10-Q

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
For the quarterly period ended September 30, 2002

OR

o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
For the transition period from __________ to ____________

Commission file number 000-13848

CONCORD EFS, INC.

(Exact Name of Registrant as Specified in its Charter)

Delaware	04-2462252
(State or Other Jurisdiction of	(I.R.S. Employer
Incorporation or Organization)	Identification Number)

2525 Horizon Lake Drive, Suite 120, Memphis, Tennessee 38133
(Address of Principal Executive Offices)

(901) 371-8000
(Registrant’s Telephone Number, Including Area Code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

The number of shares of the registrant’s Common Stock, $0.33 1/3 par value, outstanding as of October 31, 2002 was 508,733,706.

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION
	FINANCIAL STATEMENTS (UNAUDITED)
		CONDENSED CONSOLIDATED BALANCE SHEETS
		CONDENSED CONSOLIDATED STATEMENTS OF INCOME
		CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
		NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
	MANAGEMENT’S DISCUSSION & ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
	CONTROLS AND PROCEDURES
PART II OTHER INFORMATION
	Item 1. Legal Proceedings
	Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
CERTIFICATIONS
FORM 10-Q LISTING OF EXHIBITS
MASTER AGREEMENT, DATED AS OF JULY 12, 2002
MASTER LEASE AGREEMENT, DATED AS OF JULY 12, 2002
CONSTRUCTION AGENCY AGREEMENT, DATED JULY 12,2002
LOAN AGREEMENT, DATED AS OF JULY 12, 2002
GUARANTY AGREEMENT, DATED AS OF JULY 12, 2002
LETTER AGREEMENT, DATED SEPTEMBER 11, 2002
LETTER AGREEMENT, DATED AUGUST 30, 2002
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
CERTIFICATION OF PRESIDENT
CERTIFICATION OF CHIEF FINANCIAL OFFICER
CAUTIONARY STATEMENTS

CONCORD EFS, INC. AND SUBSIDIARIES

PART I - Financial Information
Item 1.  Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets as of September 30, 2002 and December 31, 2001	1
	Condensed Consolidated Statements of Income for Three Months and Nine Months Ended September 30, 2002 and September 30, 2001	2
	Condensed Consolidated Statements of Cash Flows for Nine Months Ended September 30, 2002 and September 30, 2001	3
	Notes to Condensed Consolidated Financial Statements	4
Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations		17
Item 3.  Quantitative and Qualitative Disclosures About Market Risk		28
Item 4.  Controls and Procedures		29
PART II - Other Information
Item 1.  Legal Proceedings		30
Item 6.  Exhibits and Reports on Form 8-K		32
Signatures		33
Certifications		34

CONCORD EFS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)

	September 30,		December 31,
	2002		2001
ASSETS	(in thousands)
CURRENT ASSETS
Cash and cash equivalents	$	807,425	$	682,906
Securities available for sale		1,231,823		1,228,805
Alternative investments		197,378		—
Accounts receivable, net		165,318		134,496
Inventories		20,688		20,971
Prepaid expenses and other current assets		36,083		34,346
Deferred income taxes		960		13,054
TOTAL CURRENT ASSETS		2,459,675		2,114,578
Loans, net		12,953		89,038
Property and equipment, net		311,404		267,451
Goodwill, net		282,644		158,632
Other intangible assets, net		54,609		85,712
Other assets		31,988		14,034
TOTAL ASSETS	$	3 ,153,273	$	2,729,445
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and other liabilities	$	468,318	$	488,789
Deposits		133,674		162,972
Accrued liabilities		43,565		29,837
Accrued restructuring charges		31,590		5,315
Accrued litigation settlement		2,487		—
Income taxes payable		21,954		1,438
Current maturities of long-term debt		75,489		—
TOTAL CURRENT LIABILITIES		777,077		688,351
Long-term debt		141,751		119,458
Deferred income taxes		67,385		55,437
Other liabilities		8,039		4,202
TOTAL LIABILITIES		994,252		867,448
Commitments and contingent liabilities		—		—
Minority interest in subsidiary		4,825		3,410
STOCKHOLDERS' EQUITY
Common stock		169,578		169,352
Other stockholders' equity		1,984,618		1,689,235
TOTAL STOCKHOLDERS' EQUITY		2,154,196		1,858,587
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	3,153,273	$	2,729,445

See Notes to Condensed Consolidated Financial Statements.

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CONCORD EFS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

	Three months ended September 30,					Nine months ended September 30,
	2002			2001		2002		2001
	(in thousands, except per share data)
Revenue	$	568,296		$	436,198	$	1,568,616	$	1,230,906
Cost of operations		421,086			304,414		1,125,361		874,301
Selling, general and administrative expenses		31,233			22,348		88,372		69,450
Acquisition, restructuring and write-off charges		—			—		76,506		125,362
Litigation settlement charges (credits)		(11,000	)		—		9,761		—
OPERATING INCOME		126,977			109,436		268,616		161,793
Other income and expense:
Other income		1,023			876		7,937		3,068
Investment income		20,653			19,702		59,723		50,424
Interest expense		3,054			3,510		8,816		9,890
INCOME BEFORE TAXES AND MINORITY INTEREST		145,599			126,504		327,460		205,395
Income taxes		50,959			44,910		115,033		78,438
INCOME BEFORE MINORITY INTEREST		94,640			81,594		212,427		126,957
Minority interest in net income of subsidiary		311			138		671		311
NET INCOME	$	94,329		$	81,456	$	211,756	$	126,646
PER SHARE DATA:
Basic earnings per share	$	0.18		$	0.16	$	0.41	$	0.26
Diluted earnings per share	$	0.18		$	0.16	$	0.40	$	0.25
AVERAGE SHARES OUTSTANDING:
Basic shares		512,546			503,193		510,973		491,102
Diluted shares		527,856			524,510		530,255		512,319

See Notes to Condensed Consolidated Financial Statements.

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CONCORD EFS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

	Nine months ended September 30,
	2002			2001
	(in thousands)
OPERATING ACTIVITIES
Net income	$	211,756		$	126,646
Adjustments to reconcile net income to net cash
provided by operating activities:
Minority interest in subsidiary		671			311
Provision for (recovery of) losses on accounts receivable and loans		(81	)		1,587
Depreciation and amortization		64,537			69,831
Deferred income taxes		14,671			(15,873	)
Net realized gain on sales of securities available for sale		(2,035	)		(2,492	)
Restructuring charges		38,339			19,916
Changes in operating assets and liabilities:
Settlement receivables and payables, net		(32,381	)		(19,672	)
Accounts receivable		(21,794	)		(15,099	)
Inventories		517			(4,692	)
Prepaid expenses and other current assets		(1,268	)		(11,893	)
Accounts payable and other liabilities		58,960			101,165
Other, net		2,224			(528	)
NET CASH PROVIDED BY OPERATING ACTIVITIES		334,116			249,207
INVESTING ACTIVITIES
Acquisition of securities available for sale		(665,725	)		(948,255	)
Proceeds from sales of securities available for sale		558,543			377,045
Proceeds from maturity of securities available for sale		131,483			127,391
Acquisition of alternative investments		(195,546	)		—
Purchases of loans		(17,716	)		(30,915	)
Proceeds from sales of loans		53,534			—
Other net change in loans		41,827			13,957
Acquisition of property and equipment		(100,409	)		(82,881	)
Purchased merchant contracts		—			(22,581	)
Business acquisitions, net		(17,240	)		(19,700	)
Other investing activity		(21,043	)		(6,005	)
NET CASH USED IN INVESTING ACTIVITIES		(232,292	)		(591,944	)
FINANCING ACTIVITIES
Net increase (decrease) in deposits		(29,298	)		39,030
Proceeds from borrowings		149,900			21,000
Payments on borrowings		(52,118	)		(14,444	)
Purchase and retirement of common stock		(68,365	)		—
Proceeds from offering of common stock		—			420,630
Proceeds from exercise of stock options		22,819			21,620
Payments on leases payable		(243	)		(1,217	)
NET CASH PROVIDED BY FINANCING ACTIVITIES		22,695			486,619
NET INCREASE IN CASH AND CASH EQUIVALENTS		124,519			143,882
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR		682,906			298,383
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	807,425		$	442,265

See Notes to Condensed Consolidated Financial Statements.

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CONCORD EFS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Note A - Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments, consisting of normal recurring accruals, considered necessary for a fair presentation have been included. Operating results for the three and nine months ended September 30, 2002 are not necessarily indicative of the results that may be expected for the year ended December 31, 2002. For further information, refer to the consolidated financial statements and footnotes thereto included in the Concord EFS, Inc. and Subsidiaries (Concord) annual report on Form 10-K filed on February 26, 2002 for the year ended December 31, 2001.

Nature of Operations: Concord is a vertically integrated electronic transaction processor. Concord acquires, routes, authorizes, captures, and settles virtually all types of electronic payment and deposit access transactions for financial institutions and merchants nationwide. Concord’s primary activities consist of Network Services, which provides automated teller machine (ATM) processing, debit card processing, deposit risk management, and coast-to-coast debit network access principally for financial institutions, and Payment Services, which provides payment processing for supermarkets, major retailers, petroleum dealers, convenience stores, restaurants, trucking companies, and independent retailers.

Principles of Consolidation: The condensed consolidated financial statements include the accounts of Concord and its subsidiaries after elimination of all material intercompany balances and transactions.

Business Combinations: The condensed consolidated financial statements have been restated for all transactions accounted for as poolings of interests to combine the financial position, results of operations, and cash flows of the respective companies for all periods presented. Transactions accounted for under the purchase method of accounting reflect the net assets of the acquired company at fair value on the date of acquisition, and the excess of the purchase price over fair value of the net assets is recorded as goodwill. The results of operations of the purchased company are included in Concord’s results of operations since the date of acquisition.

Alternative Investments: Concord’s alternative investments, including hedge fund-of-funds, are accounted for under the equity method of accounting with realized and unrealized gains and losses reflected in investment income for each reporting period.

Reclassification: Certain 2001 amounts have been reclassified to conform to the 2002 presentation.

Recent Pronouncement: In July 2002 the Financial Accounting Standards Board issued Statement of Financial Accounting Standards 146, “Accounting for Costs Associated with Exit or Disposal Activities.” SFAS 146 addresses financial accounting and reporting for costs associated with exit or disposal activities and nullifies EITF Issue 94-3. The principal difference between SFAS 146 and Issue 94-3 relates to SFAS 146’s requirements for recognition of a liability for a cost associated with an exit or disposal activity. SFAS 146 requires that a

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CONCORD EFS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Note A - Basis of Presentation, continued

liability for a cost associated with an exit or disposal activity be recognized when the liability is incurred. Under Issue 94-3, a liability for an exit cost as generally defined in Issue 94-3 was recognized at the date of an entity’s commitment to an exit plan. The FASB concluded in SFAS 146 that an entity’s commitment to a plan, by itself, does not create an obligation that meets the definition of a liability. Therefore, SFAS 146 eliminates the definition and requirements for recognition of exit costs in Issue 94-3. SFAS 146 also establishes that fair value is the objective for initial measurement of the liability. The provisions of this Statement are effective for exit or disposal activities that are initiated after December 31, 2002.

In October 2002 the Financial Accounting Standards Board issued Statement of Financial Accounting Standards 147, “Acquisitions of Certain Financial Institutions.” SFAS 147 addresses the financial accounting and reporting for the acquisition of all or part of a financial institution and is effective for any such activities initiated after October 1, 2002. The adoption of this statement is not anticipated to have a material effect on Concord’s financial position or results of operations.

Note B - Business Combinations and Acquisition, Restructuring and Write-Off Charges

In June 2001 the Financial Accounting Standards Board issued Statement of Financial Accounting Standards 141, “Business Combinations.” SFAS 141 requires that the purchase method of accounting be used for all business combinations initiated after June 30, 2001. SFAS 141 also includes guidance on the initial recognition and measurement of goodwill and other intangible assets arising from business combinations completed after June 30, 2001.

On May 17, 2002 Concord acquired Core Data Resources, Inc., an electronic transaction processor. The acquisition, for which Concord issued approximately 2.0 million shares of its common stock, was accounted for as a purchase transaction and is immaterial to Concord’s financial statements. The allocation of the purchase price is preliminary because a valuation study has not yet been completed. Concord expects to complete this study in the fourth quarter.

On March 1, 2002 Concord acquired The Logix Companies, LLC, an electronic transaction processor. The acquisition, for which Concord issued approximately 0.9 million shares of its common stock and paid approximately $6.3 million in cash, was accounted for as a purchase transaction and is immaterial to Concord’s financial statements. The allocation of the purchase price is preliminary because a valuation study has not yet been completed. Concord expects to complete this study in the fourth quarter.

On January 1, 2002 Concord acquired H & F Services, Inc., an independent sales organization, for $8.9 million in cash. Prior to the acquisition, Concord had purchased merchant contracts through H & F Services. The acquisition was accounted for as a purchase transaction and is immaterial to Concord’s financial statements.

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CONCORD EFS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Note B - Business Combinations and Acquisition, Restructuring and Write-Off Charges, continued

Concord owns a majority interest in Primary Payment Systems, Inc., a deposit risk management company. In April 2001 Concord increased its ownership position in Primary Payment Systems to 85.5% through the purchase of newly issued shares, which largely funded Primary Payment Systems’ acquisition of Wally Industries, Inc. d/b/a WJM Technologies. The acquisition of WJM, for which Primary Payment Systems paid approximately $20.0 million, was accounted for as a purchase transaction and is immaterial to Concord’s financial statements.

On February 1, 2001 Concord acquired Star Systems, Inc. (STAR_sm), a debit network. The acquisition was accounted for as a pooling of interests transaction in which Concord issued approximately 48.0 million shares of its common stock.

The following table presents selected financial information split between Concord and STAR (in thousands, except per share data):

	Three months ended September 30,				Nine months ended September 30,
		2002		2001		2002		2001
Revenue:
Concord	$	568,296	$	436,198	$	1,568,616	$	1,216,034
STAR (1)		—		—		—		15,396
Intercompany eliminations (2)		—		—		—		(524	)
Combined revenue	$	568,296	$	436,198	$	1,568,616	$	1,230,906
Net income:
Concord	$	94,329	$	81,456	$	211,756	$	123,718
STAR (1)		—		—		—		2,928
Combined net income	$	94,329	$	81,456	$	211,756	$	126,646
Basic earnings per share combined	$	0.18	$	0.16	$	0.41	$	0.26
Diluted earnings per share combined	$	0.18	$	0.16	$	0.40	$	0.25

(1)	The 2001 amounts reflect the results of STAR operations from January 1, 2001 through January 31, 2001. Results of operations from February 1, 2001 are included in Concord amounts.
(2)	All material activity between Concord and STAR has been eliminated.

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CONCORD EFS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Note B - Business Combinations and Acquisition, Restructuring and Write-Off Charges, continued

Acquisition, restructuring and write-off charges were $29.0 million ($18.9 million, net of taxes) for the three months ended June 30, 2002. During the second quarter, management approved a plan in conjunction with the Core Data acquisition and continued consolidation initiatives to improve overall operating efficiencies. The charge consisted of $16.8 million for contract terminations, $4.1 million for exiting a non-strategic business, $1.0 million for closing and consolidating certain facilities and $0.7 million for compensation and severance. In addition, the charge included stock compensation charges of $4.8 million related to the modification of stock options of terminated employees and asset impairment charges of $1.6 million recorded as an adjustment to the write-off of non-performing purchased merchant contracts. In connection with the plan, Concord expects to eliminate 24 positions, none of which were eliminated as of September 30, 2002. As of September 30, 2002, $21.3 million of the charges were accrued but unpaid. Concord expects to complete the plan by June 30, 2003.

The following table presents a summary of activity through September 30, 2002 related to the second quarter 2002 restructuring charge accrual (in thousands):

Acquisition, restructuring and write-off charges	$	29,006
Cash outlays		1,182
Non-cash writedowns and charges - asset impairment		1,691
Non-cash writedowns and charges - other		4,845
Balance, September 30, 2002	$	21,288

The following table presents a summary of the remaining components related to the second quarter 2002 restructuring charge accrual (in thousands):

Contract terminations	$	16,649
Non-strategic business closures		3,093
Facility closings and consolidations		863
Compensation and severance		683
Balance, September 30, 2002	$	21,288

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CONCORD EFS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Note B - Business Combinations and Acquisition, Restructuring and Write-Off Charges, continued

Acquisition, restructuring and write-off charges were $47.5 million ($30.6 million, net of taxes) for the three months ended March 31, 2002. During the first quarter, management approved a corporate consolidation plan initiated to continue improvements in overall operating efficiency and integrate recent acquisitions. The charge consisted of $6.7 million for closing and consolidating certain facilities, $5.9 million for compensation and severance, and $4.5 million for exiting non-strategic businesses. In addition, asset impairment charges of $22.5 million ($0.03 basic and diluted earnings per share) were incurred for the write-off of non-performing purchased merchant contracts identified in the first quarter and $7.9 million was incurred for the write-off of capitalized software and computer and communications equipment no longer in use. In connection with the plan, Concord expects to eliminate approximately 165 positions, 142 of which were eliminated as of September 30, 2002. Compensation and severance costs paid and charged against the restructuring charge accrual were $2.9 million through September 30, 2002. As of September 30, 2002, $10.3 million of the charges were accrued but unpaid. Concord expects to complete the consolidation plan by March 31, 2003.

The following table presents a summary of activity through September 30, 2002 related to the first quarter 2002 restructuring charge accrual (in thousands):

Acquisition, restructuring and write-off charges	$	47,500
Cash outlays		5,424
Non-cash writedowns and charges - asset impairment		31,774
Balance, September 30, 2002	$	10,302

The following table presents a summary of the remaining components related to the first quarter 2002 restructuring charge accrual (in thousands):

Facility closings and consolidations	$	5,333
Compensation and severance		2,981
Non-strategic business closures		1,988
Balance, September 30, 2002	$	10,302

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CONCORD EFS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Note B - Business Combinations and Acquisition, Restructuring and Write-Off Charges, continued

Acquisition, restructuring and write-off charges were $125.4 million ($86.4 million, net of taxes) for the three months ended March 31, 2001. The charges were a result of a company-wide consolidation plan to address areas of operating redundancies created by recent acquisitions. The plan included consolidation of data centers and other facilities to eliminate redundancies, the reassignment or termination of certain employees timed to coincide with the integration of redundant processing platforms, and the functional integration of the STAR organization into Concord. The charges consisted of $63.9 million for combining various processing platforms, $16.0 million for the consolidation of duplicate products and internal systems, $15.6 million for advisory, legal, and accounting fees, $19.1 million for the termination of certain data center services contracts, $9.8 million for compensation and severance costs, and $1.0 million for other expenses. In connection with the consolidation plan, Concord expected to eliminate approximately 250 positions, all of which were eliminated as of March 31, 2002. Compensation and severance costs paid and charged against the restructuring charge accrual were $9.8 million through March 31, 2002. As of March 31, 2002, the consolidation activities were substantially completed, and there was no remaining balance related to the 2001 restructuring charge accrual.

The following table presents a summary of current year activity through March 31, 2002 related to the 2001 restructuring charge accrual (in thousands):

Balance, December 31, 2001	$	5,315
Cash outlays		5,286
Non-cash writedowns and charges - asset impairment		29
Balance, March 31, 2002	$	—

Note C - Goodwill and Other Intangible Assets

In June 2001 the Financial Accounting Standards Board issued Statement of Financial Accounting Standards 142, “Goodwill and Other Intangible Assets.” SFAS 142 prohibits the amortization of goodwill and intangible assets with indefinite useful lives. SFAS 142 requires that these assets be reviewed for impairment at least annually. Intangible assets with finite lives will continue to be amortized over their estimated useful lives.

Concord adopted SFAS 142 effective January 1, 2002. Concord has tested goodwill for impairment using the two-step process prescribed in SFAS 142. The first step is a screen for potential impairment, while the second step measures the amount of the impairment, if any. Concord has performed the first of the required impairment tests for goodwill as of January 1, 2002 and has determined that the carrying amount of goodwill is not impaired.

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CONCORD EFS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Note C - Goodwill and Other Intangible Assets, continued

The following table presents a reconciliation of net income adjusted to exclude amortization expense of goodwill with indefinite useful lives (in thousands, except per share data):

	Three months ended September 30,				Nine months ended September 30,
	2002		2001		2002		2001
Reported net income	$	94,329	$	81,456	$	211,756	$	126,646
Goodwill amortization, net of tax		—		2,485		—		7,176
Adjusted net income	$	94,329	$	83,941	$	211,756	$	133,822
Adjusted basic earnings per share	$	0.18	$	0.17	$	0.41	$	0.27
Adjusted diluted earnings per share	$	0.18	$	0.16	$	0.40	$	0.26

The following table presents the allocation of unamortized goodwill to Concord’s reporting units (in thousands):

Network Services	$	124,982
Payment Services		33,650
Balance, December 31, 2001	$	158,632

The following table presents Concord’s amortization expense relating to other intangible assets as of December 31, 2001 for the periods indicated, net of the write-off of non-performing purchased merchant contracts of $22,496 in the three months ended March 31, 2002 and $1,611 in the three months ended June 30, 2002 included in acquisition, restructuring and write-off charges as described in Note B (in thousands):

2002	$	12,486
2003		7,925
2004		7,873
2005		7,873
2006		7,698
Thereafter		17,750
Total	$	61,605

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CONCORD EFS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Note D - Comprehensive Income

Total comprehensive income was $100.4 million and $84.4 million for the three months ended September 30, 2002 and 2001, respectively. Total comprehensive income was $229.2 million and $135.9 million for the nine months ended September 30, 2002 and 2001, respectively. Comprehensive income includes net income and the change in the unrealized gain or loss on securities available for sale arising during the period.

Note E - Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share data):

	Three months ended September 30,				Nine months ended September 30,
	2002		2001		2002		2001
Numerator:
Net income	$	94,329	$	81,456	$	211,756	$	126,646
Denominator:
Denominator for basic earnings per share, weighted-average shares		512,546		503,193		510,973		491,102
Effect of dilutive stock options		15,310		21,317		19,282		21,217
Denominator for diluted earnings per share, adjusted weighted-average shares, and assumed conversions		527,856		524,510		530,255		512,319
Basic earnings per share	$	0.18	$	0.16	$	0.41	$	0.26
Diluted earnings per share	$	0.18	$	0.16	$	0.40	$	0.25

Excluding acquisition, restructuring, write-off, and litigation settlement charges and related taxes, diluted earnings per share for the three months ended September 30, 2002 and 2001 were $0.17 and $0.16, respectively, and for the nine months ended September 30, 2002 and 2001 were $0.50 and $0.42, respectively. Earnings per share and related per share data have been restated to reflect all stock splits.

Note F - Common Stock Repurchase Plan

On August 5, 2002 Concord announced that its Board of Directors approved the repurchase of up to $250.0 million of Concord’s common stock. Under the repurchase plan, Concord may buy back shares of its outstanding stock from time to time either on the open market or through privately negotiated transactions. A total of 4.5 million shares at an aggregate cost of $68.4 million have been purchased and retired for the three months ended September 30, 2002. On November 7, 2002 Concord announced that its Board of Directors approved the repurchase of an additional $150.0 million of Concord’s common stock. The Board’s approval brings the total potential repurchase to $400.0 million.

Concord immediately retires its common stock when purchased. Upon retirement, Concord reduces retained earnings for the excess of purchase price over par value.

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CONCORD EFS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Note G - Stock Split

The Board of Directors approved a two-for-one stock split on August 30, 2001. Shareholders of record as of September 14, 2001 were distributed additional shares on September 28, 2001. All share data, earnings per share, and per share data have been restated to reflect the stock split.

Note H - Offering of Common Stock

In June 2001 Concord issued and sold approximately 17.8 million shares of its common stock pursuant to a registration statement filed with the Securities and Exchange Commission. Pursuant to the same registration statement, the selling stockholders named in the registration statement sold approximately 34.1 million shares of Concord common stock. Most of the selling stockholders were the previous owners of STAR who received unregistered common stock of Concord in connection with the February 1, 2001 acquisition. Net of the underwriting discount and other expenses of the offering, Concord received $420.6 million for the common stock it issued and sold. Concord did not receive any proceeds from the sale of shares by the selling stockholders.

Note I - Operations by Business Segment

Concord has two reportable segments: Network Services and Payment Services.

Network Services revenue consists of processing fees for driving and monitoring ATMs, processing fees for managing debit card records, and access and switching fees for network access, plus the network fees charged by the debit networks and collected by Concord.

Revenue from Payment Services primarily includes discount fees charged to merchants, which are a percentage of the dollar amount of each credit card transaction Concord processes, as well as a flat fee per transaction. The discount fee, primarily charged to smaller merchants, is negotiated with each merchant and typically constitutes a bundled rate for the transaction authorization, processing, settlement, and funds transfer services Concord provides, plus the interchange fees charged by the credit card associations and collected by Concord. The balance of Payment Services revenue is derived from transaction fees for processing debit card and electronic benefits transfer card transactions, check verification and authorization services, and sales of POS terminals from inventory.

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CONCORD EFS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Note I - Operations by Business Segment, continued

Business segment information for the three months and nine months ended September 30, 2002 and 2001 is presented below (in thousands):

	Three months ended September 30, 2002
	Network Services		Payment Services		Other			Total
Revenue	$	209,407	$	358,889	$	—		$	568,296
Cost of operations		115,129		305,957		—			421,086
Selling, general and administrative expenses		—		—		31,233			31,233
Acquisition, restructuring and write-off charges		—		—		—			—
Litigation settlement charges (credits)		—		—		(11,000	)		(11,000	)
Other income		—		—		1,023			1,023
Investment income		—		—		20,653			20,653
Interest expense		—		—		3,054			3,054
Income taxes		—		—		50,959			50,959
Minority interest in subsidiary		—		—		311			311
Net income (loss)	$	94,278	$	52,932	$	(52,881	)	$	94,329
	Three months ended September 30, 2001
	Network Services		Payment Services		Other			Total
Revenue	$	165,009	$	271,189	$	—		$	436,198
Cost of operations		84,239		220,175		—			304,414
Selling, general and administrative expenses		—		—		22,348			22,348
Acquisition, restructuring and write-off charges		—		—		—			—
Litigation settlement charges (credits)		—		—		—			—
Other income		—		—		876			876
Investment income		—		—		19,702			19,702
Interest expense		—		—		3,510			3,510
Income taxes		—		—		44,910			44,910
Minority interest in subsidiary		—		—		138			138
Net income (loss)	$	80,770	$	51,014	$	(50,328	)	$	81,456

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CONCORD EFS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Note I - Operations by Business Segment, continued

	Nine months ended September 30, 2002
	Network Services		Payment Services		Other			Total
Revenue	$	600,213	$	968,403	$	—		$	1,568,616
Cost of operations		319,018		806,343		—			1,125,361
Selling, general and administrative expenses		—		—		88,372			88,372
Acquisition, restructuring and write-off charges		—		—		76,506			76,506
Litigation settlement charges (credits)		—		—		9,761			9,761
Other income		—		—		7,937			7,937
Investment income		—		—		59,723			59,723
Interest expense		—		—		8,816			8,816
Income taxes		—		—		115,033			115,033
Minority interest in subsidiary		—		—		671			671
Net income (loss)	$	281,195	$	162,060	$	(231,499	)	$	211,756
	Nine months ended September 30, 2001
	Network Services		Payment Services		Other			Total
Revenue	$	468,995	$	761,911	$	—		$	1,230,906
Cost of operations		254,288		620,013		—			874,301
Selling, general and administrative expenses		—		—		69,450			69,450
Acquisition, restructuring and write-off charges		—		—		125,362			125,362
Litigation settlement charges (credits)		—		—		—			—
Other income		—		—		3,068			3,068
Investment income		—		—		50,424			50,424
Interest expense		—		—		9,890			9,890
Income taxes		—		—		78,438			78,438
Minority interest in subsidiary		—		—		311			311
Net income (loss)	$	214,707	$	141,898	$	(229,959	)	$	126,646

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CONCORD EFS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Note J - Contingencies

In September 2000 EFS National Bank was named as a defendant in a purported class action lawsuit filed in the Circuit Court of Tennessee for the Thirtieth Judicial District at Memphis alleging that certain of EFS National Bank’s rate and fee changes were improper under Tennessee law due to allegedly deficient notice. On May 14, 2002 the plaintiffs filed a second amended complaint alleging that the class consists of over 100,000 merchants who were subjected to the allegedly improper rate and fee changes over a several-year period. The second amended complaint sought damages in excess of $70.0 million as well as injunctive relief and unspecified punitive damages, treble damages, attorney fees, and costs.

On May 16, 2002 the parties entered into a settlement agreement relating to this litigation and received preliminary approval from the trial court therefor. On August 6, 2002 the trial court rejected the only objection filed against the settlement agreement and gave the settlement agreement its final approval. The objector and his counsel subsequently reached an agreement with EFS National Bank, plaintiffs and counsel for the plaintiffs, pursuant to which EFS National Bank contributed an immaterial amount. As a result, no appeal was taken, and thus the settlement is now final and unappealable. The maximum amount of the credits and payments by EFS National Bank under the settlement is $37.6 million, payable over a five-year period. In connection with the settlement, Concord initially recorded a charge of $20.8 million ($13.5 million, net of taxes) for the three months ended June 30, 2002. The charge was less than $37.6 million, because the credits and payments are contingent upon merchant retention and submission of claims.

On September 17, 2002 EFS National Bank paid plaintiffs’ counsel and the named plaintiffs a total of $5.0 million, as required by the settlement agreement. The deadline for the submission of claims by class members was September 16, 2002. Approximately 150,000 class members were eligible to make claims, but less than 3,000 valid claims were actually submitted. In the fourth quarter the court-appointed claims administrator is expected to submit a report on the total amount of the valid claims submitted. Based on the low number of valid claims submitted, Concord has reduced the charge by $11.0 million ($7.2 million, net of taxes) for the three months ended September 30, 2002. EFS National Bank is also responsible for the costs of claims administration and for its own costs and expenses, including attorneys’ fees.

A purported class action complaint with similar allegations and requests for relief was filed in St. Charles County, Missouri. That action was dismissed with prejudice in connection with the settlement of the Tennessee case.

Concord and its directors and certain of its officers have been named as defendants in a number of securities fraud class action lawsuits and shareholder derivative actions. The lawsuits all raise allegations relating to Concord’s financial performance between October 2001 and September 2002, changes in the price of Concord’s common stock during that time, alleged failures to disclose material facts, and alleged insider trading by certain officers and directors. The lawsuits seek unspecified compensatory and punitive damages, attorneys’ fees, and injunctive and other relief. Certain of these lawsuits have been consolidated. Although these matters are in the preliminary stages, Concord believes that the claims against it and its directors and officers are without merit and intends to vigorously defend against all claims.

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CONCORD EFS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Note K - Other Income

Other income for the nine months ended September 30, 2002 includes $5.9 million representing the sale of certain terminal hardware and related future rental payments. The remaining other income represents net realized gain on sales of securities available for sale.

Note L - Investment Income

Investment income for the three and nine months ended September 30, 2002 includes $1.8 million representing unrealized gains and losses from alternative investments. The remaining investment income represents interest income on securities available for sale and other investments of available cash.

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CONCORD EFS, INC. AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION & ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion together with our condensed consolidated financial statements and the notes to those financial statements, which are included in this report. This report may contain forward-looking statements made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are not guarantees of future performance and involve risks, uncertainties, and other factors, including those set forth in this paragraph. Important factors that could cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by those statements include, but are not limited to: (i) the failure to successfully execute our corporate consolidation plans, (ii) the loss of key personnel or inability to attract additional qualified personnel, (iii) the loss of key customers, (iv) increasing competition, (v) changes in card association rules and practices, (vi) the inability to remain current with rapid technological change, (vii) risks related to acquisitions, (viii) the imposition of additional state taxes, (ix) continued consolidation in the banking and retail industries, (x) business cycles and the credit risk of our merchant customers, (xi) the outcome of litigation involving VISA and MasterCard, (xii) utility and system interruptions or processing errors, (xiii) susceptibility to fraud at the merchant level, (xiv) changes in card association fees, products, or practices, (xv) market saturation or restrictions on surcharging, (xvi) rules and regulations governing financial institutions and changes in such rules and regulations, (xvii) the timing and extent of changes in interest rates, (xviii) volatility of the price of our common stock, and (xix) litigation risks. We undertake no obligation to publicly update or revise any forward-looking statements to reflect changed assumptions, the occurrence of anticipated or unanticipated events, or changes to future results over time. See the cautionary statements included as Exhibit 99.4 to this quarterly report on Form 10-Q for a more detailed discussion of the foregoing and other factors.

Overview

Concord EFS, Inc. (Concord) is a leading vertically integrated electronic transaction processor. We acquire, route, authorize, capture, and settle virtually all types of electronic payment and deposit access transactions for financial institutions and merchants nationwide. Our primary activities consist of Network Services, which provides automated teller machine (ATM) processing, debit card processing, deposit risk management, and coast-to-coast debit network access principally for financial institutions, and Payment Services, which provides payment processing for supermarkets, major retailers, petroleum dealers, convenience stores, restaurants, trucking companies, and independent retailers.

Network Services

Network Services includes terminal driving and monitoring for ATMs, transaction routing and authorization via the combined STAR_sm, MAC_®, and Cash Station^® debit network as well as other debit networks, deposit risk management, and real-time card management and authorization for personal identification number (PIN)-secured debit and signature debit cards. In addition, we operate the network switch that connects a coast-to-coast network of ATMs and point of sale (POS) locations that accept debit cards issued by our member financial institutions. Our network access services include transaction switching and settlement.

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CONCORD EFS, INC. AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION & ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

On May 17, 2002 we acquired Core Data Resources, Inc., a privately held electronic transaction processor based in Amarillo, Texas. Core Data provides ATM processing and related services to financial institutions, retailers, and independent sales organizations nationwide. This acquisition was accounted for as a purchase transaction in which we exchanged approximately 2.0 million shares of our common stock for all of Core Data’s outstanding common stock.

On March 1, 2002 we completed our acquisition of The Logix Companies, LLC, an electronic transaction processor based in Longmont, Colorado. A private limited liability company, Logix provides financial institutions, retailers, and independent sales organizations with ATM processing, electronic check conversion, identification and authentication services, database development and reporting, and merchant processing services. This acquisition was accounted for as a purchase transaction in which we exchanged approximately 0.9 million shares of our common stock and $6.3 million in cash for all of the outstanding membership units of Logix.

On February 1, 2001 we completed our acquisition of Star Systems, Inc. (STAR), the nation’s largest PIN-secured debit network, based in Maitland, Florida. The merger was accounted for as a pooling-of-interests transaction in which we exchanged approximately 48.0 million shares of our common stock for all of STAR’s outstanding common stock.

As a result of our acquisition of STAR and subsequent purchase of shares, we acquired a majority interest in Primary Payment Systems, Inc., a company providing deposit risk management services to merchants and financial institutions. We own an 85.5% interest in Primary Payment Systems, with the remainder owned by certain financial institutions and a credit union service provider. Primary Payment Systems’ deposit risk management services provide advance notification of potential losses associated with fraudulent checks or high risk accounts utilizing a national database.

In 2001 Primary Payment Systems expanded its operations in the deposit risk management area through its acquisition of Wally Industries, Inc. d/b/a WJM Technologies. WJM’s front-end tools, which screen new deposit accounts before they are opened, increase the breadth of Primary Payment Systems’ deposit risk management services. Primary Payment Systems believes that the addition of WJM will enable it to develop more powerful fraud filters that can be extended to other markets, as well as provide additional cross-selling opportunities and augment customer retention.

Payment Services

Payment Services provides the systems and processing that allow retail clients to accept virtually any type of electronic payment, including all card types–credit, debit, electronic benefits transfer (EBT), prepaid, and proprietary cards–as well as a variety of check-based options. We focus on providing payment processing services to selected segments, with specialized systems designed for supermarkets, gas stations, convenience stores, and restaurants. Payment Services also includes providing payment cards that enable drivers of trucking companies to purchase fuel and obtain cash advances at truck stops. Our services are turn-key, providing merchants with POS terminal equipment, transaction routing and authorization, settlement, funds movement, and sponsorship into all credit card associations (such as VISA and MasterCard) and debit networks (such as STAR, Pulse, and NYCE).

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CONCORD EFS, INC. AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION & ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

We own one insured depository institution, EFS National Bank, which supports our payment processing business. As part of our effort to consolidate our insured depository operations and terminate local deposit taking and lending activities, EFS Federal Savings Bank, another subsidiary, was merged into EFS National Bank on August 26, 2002.

On January 1, 2002 we acquired H & F Services, Inc., an independent sales organization. Prior to the acquisition, we had purchased merchant contracts through H & F Services. Through the acquisition, we have improved our control over this sales channel with product, pricing, compensation, and productivity initiatives. This acquisition will significantly increase selling, general and administrative expenses, reduce the average cost of acquiring merchant contracts, and reduce the cost of operations.

Consolidation Plans

In the second quarter of 2002 we initiated a plan in conjunction with the Core Data acquisition and continued consolidation initiatives to improve overall operating efficiencies. The plan includes contract terminations, exiting a non-strategic business, closing and consolidating certain facilities, eliminating 24 positions, and writing off impaired assets. We incurred a charge of $18.9 million, net of taxes, related to the plan. During the next nine months, we expect to complete the plan to improve our overall operating efficiencies.

In the first quarter of 2002 we initiated a consolidation plan to continue improvements in overall operating efficiency and integrate recent acquisitions. The plan includes closing and consolidating certain facilities, exiting several non-strategic businesses, eliminating approximately 165 positions, and writing off impaired assets. We incurred a charge of $30.6 million, net of taxes, related to the consolidation plan. During the next six months, we expect to complete the plan and focus on consolidation activities for operational improvements in our Payment Services segment.

In the first quarter of 2001 we initiated a company-wide consolidation plan to address areas of operating redundancies created through acquisitions. The plan included consolidation of data centers and other facilities to eliminate redundancies, the reassignment or termination of certain employees timed to coincide with the integration of redundant processing platforms, and the functional integration of the STAR organization into Concord. We incurred a charge of $86.4 million, net of taxes, related to our consolidation plan, including costs incurred in combining operating platforms and facilities, communications conversion costs, asset write-offs, and severance and compensation costs, as well as investment banking fees and advisory, legal, and accounting fees incurred in connection with the acquisition of STAR. Our consolidation activities to capture synergies within our network operations and align our resources across the enterprise for greater efficiency and improved service delivery were substantially completed as of March 31, 2002.

Restatement of Historical Financial Information

The financial information for prior periods presented below and elsewhere in this report has been restated for the results of STAR in accordance with the pooling-of-interests method of accounting for business combinations. The financial information includes the financial position, operating results, and cash flows for all periods presented.

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CONCORD EFS, INC. AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION & ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Components of Revenue and Expenses

Network Services and Payment Services are our two reportable business segments. These business units are managed separately because they offer distinct products for different end users. All of our revenue is generated in the United States, and no single customer of Concord accounts for a material portion of our revenue. The majority of our revenue is tied to contracts with original terms of between three and five years.

A principal component of our revenue is derived from Network Services (36.8% and 37.8% for the three months ended September 30, 2002 and 2001 and 38.3% and 38.1% for the nine months ended September 30, 2002 and 2001). Network Services revenue consists of processing fees for driving and monitoring ATMs, processing fees for managing debit card records, access and switching fees for network access, and network fees charged by the debit networks and collected by us. We recognize this revenue at the time of the transaction.

The majority of our revenue (63.2% and 62.2% for the three months ended September 30, 2002 and 2001 and 61.7% and 61.9% for the nine months ended September 30, 2002 and 2001) is generated from fee income related to Payment Services. Revenue from Payment Services primarily includes discount fees charged to merchants, which are a percentage of the dollar amount of each credit card transaction we process, as well as a flat fee per transaction. The discount fee, primarily charged to smaller merchants, is negotiated with each merchant and typically constitutes a bundled rate for the transaction authorization, processing, settlement, and funds transfer services we provide, plus the interchange fees charged by the credit card associations and collected by us. The balance of Payment Services revenue is derived from transaction fees for processing credit card transactions for larger merchants, debit card and EBT card transactions, check verification and authorization services, and sales of POS terminals from inventory. We recognize this revenue at the time of the transaction. One result of having revenue dependent on the total dollar volume processed is that lower ticket size or other reduction in total purchases causes a reduction in our revenue. However, net income is not correspondingly affected because the majority of our transactions are priced on a fixed fee per transaction basis plus interchange fees.

The following table lists revenue by segment for the periods indicated (in millions):

	Three months ended September 30,				Nine months ended September 30,
	2002		2001		2002		2001
Network Services	$	209.4	$	165.0	$	600.2	$	469.0
Payment Services		358.9		271.2		968.4		761.9
Total	$	568.3	$	436.2	$	1,568.6	$	1,230.9

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CONCORD EFS, INC. AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION & ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Components of Revenue and Expenses, continued

Cost of operations includes all costs directly attributable to our providing services to our customers. The most significant component of cost of operations is interchange and network fees, which represent amounts charged by the credit and debit networks. Interchange and network fees are billed primarily as a percentage of dollar volume processed and, to a lesser extent, as a transaction fee. This amount is a direct expense of the revenue component described above, so that when total dollar volume processed declines, due to lower ticket size or other reduction in total purchases, there is a corresponding decline in cost of operations. Cost of operations also includes telecommunications costs, personnel costs, occupancy costs, depreciation, the cost of equipment leased and sold, the cost of operating our debit network, and other miscellaneous merchant supplies and services expenses.

The following table lists cost of operations by segment for the periods indicated (in millions):

	Three months ended September 30,				Nine months ended September 30,
	2002		2001		2002		2001
Network Services	$	115.1	$	84.2	$	319.0	$	254.3
Payment Services		306.0		220.2		806.4		620.0
Total	$	421.1	$	304.4	$	1,125.4	$	874.3

Our selling, general and administrative expenses include certain salaries and wages and other general administrative expenses. These costs are not allocated to the reportable segments.

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CONCORD EFS, INC. AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION & ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Results of Operations

The following table shows, for the periods indicated, the percentage of revenue represented by certain items on our consolidated statements of income:

	Three months ended September 30,				Nine months ended September 30,
	2002		2001		2002		2001
Revenue	100.0	%	100.0	%	100.0	%	100.0	%
Cost of operations	74.1		69.8		71.8		71.0
Selling, general and administrative expenses	5.5		5.1		5.6		5.6
Acquisition, restructuring and write-off charges	—		—		4.9		10.2
Litigation settlement charges (credits)	(1.9	)	—		0.6		—
Operating income	22.3		25.1		17.1		13.2
Other income	0.2		0.2		0.5		0.2
Net investment income	3.1		3.7		3.3		3.3
Income before taxes	25.6		29.0		20.9		16.7
Income taxes	9.0		10.3		7.4		6.4
Net income	16.6	%	18.7	%	13.5	%	10.3	%

Third Quarter 2002 Compared to 2001

Revenue in the third quarter 2002 increased 30.3% to $568.3 million from $436.2 million in 2001. In the third quarter 2002 Network Services accounted for 36.8% of revenue, and Payment Services accounted for 63.2%. Network Services revenue in the third quarter 2002 increased 26.9% compared to 2001 as a result of network price increases, the addition of new network and processing customers, and increases in transaction volumes from existing customers. The increased transaction volumes resulted primarily from increased use of STAR network debit cards for payment at the point of sale. Revenue from Payment Services in the third quarter 2002 increased 32.3% compared to 2001, due primarily to increased transaction volumes. The increased volumes resulted from the addition of new merchants and the increased use of debit, EBT, and credit card transactions at new and existing merchants.

Cost of operations increased in the third quarter 2002 to 74.1% of revenue compared to 69.8% in 2001. This percentage increase was due primarily to increased interchange and network fees. These increases resulted from the addition of new lower margin merchants, the expansion of relationships with existing lower margin merchants, and price increases by the credit and debit networks.

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CONCORD EFS, INC. AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION & ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Third Quarter 2002 Compared to 2001, continued

In the third quarter 2002 selling, general and administrative expenses increased as a percentage of revenue to 5.5% from 5.1% in 2001. Overall, selling, general and administrative expenses increased to $31.2 million in the third quarter 2002 from $22.3 million in 2001. This increase is primarily attributable to the expenses related to the acquisition of the H & F Services sales force, increased headcount, and expenses related to the Logix and Core Data acquisitions.

