311786339 (the “Sweep Account”). The Sweep Account shall be activated at such time as Lender, in Lender’s sole and absolute discretion, deems appropriate, by notice thereof to Borrower. Upon such activation, then, subject to the terms of this Section, the terms of the sweep shall be governed by that certain Master Agreement for Treasury Management Services Agreement, dated May 18, 2000, by and between Borrower and Lender (the “Sweep Agreement”). Upon activation of the Sweep Account, Borrower hereby authorizes Lender, at the close of each business day, to make disbursements from the Loan for deposit into the Sweep Account (which shall be treated as a Base Rate Loan) and/or to withdraw funds from

the Sweep Account to pay, in whole or in part, the outstanding principal balance on the Revolving Loan. Following such activation, Lender may accept changes to these instructions only by written request from one of the following persons: H. Kerr Taylor and Chad Braun. Borrower hereby represents (i) that Lender may rely and act upon any written request from any such individuals and (ii) that the sweep specified above has been duly authorized by all necessary entity approvals. Borrower further hereby irrevocably grants, pledges and assigns to Lender, as additional security for the Loan, all monies now or hereafter deposited in the Sweep Account. Finally, notwithstanding anything in the Sweep Agreement to the contrary, Borrower agrees that Lender may immediately terminate the sweep relationship upon any Default under the Loan Documents and/or, whether or not there has been a Default under the Loan Documents, upon seven (7) days prior written notice to Borrower.

     Section 2.12 Funds Transfer Disbursements .

     If requested by Borrower, Borrower hereby authorizes Lender to disburse the proceeds of any Loan(s) made by Lender or its affiliate pursuant to the Loan Documents as requested by an authorized representative of the Borrower to any of the accounts designated in that certain Exhibit entitled Transfer Authorizer Designation. Borrower agrees to be bound by any transfer request: (i) authorized or transmitted by Borrower, or, (ii) made in Borrower’s name and accepted by Lender in good faith and in compliance with these transfer instruction, even if not properly authorized by Borrower. Borrower further agrees and acknowledges that Lender may rely solely on any bank routing number or identifying bank account number or name provided by Borrower to effect a wire or funds transfer even if the information provided by Borrower identifies a different bank or account holder than named by the Borrower. Lender is not obligated or required in any way to take any actions to detect errors in information provided by Borrower. If Lender takes any actions in an attempt to detect errors in the transmission or content of transfer or requests or takes any actions in an attempt to detect unauthorized funds transfer requests, Borrower agrees that no matter how many times Lender takes these actions Lender will not in any situation be liable for failing to take or correctly perform these actions in the future and such actions shall not become any part of the transfer disbursement procedures authorized under this provision, the Loan Documents, or any agreement between Lender and Borrower. Borrower agrees to notify Lender of any errors in the transfer of any funds or of any unauthorized or improperly authorized transfer requests within 14 days after Lender’s confirmation to Borrower of such transfer. Lender will, in its sole discretion, determine the funds transfer system and the means by which each transfer will be made. Lender may delay or refuse to accept a funds transfer request if the transfer would: (i) violate the terms of this authorization; (ii) require use of a bank unacceptable to Lender or prohibited by governmental authority; (iii) cause Lender to violate and Federal Reserve or other regulatory risk control program or guideline, or (iv) otherwise cause Lender to violate any applicable law or regulation. Lender shall not be liable to Borrower or any other parties for (i) errors, acts or failures to act of others, including other entities, banks, communications carriers or clearinghouses, through which Borrower’s transfers may be made or information received or transmitted, and no such entity shall be deemed an agent of the Lender, (ii) any loss, liability or delay caused by fires, earthquakes, wars, civil disturbances, power surges or failures, acts of government, labor disputes, failures in communications networks, legal constraints or other events beyond Lender’s control, or (iii) any special, consequential, indirect or punitive damages, whether or not (a) any claim for these damages is based on tort or contract or (b) Lender or Borrower knew or should

have known the likelihood of these damages in any situation. Lender makes no representations or warranties other than those expressly made in this Agreement.

     Section 2.13 Revolving Note .

     The obligation of Borrower to repay the Revolving Loan shall, in addition to this Agreement, be evidenced by the Revolving Note.

     Section 2.14 Letters of Credit .