We reduced our litigation settlement charges by $11.0 million in the third quarter 2002. There were no such charges in the third quarter 2001. The charges represent credits and payments to merchants and former merchants, legal expenses, and claims administration expenses in connection with a settlement agreement relating to a purported class action lawsuit alleging that certain rate and fee charges were improper under Tennessee law due to allegedly deficient notice. The reduction was due to the low number of valid claims actually submitted.

Excluding the litigation settlement credit, operating income as a percentage of revenue decreased to 20.4% in the third quarter 2002 compared to 25.1% in 2001. This decrease was due to the addition of lower margin revenue from large merchants and increased selling, general and administrative expenses.

Other income as a percentage of revenue was 0.2% in the third quarter of both 2002 and 2001.

Net investment income decreased as a percentage of revenue to 3.1% in the third quarter 2002 compared to 3.7% in 2001. Overall, net investment income increased 8.7% to $17.6 million in the third quarter 2002 compared to $16.2 million in 2001. This increase resulted primarily from increased investments in various securities of available cash flow from operations offset by lower than anticipated rates of return. Net investment income includes $1.8 million of unrealized gains and losses from alternative investments in the third quarter of 2002.

Our overall tax rate was 35.0% in the third quarter 2002 compared to 35.5% in 2001.

Net income as a percentage of revenue decreased to 16.6% in the third quarter 2002 from 18.7% in 2001. Excluding the litigation settlement credit, net income as a percentage of revenue decreased to 15.3% in the third quarter 2002 compared to 18.7% in 2001. This decrease is the result of lower operating margins, increased selling, general and administrative expenses, and decreased net investment income as a percentage of revenue.

A slower than anticipated economy and a significant increase in our implementation backlog, which measures new contract revenue not yet implemented, have had an impact on our results of operations in the third quarter of 2002. The delay in implementations is attributable to our continuing migration of existing customers between our various processing platforms. In addition, we have experienced larger than anticipated merchant losses and lower than forecasted September transactions.

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CONCORD EFS, INC. AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION & ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Nine Months Ended September 30, 2002 Compared to 2001

Revenue in the nine months ended September 30, 2002 increased 27.4% to $1,568.6 million from $1,230.9 million in 2001. In the nine months ended September 30, 2002 Network Services accounted for 38.3% of revenue, and Payment Services accounted for 61.7%. Network Services revenue in the nine months ended September 30, 2002 increased 28.0% compared to 2001 as a result of network price increases, the addition of new network and processing customers, and increases in transaction volumes from existing customers. The increased transaction volumes resulted primarily from increased use of STAR network debit cards for payment at the point of sale. Revenue from Payment Services in the nine months ended September 30, 2002 increased 27.1% compared to 2001, due primarily to increased transaction volumes. The increased volumes resulted from the addition of new merchants and the increased use of debit, EBT, and credit card transactions at new and existing merchants.

Cost of operations increased in the nine months ended September 30, 2002 to 71.8% of revenue compared to 71.0% in 2001. This percentage increase was due to increased interchange and network fees partially offset by improvements in operating efficiencies and economies of scale. The increased interchange and network fees resulted from the addition of new lower margin merchants, the expansion of relationships with existing lower margin merchants, and price increases by the credit and debit networks.

Selling, general and administrative expenses as a percentage of revenue was 5.6% in the nine months ended September 30, 2002 and 2001. Overall, selling, general and administrative expenses increased to $88.4 million in the nine months ended September 30, 2002 from $69.5 million in 2001. This increase is primarily attributable to the expenses related to the acquisition of the H & F Services sales force, increased headcount, and expenses related to the Logix and Core Data acquisitions.

Acquisition, restructuring and write-off charges decreased to $76.5 million in 2002 from $125.4 million in 2001. In the second quarter of 2002 we initiated a plan in conjunction with the Core Data acquisition and continued consolidation initiatives to improve overall operating efficiencies. The plan includes contract terminations, exiting a non-strategic business, closing and consolidating certain facilities, eliminating 24 positions, and writing off impaired assets. The charge of $29.0 million ($18.9 million, net of taxes) consisted of $16.8 million for contract terminations, $4.1 million for exiting a non-strategic business, $1.0 million for closing and consolidating certain facilities, and $0.7 million for compensation and severance. In addition, the charge included stock compensation charges of $4.8 million related to the modification of stock options of terminated employees and asset impairment charges of $1.6 million recorded as an adjustment to the write-off of non-performing purchased merchant contracts.

In the first quarter of 2002 we initiated a consolidation plan to continue improvements in overall operating efficiency and integrate recent acquisitions. The plan includes closing and consolidating certain facilities, exiting several non-strategic businesses, eliminating approximately 165 positions, and writing off impaired assets. The charge of $47.5 million ($30.6 million, net of taxes) consisted of $6.7 million for closing and consolidating certain facilities, $5.9 million for compensation and severance, and $4.5 million for exiting non-strategic businesses. In addition, asset impairment charges of $22.5 million were incurred for the write-off of non-performing purchased

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CONCORD EFS, INC. AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION & ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Nine Months Ended September 30, 2002 Compared to 2001, continued

merchant contracts identified in the first quarter and $7.9 million was incurred for the write-off of capitalized software and computer and communications equipment no longer in use.

Litigation settlement charges were $9.8 million in the nine months ended September 30, 2002. There were no such charges in the nine months ended September 30, 2001. The charges represent credits and payments to merchants and former merchants, legal expenses, and claims administration expenses in connection with a settlement agreement relating to a purported class action lawsuit alleging that certain rate and fee charges were improper under Tennessee law due to allegedly deficient notice.

Excluding acquisition, restructuring, write-off, and litigation settlement charges, operating income as a percentage of revenue decreased to 22.6% in the nine months ended September 30, 2002 from 23.3% in 2001. This decrease in operating income resulted from the addition of lower margin revenue from large merchants partially offset by improved efficiencies and economies of scale.

Other income increased as a percentage of revenue to 0.5% in the nine months ended September 30, 2002 from 0.2% in 2001. This increase resulted from the sale of certain terminal hardware and related future rental payments in the second quarter of 2002.

Net investment income as a percentage of revenue was 3.3% in the nine months ended September 30, 2002 and 2001. Overall, net investment income increased 25.6% to $50.9 million in the nine months ended September 30, 2002 compared to $40.5 million in 2001. This increase resulted primarily from increased investments in various securities of available cash flow from operations plus approximately $420.6 million in proceeds from our June 2001 stock offering offset by lower than anticipated rates of return. Net investment income includes $1.8 million of unrealized gains and losses from alternative investments in the nine months ended September 30, 2002.

Our overall tax rate decreased to 35.1% in the nine months ended September 30, 2002 compared to 38.2% in 2001. Excluding acquisition, restructuring, write-off, and litigation settlement charges, the tax rate was 35.2% in 2002 and 35.5% in 2001.

Net income as a percentage of revenue increased to 13.5% in the nine months ended September 30, 2002 from 10.3% in 2001. Excluding acquisition, restructuring, write-off, and litigation settlement charges, net income as a percentage of revenue was 17.1% in 2002 compared to 17.3% in 2001.

A slower than anticipated economy, lower than anticipated ticket size, and a significant increase in our implementation backlog, which measures new contract revenue not yet implemented, have had an impact on our results of operations in the third quarter of 2002. The delay in implementations is attributable to our continuing migration of existing customers between our various processing platforms. In addition, we have experienced larger than anticipated merchant losses and lower than forecasted September transactions.

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CONCORD EFS, INC. AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION & ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Liquidity and Capital Resources

In the nine months ended September 30, 2002 we generated $366.5 million from operating activities excluding the timing of settlement operations. Including the timing of settlement operations, we generated $334.1 million in operating activities. We received $97.8 million in proceeds from Federal Home Loan Bank advances, net of payments, $53.5 million from sales of loans, and $22.8 million from stock issued for exercises of options under our stock option plan. We liquidated $24.3 million in securities, net of purchases and maturities, and invested $195.5 million in alternative investments. We spent $100.4 million on capital additions, $68.4 million repurchasing our common stock, and $17.2 million for business acquisitions. Our capital additions were primarily for capitalized and purchased software and computer facilities and equipment.

As of September 30, 2002 our assets were primarily monetary, consisting of cash, assets convertible into cash, securities, alternative investments, and receivables. Because of their liquidity, these assets are not significantly affected by inflation; however, earnings and asset values are impacted by the interest rate environment. We believe that anticipated replacement costs of software, facilities, and equipment will not materially affect operations. However, the rate of inflation affects our expenses, such as those for employee compensation and telecommunications, which may not be readily recoverable in the price of services offered by us.

As of September 30, 2002 our investment in alternative investments totaled $197.4 million in two hedge fund-of-funds entities. A total of 85 individual hedge funds are included in our fund-of-funds investments. In response to negative perceptions among shareholders of potential risks, on August 9, 2002, we announced we would be liquidating these alternative investments in an orderly process which began immediately after the announcement and will take place over the next two quarters. Under the terms of the investment agreements, all of the funds require advance notice to redeem and withdraw our investment. These notices to redeem are required to be given from 30 to 60 days prior to the end of a quarter. There were no redemption fees required to be paid by us as a result of our negotiations to exit the funds. As of October 31, 2002 cash redemptions of $120.1 million have been received from the liquidation process, with an additional amount of $57.3 million expected to be received in the last two months of 2002 and the remainder expected to be received in the first quarter of 2003.

On August 5, 2002 we announced that our Board of Directors approved the repurchase of up to $250.0 million of our common stock. Under the repurchase plan, we may buy back shares of our outstanding stock from time to time either on the open market or through privately negotiated transactions. As of September 30, 2002 a total of 4.5 million shares at an aggregate cost of $68.4 million had been purchased and retired pursuant to the repurchase plan. On November 7, 2002 we announced that our Board of Directors approved the repurchase of an additional $150.0 million of our common stock. The Board’s approval brings the total potential repurchase to $400.0 million.

During the third quarter we entered into agreements for the financing, construction and leasing of a new corporate headquarters in Memphis, Tennessee with an estimated total cost of $55.0 million. The agreements qualify for operating lease accounting treatment under Statement of Financial Accounting Standards 13, “Accounting For Leases,” and, as such, the related assets and obligations are not recorded on our balance sheet. The term of the lease is seven years. Upon the completion of construction, which is expected in the fourth quarter of 2003, rent payments will begin and will be expensed in our statement of income. The anticipated minimum lease payments

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CONCORD EFS, INC. AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION & ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Liquidity and Capital Resources, continued

under these agreements are not material to us. At the end of the lease term, we have options which include the renewal of the lease and a fixed-price purchase option on the land and facility. We have guaranteed the residual value of the land and facility at the end of the lease term to the owner / lessor. Under this guarantee, we would be responsible for a decline in fair value during the lease term up to an estimated maximum amount of approximately $45.9 million. Based on current market conditions, we do not expect to be required to make payments under this residual value guarantee. We also hold separate agreements with similar provisions on properties we currently occupy in Wilmington, Delaware and Atlanta, Georgia. The combined total cost financed under these agreements at their inception was approximately $35.0 million.

We believe that our cash and cash equivalents, securities, available credit (unused lines of credit with the Federal Home Loan Bank and unsecured lines of credit with financial institutions), and cash generated from operations are adequate to meet our capital and operating needs. EFS National Bank, our wholly owned financial institution subsidiary, exceeded the required regulatory capital ratios.

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CONCORD EFS, INC. AND SUBSIDIARIES
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Quantitative and Qualitative Disclosures About Market Risk

As of September 30, 2002 there were no changes with regard to market risk that would require further quantitative or qualitative disclosure. For our quantitative and qualitative disclosures about market risk for the fiscal year ended December 31, 2001, refer to Exhibit 13 to our annual report on Form 10-K, filed on February 26, 2002.

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CONCORD EFS, INC. AND SUBSIDIARIES
CONTROLS AND PROCEDURES

Controls and Procedures

Based on their evaluation as of a date within 90 days prior to the filing of this quarterly report on Form 10-Q, our Chief Executive Officer, President, and Chief Financial Officer have concluded that our disclosure controls and procedures (as defined in Rules 13a-14(c) and 15d-14(c) under the Securities Exchange Act of 1934, as amended) are effective. As of the date of this quarterly report on Form 10-Q, there have been no significant changes in our internal controls or in other factors that could significantly affect internal controls subsequent to the date of such evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

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CONCORD EFS, INC. AND SUBSIDIARIES
PART II
OTHER INFORMATION

Item 1.    Legal Proceedings

From time to time Concord is involved in various litigation matters arising out of the conduct of its business. Pending proceedings and developments that may be considered material were reported in our annual report on Form 10-K for the year ended December 31, 2001 (filed on February 26, 2002), our quarterly report on Form 10-Q for the quarter ended March 31, 2002 (filed on May 9, 2002), our current report on Form 8-K (filed on May 16, 2002), and our quarterly report on Form 10-Q for the quarter ended June 30, 2002 (filed on August 8, 2002). During the quarter ended September 30, 2002, there were no material developments in any litigation matter previously disclosed except for the developments discussed below.

As previously disclosed, in September 2000 EFS National Bank was named as a defendant in a purported class action lawsuit filed in the Circuit Court of Tennessee for the Thirtieth Judicial District at Memphis alleging that certain of EFS National Bank’s rate and fee changes were improper under Tennessee law due to allegedly deficient notice. On May 14, 2002 the plaintiffs filed a second amended complaint alleging that the class consists of over 100,000 merchants who were subjected to the allegedly improper rate and fee changes over a several-year period. The second amended complaint sought damages in excess of $70.0 million as well as injunctive relief and unspecified punitive damages, treble damages, attorney fees, and costs.

As previously disclosed, on May 16, 2002 the parties entered into a settlement agreement relating to this litigation and received preliminary approval from the trial court therefor. On August 6, 2002 the trial court rejected the only objection filed against the settlement agreement and gave the settlement agreement its final approval. The objector and his counsel subsequently reached an agreement with EFS National Bank, plaintiffs and counsel for the plaintiffs, pursuant to which EFS National Bank contributed $50,000. As a result, no appeal was taken, and thus the settlement is now final and unappealable. The maximum amount of the credits and payments by EFS National Bank under the settlement is $37.6 million, payable over a five-year period.

It appears that the total cost to EFS National Bank of the settlement will be significantly less than $37.6 million. On September 17, 2002 EFS National Bank paid plaintiffs’ counsel and the named plaintiffs a total of $5.0 million, as required by the settlement agreement. The deadline for the submission of claims by class members was September 16, 2002. Approximately 150,000 class members were eligible to make claims, but less than 3,000 valid claims were actually submitted. In the fourth quarter the court-appointed claims administrator is expected to submit a report on the total amount of the valid claims submitted. EFS National Bank is also responsible for the costs of claims administration and for its own costs and expenses, including attorneys’ fees.

A purported class action complaint with similar allegations and requests for relief was filed in St. Charles County, Missouri. That action was dismissed with prejudice in connection with the settlement of the Tennessee case.

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CONCORD EFS, INC. AND SUBSIDIARIES
PART II
OTHER INFORMATION

Item 1.    Legal Proceedings, continued

The following table lists certain information with respect to the securities fraud purported class action lawsuits and shareholder derivative actions filed as of November 8, 2002 against Concord and various of its officers and directors:

Name of Plaintiff	Filing Date	Type of Case
Matt L. Brody	September 6, 2002*	Securities Fraud
James Weir and Chemical Valley Pension Fund of West Virginia	September 9, 2002**	Derivative
Colbert Birnet, L.P.	September 12, 2002*	Securities Fraud
Carolyn France	September 12, 2002**	Derivative
Terry Prince	September 13, 2002*	Derivative
Stanley Tseng	September 16, 2002*	Derivative
Marc Abrams	September 20, 2002*	Securities Fraud
John Morgan	September 20, 2002**	Derivative
Michele Rafkin	September 25, 2002***	Derivative
Jason Counts	October 1, 2002*	Securities Fraud
Gerald Goldberg	October 22, 2002***	Derivative
Dan Miller	October 24, 2002****	Derivative
Kathy Schmersahl	October 24, 2002*	Securities Fraud
John Norwood	November 4, 2002*	Securities Fraud
GF Partnership	November 6, 2002*	Securities Fraud

*    Filed in the United States District Court for the Western District of Tennessee

**    Filed in Tennessee state court in Memphis (Circuit Court)

***    Filed in Tennessee state court in Memphis (Chancery Court)

****    Filed in Delaware state court in New Castle County (Chancery Court)

The lawsuits all raise allegations relating to Concord’s financial performance between October 2001 and September 2002, changes in the price of Concord’s common stock during that time, alleged failures to disclose material facts, and alleged insider trading by certain officers and directors. The lawsuits seek unspecified compensatory and punitive damages, attorneys’ fees, and injunctive and other relief. Certain of these lawsuits have been consolidated. Although these matters are in the preliminary stages, Concord believes that the claims against it and its directors and officers are without merit and intends to vigorously defend against all claims.

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CONCORD EFS, INC. AND SUBSIDIARIES
PART II
OTHER INFORMATION

Item 6.    Exhibits and Reports on Form 8-K

(a)    Exhibits

Exhibit
Number	Description of Exhibit
3.1	Restated Certificate of Incorporation of Concord EFS, Inc. is incorporated herein by reference to Exhibit 4.1 to Concord’s registration statement on Form S-8 (File No. 333-90678), filed on June 18, 2002.
3.2	Amended and Restated Bylaws of Concord EFS, Inc. are incorporated herein by reference to Exhibit 4.2 to Concord’s registration statement on Form S-8 (File No. 333-74215), filed on March 10, 1999.
10.1	Master Agreement, dated as of July 12, 2002, among Concord EFS, Inc., Electronic Payment Services, Inc., Star Systems, LLC, certain subsidiaries of Concord EFS, Inc. that may become a party to such agreement, Atlantic Financial Group, Ltd., certain financial institutions, and SunTrust Bank
10.2	Master Lease Agreement, dated as of July 12, 2002, among Atlantic Financial Group, Ltd., Concord EFS, Inc., and certain subsidiaries of Concord EFS, Inc.
10.3	Construction Agency Agreement, dated as of July 12, 2002, between Atlantic Financial Group, Ltd. and Concord EFS, Inc.
10.4	Loan Agreement, dated as of July 12, 2002, between Atlantic Financial Group, Ltd. and SunTrust Bank
10.5	Guaranty Agreement, dated as of July 12, 2002, from Concord EFS, Inc. to Atlantic Financial Group, Ltd. and certain financial institutions
10.6	Letter agreement, dated September 11, 2002, between Concord EFS, Inc. and J. Richard Buchignani
10.7	Letter agreement, dated August 30, 2002, between Concord EFS, Inc. and Bond Isaacson, including the accompanying Sign-On Bonus Re-Pay Agreement, dated November 9, 2002, between Concord EFS, Inc. and Bond Isaacson (Confidential material appearing in this document was omitted and filed separately with the Securities and Exchange Commission in accordance with the Securities and Exchange Act of 1934, as amended, and 17 C.F.R. 240.24b-2 and 200.80. Omitted information was replaced with asterisks.)
99.1	Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
99.2	Certification of President Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
99.3	Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
99.4	Cautionary Statements

(b)    Reports on Form 8-K

On August 8, 2002 we filed a current report on Form 8-K to report, under Item 9 of that form, the submission to the Securities and Exchange Commission of sworn statements by each of our Principal Executive Officer, Dan M. Palmer, and Principal Financial Officer, Edward T. Haslam, in accordance with the Securities and Exchange Commission Order No. 4-460.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	CONCORD EFS, INC.
Date: November 13, 2002	By: /s/ Dan M. Palmer
	Dan M. Palmer
	Chairman of the Board and
	Chief Executive Officer
Date: November 13, 2002	By: /s/ Edward T. Haslam
	Edward T. Haslam
	Senior Vice President,
	Chief Financial Officer, and Treasurer

-33-

CERTIFICATION

     I, Dan M. Palmer, certify that:

     1.     I have reviewed this quarterly report on Form 10-Q of Concord EFS, Inc. (the “registrant”);

     2.     Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

     3.     Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

     4.      The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a)      designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

     b)      evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and

     c)      presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

     5.     The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

     a)       all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

     b)      any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

     6.      The registrant’s other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date	November 13, 2002
By	/s/ Dan M. Palmer
	Dan M. Palmer
	Chief Executive Officer

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CERTIFICATION

     I, Edward A. Labry III, certify that:

     1.     I have reviewed this quarterly report on Form 10-Q of Concord EFS, Inc. (the “registrant”);

     2.     Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

     3.     Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

      4.     The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a)      designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

     b)      evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and

     c)      presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

     5.      The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

     a)      all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

     b)      any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

     6.      The registrant’s other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date	November 13, 2002
By	/s/ Edward A. Labry III
	Edward A. Labry III
	President

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CERTIFICATION

     I, Edward T. Haslam, certify that:

     1.     I have reviewed this quarterly report on Form 10-Q of Concord EFS, Inc. (the “registrant”);

     2.     Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

     3.     Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

     4.      The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a)      designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

     b)      evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and

     c)      presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

     5.      The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

     a)      all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

     b)      any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

     6.      The registrant’s other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date	November 13, 2002
By	/s/ Edward T. Haslam
	Edward T. Haslam
	Chief Financial Officer

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CONCORD EFS, INC. AND SUBSIDIARIES
FORM 10-Q LISTING OF EXHIBITS

Exhibit Number	Description of Exhibit
3.1	Restated Certificate of Incorporation of Concord EFS, Inc. is incorporated herein by reference to Exhibit 4.1 to Concord’s registration statement on Form S-8 (File No. 333-90678), filed on June 18, 2002.
3.2	Amended and Restated Bylaws of Concord EFS, Inc. are incorporated herein by reference to Exhibit 4.2 to Concord’s registration statement on Form S-8 (File No. 333-74215), filed on March 10, 1999.
10.1	Master Agreement, dated as of July 12, 2002, among Concord EFS, Inc., Electronic Payment Services, Inc., Star Systems, LLC, certain subsidiaries of Concord EFS, Inc. that may become a party to such agreement, Atlantic Financial Group, Ltd., certain financial Institutions, and SunTrust Bank
10.2	Master Lease Agreement, dated as of July 12, 2002, among Atlantic Financial Group, Ltd., Concord EFS, Inc., and certain subsidiaries of Concord EFS, Inc.
10.3	Construction Agency Agreement, dated as of July 12, 2002, between Atlantic Financial Group, Ltd. and Concord EFS, Inc.
10.4	Loan Agreement, dated as of July 12, 2002, between Atlantic Financial Group, Ltd. and SunTrust Bank
10.5	Guaranty Agreement, dated as of July 12, 2002, from Concord EFS, Inc. to Atlantic Financial Group, Ltd. and certain financial institutions
10.6	Letter agreement, dated September 11, 2002, between Concord EFS, Inc. and J. Richard Buchignani
10.7	Letter agreement, dated August 30, 2002, between Concord EFS, Inc. and Bond Isaacson, including the accompanying Sign-On Bonus Re-Pay Agreement, dated November 9, 2002, between Concord EFS, Inc. and Bond Isaacson (Confidential material appearing in this document was omitted and filed separately with the Securities and Exchange Commission in accordance with the Securities and Exchange Act of 1934, as amended, and 17 C.F.R. 240.24b-2 and 200.80. Omitted information was replaced with asterisks.)
99.1	Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
99.2	Certification of President Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
99.3	Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
99.4	Cautionary Statements

EX-10.1 3 w64721exv10w1.htm MASTER AGREEMENT, DATED AS OF JULY 12, 2002

Exhibit 10.1

MASTER AGREEMENT

Dated as of July 12, 2002

among

CONCORD EFS, INC.,
as Guarantor

CONCORD EFS, INC. AND
CERTAIN SUBSIDIARIES OF
CONCORD EFS, INC.
THAT MAY HEREAFTER BECOME PARTY HERETO,
as Lessees

ELECTRONIC PAYMENT SERVICES, INC.,
STAR SYSTEMS, LLC AND CERTAIN OTHER
SIGNIFICANT SUBSIDIARIES OF
CONCORD EFS, INC.
THAT ARE OR MAY HEREAFTER BECOME PARTY HERETO,
as Subsidiary Guarantors,

ATLANTIC FINANCIAL GROUP, LTD., as Lessor,

CERTAIN FINANCIAL INSTITUTIONS PARTIES HERETO,
as Lenders

and

SUNTRUST BANK, as Agent

TABLE OF CONTENTS

		Page
ARTICLE I     DEFINITIONS; INTERPRETATION			1
ARTICLE II     ACQUISITION, CONSTRUCTION AND LEASE; FUNDINGS;NATURE OF TRANSACTION			2
SECTION 2.1	Agreement to Acquire, Construct, Fund and Lease		2
SECTION 2.2	Fundings of Purchase Price, Development Costs and Construction Costs		3
SECTION 2.3	Funded Amounts and Interest and Yield Thereon		6
SECTION 2.4	Lessee Owner for Tax Purposes		6
SECTION 2.5	Amounts Due Under Lease		7
SECTION 2.6	Posting of Cash Collateral		7
ARTICLE III     CONDITIONS PRECEDENT; DOCUMENTS			8
SECTION 3.1	Conditions to the Obligations of the Funding Parties on each Closing Date		8
SECTION 3.2	Additional Conditions for the Initial Closing Date		12
SECTION 3.3	Conditions to the Obligations of Lessee		14
SECTION 3.4	Conditions to the Obligations of the Funding Parties on each Funding Date		14
SECTION 3.5	Completion Date Conditions		15
SECTION 3.6	Addition of Lessees		17
ARTICLE IV     REPRESENTATIONS			17
SECTION 4.1	Representations of the Obligors		17
SECTION 4.2	Survival of Representations and Effect of Fundings		23
SECTION 4.3	Representations of the Lessor		24
SECTION 4.4	Representations of each Lender		25
ARTICLE V     COVENANTS OF OBLIGORS AND THE LESSOR			26
SECTION 5.1	Financial Statements		26
SECTION 5.3	Funded Debt to Tangible Capitalization Ratio		27
SECTION 5.4	Adjusted Net Income		27
SECTION 5.5	No Impairment		27
SECTION 5.6	Additional Covenants; Significant Subsidiary		28
SECTION 5.7	Payment of Obligations		28
SECTION 5.8	Maintenance of Property: Insurance		28
SECTION 5.9	Conduct of Business and Maintenance of Existence		29
SECTION 5.10	Compliance with Laws		29
SECTION 5.11	Inspection of Property, Books and Records		29

-i-

SECTION 5.12	Consolidations, Mergers and Sales of Assets	29
SECTION 5.13	Negative Pledge	30
SECTION 5.14	Limitation on Indebtedness	31
SECTION 5.15	Transactions with Affiliates	31
SECTION 5.16	Further Assurances	32
SECTION 5.17	Additional Required Appraisals	32
SECTION 5.18	Lessor's Covenants	32
ARTICLE VI     TRANSFERS BY LESSOR AND LENDERS		34
SECTION 6.1	Lessor Transfers	34
SECTION 6.2	Lender Transfers	34
ARTICLE VII     INDEMNIFICATION		35
SECTION 7.1	General Indemnification	35
SECTION 7.2	Environmental Indemnity	37
SECTION 7.3	Proceedings in Respect of Claims	39
SECTION 7.4	General Tax Indemnity	41
SECTION 7.5	Increased Costs, etc.	46
SECTION 7.6	End of Term Indemnity	51
ARTICLE VIII     MISCELLANEOUS		52
SECTION 8.1	Survival of Agreements	52
SECTION 8.2	Notices	52
SECTION 8.3	Counterparts	52
SECTION 8.4	Amendments	52
SECTION 8.5	Headings, etc	54
SECTION 8.6	Parties in Interest	54
SECTION 8.7	GOVERNING LAW	54
SECTION 8.8	Expenses	54
SECTION 8.9	Severability	54
SECTION 8.10	Liabilities of the Funding Parties: Sharing of Payments	55
SECTION 8.11	Submission to Jurisdiction; Waivers	56
SECTION 8.12	Liabilities of the Agent	56

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APPENDIX A Definitions and Interpretation

SCHEDULES

SCHEDULE 1	Significant Subsidiaries
SCHEDULE 2.2	Commitments
SCHEDULE 4.1(o)	Environmental Matters
SCHEDULE 8.2	Notice Addresses

EXHIBITS

EXHIBIT A	Form of Funding Request
EXHIBIT B	Form of Assignment of Lease and Rents
EXHIBIT C	Form of Security Agreement and Assignment
EXHIBIT D	Form of Mortgage
EXHIBIT E	Form of Joinder Agreement
EXHIBIT F	Form of Assignment and Acceptance Agreement
EXHIBIT G	Form of Local Counsel Opinion
EXHIBIT H	Form of Certification of Construction Completion
EXHIBIT I	Form of Payment Date Notice
EXHIBIT J	Form of Compliance Certificate

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MASTER AGREEMENT

         THIS MASTER AGREEMENT, dated as of July 12, 2002 (as it may be amended or modified from time to time in accordance with the provisions hereof, this “Master Agreement”), is among CONCORD EFS, INC., a Delaware corporation (“Concord” or the “Guarantor”), CONCORD EFS, INC. and certain Subsidiaries of Concord that may hereafter become parties hereto as lessees pursuant to Section 3.6 (individually, a “Lessee” and collectively the “Lessees”), as Lessees, ELECTRONIC PAYMENT SERVICES, INC., a Delaware corporation (“EPS”), STAR SYSTEMS, LLC, a Delaware limited liability company (“Star”), and the other Significant Subsidiaries set forth on Schedule 1 (together with other Significant Subsidiaries that may hereafter become parties hereto pursuant to the Subsidiary Guaranty, individually, a “Subsidiary Guarantor” and collectively the “Subsidiary Guarantors”), ATLANTIC FINANCIAL GROUP, LTD., a Texas limited partnership (the “Lessor”), certain financial institutions parties hereto as lenders (together with any other financial institution that becomes a party hereto as a lender, collectively referred to as “Lenders” and individually as a “Lender”), and SUNTRUST BANK, a Georgia banking corporation, as agent for the Lenders (in such capacity, the “Agent”).

PRELIMINARY STATEMENT

         In accordance with the terms and provisions of this Master Agreement, the Lease, the Loan Agreement and the other Operative Documents, (i) the Lessor contemplates acquiring Land and, in certain cases, the Buildings on such Land identified by Concord, as Construction Agent, from time to time, and leasing such Land and Buildings thereon to a Lessee, (ii) Concord, as Construction Agent for the Lessor, wishes, in certain instances, to construct Buildings on Land for the Lessor and, when completed, the related Lessee wishes to lease such Buildings from the Lessor as part of the Leased Properties under the Lease, (iii) Concord, as Construction Agent, wishes to obtain, and the Lessor is willing to provide, funding for the acquisition of the Land and Buildings, or, in certain instances, the construction of Buildings, and (iv) the Lessor wishes to obtain, and Lenders are willing to provide, from time to time, financing of a portion of the funding of the acquisition of the Land and Buildings and, if applicable, the construction of the Buildings.

         In consideration of the mutual agreements contained in this Master Agreement and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

ARTICLE I
DEFINITIONS; INTERPRETATION

         Unless the context shall otherwise require, capitalized terms used and not defined herein shall have the meanings assigned thereto in Appendix A hereto for all purposes hereof; and the rules of interpretation set forth in Appendix A hereto shall apply to this Master Agreement.

ARTICLE II
ACQUISITION, CONSTRUCTION AND LEASE; FUNDINGS;
NATURE OF TRANSACTION

         SECTION 2.1 Agreement to Acquire, Construct, Fund and Lease.

                  (a) Land. Subject to the terms and conditions of this Master Agreement, with respect to each parcel of Land identified by Concord, as Construction Agent, on the related Closing Date (i) the Lessor agrees to acquire such interest in the related Land, and any Building thereon, from the applicable Seller as is transferred, sold, assigned and conveyed to the Lessor pursuant to the applicable Purchase Agreement or to lease such interest in the related Land, and any Building thereon, from the applicable Ground Lessor as is leased to the Lessor pursuant to the applicable Ground Lease, (ii) the Lessor hereby agrees to lease, or sublease, as the case may be, such Land and any Building thereon to the related Lessee pursuant to the Lease, and (iii) the related Lessee hereby agrees to lease, or sublease, as the case may be, such Land, and any Building thereon, from the Lessor pursuant to the Lease. With respect to certain IDB Properties, (i) the applicable Authority may acquire such interest in the related Land from the applicable Seller as is transferred, sold, assigned and conveyed to the Authority pursuant to the applicable Purchase Agreement, (ii) the applicable Authority will lease such Land to the Lessor pursuant to the related IDB Lease, and (iii) the related Lessee hereby agrees to sublease such Land from the Lessor pursuant to the Lease (it being understood that any reference in the Operative Documents to the lease by a Lessee of an IDB Property shall be deemed to refer to the sublease thereof pursuant to the Lease). With respect to certain IDB Properties, after the Closing Date therefor, upon request of the related Lessee, (i) the Lessor shall transfer to the applicable Authority such interest in such IDB Property as the Lessor has, (ii) the applicable Authority will lease such IDB Property to the Lessor pursuant to the related IDB Lease and (iii) the related Lessee will sublease such IDB Property from the Lessor pursuant to the Lease (and any reference in the Operative Documents to the lease by the related Lessee of such IDB Property shall be deemed to refer to the sublease thereof pursuant to the Lease). The obligation of the Lessor to enter into the IDB Documentation with respect to any IDB Property is subject to the Lessor’s and the Agent’s reasonable satisfaction with the form and substance of such IDB Documentation. The Lessor and the Agent agree to promptly review the IDB Documentation for each IDB Property after their receipt thereof, and the Lessor and the Agent agree that their consent to such IDB Documentation shall not be unreasonably withheld, conditioned or delayed.

                  (b) Building. With respect to each parcel of Land on which a Building is to be constructed, subject to the terms and conditions of this Master Agreement, from and after the Closing Date relating to such Land (i) the Construction Agent agrees, pursuant to the terms of the Construction Agency Agreement, to construct and install the Building on such Land for the Lessor prior to the Scheduled Construction Termination Date, (ii) the Lenders and the Lessor agree to fund the costs of such construction and installation (and interest and yield thereon), (iii) the Lessor shall lease, or sublease, as the case may be, such Building as part of such Leased

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Property to the related Lessee pursuant to the Lease, and (iv) the related Lessee shall lease, or sublease, as the case may be, such Building from the Lessor pursuant to the Lease.

         SECTION 2.2 Fundings of Purchase Price, Development Costs and Construction Costs.

                  (a) Initial Funding and Payment of Purchase Price for Land and Development Costs on Closing Date. Subject to the terms and conditions of this Master Agreement, on the Closing Date for any Land, and any Building thereon, each Lender shall make available to the Lessor its initial Loan with respect to such Land, and any Building thereon, in an amount equal to the product of such Lender’s Commitment Percentage times the purchase price for such Land, and any Building thereon, and the Construction Costs incurred by the Construction Agent, as agent, through such Closing Date, which funds the Lessor shall use, together with the Lessor’s own funds in an amount equal to the product of the Lessor’s Commitment Percentage times the purchase price for the related Land and any Building thereon, and the Construction Costs incurred by the Construction Agent, as agent, through such Closing Date, to purchase such Land, and any Building thereon, from the applicable Seller pursuant to the applicable Purchase Agreement or lease the Land and any Building thereon, from the applicable Ground Lessor pursuant to the applicable Ground Lease, as the case may be, and to pay to the Construction Agent the amount of such Construction Costs, and the Lessor shall lease, or sublease, as the case may be, such Land to the related Lessee pursuant to the Lease.

                  (b) Subsequent Fundings and Payments of Construction Costs during Construction Term. Subject to the terms and conditions of this Master Agreement, if a Building is to be constructed on Land, on each Funding Date following the Closing Date for each such parcel of Land until the related Construction Term Expiration Date, (i) each Lender shall make available to the Lessor a Loan in an amount equal to the product of such Lender’s Commitment Percentage times the amount of Funding requested by the Construction Agent for such Funding Date, which funds the Lessor hereby directs each Lender to pay over to the Agent, for distribution to the Construction Agent or a Lessee, as the case may be, as set forth in paragraph (d), and (ii) the Lessor shall pay over to the Agent, for distribution to the Construction Agent, its own funds (which shall constitute a part of, and an increase in, the Lessor’s Invested Amount with respect to such Leased Property) in an amount equal to the product of the Lessor’s Commitment Percentage times the amount of Funding requested by the Construction Agent for such Funding Date.

                  (c) Aggregate Limits on Funded Amounts. The aggregate amount that the Funding Parties shall be committed to provide as Funded Amounts under this Master Agreement and the Loan Agreement shall not exceed (x) with respect to each Leased Property the Construction Costs for such Leased Property (including, without limitation, the costs of acquiring the Leased Property), or (y) $55,000,000 in the aggregate. The aggregate amount that any Funding Party shall be committed to fund under this Master Agreement and the Loan Agreement shall not exceed the lesser of (i) such Funding Party’s Commitment and (ii) such Funding Party’s Commitment Percentage of the aggregate Fundings requested under this Master Agreement.

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                  (d) Notice, Time and Place of Fundings. With respect to each Funding, a Lessee or the Construction Agent, as the case may be, shall give the Lessor and the Agent an irrevocable prior telephone (followed within one Business Day with written) or written notice not later than (i) 11:00 a.m., Atlanta, Georgia time, at least three Business Days prior to the proposed Closing Date or other Funding Date, as the case may be, in the case of LIBOR Advances and (ii) 11:00 a.m., Atlanta, Georgia time on the proposed Closing Date or other Funding Date, as the case may be, in the case of Base Rate Advances, pursuant, in each case, to a Funding Request in the form of Exhibit A (a “Funding Request”), signed by an Executive Officer of such Lessee or the Construction Agent, as the case may be, specifying the Closing Date or subsequent Funding Date, as the case may be, the amount of Funding requested, whether such Funding shall be a LIBOR Advance or a Base Rate Advance or a combination thereof and the Rent Period(s) therefor. All documents and instruments required to be delivered on such Closing Date pursuant to this Master Agreement shall be delivered at the offices of Mayer, Brown, Rowe & Maw, 190 South LaSalle Street, Chicago, Illinois 60603, or at such other location as may be determined by the Lessor, the Construction Agent and the Agent. Each Funding shall occur on a Business Day and shall be in an amount equal to $250,000 or an integral multiple of $10,000 in excess thereof. All remittances made by any Lender and the Lessor for any Funding shall be made in immediately available funds by wire transfer to or, as is directed by, the related Lessee or the Construction Agent, as the case may be, with receipt by the related Lessee or the Construction Agent, as the case may be, not later than 12:00 noon, Atlanta, Georgia time, on the applicable Funding Date, upon satisfaction or waiver of the conditions precedent to such Funding set forth in Section 3; such funds shall (1) in the case of the initial Funding on a Closing Date, be used (A) to pay the purchase price to the applicable Seller for the related Land and any Building thereon, and (B) to pay the Construction Agent for the payment or reimbursement of Construction Costs incurred on or prior to the Closing Date, and (2) in the case of each subsequent Funding be paid to the Construction Agent, for the payment of Construction Costs incurred through such Funding Date and not previously paid.

                  (e) Lessee’s Deemed Representation for Each Funding. Each Funding Request by a Lessee or the Construction Agent shall be deemed a reaffirmation of each Lessee’s indemnity obligations in favor of the Indemnitees under the Operative Documents and a representation and warranty from such Lessee or the Construction Agent, as the case may be, to the Lessor, the Agent and the Lenders that on the proposed Closing Date or Funding Date, as the case may be, (i) the amount of Funding requested represents amounts owing in respect of the purchase price of the related Land, and any Building thereon, and Construction Costs in respect of the Leased Property (in the case of the initial Funding on a Closing Date) or amounts that are then due to third parties in respect of the Construction (in the case of any Funding), (ii) no Event of Default or Potential Event of Default exists, and (iii) the representations and warranties of each Obligor set forth in Section 4.1 are true and correct in all material respects as though made on and as of such Funding Date, except to the extent such representations or warranties relate solely to an earlier date, in which case such representations and warranties shall have been true and correct in all material respects on and as of such earlier date.

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                  (f) Not Joint Obligations. Notwithstanding anything to the contrary set forth herein or in the other Operative Documents, each Lender’s and the Lessor’s commitments shall be several, and not joint. In no event shall any Funding Party be obligated to fund an amount in excess of such Funding Party’s Commitment Percentage of any Funding, or to fund amounts in the aggregate in excess of such Funding Party’s Commitment.

                  (g) Non-Pro Rata Fundings. Notwithstanding anything to the contrary set forth in this Master Agreement, but subject to Section 2.2(f) above, at the Agent’s option, Fundings may be made by drawing on the Lessor’s Commitment until such Commitment is fully funded before drawing on the Lenders’ Commitments. In such event, when the Lessor’s Commitment is fully funded, the Lenders will fund, on a pro rata basis as among themselves, 100% of the amount of the Fundings thereafter, provided that, in no event will the Lessor’s Invested Amount be less than 11.5% of the aggregate Funded Amounts.

                  (h) Commitment Fee. Concord shall pay to the Agent, for the ratable benefit of each Funding Party based upon its Commitment Percentage of the aggregate Commitments, a commitment fee (the “Commitment Fee”) for the period commencing on July 18, 2002 to and including the Lease Termination Date, payable quarterly in arrears on each Quarterly Payment Date and on the Lease Termination Date in an amount equal to (i) the Commitment Fee Percentage, times (ii) an amount equal to the aggregate Commitments, minus the aggregate Funded Amounts as of such day times (iii) 1/360 times (iv) the number of days from and including July 18, 2002 (in the case of the first Quarterly Payment Date) or the immediately preceding Quarterly Payment Date (in the case of each other Quarterly Payment Date) to, but excluding, such Quarterly Payment Date or the Lease Termination Date, as applicable. During the Construction Period, the Commitment Fee will be funded by Advances (subject to the terms and conditions of this Master Agreement).

                  (i) Funding Conditions; Frequency of Funding Requests. The Construction Agent agrees that it shall submit a Funding Request (i) within one Business Day of each date on which Construction Costs that have been paid by the Construction Agent, or for which the Construction Agent has recourse liability, and, in either case, have not been previously paid or reimbursed by the Funding Parties exceed $2,500,000 and (ii) on the 45th day (or, if such day is not a Business Day, on the next succeeding Business Day) after delivery of the preceding Funding Request. The obligation of the Funding Parties to make Advances hereunder with respect to any Leased Property after the Closing Date therefor to reimburse the Construction Agent for Construction Costs paid by the Construction Agent, or to pay for Construction Costs for which the Construction Agent has recourse liability, are subject only to the conditions precedent that (i) the Agent has received from the Construction Agent the Funding Request therefor and (ii) neither the Lessor nor the Construction Agent has misappropriated any Funding or engaged in any willful misconduct. In the event that the Agent notifies the Construction Agent that (i) an Event of Default or Potential Event of Default has occurred and is continuing or (ii) there shall have occurred any event that would reasonably be expected to have a Material Adverse Effect since December 31, 2001, the Construction Agent shall not incur any more

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recourse liability for, or pay from its own funds, Construction Costs, and the Funding Parties shall have no obligation to make Advances for such Construction Costs incurred after the receipt by the Construction Agent of such notice. Nothing set forth in this Section 2.2(i) is intended to, or shall be deemed to, abrogate the Construction Agent’s agreement set forth in Section 4.1(c) of the Construction Agency Agreement.

         SECTION 2.3 Funded Amounts and Interest and Yield Thereon.

                  (a) The Lessor’s Invested Amount for any Leased Property outstanding from time to time shall be allocated on a pro rata basis (based on the aggregate Funded Amounts), to the LIBOR Advances and the Base Rate Advances, and shall accrue yield (“Yield”) at the Lessor Rate, computed using the actual number of days elapsed and a 360 day year. If all or a portion of the principal amount of or Yield on the Lessor’s Invested Amounts shall not be paid when due (whether at the stated maturity, by acceleration or otherwise), such overdue amount shall, without limiting the rights of the Lessor under the Lease, to the maximum extent permitted by law, accrue Yield at the Overdue Rate, from the date of nonpayment until paid in full (both before and after judgment).

                  (b) Each Lender’s Funded Amount for any Leased Property outstanding from time to time shall accrue interest as provided in the Loan Agreement.

                  (c) During the Construction Term, in lieu of the payment of accrued interest, on each Payment Date, each Lender’s Funded Amount in respect of a Construction Land Interest shall automatically be increased by the amount of interest accrued and unpaid on the related Loans pursuant to the Loan Agreement during the Rent Period ending immediately prior to such Payment Date. Similarly, in lieu of the payment of accrued Yield, on each Payment Date, the Lessor’s Invested Amount in respect of a Construction Land Interest shall automatically be increased by the amount of Yield accrued on the Lessor’s Invested Amount in respect of such Leased Property during the Rent Period ending immediately prior to such Payment Date. Such increases in Funded Amounts shall occur without any disbursement of funds by the Funding Parties and without the requirement that a Funding Request be delivered with respect thereto.

                  (d) Three Business Days prior to the last day of each Rent Period, Concord shall deliver (which delivery may be by facsimile) to the Lessor and the Agent a notice substantially in the form of Exhibit I (each, a “Payment Date Notice”), appropriately completed, specifying the allocation of the Funded Amounts related to such Rent Period to LIBOR Advances and Base Rate Advances and the Rent Periods therefor, provided that no such allocation to LIBOR Advances shall be in an amount less than $500,000. Each such Payment Date Notice shall be irrevocable. If no such notice is given, the Funded Amounts shall be allocated to a LIBOR Advance with a Rent Period of three (3) months.

         SECTION 2.4 Lessee Owner for Tax Purposes. With respect to each Leased Property, it is the intent of the Lessees and the Funding Parties that for federal, state and local tax purposes

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and bankruptcy law purposes the Lease shall be treated as the repayment and security provisions of a loan by the Lessor to the Lessees, and that the related Lessee shall be treated as the legal and beneficial owner entitled to any and all benefits of ownership of such Leased Property and all payments of Basic Rent during the Lease Term shall be treated as payments of interest and principal. Nevertheless, each of Concord and each other Lessee acknowledges and agrees that neither the Agent, nor any Funding Party, nor any other Person has made any representations or warranties concerning the tax, financial, accounting or legal characteristics or treatment of the Operative Documents and that each of Concord and each other Lessee has obtained and relied solely upon the advice of its own tax, accounting and legal advisors concerning the Operative Documents and the accounting, tax, financial and legal consequences of the transactions contemplated therein.

         SECTION 2.5 Amounts Due Under Lease. With respect to each Leased Property, anything else herein or elsewhere to the contrary notwithstanding, it is the intention of the Lessees and the Funding Parties that: (i) subject to clauses (ii) and (iii) below, the amount and timing of Basic Rent due and payable from time to time from the related Lessee under the Lease shall be equal to the aggregate payments due and payable with respect to interest on the Loans in respect of such Leased Property and Yield on the Lessor’s Invested Amounts in respect of such Leased Property on each Payment Date; (ii) if a Lessee elects the Purchase Option with respect to any Leased Property or becomes obligated to purchase any Leased Property under the Lease, the Funded Amounts in respect of such Leased Property, all interest and Yield thereon and all other obligations of the Lessees owing to the Funding Parties with respect to such Leased Property shall be paid in full by the related Lessee, (iii) if a Lessee properly elects the Remarketing Option with respect to any Leased Property, (A) such Lessee will only be required to pay the Recourse Deficiency Amount with respect to such Leased Property and the other amounts required to be paid pursuant to Section 14.6 of the Lease with respect to such Leased Property, which amounts shall be used to pay the principal of the A Loans with respect to such Leased Property, and (B) such Lessee shall only be required to pay to the Lenders the principal amount of the B Loans with respect to such Leased Property and to the Lessor the Lessor’s Invested Amounts with respect to such Leased Property, to the extent of the proceeds of the sale of the related Leased Property in accordance with Section 14.6 of the Lease; and (iv) upon an Event of Default resulting in an acceleration of the Lessees’ obligation to purchase the Leased Properties under the Lease, the amounts then due and payable by the Lessees under the Lease shall include all amounts necessary to pay in full the Loans, and accrued interest thereon, the Lessor’s Invested Amounts and accrued Yield thereon and all other obligations of the Lessees owing to the Agent and the Funding Parties pursuant to the Operative Documents.

         SECTION 2.6 Posting of Cash Collateral. On the fifth anniversary of the date hereof, Concord hereby agrees that it shall deliver, as security for the Obligations, cash in an amount equal to the aggregate Funded Amounts outstanding on such fifth anniversary to an independent bank or other financial institution reasonably satisfactory to Concord and the Agent (the “Cash Collateral Trustee”) to be held in a segregated account (the “Cash Collateral Account”) for the sole benefit of the Funding Parties pursuant to a controlled account agreement in a form

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reasonably acceptable to Concord, the Cash Collateral Trustee and the Agent. Funds in the Cash Collateral Account shall be invested in Permitted Investments from time to time at the direction of Concord, provided that the Cash Collateral Trustee shall have a first priority, perfected interest in each such Permitted Investment. Concord hereby grants a continuing security interest in the Cash Collateral Account, and in the funds therein, to the Agent to secure all of the Obligations. Funds in the Cash Collateral Account shall be paid to the Agent, for application in accordance with the applicable provisions of the Loan Agreement upon the declaration of an Event of Default or the Acceleration of the obligations of the Lessees under the Lease. Concord hereby agrees to execute and deliver such documents, agreements, financing statements and certificates that the Agent or the Cash Collateral Trustee may reasonably request in order to effect, evidence or perfect the interests of the Agent and the Cash Collateral Trustee in the Cash Collateral Account and the funds therein, together with an opinion of counsel in form and substance reasonably satisfactory to the Agent as to the enforceability of the controlled account agreement relating to the Cash Collateral Account and the perfection and priority of the Cash Collateral Trustee’s Lien thereon and on the funds on deposit therein. If Concord has complied with the provisions of this Section 2.6, and Concord requests the Agent and the Lessor in writing to release the Mortgages and the Assignments of Lease and Rents on the Leased Properties, the Agent and the Lessor shall execute and deliver such releases, termination statements and other documents as Concord reasonably requests to evidence such release, all at Concord’s cost and expense. Upon the termination of the Lease and the payment in full of all of the Obligations, all funds remaining in the Cash Collateral Account shall be delivered to Concord.

ARTICLE III
CONDITIONS PRECEDENT; DOCUMENTS

         SECTION 3.1 Conditions to the Obligations of the Funding Parties on each Closing Date. The obligations of the Lessor and each Lender to carry out their respective obligations under Section 2 of this Master Agreement to be performed on the Closing Date with respect to any Land and any Building thereon shall be subject to the fulfillment to the satisfaction of, or waiver by, each such party hereto (acting directly or through its counsel) on or prior to such Closing Date of the following conditions precedent, provided that the obligations of any Funding Party shall not be subject to any conditions contained in this Section 3.1 which are required to be performed by such Funding Party:

         (a) Documents. The following documents shall have been executed and delivered by the respective parties thereto:

         (i) Deed and Purchase Agreement. The related original Deed duly executed by the applicable Seller and in recordable form, and copies of the related Purchase Agreement, assigned to the Lessor, shall each have been delivered to the Agent by the related Lessee, or the related Ground Lease, duly assigned to the Lessor, shall have been delivered to the Agent, as applicable (it being understood,

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that each Purchase Agreement and each Ground Lease shall be reasonably satisfactory in form and substance to the Lessor and the Agent).

         (ii) Lease Supplement. The original of the related Lease Supplement, duly executed by the related Lessee and the Lessor and in recordable form, shall have been delivered to the Agent by such Lessee.

         (iii) Mortgage and Assignment of Lease and Rents. Counterparts of the Mortgage (substantially in the form of Exhibit D attached hereto), duly executed by the Lessor and in recordable form, shall have been delivered to the Agent (which Mortgage shall secure all the Lease Balance unless such mortgage is subject to a tax based on the amount of indebtedness secured thereby, in which case the amount secured will be limited to debt in an amount equal to such amount as is negotiated in good faith by the Agent and Concord); and the Assignment of Lease and Rents (substantially in the form of Exhibit B attached hereto) in recordable form, duly executed by the Lessor, shall have been delivered to the Agent by the Lessor.

         (iv) Security Agreement and Assignment. If Buildings are to be constructed on the Land, counterparts of a supplement to the Construction Agency Agreement duly executed by the Construction Agent and counterparts of the Security Agreement and Assignment (substantially in the form of Exhibit C attached hereto), duly executed by the Construction Agent, with an acknowledgment and consent thereto satisfactory to the Lessor and the Agent duly executed by the related General Contractor and the related Architect or Engineer, as applicable, and complete copies of the related Construction Contract and the related Architect’s Agreement or Engineer’s Agreement certified by the Construction Agent, shall have been delivered to the Lessor and the Agent (it being understood and agreed that if no related Construction Contract or Architect’s Agreement or Engineer’s Agreement exists on such Closing Date, such delivery shall not be a condition precedent to the Funding on such Closing Date, and in lieu thereof the Construction Agent shall deliver complete copies of such Security Agreement and Assignment and consents concurrently with or promptly after the Construction Agent’s entering into such contracts).

         (v) Survey. The related Lessee shall have delivered, or shall have caused to be delivered, to the Lessor and the Agent, at such Lessee’s expense, an accurate survey certified to the Lessor and the Agent in a form reasonably satisfactory to the Lessor and the Agent and prepared within ninety (90) days of such Closing Date (or such other longer time period agreed to by the Lessor and the Agent) by a Person reasonably satisfactory to the Lessor and the Agent. Such survey shall (1) be acceptable to the Title Insurance Company for the purpose of providing extended coverage to the Lessor and a lender’s comprehensive endorsement to the Agent, (2) show no material encroachments on the related

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Land by structures owned by others, and no material encroachments from any part of such Leased Property onto any land owned by others, and (3) disclose no state of facts reasonably objectionable to the Lessor, the Agent or the Title Insurance Company.

         (vi) Title and Title Insurance. On such Closing Date, the Lessor shall receive from a title insurance company acceptable to the Lessor and the Agent an ALTA Owner’s Policy of Title Insurance issued by such title insurance company and the Agent shall receive from such title insurance company an ALTA Mortgagee’s Policy of Title Insurance issued by such title insurance company, in each case, in the amount of the projected cost of acquisition and construction of such Leased Property, reasonably acceptable in form and substance to the Lessor and the Agent, respectively (collectively, the “Title Policy”). The Title Policy shall be dated as of such Closing Date, and, to the extent permitted under Applicable Law, shall include such affirmative endorsements as the Lessor or the Agent shall reasonably request.

         (vii) Appraisal. The Agent shall have received a report of the Appraiser (an “Appraisal”), paid for by the related Lessee, which shall meet the requirements of the Financial Institutions Reform, Recovery and Enforcement Act of 1989, shall be satisfactory to each Funding Party and shall state in a manner satisfactory to each Funding Party the estimated “as vacant” value of such Land and existing Buildings or any Building to be constructed thereon. Such Appraisal must show that the “as vacant” value of such Leased Property (if a Building is to be constructed on the Land, determined as if the Building had already been completed in accordance with the related Plans and Specifications) is at least 45% of the total cost of such Leased Property.

         (viii) Environmental Audit and related Reliance Letter. The Agent shall have received an Environmental Audit for such Leased Property, which shall be conducted in accordance with ASTM standards and shall not include a recommendation for further investigation and shall be otherwise satisfactory to the Lessor and the Agent; and the firm that prepared the Environmental Audit for such Leased Property shall have delivered to the Agent a letter stating that the Lessor, the Agent and the Lenders may rely upon such firm’s Environmental Audit of such Land, it being understood that the Lessor’s and the Agent’s acceptance of any such Environmental Audit shall not release or impair Concord’s or any Lessee’s obligations under the Operative Documents with respect to any environmental liabilities relating to such Leased Property.

         (ix) Evidence of Insurance. The Agent shall have received from the related Lessee certificates of insurance evidencing compliance with the provisions of Article VIII of the Lease or, if such Leased Property is a Construction Land

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Interest, the provisions of Section 2.9 of the Construction Agency Agreement (including the naming of the Lessor, the Agent and the Lenders as additional insured or loss payee as set forth in Article VII of the Lease or Section 2.9 of the Construction Agency Agreement, as applicable), in form and substance reasonably satisfactory to the Lessor and the Agent.

         (x) UCC Financing Statement; Recording Fees; Transfer Taxes. The Agent shall have received satisfactory evidence of (i) the execution (if required by applicable law) and delivery by the related Lessee and the Lessor to Agent of a UCC-1 and, if required by applicable law, UCC-2 financing statement to be filed with the Secretary of State of the applicable State (or other appropriate filing office) and the county where the related Land is located, respectively, and such other Uniform Commercial Code financing statements as any Funding Party deems necessary or desirable in order to perfect such Funding Party’s or the Agent’s interests and (ii) the payment of all recording and filing fees and taxes with respect to any recordings or filings made of the related Deed, the Lease, the related Lease Supplement, the related Mortgage and the related Assignment of Lease and Rents.

         (xi) Opinions. An opinion of local counsel for the related Lessee qualified in the jurisdiction in which such Leased Property is located, substantially in the form set forth in Exhibit G attached hereto, and containing such other matters as the parties to whom they are addressed shall reasonably request, shall have been delivered and addressed to Agent. To the extent requested by the Agent, opinions supplemental to those delivered under Section 3.2(vi) and reasonably satisfactory to the Agent shall have been delivered to the Agent and addressed to each of the Lessor, the Agent and the Lenders.

         (xii) Good Standing Certificates. The Agent shall have received good standing certificates for the Lessor and the related Lessee from the appropriate offices of the state where the related Land is located.

         (xiii) IDB Property. If such Leased Property is an IDB Property or will otherwise be subject to industrial development or revenue bonds, the IDB Documentation shall have been executed or will, when applicable, be executed by the parties thereto, and shall be in form and substance reasonably acceptable to the Agent, the Lessor and the Lenders; provided that the consent of the Agent, the Lessor and the Lenders shall not be unreasonably withheld, conditioned or delayed.

         (b) Litigation. No action or proceeding shall have been instituted or, to the knowledge of any Funding Party, threatened nor shall any governmental action, suit, proceeding or investigation be instituted or threatened before any Governmental

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Authority, nor shall any order, judgment or decree have been issued or proposed to be issued by any Governmental Authority, to set aside, restrain, enjoin or prevent the performance of this Master Agreement or any transaction contemplated hereby or by any other Operative Document or which would reasonably be expected to result in a Material Adverse Effect.

         (c) Legality. In the opinion of such Funding Party or its counsel, the transactions contemplated by the Operative Documents shall not violate any Applicable Law, and no change shall have occurred or been proposed in Applicable Law that would make it illegal for such Funding Party to participate in any of the transactions contemplated by the Operative Documents.

         (d) No Events. (i) No Event of Default, Potential Event of Default, Event of Loss or Event of Taking relating to such Leased Property shall have occurred and be continuing, (ii) no action shall be pending or threatened by a Governmental Authority to initiate a Condemnation or an Event of Taking, and (iii) there shall not have occurred any event that would reasonably be expected to have a Material Adverse Effect since December 31, 2001.

         (e) Representations. Each representation and warranty of the parties hereto or to any other Operative Document contained herein or in any other Operative Document shall be true and correct in all material respects as though made on and as of such Closing Date, except to the extent such representations or warranties relate solely to an earlier date, in which case such representations and warranties shall have been true and correct in all material respects on and as of such earlier date.

         (f) Cutoff Date. No Closing Date shall occur after the Funding Termination Date.

         (g) Approval. The Agent shall not have rejected such Leased Property for inclusion in the Lease by written notice to Concord.

         SECTION 3.2 Additional Conditions for the Initial Closing Date. The obligations of the Lessor and each Lender to carry out their respective obligations under Section 2 of this Master Agreement to be performed on the Initial Closing Date shall be subject to the satisfaction of, or waiver by, each such party hereto (acting directly or through its counsel) on or prior to the Initial Closing Date of the following conditions precedent in addition to those set forth in Section 3.1, provided that the obligations of any Funding Party shall not be subject to any conditions contained in this Section 3.2 which are required to be performed by such Funding Party:

         (i) Loan Agreement; Guaranty Agreement; Etc. Counterparts of the Loan Agreement, duly executed by the Lessor, the Agent and each Lender shall have been

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delivered to the Agent. An A Note and a B Note, duly executed by the Lessor, and the Subsidiary Guaranty, duly executed by the Subsidiary Guarantors, shall have been delivered to the Agent. The Guaranty Agreement, duly executed by Concord, shall have been delivered to the Agent. The Agent’s Fee Letter and the Disbursement Agreement, duly executed by Concord, shall have been delivered to the Agent, and the Lessor Yield Letter, duly executed by Concord, shall have been delivered to the Lessor.

         (ii) Master Agreement. Counterparts of this Master Agreement, duly executed by the parties hereto, shall have been delivered to the Agent.

         (iii) Construction Agency Agreement. Counterparts of the Construction Agency Agreement, duly executed by the parties thereto shall have been delivered to the Agent.

         (iv) Lease. Counterparts of the Lease, duly executed by the Lessees party to this Master Agreement on the Initial Closing Date and the Lessor, shall have been delivered to the Agent and the original, chattel paper copy of the Lease shall have been delivered to the Agent.

         (v) Lessee’s Resolutions and Incumbency Certificate, etc. The Agent shall have received (x) a certificate of the Secretary or an Assistant Secretary of each of Guarantor, each Lessee party hereto on the Initial Closing Date and each other Obligor, attaching and certifying as to (i) the Board of Directors’ (or appropriate committee’s) resolution duly authorizing the execution, delivery and performance by it of each Operative Document to which it is or will be a party, (ii) the incumbency and signatures of persons authorized to execute and deliver such documents on its behalf, (iii) its articles or certificate of incorporation, certified as of a recent date by the Secretary of State of the state of its incorporation and (iv) its by-laws, and (y) good standing certificates for each of Guarantor, each Lessee party hereto on the Initial Closing Date and each other Obligor from the appropriate offices of the States of Guarantor’s, such Lessee’s or such Obligor’s incorporation and principal place of business.

         (vi) Opinions of Counsel. The opinions of Dechert and Wyatt, Tarrant and Combs, LLP, each dated the Initial Closing Date, containing such matters as the parties to whom it is addressed shall reasonably request, shall have been delivered to the Agent and addressed to each of the Lessor, the Agent and the Lenders. The opinion of Brown McCarroll, LLP, dated the Initial Closing Date, and containing such matters as the parties to whom it is addressed shall reasonably request, shall have been delivered to each of the Agent and Concord.

         (vii) Good Standing Certificate. The Agent and Concord shall have received a good standing certificate for the Lessor from the appropriate office of the State of Texas.

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         (viii) Lessor’s Consents and Incumbency Certificate, etc. The Agent and Concord shall have received a certificate of the Secretary or an Assistant Secretary of the General Partner of the Lessor attaching and certifying as to (i) the consents of the partners of the Lessor duly authorizing the execution, delivery and performance by it of each Operative Document to which it is or will be a party, (ii) the incumbency and signatures of persons authorized to execute and deliver such documents on its behalf, and (iii) the Partnership Agreement.

         Notwithstanding the foregoing, the parties hereto hereby agree that the receipt of the documents described in Section 3.2(v) above, and the opinions described in the first sentence of Section 3.1(vi) above, in each case with respect to the Significant Subsidiaries shall not be a condition precedent to the Initial Closing Date, provided that Concord agrees to deliver, or cause to be delivered, such documents and opinions as promptly as practicable after the Initial Closing Date, but in any event within 30 days after the Initial Closing Date.

         SECTION 3.3 Conditions to the Obligations of Lessee. The obligations of any Lessee to lease a Leased Property from the Lessor are subject to the fulfillment on the related Closing Date to the satisfaction of, or waiver by, such Lessee, of the following conditions precedent:

         (a) General Conditions. The conditions set forth in Sections 3.1 and 3.2 that require fulfillment by the Lessor or the Lenders shall have been satisfied, including the delivery of good standing certificates by the Lessor pursuant to Sections 3.1(a)(xii) and 3.2(vii) and the delivery of an opinion of counsel for the Lessor pursuant to Section 3.2(vi) and the execution and delivery of the Operative Documents to be executed by the Lessor or the Lenders in connection with such Leased Property.

         (b) Legality. In the opinion of such Lessee or its counsel, the transactions contemplated by the Operative Documents shall not violate any Applicable Law, and no change shall have occurred or been proposed in Applicable Law that would make it illegal for such Lessee to participate in any of the transactions contemplated by the Operative Documents.

         (c) Purchase Agreement; Ground Lease. The Purchase Agreement and, if applicable, the Ground Lease and all documents to be delivered under the Purchase Agreement or Ground Lease, including title insurance, survey and environmental audit, shall be reasonably satisfactory to such Lessee.

         SECTION 3.4 Conditions to the Obligations of the Funding Parties on each Funding Date. The obligations of the Lessor and each Lender to carry out their respective obligations under Section 2 of this Master Agreement to be performed on each Funding Date shall be subject to the fulfillment to the satisfaction of, or waiver by, each such party hereto (acting directly or through their respective counsel) on or prior to each such Funding Date of the following

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conditions precedent, provided that the obligations of any Funding Party shall not be subject to any conditions contained in this Section 3.4 which are required to be performed by such Funding Party:

         (a) Funding Request. The Lessor and the Agent shall have received from the Construction Agent or a Lessee the Funding Request therefor pursuant to Section 2.2(d).

         (b) Condition Fulfilled. As of such Funding Date, the condition set forth in Section 3.1(d) shall have been satisfied.

         (c) Representations. As of such Funding Date, both before and after giving effect to the Funding requested by the Construction Agent or a Lessee on such date, the representations and warranties that the Construction Agent or such Lessee is deemed to make pursuant to Section 2.2(e) shall be true and correct on and as of such Funding Date as though made on and as of such Funding Date, except to the extent such representations or warranties relate solely to an earlier date, in which case such representations and warranties shall have been true and correct in all material respects on and as of such earlier date.

         (d) No Bonded Stop Notice or Filed Mechanics Lien. As of such Funding Date, and as to any Funded Amount requested for any Leased Property on such Funding Date, (i) none of the Lessor, the Agent or any Lender has received (with respect to such Leased Property) a bonded notice to withhold Loan funds that has not been discharged by the related Lessee or the Construction Agent, and (ii) no mechanic’s liens or materialman’s liens have been filed against such Leased Property in an amount in excess of 15% of the Construction Budget for such Leased Property that have not been discharged by the related Lessee, bonded over in a manner reasonably satisfactory to the Agent or insured over by the Title Insurance Company.

         (e) Lease Supplement. If the Funding relates to a Building that will be leased under a Lease Supplement separate from the Lease Supplement for the related Land, the original of such separate Lease Supplement, duly executed by the related Lessee and the Lessor and in recordable form, shall have been delivered to the Agent.

         SECTION 3.5 Completion Date Conditions. The occurrence of the Completion Date with respect to any Leased Property shall be subject to the fulfillment to the satisfaction of, or waiver by, the Required Funding Parties (acting directly or through their respective counsel) of the following conditions precedent:

         (a) Title Policy Endorsements. The Construction Agent shall have furnished to the Agent, for the benefit of the Funding Parties, the following endorsements to the related Title Policy (each of which shall be subject to no exceptions other than

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those reasonably acceptable to the Agent): a date-down endorsement (redating and confirming the coverage provided under the Title Policy and each endorsement thereto) and a “Form 9” endorsement (if available in the applicable jurisdiction), in each case, effective as of a date not earlier than the date of completion of the Construction. The Construction Agent shall also deliver to the Agent copies of a certificate or certificates of occupancy for such Leased Property or other legally equivalent permission to occupy such Leased Property.

         (b) Construction Completion. Any related Construction shall have been completed substantially in accordance with the related Plans and Specifications (subject to minor punch list requirements), the related Deed and all Applicable Laws, and such Leased Property shall be ready for occupancy and operation. All fixtures, equipment and other property contemplated under the Plans and Specifications to be incorporated into or installed in such Leased Property shall have been substantially incorporated or installed, free and clear of all Liens except for Permitted Liens. The Construction Agent shall have provided to the Agent a list, in reasonable detail, of the Funded Equipment.

         (c) Construction Agent Certification. The Construction Agent shall have furnished the Lessor and the Agent with a certification of the Construction Agent (substantially in the form of Exhibit H) that:

         (i) all amounts owing to third parties for the related Construction have been paid in full (other than contingent obligations for which the Construction Agent has made adequate reserves), and no litigation or proceedings are pending, or to the best of the Construction Agent’s knowledge, are threatened, against such Leased Property or the Construction Agent or the related Lessee which could reasonably be expected to have a Material Adverse Effect;

         (ii) all material consents, licenses and permits and other governmental authorizations or approvals required for such Construction and operation of such Leased Property have been obtained and are in full force and effect;

         (iii) such Leased Property has available all services of public facilities and other utilities necessary for use and operation of such Leased Property for its intended purposes including, without limitation, adequate water, gas and electrical supply, storm and sanitary sewerage facilities, telephone, other required public utilities and means of access between the related Building and public highways for pedestrians and motor vehicles;

         (iv) all material agreements, easements and other rights, public or private, which are necessary to permit the lawful use and operation of such Leased Property as the related Lessee intends to use such Leased Property under the Lease

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and which are necessary to permit the lawful intended use and operation of all then intended utilities, driveways, roads and other means of egress and ingress to and from the same have been obtained and are in full force and effect and neither the Construction Agent nor the related Lessee has any knowledge of any pending modification or cancellation of any of the same; and the use of such Leased Property does not depend on any variance, special exception or other municipal approval, permit or consent that has not been obtained and is in full force and effect for its continuing legal use; and

         (v) to the best of the Construction Agent’s knowledge, such Leased Property is in compliance in all material respects with all applicable zoning laws and regulations.

         SECTION 3.6 Addition of Lessees. After the date hereof, Subsidiaries of Concord may become Lessees hereunder and under the other Operative Documents upon satisfaction of the following conditions precedent:

         (a) such Subsidiary and the Guarantor shall have executed and delivered to the Agent and the Lessor a Joinder Agreement, substantially in the form of Exhibit E;

         (b) such Subsidiary shall have delivered to each of the Agent and the Lessor (x) a certificate of the Secretary or an Assistant Secretary of such Subsidiary, attaching and certifying as to (i) the Board of Directors’ resolution duly authorizing the execution, delivery and performance by it of each Operative Document to which it is or will be a party, (ii) the incumbency and signatures of persons authorized to execute and deliver such documents on its behalf, (iii) its certificate of incorporation, certified as of a recent date by the Secretary of State of its incorporation and (iv) its by-laws, and (y) good standing certificates from the appropriate offices of the States of such Subsidiary’s incorporation and principal place of business;

         (c) such Subsidiary shall have delivered an opinion of Dechert or other counsel reasonably acceptable to the Agent and the Funding Parties, addressed to each of the Lessor, the Agent and the Lenders, substantially in the form of the opinions delivered pursuant to the first sentence of Section 3.2(vi); and

         (d) the Agent, the Lessor and the Lenders shall have received such other documents, certificates and information as any of them shall have reasonably requested.

ARTICLE IV
REPRESENTATIONS

         SECTION 4.1 Representations of the Obligors. Effective as of the date of execution hereof, as of each Closing Date and as of each Funding Date, each Obligor represents and

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warrants to each of the other parties hereto as follows (provided that Concord shall not make the representation set forth in Section 4.1(o)):

                  (a) Corporate Existence and Power. Each of Concord and its Subsidiaries (i) is duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, (ii) has the corporate or other necessary power and authority, and the legal right, to own and operate its property, to lease the property it operates as lessee and to conduct the business in which it is currently engaged, except to the extent that the failure to have such legal right would not be reasonably expected to have a Material Adverse Effect, (iii) is duly qualified as a foreign entity and in good standing under the laws of each jurisdiction where its ownership, lease or operation of property or the conduct of its business requires such qualification, other than in such jurisdictions where the failure to be so qualified and in good standing would not be reasonably expected to have a Material Adverse Effect, and (iv) is in compliance with all Requirements of Law, except to the extent that the failure to comply therewith would not, in the aggregate, be reasonably expected to have a Material Adverse Effect.

                  (b) Corporate and Governmental Authorization; No Contravention. The execution, delivery and performance by each Obligor of this Master Agreement and the other Operative Documents to which such Obligor is party (i) are within the corporate or other applicable powers of such Obligor, (ii) have been duly authorized by all necessary corporate or other applicable action, (iii) require no action by or in respect of, or filing with, any governmental body, agency or official and (iv) do not contravene, or constitute a default under, any provision of Requirement of Law or Contractual Obligation of such Obligor that would reasonably be expected to have a Material Adverse Effect or (v) result in the creation or imposition of any Lien on any of the properties or revenues of such Obligor or any of its Subsidiaries (other than any Lien created by the Operative Documents).

                  (c) Binding Effect. This Master Agreement and the other Operative Documents to which any Obligor is party constitute valid and binding agreements of such Obligor and will constitute valid and binding obligations of such Obligor, in each case enforceable in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law).

                  (d) Material Adverse Effect. Since December 31, 2001, there has not occurred any event that would reasonably be expected to have a Material Adverse Effect.

                  (e) Litigation.

         (i) There is no action, suit or proceeding pending against, or to the knowledge of such Obligor threatened against or affecting, any Obligor or any of its Subsidiaries before any court or arbitrator or any governmental body, agency or official

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(A) could reasonably be expected to have any Material Adverse Effect or (B) which in any manner draws into question the validity or enforceability of this Master Agreement or any other Operative Document.

         (ii) Without limiting the generality of clause (i) of this paragraph (e), (A) there is not any Covered Administrative Action which is currently in effect and (B) there is no examination, investigation or proceeding by any Banking Agency pending against, or to the knowledge of such Obligor threatened against or affecting, such Obligor or any of its Subsidiaries in which there is a reasonable likelihood of any Covered Administrative Action that, in the case of either (A) or (B), could reasonably be expected to have a Material Adverse Effect.

                  (f) Compliance with ERISA. Each member of the ERISA Group has fulfilled its obligations under the minimum funding standards of ERISA and the Code with respect to each Plan and is in compliance in all material respects with the presently applicable provisions of ERISA and the Code with respect to each Plan. No member of the ERISA Group has (i) sought a waiver of the minimum funding standard under Section 412 of the Code in respect of any Plan, (ii) failed to make any contribution or payment to any Plan or Multiemployer Plan or in respect of any Benefit Arrangement, or made any amendment to any Plan or Benefit Arrangement, which has resulted or could result in the imposition of a Lien or the posting of a bond or other security under ERISA or the Code or (iii) incurred any liability under Title IV of ERISA other than a liability to the PBGC for premiums under Section 4007 of ERISA.

                  (g) Taxes. Each Obligor and its Subsidiaries have filed all United States Federal income tax returns (or timely extension requests therefor) and all other material tax returns (or timely extension requests therefor) which are required to be filed by them and have paid, to the extent that the failure to pay could reasonably be expected to have a Material Adverse Effect, (i) all taxes shown to be due and payable on said returns or (ii) all taxes shown to be due and payable on any assessments of which it has received notice made against it or any of its property and all other taxes, fees or other charges imposed on it or any of its property by any Governmental Authority, and no tax Lien has been filed, and, to the best knowledge of such Obligor no claim is being asserted, with respect to any such tax, fee or other charge, except to the extent that such liens or claims would not be reasonably expected to have a Material Adverse Effect. The charges, accruals and reserves in accordance with GAAP on the books of such Obligor and its Subsidiaries in respect of taxes or other governmental charges are, in the reasonable opinion of such Obligor, adequate.

                  (h) Subsidiaries. Each of Concord’s Subsidiaries is an entity duly incorporated or organized, validly existing and in good standing under the laws of its jurisdiction of incorporation, and has all corporate or other necessary powers and all material governmental licenses, authorizations, consents and approvals required to carry on its business as now conducted.

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                  (i) Not an Investment Company. No Obligor is an “investment company” within the meaning of the Investment Company Act of 1940, as amended.

                  (j) Full Disclosure. All information heretofore furnished by any Obligor to the Agent or any Funding Party for purposes of or in connection with this Master Agreement or any transaction contemplated hereby, taken as a whole, does not contain, and all such information hereafter furnished by any Obligor to the Agent or any Funding Party will not contain, any untrue statement of material fact and does not omit and will not omit to state any material fact necessary to make the statements therein in light of the circumstances in which they were made, not misleading.

                  (k) Use of Proceeds. The proceeds of the Funded Amounts made under this Master Agreement will be used by the Construction Agent or a Lessee for the purposes described in Section 2.2. None of such proceeds will be used, directly or indirectly, for the purpose, whether immediate, incidental or ultimate, of buying or carrying any “margin stock” within the meaning of Regulation U.

                  (l) Absence of Defaults. No event has occurred and is continuing which constitutes a Potential Event of Default or an Event of Default. No event has occurred and is continuing which constitutes, or which with the passage of time or giving of notice or both would constitute, a default or event of default by any Obligor or any Subsidiary under any Material Contract or judgment, decree or order to which such Obligor or one or more of its Subsidiaries is a party or by which such Obligor or one or more of its Subsidiaries or any of their respective properties may be bound or which would require such Obligor or one or more of its Subsidiaries to make any payment thereunder prior to the scheduled maturity date therefor, except in cases in which any such default or event of default would not, in any instance or in the aggregate, be reasonably expected to have a Material Adverse Effect.

                  (m) Financial Condition. The audited consolidated balance sheet of Concord and its consolidated Subsidiaries as of December 31, 2001 and the audited consolidated statements of earnings and statements of cash flows for the year ended December 31, 2001 have heretofore been furnished to the Agent. Such financial statements (including the notes thereto) (i) have been audited by Ernst & Young LLP, (ii) have been prepared in accordance with GAAP consistently applied throughout the periods covered thereby and (iii) present fairly (on the basis disclosed in the footnotes to such financial statements) the consolidated financial condition, results of operations and cash flows of Concord and its consolidated Subsidiaries as of such date and for such periods. Since December 31, 2001, there has been no material adverse change in the business, financial position, results of operations or prospects of Concord and its consolidated Subsidiaries, taken as a whole.

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                  (n) Rights in Respect of the Leased Property. No Lessee is a party to any contract or agreement to sell any interest in any Leased Property or any part thereof, other than as contemplated by the Operative Documents or as disclosed in the Title Policy.

                  (o) Environmental Matters — General. Except to the extent otherwise disclosed in Schedule 4.1(o),

         (i) To the best of each Obligor’s knowledge, the properties of such Obligor and its Subsidiaries do not contain, and have not previously contained, any Hazardous Materials in amounts or concentrations which (A) constitute or constituted a violation of applicable Environmental Laws or (B) could give rise to liability under applicable Environmental Laws, except in cases in which any such violation or liability is not reasonably likely to result, in any given instance or in the aggregate, in liability of such Obligor or any Subsidiary in excess of $10,000,000;

         (ii) To the best of each Obligor’s knowledge, such properties and all operations conducted in connection therewith are in compliance, and have been in compliance, with all applicable Environmental Laws, except in cases in which any failure to be in compliance is not reasonably likely to result, in any given instance or in the aggregate, in liability of such Obligor or any Subsidiary in excess of $10,000,000, and there is no contamination at, under or about such properties or such operations which could materially interfere with the continued operation of such properties or materially impair the fair saleable value thereof;

         (iii) Neither any Obligor nor any Subsidiary has received any notice of violation, alleged violation, non-compliance, liability or potential liability regarding environmental matters or compliance with Environmental Laws with regard to any of its properties or the operations conducted in connection therewith, nor does any Obligor or any Subsidiary have knowledge or reason to believe that any such notice will be received or is being threatened, except in cases in which the liability of such Obligor or any Subsidiary, in any given instance or in the aggregate, is not reasonably likely to exceed $10,000,000;

         (iv) No Hazardous Materials have been transported or disposed of from the properties of any Obligor or its Subsidiaries in violation of, or in a manner or to a location which could give rise to liability under, Environmental Laws, nor have any Hazardous Materials been generated, treated, stored or disposed of at, on or under any of such properties in violation of, or in a manner that could give rise to liability under, any applicable Environmental Laws, except in cases in which the liability of such Obligor or any Subsidiary, in any given instance or in the aggregate, is not reasonably likely to exceed $10,000,000;

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         (v) No judicial proceedings or governmental or administrative action is pending, or, to the knowledge of any Obligor, threatened, under any Environmental Law to which such Obligor or any Subsidiary is or will be named as a party with respect to such properties or operations conducted in connection therewith, nor are there any consent decrees or other decrees, consent orders, administrative orders or other orders, or other administrative or judicial requirements outstanding under any Environmental Law with respect to such properties or such operations, except in cases in which the liability of such Obligor or any Subsidiary, in any given instance or in the aggregate, is not reasonably likely to exceed $10,000,000; and

         (vi) There has been no release, or to the best of any Obligor’s knowledge, the threat of release, of Hazardous Materials at or from such properties, in violation of or in amounts or in a manner that could give rise to liability under Environmental Laws, except in cases in which the liability of such Obligor or any Subsidiary, in any given instance or in the aggregate, is not reasonably likely to exceed $10,000,000.

                  (p) Hazardous Materials — Leased Properties.

         (i) To the best knowledge of the related Lessee, except as described in the related Environmental Audit, on the Closing Date for each Leased Property, there are no Hazardous Materials present at, upon, under or within such Leased Property or released or transported to or from such Leased Property (except in compliance in all material respects with all Applicable Law).

         (ii) On the related Closing Date, no Governmental Actions have been taken or are in process or have been threatened, which could reasonably be expected to subject such Leased Property, any Lender or the Lessor to any Claims or Liens with respect to such Leased Property under any Environmental Law or would otherwise have a Material Adverse Effect.

         (iii) The related Lessee has, or will obtain on or before the date required by Applicable Law, all Environmental Permits necessary to operate each Leased Property, if any, in accordance with Environmental Laws and is complying with and has at all times complied with all such Environmental Permits, except to the extent the failure to obtain such Environmental Permits or to so comply would not have a Material Adverse Effect.

         (iv) Except as set forth in the related Environmental Audit or in any notice subsequently furnished by the related Lessee to the Agent and approved by the Agent in writing prior to the respective times that the representations and warranties contained herein are made or deemed made hereunder, no notice,

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notification, demand, request for information, citations, summons, complaint or order has been issued or filed to or with respect to the related Lessee, no penalty has been assessed on the related Lessee and no investigation or review is pending or, to its best knowledge, threatened by any Governmental Authority or other Person in each case relating to any Leased Property with respect to any alleged material violation or liability of the related Lessee under any Environmental Law. To the best knowledge of the related Lessee, no material notice, notification, demand, request for information, citations, summons, complaint or order has been issued or filed to or with respect to any other Person, no material penalty has been assessed on any other Person and no investigation or review is pending or threatened by any Governmental Authority or other Person relating to any Leased Property with respect to any alleged material violation or liability under any Environmental Law by any other Person.

         (v) Each Leased Property and each portion thereof are presently in compliance in all material respects with all Environmental Laws, and there are no present or, to the related Lessee’s best knowledge, past facts, circumstances, activities, events, conditions or occurrences regarding such Leased Property (including without limitation the release or presence of Hazardous Materials) that would reasonably be anticipated to (A) form the basis of a material Claim against such Leased Property, any Funding Party or the related Lessee, (B) cause such Leased Property to be subject to any restrictions on ownership, occupancy, use or transferability under any Environmental Law, (C) require the filing or recording of any notice or restriction relating to the presence of Hazardous Materials in the real estate records in the county or other appropriate municipality in which such Leased Property is located, other than notices filed in the ordinary cause of business, or (D) prevent or interfere with the continued operation and maintenance of such Leased Property as contemplated by the Operative Documents.

For purposes of this Section 4.1(p), the term “material” with respect to any event or circumstance means that such event or circumstance would reasonably be anticipated to result in criminal or material liability on the part of any Funding Party, or to otherwise have a Material Adverse Effect.

                  (q) Leased Property. The present condition of each Leased Property conforms in all material respects with all conditions or requirements of all existing permits and approvals issued with respect to such Leased Property, and the related Lessee’s future intended use of such Leased Property under the Lease does not, in any material respect, violate any Applicable Law. No material notices, complaints or orders of violation or non-compliance have been issued or threatened or contemplated by any Governmental Authority with respect to any Leased Property or any present or intended future use thereof. All material agreements, easements and other rights, public or private, which are necessary to permit the lawful use and operation of each Leased Property as the related Lessee intends to use such Leased Property

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under the Lease and which are necessary to permit the lawful intended use and operation of all presently intended utilities, driveways, roads and other means of egress and ingress to and from the same have been, or to the related Lessee’s best knowledge will be, obtained and are or will be in full force and effect, and the related Lessee has no knowledge of any pending material modification or cancellation of any of the same.

                  (r) Flood Hazard Areas. No portion of any Leased Property is located in an area identified as a special flood hazard area by the Federal Emergency Management Agency or other applicable agency, or if any Building located on any Leased Property is located in an area identified as a special flood hazard area by the Federal Emergency Management Agency or other applicable agency, then flood insurance has been obtained for such Leased Property in accordance with the Lease and in accordance with the National Flood Insurance Act of 1968, as amended.

         SECTION 4.2 Survival of Representations and Effect of Fundings.

                  (a) Survival of Representations and Warranties. All representations and warranties made in Section 4.1 shall survive delivery of the Operative Documents and every Funding, and shall remain in effect until all of the Obligations are fully and irrevocably paid.

                  (b) Each Funding a Representation. Each Funding accepted by a Lessee or the Construction Agent shall be deemed to constitute a representation and warranty by each Obligor to the effect of Section 4.1.

         SECTION 4.3 Representations of the Lessor. Effective as of the date of execution hereof, as of each Closing Date and as of each Funding Date, in each case, with respect to each of the Leased Properties, the Lessor represents and warrants to the Agent, the Lenders, Concord and the other Lessees as follows:

                  (a) Securities Act. The interest being acquired or to be acquired by the Lessor in such Leased Property is being acquired for its own account, without any view to the distribution thereof or any interest therein, provided that the Lessor shall be entitled to assign, convey or transfer its interest in accordance with Section 6.1.

                  (b) Due Organization, etc. The Lessor is a limited partnership duly organized and validly existing in good standing under the laws of Texas and is duly qualified and in good standing in each state in which a Leased Property is located and has full power, authority and legal right to execute, deliver and perform its obligations under the Lease, this Master Agreement and each other Operative Document to which it is or will be a party.

                  (c) Due Authorization; Enforceability, etc. This Master Agreement and each other Operative Document to which the Lessor is or will be a party have been or will be duly authorized, executed and delivered by or on behalf of the Lessor and are, or upon execution and delivery will be, legal, valid and binding obligations of the Lessor enforceable against it in

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accordance with their respective terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, or similar laws affecting creditors’ rights generally and by general equitable principles.

                  (d) No Conflict. The execution and delivery by the Lessor of the Lease, this Master Agreement and each other Operative Document to which the Lessor is or will be a party, are not or will not be, and the performance by the Lessor of its obligations under each will not be, inconsistent with its Partnership Agreement, do not and will not contravene any Applicable Law applicable generally to parties providing financing and do not and will not contravene any provision of, or constitute a default under, any Contractual Obligation of Lessor, do not and will not require the consent or approval of, the giving of notice to, the registration with or taking of any action in respect of or by, any Governmental Authority applicable generally to parties providing financing, except such as have been obtained, given or accomplished, and the Lessor possesses all requisite regulatory authority to undertake and perform its obligations under the Operative Documents.

                  (e) Litigation. There are no pending or, to the knowledge of the Lessor, threatened actions or proceedings against the Lessor before any court, arbitrator or administrative agency with respect to any Operative Document or that would have a material adverse effect upon the ability of the Lessor to perform its obligations under this Master Agreement or any other Operative Documents to which it is or will be a party.

                  (f) Lessor Liens. No Lessor Liens (other than those created by the Operative Documents) exist on any Closing Date on the Leased Property, or any portion thereof, and the execution, delivery and performance by the Lessor of this Master Agreement or any other Operative Document to which it is or will be a party will not subject any Leased Property, or any portion thereof, to any Lessor Liens (other than those created by the Operative Documents).

                  (g) Employee Benefit Plans. The Lessor is not and will not be making its investment hereunder, and is not performing its obligations under the Operative Documents, with the assets of an “employee benefit plan” (as defined in Section 3(3) of ERISA) which is subject to Title I of ERISA, or “plan” (as defined in Section 4975(e)(1)) of the Code.