     (a) Subject to the terms and conditions of this Agreement including, without limitation, Section 2.1(b), Lender agrees to cause the Issuing Bank to issue for the account of Borrower during the period from and including the Effective Date to, but excluding, the Revolving Credit Termination Date one or more letters of credit (each a “Letter of Credit”) in such form and containing such terms as may be requested from time to time by Borrower and acceptable to the Issuing Bank and Lender, up to a maximum aggregate Stated Amount at any one time outstanding not to exceed the L/C Commitment Amount. Lender and Borrower agree that those Letters of Credit which are described on Schedule 2.14(a) attached hereto and made a part hereof are outstanding as of the date of this Agreement but shall, for all purposes, be deemed Letters of Credit issued under this Agreement.

     (b) At the time of issuance, the amount, terms and conditions of each Letter of Credit, and of any drafts or acceptances thereunder, shall be subject to approval by the Issuing Bank, Lender and Borrower. Notwithstanding the foregoing, in no event may (i) the expiration date of any Letter of Credit extend beyond the Revolving Credit Termination Date, (ii) a Letter of Credit have an initial duration in excess of one year, (iii) a Letter of Credit contain an automatic renewal clause or (iv) a Letter of Credit be issued within 30 days of the Revolving Credit Termination Date. The initial Stated Amount of each Letter of Credit shall be at least $100,000.00.

     (c) In connection with the proposed issuance of a Letter of Credit, Borrower shall give Lender written notice (or telephonic notice promptly confirmed in writing) prior to the requested date of issuance of a Letter of Credit, such notice to describe in reasonable detail the proposed terms of such Letter of Credit and the nature of the transactions or obligations proposed to be supported by such Letter of Credit, and in any event shall set forth with respect to such Letter of Credit (i) the proposed initial Stated Amount, (ii) the beneficiary, (iii) whether such Letter of Credit is a commercial or standby letter of credit and (iv) the proposed expiration date. Borrower shall also execute and deliver such customary applications and agreements for standby letters of credit, standby letter of credit agreements, applications for amendment to letter of credit, and other forms as requested from time to time by Lender or the Issuing Bank. Provided Borrower has given the notice prescribed by the first sentence of this subsection and Borrower has executed and delivered to Lender and the Issuing Bank the agreements, applications and other forms as required by the immediately preceding sentence of this subsection, and subject to the terms and conditions of this Agreement, including the satisfaction of any applicable conditions precedent set forth in Article 5., Lender agrees to cause the Issuing Bank to issue the requested Letter of Credit on the requested date of issuance for the benefit of the stipulated beneficiary but in no event prior to the date five (5) Business Days following the date after which

each of Lender and the Issuing Bank received the items required to be delivered to it under this subsection. Upon the written request of Borrower, Lender shall deliver to Borrower a copy of each issued Letter of Credit within a reasonable time after the date of issuance thereof. To the extent any term of a Letter of Credit Document is inconsistent with a term of any Loan Document, the term of the Letter of Credit Document shall control.

     (d) Upon receipt by the Issuing Bank from the beneficiary of a Letter of Credit of any demand for payment under such Letter of Credit, Lender shall promptly notify Borrower of the amount to be paid by the Issuing Bank as a result of such demand and the date on which payment is to be made by the Issuing Bank to such beneficiary in respect of such demand. Borrower hereby unconditionally and irrevocably agrees to pay and reimburse the Issuing Bank for the amount of each demand for payment under such Letter of Credit at or prior to the date on which payment is to be made by the Issuing Bank to the beneficiary thereunder, without presentment, demand, protest or other formalities of any kind.

     (e) Unless Borrower shall elect to otherwise satisfy such Reimbursement Obligation, such reimbursement shall, subject to satisfaction of the conditions in Section 5.1 and Section 5.2 hereof and to the Maximum Loan Availability (after adjustment to reflect elimination of the corresponding Reimbursement Obligation), automatically be made by a borrowing under the Revolving Loans.