                  (h) General Partner. The sole general partner of the Lessor is Atlantic Financial Managers, Inc.

                  (i) Financial Information. (A) The unaudited balance sheet of the Lessor as of December 31, 2001 and the related statements of income, partners’ capital and cash flows for the year then ended, copies of which have been delivered to the Agent, fairly present, in conformity with sound accounting principles, consistent with the income tax basis reports provided to Concord for the period ended on December 31, 2001, the financial condition of the Lessor as of such date and the results of operations and cash flows for such period.

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                           (B) Since December 31, 2001, there has been no event, act, condition or occurrence having a material adverse effect upon the financial condition, operations, performance or properties of the Lessor, or the ability of the Lessor to perform in any material respect its obligations under the Operative Documents.

                  (j) No Offering. The Lessor has not offered the Notes to any Person in any manner that would subject the issuance thereof to registration under the Securities Act or any applicable state securities laws.

                  (k) Investment Company. The Lessor is not an “investment company” or a company “controlled” by an “investment company”, within the meaning of the Investment Company Act of 1940, as amended.

                  (l) Source of Funds. The Lessor has not obtained funds for the Lessor’s Invested Amount from the proceeds of non-recourse debt. The Lessor has not obtained residual value insurance with respect to any Leased Property.

         SECTION 4.4 Representations of each Lender. Effective as of the date of execution hereof, as of each Closing Date and as of each Funding Date, each Lender represents and warrants to the Lessor, to Concord and to the other Lessees as follows:

                  (a) Securities Act. The interest being acquired or to be acquired by such Lender in the Funded Amounts is being acquired for its own account, without any view to the distribution thereof or any interest therein, provided that such Lender shall be entitled to assign, convey or transfer its interest in accordance with Section 6.2.

                  (b) Employee Benefit Plans. Such Lender is not and will not be making its investment hereunder, and is not performing its obligations under the Operative Documents, with the assets of an “employee benefit plan” (as defined in Section 3(3) of ERISA) which is subject to Title I of ERISA, or “plan” (as defined in Section 4975(e)(1)) of the Code.

ARTICLE V
COVENANTS OF OBLIGORS AND THE LESSOR

         SECTION 5.1 Financial Statements. Concord shall deliver to the Agent:

                  (a) as soon as available and in any event within 90 days after the end of each fiscal year of Concord, a consolidated balance sheet of Concord and its Consolidated Subsidiaries as of the end of such fiscal year and the related consolidated statements of income, changes in shareholder’s equity and cash flows for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year, all reported on without any material qualification by Ernst & Young LLP or other independent public accountants of nationally

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recognized standing, together with an internally prepared consolidating balance sheet of Concord as of the end of such fiscal year and the related consolidating statement of income for such fiscal year.

                  (b) as soon as available and in any event within 45 days after the end of each of the first three quarters of each fiscal year of Concord, Concord’s quarterly reporting package which shall include a consolidated and consolidating balance sheet of Concord and its Consolidated Subsidiaries as of the end of such quarter and the related consolidated and consolidating statement of income, and consolidated statements of changes in shareholder’s equity and cash flows for the portion of Concord’s fiscal year ended at the end of such quarter, setting forth in the case of such statements of income, changes in shareholder’s equity and cash flows, in comparative form the figures for the corresponding portion of Concord’s previous fiscal year, all certified (subject to normal year-end adjustments) as to fairness of presentation, GAAP and consistency by the chief financial officer or the chief accounting officer of Concord;

                  (c) simultaneously with the delivery of each set of financial statements referred to in clauses (a) and (b) above, a certificate of the chief financial officer or the chief accounting officer of Concord on behalf of Concord in substantially the form of Exhibit J (i) setting forth in reasonable detail the calculations required to establish whether Concord was in compliance with the requirements of Sections 5.2, 5.3 and 5.4 on the date of such financial statements and (ii) stating whether, to such officer’s knowledge, any Default exists on the date of such certificate and, if any Default then exists, setting forth the details thereof and the action which Concord is taking or proposes to take with respect thereto;

                  (d) within five days after any financial officer of Concord obtains knowledge of any Default, if such Default is then continuing, a certificate of the chief financial officer or the chief accounting officer of Concord setting forth the details thereof and the action which Concord is taking or proposes to take with respect thereto;

                  (e) if and when any member of the ERISA Group (i) gives or is required to give notice to the PBGC of any “reportable event” (as defined in Section 4043 of ERISA) with respect to any Plan which might constitute grounds for a termination of such Plan under Title IV of ERISA, or knows that the plan administrator of any Plan has given or is required to give notice of any such reportable event, a copy of the notice of such reportable event given or required to be given to the PBGC; (ii) receives notice of complete or partial withdrawal liability under Title IV of ERISA or notice that any Multiemployer Plan is in reorganization, is insolvent or has been terminated, a copy of such notice; (iii) receives notice from the PBGC under Title IV of ERISA of an intent to terminate, impose liability (other than for premiums under Section 4007 of ERISA) in respect of, or appoint a trustee to administer any Plan, a copy of such notice; (iv) applies for a waiver of the minimum funding standard under Section 412 of the Code, a copy of such application; (v) gives notice of intent to terminate any Plan under Section 4041(c) of ERISA, a copy of such notice and other information filed with the PBGC; (vi) gives notice of withdrawal from any Plan pursuant to Section 4063 of ERISA, a copy of such notice; or (vii)

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fails to make any payment or contribution to any Plan or Multiemployer Plan or in respect of any Benefit Arrangement or makes any amendment to any Plan or Benefit Arrangement which has resulted or could result in the imposition of a Lien or the posting of a bond or other security, a certificate of the chief financial officer or the chief accounting officer of Guarantor setting forth details as to such occurrence and action, if any, which Concord or applicable member of the ERISA Group is required or proposes to take; and

                  (f) from time to time such additional information regarding the financial position or business of Concord and its Subsidiaries as the Agent, at the request of any Funding Party, may reasonably request.

         SECTION 5.2 EBITR Ratio. Concord shall cause the ratio of Consolidated EBITR to Fixed Charges as of the last day of each fiscal quarter to be at least 3.0:1.

         SECTION 5.3 Funded Debt to Tangible Capitalization Ratio. Concord shall cause the Funded Debt to Tangible Capitalization Ratio as of the last day of each fiscal quarter to be no greater than 40%.

         SECTION 5.4 Adjusted Net Income. Concord shall cause Adjusted Net Income for each period of four consecutive fiscal quarters to be greater than $0.

         SECTION 5.5 No Impairment. Concord shall not take any action, and shall not permit any of its Significant Subsidiaries to take any action, that would materially impair Concord’s ability to perform its obligations hereunder or under any other Operative Document. In particular, Concord shall not permit any of its Significant Subsidiaries to enter into any agreement or arrangement that would materially impair or restrict any Significant Subsidiary’s ability to declare and pay dividends (or other similar distributions in the case of Significant Subsidiaries that are limited liability companies or partnerships) to its shareholders or other equity holders.

         SECTION 5.6 Additional Covenants; Significant Subsidiary. In the event that Concord or any Ten Percent Subsidiary enters into any credit agreement or loan agreement, Concord shall (i) promptly notify the Agent of such event and shall provide the Agent with a copy of such amendment, replacement or additional agreement and (ii) if requested by the Required Lenders, enter into an amendment to this Master Agreement and/or the Lease to evidence an amendment or addition to the covenants set forth herein or the Events of Default to the extent requested by the Required Lenders to make such covenants and/or Events of Default consistent with those set forth in such agreement (provided, with respect to Events of Default, they are consistent with the limitations thereon set forth in Article XIII of the Lease). If Concord acquires any Significant Subsidiary after the date hereof, or any Subsidiary otherwise becomes a Significant Subsidiary after the date hereof, Concord shall cause such Significant Subsidiary to become a Subsidiary Guarantor in accordance with the Subsidiary Guaranty.

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         SECTION 5.7 Payment of Obligations. Each Obligor will pay and discharge, and will cause each Subsidiary to pay and discharge, at or before maturity, all their respective material obligations and liabilities (including, without limitation, tax liabilities and claims of materialmen, warehousemen and the like which if unpaid might by law give rise to a Lien), except where the same may be contested in good faith by appropriate proceedings, and will maintain, and will cause each Subsidiary to maintain, in accordance with GAAP, appropriate reserves for the accrual of any of the same.

         SECTION 5.8 Maintenance of Property: Insurance. (a) Each Obligor will keep, and will cause each Subsidiary to keep, all property useful and necessary in its business in good working order and condition, ordinary wear and tear excepted, provided that, with respect to each fiscal year, each Obligor, together with its Subsidiaries, may fail to comply with the foregoing covenant with respect to property with an aggregate fair market value not exceeding $10,000,000.

                  (b) EPS will, and will cause each of its Subsidiaries to, maintain (either in the name of such Obligor or in such Subsidiary’s own name) with financially sound and responsible insurance companies, insurance on all their respective properties in at least such amounts, against at least such risks and with such risk retention as are usually maintained, insured against or retained, as the case may be, in the same general area by companies of established repute engaged in the same or a similar business; and will furnish to the Funding Parties, upon request from the Agent, information presented in reasonable detail as to the insurance so carried. Each Obligor (other than EPS) will maintain insurance in such amounts, against such risks, with insurance companies with credit standards and with deductibles as such Obligor determines to be appropriate in the exercise of its reasonable business judgment.

         SECTION 5.9 Conduct of Business and Maintenance of Existence. EPS will continue, and will cause each of its Subsidiaries to continue, to engage in business of substantially the same general type as now conducted by EPS and its Subsidiaries or a business related thereto, and will preserve, renew and keep in full force and effect, and will cause each Subsidiary to preserve, renew and keep in full force and effect their respective existence and their respective rights, privileges and franchises necessary or desirable in the normal conduct of business; provided that nothing in this Section 5.9 shall prohibit (i) the merger of a Subsidiary into EPS or the liquidation, merger or consolidation of a Subsidiary with or into another Person if the Person surviving such consolidation or merger is a Subsidiary and if, in each case, after giving effect thereto, no Default shall have occurred and be continuing or (ii) the termination of the corporate existence or the abandonment of rights, privileges and franchises of any Subsidiary if EPS in good faith determines that such termination or abandonment is in the best interest of EPS and is not materially disadvantageous to the Funding Parties. Each of Concord and each Ten Percent Subsidiary (other than EPS) will continue to engage in business of substantially the same general type as now conducted by Concord or such Ten Percent Subsidiary, as the case may be, or a business related thereto, and will preserve, renew and keep in full force and effect its existence and its rights, privileges and franchises necessary or desirable in the normal conduct of business;

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provided that nothing set forth in this Section 5.9 shall prohibit the merger of any Ten Percent Subsidiary with any other Subsidiary or with Concord.

         SECTION 5.10 Compliance with Laws. Each Obligor will comply, and cause each Subsidiary to comply, in all material respects with all applicable laws, ordinances, rules, regulations, and requirements of governmental authorities (including, without limitation, ERISA and the rules and regulations thereunder and Environmental Laws) except where the necessity of compliance therewith is contested in good faith by appropriate proceedings.

         SECTION 5.11 Inspection of Property, Books and Records. Each Obligor will keep and, in the case of EPS will cause each of its Subsidiaries to keep, proper books of record and account in which full, true and correct entries shall be made of all dealings and transactions in relation to its business and activities; and, upon reasonable advance notice during normal business hours, will permit, representatives of any Funding Party at such Funding Party’s expense to visit and inspect any of their respective properties, to examine and make abstracts from any of their respective books and records relating to finance or accounting matters (other than strategic plans and other proprietary materials, and any materials subject to confidentiality agreements that prohibit such disclosure) and to discuss their respective affairs, finances and accounts with their respective officers, employees and independent public accountants, all at such reasonable times and as often as may reasonably be desired.

         SECTION 5.12 Consolidations, Mergers and Sales of Assets. Neither Concord nor any Ten Percent Subsidiary will (i) consolidate or merge with or into any other Person or (ii) sell, lease or otherwise transfer, directly or indirectly, all or any substantial part of the assets of Concord or such Ten Percent Subsidiary, as the case may be, and its Subsidiaries, taken as a whole, to any other Person, nor will Concord or any Ten Percent Subsidiary permit any of its Subsidiaries to do any of the foregoing if the effect thereof is to reduce the total assets or net income of Concord or such Ten Percent Subsidiary (in each case, on a consolidated basis for Concord or such Ten Percent Subsidiary, as the case may be, and its Subsidiaries) by more than 25% of such assets existing on, or net income generated during the four consecutive fiscal quarters ending immediately prior to, the date of such consolidation, merger, sale, lease or other transfer; provided that Concord or such Ten Percent Subsidiary, as the case may be, may merge with another Person if (x) Concord or such Ten Percent Subsidiary, as the case may be, is the corporation surviving such merger and (y) after giving effect to such merger, no Default shall have occurred and be continuing; provided, further that any Ten Percent Subsidiary may merge with any other Subsidiary or with Concord, as long as a Ten Percent Subsidiary or Concord is the entity surviving such merger. Concord will not transfer ownership, or permit the transfer of ownership, of the equity interests in EPS or Star if the effect thereof is that EPS or Star, as the case may be, becomes a Subsidiary of any national bank or federal savings bank that is a Subsidiary of Concord; in addition, Concord will not transfer ownership, or permit the transfer of ownership, of the equity interests of any other Significant Subsidiary (other than EPS or Star), whether such Significant Subsidiary exists on the date hereof or hereafter arises, to a national bank or federal savings bank that is a Subsidiary of Concord, if the intent of such transfer is to

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circumvent the representations and covenants applicable to Significant Subsidiaries in the Operative Documents (as opposed to an independent business purpose).

         SECTION 5.13 Negative Pledge. Neither any Ten Percent Subsidiary nor any Subsidiary thereof will create, assume or suffer to exist any Lien on any asset now owned or hereafter acquired by it, except for Permitted Liens and except:

                  (a) any Lien existing on any asset of any Person at the time such Person becomes a Subsidiary and not created in contemplation of such event;

                  (b) any Lien on any asset securing Indebtedness incurred or assumed for the purpose of financing all or any part of the cost of acquiring such asset, provided that such Lien attaches to such asset concurrently with or within 90 days after the acquisition thereof;

                  (c) any Lien on any asset of any person existing at the time such person is merged or consolidated with or into such Ten Percent Subsidiary or a Subsidiary and not created in contemplation of such event;

                  (d) any Lien existing on any asset prior to the acquisition thereof by such Ten Percent Subsidiary or a Subsidiary and not created in contemplation of such acquisition;

                  (e) any Lien arising out of the refinancing, extension, renewal or refunding of any Indebtedness secured by any Lien permitted by any of the foregoing clauses of this Section, provided that such Indebtedness is not increased and is not secured by any additional assets;

                  (f) Liens arising in the ordinary course of its business (including, without limitation, any such Liens for any income taxes not due and for any workmen’s compensation liability) which (i) do not secure Indebtedness or Derivatives Obligations, (ii) do not secure any obligation in an amount exceeding $40,000,000 for such Ten Percent Subsidiary and its Subsidiaries in the aggregate and (iii) do not in the aggregate materially detract from the value of its assets or materially impair the use thereof in the operation of its business;

                  (g) Liens on cash and cash equivalents securing Derivatives Obligations, provided that the aggregate amount of cash and cash equivalents subject to such Liens may at no time exceed $20,000,000 for such Ten Percent Subsidiary and its Subsidiaries in the aggregate;

                  (h) Liens created under the Operative Documents, or in connection with the 1998 Lease or the 2000 Lease; and

                  (i) Liens not otherwise permitted by the foregoing clauses of this Section securing Indebtedness in an aggregate principal or face amount at any date not to exceed 3.0% of Consolidated Tangible Net Worth of such Ten Percent Subsidiary and its Subsidiaries.

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         SECTION 5.14 Limitation on Indebtedness. No Ten Percent Subsidiary will or will permit any of its Subsidiaries to, incur or at any time be liable with respect to any Indebtedness except:

                  (a) Indebtedness under this Master Agreement, the 2000 Master Agreement and the 1998 Master Agreement;

                  (b) other Indebtedness outstanding on the date hereof (or, in the case of Persons that are not Ten Percent Subsidiaries on the date hereof, on the date such Person became a Ten Percent Subsidiary) not in excess of $10,000,000 in aggregate principal amount for such Ten Percent Subsidiary and its Subsidiaries in the aggregate (in the case of EPS and Star only) and refinancings thereof, provided that the principal amount thereof is not increased beyond the amount outstanding thereunder on the date hereof or, in the case of Ten Percent Subsidiaries other than EPS and Star, on the date such Person becomes a Ten Percent Subsidiary, as the case may be; provided, further that for purpose of the foregoing, intercompany debt between Obligors and loans from any Obligor to any Subsidiary shall not be included as Indebtedness; and provided, further that no Subsidiary shall incur Indebtedness or enter into intercompany debt solely in anticipation of being a Ten Percent Subsidiary and subject to the restrictions set forth in this Section 5.14 (as opposed to an independent business purpose);

                  (c) Indebtedness secured by Liens permitted by Section 5.14; and

                  (d) Indebtedness of such Ten Percent Subsidiary and its Subsidiaries not otherwise permitted by this Section incurred after the Initial Closing Date in an aggregate principal amount at any time outstanding not to exceed $10,000,000 for such Ten Percent Subsidiary and its Subsidiaries in the aggregate.

         SECTION 5.15 Transactions with Affiliates. Neither Concord nor any Obligor will, nor, in the case of EPS will it permit any of its Subsidiaries to, directly or indirectly, pay any funds to or for the account of, make any investment (whether by acquisition of stock or indebtedness, by loan, advance, transfer of property, guarantee or other agreement to pay, purchase or service, directly or indirectly, any Indebtedness, or otherwise) in, lease, sell, transfer or otherwise dispose of any substantial portion of its assets, tangible or intangible, to, or participate in, or effect, any transaction involving a substantial portion of its assets or that would affect the nature of its business or operations in any material adverse respect with, any Affiliate (other than another Obligor) except on an arms-length basis on terms at least as favorable to such Obligor, or, in the case of EPS, such Subsidiary of EPS as would have been obtained from a third party who was not an Affiliate; provided that the foregoing provisions of this Section shall not prohibit any such Person from declaring or paying any lawful dividend or other payment ratably in respect of all of its capital stock of the relevant class so long as, after giving effect thereto, no Default shall have occurred and be continuing; and provided, further that with respect to Concord the foregoing

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actions shall only be prohibited if they could reasonably be expected to have a Material Adverse Effect.

         SECTION 5.16 Further Assurances. Upon the written request of the Lessor or the Agent, each Lessee, at its own cost and expense, will cause all financing statements (including precautionary financing statements), fixture filings and other similar documents, to be recorded or filed at such places and times in such manner, as may be necessary to preserve, protect and perfect the interest of the Lessor, the Agent and the Lenders in the Leased Properties as contemplated by the Operative Documents.

         SECTION 5.17 Additional Required Appraisals. If, as a result of any change in Applicable Law after the date hereof, an appraisal of all or any of the Leased Properties is required during the Lease Term under Applicable Law with respect to any Funding Party’s interest therein, such Funding Party’s Funded Amount with respect thereto or the Operative Documents, then the related Lessee shall pay the reasonable cost of such appraisal.

         SECTION 5.18 Lessor’s Covenants. The Lessor covenants and agrees that, unless the Agent, Concord and the Lenders shall have otherwise consented in writing:

         (a) the proceeds of the Loans received from the Lenders will be used by the Lessor solely to acquire the related Leased Property and to pay the Construction Agent for certain Construction Costs associated therewith. No portion of the proceeds of the Loans will be used by the Lessor (i) in connection with, whether directly or indirectly, any tender offer for, or other acquisition of, stock of any corporation with a view towards obtaining control of such other corporation or (ii) directly or indirectly, for the purpose, whether immediate, incidental or ultimate, of purchasing or carrying any Margin Stock;

         (b) it shall not engage in any business or activity, or invest in any Person, except for activities similar to its activities conducted on the date hereof, the Transaction and lease transactions similar to the Transaction;

         (c) it will maintain tangible net worth in an amount no less than the sum of (i) $100,000 plus (ii) 3% of its total assets (calculated assuming no reduction in the value of any leased property from its original cost to the Lessor)and will at all times be solvent (as defined in the Bankruptcy Code);

         (d) it will deliver to the Agent and Concord, as soon as available and in any event within 90 days after the end of each fiscal year, a balance sheet of the Lessor as of the end of such fiscal year and the related statements of income, partners’ capital and cash flows for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year, prepared in accordance with sound accounting principles consistent with the income tax basis reports provided to Concord for the period ended on December 31, 2001, together with copies of its tax returns, all certified by an officer of

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the General Partner (and if the Lessor ever prepares audited financial statements, it shall deliver copies thereof to the Agent);

         (e) it will permit the Agent and Concord and their representatives to examine, and make copies from, the Lessor’s books and records, and to visit the offices and properties of the Lessor for the purpose of examining such materials, and to discuss the Lessor’s performance hereunder with any of its, or its general partner’s, officers and employees, in each case during normal business hours and upon reasonable notice;

         (f) it shall not consent to or permit the creation of any easement or other restriction against any Leased Property other than as permitted pursuant to Article VI of the Lease;

         (g) it shall not incur or permit to exist, and will promptly discharge each Lessor Lien and shall indemnify the Lenders and such Lessees for any loss, cost, expense or diminution in value of any Leased Property resulting from, or incurred as a result of, such Lessor Liens;

         (h) it shall not enter into any other transactions, leases, purchases or other agreements, other than immaterial transactions, purchases, leases and other agreements entered into by the Lessor in the ordinary course of its business, in which the other parties to said transactions, leases, purchases or other agreements will have any recourse against Lessor other than recourse to Lessor’s ownership or other interest in the property subject to such transactions, purchases, leases or other agreements, other than liability for required fundings, breach of contract, misrepresentation, gross negligence, willful misconduct, fraud, failure to turn over funds and similar exceptions to limitations on recourse;

         (i) it shall not guaranty the liabilities of any other Person;

         (j) it shall pay its recourse debts as such debts become due unless such debts are the subject of a bona fide dispute;

         (k) it shall promptly notify Concord and the Agent of any claim against the Lessor that would reasonably be expected to result in a material liability of the Lessor for which it is not indemnified; and

         (l) it will at all times maintain its Lessor’s Invested Amount with respect to each Leased Property at an amount not less than 11.5% of the Funded Amounts related to such Leased Property and, at the request of Concord (provided such request is not given more than once in a calendar year), and at Concord’s expense, shall provide a certification of the General Partner to such effect.

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ARTICLE VI
TRANSFERS BY LESSOR AND LENDERS

         SECTION 6.1 Lessor Transfers. The Lessor shall not assign, convey or otherwise transfer all or any portion of its right, title or interest in, to or under any Leased Property (except to a Lessee in accordance with the Lease) or any of the Operative Documents without the prior written consent of the Lenders and, unless an Event of Default has occurred and is continuing, Concord. Any proposed transferee of the Lessor shall make the representation set forth in Section 4.3 to the other parties hereto.

         SECTION 6.2 Lender Transfers.

                  (a) Any Lender may make, carry or transfer Loans at, to or for the account of, any of its branch offices or the office of an Affiliate of such Lender.

                  (b) Each Lender may assign all or a portion of its interests, rights and obligations under this Master Agreement and the Loan Agreement (including all or a portion of its Commitment and the Loans at the time owing to it) to any Eligible Assignee; provided, however, that (i) the Agent and, except during the continuance of an Event of Default, Concord must give its prior written consent to such assignment (which consent shall not be unreasonably withheld or delayed) unless such assignment is to another Lender, (ii) unless such Lender is assigning all of its Commitment, after giving effect to such assignment, the Commitment of both the assignor and the assignee is at least $1,000,000 and (iii) the parties to each such assignment shall execute and deliver to the Agent an Assignment and Acceptance, and, unless such assignment is to an Affiliate of such Lender, a processing and recordation fee of $2,500. Any such assignment of the Loans shall include both the A Loans and the B Loans of such assigning Lender, on a pro rata basis. No Lessee shall be responsible for such processing and recordation fee or any costs or expenses incurred by any Lender or the Agent in connection with such assignment. From and after the effective date specified in each Assignment and Acceptance, which effective date shall be at least five (5) Business Days after the execution thereof, the assignee thereunder shall be a party hereto and to the extent of the interest assigned by such Assignment and Acceptance, have the rights and obligations of a Lender under this Master Agreement and the Loan Agreement, provided that the assigning Lender shall not be released from any of its obligations incurred prior to the effective date of such assignment.

                  (c) Each Lender may, without the consent of any Lessee, sell participations to one or more banks or other entities in all or a portion of its rights and obligations under this Master Agreement and the Loan Agreement (including all or a portion of its Commitments in the Loans owing to it), provided, however, that (i) such Lender’s obligations under this Master Agreement and the Loan Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, (iii) the participating bank or other entity shall not be entitled to any greater benefit than its selling Lender under the cost protection provisions contained in Section 7.5 of this Master Agreement, (iv) Concord and each other Lessee, the Agent and the other Lenders shall continue to deal solely and directly with each Lender in connection with such Lender’s rights and obligations under this

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Master Agreement and the other Operative Documents, and such Lender shall retain the sole right to enforce the obligations of Lessor relating to the Loans and to approve any amendment, modification or waiver of any provisions of this Master Agreement and the Loan Agreement (except that such Lender may permit the participant to approve any amendment, modification or waiver which would reduce the principal of or the interest rate on its Loan, extend the term of such Lender’s Commitment, reduce the amount of any fees to which such participant is entitled or extend the final scheduled payment date of any Loan) and (v) any participations and related transactions shall be at no cost (directly or indirectly through Lessor or any other party) to Concord or any other Lessee. Any Lender selling a participation hereunder shall provide prompt written notice to the Agent of the name of such participant.

                  (d) Any Lender or participant may, in connection with the assignment or participation or proposed assignment or participation, pursuant to this Section, disclose to the assignee or participant or proposed assignee or participant any information relating to Concord or its Subsidiaries furnished to such Lender by or on behalf of Concord. With respect to any disclosure of confidential, non-public, proprietary information, such proposed assignee or participant shall agree in writing to use the information only for the purpose of making any necessary credit judgments with respect to this facility and not to use the information in any manner prohibited by any law, including without limitation, the securities laws of the United States. The proposed participant or assignee shall agree in writing not to disclose any of such information except as permitted by this Master Agreement. The proposed participant or assignee shall further agree to return all documents or other written material and copies thereof received from any Lender, the Agent or any Lessee relating to such confidential information unless otherwise properly disposed of by such entity.

                  (e) Any Lender may at any time assign all or any portion of its rights under this Master Agreement and the Notes to a Federal Reserve Bank without complying with the requirements of paragraph (b) above; provided that no such assignment shall release such Lender from any of its obligations hereunder.

                  (f) The Lenders hereby acknowledge and agree that the Lessees shall have the right to the quiet enjoyment of the Leased Properties pursuant to the Lease, whether or not a Loan Event of Default that is not an Event of Default has occurred and is continuing, so long as no Event of Default has occurred and is continuing.

ARTICLE VII
INDEMNIFICATION

         SECTION 7.1 General Indemnification. Each Lessee, jointly and severally, agrees, whether or not any of the transactions contemplated hereby shall be consummated, to assume liability for, and to indemnify, protect, defend, save and hold harmless each Indemnitee, on an After-Tax Basis, from and against, any and all Claims that may be imposed on, incurred by or asserted, or threatened to be asserted, against such Indemnitee, whether or not such Indemnitee shall also be indemnified as to any such Claim by any other Person (provided that no Indemnitee

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shall have the right to double recovery with respect to any Claim) and whether or not such Claim arises or accrues prior to any Closing Date or after the Lease Termination Date, or results from such Indemnitee’s negligence, in any way relating to or arising out of:

         (a) any of the Operative Documents or any of the transactions contemplated thereby, and any amendment, modification or waiver in respect thereof; or

         (b) the purchase, design, construction, preparation, installation, inspection, delivery, non-delivery, acceptance, rejection, ownership, management, possession, operation, rental, lease, sublease, repossession, maintenance, repair, alteration, modification, addition, substitution, storage, transfer of title, redelivery, use, financing, refinancing, disposition, operation, condition, sale (including, without limitation, any sale pursuant to the Lease), return or other disposition of all or any part of any interest in any Leased Property or the imposition of any Lien, other than a Lessor Lien (or incurring of any liability to refund or pay over any amount as a result of any Lien, other than a Lessor Lien) thereon, including, without limitation: (i) Claims or penalties arising from any violation or alleged violation of law or in tort (strict liability or otherwise), (ii) latent or other defects, whether or not discoverable, (iii) any Claim based upon a violation or alleged violation of the terms of any restriction, easement, condition or covenant or other matter affecting title to any Leased Property or any part thereof, (iv) the making of any Alterations in violation of any standards imposed by any insurance policies required to be maintained by any Lessee pursuant to the Lease which are in effect at any time with respect to any Leased Property or any part thereof, (v) any Claim for patent, trademark or copyright infringement, (vi) Claims arising from any public improvements with respect to any Leased Property resulting in any charge or special assessments being levied against any Leased Property or any Claim for utility “tap-in” fees, and (vii) Claims for personal injury or real or personal property damage occurring, or allegedly occurring, on any Land, Building or Leased Property;

         (c) the breach or alleged breach by Concord or any other Lessee of any representation or warranty made by it or deemed made by it in any Operative Document or any certificate required to be delivered by any Operative Document;

         (d) the retaining or employment of any broker, finder or financial advisor by Concord or any other Lessee to act on its behalf in connection with this Master Agreement, or the incurring of any fees or commissions to which the Lessor, the Agent or any Lender might be subjected by virtue of their entering into the transactions contemplated by this Master Agreement (other than fees or commissions due to any broker, finder or financial advisor retained or deemed retained by the Lessor, the Agent or any Lender);

         (e) the existence of any Lien (other than Lessor Liens) on or with respect to any Leased Property, the Construction, any Basic Rent or Supplemental Rent, title

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thereto, or any interest therein, including any Liens which arise out of the possession, use, occupancy, construction, repair or rebuilding of any Leased Property or by reason of labor or materials furnished or claimed to have been furnished to the Construction Agent, any Lessee, or any of its contractors or agents or by reason of the financing of any personalty or equipment purchased or leased by any Lessee or Alterations constructed by any Lessee;

         (f) the transactions contemplated hereby or by any other Operative Document, in respect of the application of Parts 4 and 5 of Subtitle B of Title I of ERISA and any prohibited transaction described in Section 4975(c) of the Code;

         (g) any act or omission by Concord or any other Lessee under any Purchase Agreement or any other Operative Document, or any breach by Concord or any other Lessee of any requirement, condition, restriction or limitation in any Deed, Purchase Agreement, IDB Documentation or Ground Lease; or

         (h) any IDB Documentation;

provided, however, no Lessee shall be required to indemnify any Indemnitee under this Section 7.1 for any Claim to the extent that such Claim results from any of the following: (1) any Claim to the extent that such Claim results from the willful misconduct or gross negligence of such Indemnitee, (2) any Claim resulting from Lessor Liens under the Operative Documents, (3) any Claims resulting from a breach of the Operative Documents by such Indemnitee, (4) any Claim resulting from a violation of Applicable Law by such Indemnitee that relates to the general business of such Indemnitee or (5) any Claim arising from events occurring after payment in full of the Lease Balance and the termination of the Lease in accordance with the terms thereof (including the return or sale of the Leased Properties pursuant to the terms thereof); and, provided, further, that with respect to each Construction Land Interest, each Lessee’s indemnity obligations with respect to such Leased Property shall be governed by, and expressly limited to the matters covered by, Section 3.3 of the Construction Agency Agreement during the Construction Term therefor. It is expressly understood and agreed that the indemnity provided for herein shall survive the expiration or termination of, and shall be separate and independent from any other remedy under this Master Agreement, the Lease or any other Operative Document.

         SECTION 7.2 Environmental Indemnity. In addition to and without limitation of Section 7.1 or Section 3.3 of the Construction Agency Agreement, each Lessee, jointly and severally, agrees to indemnify, hold harmless and defend each Indemnitee, on an After-Tax Basis, from and against any and all claims (including without limitation third party claims for personal injury or real or personal property damage), losses (including but not limited to any loss of value of any Leased Property), damages, liabilities, fines, penalties, charges, suits, settlements, demands, administrative and judicial proceedings (including informal proceedings and investigations) and orders, judgments, remedial action, requirements, enforcement actions of any kind, and all reasonable costs and expenses actually incurred in connection therewith (including,

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but not limited to, reasonable attorneys’ and/or paralegals’ fees and expenses), including, but not limited to, all costs incurred in connection with any investigation or monitoring of site conditions or any clean-up, remedial, removal or restoration work by any federal, state or local government agency, arising directly or indirectly, in whole or in part, out of

         (i) the presence on or under any Land of any Hazardous Materials, or any releases or discharges of any Hazardous Materials on, under, from or onto any Land,

         (ii) any activity, including, without limitation, construction, carried on or undertaken on or off any Land, and whether by a Lessee or any predecessor in title or any employees, agents, contractors or subcontractors of a Lessee or any predecessor in title, or any other Person, in connection with the handling, treatment, removal, storage, decontamination, clean-up, transport or disposal of any Hazardous Materials that at any time are located or present on or under or that at any time migrate, flow, percolate, diffuse or in any way move onto or under any Land,

         (iii) loss of or damage to any property or the environment (including, without limitation, clean-up costs, response costs, remediation and removal costs, cost of corrective action, costs of financial assurance, fines and penalties and natural resource damages), or death or injury to any Person, and all expenses associated with the protection of wildlife, aquatic species, vegetation, flora and fauna, and any mitigative action required by or under Environmental Laws, in each case to the extent related to any Leased Property,

         (iv) any claim concerning any Leased Property’s lack of compliance with Environmental Laws, or any act or omission causing an environmental condition on or with respect to any Leased Property that requires remediation or would allow any governmental agency to record a lien or encumbrance on the land records, or

         (v) any residual contamination on or under any Land, or affecting any natural resources on any Land, and to any contamination of any property or natural resources arising in connection with the generation, use, handling, storage, transport or disposal of any such Hazardous Materials on or from any Leased Property; in each case irrespective of whether any of such activities were or will be undertaken in accordance with applicable laws, regulations, codes and ordinances;

in any case with respect to the matters described in the foregoing clauses (i) through (v) that arise or occur

         (w) prior to or during the Lease Term,

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         (x) at any time during which a Lessee or any Affiliate thereof owns any interest in or otherwise occupies or possesses any Leased Property or any portion thereof, or

         (y) during any period after and during the continuance of any Event of Default, or

         (z) during any period of three years following the date on which an Indemnitee takes possession of any Leased Property;

provided, however, no Lessee shall be required to indemnify any Indemnitee under this Section 7.2 for any Claim to the extent that such Claim results from the willful misconduct or gross negligence of such Indemnitee. It is expressly understood and agreed that the indemnity provided for herein shall survive the expiration or termination of, and shall be separate and independent from any other remedy under this Master Agreement, the Lease or any other Operative Document.

         SECTION 7.3 Proceedings in Respect of Claims. With respect to any amount that a Lessee is requested by an Indemnitee to pay by reason of Section 7.1 or 7.2, such Indemnitee shall, if so requested by such Lessee and prior to any payment, submit such additional information to such Lessee as such Lessee may reasonably request and which is in the possession of, or under the control of, such Indemnitee to substantiate properly the requested payment. In case any action, suit or proceeding shall be brought against any Indemnitee, such Indemnitee promptly shall notify Concord of the commencement thereof (provided that the failure of such Indemnitee to promptly notify Concord shall not affect any Lessee’s obligation to indemnify hereunder except to the extent that a Lessee’s rights to contest or defenses otherwise available to such Lessee are materially prejudiced by such failure), and such Lessee shall be entitled, at its expense, to participate in, and, to the extent that such Lessee desires to, assume and control the defense thereof with counsel reasonably satisfactory to such Indemnitee; provided, however, that such Indemnitee may pursue a motion to dismiss such Indemnitee from such action, suit or proceeding with counsel of such Indemnitee’s choice at such Lessees’ expense; and provided further that a Lessee may assume and control the defense of such proceeding only if Concord shall have acknowledged in writing its and each other Lessee’s obligations to fully indemnify such Indemnitee in respect of such action, suit or proceeding, Lessees shall pay all reasonable costs and expenses related to such action, suit or proceeding as and when incurred and the related Lessee shall keep such Indemnitee fully apprised of the status of such action suit or proceeding and shall provide such Indemnitee with all information with respect to such action, suit or proceeding as such Indemnitee shall reasonably request; and, provided further, that no Lessee shall be entitled to assume and control the defense of any such action, suit or proceeding if and to the extent that, (A) in the reasonable opinion of such Indemnitee, (x) such action, suit or proceeding involves any possibility of imposition of criminal liability or any material risk of civil liability on such Indemnitee in excess of $10,000,000 or (y) such action, suit or proceeding will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a

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Permitted Lien) on any Leased Property or any part thereof unless the related Lessee or Concord shall have posted a bond or other security satisfactory to the relevant Indemnitees in respect to such risk or (z) the control of such action, suit or proceeding would involve an actual or potential conflict of interest, (B) such proceeding involves Claims not fully indemnified by the Lessees which the related Lessee and the Indemnitee have been unable to sever from the indemnified claim(s), or (C) an Event of Default has occurred and is continuing. The Indemnitee may participate in a reasonable manner at its own expense and with its own counsel in any proceeding conducted by a Lessee in accordance with the foregoing.

         If a Lessee fails to fulfill the conditions to such Lessee’s assuming the defense of any claim after receiving notice thereof on or prior to the date that is fifteen (15) days prior to the date that an answer or response is required, the Indemnitee may undertake such defense, at the Lessees’ expense. No Lessee shall enter into any settlement or other compromise with respect to any Claim which is entitled to be indemnified under Section 7.1 or 7.2 that (i) does not contain a complete release of the related Indemnitee or does contain any admission of liability or fault by such Indemnitee or (ii) involves a payment in excess of $10,000,000, without the prior written consent of the related Indemnitee, which consent shall not be unreasonably withheld. Unless an Event of Default shall have occurred and be continuing, no Indemnitee shall enter into any settlement or other compromise with respect to any claim which is entitled to be indemnified under Section 7.1 or 7.2 without the prior written consent of Concord, which consent shall not be unreasonably withheld, unless such Indemnitee waives its right to be indemnified under Section 7.1 or 7.2 with respect to such Claim.

         Upon payment in full of any Claim by the Lessees pursuant to Section 7.1 or 7.2 to or on behalf of an Indemnitee, the Lessees, without any further action, shall be subrogated to any and all claims that such Indemnitee may have relating thereto (other than claims in respect of insurance policies maintained by such Indemnitee at its own expense), and such Indemnitee shall execute such instruments of assignment and conveyance, evidence of claims and payment and such other documents, instruments and agreements as may be reasonably necessary to preserve any such claims and otherwise cooperate with the Lessees and give such further assurances as are reasonably necessary or advisable to enable the Lessees vigorously to pursue such claims.

         Any amount payable to an Indemnitee pursuant to Section 7.1 or 7.2 shall be paid to such Indemnitee promptly upon, but in no event later than thirty (30) days after, receipt of a written demand therefor from such Indemnitee, accompanied by a written statement describing in reasonable detail the basis for such indemnity and the computation of the amount so payable.

         If for any reason the indemnification provided for in Section 7.1 or 7.2 is unavailable to an Indemnitee or is insufficient to hold an Indemnitee harmless, then each Lessee agrees to contribute to the amount paid or payable by such Indemnitee as a result of such loss, claim, damage or liability in such proportion as is appropriate to reflect not only the relative benefits received by such Indemnitee on the one hand and by the Lessees on the other hand but also the relative fault of such Indemnitee as well as any other relevant equitable considerations. It is expressly understood and agreed that the right to contribution provided for herein shall survive

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the expiration or termination of and shall be separate and independent from any other remedy under this Master Agreement, the Lease or any other Operative Document.

         SECTION 7.4 General Tax Indemnity.

                  (a) Tax Indemnity. Except as otherwise provided in this Section 7.4, each Lessee, jointly and severally, shall pay on an After-Tax Basis, and on written demand shall indemnify and hold each Tax Indemnitee harmless from and against, any and all fees (including, without limitation, documentation, recording, license and registration fees), taxes (including, without limitation, income, gross receipts, sales, rental, use, turnover, value-added, property, excise and stamp taxes), levies, imposts, duties, charges, assessments or withholdings of any nature whatsoever, together with any penalties, fines or interest thereon or additions thereto (any of the foregoing being referred to herein as “Taxes” and individually as a “Tax” (for the purposes of this Section 7.4, the definition of “Taxes” includes amounts imposed on, incurred by, or asserted against each Tax Indemnitee as the result of any prohibited transaction, within the meaning of Section 406 or 407 of ERISA or Section 4975(c) of the Code, arising out of the transactions contemplated hereby or by any other Operative Document)) imposed on or with respect to any Tax Indemnitee, any Lessee, Concord, any Leased Property or any portion thereof or any Land, or any sublessee or user thereof, by the United States or by any state or local government or other taxing authority in the United States in connection with or in any way relating to (i) the acquisition, financing, mortgaging, construction, preparation, installation, inspection, delivery, non-delivery, acceptance, rejection, purchase, ownership, possession, rental, lease, sublease, maintenance, repair, storage, transfer of title, redelivery, use, operation, condition, sale, return or other application or disposition of all or any part of any Leased Property or the imposition of any Lien (or incurrence of any liability to refund or pay over any amount as a result of any Lien) thereon, (ii) Basic Rent or Supplemental Rent or the receipts or earnings arising from or received with respect to any Leased Property or any part thereof, or any interest therein or any applications or dispositions thereof, (iii) any other amount paid or payable pursuant to the Notes or any other Operative Documents, (iv) any Leased Property, any Land or any part thereof or any interest therein (including, without limitation, all assessments payable in respect thereof, including, without limitation, all assessments noted on the related Title Policy), (v) all or any of the Operative Documents, any other documents contemplated thereby, any amendments and supplements thereto, and (vi) otherwise with respect to or in connection with the transactions contemplated by the Operative Documents. Notwithstanding the foregoing, during the Construction Term for any Construction Land Interest, (i) the Lessees shall only be obligated to indemnify the Lessor with respect to Taxes related to such Construction Land Interest, (ii) Lessor hereby indemnifies the other Tax Indemnitees (as defined in clause (ii) of the definition thereof) for such Taxes, to the extent that Lessor receives payment therefor from any Lessee or the Construction Agent and (iii) subject to the terms and conditions of this Master Agreement, property taxes with respect to such Construction Land Interest will be funded with the proceeds of Advances.

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                   (b) Exclusions from General Tax Indemnity. Section 7.4(a) shall not apply to:

         (i) Taxes on, based on, or measured by or with respect to net income of the Lessor, the Agent and the Lenders (including, without limitation, minimum Taxes, capital gains Taxes, Taxes on or measured by items of tax preference or alternative minimum Taxes) other than (A) any such Taxes that are, or are in the nature of, sales, use, license, rental or property Taxes, and (B) withholding Taxes imposed by the United States or any state in which Leased Property is located (i) on payments with respect to the Notes, to the extent imposed by reason of a change in Applicable Law occurring after the Initial Closing Date or (ii) on Rent, to the extent the net payment of Rent after deduction of such withholding Taxes would be less than amounts currently payable with respect to the Funded Amounts;

          (ii) Taxes on, based on or in the nature of or measured by Taxes on doing business, business privilege, franchise, capital, capital stock, net worth, bank shares or mercantile license or similar Taxes, other than (A) any increase in such Taxes imposed on such Tax Indemnitee by any state in which Leased Property is located, net of any decrease in such taxes realized by such Tax Indemnitee, to the extent that such tax increase would not have occurred if on each Funding Date the Lessor and the Lenders had advanced funds to a Lessee or the Construction Agent in the form of loans secured by the Leased Property in an amount equal to the Funded Amounts funded on such Funding Date, with debt service for such loans equal to the Basic Rent payable on each Payment Date and a principal balance at the maturity of such loans in a total amount equal to the Funded Amounts at the end of the Lease Term, or (B) any Taxes that are or are in the nature of sales, use, rental, license or property Taxes relating to any Leased Property;

          (iii) Taxes that are based on, or measured by, the fees or other compensation received by a Person acting as Agent (in its individual capacities) or any Affiliate of any thereof for acting as trustee under the Loan Agreement;

          (iv) Taxes that result from any act, event or omission, or are attributable to any period of time, that occurs after the earlier of (A) the expiration of the Lease Term with respect to any Leased Property and, if such Leased Property is required to be returned to the Lessor in accordance with the Lease, such return and (B) the discharge in full of the Lessees’ obligations to pay the Lease Balance, or any amount determined by reference thereto, with respect to any Leased Property and all other amounts due under the Lease, unless such Taxes relate to acts, events or matters occurring prior to the earlier of such times or are imposed on or with respect to any payments due under the Operative Documents after such expiration or discharge;

          (v) Taxes imposed on a Tax Indemnitee that result from any voluntary sale, assignment, transfer or other disposition or bankruptcy by such Tax

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Indemnitee or any related Tax Indemnitee of any interest in any Leased Property or any part thereof, or any interest therein or any interest or obligation arising under the Operative Documents, or from any sale, assignment, transfer or other disposition of any interest in such Tax Indemnitee or any related Tax Indemnitee, it being understood that each of the following shall not be considered a voluntary sale: (A) any substitution, replacement or removal of any of the Leased Property by any Lessee, (B) any sale or transfer resulting from the exercise by any Lessee of any termination option, any purchase option or sale option, (C) any sale or transfer while an Event of Default shall have occurred and be continuing under the Lease, and (D) any sale or transfer resulting from the Lessor’s exercise of remedies under the Lease;

          (vi) any Tax which is being contested in accordance with the provisions of Section 7.4(c), during the pendency of such contest;

          (vii) any Tax that is imposed on a Tax Indemnitee as a result of such Tax Indemnitee’s gross negligence or willful misconduct (other than gross negligence or willful misconduct imputed to such Tax Indemnitee solely by reason of its interest in any Leased Property);

          (viii) to the extent any interest, penalties or additions to tax result in whole or in part from the failure of a Tax Indemnitee to file a return that it is required to file in a proper and timely manner, unless such failure (A) results from the transactions contemplated by the Operative Documents in circumstances where a Lessee did not give timely notice to such Tax Indemnitee (and such Tax Indemnitee otherwise had no actual knowledge) of such filing requirement that would have permitted a proper and timely filing of such return, or (B) results from the failure of Lessee to supply information necessary for the proper and timely filing of such return of such Tax that was not in the possession of such Tax Indemnitee;

          (ix) as to Lessor, any Tax that results from the breach by the Lessor of its representation and warranty made in Section 4.3(g) or as to any Lender the breach of such Lender of its representation and warranty made in Section 4.4(b); and

         (x) any Tax that results from a Tax Indemnitee engaging, with respect to a Leased Property, in transactions other than those permitted by the Operative Documents.

                  (c) Contests. If any claim shall be made against any Tax Indemnitee or if any proceeding shall be commenced against any Tax Indemnitee (including a written notice of such proceeding) for any Taxes as to which the Lessees may have an indemnity obligation pursuant to Section 7.4, or if any Tax Indemnitee shall determine that any Taxes as to which the Lessees may have an indemnity obligation pursuant to Section 7.4 may be payable, such Tax Indemnitee shall promptly notify Concord. Concord shall be entitled, at its expense, to

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participate in, and, to the extent that Concord desires to, assume and control the defense thereof; provided, however, that Concord shall have acknowledged in writing its and each Lessee’s obligation to fully indemnify such Tax Indemnitee in respect of such action, suit or proceeding if the contest is unsuccessful; and, provided further, that Concord shall not be entitled to assume and control the defense of any such action, suit or proceeding (but the Tax Indemnitee shall then contest, at the sole cost and expense of Concord and such other Lessees, on behalf of Concord with representatives reasonably satisfactory to Concord) if and to the extent that, (A) in the reasonable opinion of such Tax Indemnitee, such action, suit or proceeding (x) involves any meaningful risk of imposition of criminal liability or any material risk of material civil liability on such Tax Indemnitee or (y) will involve a material risk of the sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien) on any Leased Property or any part thereof unless a Lessee shall have posted a bond or other security reasonably satisfactory to the relevant Tax Indemnitees in respect to such risk, (B) such proceeding involves Claims not fully indemnified by the Lessees which Concord and the Tax Indemnitee have been unable to sever from the indemnified claim(s), (C) an Event of Default has occurred and is continuing, (D) such action, suit or proceeding involves matters which extend beyond or are unrelated to the Transaction and if determined adversely could be materially detrimental to the interests of such Tax Indemnitee notwithstanding indemnification by the Lessees or (E) such action, suit or proceeding involves the federal or any state income tax liability of the Tax Indemnitee not indemnified by the Lessees. With respect to any contests controlled by a Tax Indemnitee, (i) if such contest relates to the federal or any state income tax liability of such Tax Indemnitee, such Tax Indemnitee shall be required to conduct such contest only if Concord shall have provided to such Tax Indemnitee an opinion of independent tax counsel selected by the Tax Indemnitee and reasonably satisfactory to Concord stating that a reasonable basis exists to contest such claim or (ii) in the case of an appeal of an adverse determination of any contest relating to any Taxes, an opinion of such counsel to the effect that such appeal is more likely than not to be successful, provided, however, such Tax Indemnitee shall in no event be required to appeal an adverse determination to the United States Supreme Court. The Tax Indemnitee may participate in a reasonable manner at its own expense and with its own counsel in any proceeding conducted by Concord in accordance with the foregoing.

         Each Tax Indemnitee shall, at the Lessees’ expense, supply Concord with such information and documents in such Tax Indemnitee’s possession as are reasonably requested by Concord and are necessary or advisable for Concord to participate in any action, suit or proceeding to the extent permitted by this Section 7.4. Unless an Event of Default shall have occurred and be continuing, no Tax Indemnitee shall enter into any settlement or other compromise with respect to any Claim which is entitled to be indemnified under this Section 7.4 without the prior written consent of Concord, which consent shall not be unreasonably withheld, unless such Tax Indemnitee waives its right to be indemnified under this Section 7.4 with respect to such Claim.

         Notwithstanding anything contained herein to the contrary, (i) a Tax Indemnitee will not be required to contest (and no Lessee shall be permitted to contest except on its own behalf) a claim with respect to the imposition of any Tax if such Tax Indemnitee shall waive its right to

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indemnification under this Section 7.4 with respect to such claim (and any related claim with respect to other taxable years the contest of which is precluded as a result of such waiver) and (ii) no Tax Indemnitee shall be required to contest any claim if the subject matter thereof shall be of a continuing nature and shall have previously been decided adversely, unless Concord shall have provided to such Tax Indemnitee an opinion of Tax Indemnitee’s counsel selected by the Tax Indemnitee and reasonably satisfactory to Concord stating that a reasonable basis exists to contest such claim in light of such adverse decision. Each Tax Indemnitee and Concord shall consult in good faith with each other regarding the conduct of such contest controlled by either.

                  (d) Reimbursement for Tax Savings. If (x) a Tax Indemnitee shall obtain a credit or refund of any Taxes paid by any Lessee pursuant to this Section 7.4 or (y) by reason of the incurrence or imposition of any Tax for which a Tax Indemnitee is indemnified hereunder or any payment made to or for the account of such Tax Indemnitee by any Lessee pursuant to this Section 7.4, such Tax Indemnitee at any time realizes a reduction in any Taxes for which the Lessees are not required to indemnify such Tax Indemnitee pursuant to this Section 7.4, which reduction in Taxes was not taken into account in computing such payment by any Lessee to or for the account of such Tax Indemnitee, then such Tax Indemnitee shall promptly pay to Concord (xx) the amount of such credit or refund, together with the amount of any interest received by such Tax Indemnitee on account of such credit or refund or (yy) an amount equal to such reduction in Taxes, as the case may be; provided that so long as an Event of Default shall have occurred and be continuing such payment shall be made to the Agent and applied to the amounts owing by the Lessees under the Operative Documents pursuant to Section 3.5 of the Loan Agreement) and, provided, further, that the amount payable to Concord by any Tax Indemnitee pursuant to this Section 7.4(d) shall not at any time exceed the aggregate amount of all indemnity payments made by such Lessees under this Section 7.4 to such Tax Indemnitee with respect to the Taxes which gave rise to the credit or refund or with respect to the Tax which gave rise to the reduction in Taxes less the amount of all prior payments made to Concord by such Tax Indemnitee under this Section 7.4(d). Each Tax Indemnitee agrees to act in good faith to claim such refunds and other available Tax benefits, and take such other actions as may be reasonable to minimize any payment due from the Lessees pursuant to this Section 7.4. The disallowance or reduction of any credit, refund or other tax savings with respect to which a Tax Indemnitee has made a payment to the Lessees under this Section 7.4(d) shall be treated as a Tax for which the Lessees are obligated to indemnify such Tax Indemnitee hereunder without regard to Section 7.4(b) hereof.

                  (e) Payments. Any Tax indemnifiable under this Section 7.4 shall be paid by a Lessee directly when due to the applicable taxing authority if direct payment is practicable and permitted. If direct payment to the applicable taxing authority is not permitted or is otherwise not made, any amount payable to a Tax Indemnitee pursuant to Section 7.4 shall be paid within thirty (30) days after receipt of a written demand therefor from such Tax Indemnitee accompanied by a written statement describing in reasonable detail the amount so payable, but not before the date that the relevant Taxes are due. Any payments made pursuant to Section 7.4 shall be made to the Tax Indemnitee entitled thereto or Concord, as the case may be, in

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immediately available funds at such bank or to such account as specified by the payee in written directions to the payor, or, if no such direction shall have been given, by check of the payor payable to the order of the payee by certified mail, postage prepaid at its address as set forth in this Master Agreement. Upon the request of any Tax Indemnitee with respect to a Tax that the Lessees are required to pay, Concord shall furnish to such Tax Indemnitee the original or a certified copy of a receipt for a Lessee’s payment of such Tax or such other evidence of payment as is reasonably acceptable to such Tax Indemnitee.

                  (f) Reports. If any Lessee knows of any report, return or statement required to be filed with respect to any Taxes that are subject to indemnification under this Section 7.4, such Lessee shall, if such Lessee is permitted by Applicable Law, timely file such report, return or statement (and, to the extent permitted by law, show ownership of the applicable Leased Property in such Lessee); provided, however, that if such Lessee is not permitted by Applicable Law or does not have access to the information required to file any such report, return or statement, such Lessee will promptly so notify the appropriate Tax Indemnitee, in which case Tax Indemnitee will file such report. In any case in which the Tax Indemnitee will file any such report, return or statement, the related Lessee shall, upon written request of such Tax Indemnitee, prepare such report, return or statement for filing by such Tax Indemnitee or, if such Tax Indemnitee so requests, provide such Tax Indemnitee with such information as is reasonably available to such Lessee.

                  (g) Verification. At Concord’s request, the amount of any indemnity payment by a Lessee or any payment by a Tax Indemnitee to a Lessee pursuant to this Section 7.4 shall be verified and certified by an independent public accounting firm selected by Concord and reasonably acceptable to the Tax Indemnitee. Unless such verification shall disclose an error in a Lessee’s favor of 5% or more of the related indemnity payment, the costs of such verification shall be borne by Concord. In no event shall any Lessee have the right to review the Tax Indemnitee’s tax returns or receive any other confidential information from the Tax Indemnitee in connection with such verification. The Tax Indemnitee agrees to cooperate with the independent public accounting firm performing the verification and to supply such firm with all information reasonably necessary to permit it to accomplish such verification, provided that the information provided to such firm by such Tax Indemnitee shall be for its confidential use. The parties agree that the sole responsibility of the independent public accounting firm shall be to verify the amount of a payment pursuant to this Master Agreement and that matters of interpretation of this Master Agreement are not within the scope of the independent accounting firm’s responsibilities.

         SECTION 7.5 Increased Costs, etc.

                  (a) Circumstances Affecting LIBOR Rate Availability. If with respect to any Rent Period applicable to a LIBOR Advance the Agent or any Funding Party (after consultation with the Agent) shall determine that, by reason of circumstances affecting the interbank markets generally, deposits in eurodollars, in the applicable amounts are not being

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quoted via Telerate Page 3750 or offered to the Agent for such Rent Period, then the Agent shall forthwith give notice thereof to Concord. Thereafter, until the Agent notifies Concord that such circumstances no longer exist, the obligation of the Funding Parties to make LIBOR Advances and the right of Lessee to convert any Funding to or continue any Funding as a LIBOR Advance shall be suspended, and the Lessees shall repay in full (or cause to be repaid in full) the then outstanding principal amount of each such LIBOR Advances together with accrued interest thereon on the last day of the then current Rent Period applicable to such LIBOR Advance or convert the then outstanding principal amount of each such LIBOR Advance to a Base Rate Advance as of the last day of such Rent Period.

                  (b) Laws Affecting LIBOR Rate Availability. If, after the date hereof, the introduction of, or any change in, any Applicable Law 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 any Funding Party (or any of their respective Lending Offices) with any request or directive (whether or not having the force of law) of any such Governmental Authority, central bank or comparable agency, shall make it unlawful or impossible for any of such Funding Party (or any of their respective Lending Offices) to honor its obligations hereunder to make or maintain any LIBOR Advance, such Funding Party shall promptly give notice thereof to the Agent and the Agent shall promptly give notice to the Lessee and the other Funding Parties. Thereafter, until the Agent notifies Concord that such circumstances no longer exist, (i) the obligations of such Funding Party to make LIBOR Advances and the right of Concord to convert such Funding Party’s portion of any Funding or continue such Funding Party’s portion of any Funding as a LIBOR Advances shall be suspended and thereafter Concord may select only Base Rate Advances hereunder with respect to such portion, and (ii) if any of the Funding Parties may not lawfully continue to maintain a LIBOR Advance to the end of the then current Rent Period applicable thereto as a LIBOR Advance, the applicable LIBOR Advance shall immediately be converted to a Base Rate Advance for the remainder of such Rent Period.

                  (c) Increased Costs. If, after the date hereof, the introduction of, or any change in, any Applicable Law, or 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 any of the Funding Parties (or any of their respective Lending Offices) with any request or directive (whether or not having the force of law) of such Governmental Authority, central bank or comparable agency:

         (i) shall subject any of the Funding Parties (or any of their respective Lending Offices) to any tax, duty or other charge with respect to any Note or any Funding or shall change the basis of taxation of payments to any of the Funding Parties (or any of their respective Lending Offices) of the principal of or interest on any Note or Invested Amount or any other amounts due under this Master Agreement with respect thereto (except for changes in the rate of tax on the overall net income of any of the Funding Parties or any of their respective Lending Offices imposed by the jurisdiction in which

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such Funding Party is organized or is or should be qualified to do business or such Lending Office is located); or

         (ii) shall impose, modify or deem applicable any reserve (including, without limitation, any imposed by the Board of Governors of the Federal Reserve System, but excluding any reserve requirement included in the calculation of the LIBOR Rate), special deposit, insurance or capital or similar requirement against assets of, deposits with or for the account of, or credit extended by any of the Funding Parties (or any of their respective Lending Offices) or shall impose on any of the Funding Parties (or any of their respective Lending Offices) or the interbank markets any other condition affecting any Note or Funding;

and the result of any of the foregoing is to increase the costs to any of the Funding Parties of maintaining any LIBOR Advance or issuing or (subject to Section 6.2(d)(viii)) participating in any Funding or to reduce the yield or amount of any sum received or receivable by any of the Funding Parties under any of the Operative Documents in respect of a LIBOR Advance, then such Funding Party shall promptly notify the Agent, and the Agent shall promptly notify Concord of such fact and demand compensation therefor and, within fifteen (15) days after such notice by the Agent, the Lessees shall pay to such Funding Party such additional amount or amounts as will compensate such Funding Party or Funding Parties for such increased cost or reduction, provided that such Funding Party is generally imposing similar charges on its other similarly situated lessees or borrowers. The Agent will promptly notify Concord of any event of which it has knowledge which will entitle a Funding Party to compensation pursuant to this Section 7.5(c); provided that the Agent shall incur no liability whatsoever to the Funding Parties or any Lessee in the event it fails in good faith to do so. The amount of such compensation shall be determined by the applicable Funding Party in good faith based upon the assumption that such Funding Party funded its LIBOR Advances in the London interbank market and using any reasonable attribution or averaging methods which such Funding Party deems appropriate and practical. A certificate of such Funding Party setting forth the basis for determining such amount or amounts necessary to compensate such Funding Party shall be forwarded to Concord through the Agent and shall be conclusively presumed to be correct in the absence of manifest error.

                  (d) Indemnity. The Lessees, jointly and severally, hereby indemnifies each of the Funding Parties against any loss or expense which may arise or be attributable to such Funding Party’s obtaining, liquidating or employing deposits or other funds acquired to effect, fund or maintain any Funding (a) as a consequence of any failure by any Lessee to make any payment when due of any amount due under the Operative Documents in connection with a LIBOR Advance, (b) due to any failure of any Lessee or the Construction Agent to accept the proceeds of a funding on a date specified therefor in a Funding Request or a Rent Period Notice or (c) due to any payment, prepayment or conversion of any LIBOR Advance on a date other than the last day of the Rent Period therefor. The amount of such loss or expense shall be determined by the applicable Funding Party in good faith based upon the assumption that such Funding Party funded its LIBOR Advances in the London interbank market and using any reasonable attribution

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or averaging methods which such Funding Party deems appropriate and practical. A certificate of such Funding Party setting forth the basis for determining such amount or amounts necessary to compensate such Funding Party shall be forwarded to Concord through the Agent and shall be conclusively presumed to be correct in the absence of manifest error.

                  (e) Capital Requirements. If either (a) the introduction of, or any change in, or in the interpretation of, any Applicable Law or (b) compliance with any guideline or request from any central bank or comparable agency or other Governmental Authority (whether or not having the force of law), has or would have the effect of reducing the rate of return on the capital of, or has affected or would affect the amount of capital required to be maintained by, any Funding Party or any corporation controlling such Funding Party as a consequence of, or with reference to the Commitments or Fundings and other commitments or fundings of this type, below the rate which the Funding Party or such other corporation could have achieved but for such introduction, change or compliance, then within five (5) Business Days after written demand by any such Funding Party, the Lessees shall pay to such Funding Party from time to time as specified by such Funding Party additional amounts sufficient to compensate such Funding Party or other corporation for such reduction, provided that such Funding Party is generally imposing similar charges on its other similarly situated lessees or borrowers. A certificate as to such amounts submitted to Concord and the Agent by such Funding Party, shall, in the absence of manifest error, be presumed to be correct and binding for all purposes.

                  (f) Payments Free and Clear. Any and all payments by a Lessee hereunder or under the Lease shall be made free and clear of and without deduction for any and all present or future taxes, levies, imposts, deductions, charges or withholding, and all liabilities with respect thereto, excluding, (i) in the case of each Funding Party and the Agent, income and franchise taxes imposed by the jurisdiction under the laws of which such Funding Party or the Agent, as the case may be, is organized or is or should be qualified to do business or any political subdivision thereof, (ii) in the case of each Funding Party, income and franchise taxes imposed by the jurisdiction of such Funding Party’s Lending Office or any political subdivision thereof, (iii) in the case of each Funding Party, income and franchise taxes payable solely as a result of such Funding Party’s failure to comply with Section 7.5(j) and (iv) in the case of each Funding Party, income and franchise taxes imposed by any other jurisdiction to which taxes such Funding Party would be subject even if such Funding Party had not entered into the transactions contemplated by the Operative Documents (all such non-excluded taxes, levies, imposts, deductions, charges, withholdings and liabilities being hereinafter referred to as “Withholding Taxes”). If any Lessee shall be required by law to deduct any Withholding Taxes from or in respect of any sum payable hereunder or under the Lease to any Funding Party or the Agent, (A) the sum payable shall be increased as may be necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 7.5(j)) such Funding Party or the Agent, as the case may be, receives an amount equal to the amount such party would have received had no such deductions been made, (B) the related Lessee shall make such deductions, (C) the related Lessee shall pay the full amount deducted to the relevant taxing authority or other authority in accordance with applicable law, and (D) the related Lessee

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shall deliver to the Agent evidence of such payment to the relevant taxing authority or other authority in the manner provided in Section 7.5(i).

                  (g) Stamp and Other Taxes. In addition, the Lessees shall pay any present or future stamp, registration, recordation or documentary taxes or any other similar fees or charges or excise or property taxes, levies of the United States or any state or political subdivision thereof or any applicable foreign jurisdiction which arise from any payment made hereunder or from the execution, delivery or registration of, or otherwise with respect to this Master Agreement, the Loans, the other Operative Documents, or the perfection of any rights or security interest in respect thereto (hereinafter referred to as “Other Taxes”).

                  (h) Indemnity. The Lessees, jointly and severally, shall indemnify each Funding Party and the Agent for the full amount of Withholding Taxes and Other Taxes (including, without limitation, any Withholding Taxes and Other Taxes imposed by any jurisdiction on amounts payable under this Section 7.5) paid by such Funding Party or the Agent, as the case may be, and any liability (including penalties, interest and expenses) arising therefrom or with respect thereto, whether or not such Withholding Taxes or Other Taxes were correctly or legally asserted. Such indemnification shall be made within thirty (30) days from the date such Funding Party or the Agent, as the case may be, makes written demand therefor. In the event that Lessee has indemnified a Funding Party or the Agent for the full amount of any Withholding Taxes or Other Taxes as required hereby, such Lessee shall have the right, at its sole cost and expense, to contest the validity of such Withholding Taxes or Other Taxes by appropriate proceedings, to seek a refund with respect thereto and to receive and retain any such refund obtained for its own account.

                  (i) Evidence of Payment. Within thirty (30) days after the date of any payment of Withholding Taxes or Other Taxes, the related Lessee shall furnish to the Agent, the original or a certified copy of a receipt evidencing payment thereof or other evidence of payment satisfactory to the Agent.

                  (j) Delivery of Tax Forms. Each Funding Party organized under the laws of a jurisdiction other than the United States or any state thereof shall deliver to Concord, with a copy to the Agent, on the Initial Closing Date or concurrently with the delivery of the relevant Assignment and Acceptance, as applicable, (i) two United States Internal Revenue Service Form W-8BEN or W-8ECI, as applicable (or successor forms) properly completed and certifying in each case that such Funding Party is entitled to a complete exemption from withholding or deduction for or on account of any United States federal income taxes, and (ii) an Internal Revenue Service Form W-9 or successor applicable form, as the case may be, to establish an exemption from United States backup withholding taxes. Each such Funding Party further agrees to deliver to the Lessee, with a copy to the Agent, a Form W-8BEN or W-8ECI and Form W-9, or successor applicable forms or manner of certification, as the case may be, on or before the date that any such form expires or becomes obsolete or after the occurrence of any event requiring a change in the most recent form previously delivered by it to Concord, certifying in the

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case of a Form W-8BEN or W-8ECI that such Funding Party is entitled to receive payments under the Operative Documents without deduction or withholding of any United States federal income taxes (unless in any such case an event (including without limitation any change in treaty, law or regulation) has occurred prior to the date on which any such delivery would otherwise be required which renders such forms inapplicable or the exemption to which such forms relate unavailable and such Funding Party notifies Concord and the Agent that it is not entitled to receive payments without deduction or withholding of United States federal income taxes) and, in the case of a Form W-9, establishing an exemption from United States backup withholding tax.

                  (k) Survival. Without prejudice to the survival of any other agreement of any Lessee hereunder, the agreements and obligations of the Lessees contained in this Section 7.5 shall survive the payment in full of the obligations of the Lessees and the termination of the Lease.

                  (l) Mitigation. If a Lessee is required to pay additional amounts to or for the account of any Funding Party pursuant to this Section 7.5, then such Funding Party shall change the jurisdiction or location of its Lending Office if, in the reasonable judgment of such Funding Party, such change (i) will eliminate or, if it is not possible to eliminate, will reduce to the greatest extent possible any such additional amounts which may thereafter accrue, and (ii) is not otherwise disadvantageous to such Funding Party. In addition, any Funding Party claiming any indemnity payment or additional amounts pursuant to this Section 7.5 shall use reasonable efforts (consistent with legal and regulatory restrictions) to file any certificate or document reasonably requested in writing by Concord if the making of such a filing would avoid the need for or reduce the amount of any such indemnity payment or additional amounts that may thereafter accrue and would not, in the sole determination of such Funding Party, be otherwise disadvantageous to such Funding Party.

                  (m) Limitations During Construction Term. During the Construction Term, (i) the Lessees shall only be required to indemnify and make payments to the Lessor under this Section 7.5, (ii) the Lessor hereby indemnifies and agrees to make payments to the Lenders to the extent that any Lender would have been entitled to the benefits of this Section 7.5 but for the provisions of clause (i) above, provided that the Lessor’s obligations pursuant to this paragraph shall be limited as provided in Section 4.2 of the Loan Agreement and (iii) amounts payable pursuant to this Section 7.5 shall be paid with Advances, subject to the terms and conditions of this Master Agreement.

         SECTION 7.6 End of Term Indemnity. In the event that at the end of the Lease Term for the Leased Properties: (i) the related Lessee elects the option set forth in Section 14.6 of the Lease with respect to any Leased Property, and (ii) after the Lessor receives the sales proceeds from the remarketed Leased Properties under Section 14.6 or 14.7 of the Lease, together with Lessees’ payment of the Recourse Deficiency Amount with respect to such Leased Properties, the Lessor shall not have received the entire aggregate Leased Property Balances of the remarketing

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Leased Properties, then, within 90 days after the end of the Lease Term, the Lessor or the Agent may obtain, at Lessees’ sole cost and expense, a report from the Appraiser (or, if the Appraiser is not available, another appraiser reasonably satisfactory to the Lessor or the Agent, as the case may be, and approved by Concord, such approval not to be unreasonably withheld) in form and substance reasonably satisfactory to the Lessor and the Agent (the “Report”) to establish the reason for any decline in value of the remarketed Leased Properties from the aggregate Leased Property Balances thereof. The Lessees, jointly and severally, shall promptly reimburse the Lessor for the amount equal to such decline in value to the extent that the Report indicates that such decline was due to extraordinary wear and tear, excessive usage or damage. Nothing in this Section 7.6 shall limit Lessor’s rights and remedies against any Lessee with respect to any violation of, or default under, the Lease or any other Operative Documents by such Lessee.

ARTICLE VIII
MISCELLANEOUS

         SECTION 8.1 Survival of Agreements. The representations, warranties, covenants, indemnities and agreements of the parties provided for in the Operative Documents, and the parties’ obligations under any and all thereof, shall survive the execution and delivery of this Master Agreement and any of the Operative Documents, the transfer of any Land to the Lessor as provided herein (and shall not be merged into any Deed), any disposition of any interest of the Lessor in any Leased Property, the purchase and sale of the Notes, payment therefor and any disposition thereof and shall be and continue in effect notwithstanding any investigation made by any party hereto or to any of the other Operative Documents and the fact that any such party may waive compliance with any of the other terms, provisions or conditions of any of the Operative Documents.

         SECTION 8.2 Notices. Unless otherwise specified herein, all notices, requests, demands or other communications to or upon the respective parties hereto shall be addressed to such parties at the addresses therefor as set forth in Schedule 8.2, or such other address as any such party shall specify to the other parties hereto in a written notice complying with this Section 8.2, and shall be deemed to have been given (i) the Business Day after being sent, if sent by overnight courier service marked for next Business Day delivery; (ii) the Business Day received, if sent by messenger; (iii) the day sent, if sent by facsimile and confirmed electronically or otherwise during business hours of a Business Day (or on the next Business Day if otherwise sent by facsimile and confirmed electronically or otherwise); or (iv) three Business Days after being sent, if sent by registered or certified mail, postage prepaid.

         SECTION 8.3 Counterparts. This Master Agreement may be executed by the parties hereto in separate counterparts (including by facsimile), each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument.

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         SECTION 8.4 Amendments. No Operative Document nor any of the terms thereof may be terminated, amended, supplemented, waived or modified with respect to Concord, any other Lessee or any Funding Party, except (a) in the case of a termination, amendment, supplement, waiver or modification to be binding on the Lessees, with the written agreement or consent of the Lessees and (b) in the case of a termination, amendment, supplement, waiver or modification to be binding on the Funding Parties, with the written agreement or consent of the Required Funding Parties; provided, however, that

         (x) notwithstanding the foregoing provisions of this Section 8.4 or clause (y) below, the consent of each Funding Party affected thereby shall be required for any amendment, modification or waiver directly:

         (i) modifying any of the provisions of this Section 8.4, changing the definition of “Required Funding Parties” or “Required Lenders”, or increasing the Commitment of such Funding Party;

         (ii) amending, modifying, waiving or supplementing any of the provisions of Section 3 of the Loan Agreement or the representations of such Funding Party in Section 4.2 or 4.3 or the covenants of such Funding Party in Section 6 of this Master Agreement;

         (iii) reducing any amount payable to such Funding Party under the Operative Documents or extending the time for payment of any such amount, including, without limitation, any Rent, any Funded Amount, any fees, any indemnity, any Leased Property Balance, the Lease Balance, any Funding Party Balance, the Recourse Deficiency Amount, interest or Yield; or

         (iv) consenting to any assignment of the Lease (unless such assignment is permitted pursuant to the Lease) or the extension of the Lease Term, releasing any of the collateral assigned to the Agent and the Lenders pursuant to any Mortgage and any Assignment of Lease and Rents (but excluding a release of any rights that the Lenders may have in any Leased Property, or the proceeds thereof as contemplated in the definition of “Release Date”), releasing any Lessee from its obligations in respect of the payments of Rent and the Lease Balance, releasing Concord from its obligations under the Guaranty Agreement or any other Operative Document or changing the absolute and unconditional character of any such obligation; and

         (y) no such termination, amendment, supplement, waiver or modification shall, without the written agreement or consent of the Lessor, the Agent and the Required Lenders, be made to the Lease or any Security Agreement and Assignment; and

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         (z) subject to the foregoing clauses (x) and (y), so long as no Event of Default has occurred and is continuing, the Lessor, the Agent and the Lenders may not amend, supplement, waive or modify any terms of the Loan Agreement, the Notes, the Mortgages and the Assignments of Lease and Rents without the consent of Concord (such consent not to be unreasonably withheld or delayed); provided that in no event may any Operative Document be amended so as to increase the obligations of Concord or any other Lessee, or deprive Concord or any other Lessee of any rights thereunder, without the written consent of Concord and such Lessee.

Each of the Agent and each Lender, severally and not jointly, acknowledge the provisions of, and agree to be bound by, Article II and Section 17.3 of the Lease, and all parties to ths Master Agreement agree that the Lessees shall be third party beneficiaries of Section 3 of the Loan Agreement.

         SECTION 8.5 Headings, etc. The Table of Contents and headings of the various Articles and Sections of this Master Agreement are for convenience of reference only and shall not modify, define, expand or limit any of the terms or provisions hereof.

         SECTION 8.6 Parties in Interest. Except as expressly provided herein, none of the provisions of this Master Agreement is intended for the benefit of any Person except the parties hereto and their respective successors and permitted assigns.

         SECTION 8.7 GOVERNING LAW. THIS MASTER AGREEMENT HAS BEEN DELIVERED IN, AND SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF GEORGIA APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.

         SECTION 8.8 Expenses. Whether or not the transactions herein contemplated are consummated, the Lessees, jointly and severally, agrees to pay, as Supplemental Rent, all actual, reasonable and documented out-of-pocket costs and expenses of the Lessor, the Agent and the Lenders in connection with the preparation, execution and delivery of any amendment, waiver or consent relating thereto (including, without limitation, the reasonable fees and disbursements of Mayer, Brown, Rowe & Maw) and of the Lessor, the Agent and the Lenders in connection with the enforcement of the Operative Documents and the documents and instruments referred to therein (including, without limitation, the reasonable fees actually incurred and disbursements of counsel for the Lessor, the Agent and the Lenders); provided that nothing in this Section 8.8 shall be interpreted to require any Lessee to pay the fees and expenses of any participant, or in connection with any participations, described in Section 6.2(c). All actual, reasonable and documented out-of-pocket costs and expenses of the Lessor, the Agent and the Lenders in connection with the preparation, execution and delivery of the Operative Documents and the documents and instruments referred to therein (including, without limitation, the

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reasonable fees and disbursements of Mayer, Brown, Rowe & Maw) shall be paid with the proceeds of Advances. All references in the Operative Documents to “attorneys’ fees” or “reasonable attorneys fees” shall mean reasonable attorneys’ fees actually incurred, without regard to any statutory definition thereof.

         SECTION 8.9 Severability. Any provision of this Master Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

         SECTION 8.10 Liabilities of the Funding Parties: Sharing of Payments. (a) No Funding Party shall have any obligation to any other Funding Party or to the Guarantor or any Lessee with respect to the transactions contemplated by the Operative Documents except those obligations of such Funding Party expressly set forth in the Operative Documents or except as set forth in the instruments delivered in connection therewith, and no Funding Party shall be liable for performance by any other party hereto of such other party’s obligations under the Operative Documents except as otherwise so set forth. No Lender shall have any obligation or duty to Concord or any other Lessee, any other Funding Parties or any other Person with respect to the transactions contemplated hereby except to the extent of the obligations and duties expressly set forth in this Master Agreement or the Loan Agreement.

                  (b) If any Funding Party shall obtain any payment (whether voluntary or involuntary, or through the exercise of any right of set-off or otherwise) on account of the Advances made by it in excess of its ratable share of payments on account of the Advances obtained by all the Funding Parties, such Funding Parties shall forthwith purchase from the other Funding Parties such participations in the Advances owed to them as shall be necessary to cause such purchasing Funding Party to share the excess payment ratably with each of them, provided, however, that if all or any portion of such excess payment is thereafter recovered from such purchasing Funding Party, such purchase from each Funding Party shall be rescinded and such Funding Party shall repay to the purchasing Funding Party the purchase price to the extent of such Funding Party’s ratable share (according to the proportion of (i) the amount of the participation purchased from such Funding Party as a result of such excess payment to (ii) the total amount of such excess payment) of such recovery together with an amount equal to such Funding Party’s ratable share (according to the proportion of (i) the amount of such Funding Party’s required repayment to (ii) the total amount so recovered from the purchasing Funding Party) of any interest or other amount paid or payable by the purchasing Funding Party in respect of the total amount so recovered. Each Funding Party agrees that any Funding Party so purchasing a participation from another Funding Party pursuant to this Section 8.10 may, to the fullest extent permitted by law, exercise all its rights of payment (including the right of set-off) with respect to such participation as fully as if such Funding Party were the direct creditor of such Funding Party in the amount of such participation.

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                  (c) Non-Receipt of Funds by the Agent. Unless a Lender notifies the Agent prior to the date on which it is scheduled to make payment to the Agent of the proceeds of a Loan that it does not intend to make such payment, the Agent may assume that such payment has been made. The Agent may, but shall not be obligated to, make the amount of such payment available to the intended recipient in reliance upon such assumption. If such Lender has not in fact made such payment to the Agent, the recipient of such payment shall, on demand by the Agent, repay to the Agent the amount so made available together with interest thereon in respect of each day during the period commencing on the date such amount was so made available by the Agent until the date the Agent recovers such amount at a rate per annum equal to the Federal Funds Rate for such day (or, if such amount has not been repaid within two or more Business Days, at the Base Rate for such day).

         SECTION 8.11 Submission to Jurisdiction; Waivers. Each party hereto hereby irrevocably and unconditionally:

         (i) submits for itself and its property in any legal action or proceeding relating to this Master Agreement or any other Operative Document, or for recognition and enforcement of any judgment in respect thereof, to the non-exclusive general jurisdiction of the Courts of the State of Georgia sitting in Fulton County, the courts of the United States of America for the Northern District of Georgia, and appellate courts from any thereof;

         (ii) consents that any such action or proceedings may be brought to such courts, and waives any objection that it may now or hereafter have to the venue of any such action or proceeding in any court or that such action or proceeding was brought in an inconvenient court and agrees not to plead or claim the same; and

         (iii) agrees that nothing herein shall affect the right to effect service of process in any manner permitted by law.

         EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS MASTER AGREEMENT, ANY OTHER OPERATIVE DOCUMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

         SECTION 8.12 Liabilities of the Agent. The Agent shall have no duty, liability or obligation to any party to this Master Agreement with respect to the transactions contemplated hereby except those duties, liabilities or obligations expressly set forth in this Master Agreement or the Loan Agreement, and any such duty, liability or obligations of the Agent shall be as expressly limited by this Master Agreement or the Loan Agreement, as the case may be. All parties to this Master Agreement acknowledge that the Agent is not, and will not be, performing any due diligence with respect to documents and information received pursuant to this Master Agreement or any other Operative Agreement including, without limitation, any Environmental

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Audit, Title Policy or survey; it being understood that if the Funding Parties make a Funding on a Closing Date, unless otherwise expressly stated in writing, the conditions precedent to such Funding shall be deemed to have been satisfied. Except as expressly qualified herein, the acceptance by the Agent of any such document or information shall not constitute a waiver by any Funding Party of any representation or warranty of Concord or any other Lessee even if such document or information indicates that any such representation or warranty is untrue.

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

CONCORD EFS, INC.,
as the Guarantor and as a Lessee

By: /s/ E. T. Haslam
Name Printed: Edward T. Haslam
Title: Chief Financial Officer

MASTER
AGREEMENT

S-1

ELECTRONIC PAYMENT SERVICES, INC.
as a Subsidiary Guarantor

By: /s/ E. T. Haslam
Name Printed: Edward T. Haslam
Title: Chief Financial Officer

MASTER
AGREEMENT

S-2

STAR SYSTEMS, LLC, as a Subsidiary
Guarantor

By: Concord EFS, Inc., its sole member

By: /s/ E. T. Haslam
Name Printed: Edward T. Haslam
Title: Chief Financial Officer

MASTER
AGREEMENT

S-3

BUYPASS CORPORATION, as a Subsidiary
Guarantor

By: /s/ E. T. Haslam
Name Printed: Edward T. Haslam
Title: Chief Financial Officer

MASTER
AGREEMENT

S-4

EPSF CORPORATION, as a Subsidiary Guarantor

By: /s/ E. T. Haslam
Name Printed: Edward T. Haslam
Title: Chief Financial Officer

MASTER
AGREEMENT

S-5

MONEY ACCESS SERVICE, INC., as a Subsidiary
Guarantor

By: /s/ E. T. Haslam
Name Printed: Edward T. Haslam
Title: Chief Financial Officer

MASTER
AGREEMENT

S-6

MAS INCO CORPORATION, as a Subsidiary
Guarantor

By: /s/ E. T. Haslam
Name Printed: Edward T. Haslam
Title: Chief Financial Officer

MASTER
AGREEMENT

S-7

STAR SYSTEMS, INC., as a Subsidiary
Guarantor

By: /s/ E. T. Haslam
Name Printed: Edward T. Haslam
Title: Chief Financial Officer

MASTER
AGREEMENT

S-8

STAR NETWORKS, INC., as a Subsidiary
Guarantor

By: /s/ E. T. Haslam
Name Printed: Edward T. Haslam
Title: Chief Financial Officer

MASTER
AGREEMENT

S-9

STAR SYSTEMS ASSETS, INC., as a Subsidiary
Guarantor

By: /s/ E. T. Haslam
Name Printed: Edward T. Haslam
Title: Chief Financial Officer

MASTER
AGREEMENT

S-10

ATLANTIC FINANCIAL GROUP, LTD., as Lessor

By: Atlantic Financial Managers, Inc., its
General Partner

By:/s/ Stephen Brookshire
Name Printed: Stephen Brookshire
Title: President

MASTER
AGREEMENT

S-11

SUNTRUST BANK, as Agent and as a Lender

By: /s/ Bryan W. Ford
Name Printed: Bryan W. Ford
Title: Director

MASTER
AGREEMENT

S-12

SCHEDULE 2.2

AMOUNT OF EACH FUNDING PARTY’S COMMITMENT

Lessor Commitment Percentage:			11.5	%
Lessor Commitment:		$	6,325,000
Lender Commitment Percentages:
	SunTrust Bank		88.5	%
Lender Commitments:
	SunTrust Bank	$	48,675,000

SCHEDULE 8.2

ADDRESSES FOR NOTICES

Concord:		Concord EFS, Inc. 1000 Carr Road Washington, Delaware 19809 Attn: Mr. Edward T. Haslam and           Marcia Heister, Esq. Facsimile: 302-791-8764           and 302-791-8762
	with a copy to:
		Dechert 4000 Bell Atlantic Tower 1717 Arch Street Philadelphia, Pennsylvania 19103 Attn: Glenn D. Blumenfeld, Esq. Facsimile: 215-994-2222
Lessor:		Atlantic Financial Group, Ltd. 2808 Fairmount Suite 250 Dallas, Texas 75201 Attn: Stephen Brookshire Facsimile: 214/871-2799
Lender and Agent:		SunTrust Bank 6410 Poplar Avenue Suite 320 Memphis, Tennessee 38119 Attn: Bryan Ford Facsimile: 901/766-7565
	with a copy to:	SunTrust Capital Markets, Inc. 303 Peachtree Street, 24th Floor Mail Code 3951 Atlanta, Georgia 30308 Attn: Peter Kantor Facsimile: 404/230-1344

APPENDIX A
to
Master Agreement, Lease,
Loan Agreement and Construction Agency Agreement

DEFINITIONS AND INTERPRETATION

         A.     Interpretation. In each Operative Document, unless a clear contrary intention appears:

         (i) the singular number includes the plural number and vice versa;

         (ii) reference to any Person includes such Person’s successors and assigns but, if applicable, only if such successors and assigns are permitted by the Operative Documents;

         (iii) reference to any gender includes each other gender;

         (iv) reference to any agreement (including any Operative Document), document or instrument means such agreement, document or instrument as amended, supplemented or modified and in effect from time to time in accordance with the terms thereof and, if applicable, the terms of the other Operative Documents and reference to any promissory note includes any promissory note which is an extension or renewal thereof or a substitute or replacement therefor;

         (v) reference to any Applicable Law or Requirement of Law means such Applicable Law or Requirement of Law as amended, modified, codified, replaced or reenacted, in whole or in part, and in effect from time to time, including rules and regulations promulgated thereunder and reference to any section or other provision of any Applicable Law or Requirement of Law means that provision of such Applicable Law from time to time in effect and constituting the substantive amendment, modification, codification, replacement or reenactment of such section or other provision;

         (vi) reference in any Operative Document to any Article, Section, Appendix, Schedule or Exhibit means such Article or Section thereof or Appendix, Schedule or Exhibit thereto;

         (vii) “hereunder”, “hereof”, “hereto” and words of similar import shall be deemed references to an Operative Document as a whole and not to any particular Article, Section, paragraph or other provision of such Operative Document;

         (viii) “including” (and with correlative meaning “include”) means including without limiting the generality of any description preceding such term;

         (ix) “or” is not exclusive; and

         (x) relative to the determination of any period of time, “from” means “from and including” and “to” means “to but excluding”.

         B.     Accounting Terms. In each Operative Document, unless expressly otherwise provided, all terms of an accounting character used in the Operative Documents shall be interpreted, all accounting determinations under the Operative Documents shall be made, and all financial statements required to be delivered under the Master Agreement shall be prepared, in accordance with GAAP.

         C.     Conflict in Operative Documents. If there is any conflict between any Operative Documents, each such Operative Document shall be interpreted and construed, if possible, so as to avoid or minimize such conflict but, to the extent (and only to the extent) of such conflict, the Master Agreement shall prevail and control.

         D.     Legal Representation of the Parties. The Operative Documents were negotiated by the parties with the benefit of legal representation and any rule of construction or interpretation otherwise requiring any Operative Document to be construed or interpreted against any party shall not apply to any construction or interpretation hereof or thereof.

         E.     Defined Terms. Unless a clear contrary intention appears, terms defined herein have the respective indicated meanings when used in each Operative Document.

         “1998 Lease” means the Lease Agreement, dated as of May 22, 1998, between Electronic Payment Services, Inc. and the Lessor.

         “2000 Lease” means the Master Lease Agreement, dated as of November 15, 2000, among Electronic Payment Services, Inc., the other Subsidiaries of Concord party thereto and the Lessor.

         “A Loan” means the A Percentage of Fundings made pursuant to the Loan Agreement and the Master Agreement.