     (f) In examining documents presented in connection with drawings under Letters of Credit and making payments under such Letters of Credit against such documents, the Issuing Bank shall only be required to use the same standard of care as it uses in connection with examining documents presented in connection with drawings under other letters of credit it has issued and making payments under such other letters of credit. Borrower assumes all risks of the acts and omissions of, or misuse of the Letters of Credit by, the respective beneficiaries of such Letters of Credit. In furtherance and not in limitation of the foregoing, neither the Issuing Bank, nor Lender shall be responsible (i) for the form, validity, sufficiency, accuracy, genuineness or legal effects of any document submitted by any party in connection with the application for and issuance of or any drawing honored under any Letter of Credit even if it should in fact prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) for the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign any Letter of Credit, or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason; (iii) for failure of the beneficiary of any Letter of Credit to comply fully with conditions required in order to draw upon such Letter of Credit; (iv) for errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, telex, telecopy or otherwise, whether or not they be in cipher; (v) for errors in interpretation of technical terms; (vi) for any loss or delay in the transmission or otherwise of any document required in order to make a drawing under any Letter of Credit, or of the proceeds thereof; (vii) for the misapplication by the beneficiary of any such Letter of Credit, or the proceeds of any drawing under such Letter of Credit; and (viii) for any consequences arising from causes beyond the control of the Issuing Bank or Lender. None of the above shall affect, impair or prevent the vesting of any of the Issuing Bank’s rights or powers hereunder. Any action taken or omitted to be taken by the Issuing Bank under or in connection with any Letter of Credit, if taken or omitted in the absence of gross negligence or willful misconduct, shall not create against the Issuing Bank any liability to Borrower or Lender. In this connection,

the obligation of Borrower to reimburse the Issuing Bank for any drawing made under any Letter of Credit shall be absolute, unconditional and irrevocable and shall be paid strictly in accordance with the terms of this Agreement or any other applicable Letter of Credit Document under all circumstances whatsoever, including without limitation, the following circumstances: (i) any lack of validity or enforceability of any Letter of Credit Document or any term or provisions therein; (ii) any amendment or waiver of or any consent to departure from all or any of the Letter of Credit Documents; (iii) the existence of any claim, setoff, defense or other right which Borrower may have at any time against the Issuing Bank, Lender, any beneficiary of a Letter of Credit or any other Person, whether in connection with this Agreement, the transactions contemplated hereby or in the Letter of Credit Documents or any unrelated transaction; (iv) any breach of contract or dispute between Borrower, the Issuing Bank, Lender or any other Person; (v) any demand, statement or any other document presented under a Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein or made in connection therewith being untrue or inaccurate in any respect whatsoever; (vi) any non-application or misapplication by the beneficiary of a Letter of Credit of the proceeds of any drawing under such Letter of Credit; (vii) payment by the Issuing Bank under the Letter of Credit against presentation of a draft or certificate which does not strictly comply with the terms of the Letter of Credit; and (viii) any other act, omission to act, delay or circumstance whatsoever that might, but for the provisions of this Section, constitute a legal or equitable defense to or discharge of Borrower’s Reimbursement Obligations.

     (g) The issuance by the Issuing Bank of any amendment, supplement or other modification to any Letter of Credit shall be subject to the same conditions applicable under this Agreement to the issuance of new Letters of Credit (including, without limitation, that the request therefor be made through the Issuing Bank), and no such amendment, supplement or other modification shall be issued unless either (i) the respective Letter of Credit affected thereby would have complied with such conditions had it originally been issued hereunder in such amended, supplemented or modified form or (ii) Lender shall have consented thereto.

     (h) Upon the issuance by the Issuing Bank of any Letter of Credit and until such Letter of Credit shall have expired or been terminated, the Commitment shall be deemed to be utilized for all purposes of this Agreement in an amount equal to the Stated Amount of such Letter of Credit plus any related Reimbursement Obligations then outstanding.

     (i) If on the date (the “Facility Termination Date”) this Agreement is terminated (whether voluntarily, by reason of the occurrence of an Event of Default or otherwise) any Letters of Credit are outstanding, Borrower shall, on the Facility Termination Date, pay to Lender an amount of money equal to the Stated Amount of such Letter(s) of Credit, together with the amount of any fees which would otherwise be payable by Borrower to Lender or the Issuing Bank in respect of such Letters of Credit but for the occurrence of the Facility Termination Date for deposit into the Collateral Account. If at any time the aggregate Stated Amount of all outstanding Letters of Credit shall exceed the L/C Commitment Amount then in effect, Borrower shall pay to Lender for deposit into the Collateral Account an amount equal to such excess. If a drawing pursuant to any such Letter of Credit occurs on or prior to the expiration date of such Letter of Credit, Borrower authorizes Lender to disburse to the Issuing Bank the monies deposited in the Collateral Account to make payment to the beneficiary with respect to such drawing. If no drawing occurs on or prior to the expiration date of any such

Letter of Credit, Lender shall return to Borrower the monies deposited in the Collateral Account with respect to such outstanding Letter of Credit on or before the date 10 Business Days after the expiration date with respect to the Letter of Credit.