         “A Note” is defined in Section 2.2 of the Loan Agreement.

         “A Percentage” means 83.5%.

         “Acquisition Related Special Charges” for any fiscal quarter means charges to income related specifically to acquisitions by Concord and its Subsidiaries accounted for during such

2

fiscal quarter, it being understood that Acquisition Related Special Charges shall not include write-downs of goodwill, other charges related to future performance and costs and accruals for restructuring or accrual charges of Concord or any restructuring or accrual charges of Concord or any of its Subsidiaries for its operations that are not specifically related to such acquisition.

         “Acquisition Related Special Gains” for any fiscal quarter means gains arising from any write-up of assets resulting from acquisitions, earnings of any Person acquired realized by such Person prior to the acquisition and any gain resulting from extraordinary or non-recurring items resulting from acquisitions, in each case realized by Concord or any of its Subsidiaries during such fiscal quarter.

         “Address” means with respect to any Person, its address set forth in Schedule 8.2 to the Master Agreement or such other address as it shall have identified to the parties to the Master Agreement in writing in the manner provided for the giving of notices thereunder.

         “Adjusted LIBO Rate” means, with respect to each Rent Period for a LIBOR Advance, the rate obtained by dividing (A) LIBOR for such Rent Period by (B) a percentage equal to 1 minus the then stated maximum rate (stated as a decimal) of all reserves requirements (including, without limitation, any marginal, emergency, supplemental, special or other reserves) applicable to any member bank of the Federal Reserve System in respect of Eurocurrency liabilities as defined in Regulation D (or against any successor category of liabilities as defined in Regulation D).

         “Adjusted Net Income” for any fiscal quarter means the Consolidated Net Income (or Deficit) for such fiscal quarter adjusted to eliminate any and all Acquisition Related Special Charges and Acquisition Related Special Gains for such fiscal quarter.

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

         “Affiliate” of any Person means any other Person directly or indirectly controlling, controlled by, or under common control with, such Person, whether through the ownership of voting securities, by contract or otherwise. For purposes of this definition, “control” (including with correlative meanings, the terms “controlling”, “controlled by”, and “under common control with”) as applied to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of that Person.

         “After-Tax Basis” means (a) with respect to any payment to be received by an Indemnitee (which, for purposes of this definition, shall include any Tax Indemnitee), the amount of such payment supplemented by a further payment or payments so that, after deducting from such payments the amount of all Taxes (net of any current credits, deductions or other Tax benefits arising from the payment by the Indemnitee of any amount, including Taxes, for which the payment to be received is made) imposed currently on the Indemnitee by any Governmental Authority or taxing authority with respect to such payments, the balance of such payments shall

3

be equal to the original payment to be received and (b) with respect to any payment to be made by any Indemnitee, the amount of such payment supplemented by a further payment or payments so that, after increasing such payment by the amount of any current credits or other Tax benefits realized by the Indemnitee under the laws of any Governmental Authority or taxing authority resulting from the making of such payments, the sum of such payments (net of such credits or benefits) shall be equal to the original payment to be made; provided, however, for the purposes of this definition, and for purposes of any payment to be made to either a Lessee or an Indemnitee on an after-tax basis, it shall be assumed that (i) federal, state and local taxes are payable at the highest combined marginal federal and state statutory income tax rate (taking into account the deductibility of state income taxes for federal income tax purposes) applicable to corporations from time to time and (ii) such Indemnitee or such Lessee has sufficient income to utilize any deductions, credits (other than foreign tax credits, the use of which shall be determined on an actual basis) and other Tax benefits arising from any payments described in clause (b) of this definition.

         “Agent” means SunTrust Bank, a Georgia banking corporation, in its capacity as agent under the Master Agreement and the Loan Agreement.

         “Agent’s Fee Letter” means the Agent’s Fee Letter, dated as of July 12, 2002, between the Agent and Concord.

         “Alterations” means, with respect to any Leased Property, fixtures, alterations, improvements, modifications and additions to such Leased Property.

         “Applicable Law” means all applicable laws (including Environmental Laws), rules, regulations (including proposed, temporary and final income tax regulations), statutes, treaties, codes, ordinances, permits, certificates, orders and licenses of and interpretations by, any Governmental Authority, and applicable judgments, decrees, injunctions, writs, orders or like action of any court, arbitrator or other administrative, judicial or quasi-judicial tribunal or agency of competent jurisdiction (including those pertaining to health, safety or the environment (including, without limitation, wetlands) and those pertaining to the construction, use or occupancy of any Leased Property).

         “Applicable Margin” means (i) 0 for Base Rate Advances and (ii) for LIBOR Advances, (A) 0.50%, if the Funded Debt to Tangible Capitalization Ratio for the most recently ended fiscal quarter is less than 15%, (B) 0.75%, if the Funded Debt to Tangible Capitalization Ratio for the most recently ended fiscal quarter is equal to or greater than 15%, but less than 25%, (C) 1.00%, if the Funded Debt to Tangible Capitalization Ratio for the most recently ended fiscal quarter is equal to or greater than 25%.

         “Appraisal” is defined in Section 3.1 of the Master Agreement.

         “Appraiser” means an MAI appraiser reasonably satisfactory to the Agent.

4

         “Architect” means with respect to any Leased Property the architect engaged in connection with the construction of the related Building, if any, who may be an employee of the General Contractor for such Leased Property.

         “Architect’s Agreement” means, with respect to any Leased Property, the architectural services agreement, if any, between the Construction Agent (or a Lessee) and the related Architect.

         “Assignment and Assumption” means an assignment and assumption agreement, substantially in the form of Exhibit F to the Master Agreement.

         “Assignment of Lease and Rents” means, with respect to any Leased Property, the Assignment of Lease and Rents, dated as of the related Closing Date, from the Lessor to the Agent, substantially in the form of Exhibit B to the Master Agreement.

         “Authority” means a development or similar authority of any state, county or municipality that is an issuer of Bonds.

         “Award” means any award or payment received by or payable to the Lessor or a Lessee on account of any Condemnation or Event of Taking (less the actual costs, fees and expenses, including reasonable attorneys’ fees, incurred in the collection thereof, for which the Person incurring the same shall be reimbursed from such award or payment).

         “B Loan” means the B Percentage of Fundings made pursuant to the Loan Agreement and the Master Agreement.

         “B Note” is defined in Section 2.2 of the Loan Agreement.

         “B Percentage” means 5.0%.

         “Banking Agency” means any Governmental Authority charged with the regulation of financial institutions.

         “Bankruptcy Code” means the Bankruptcy Reform Act of 1978, as amended.

         “Base Rate” means (with any change in the Base Rate to be effective as of the date of change of either of the following rates) the higher of (i) the rate which the Agent publicly announces from time to time as its prime lending rate, as in effect from time to time, and (ii) the Federal Funds Rate, as in effect from time to time, plus one-half of one percent (0.50%) per annum. The Agent’s prime lending rate is a reference rate and does not necessarily represent the lowest or best rate actually charged to customers; the Agent may make commercial loans or other

5

loans at rates of interest at, above or below the Agent’s prime lending rate. The Base Rate is determined daily.

         “Base Rate Advance” means that portion of the Funded Amount bearing interest at the Base Rate.

         “Base Term” means, with respect to any Leased Property, (a) the period commencing on the related Closing Date and ending on July 12, 2009 or (b) such shorter period as may result from earlier termination of the Lease as provided therein.

         “Basic Rent” means the rent payable pursuant to Section 3.1 of the Lease, determined in accordance with the following: each installment of Basic Rent payable on any Payment Date shall be in an amount equal to the sum of (A) the aggregate amount of Lender Basic Rent payable on such Payment Date, plus (B) the aggregate amount of Lessor Basic Rent payable on such Payment Date, in each case for the Leased Property or Properties that are then subject to the Lease.

         “Benefit Arrangement” means at any time an employee benefit plan within the meaning of Section 3(3) of ERISA which is not a Plan or a Multiemployer Plan and which is maintained or otherwise contributed to by any member of the ERISA Group.

         “Board” means the Board of Governors of the Federal Reserve System and any successor thereto or to the functions thereof.

         “Board of Directors”, with respect to a corporation, means either the Board of Directors or any duly authorized committee of that Board which pursuant to the by-laws of such corporation has the same authority as that Board as to the matter at issue.

         “Bonds” means industrial revenue or development bonds issued by a state, county or municipal authority in connection with any Leased Property.

         “Building” means, with respect to any Leased Property, the buildings, structures and improvements located or to be located on the related Land, along with all fixtures used or useful in connection with the operation of such Leased Property, including, without limitation, all furnaces, boilers, compressors, elevators, fittings, pipings, connectives, conduits, ducts, partitions, equipment and apparatus of every kind and description now or hereafter affixed or attached to the Building, equipment, if any, financed by the Lessor and/or the Lenders and all Alterations (including all restorations, repairs, replacements and rebuilding of such buildings, improvements and structures) thereto (but in each case excluding trade fixtures and Lessee Equipment).

         “Business Day” means any day other than a Saturday, Sunday or other day on which banks are required or authorized to be closed for business in Atlanta, Georgia and, if the

6

applicable Business Day relates to a LIBOR Advance, on which trading is not carried on by and between banks in the London interbank market.

         “Capitalized Leases” means leases under which any Obligor is the lessee or obligor, the discounted future rental payment obligations under which are capitalized or are required to be capitalized on the balance sheet of the lessee or obligor in accordance with GAAP.

         “Cash Collateral Account” is defined in Section 2.6 of the Master Agreement.

         “Cash Collateral Trustee” is defined in Section 2.6 of the Master Agreement.

         “Casualty” means an event of damage or casualty relating to all or part of any Leased Property that does not constitute an Event of Loss.

         “Claims” means liabilities, obligations, damages, losses, demands, penalties, fines, claims, actions, suits, judgments, proceedings, settlements, utility charges, costs, expenses and disbursements (including, without limitation, reasonable legal fees and expenses) of any kind and nature whatsoever.

         “Closing Date” means with respect to each parcel of Land, the date on which (i) such Land is acquired by the Lessor pursuant to a Purchase Agreement or such Land is leased to the Lessor pursuant to a Ground Lease and (ii) the initial Funding occurs with respect to such Land under the Master Agreement.

         “Code” or “Tax Code” means the Internal Revenue Code of 1986, as amended.

         “Commitment” means as to each Funding Party, its obligation to make Fundings as investments in each Leased Property (in the case of the Lessor), or to make Loans to the Lessor (in the case of the Lenders), in an aggregate amount not to exceed at any one time outstanding the amount set forth for such Funding Party on Schedule 2.2 to the Master Agreement (as it may be adjusted from time to time pursuant to Section 6 of the Master Agreement).

         “Commitment Fee” is defined in Section 2.2(h) of the Master Agreement.

         “Commitment Fee Percentage” means (i) 0.10%, if the Funded Debt to Tangible Capitalization Ratio for the most recently ended fiscal quarter is less than 15%, (ii) 0.15%, if the Funded Debt to Tangible Capitalization Ratio for the most recently ended fiscal quarter is equal to or greater than 15%, but less than 25%, and (iii) 0.20%, if the Funded Debt to Tangible Capitalization Ratio for the most recently ended fiscal quarter is equal to or greater than 25%.

         “Commitment Percentage” means as to any Funding Party, at a particular time, the percentage of the aggregate Commitments in effect at such time represented by such Funding Party’s Commitment, as such percentage is shown for such Funding Party on Schedule 2.2 to the

7

Master Agreement (as it may be adjusted from time to time pursuant to Section 6 of the Master Agreement).

         “Completion Date” with respect to any Leased Property means the Business Day on which the conditions specified in Section 3.5 of the Master Agreement have been satisfied or waived with respect to such Leased Property.

         “Concord” means Concord EFS, Inc., a Delaware corporation.

         “Condemnation” means any condemnation, requisition, confiscation, seizure or other taking or sale of the use, occupancy or title to any Leased Property or any part thereof in, by or on account of any actual eminent domain proceeding or other action by any Governmental Authority or other Person under the power of eminent domain or any transfer in lieu of or in anticipation thereof, which in any case does not constitute an Event of Taking. A Condemnation shall be deemed to have “occurred” on the earliest of the dates that use is prevented or occupancy or title is taken.

         “Consolidated or consolidated” means, with reference to any term defined herein, shall mean that term as applied to the accounts of Concord and its Subsidiaries, consolidated in accordance with GAAP.

         “Consolidated EBITR” means with respect to any fiscal period, the result (determined with respect to the same period and without duplication) of the following: (a) Consolidated Net Income (or Deficit); plus (b) all taxes included as an expense of Concord and its Subsidiaries in the determination of Consolidated Net Income (or Deficit); plus (c) interest included as an expense of Concord and its Subsidiaries in the determination of Consolidated Net Income (or Deficit); plus (d) all Rents included as an expense of Concord and its Subsidiaries in the determination of Consolidated Net Income (or Deficit).

         “Consolidated Net Income (or Deficit)” means with respect to any fiscal period, the consolidated net income (or deficit) of Concord and its Subsidiaries, after deduction of all expenses, taxes, and other proper charges, determined in accordance with GAAP.

         “Consolidated Tangible Net Worth” means, at any date the sum of capital surplus, earned surplus and capital stock, minus deferred charges (including, but not limited to, unamortized debt discount and expense, organization expenses and development expenses), intangibles and treasury stock of Concord and its consolidated Subsidiaries, all determined as of such date in accordance with GAAP.

         “Construction” means, with respect to any Leased Property, the construction of the related Building pursuant to the related Plans and Specifications.

8

         “Construction Agency Agreement” means the Construction Agency Agreement, dated as of July 12, 2002, between Concord and the Lessor.

         “Construction Agency Event of Default” is defined in Section 5.1 of the Construction Agency Agreement.

         “Construction Agent” means Concord in its capacity as construction agent pursuant to the Construction Agency Agreement.

         “Construction Budget” is defined in Section 2.4 of the Construction Agency Agreement.

         “Construction Commencement Date” is defined in Section 2.3 of the Construction Agency Agreement.

         “Construction Conditions” means the conditions set forth in Section 3.5 of the Master Agreement.

         “Construction Contract” means, with respect to any Leased Property, that certain construction contract, if any, between a Lessee or the Construction Agent and a General Contractor for the Construction of the related Building, provided that such contract shall be assigned to the Lessor, and such assignment shall be consented to by such General Contractor, pursuant to an assignment of such construction contract substantially in the form of the Security Agreement and Assignment set forth as Exhibit C to the Master Agreement.

         “Construction Costs” with respect to any Leased Property means the acquisition cost of the related Land, all costs incurred in connection with the design, development and construction of the Building on the related Land, as well as the costs of excavating, grading, landscaping and other work undertaken to prepare the Land for construction of a Building, the purchase price of all Funded Equipment related to such Leased Property and all other fees, costs and expenses incurred in connection with the acquisition, development and construction of such Leased Property, including all interest on the Loans and Yield in the Lessor’s Invested Amount related to such Leased Property accrued during the Construction Term therefor, planning, engineering, development, architects’, consultants’, brokers’, attorneys’ and accountants’ fees, appraisal costs, survey costs, insurance costs, transaction costs, demolition costs, permitting costs, costs for title insurance and other soft costs related to such Leased Property.

         “Construction Failure Payment” means, with respect to any Leased Property and as of any date of calculation, an amount equal to (i) 100% of the related Land Acquisition Cost, plus (ii) 89.9% of an amount equal to the costs of acquiring any Building located on the related Land as of the Closing Date therefor, plus the Construction Costs (exclusive of Land Acquisition Cost) that are capitalizable in accordance with GAAP as construction costs incurred as of such date of calculation or incurred by the Agent or any of the Funding Parties after the occurrence of a Construction Agency Event of Default, minus Force Majeure Losses related to such Leased Property.

9

         “Construction Force Majeure Declaration” is defined in Section 3.4 of the Construction Agency Agreement.

         “Construction Force Majeure Event” means, with respect to any Leased Property:

(a)	an act of God arising after the related Closing Date, or
(b)	any change in any Applicable Law arising after such Closing Date and relating to the use of the Land or the construction of a Building on the Land, or
(c)	strikes, lockouts, labor troubles, unavailability of materials, riots, insurrections or other causes beyond a Lessee’s control

which prevents the Construction Agent from completing the Construction prior to the Scheduled Construction Termination Date and which could not have been avoided or which cannot be remedied by the Construction Agent through the exercise of all commercially reasonable efforts or the expenditure of funds and, in the case of (b) above, the existence or potentiality of which was not known to and could not have been discovered prior to such Closing Date through the exercise of reasonable due diligence by the Construction Agent.

         “Construction Land Interest” means each parcel of Land, including any Building or portion thereof thereon, for which the Completion Date has not yet occurred.

         “Construction Term” means, with respect to any Leased Property, the period commencing on the related Closing Date and ending on the related Construction Term Expiration Date, or such shorter period as may result from earlier termination of the Lease as provided therein.

         “Construction Term Expiration Date” means, with respect to any Leased Property, the earliest of the following:

(a)	the related Completion Date,
(b)	the date on which the aggregate Funded Amounts equal the Commitments, and
(c)	the related Scheduled Construction Termination Date.

         “Contractual Obligation”, as applied to any Person, means any provision of any Securities issued by that Person or any indenture, mortgage, deed of trust, contract, undertaking, agreement, instrument or other document to which that Person is a party or by which it or any of its properties is bound or to which it or any of its properties is subject (including, without limitation, any restrictive covenant affecting any of the properties of such Person).

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         “Covered Administrative Action” means any adverse administrative action against or involving EPS or any Subsidiary with respect to their respective business, operations or condition, including without limitation any (i) commitment letter, memorandum of understanding, notice of undercapitalized status or other requirement to submit a capital restoration plan or other similar arrangement related to the capital adequacy of EPS or any Subsidiary, (ii) supervisory agreement or other similar arrangement, (iii) notice of charges, (iv) temporary order suspending deposit insurance, (v) notice of intent to revoke deposit insurance, (vi) cease and desist order, (vii) order to suspend or remove any institution-affiliated party (as defined in 12 U.S.C. Section 1813(u)), (viii) notice of assessment of civil money penalties (including against any institution-affiliated party (as so defined)), (ix) directive, order, plan or material proposal relating to capital requirements, (x) proposed or final directive to take prompt regulatory action, notice of intention to reclassify, or order to dismiss a director or officer, (xi) proposal to require, or order requiring, divestiture or liquidation of any Subsidiary pursuant to 12 U.S.C. Section 1831o(f)(2)(I), (xii) proposed or final order restricting the ability of EPS to make a capital distribution or (xiii) similar administrative notice or action.

         “Deed” means, with respect to any Land, a deed in the form customary in the applicable jurisdiction, dated the applicable Closing Date, from the applicable Seller to the Lessor, conveying such Land.

         “Default” means any Event of Default or Potential Event of Default.

         “Derivatives Obligations” of any Person means all obligations of such Person in respect of any rate swap transaction, basis swap, forward rate transaction, commodity swap, commodity option, equity or equity index swap, equity or equity index option, bond option, interest rate option, foreign exchange transaction, cap transaction, floor transaction, collar transaction, currency swap transaction, cross-currency rate swap transaction, currency option or any other similar transaction (including any option with respect to any of the foregoing transactions) or any combination of the foregoing transactions.

         “Distribution” means, with respect to any Person, the declaration or payment of any dividend on or in respect of any shares of any class of capital stock, other than (a) dividends payable solely in shares of common stock of such Person and (b) the payment of cash in lieu of the distribution of fractional shares in the event of any stock dividend or stock split; the purchase, redemption, or other retirement of any shares of any class of capital stock of such Person, directly or indirectly by such Person through a Subsidiary of such Person or otherwise, unless such capital stock shall be redeemed or reacquired through the exchange of such stock with stock of the same class, and except for the redemption, repurchase, or acquisition of stock of any Subsidiary by Concord; the return of capital by such Person to its shareholders as such; or any other distribution (whether of such or other property) on or in respect of any shares of any class of capital stock of such Person.

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

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         “Eligible Assignee” means a Person that at the time of any assignment is (a) a commercial bank organized under the laws of the United States or any state thereof or under the laws of a country which is a member of the Organization for Economic Cooperation and Development, having combined capital and surplus in excess of $500,000,000 or (b) a finance company, insurance company or other financial institution which in the ordinary course of business extends credit of the type extended hereunder and that has total assets in excess of $1,000,000,000.

         “Engineer” means, with respect to any Leased Property, the engineer engaged in connection with the construction of the related Building, if any, who may be an employee of the General Contractor for such Leased Property.

         “Engineer’s Agreement” means, with respect to any Leased Property, the engineering services agreement, if any, between the Construction Agent, in its capacity as agent for Lessor, and the related Engineer.

         “Environment” shall have the meaning set forth in 42 U.S.C. §9601(8) as defined on the date of the Master Agreement, and “Environmental” shall mean pertaining or relating to the Environment.

         “Environmental Audit” means, with respect to each parcel of Land, a Phase I Environmental Assessment, dated no more than 90 days prior to the related Closing Date, by an environmental services firm satisfactory to the Funding Parties and Concord.

         “Environmental Laws” means and includes the Resource Conservation and Recovery Act of 1976, (RCRA) 42 U.S.C. §§ 6901-6987, as amended by the Hazardous and Solid Waste Amendments of 1984, the Comprehensive Environmental Response, Compensation and Liability Act, as amended by the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C. §§ 9601-9657, (CERCLA), the Hazardous Materials Transportation Act of 1975, 49 U.S.C. §§ 1801-1812, the Toxic Substances Control Act, 15 U.S.C. §§ 2601-2671, the Clean Air Act, 42 U.S.C. §§ 7401 et seq., the Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. §§ 136 et seq., and all similar federal, state and local environmental laws, ordinances, rules, orders, statutes, decrees, judgments, injunctions, codes and regulations, and any other federal, state or local laws, ordinances, rules, codes and regulations, relating to the environment, human health or natural resources or the regulation or control of or imposing liability or standards of conduct concerning human health, the environment, Hazardous Materials or the clean-up or other remediation of any Leased Property, or any part thereof, as any of the foregoing may have been from time to time amended, supplemented or supplanted.

         “EPS” means Electronic Payment Services, Inc., a Delaware corporation.

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         “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time or any successor federal statute, and the regulations promulgated and rulings issued thereunder.

         “ERISA Group” means Concord, any Subsidiary and all members of a controlled group of corporations and all trades and businesses (whether or not incorporated) under common control which, together with Concord and any Subsidiary, are treated as a single employer with Concord under Section 414 of the Code.

         “ERISA Reportable Event” means a reportable event (other than a reportable event described in Subsections 4043(b)(2)-(4) and 4043(b)(6)-(9), which do not require a thirty (30) day notice to the PBGC) with respect to a Guaranteed Pension Plan within the meaning of Section 4043 of ERISA and the regulations promulgated thereunder as to which the requirement of notice has not been waived.

         “Event of Default” means any event or condition designated as an “Event of Default” in Article XII of the Lease.

         “Event of Loss” is defined in Section 10.1 of the Lease.

         “Event of Taking” is defined in Section 10.2 of the Lease.

         “Executive Officer” means with respect to any Person, the Chief Executive Officer, President, Vice Presidents (if elected by the Board of Directors of such Person), Chief Financial Officer, Treasurer, Secretary and any Person holding comparable offices or duties (if elected by the Board of Directors of such Person).

         “Fair Market Sales Value” means, with respect to any Leased Property or any portion thereof, the fair market sales value as determined by an independent appraiser chosen by the related Lessee and reasonably acceptable to the Lessor and the Agent (unless an Event of Default has occurred and is continuing, in which case the appraiser shall be chosen by the Agent), that would be obtained in an arm’s-length transaction between an informed and willing buyer (other than a lessee currently in possession) and an informed and willing seller, under no compulsion, respectively, to buy or sell and neither of which is related to the Lessor or any Lessee, for the purchase of such Leased Property. Such fair market sales value shall be calculated as the value for such Leased Property, assuming, in the determination of such fair market sales value, that such Leased Property is in the condition and repair required to be maintained by the terms of the Lease (unless such fair market sales value is being determined for purposes of Section 13.1 of the Lease and except as otherwise specifically provided in the Lease or the Master Agreement, in which case this assumption shall not be made; it being understood that if such fair market sales value is being determined for purposes of the Construction Agency Agreement, such value shall be determined for the related Leased Property in its then state of completion, but assuming that all construction had been done in accordance with the standards required pursuant to the Construction Agency Agreement).

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         “Fair Value” of any Leased Property means the sum of (i) the Land Acquisition Cost for such Leased Property, plus (ii) the cost of acquiring any Building located on the related Land on the Closing Date for such Leased Property and all Construction Costs for such Leased Property that are capitalizable as construction costs in accordance with GAAP.

         “Federal Funds Rate” means, for any period, a fluctuating interest rate per annum equal for each day during such period to the weighted average of the rates on overnight Federal funds transactions with member banks of the Federal Reserve System arranged by Federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations for such day on such transactions received by the Agent from three Federal funds brokers of recognized standing selected by it.

         “Final Rent Payment Date” with respect to any Leased Property is defined in Section 13.1(e) of the Lease.

         “Fixed Charges” means for any fiscal period, the sum of (i) the expenses of Concord and its Subsidiaries for such period for interest payable with respect to Indebtedness (including, without limitation, imputed interest on Capitalized Leases) and all fees paid on account of or with respect thereto, plus (ii) regularly scheduled principal payments made or required to be made on account of Indebtedness (including, without limitation, Capitalized Leases) for such period, plus (iii) Rents paid during such period, in each case determined in accordance with GAAP.

         “Force Majeure Losses” means, with respect to any Leased Property and as of any date of calculation, the loss incurred by the Lessor in connection with a Construction Force Majeure Event with respect to which a Construction Force Majeure Declaration has been made, measured by the sum of (i) the lower of (A) the insurance proceeds paid with respect thereto plus the related deductible amount and (B) the reduction in Fair Market Sales Value of the Leased Property as a result of the Construction Force Majeure Event as set forth in an Appraisal, plus (ii) other direct costs incurred by the Lessor that the Lessor has consented to in accordance with Section 3.4 of the Construction Agency Agreement in connection with such Construction Force Majeure Event to the extent such costs are not covered by insurance; provided that insurance proceeds shall be used in such calculation only to the extent the event giving rise to the loss can be remediated for an amount equal to the resulting insurance proceeds plus the deductible; provided, further, that it is expressly understood and agreed that Force Majeure Losses shall not include the costs of repairing damage occasioned not as a result of the Construction Force Majeure Event, but as a result of the Construction Agent’s failure to take all reasonable steps to minimize the damages caused by such Construction Force Majeure Event.

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         “Funded Amount” means, as to the Lessor, the Lessor’s Invested Amounts (excluding Yield thereon to the extent not capitalized pursuant to Section 2.3(c) of the Master Agreement), and, as to each Lender, the outstanding principal amount of such Lender’s Loans.

         “Funded Debt” means at any time, an amount equal to the sum of the then outstanding balances of (a) Capitalized Leases, plus (b) other Indebtedness for borrowed money or other extensions of credit excluding the Net Investment Debt Amount.

         “Funded Debt to Tangible Capitalization Ratio” as of the last day of any fiscal quarter means the ratio, referenced as a percentage, of (i) the Funded Debt of Concord and its Subsidiaries, on a Consolidated basis, as of such day to (ii) the sum of (A) the amount in clause (i), plus (B) the Consolidated Tangible Net Worth as of such day.

         “Funded Equipment” means equipment, furnishings and other personal property that is located at or in a Leased Property and that has been financed or purchased with the proceeds of Fundings.

         “Funding” means any funding by the Funding Parties pursuant to Section 2.2 of the Master Agreement.

         “Funding Date” means each Closing Date and each other date on which a Funding occurs under Section 2 of the Master Agreement.

         “Funding Parties” means the Lessor and the Lenders, collectively.

         “Funding Party Balance” means, with respect to any Leased Property, (i) for the Lessor as of any date of determination, an amount equal to the sum of the outstanding related Lessor’s Invested Amount, all accrued and unpaid Yield on such outstanding related Lessor’s Invested Amount, all unpaid related fees owing to the Lessor under the Operative Documents, and all other related amounts owing to the Lessor by the Lessees under the Operative Documents, and (ii) for any Lender as of any date of determination, an amount equal to the sum of the outstanding related Loans of such Lender, all accrued and unpaid interest thereon, all unpaid related fees owing to such Lender under the Operative Documents, and all other related amounts owing to such Lender by the Lessees under the Operative Documents.

         “Funding Request” is defined in Section 2.2 of the Master Agreement.

         “Funding Termination Date” means the earlier of (i) July 12, 2004 and (ii) the termination of the Commitments pursuant to Section 5.2 of the Loan Agreement.

         “Future Value” means, with respect to any component of the Limited Recourse Value Percentage, the accreted value of such component as of the end of the Basic Term or the date of calculation, respectively, that is giving effect to the time value of money using the Implicit Rate.

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         “GAAP” means principles that are (i) consistent with the principles promulgated or adopted by the Financial Accounting Standards Board and its predecessors, as in effect from time to time and (ii) consistently applied with past financial statements of Concord adopting the same principles; provided that in each case referred to in this definition of “GAAP” a certified public accountant would, insofar as the use of such accounting principles impertinent, be in a position to deliver an unqualified opinion (other than qualification regarding changes in GAAP) as to financial statements in which such principles have been properly applied.

         “General Partner” means Atlantic Financial Managers, Inc., a Texas corporation.

         “Governmental Action” means all permits, authorizations, registrations, consents, approvals, waivers, exceptions, variances, orders, judgments, decrees, licenses, exemptions, publications, filings, notices to and declarations of or with, or required by, any Governmental Authority, or required by any Applicable Law and shall include, without limitation, all citings, environmental and operating permits and licenses that are required for the use, occupancy, zoning and operation of any Leased Property.

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

         “Ground Lease” means, with respect to any Land, the ground lease between the related Ground Lessor and the Lessor pursuant to which a leasehold estate is conveyed in the Land to the Lessor.

         “Ground Lessor” means, as to any Land, the ground lessor of such Land.

         “Guarantor” means Concord EFS, Inc., a Delaware corporation.

         “Guaranty Agreement” means the Guaranty Agreement, dated as of July 12, 2002, issued by Concord.

         “Hazardous Material” or “Hazardous Substance” means any substance, waste or material which is toxic, explosive, corrosive, flammable, infectious, radioactive, carcinogenic, mutagenic or otherwise hazardous, including petroleum, crude oil or any fraction thereof, petroleum derivatives, by products and other hydrocarbons, or which is or becomes regulated under any Environmental Law by any Governmental Authority, including any agency, department, commission, board or instrumentality of the United States, any jurisdiction in which a Leased Property is located or any political subdivision thereof and also including, without limitation, asbestos, urea formaldehyde foam insulation, polychlorinated biphenyls (“PCBs”) and radon gas.

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         “IDB Documentation” means the Bonds, each IDB Lease and all other agreements, documents, contracts and instruments entered into in connection with any Bonds or IDB Property.

         “IDB Lease” means a lease between the Lessor and an Authority with respect to a Leased Property.

         “IDB Property” means each Leased Property that is the subject of Bonds.

         “Implicit Rate” means 2.423% per annum.

         “Indebtedness” means all obligations, contingent and otherwise, that in accordance with GAAP should be classified upon the consolidated balance sheet of Concord and its Subsidiaries as liabilities, or to which reference should be made by footnotes thereto, including in any event and whether or not so classified: (a) all obligations for borrowed money or other extensions of credit whether or not secured or unsecured, absolute or contingent, including, without limitation, unmatured reimbursement obligations with respect to letters of credit or guarantees issued for the account of or on behalf of Concord and its Subsidiaries, and all obligations representing the deferred purchase price of property, other than accounts payable arising in the ordinary course of business, (b) all obligations evidenced by bonds, notes, debentures or other similar instruments; (c) all liabilities secured by any mortgage, pledge, security interest, lien, charge, or other encumbrance existing on property owned or acquired subject thereto, whether or not the liability secured thereby shall have been assumed; (d) all guarantees, endorsements(other than endorsements in the ordinary course of business of negotiable instruments or documents for deposit or collection), indemnities owed to third parties and other contingent obligations whether direct or indirect in respect of indebtedness of others or otherwise, including any obligations with respect to Derivative Obligations, any obligation to supply funds to or in any manner to invest in, directly or indirectly, the debtor, to purchase indebtedness, or to assure the owner of indebtedness against loss, through an agreement to purchase goods, supplies, or services for the purpose of enabling the debtor to make payment of the indebtedness held by such owner or otherwise, and the obligations to reimburse the issuer in respect of any letters of credit; (e) that portion of all obligations arising under Capital Leases that is required to be capitalized on the consolidated balance sheet of Concord and its Subsidiaries; and (f) all redeemable preferred stock of Concord or its Subsidiaries valued at the greater of its voluntary or involuntary liquidation preference plus accrued and unpaid dividends.

         “Indemnitee” means SunTrust Bank, in its individual capacity and in its capacity as Agent, and each Lender, and the Lessor, and their respective Affiliates, successors, permitted assigns, permitted transferees, employees, officers, directors and agents; provided, however, that in no event shall any Lessee be an Indemnitee; provided, further that with respect to any indemnification arising with respect to any Leased Property during the Construction Period for such Leased Property, the Indemnitee shall only be the Lessor (except as provided in Section 7.2 of the Master Agreement).

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         “Initial Closing Date” means the Closing Date for the first Leased Property acquired by the Lessor.

         “Joinder Agreement” means an agreement substantially in the form of Exhibit E to the Master Agreement pursuant to which a Subsidiary of Concord shall become a Lessee.

         “Land” means the land described in the related Lease Supplement.

         “Land Acquisition Costs” with respect to any Leased Property means the Funded Amounts advanced for the purpose of acquiring the related Land, including any earnest money deposits and all other amounts payable under the related Purchase Agreement, together with all interest and transaction expenses allocated to Land Acquisition Costs and capitalizable as land acquisition costs in accordance with GAAP.

         “Laws” means all ordinances, statutes, rules, regulations, orders, injunctions, writs, treaties or decrees of any Governmental Authority, or of any court or similar entity established by any thereof.

         “Lease” means the Master Lease Agreement, dated as of July 12, 2002 together with each Lease Supplement thereto, among the Lessees and the Lessor.

         “Lease Balance” means, with respect to all of the Leased Properties, as of any date of determination, an amount equal to the aggregate sum of the outstanding Funded Amounts of all Funding Parties, all accrued and unpaid interest on the Loans, all accrued and unpaid Yield on the Lessor’s Invested Amounts, all unpaid fees owing to the Funding Parties under the Operative Documents, all other amounts owing to the Funding Parties by the Lessees under the Operative Documents.

         “Lease Supplement” means a supplement to the Lease substantially in the form of Exhibit A thereto.

         “Lease Term” means (a) the Base Term, as it may be renewed pursuant to Section 14.9 of the Lease or (b) such shorter period as may result from earlier termination of the Lease as provided therein.

         “Lease Termination Date” means the last day of the Lease Term.

         “Leased Property” means Land and the related Building(s), including the related Funded Equipment. For purposes of the Lease, “Leased Property” means the Land identified in a Lease Supplement and the Buildings and Funded Equipment related thereto, unless the context provides otherwise. “Leased Property” shall not include any inventory of any Lessee or any Lessee

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Equipment. As used in this definition, “related” means such amounts arising with respect to such Leased Property.

         “Leased Property Balance” means, with respect to any Leased Property, as of any date of determination, an amount equal to the aggregate sum of the outstanding related Funded Amounts of all Funding Parties, all accrued and unpaid interest on the related Loans, all accrued and unpaid Yield on the related Lessor Invested Amounts, all related unpaid fees owing to the Funding Parties under the Operative Documents, and all other amounts owing to the Funding Parties by any Lessee under the Operative Documents with respect to such Leased Property. As used in this definition, “related” means such amounts arising with respect to such Leased Property.

         “Lender Basic Rent” means, for any Rent Period under the Lease, the aggregate amount of interest accrued on the Loans pursuant to Section 2.4 of the Loan Agreement during such Rent Period.

         “Lenders” means such financial institutions as are, or who may hereafter become, parties to the Loan Agreement as lenders to the Lessor.

         “Lending Office” for each Lender means the office such Lender designates in writing from time to time to Concord and the Agent.

         “Lessee” is defined in the preamble to the Master Agreement. The “related” Lessee with respect to any Leased Property means the Lessee that is party to the Lease Supplement for such Leased Property.

         “Lessee Equipment” means equipment and other personalty not financed or purchased with the proceeds of Fundings.

         “Lessor” is defined in the preamble to the Master Agreement.

         “Lessor Basic Rent” means, for any Rent Period under the Lease, the aggregate amount of Yield accrued and unpaid on the Lessor’s Invested Amounts pursuant to Section 2.3(a) of the Master Agreement during such Rent Period.

         “Lessor Liens” means Liens on or against any Leased Property, the Lease, any other Operative Document or any payment of Rent (a) which result from any act or omission of, or any Claim against, the Lessor or any of its Affiliates (including the General Partner) unrelated to the Transaction or from Lessor’s failure to perform as required under the Operative Documents or (b) which result from any Tax owed by the Lessor or any of its Affiliates (including the General Partner), except any Tax for which a Lessee or Concord is obligated to indemnify (including, without limitation, in the foregoing exception, any assessments with respect to any Leased

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Property noted on the related Title Policy or assessed in connection with any construction or development by a Lessee or the Construction Agent).

         “Lessor Rate” is defined in the Lessor Yield Letter.

         “Lessor Yield Letter” means the letter agreement, dated as of July 12, 2002, between Concord and the Lessor.

         “Lessor’s Invested Amount” means the amounts funded by the Lessor pursuant to Section 2 of the Master Agreement that are not proceeds of Loans by a Lender, as such amount may be increased during the related Construction Term pursuant to Section 2.3(c) of the Master Agreement.

         “LIBOR” means, for any Rent Period, with respect to LIBOR Advances the offered rate for deposits in U.S. Dollars, for a period comparable to the Rent Period and in an amount comparable to such Advances, appearing on the Telerate Screen Page 3750 as of 11:00 A.M. (London, England time) on the day that is two London Business Days prior to the first day of the Rent Period. If two or more of such rates appear on the Telerate Screen Page 3750, the rate for that Rent Period shall be the arithmetic mean of such rates. If the foregoing rate is unavailable from the Telerate Screen for any reason, then such rate shall be determined by the Agent from the Reuters Screen LIBO Page or, if such rate is also unavailable on such service, then on any other interest rate reporting service of recognized standing designated in writing by the Agent to Concord and the Funding Parties; in any such case rounded, if necessary, to the next higher 1/100 of 1.0%, if the rate is not such a multiple.

         “LIBOR Advance” means that portion of the Funded Amount bearing interest at a rate based on the Adjusted LIBO Rate.

         “Lien” means, with respect to any asset, any mortgage, deed to secure debt, deed of trust, lien, pledge, charge, security interest, security title, preferential arrangement which has the practical effect of constituting a security interest or encumbrance, or encumbrance or servitude of any kind in respect of such asset to secure or assure payment of indebtedness, whether by consensual agreement or by operation of statute or other law, or by any agreement, contingent or otherwise, to provide any of the foregoing.

         “Limited Event of Default” means an Event of Default under (i) paragraph (e), (j), (k) or (m) of Article XII of the Lease, solely if the breach of the related covenant, representation or warranty was based on (A) paragraph (e) of Article XII of the 1998 Lease or Section 5.3(b), 5.4, 5.6 or 5.14 of the Master Agreement (as defined in the 1998 Lease) or (B) a subjective interpretation of the term “diligently,” “reasonable,” “reasonably,” “practical,” “necessary,” “adequate,” “usually,” “desirable,” “reasonably likely,” “material,” “materially,” “Material Adverse Effect,” “materially adversely affect,” “material adverse change,” “materially and adversely affects,” “material adverse effect,” “adverse,” “adversely,” “substantial,” or

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“substantially”, or any Event of Default based solely on the subjective interpretation of any term (1) that gives rise to a cross default under paragraph (e) of Article XII or (2) in any covenant, representation or Event of Default added to the Operative Documents pursuant to the terms of Section 5.6 of the Master Agreement; provided, however, if the Event of Default, covenant or representation or warranty relates to the use of the Leased Property, then such Event of Default, covenant or representation or warranty will not be deemed a Limited Event of Default, (ii) paragraph (f) of Article XII of the Lease solely if such breach is based on a subjective interpretation of “Solvent” or (iii) paragraph (l) of Article XII of the Lease if the breach is the result of a hostile takeover not consented to by Concord.

         “Limited Recourse Amount” means, as of any date of determination, an amount equal to: the Future Value of: (i) 89.9% of the aggregate Fair Value of all of the Leased Properties minus (ii) the present value, as of the Initial Closing Date, of any minimum lease payments required to be made as of the Initial Closing Date and up to the date of determination that were included in Concord’s 90% test as described in paragraph 7(d) of FASB, Accounting for Leases, using a discount rate of 2.423%.

         “Loan” shall have the meaning specified in Section 2.1 of the Loan Agreement.

         “Loan Agreement” means the Loan Agreement, dated as of July 12, 2002, among the Lessor, the Agent and the Lenders.

         “Loan Documents” means the Loan Agreement, the Notes, the Assignments of Lease and Rents, the Mortgages and all documents and instruments executed and delivered in connection with each of the foregoing.

         “Loan Event of Default” means any of the events specified in Section 5.1 of the Loan Agreement, provided that any requirement for the giving of notice, the lapse of time, or both, or any other condition, event or act has been satisfied.

         “Loan Potential Event of Default” means any event, condition or failure which, with notice or lapse of time or both, would become a Loan Event of Default.

         “Loss Proceeds” is defined in Section 10.6 of the Lease.

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

         “Margin Stock” means “margin stock” as defined in Regulation T, U or X.

         “Master Agreement” means the Master Agreement, dated as of July 12, 2002, among the Guarantor, the Lessees, the Subsidiary Guarantors, the Lessor, the Agent and the Lenders.

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         “Material Adverse Effect” means with respect to any event or occurrence of whatever nature (including any adverse determination in any litigation, arbitration or governmental investigation or proceeding), (i) a materially adverse effect on the ability of Guarantor or any other Obligor to perform its obligations under any Operative Document, (ii) a materially adverse effect on the financial condition, operations, business, prospects or assets of Concord and its Subsidiaries, taken as a whole, (iii) a materially adverse effect on the value or useful life of any Leased Property, or the legality, validity or enforceability of any of the Operative Documents or (iv) a materially adverse effect on the status, perfection or priority of the Agent’s or any Funding Party’s interest in any Leased Property.

         “Material Contract” means (a) any contract or other agreement written or oral, of Concord or any of its Subsidiaries involving monetary liability of or to any such Person in an amount in excess of $15,000,000 per year, or (b) any other contract or agreement, written or oral, of Concord or any of its Subsidiaries the failure to comply with which could reasonably be expected to have a Material Adverse Effect.

         “Monthly Payment Date” means the last Business Day of each calendar month.

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

         “Mortgage” means, with respect to any Leased Property, that certain mortgage, deed of trust or security deed, dated as of the related Closing Date, by the Lessor to the Agent, in the form of Exhibit D attached to the Master Agreement, with such modifications as are satisfactory to the Lessor and the Agent in conformity with Applicable Law to assure customary remedies in favor of the Agent in the jurisdiction where the Leased Property is located.

         “Multiemployer Plan” means any multiemployer plan within the meaning of Section 3(37) of ERISA maintained or contributed to by Concord or any member of the ERISA Group.

         “Net Investment Debt Amount” on any date means an amount equal to the lesser of (i) the principal of the Indebtedness of EFS National Bank (or any successor thereto, so long as such entity is a Subsidiary of Concord) or any Subsidiary of EFS National Bank incurred for the purpose of investing in U.S. treasury notes and other U.S. governmental agencies, quasi-governmental agencies and government sponsored agencies or instrumentalities, such as obligations of the Federal Home Loan Mortgage Corp., Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation, so long as such obligations are backed by the full faith and credit of the U.S. government, and (ii) the fair market value as of such date of the investments purchased or maintained with the proceeds of such Indebtedness, provided that in no event shall the Net Investment Debt Amount exceed the amount set forth opposite the appropriate year:

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Year	Amount
2002	$	100,000,000
2003	$	150,000,000
2004	$	200,000,000
2005 and each year thereafter	$	250,000,000

         “Net Selling Price” for any Leased Property means the selling price therefor, net of all related taxes, attorneys’ fees, escrow costs, recording fees, transfer fees, title insurance costs, costs of surveys and environmental reports, brokers’ fees, advertising costs, carrying costs incurred by the Agent or any Funding Party (including, without limitation, amounts expended by the Agent or any Funding Party to insure, protect, maintain or operate such Leased Property) and all other expenses and prorations associated with such sale.