     (j) If as a result of the adoption of any Applicable Law or guideline of general applicability regarding capital adequacy, or any change therein, or any change in the interpretation or administration thereof by any Governmental Authority, central bank or comparable agency charged with the interpretation or administration thereof, or if as a result of any risk-based capital guideline or other requirement heretofore or hereafter issued by any Governmental Authority, there shall be imposed, modified or deemed applicable any tax, reserve, special deposit, capital adequacy or similar requirement against or with respect to or measured by reference to Letters of Credit and the result shall be to increase the cost to the Issuing Bank of issuing (or of Lender purchasing participations in) or maintaining its obligation hereunder to issue (or purchase participations in) any Letter of Credit or reduce any amount receivable by the Issuing Bank or Lender hereunder in respect of any Letter of Credit, then, upon demand by the Issuing Bank or Lender, Borrower shall pay immediately to the Issuing Bank or Lender, as applicable, from time to time as specified by the Issuing Bank or Lender, such additional amounts as shall be sufficient to compensate the Issuing Bank or Lender for such increased costs or reductions in amount.

ARTICLE 3.
GENERAL LOAN PROVISIONS

     Section 3.1 Fees .

     (a) Intentionally Deleted.

     (b) On the first day of each January, April, July and October prior to the Revolving Credit Termination Date, commencing January 1, 2009, and on the Revolving Credit Termination Date with respect to the period since the last date on which the Unused Fee was paid, Borrower shall pay to Lender the Unused Fee. If the unused portion of the Commitment is equal to or less than fifty percent (50%) of the Commitment, the Unused Fee rate shall be 12.5/100% (.125%) of the unused portion of the Commitment. If the unused portion of the Commitment is greater than fifty percent (50%) of the Commitment, the Unused Fee rate shall be 20/100% (.20%) of the unused portion of the Commitment.

     (c) Borrower agrees to pay to Lender such reasonable fees for services rendered by Lender as shall be separately agreed upon between Borrower and Lender. Borrower agrees to pay to the Issuing Bank such reasonable fees for services rendered by the Issuing Bank as shall be separately agreed upon between Borrower and the Issuing Bank from time to time.

     (d) Borrower agrees to pay to Lender a letter of credit fee at a rate per annum equal to the product obtained by multiplying the then Applicable Margin for LIBOR Loans times the Stated Amount of each Letter of Credit on the date of issuance of such Letter of Credit and on each anniversary of the date of issuance thereof until such Letter of Credit has expired. The fee provided for in the immediately preceding sentence shall be nonrefundable. Borrower shall also pay directly to the Issuing Bank from time to time on demand all commissions, charges, costs

and expenses in the amounts customarily charged by the Issuing Bank from time to time in like circumstances with respect to the issuance of each Letter of Credit, drawings, amendments and other transactions relating thereto. Borrower shall also pay to Lender, solely for its own account and on the date of the issuance of such Letter of Credit, a fronting fee in respect of each Letter of Credit at the rate equal to one-eighth of one percent (0.125%) per annum on the Stated Amount of such Letter of Credit; provided, however, in no event shall the amount of such fronting fee in respect of any Letter of Credit be less than $500.00.

     Section 3.2 Computation of Interest and Fees .

     Interest on the Loans and the Letter of Credit Liabilities and all fees shall be computed on the basis of a year of 360 days and paid for the actual number of days elapsed (including the first day but excluding the last day of a period).

     Section 3.3 Limitation of Interest .

     (a) It is expressly stipulated and agreed to be the intent of Borrower and Lender at all times to comply strictly with the applicable Texas law (or applicable United States federal law to the extent that it permits Lender to contract for, charge, take, reserve or receive a greater amount of interest than under Texas law) governing the maximum rate or amount of interest payable on the Revolving Note or the Related Indebtedness. If the applicable law is ever judicially interpreted so as to render usurious any amount (i) contracted for, charged, taken, reserved or received pursuant to the Revolving Note, any of the other Loan Documents or any other communication or writing by or between Borrower and Lender related to the transaction or transactions that are the subject matter of the Loan Documents, (ii) contracted for, charged or received by reason of Lender’s exercise of the opt