         “Notes” means the A Note and the B Note issued by the Lessor under the Loan Agreement, and any and all notes issued in replacement or exchange therefor in accordance with the provisions thereof.

         “Obligations” means all indebtedness (whether principal, interest, fees or otherwise), obligations and liabilities of the Guarantor and each Lessee to the Funding Parties (including without limitation all extensions, renewals, modifications, rearrangements, restructures, replacements and refinancings thereof, whether or not the same involve modifications to interest rates or other payment terms of such indebtedness, obligations and liabilities), whether arising under any of the Operative Documents or otherwise, and whether now existing or hereafter created, absolute or contingent, direct or indirect, joint or several, secured or unsecured, due or not due, contractual or tortious, liquidated or unliquidated, arising by operation of law or otherwise, or acquired by Funding Parties outright, conditionally or as collateral security from another, including but not limited to the obligation of the Guarantor and each Lessee to repay future advances by the Funding Parties, whether or not made pursuant to commitment and whether or not presently contemplated by the Guarantor or any Lessee and the Funding Parties under the Operative Documents.

         “Obligors” means the Guarantor, the Subsidiary Guarantors, the Construction Agent and the Lessees, collectively.

         “Officer’s Certificate” of a Person means a certificate signed by the Chairman of the Board or the President or any Executive Vice President or any Senior Vice President or any other Vice President or the Treasurer or any Assistant Treasurer or the Controller or any Assistant Controller or the Secretary of such Person.

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         “Operative Documents” means the Master Agreement, the Purchase Agreements, the Deeds, the Lease, the Security Agreement and Assignment, the Notes, the Loan Agreement, the Guaranty Agreement, the Swap Documents, the Subsidiary Guaranty, the Assignments of Lease and Rents, the Mortgages, the Ground Leases, the Construction Agency Agreement, the Joinder Agreements, Lessor Yield Letter and the other documents delivered in connection with the transactions contemplated by the Master Agreement.

         “Overdue Rate” means the lesser of (a) the highest interest rate permitted by Applicable Law and (b) an interest rate per annum (calculated on the basis of a 365-day (or 366-day, if appropriate) year equal to (i) in the case of each LIBOR Rate Advance, 2.0% in excess of the rate then applicable to such LIBOR Rate Advance until the end of the applicable Rent Period and thereafter 2.0% above the Base Rate in effect from time to time, (ii) in the case of Base Rate Advances, 2% above the Base Rate in effect from time to time and (iii) in the case of Yield, 2% above the Lessor Rate.

         “Partnership Agreement” means the Agreement of Limited Partnership of AFG, dated as of February 28, 1996, among the General Partner and the persons listed on Schedule A thereto as limited partners.

         “Payment Date” means the last day of each Rent Period (and if such Rent Period is longer than three months, the day that is 90 days after the first day of such Rent Period) or, if such day is not a Business Day, the next Business Day.

         “Payment Date Notice” is defined in Section 2.3(d) of the Master Agreement.

         “PBGC” means the Pension Benefit Guaranty Corporation, and any successor thereto.

         “Permitted Investments” means: (a) direct obligations of the United States of America, or of any agency thereof, or obligations guaranteed as to principal and interest by the United States of America, or of any agency thereof, in either case maturing not more than 90 days from the date of acquisition thereof; (b) certificates of deposit issued by any Lender or by any bank or trust company organized under the laws of the United States of America or any state thereof and having capital, surplus and undivided profits of at least $500,000,000, maturing not more than 90 days from the date of acquisition thereof; (c) commercial paper rated A-1 or better or P-1 by Standard & Poor’s Corporation or Moody’s Investors Services, Inc., respectively, maturing not more than six months from the date of acquisition thereof; (d) commercial paper of any Lender (or any Affiliate thereof located in the United States of America) that is rated
A-1 or better or P-1 by Standard and Poor’s Corporation or Moody’s Investors Services, Inc., respectively, maturing not more than six months from the date of acquisition thereof; (e) repurchase agreements entered into with any Lender or with any bank or trust company satisfying the conditions of clause (b) hereof that is secured by any obligation of the type described in clauses (a) through (d) of this definition; and (f) money market funds acceptable to the Required Lenders.

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         “Permitted Lease Balance” with respect to any Leased Property means (i) the Leased Property Balance therefor, minus (ii) the Force Majeure Losses, if any, related to such Leased Property.

         “Permitted Liens” means the following with respect to any Leased Property: (a) the respective rights and interest of the related Lessee, the Lessor, the Agent and any Lender, as provided in the Operative Documents, (b) Liens for Taxes either not yet due or being contested in good faith and by appropriate proceedings, so long as enforcement thereof is stayed pending such proceedings, (c) materialmen’s, mechanics’, workers’, repairmen’s, employees’ or other like Liens arising after the related Closing Date in the ordinary course of business for amounts either not yet due or being contested in good faith and by appropriate proceedings, so long as enforcement thereof is stayed pending such proceedings or such Liens are bonded over, (d) Liens arising after such Closing Date out of judgments or awards with respect to which at the time an appeal or proceeding for review is being prosecuted in good faith, so long as the enforcement thereof has been stayed pending such appeal or review, (e) easements, rights of way, reservations, servitudes and rights of others against the Land which do not materially and adversely affect the value or the utility of such Leased Property, (f) other Liens incidental to the conduct of the related Lessee’s business which were not incurred in connection with the borrowing of money or the obtaining of advances or credit and which do not in the aggregate materially detract from the value of such Leased Property or materially impair the use thereof, (g) assignments and subleases expressly permitted by the Operative Documents, (h) Liens in favor of municipalities agreed to by the related Lessee that do not affect the value or utility of the related Leased Property and (i) Liens created by the IDB Documentation.

         “Person” means an individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, nonincorporated organization or government or any agency or political subdivision thereof.

         “Plan” means at any time an employee pension benefit plan (other than a Multiemployer Plan) which is covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Code and either (a) is maintained by any member of the ERISA Group or (b) has at any time within the preceding five years been maintained, or contributed to, by any Person which was at such time a member of the ERISA Group for employees of any Person which was at such time a member of the ERISA Group.

         “Plans and Specifications” means with respect to any Building the final plans and specifications for such Building prepared by the Architect, and, if applicable, referred to by the Appraiser in the Appraisal, as such Plans and Specifications may be hereafter amended, supplemented or otherwise modified from time to time.

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

25

         “Purchase Agreement” means with respect to any Land, the purchase agreement with the Seller for the conveyance of such Land to the Lessor.

         “Purchase Option” is defined in Section 14.1 of the Lease.

         “Quarterly Payment Date” means the last Business Day of each March, June, September and December of each year.

         “Recourse Deficiency Amount” means for any Leased Property, an amount equal to (i) the A Percentage times (ii) the Fair Value of such Leased Property.

         “Release” means the release, deposit, disposal or leak of any Hazardous Material into or upon or under any land or water or air, or otherwise into the environment, including, without limitation, by means of burial, disposal, discharge, emission, injection, spillage, leakage, seepage, leaching, dumping, pumping, pouring, escaping, emptying, placement and the like.

         “Release Date” means, with respect to any Leased Property, the earlier of (i) the date that the Lease Balance has been paid in full, and (ii) the date on which the Agent gives notice to the Lessor that the Lenders release any and all interest they may have in such Leased Property, and all proceeds thereof, and any rights to direct, consent or deny consent to any action by the Lessor with respect to such Leased Property.

         “Remarketing Option” is defined in Section 14.6 of the Lease.

         “Rent” means Basic Rent and Supplemental Rent, collectively.

         “Rent Period” means (i) in the case of Base Rate Advances, means the period from, and including, a Quarterly Payment Date to, but excluding, the next succeeding Quarterly Payment Date; and (ii) with respect to any LIBOR Advance:

(1)	initially, the period commencing on the borrowing or conversion date, as the case may be, with respect to such LIBOR Advance and ending one, two, three or six months thereafter, as selected by Concord in its Funding Notice or Payment Date Notice, as the case may be, given with respect thereto; and
(2)	thereafter, each period commencing on the last day of the next preceding Rent Period applicable to such LIBOR Advance and ending one, two, three or six months thereafter, as selected by Concord by irrevocable notice to the Agent in its related Payment Date Notice;

26

provided, however that:

         (a) The initial Rent Period for any Funding shall commence on the Funding Date of such Funding and each Rent Period occurring thereafter in respect of such Funding shall commence on the day on which the next preceding Rent Period expires;

         (b) If any Rent Period would otherwise expire on a day which is not a Business Day, such Rent Period shall expire on the next succeeding Business Day, provided that if any Rent Period in respect of LIBOR Advances would otherwise expire on a day that is not a Business Day but is a day of the month after which no further Business Day occurs in such month, such Rent Period shall expire on the next preceding Business Day;

         (c) Any Rent Period in respect of LIBOR Advances which begins on a day for which there is no numerically corresponding day in the calendar month at the end of such Rent Period shall, subject to paragraph (d) below, expire on the last Business Day of such calendar month;

         (d) No Rent Period shall extend beyond the Lease Termination Date; and

         (e) At any one time, there shall be no more than five (5) Rent Periods.

         “Rents” means all consideration paid in the ordinary course of business by Concord and its Subsidiaries to any Person for the use or occupation of property under any operating lease to which Concord or any of its Subsidiaries is the lessee or obligor, determined in accordance with GAAP.

         “Report” is defined in Section 7.6 of the Master Agreement.

         “Required Funding Parties” means, at any time, Funding Parties holding an aggregate outstanding principal amount of Funded Amounts equal to at least 51% of the aggregate outstanding principal amount of all Funded Amounts.

         “Required Lenders” means, at any time, Lenders holding an aggregate outstanding principal amount of Loans equal to at least 51% of the aggregate outstanding principal amount of all Loans.

         “Requirements of Law” for any Person means the articles or certificate of incorporation and bylaws or other organizational or governing documents of such Person, and any law, treaty, rule or regulation, or determination of an arbitrator or a court or other governmental authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.

27

         “Reuters Screen” means, when used in connection with any designated page and LIBOR, the display page so designated on the Reuters Monitor Money Rates Service (or such other page as may replace that page on that service for the purpose of displaying rates comparable to LIBOR).

         “Scheduled Construction Termination Date” means with respect to any Building the earlier of (A) two (2) years after the Closing Date for the related Land and (B) the Funding Termination Date.

         “SEC” means the United States Securities and Exchange Commission.

         “Securities Act” means the Securities Act of 1933, as amended.

         “Securities Exchange Act” means the Securities Exchange Act of 1934, as amended.

         “Security Agreement and Assignment” means, with respect to any Leased Property, the Security Agreement and Assignment (Construction Contract, Architect’s Agreement, Engineer’s Agreement, Permits, Licenses and Governmental Approvals, and Plans, Specifications and Drawings) from the Construction Agent to the Lessor, substantially in the form of Exhibit C to the Master Agreement.

         “Significant Subsidiary” means, at the date of determination, any Subsidiary (i) whose consolidated total assets equals or exceeds five percent (5%) of the consolidated total assets of the Guarantor, or (ii) whose consolidated net income for the most recently completed four quarters equals or exceeds five percent (5%) of the Guarantor’s consolidated net income for such period, provided that “Significant Subsidiary” shall not include any Subsidiary of Concord that is a national bank or a federal savings bank, or any subsidiary of such national bank or federal savings bank. The Significant Subsidiaries as of the Initial Closing Date are listed on Schedule 1 to the Master Agreement.

         “Solvent” means, with respect to any Person as of any date, that on such date (i) the fair value of the property of such Person is greater than the total amount of liabilities, including, without limitation, contingent liabilities, of such Person, (ii) the present fair salable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become matured, (iii) such Person is able to realize upon its assets and pay its debts and other liabilities, contingent obligations and other commitments as they mature in the normal course of business, (iv) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay as such debts and liabilities mature, and (v) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person’s property would constitute unreasonably small capital after giving due consideration to the prevailing practice in the industry in which such Person is engaged. In computing the amount of contingent liabilities at anytime, it

28

is intended that such liabilities will be computed at the amount which, in light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

         “Star” means Star Systems, LLC, a Delaware limited liability company.

         “Subsidiary” means any corporation, association, partnership, trust, limited liability company or other business entity of which the designated parent shall at any time own directly or indirectly through a Subsidiary or Subsidiaries at least a majority (by number of votes or controlling interests) of the outstanding Voting Interests.

         “Subsidiary Guarantors” means each Significant Subsidiary.

         “Subsidiary Guaranty” means the Subsidiary Guaranty Agreement, dated as of July 12, 2002, issued by the Subsidiary Guarantors.

         “Supplemental Rent” means any and all amounts, liabilities and obligations other than Basic Rent which any Lessee assumes or agrees or is otherwise obligated to pay under the Lease or any other Operative Document (whether or not designated as Supplemental Rent) to the Lessor, the Agent, any Lender or any other party, including, without limitation, amounts under Article XVI of the Lease, and indemnities and damages for breach of any covenants, representations, warranties or agreements, and all overdue or late payment charges in respect of any Funded Amount.

         “Swap Documents” means the ISDA Master Agreement, dated as of April 3, 1998, between SunTrust Bank and EPS, together with all schedules and confirmations related thereto (including the amended confirmation dated July 13, 2000).

         “Tax Code” means the Internal Revenue Code of 1986, as amended and in effect from time to time.

         “Tax Indemnitee” means, with respect to each Leased Property, (i) so long as such Leased Property is a Construction Land Interest, the Lessor and its Affiliates, successors, permitted assigns, permitted transferees, employees, officers, directors and agents and (ii) from and after the Completion Date for such Leased Property, the Lessor, SunTrust Bank, in its individual capacity and in its capacity as Agent, each Lender and their respective Affiliates, successors, permitted assigns, permitted transferees, employees, officers, directors and agents; provided, however, that in no event shall any Lessee be a Tax Indemnitee.

         “Taxes” means any present or future taxes, levies, imposts, duties, fees, assessments, deductions, withholdings or other charges of whatever nature, including without limitation, income, receipts, excise, property, sales, transfer, license, payroll, withholding, social security and franchise taxes now or hereafter imposed or levied by the United States, or any state, local or

29

foreign government or by any department, agency or other political subdivision or taxing authority thereof or therein and all interest, penalties, additions to tax and similar liabilities with respect thereto.

         “Telerate” means, when used in connection with any designated page and LIBOR, the display page so designated on the Dow Jones Telerate Service (or such other page as may replace that page on that service for the purpose of displaying rates comparable to LIBOR).

         “Ten Percent Subsidiary” means each of (i) EPS, (ii) Star and (iii) any other Subsidiary of Concord that is not a Subsidiary of either Star or EPS and (A) whose consolidated total assets equals or exceeds ten percent (10%) of the consolidated total assets of the Guarantor, or (B) whose consolidated net income for the most recently completed four quarters equals or exceeds ten percent (10%) of the Guarantor’s consolidated net income for such period, provided that “Ten Percent Subsidiary” shall not include any Subsidiary of Concord that is a national bank or federal savings bank, or any subsidiary of such national bank or federal savings bank.

         “Title Insurance Company” means the company that has or will issue the title policies with respect to a Leased Property, which company shall be reasonably acceptable to the Funding Parties.

         “Title Policy” is defined in Section 3.1 of the Master Agreement.

         “Transaction” means all the transactions and activities referred to in or contemplated by the Operative Documents.

         “UCC” means the Uniform Commercial Code of Georgia, as in effect from time to time.

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         “Voting Interests” means stock or similar ownership interests, of any class or classes (however designated), the holders of which are at the time entitled, as such holders, (a) to vote for the election of a majority of the directors (or persons performing similar functions) of the corporation, association, partnership, trust or other business entity involved, or (b) to control, manage, or conduct the business of the corporation, partnership, association, trust or other business entity involved.

         “Withholding Taxes” is defined in Section 7.5(f) of the Master Agreement.

         “Yield” is defined in Section 2.3 of the Master Agreement.

31 EX-10.2 4 w64721exv10w2.htm MASTER LEASE AGREEMENT, DATED AS OF JULY 12, 2002

After recordation, this instrument should be returned to:	Exhibit 10.2
Mayer, Brown, Rowe & Maw 190 South LaSalle Street Chicago, Illinois 60603 Attention: Rex Palmer

MASTER LEASE AGREEMENT

Dated as of July 12, 2002

between

ATLANTIC FINANCIAL GROUP, LTD., as Lessor,

and

CONCORD EFS, INC. AND CERTAIN SUBSIDIARIES
OF CONCORD EFS, INC., as Lessees

TABLE OF CONTENTS
(Lease Agreement)

			Page
ARTICLE I.		DEFINITIONS	1
ARTICLE II.		LEASE OF LEASED PROPERTY	1
	2.1	Acceptance and Lease of Property	1
	2.2	Acceptance Procedure	2
ARTICLE III.		RENT	2
	3.1	Basic Rent	2
	3.2	Supplemental Rent	2
	3.3	Method of Payment	3
	3.4	Late Payment	3
	3.5	Net Lease; No Setoff, Etc	3
	3.6	Certain Taxes	4
	3.7	Utility Charges	5
ARTICLE IV.		WAIVERS	5
ARTICLE V.		LIENS; EASEMENTS; PARTIAL CONVEYANCES	6
ARTICLE VI.		MAINTENANCE AND REPAIR; ALTERATIONS, MODIFICATIONS AND ADDITIONS	7
	6.1	Maintenance and Repair; Compliance With Law	7
	6.2	Alterations	8
	6.3	Title to Alterations	8
ARTICLE VII.		USE	8
ARTICLE VIII.		INSURANCE	9
ARTICLE IX.		ASSIGNMENT AND SUBLEASING	10
ARTICLE X.		LOSS, DESTRUCTION, CONDEMNATION OR DAMAGE	11
	10.1	Event of Loss	11
	10.2	Event of Taking	12
	10.3	Casualty	12
	10.4	Condemnation	12
	10.5	Verification of Restoration and Rebuilding	13

(i)

	10.6	Application of Payments	13
	10.7	Prosecution of Awards	14
	10.8	Application of Certain Payments Not Relating to an Event of Taking	15
	10.9	Other Dispositions	15
	10.10	No Rent Abatement	15
	10.11	Event During Construction Period	15
ARTICLE XI.		INTEREST CONVEYED TO LESSEES	15
ARTICLE XII.		EVENTS OF DEFAULT	16
ARTICLE XIII.		ENFORCEMENT	18
	13.1	Remedies	18
	13.2	Remedies Cumulative; No Waiver; Consents	20
	13.3	Purchase Upon an Event of Default	21
	13.4	Limitation on Liability	21
ARTICLE XIV.		SALE, RETURN OR PURCHASE OF LEASED PROPERTY; RENEWAL	22
	14.1	Lessee’s Option to Purchase	22
	14.2	Conveyance to Lessee	22
	14.3	Acceleration of Purchase Obligation	22
	14.4	Determination of Purchase Price	23
	14.5	Purchase Procedure	23
	14.6	Option to Remarket	24
	14.7	Rejection of Sale	26
	14.8	Return of Leased Property	26
	14.9	Renewal	27
ARTICLE XV.		LESSEE’S EQUIPMENT	27
ARTICLE XVI.		RIGHT TO PERFORM FOR LESSEE	28
ARTICLE XVII.		MISCELLANEOUS	28
	17.1	Reports	28
	17.2	Binding Effect; Successors and Assigns; Survival	28
	17.3	Quiet Enjoyment	29
	17.4	Notices	29
	17.5	Severability	30
	17.6	Amendment; Complete Agreements	30
	17.7	Construction	30
	17.8	Headings	30
	17.9	Counterparts	31

(ii)

17.10	GOVERNING LAW	31
17.11	Discharge of Lessee’s Obligations by its Subsidiaries or Affiliates	31
17.12	Liability of Lessor Limited	31
17.13	Estoppel Certificates	31
17.14	No Joint Venture	32
17.15	No Accord and Satisfaction	32
17.16	No Merger	32
17.17	Survival	32
17.18	Chattel Paper	32
17.19	Time of Essence	33
17.20	Recordation of Lease	33
17.21	Investment of Security Funds	33
17.22	Ground Leases	33
17.23	Land and Building	33
17.24	Joint and Several	34
17.25	Construction Land Interests	34
17.26	IDB Documentation	34

(iii)

APPENDICES AND EXHIBITS

APPENDIX A	Defined Terms
EXHIBIT A	Lease Supplement

(iv)

         THIS MASTER LEASE AGREEMENT (as from time to time amended or supplemented, this “Lease”), dated as of July 12, 2002, is among ATLANTIC FINANCIAL GROUP, LTD., a Texas limited partnership (together with its successors and assigns hereunder, the “Lessor”), as Lessor, and CONCORD EFS, INC., a Delaware corporation (“Concord”), and certain Subsidiaries (as defined below) of Concord hereafter parties hereto (each individually, with its successors and permitted assigns hereunder, a “Lessee” and collectively, the “Lessees”), as Lessees.

PRELIMINARY STATEMENT

         A.     Lessor will purchase fee title to, or acquire a leasehold interest in, from one or more third parties designated by the Construction Agent, on a Closing Date, certain parcels of real property to be specified by the Construction Agent, together with any improvements thereon.

         B.     Lessor desires to lease to each Lessee, and each Lessee desires to lease from Lessor, certain of such properties as described on the Lease Supplement(s) to which such Lessee is a party.

         C.     If applicable, the Construction Agent will construct, or cause to be constructed, certain improvements on such parcels of real property which as constructed will be the property of Lessor and will become part of such property subject to the terms of this Lease.

         In consideration of the mutual agreements herein contained and other good and valuable consideration, receipt of which is hereby acknowledged, Lessor and Lessees hereby agree as follows:

ARTICLE I.
DEFINITIONS

         Terms used herein and not otherwise defined shall have the meanings assigned thereto in Appendix A hereto for all purposes hereof.

ARTICLE II.
LEASE OF LEASED PROPERTY

         Section 2.1 Acceptance and Lease of Property. On each Closing Date for Land, Lessor, subject to the satisfaction or waiver of the conditions set forth in Section 3 of the Master Agreement, hereby agrees to accept delivery on such Closing Date of such Land pursuant to the terms of the Master Agreement, together with any Building or other improvements thereon, and

1

simultaneously to lease to the related Lessee hereunder for the Lease Term, Lessor’s interest in such Land and in such Building or other improvements, together with any Building which thereafter may be constructed thereon pursuant to the Construction Agency Agreement, and such related Lessee hereby agrees, expressly for the direct benefit of Lessor, commencing on such Closing Date for the Lease Term, to lease from Lessor Lessor’s interest in such Land to be delivered on such Closing Date, together with, in the case of Land, Lessor’s interest in any Building and other improvements thereon or which thereafter may be constructed thereon pursuant to the Construction Agency Agreement.

         Section 2.2 Acceptance Procedure. Lessor hereby authorizes one or more employees of the related Lessee, to be designated by such Lessee, as the authorized representative or representatives of Lessor to accept delivery on behalf of Lessor of that Leased Property identified on the applicable Funding Request. Each Lessee hereby agrees that such acceptance of delivery by such authorized representative or representatives and the execution and delivery by such Lessee on each Closing Date for property to be leased hereunder of a Lease Supplement in substantially the form of Exhibit A hereto (appropriately completed) shall, without further act, constitute the irrevocable acceptance by such Lessee of that Leased Property which is the subject thereof for all purposes of this Lease and the other Operative Documents on the terms set forth therein and herein, and that such Leased Property, together with, in the case of Land, any Building or other improvements thereon or to be constructed thereon pursuant to the Construction Agency Agreement, shall be deemed to be included in the leasehold estate of this Lease and shall be subject to the terms and conditions of this Lease as of such Closing Date. The demise and lease of each Building pursuant to this Section 2.2 shall include any additional right, title or interest in such Building which may at any time be acquired by Lessor, the intent being that all right, title and interest of Lessor in and to such Building shall at all times be demised and leased to the related Lessee hereunder.

ARTICLE III.
RENT

         Section 3.1 Basic Rent. Beginning with and including the first Payment Date occurring after the Initial Closing Date, each Lessee shall pay to Lessor (and Lessor hereby irrevocably directs each Lessee to pay to the Agent, as assignee of Lessor) the Basic Rent for the Leased Properties subject to a Lease Supplement to which such Lessee is a party, in installments, payable in arrears on each Payment Date during the Lease Term, except that during the Construction Period for a Leased Property, no Basic Rent shall be payable by the related Lessee to the extent the Funded Amounts are increased with respect to such Leased Property under Section 2.3(c) of the Master Agreement.

         Section 3.2 Supplemental Rent. Each Lessee shall pay to the Agent, or to whomever shall be entitled thereto as expressly provided herein or in any other Operative Document, any

2

and all Supplemental Rent within five (5) Business Days of the date the same shall become due and payable and in the event of any failure on the part of such Lessee to pay any Supplemental Rent, the Agent (as assignee of Lessor) shall have all rights, powers and remedies provided for herein or by law or in equity or otherwise in the case of nonpayment of Basic Rent. All Supplemental Rent to be paid pursuant to this Section 3.2 shall be payable in the type of funds and in the manner set forth in Section 3.3.

         Section 3.3 Method of Payment. Basic Rent shall be paid to the Agent, and Supplemental Rent (including amounts due under Article XIV hereof) shall be paid to the Agent (or to such Person as may be entitled thereto) or, in each case, to such Person as the Agent (or such other Person) shall specify in writing to the related Lessee, and at such place as the Agent (or such other Person) shall specify in writing to the related Lessee, which specifications by the Agent shall be given by the Agent at least five (5) Business Days prior to the due date therefor. Each payment of Rent (including payments under Article XIV hereof) shall be made by the Lessees prior to 12:00 p.m. (noon) Atlanta, Georgia time at the place of payment in funds consisting of lawful currency of the United States of America which shall be immediately available on the scheduled date when such payment shall be due, unless such scheduled date shall not be a Business Day, in which case such payment shall be made on the next succeeding Business Day. The Agent agrees, at a Lessee’s request, to arrange for automated clearing house debits from such Lessee’s accounts for payments due hereunder.

         Section 3.4 Late Payment. If any Basic Rent shall not be paid on the date when due, the related Lessee shall pay to the Agent, as Supplemental Rent, interest (to the maximum extent permitted by law) on such overdue amount from and including the due date thereof to but excluding the Business Day of payment thereof at the Overdue Rate.

         Section 3.5 Net Lease; No Setoff, Etc. This Lease is a net lease and notwithstanding any other provision of this Lease, each Lessee shall pay all Basic Rent and Supplemental Rent, and all costs, charges, assessments and other expenses foreseen or unforeseen, for which such Lessee or any Indemnitee is or shall become liable by reason of such Lessee’s or such Indemnitee’s estate, right, title or interest in the Leased Properties, or that are connected with or arise out of the acquisition (except the initial costs of purchase by Lessor of its interest in any Leased Property, which costs, subject to the terms of the Master Agreement, shall be funded by the Funding Parties pursuant to the Master Agreement), construction (except Construction Costs, which costs, subject to the terms of the Master Agreement, shall be funded by the Funding Parties pursuant to the Master Agreement), installation, possession, use, occupancy, maintenance, ownership, leasing, repairs and rebuilding of, or addition to, the Leased Properties or any portion thereof, and any other amounts payable hereunder and under the other Operative Documents without counterclaim, setoff, deduction or defense and without abatement, suspension, deferment, diminution or reduction, and each Lessee’s obligation to pay all such amounts throughout the Lease Term, including the Construction Term, is absolute and

3

unconditional. The obligations and liabilities of each Lessee hereunder shall in no way be released, discharged or otherwise affected for any reason, including without limitation: (a) any defect in the condition, merchantability, design, quality or fitness for use of any Leased Property or any part thereof, or the failure of any Leased Property to comply with all Applicable Law, including any inability to occupy or use any Leased Property by reason of such non-compliance; (b) any damage to, removal, abandonment, salvage, loss, contamination of or Release from, scrapping or destruction of or any requisition or taking of any Leased Property or any part thereof; (c) any restriction, prevention or curtailment of or interference with any use of any Leased Property or any part thereof including eviction; (d) any defect in title to or rights to any Leased Property or any Lien on such title or rights or on any Leased Property; (e) any change, waiver, extension, indulgence or other action or omission or breach in respect of any obligation or liability of or by Lessor, the Agent or any Lender; (f) any bankruptcy, insolvency, reorganization, composition, adjustment, dissolution, liquidation or other like proceedings relating to any Lessee, Lessor, any Lender, the Agent or any other Person, or any action taken with respect to this Lease by any trustee or receiver of any Lessee, Lessor, any Lender, the Agent, any Ground Lessor or any other Person, or by any court, in any such proceeding; (g) any claim that any Lessee has or might have against any Person, including without limitation, Lessor, any vendor, manufacturer, contractor of or for any Leased Property or any part thereof, the Agent, any Ground Lessor, any Governmental Authority, or any Lender; (h) any failure on the part of Lessor to perform or comply with any of the terms of this Lease, any other Operative Document or of any other agreement; (i) any invalidity or unenforceability or illegality or disaffirmance of this Lease against or by any Lessee or any provision hereof or any of the other Operative Documents or any provision of any thereof whether or not related to the Transaction; (j) the impossibility or illegality of performance by any Lessee, Lessor or both; (k) any action by any court, administrative agency or other Governmental Authority; (l) any restriction, prevention or curtailment of or interference with the Construction or any use of any Leased Property or any part thereof; or (m) any other occurrence whatsoever, whether similar or dissimilar to the foregoing, whether or not any Lessee shall have notice or knowledge of any of the foregoing. Except as specifically set forth in Article XIV or X of this Lease, this Lease shall be noncancellable by each Lessee in any circumstance whatsoever and each Lessee, to the extent permitted by Applicable Law, waives all rights now or hereafter conferred by statute or otherwise to quit, terminate or surrender this Lease, or to any diminution, abatement or reduction of Rent payable by such Lessee hereunder. Each payment of Rent made by a Lessee hereunder shall be final and such Lessee shall not seek or have any right to recover all or any part of such payment from Lessor, the Agent, any Lender or any party to any agreements related thereto for any reason whatsoever. Each Lessee assumes the sole responsibility for the condition, use, operation, maintenance, and management of the Leased Properties leased by it and Lessor shall have no responsibility in respect thereof and shall have no liability for damage to the property of either any Lessee or any subtenant of any Lessee on any account or for any reason whatsoever, other than solely by reason of Lessor’s or its agent’s (other than a Lessee or the Construction Agent) or employee’s willful misconduct or gross negligence.

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         Section 3.6 Certain Taxes. Without limiting the generality of Section 3.5, each Lessee agrees to pay when due all real estate taxes, personal property taxes, gross sales taxes, including any sales or lease tax imposed upon the rental payments hereunder or under a sublease, occupational license taxes, water charges, sewer charges, assessments of any nature and all other governmental impositions and charges of every kind and nature whatsoever (the “tax(es)”), when the same shall be due and payable without penalty or interest; provided, however, that this Section shall not apply to any of the taxes covered by the exclusion described in Section 7.4(b) of the Master Agreement. It is the intention of the parties hereto that, insofar as the same may lawfully be done, Lessor shall be, except as specifically provided for herein, free from all expenses in any way related to the Leased Properties and the use and occupancy thereof. Any tax relating to a fiscal period of any taxing authority falling partially within and partially outside the Lease Term, shall be apportioned and adjusted between Lessor and the related Lessee. Each Lessee covenants to furnish Lessor and the Agent, upon the Agent’s written request, within forty-five (45) days after the last date when any tax must be paid by such Lessee as provided in this Section 3.6, official receipts, to the extent available, of the appropriate taxing, authority or other proof satisfactory to Lessor, evidencing the payment thereof.

         So long as no Event of Default has occurred and is continuing, the related Lessee may defer payment of a tax so long as the validity or the amount thereof is contested by such Lessee with diligence and in good faith; provided, however, that such Lessee shall pay the tax in sufficient time to prevent delivery of a tax deed. Such contest shall be at the related Lessee’s sole cost and expense. Each Lessee covenants to indemnify and save harmless Lessor, which indemnification shall survive the termination of this Lease, the Agent and each Lender from any actual and reasonable costs or expenses incurred by Lessor, the Agent or any Lender as a result of such contest; provided that neither the Agent nor any Lender shall be entitled to claim any indemnity against any Lessee pursuant to this sentence with respect to any Construction Land Interest during the Construction Term therefor.

         Section 3.7 Utility Charges. Each Lessee agrees to pay or cause to be paid as and when the same are due and payable all charges for gas, water, sewer, electricity, lights, heat, power, telephone or other communication service and all other utility services used, rendered or supplied to, upon or in connection with the Leased Properties leased by it.

ARTICLE IV.
WAIVERS

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         During the Lease Term, Lessor’s interest in the Leased Properties, including the Funded Equipment, the Building(s) (whether or not completed) and the Land, is demised and let by Lessor “AS IS” subject to (a) the rights of any parties in possession thereof, (b) the state of the title thereto existing at the time Lessor acquired its interest in the Leased Properties, (c) any state of facts which an accurate survey or physical inspection might show (including the survey delivered on the related Closing Date), (d) all Applicable Law, and (e) any violations of Applicable Law which may exist upon or subsequent to the commencement of the Lease Term. EACH LESSEE ACKNOWLEDGES THAT, ALTHOUGH LESSOR WILL OWN AND HOLD TITLE TO THE LEASED PROPERTIES, LESSOR IS NOT A MANUFACTURER OF, OR DEALER IN ANY LEASED PROPERTY, AND IS NOT RESPONSIBLE FOR THE DESIGN, DEVELOPMENT, BUDGETING AND CONSTRUCTION OF THE BUILDING(S) OR ANY ALTERATIONS. NEITHER LESSOR, THE AGENT NOR ANY LENDER HAS MADE OR SHALL BE DEEMED TO HAVE MADE ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, OR SHALL BE DEEMED TO HAVE ANY LIABILITY WHATSOEVER AS TO THE VALUE, MERCHANTABILITY, TITLE, HABITABILITY, CONDITION, DESIGN, OPERATION, OR FITNESS FOR USE OF THE LEASED PROPERTIES (OR ANY PART THEREOF), OR ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO THE LEASED PROPERTIES (OR ANY PART THEREOF), ALL SUCH WARRANTIES BEING HEREBY DISCLAIMED, AND NEITHER LESSOR, THE AGENT NOR ANY LENDER SHALL BE LIABLE FOR ANY LATENT, HIDDEN, OR PATENT DEFECT THEREIN OR THE FAILURE OF ANY LEASED PROPERTY, OR ANY PART THEREOF, TO COMPLY WITH ANY APPLICABLE LAW, except that Lessor hereby represents and warrants that each Leased Property is and shall be free of Lessor Liens. As between Lessor and the Lessees, each related Lessee has been afforded full opportunity to inspect each Leased Property, is satisfied with the results of its inspections of such Leased Property and is entering into this Lease solely on the basis of the results of its own inspections and all risks incident to the matters discussed in the two preceding sentences, as between Lessor, the Agent or the Lenders on the one hand, and the Lessees, on the other, are to be borne by the Lessees. The provisions of this Article IV have been negotiated, and, except to the extent otherwise expressly stated, the foregoing provisions are intended to be a complete exclusion and negation of any representations or warranties by Lessor, the Agent or the Lenders, express or implied, with respect to the Leased Properties, that may arise pursuant to any law now or hereafter in effect, or otherwise.

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ARTICLE V.
LIENS; EASEMENTS; PARTIAL CONVEYANCES

         No Lessee shall directly or indirectly create, incur, suffer to exist or assume, and shall promptly discharge, any Lien on or with respect to any Leased Property, the title thereto, or any interest therein, including any Liens which arise out of the possession, use, occupancy, construction, repair or rebuilding of any Leased Property or by reason of labor or materials furnished or claimed to have been furnished to a Lessee, or any of its contractors or agents or Alterations constructed by a Lessee, except, in all cases, Permitted Liens.

         Notwithstanding the foregoing paragraph, at the request of a Lessee, Lessor shall, from time to time during the Lease Term and upon reasonable advance written notice from such Lessee, and receipt of the materials specified in the next succeeding sentence, consent to and join in any (i) grant of easements, licenses, rights of way and other rights in the nature of easements, including, without limitation, utility easements to facilitate Lessees’ use, development and construction of the Leased Properties, (ii) release or termination of easements, licenses, rights of way or other rights in the nature of easements which are for the benefit of the Land or the Building(s) or any portion thereof, (iii) dedication or transfer of portions of the Land, not improved with a Building, for road, highway or other public purposes, (iv) execution of agreements for ingress and egress and amendments to any covenants and restrictions affecting the Land or the Building(s) or any portion thereof and (v) request to any Governmental Authority for platting or subdivision or replatting or resubdivision approval with respect to the Land or any portion thereof or any parcel of land of which the Land or any portion thereof forms a part or a request for rezoning or any variance from zoning or other governmental requirements. Lessor’s obligations pursuant to the preceding sentence shall be subject to the requirements that:

                  (a) any such action shall be at the sole cost and expense of the requesting Lessee and such Lessee shall pay all actual and reasonable out-of-pocket costs of Lessor, the Agent and any Lender in connection therewith (including, without limitation, the reasonable fees of attorneys, architects, engineers, planners, appraisers and other professionals reasonably retained by Lessor, the Agent or any Lender in connection with any such action),

                  (b) the requesting Lessee shall have delivered to Lessor and Agent a certificate of an Executive Officer of such Lessee stating that

         (i) such action will not cause any Leased Property, the Land or any Building or any portion thereof to fail to comply in any material respect with the provisions of this Lease or any other Operative Documents, or in any material respect with Applicable Law; and

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         (ii) such action will not materially reduce the Fair Market Sales Value, utility or useful life of any Leased Property, the Land or any Building nor Lessor’s interest therein; and

                  (c) in the case of any release or conveyance, if Lessor, the Agent or any Lender so reasonably requests, the requesting Lessee will cause to be issued and delivered to Lessor and the Agent by the Title Insurance Company an endorsement to the Title Policy pursuant to which the Title Insurance Company agrees that its liability for the payment of any loss or damage under the terms and provisions of the Title Policy will not be affected by reason of the fact that a portion of the real property referred to in Schedule A of the Title Policy has been released or conveyed by Lessor. Lessor shall provide written acknowledgments or lien subordination and waiver agreements from time to time, at a Lessee’s reasonable request and expense, to other financiers of such Lessee with respect to Lessee Equipment, confirming that this Lease does not cover such Lessee Equipment.

ARTICLE VI.
MAINTENANCE AND REPAIR;
ALTERATIONS, MODIFICATIONS AND ADDITIONS

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         Section 6.1 Maintenance and Repair; Compliance With Law. Each Lessee, at its own expense, shall at all times (a) maintain each Leased Property leased by it in good repair and condition (subject to ordinary wear and tear), in accordance with prudent industry standards for similar types of property located in the geographical area where such Leased Property is located and, in any event, in no less a manner as other similar property owned or leased by such Lessee or its Affiliates, (b) make all Alterations in accordance with, and maintain (whether or not such maintenance requires structural modifications or Alterations) and operate and otherwise keep each Leased Property in compliance in all material respects with, all Applicable Laws and insurance requirements, and (c) make all material repairs, replacements and renewals of each Leased Property or any part thereof which may be required to keep such Leased Property in the condition required by the preceding clauses (a) and (b). Each Lessee shall perform the foregoing maintenance obligations regardless of whether any Leased Property is occupied or unoccupied. Each Lessee waives any right that it may now have or hereafter acquire to (i) require Lessor, the Agent or any Lender to maintain, repair, replace, alter, remove or rebuild all or any part of any Leased Property or (ii) make repairs at the expense of Lessor, the Agent or any Lender pursuant to any Applicable Law or other agreements or otherwise. NEITHER LESSOR, THE AGENT NOR ANY LENDER SHALL BE PERSONALLY LIABLE TO ANY LESSEE OR TO ANY CONTRACTORS, SUBCONTRACTORS, LABORERS, MATERIALMEN, SUPPLIERS OR VENDORS FOR SERVICES PERFORMED OR MATERIAL PROVIDED ON OR IN CONNECTION WITH ANY LEASED PROPERTY OR ANY PART THEREOF. Neither Lessor, the Agent nor any Lender shall be required to maintain, alter, repair, rebuild or replace any Leased Property in any way.

         Section 6.2 Alterations. Each Lessee may, at such Lessee’s own cost and expense, make Alterations which do not materially diminish the Fair Market Value of any Leased Property, provided that, if the Alterations are reasonably expected to cost in excess of $2,000,000, the Lessor shall have consented to such Alterations, which consent shall not be unreasonably withheld, conditioned or delayed.

         Section 6.3 Title to Alterations. Title to all non-severable Alterations shall without further act vest in Lessor (subject to each Lessee’s right to remove severable trade fixtures and Lessee Equipment) and shall be deemed to constitute a part of the Leased Properties and be subject to this Lease.

ARTICLE VII.
USE

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         Each Lessee may use each Leased Property leased by it or any part thereof for any lawful purpose, provided that such use does not materially adversely affect the Fair Market Sales Value, utility, remaining useful life or residual value of such Leased Property, and does not materially violate or conflict with, or constitute or result in a material default under, any Applicable Law or any insurance policy required hereunder. In the event that any use of any of the Leased Property substantially changes the character or original intended use of such Leased Property and the Lessees do not purchase the Leased Properties at the end of the Lease Term, the related Lessee, upon request of Lessor, shall restore such Leased Property to its general character and intended use on the Closing Date or Completion Date therefor, ordinary wear and tear excepted. No Lessee shall commit or permit any waste of any Leased Property or any material part thereof.

ARTICLE VIII.
INSURANCE

         The provisions of this Article VIII shall apply to Leased Properties that are not then subject to the Construction Agency Agreement. For any Leased Property subject to the Construction Agency Agreement, the related Lessee shall maintain insurance in accordance with Section 2.9 of the Construction Agency Agreement.

                  (a) At any time during which any part of any Building or any Alteration is under construction and as to any part of any Building or any Alteration under construction, the related Lessee shall maintain, or cause to be maintained, at its sole cost and expense, as a part of its blanket policies or otherwise, “all risks” non-reporting completed value form of builder’s risk insurance.

                  (b) During the Lease Term, each Lessee shall maintain, at its sole cost and expense, as a part of its blanket policies or otherwise, insurance against loss or damage to any Building or any item of Equipment by fire and other risks, including comprehensive boiler and machinery coverage, on terms and in amounts no less favorable than insurance covering other similar properties or equipment owned or leased by a Lessee, but in no event less than the replacement cost of such Building or item of Equipment, as the case may be, from time to time, with commercially reasonable deductibles (but in no event with greater deductibles than any Lessee has with respect to similar property or equipment that it owns or leases).

                  (c) During the Lease Term, each Lessee shall maintain, at its sole cost and expense, commercial general liability insurance with respect to such Lessee’s use, operation and occupancy of the Leased Properties. Such insurance shall be on terms and in amounts that are no less favorable than insurance maintained by a Lessee or its Affiliates with respect to similar properties or equipment that it owns or leases, but in no event less than $2,000,000 general liability coverage, per occurrence. Such insurance policies shall also provide that each Lessee’s

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insurance shall be considered primary insurance. Nothing in this Article VIII shall prohibit Lessor, the Agent or any Lender from carrying at its own expense other insurance on or with respect to the Leased Properties, provided that any insurance carried by Lessor, the Agent or any Lender shall not prevent any Lessee from carrying the insurance required hereby.

                  (d) Each policy of insurance maintained by a Lessee pursuant to clauses (a) and (b) of this Article VIII shall provide that all insurance proceeds in respect of any loss or occurrence shall be adjusted by such Lessee, except (a) that with respect to any loss, the estimated cost of restoration of which is in excess of $10,000,000, the adjustment thereof shall be subject to the prior written approval of the Agent (which shall not be unreasonably withheld, conditioned or delayed) and the insurance proceeds therefor shall be paid to the Agent for application in accordance with this Lease, and (b) if, and for so long as an Event of Default exists, all losses shall be adjusted solely by, and all insurance proceeds shall be paid solely to, the Agent for application pursuant to this Lease.

                  (e) On the Closing Date for each parcel of Land and on, or within thirty (30) days prior to, each anniversary of the Initial Closing Date, each Lessee shall furnish Lessor with certificates showing the insurance required under this Article VIII to be in effect and, in the case of the liability policies, naming Lessor, the Agent and the Lenders as additional insureds and, in the case of property insurance, naming the Agent as loss payee to the extent required under this Lease. Such certificates shall include a provision for thirty (30) days’ advance written notice by the insurer to Lessor and the Agent in the event of cancellation or expiration or nonpayment of premium with respect to such insurance, and shall include a customary breach of warranty clause. Each Lessee shall provide evidence to Lessor and the Agent that each insurance policy required by this Article VIII has been renewed or replaced prior to the scheduled expiration date therefor.

                  (f) Each policy of insurance maintained by a Lessee pursuant to this Article VIII shall provide that in respect of the interests of Lessor, the Agent and the Lenders, such policies shall not be invalidated by any fraud, action, inaction or misrepresentation of any Lessee or any other Person acting on behalf of any Lessee. Each of each Lessee, Lessor, the Agent and the Lenders agree to waive their rights of subrogation against the others to the extent permitted by Applicable Law and to the extent of the losses paid under insurance policies.

                  (g) All insurance policies carried in accordance with this Article VIII shall be maintained with insurers rated at least A by A.M. Best & Company, and in all cases the insurer shall be qualified to insure risks in the State where each Leased Property is located.

ARTICLE IX.
ASSIGNMENT AND SUBLEASING

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         Except as set forth in the next two sentences, no Lessee may assign its rights and obligations under this Lease or sublease any Leased Property to any Person, without the consent of the Funding Parties. Concord may assign its rights and obligations under this Lease to a Significant Subsidiary, provided that Concord reaffirms its obligations under the Guaranty Agreement (in which case Concord shall be released from liability as a Lessee (but not as an Obligor) under this Lease and the other Operative Documents). Each Lessee may sublease all or any portion of any Leased Property to any Subsidiary of Concord and may sublease up to 50% of the floor space of any Leased Property to any Person without the consent of the Funding Parties, provided that (a) all obligations of such Lessee shall continue in full force and effect as obligations of a principal and not of a guarantor or surety, as though no sublease had been made, and all obligations of Guarantor and the Subsidiary Guarantors under the Guaranty Agreement and the Subsidiary Guaranty, respectively, shall continue in full force and effect; (b) such sublease shall be expressly subject and subordinate to this Lease, the Loan Agreement and the other Operative Documents; and (c) each such sublease shall terminate at least one day before the Lease Termination Date. Each Lessee shall give the Agent and Lessor prompt written notice of any such sublease.

         Except pursuant to an Operative Document or the IDB Documentation, this Lease shall not be mortgaged or pledged by any Lessee, nor shall any Lessee mortgage or pledge any interest in any Leased Property or any portion thereof. Any such mortgage or pledge shall be void.

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ARTICLE X.
LOSS, DESTRUCTION, CONDEMNATION OR DAMAGE

         Section 10.1 Event of Loss. Any event (i) which would otherwise constitute a Casualty during the Base Term, and (ii) which, in the good-faith judgment of the related Lessee, renders repair and restoration of a Leased Property impossible or impractical, or requires repairs to a Leased Property that would cost in excess of 50% of the original cost of such Leased Property or that cannot be completed by the Lease Termination Date, and (iii) as to which such Lessee, within sixty (60) days after the occurrence of such event, delivers to Lessor an Officer’s Certificate notifying Lessor of such event and of such judgment, shall constitute an “Event of Loss”. In the case of any other event which constitutes a Casualty, the related Lessee shall restore such Leased Property pursuant to Section 10.3. If an Event of Loss shall occur, the related Lessee shall pay to Lessor on the later of (i) the 90th day and (ii) the next Payment Date, in either case following delivery of the Officer’s Certificate pursuant to clause (iii) above an amount equal to the related Leased Property Balance. Upon Lessor’s receipt of such Leased Property Balance on such date, Lessor shall cause Lessor’s interest in such Leased Property to be conveyed to the related Lessee in accordance with and subject to the provisions of Section 14.5 hereof; upon completion of such purchase, but not prior thereto, this Lease with respect to such Leased Property and all obligations hereunder with respect to such Leased Property shall terminate, except with respect to obligations and liabilities hereunder, actual or contingent, that have arisen or relate to events occurring on or prior to such date of purchase, or which are expressly stated herein to survive termination of this Lease.

         Upon the consummation of the purchase of any Leased Property pursuant to this Section 10.1, any proceeds derived from insurance required to be maintained by the related Lessee pursuant to this Lease for any Leased Property remaining after payment of such purchase price shall be paid over to, or retained by, such Lessee or as it may direct, and Lessor shall assign to such Lessee, without warranty (other than as to the absence of Lessor Liens), all of Lessor’s rights to and interest in such insurance required to be maintained by such Lessee pursuant to this Lease.

         Section 10.2 Event of Taking. Any event (i) which constitutes a Condemnation of all of, or substantially all of, a Leased Property, or (ii) (A) which would otherwise constitute a Condemnation, (B) which, in the good-faith judgment of the related Lessee, renders restoration and rebuilding of a Leased Property impossible or impractical, or requires repairs to a Leased Property that would cost in excess of 50% of the original cost of such Leased Property, or that cannot be restored by the Lease Termination Date, and (C) as to which such Lessee, within sixty (60) days after the occurrence of such event, delivers to Lessor an Officer’s Certificate notifying Lessor of such event and of such judgment, shall constitute an “Event of Taking”. In the case of any other event which constitutes a Condemnation, the related Lessee shall restore and rebuild such Leased Property pursuant to Section 10.4. If an Event of Taking shall occur, the related

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Lessee shall pay to Lessor (1) on the later of (A) the thirtieth day and (B) the next Payment Date following the occurrence of such Event of Taking, in the case of an Event of Taking described in clause (i) above, or (2) on the later of (A) the 90th day and (B) the next Payment Date, in either case following delivery of the Officer’s Certificate pursuant to clause (ii) above, in the case of an Event of Taking described in clause (ii) above, an amount equal to the related Leased Property Balance. Upon Lessor’s receipt of such Leased Property Balance on such date, Lessor shall cause Lessor’s interest in such Leased Property to be conveyed to the related Lessee in accordance with and subject to the provisions of Section 14.5 hereof (provided that such conveyance shall be subject to all rights of the condemning authority); upon completion of such purchase, but not prior thereto, this Lease with respect to such Leased Property and all obligations hereunder with respect to such Leased Property shall terminate, except with respect to obligations and liabilities hereunder, actual or contingent, that have arisen or relate to events occurring on or prior to such date of purchase, or which are expressly stated herein to survive termination of this Lease.

         Upon the consummation of the purchase of such Leased Property pursuant to this Section 10.2, all Awards received by Lessor, after deducting any reasonable out-of-pocket costs incurred by Lessor in collecting such Awards, received or payable on account of an Event of Taking with respect to such Leased Property during the related Lease Term shall be promptly paid to the related Lessee, and all rights of Lessor in Awards not then received shall be assigned to Lessee by Lessor.

         Section 10.3 Casualty. If a Casualty shall occur which is not an Event of Loss, the related Lessee shall rebuild and restore the affected Leased Property, will complete the same prior to the Lease Termination Date, and will cause the condition set forth in Section 3.5 (c) of the Master Agreement to be fulfilled with respect to such restoration and rebuilding prior to the Lease Termination Date, regardless of whether insurance proceeds received as a result of such Casualty are sufficient for such purpose.

         Section 10.4 Condemnation. If a Condemnation shall occur which is not an Event of Taking, the related Lessee shall rebuild and restore the affected Leased Property, will complete the same prior to the Lease Termination Date, and will cause the condition set forth in Section 3.5 (c) of the Master Agreement to be fulfilled with respect to such restoration and rebuilding prior to the Lease Termination Date, regardless of whether the Awards received as a result of such Condemnation are sufficient for such purpose.

         Section 10.5 Verification of Restoration and Rebuilding. In the event of Casualty or Condemnation that involves, or is reasonably expected to involve, repair or rebuilding costs in excess of $10,000,000, to verify the related Lessee’s compliance with the foregoing Section 10.3 or 10.4, as appropriate, Lessor, the Agent, the Lenders and their respective authorized representatives may, upon five (5) Business Days’ notice to such Lessee, make a reasonable

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number of inspections of the affected Leased Property with respect to (i) the extent of the Casualty or Condemnation and (ii) the restoration and rebuilding of the related Building and the Land. All actual and reasonable out-of-pocket costs of such inspections incurred by Lessor, the Agent or any Lender will be paid by the related Lessee promptly after written request. No such inspection shall unreasonably interfere with the related Lessee’s operations or the operations of any other occupant of such Leased Property. None of the inspecting parties shall have any duty to make any such inspection or inquiry and none of the inspecting parties shall incur any liability or obligation by reason of making or not making any such inspection or inquiry, other than for such inspecting party’s gross negligence or willful misconduct.

         Section 10.6 Application of Payments. All proceeds (except for payments under insurance policies maintained other than pursuant to Article VIII of this Lease) received at any time by Lessor, any Lessee or the Agent from any Governmental Authority or other Person with respect to any Condemnation or Casualty to any Leased Property or any part thereof or with respect to an Event of Loss or an Event of Taking, plus the amount of any payment that would have been due from an insurer but for a Lessee’s self-insurance or deductibles (“Loss Proceeds”), shall (except to the extent Section 10.9 applies) be applied as follows:

         (a) In the event the related Lessee purchases such Leased Property pursuant to Section 10.1 or Section 10.2, such Loss Proceeds shall be applied as set forth in Section 10.1 or Section 10.2, as the case may be;

         (b) In the event of a Casualty at such time when no Event of Default has occurred and is continuing and the related Lessee is obligated to repair and rebuild such Leased Property pursuant to Section 10.3, such Lessee may, in good faith and subsequent to the date of such Casualty, certify to Lessor and to the applicable insurer that no Event of Default has occurred and is continuing, in which event the applicable insurer shall pay the Loss Proceeds to such Lessee;

         (c) In the event of a Condemnation at such time when no Event of Default has occurred and is continuing and the related Lessee is obligated to repair and rebuild such Leased Property pursuant to Section 10.4, such Lessee may, in good faith and subsequent to the date of such Condemnation, certify to Lessor and the Agent that no Event of Default has occurred and is continuing, in which event the applicable Award shall be paid over to such Lessee;

         (d) As provided in Section 10.8, if such section is applicable; and

         (e) In the event of a Casualty or Condemnation at a time when an Event of Default has occurred and is continuing, the Loss Proceeds or Award shall be paid to the Agent and shall be (A) applied to the Lease Balance if the Agent is exercising remedies pursuant to Section 13.1 or (B) released to the related Lessee upon certification by such

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Lessee to Lessor and the Agent that such Lessee has incurred costs in the amount requested to be released for the repair or rebuilding of the related Leased Property.

         During any period of repair or rebuilding pursuant to this Article X, this Lease will remain in full force and effect and Basic Rent shall continue to accrue and be payable without abatement or reduction. Each Lessee shall maintain records setting forth information relating to the receipt and application of payments in accordance with this Section 10.6. Such records shall be kept on file by each Lessee at its offices and shall be made available to Lessor, the Lenders and the Agent upon request.

         Section 10.7 Prosecution of Awards. (a) If any Condemnation shall occur, the party receiving the notice of such Condemnation shall give to the other party and the Agent promptly, but in any event within thirty (30) days after the occurrence thereof, written notice of such occurrence and the date thereof, generally describing the nature and extent of such Condemnation. With respect to any Event of Taking or any Condemnation, the related Lessee shall control the negotiations with the relevant Governmental Authority as to any proceeding in respect of which Awards are required, under Section 10.6, to be assigned or released to such Lessee, unless an Event of Default shall have occurred and be continuing, in which case (i) the Agent (or Lessor if the Loans have been fully paid) shall control such negotiations; and (ii) such Lessee hereby irrevocably assigns, transfers and sets over to Lessor all rights of such Lessee to any Award on account of any Event of Taking or any Condemnation and, if there will not be separate Awards to Lessor and such Lessee on account of such Event of Taking or Condemnation, irrevocably authorizes and empowers the Agent (or Lessor if the Loans have been fully paid) during the continuance of an Event of Default, with full power of substitution, in the name of such Lessee or otherwise (but without limiting the obligations of such Lessee under this Article X), to file and prosecute what would otherwise be such Lessee’s claim for any such Award and to collect, receipt for and retain the same. The agency and power of the Agent (or of the Lessor if the Loans have been fully paid) as attorney-in-fact hereunder are coupled with an interest, and cannot be revoked by bankruptcy, insolvency, incompetency, death, dissolution or otherwise. In any event Lessor and the Agent may participate in such negotiations, and no settlement will be made without the prior consent of the Agent (or Lessor if the Loans have been fully paid), not to be unreasonably withheld.

         (b)  Notwithstanding the foregoing, each Lessee may prosecute, and Lessor shall have no interest in, any claim with respect to such Lessee’s personal property and Lessee Equipment , business interruption or similar award and such Lessee’s relocation expenses.

         Section 10.8 Application of Certain Payments Not Relating to an Event of Taking. In case of a requisition for temporary use of all or a portion of any Leased Property which is not an Event of Taking, this Lease shall remain in full force and effect with respect to such Leased Property, without any abatement or reduction of Basic Rent, and the Awards for such Leased

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Property shall, unless an Event of Default has occurred and is continuing, be paid to the related Lessee.

         Section 10.9 Other Dispositions. Notwithstanding the foregoing provisions of this Article X, so long as an Event of Default shall have occurred and be continuing, any amount that would otherwise be payable to or for the account of, or that would otherwise be retained by, Lessee pursuant to this Article X shall be paid to the Agent (or Lessor if the Loans have been fully paid) as security for the obligations of the Lessees under this Lease and, at such time thereafter as no Event of Default shall be continuing, such amount shall be paid promptly to the related Lessee to the extent not previously applied by Lessor or the Agent in accordance with the terms of this Lease or the other Operative Documents.

         Section 10.10 No Rent Abatement. Rent shall not abate hereunder by reason of any Casualty, any Event of Loss, any Event of Taking or any Condemnation of any Leased Property, and each Lessee shall continue to perform and fulfill all of such Lessee’s obligations, covenants and agreements hereunder notwithstanding such Casualty, Event of Loss, Event of Taking or Condemnation until the Lease Termination Date, except to the extent that the affected Leased Property is purchased by the related Lessee.

         Section 10.11 Event During Construction Period. Notwithstanding anything to the contrary set forth herein, if a Casualty, Condemnation, Event of Loss or Event of Taking occurs during the Construction Term with respect to a Leased Property, the Construction Agency Agreement shall govern the related Lessee’s obligations with respect thereto.

ARTICLE XI.
INTEREST CONVEYED TO LESSEES

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         Each Lessee and Lessor intend that this Lease be treated, for accounting purposes, as an operating lease. For purposes of federal and state taxes, and bankruptcy law, each Lessee and Lessor intend that the transaction represented by this Lease be treated as a financing transaction; for such purposes, it is the intention of the parties hereto (i) that this Lease be treated as a mortgage, deed of trust or deed to secure debt (whichever is applicable in the jurisdictions in which the Leased Properties are located) and security agreement, encumbering the Leased Properties, and that each Lessee, as grantor, hereby grants to Lessor, as mortgagee or beneficiary and secured party, or any successor thereto, a first and paramount Lien on each Leased Property in which such Lessee has an interest, (ii) that Lessor shall have, as a result of such determination, all of the rights, powers and remedies of a mortgagee, deed of trust beneficiary, grantee under a deed to secure debt or secured party available under Applicable Law to take possession of and sell (whether by foreclosure or otherwise) any Leased Property after the occurrence of an Event of Default, (iii) that the effective date of such mortgage, security deed or deed of trust shall be the effective date of this Lease, or the related Lease Supplement, if later, (iv) that the recording of this Lease or a Lease Supplement shall be deemed to be the recording of such mortgage, security deed or deed of trust, (v) that the obligations secured by such mortgage, security deed or deed of trust shall include the Funded Amounts and all Basic Rent and Supplemental Rent hereunder and all other obligations of and amounts due from each Lessee hereunder and under the Operative Documents and (vi) that the related Lessee will be treated as the owner of the Leased Properties leased by such Lessee for tax purposes.

ARTICLE XII.
EVENTS OF DEFAULT

         The following events shall constitute Events of Default (whether any such event shall be voluntary or involuntary or come about or be effected by operation of law or pursuant to or in compliance with any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):

         (a)  any Lessee shall fail to make any payment of Basic Rent and such failure shall continue for five (5) or more Business Days;

         (b)  any Lessee shall fail to make any payment of Rent (other than Basic Rent and other than as set forth in clause (c)) or any other amount payable hereunder or under any of the other Operative Documents (other than Basic Rent and other than as set forth in clause (c)), and such failure shall continue for a period of ten (10) days;

         (c)  any Lessee shall fail to pay the Funded Amount or Lease Balance when due pursuant to Section 10.1, 10.2, 14.1 or 14.2, or any Lessee shall fail to pay the Recourse Deficiency Amount when required pursuant to Article XIV or a Construction Agency Event of

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Default has occurred and is continuing, or Concord fails to deposit cash collateral as and when required pursuant to Section 2.6 of the Master Agreement;

         (d)  any Lessee shall fail to maintain insurance as required by Article VIII hereof, and such failure shall continue until the earlier of (i) thirty (30) days after written notice thereof from Lessor and (ii) the day immediately preceding the date on which any applicable insurance coverage would otherwise lapse or terminate;

         (e)  any Obligor shall fail to pay at maturity, or within any applicable period of grace, any Indebtedness in excess of $25,000,000 in the aggregate, in the case of Concord, or $10,000,000 in the aggregate, in the case of any other Obligor, or fail to observe or perform any term, covenant or agreement contained in any agreement by which it is bound, evidencing or securing Indebtedness in excess of $25,000,000 in the aggregate, in the case of Concord, or $10,000,000 in the aggregate, in the case of any other Obligor for such period of time as would permit (assuming the giving of appropriate notice if required) the holder or holders thereof or of any obligations issued thereunder to accelerate the maturity thereof;

         (f)  any Obligor shall cease to be Solvent, or shall make an assignment for the benefit of creditors, or admit in writing its inability to pay or generally fail to pay its debts as they mature or become due, or shall petition or apply for the appointment of a trustee or other custodian, liquidator or receiver of any Obligor or of any substantial part of the assets of any Obligor or shall commence any case or other proceeding relating to any Obligor under any bankruptcy, reorganization, arrangement, insolvency, readjustment of debt, dissolution or liquidation or similar law of any jurisdiction, now or hereafter in effect, or shall take any action to authorize or in furtherance of any of the fore going, or if any such petition or application shall be filed or any such case or other proceeding shall be commenced against any Obligor and such Obligor shall indicate its approval thereof, consent thereto or acquiescence therein; or the filing of any case or other proceeding against any obligor under any bankruptcy, reorganization, arrangement, insolvency, readjustment of debt, dissolution or liquidation or similar law of any jurisdiction, now or hereafter in effect and such case or proceeding is not discharged or dismissed within sixty (60) days of its commencement; a decree or order is entered appointing any such trustee, custodian, liquidator or receiver or adjudicating any Obligor bankrupt or insolvent, or approving a petition in any such case or other proceeding, or a decree or order for relief is entered in respect of any Obligor, in an involuntary case under federal bankruptcy laws as now or hereafter constituted;

         (g)  there shall remain in force, undischarged, unsatisfied and unstayed, for more than thirty (30) days, whether or not consecutive, any uninsured final unappealable judgment against any Obligor that, with other outstanding uninsured final unappealable judgments, undischarged, against the Obligors exceeds $25,000,000 in the aggregate;

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         (h)  if any of the Operative Documents shall be cancelled, terminated, revoked or rescinded or any action at law, suit or in equity or other legal proceeding to cancel, revoke or rescind any of the Operative Documents shall be commenced by or on behalf of any Obligor, or any court or any other governmental or regulatory authority or agency of competent jurisdiction shall make a determination that, or issue a judgment, order, decree or ruling to the effect that, any one or more of the Operative Documents is illegal, invalid or unenforceable in accordance with the terms thereof;

         (i)  The occurrence of any of the following events: (i) any member of the ERISA Group fails to make full payment when due of all amounts which, under the provisions of any Plan or Section 412 of the Code, any member of the ERISA Group is required to pay as contributions thereto, except in cases in which a failure to make such payment is not reasonably likely to result, in any given instance or in the aggregate, in liability of any member of the ERISA Group in excess of $25,000,000, (ii) an accumulated funding deficiency in excess of $25,000,000 occurs or exists, whether or not waived, with respect to any Plan, (iii) a Termination Event or (iv) any member of the ERISA Group as employers under one or more Multiemployer Plan makes a complete or partial withdrawal from any such Multiemployer Plan and the plan sponsor of such Multiemployer Plans notifies such withdrawing employer that such employer has incurred a withdrawal liability requiring payments in an amount exceeding $25,000,000;

         (j)  any representation or warranty by Concord or any other Obligor in any Operative Document or in any certificate or document delivered to Lessor, the Agent or any Lender pursuant to any Operative Document shall have been incorrect in any material respect when made;

         (k)  any Obligor shall fail in any material respect to timely perform or observe any covenant or material agreement (not included in clause (a) through (j) of this Article XII) to be performed or observed by it hereunder or under any other Operative Document and such failure shall continue for a period of thirty (30) days (or 10 Business Days in the case of financial covenants) after such Obligor’s or Concord’s receipt of written notice thereof from Lessor, the Agent or any Lender or such Obligor or Concord shall have knowledge of such failure;

         (l)  Any person or group of persons (within the meaning of Section 13(d) of the Securities Exchange Act of 1934, as amended) shall obtain ownership or control in one or more series of transactions of thirty percent (30%) or more of the common stock or thirty percent (30%) or more of the voting power of Concord entitled to vote in the election of members of the board of directors of Concord or there shall have occurred under any indenture or other instrument evidencing any Indebtedness in excess of $50,000,000 any “change in control” (as defined in such indenture or other evidence of Indebtedness) obligating Concord to repurchase, redeem or repay all or any part of the Indebtedness provided for therein (any such event, a

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“Change in Control”), or any Obligor (other than Concord) ceases for any reason to be a wholly-owned Subsidiary of Concord; or

         (m)  an “Event of Default” occurs under the 1998 Lease or the 2000 Lease.

ARTICLE XIII.
ENFORCEMENT

         Section 13.1 Remedies. Upon the occurrence and during the continuance of any Event of Default, Lessor may do one or more of the following as Lessor in its sole discretion shall determine, without limiting any other right or remedy Lessor may have on account of such Event of Default (including, without limitation, the obligation of the Lessees to purchase the Leased Properties as set forth in Section 14.3):

         (a)  Lessor may, by notice to Concord, rescind or terminate this Lease as of the date specified in such notice; however, (A) no reletting, reentry or taking of possession of any Leased Property by Lessor will be construed as an election on Lessor’s part to terminate this Lease unless a written notice of such intention is given to Concord, (B) notwithstanding any reletting, reentry or taking of possession, Lessor may at any time thereafter elect to terminate this Lease for a continuing Event of Default, and (C) no act or thing done by Lessor or any of its agents, representatives or employees and no agreement accepting a surrender of any Leased Property shall be valid unless the same be made in writing and executed by Lessor;

         (b)  Lessor may (i) demand that the Lessees, and the Lessees shall upon the written demand of Lessor, return the Leased Properties promptly to Lessor in the manner and condition required by, and otherwise in accordance with all of the provisions of, Articles VI and XIV hereof as if the Leased Properties were being returned at the end of the Lease Term, and Lessor shall not be liable for the reimbursement of any Lessee for any costs and expenses incurred by such Lessee in connection therewith and (ii) without prejudice to any other remedy which Lessor may have for possession of the Leased Properties, and to the extent and in the manner permitted by Applicable Law, enter upon any Leased Property and take immediate possession of (to the exclusion of the related Lessee) any Leased Property or any part thereof and expel or remove the related Lessee and any other person who may be occupying such Leased Property, by summary proceedings or otherwise, all without liability to any Lessee for or by reason of such entry or taking of possession, whether for the restoration of damage to property caused by such taking or otherwise and, in addition to Lessor’s other damages, the Lessees shall be responsible for the actual and reasonable costs and expenses of reletting, including brokers’ fees and the reasonable out-of-pocket costs of any alterations or repairs made by Lessor;

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         (c)  Lessor may (i) sell all or any part of any Leased Property at public or private sale, as Lessor may determine, free and clear of any rights of any Lessee and without any duty to account to any Lessee with respect to such action or inaction or any proceeds with respect thereto (except to the extent required by Applicable Law or clause (ii) below if Lessor shall elect to exercise its rights thereunder) in which event the related Lessee’s obligation to pay Basic Rent for such Leased Property hereunder for periods commencing after the date of such sale shall be terminated or proportionately reduced, as the case may be; and (ii) if Lessor shall so elect, demand that the related Lessee pay to Lessor, and the related Lessee shall pay to Lessor, on the date of such sale, as liquidated damages for loss of a bargain and not as a penalty (the parties agreeing that Lessor’s actual damages would be difficult to predict, but the aforementioned liquidated damages represent a reasonable approximation of such amount) (in lieu of Basic Rent due for periods commencing on or after the Payment Date coinciding with such date of sale (or, if the sale date is not a Payment Date, the Payment Date next preceding the date of such sale)), an amount equal to (a) the excess, if any, of (1) the sum of (A) all Rent due and unpaid to and including such Payment Date and (B) the Lease Balance, computed as of such date, over (2) the net proceeds of such sale (that is, after deducting all out-of-pocket costs and expenses incurred by Lessor, the Agent or any Lender incident to such conveyance (including, without limitation, all costs, expenses, fees, premiums and taxes described in Section 14.5(b)); plus (b) interest at the Overdue Rate on the foregoing amount from such Payment Date until the date of payment;

         (d)  Lessor may, at its option, not terminate this Lease, and continue to collect all Basic Rent, Supplemental Rent, and all other amounts (including, without limitation, the Funded Amount) due Lessor (together with all costs of collection) and enforce the Lessees’ obligations under this Lease as and when the same become due, or are to be performed, and at the option of Lessor, upon any abandonment of any Leased Property by Lessee or re-entry of same by Lessor, Lessor may, in its sole and absolute discretion, elect not to terminate this Lease with respect thereto and may make such reasonable alterations and necessary repairs in order to relet such Leased Property, and relet such Leased Property or any part thereof for such term or terms (which may be for a term extending beyond the term of this Lease) and at such rental or rentals and upon such other terms and conditions as Lessor in its reasonable discretion may deem advisable; and upon each such reletting all rentals actually received by Lessor from such reletting shall be applied to the Lessees’ obligations hereunder in such order, proportion and priority as Lessor may elect in Lessor’s sole and absolute discretion. If such rentals received from such reletting during any Rent Period are less than the Rent to be paid during that Rent Period by the Lessees hereunder, the Lessees shall pay any deficiency, as calculated by Lessor, to Lessor on the Payment Date for such Rent Period;

         (e)  Lessor may, whether or not Lessor shall have exercised or shall thereafter at any time exercise any of its rights under paragraph (b), (c) or (d) of this Article XIII, demand, by written notice to Concord specifying a date (the “Final Rent Payment Date”) not earlier than 30 days after the date of such notice, that Lessees purchase, on the Final Rent Payment Date, all of

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the remaining Leased Properties in accordance with the provisions of Sections 14.2, 14.4 and 14.5; provided, however, that (1) such purchase shall occur on the date set forth in such notice, notwithstanding the provision in Section 14.2 calling for such purchase to occur on the Lease Termination Date; and (2) Lessor’s obligations under Section 14.5(a) shall be limited to delivery of a special (or limited) warranty deed and quit claim bill of sale of such Leased Properties, without recourse or warranty, but free and clear of Lessor Liens;

         (f)  Lessor may exercise any other right or remedy that may be available to it under Applicable Law, or proceed by appropriate court action (legal or equitable) to enforce the terms hereof or to recover damages for the breach hereof. Separate suits may be brought to collect any such damages for any Rent Period(s), and such suits shall not in any manner prejudice Lessor’s right to collect any such damages for any subsequent Rent Period(s), or Lessor may defer any such suit until after the expiration of the Lease Term, in which event such suit shall be deemed not to have accrued until the expiration of the Lease Term; or

         (g)  Lessor may retain and apply against Lessor’s damages all sums which Lessor would, absent such Event of Default, be required to pay to, or turn over to, a Lessee pursuant to the terms of this Lease.

         Section 13.2 Remedies Cumulative; No Waiver; Consents. To the extent permitted by, and subject to the mandatory requirements of, Applicable Law, each and every right, power and remedy herein specifically given to Lessor or otherwise in this Lease shall be cumulative and shall be in addition to every other right, power and remedy herein specifically given or now or hereafter existing at law, in equity or by statute, and each and every right, power and remedy whether specifically herein given or otherwise existing may be exercised from time to time and as often and in such order as may be deemed expedient by Lessor, and the exercise or the beginning of the exercise of any power or remedy shall not be construed to be a waiver of the right to exercise at the same time or thereafter any right, power or remedy. No delay or omission by Lessor in the exercise of any right, power or remedy or in the pursuit of any remedy shall impair any such right, power or remedy or be construed to be a waiver of any default on the part of any Lessee or to be an acquiescence therein. Lessor’s consent to any request made by any Lessee shall not be deemed to constitute or preclude the necessity for obtaining Lessor’s consent, in the future, to all similar requests. No express or implied waiver by Lessor of any Event of Default shall in any way be, or be construed to be, a waiver of any future or subsequent Potential Event of Default or Event of Default. To the extent permitted by Applicable Law, each Lessee hereby waives any rights now or hereafter conferred by statute or otherwise that may require Lessor to sell, lease or otherwise use any Leased Property or part thereof in mitigation of Lessor’s damages upon the occurrence of an Event of Default or that may otherwise limit or modify any of Lessor’s rights or remedies under this Article XIII.

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         Section 13.3 Purchase Upon an Event of Default. Upon the occurrence of an event described in paragraph (d), (j) or (k) of Article XII that relates to only one or more Leased Properties, if the related Lessee purchases the affected Leased Property or Leased Properties in accordance with Section 14.5 within five (5) Business Days of Concord’s receipt of notice from the Agent requiring such purchase, such Event of Default shall be deemed to be cured. Upon the occurrence of an Event of Default, until such time as Lessor commences material preparations for the sale or re-lease of the Leased Properties, the Lessees may purchase all, but not less than all, of the Leased Properties for the Lease Balance, plus any amounts due pursuant to Section 7.5 of the Master Agreement. Such purchase shall be made in accordance with Section 14.5, upon not less than five (5) Business Days’ written notice (which shall be irrevocable) to Lessor, which notice shall set forth the date of purchase (which shall be a date no later than 30 Business Days from the date of such notice).

         Section 13.4 Limitation on Liability. Notwithstanding the provisions of Section 13.1, the Lessees’ recourse liability to Lessor as a consequence of the occurrence of a Limited Event of Default shall be limited to the payment by the Lessees of the Limited Recourse Amount for all of the Leased Properties; provided, however if Concord agrees or acknowledges in writing that an Event of Default has occurred (including an acknowledgment that an event of default has occurred under any agreement evidencing Indebtedness or any replacement thereof), then the Lessor shall be entitled to exercise any of the remedies set forth in Section 13.1.

ARTICLE XIV.
SALE, RETURN OR PURCHASE OF LEASED PROPERTY; RENEWAL

         Section 14.1 Lessee’s Option to Purchase. Subject to the terms, conditions and provisions set forth in this Article XIV, each Lessee shall have the option (a “Purchase Option”), to be exercised as set forth below, to purchase from Lessor, Lessor’s interest in any or all of the Leased Properties. Such option must be exercised with respect to any Leased Property by written notice to Lessor not later than six months prior to the Lease Termination Date, which notice shall be irrevocable; such notice shall specify the Leased Property to be purchased, and the date that such purchase shall take place, which date shall be a date occurring not less than thirty (30) days after such notice or the Lease Termination Date (whichever is earlier). If the Purchase Option is exercised pursuant to the foregoing with respect to any Leased Property, then, subject to the provisions set forth in this Article XIV, on the applicable purchase date or the Lease Termination Date, as the case may be, Lessor shall convey to the related Lessee, by special or limited warranty deed and bill of sale, without recourse or warranty (other than as to the absence of Lessor Liens) and the related Lessee shall purchase from Lessor, Lessor’s interest in the Leased Property or Leased Properties that are the subject of such Purchase Option.

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         Section 14.2 Conveyance to Lessee. With respect to any Leased Property, unless (a) a Lessee shall have properly exercised the Purchase Option and purchased such Leased Property pursuant to Section 14.1 hereof, or (b) the related Lessee shall have properly exercised the Remarketing Option with respect to such Leased Property and shall have fulfilled all of the conditions of Section 14.6 hereof with respect to such Leased Property, then, subject to the terms, conditions and provisions set forth in this Article XIV, the related Lessee shall purchase from Lessor, and Lessor shall convey to each Lessee, on the Lease Termination Date all of Lessor’s interest in such Leased Property. Any Lessee may designate, in a notice given to Lessor not less than ten (10) Business Days prior to the closing of such purchase, or any purchase pursuant to Section 14.1, (time being of the essence), the transferee to whom the conveyance shall be made (if other than to such Lessee), in which case such conveyance shall (subject to the terms and conditions set forth herein) be made to such designee; provided, however, that such designation of a transferee shall not cause any Lessee to be released, fully or partially, from any of its obligations under this Lease.

         Section 14.3 Acceleration of Purchase Obligation. The Lessees shall be obligated to purchase Lessor’s interest in the Leased Properties immediately, automatically and without notice upon the occurrence of any Event of Default specified in clause (f) of Article XII (subject to clause (ii) of the definition of Limited Event of Default), for the purchase price set forth in Section 14.4. Subject to Section 13.4, upon the occurrence and during the continuance of any other Event of Default, the Lessees shall be obligated to purchase Lessor’s interest in the Leased Properties for the purchase price set forth in Section 14.4 upon notice of such obligation from Lessor.

         Section 14.4 Determination of Purchase Price. Upon the purchase by the Lessees of Lessor’s interest in all of the Leased Properties upon the exercise of the Purchase Option or pursuant to Section 14.2 or 14.3, the aggregate purchase price for all of the Leased Properties shall be an amount equal to the Lease Balance as of the closing date for such purchase, including any amount due pursuant to Section 7.5(f) of the Master Agreement as a result of such purchase. Upon the purchase by a Lessee of Lessor’s interest in a Leased Property upon the exercise of a Purchase Option with respect to a particular Leased Property, the purchase price for such Leased Property shall be an amount equal to the Leased Property Balance for such Leased Property as of the closing date for such purchase, including any amount due pursuant to Section 7.5(f) of the Master Agreement as the result of such purchase.

         Section 14.5 Purchase Procedure. (a) If a Lessee shall purchase Lessor’s interest in a Leased Property pursuant to any provision of this Lease, (i) such Lessee shall accept from Lessor and Lessor shall convey such Leased Property by a duly executed and acknowledged special (or limited) warranty deed and quit claim bill of sale of such a Leased Property in recordable form, (ii) upon the date fixed for any purchase of Lessor’s interest in Leased Property hereunder, the related Lessee(s) shall pay to the order of the Agent (or Lessor if the Loans have been paid in

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full) the Lease Balance or Leased Property Balance, as applicable, including any amount due pursuant to Section 7.5 of the Master Agreement as a result of such purchase by wire transfer of immediately available funds, (iii) Lessor will execute and deliver to the related Lessee such other documents, including releases, affidavits, termination agreements and termination statements, as may be legally required or as may be reasonably requested by Lessee in order to effect such conveyance, free and clear of Lessor Liens and the Liens of the Operative Documents, (iv) if such Leased Property is subject to a Ground Lease, Lessor will execute and deliver to the related Lessee an assignment or termination of such Ground Lease, as directed by such Lessee, in such form as may be reasonably requested by such Lessee, and such Lessee shall pay any amounts due with respect thereto under such Ground Lease and, if such Ground Lease is assigned, assume all obligations thereunder and (v) if such Leased Property is subject to IDB Documentation, Lessor will execute and deliver to the related Lessee, and the related Lessee shall accept, an assignment and assumption of such IDB Documentation to and by such related Lessee, in such form as may be reasonably requested by such Lessee, and such Lessee shall pay any amounts due with respect thereto under such IDB Documentation.

         (b)  Each Lessee shall, at such Lessee’s sole cost and expense, obtain all required governmental and regulatory approval and consents and in connection therewith shall make such filings as required by Applicable Law, and Lessor shall cooperate with such Lessee upon such Lessee’s request in connection therewith; in the event that Lessor is required by Applicable Law to take any action in connection with such purchase and sale, the Lessees shall pay prior to transfer all reasonable out-of-pocket costs incurred by Lessor in connection therewith. Without limiting the foregoing, all costs incident to such conveyance, including, without limitation, each Lessee’s attorneys’ fees, Lessor’s attorneys’ fees, commissions, each Lessee’s and Lessor’s escrow fees, recording fees, title insurance premiums and all applicable documentary transfer or other transfer taxes and other taxes required to be paid in order to record the transfer documents that might be imposed by reason of such conveyance and the delivery of such deed shall, as between Lessees on the one hand, and the Funding Parties on the other hand, be borne entirely by and paid by the Lessees.

         (c)  Upon expiration or termination of this Lease resulting in conveyance of Lessor’s interest in the title to the Leased Properties to the Lessees, there shall be no apportionment of rents (including, without limitation, water rents and sewer rents), taxes, insurance, utility charges or other charges payable with respect to the Leased Properties, all of such rents, taxes, insurance, utility or other charges due and payable with respect to the Leased Properties prior to termination being payable by the Lessees hereunder and all due after such time being payable by the Lessees as the then owners of the Leased Properties.

         Section 14.6 Option to Remarket. Subject to the fulfillment of each of the conditions set forth in this Section 14.6, the Lessees shall have the option to market any of the Leased Properties for Lessor (the “Remarketing Option”).

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         The Lessees’ effective exercise and consummation of the Remarketing Option shall be subject to the due and timely fulfillment of each of the following provisions, the failure of any of which, unless waived in writing by Lessor and the Lenders, shall render the Remarketing Option and the Lessees’ exercise thereof null and void, in which event, each Lessee shall be obligated to perform its obligations under Section 14.2.

         (a) Not later than twelve months prior to the Lease Termination Date, Concord shall give to Lessor and the Agent written notice of the Lessees’ exercise of the Remarketing Option, which notice shall specify the Leased Property or Leased Properties that will be remarketed.

         (b) Not later than ten (10) Business Days prior to the Lease Termination Date, each Lessee shall deliver to Lessor and the Agent an environmental assessment of each Leased Property leased by it and to be remarketed dated not earlier than forty-five (45) days prior to the Lease Termination Date. Such environmental assessment shall be prepared by an environmental consultant selected by the related Lessee and reasonably satisfactory to the Required Funding Parties, shall be in form, detail and substance reasonably satisfactory to the Required Funding Parties, and shall otherwise indicate no degradation in environmental conditions beyond those described in the related Environmental Audit for which corrective action is required by Applicable Law and shall not include a recommendation for further investigation to make such determination.

         (c) On the date of Concord’s notice to Lessor and the Agent of the Lessees’ exercise of the Remarketing Option, each of the Construction Conditions shall have been timely satisfied with respect to the Leased Property or Leased Properties being remarketed and no Event of Default or Potential Event of Default shall exist, and thereafter, no Event of Default or Potential Event of Default shall exist under this Lease.

         (d) Each Lessee shall have completed in all material respects all Alterations, restoration and rebuilding of the Leased Property or Leased Properties leased by it and to be remarketed pursuant to Sections 6.1, 6.2, 10.3 and 10.4 (as the case may be) and shall have fulfilled in all material respects all of the conditions and requirements in connection therewith pursuant to said Sections, in each case by the date on which Lessor and the Agent receive Concord’s notice of the Lessees’ exercise of the Remarketing Option (time being of the essence), regardless of whether the same shall be within such Lessee’s control.

         (e) Upon request by the Agent, each Lessee shall promptly provide any maintenance records relating to each Leased Property leased by it and to be remarketed to Lessor, the Agent and any potential purchaser, and shall otherwise do all things necessary to deliver possession of such Leased Property to the potential purchaser at the appropriate

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closing date. Each Lessee shall allow Lessor, the Agent and any potential purchaser reasonable access during normal business hours to any Leased Property to be remarketed for the purpose of inspecting the same.

         (f) On the Lease Termination Date, each Lessee shall surrender the related Leased Property or Leased Properties leased by it and being remarketed in accordance with Section 14.8 hereof.

         (g) In connection with any such sale of the Leased Properties, each Lessee will provide to the purchaser all customary “seller’s” indemnities requested by the potential purchaser (taking into account the location and nature of the related Leased Property or Leased Properties), representations and warranties regarding title, absence of Liens (except Lessor Liens) and the condition of the related Leased Property or Leased Properties. Each Lessee shall fulfill all of the requirements set forth in clause (b) of Section 14.5, and such requirements are incorporated herein by reference. As to Lessor, any such sale shall be made on an “as is, with all faults” basis without representation or warranty by Lessor, other than the absence of Lessor Liens.

         (h) The Lessees, jointly and severally, shall pay to the Agent on the Lease Termination Date (or to such other Person as Agent shall notify Lessee in writing, or in the case of Supplemental Rent, to the Person entitled thereto) an amount equal to the Recourse Deficiency Amount for the Leased Property or Leased Properties that were the subject of the Remarketing Option, plus all accrued and unpaid Basic Rent and Supplemental Rent, and all other amounts hereunder with respect to such Leased Property or Leased Properties which have accrued prior to or as of such date that are then unpaid, in the type of funds specified in Section 3.3 hereof.

If the Lessees have exercised the Remarketing Option, the following additional provisions shall apply: During the period commencing on the date twelve months prior to the scheduled expiration of the Lease Term, one or more of the Lessees shall, as nonexclusive agent for Lessor, use commercially reasonable efforts to sell Lessor’s interest in the Leased Properties that will be remarketed and will attempt to obtain the highest purchase price therefor. Lessee promptly shall submit all bids to Lessor and the Agent and Lessor and the Agent will have the right to review the same and the right to submit any one or more bids. All bids shall be on an all-cash basis. In no event shall such bidder be a Lessee or any Subsidiary or Affiliate of a Lessee. The written offer must specify the Lease Termination Date as the closing date. If, and only if, the Net Selling Price, as reasonably estimated by the Agent is less than an amount equal to the difference between the aggregate Leased Property Balances for the Leased Properties that are the subject of the Remarketing Option at such time minus the Recourse Deficiency Amount for such remarketed Leased Properties, then Lessor or the Agent may, in its sole and absolute discretion, by notice to Concord, reject such offer to purchase, in which event the parties will proceed

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according to the provisions of Section 14.7 hereof. If neither Lessor nor the Agent rejects such purchase offer as provided above, the closing of such purchase of the related Leased Properties by such purchaser shall occur on the Lease Termination Date, contemporaneously with the Lessees’ surrender of the related Leased Property or Leased Properties in accordance with Section 14.8 hereof. The Net Selling Price shall be paid directly to the Agent (or Lessor if the Funded Amounts have been fully paid) and shall be distributed pursuant to Section 3.4(a) of the Loan Agreement. No Lessee shall have the right, power or authority to bind Lessor in connection with any proposed sale of the Leased Properties.

         Section 14.7 Rejection of Sale. Notwithstanding anything contained herein to the contrary, if Lessor or the Agent rejects the purchase offer for any remarketed Leased Property as provided in (and subject to the conditions set forth in) Section 14.6, or if no bids are obtained for any remarketed Leased Property after Lessees have fully complied with their obligations pursuant to Section 14.6, then (a) the Lessees, jointly and severally, shall pay to the Agent the Recourse Deficiency Amount for such remarketed Leased Property pursuant to Section 14.6(i), and (b) Lessor shall retain title to such Leased Property.

         Section 14.8 Return of Leased Property. If Lessor retains title to any Leased Property pursuant to Section 14.7 hereof, then each Lessee shall, on the Lease Termination Date, and at its own expense, return possession of the Leased Properties leased by it to Lessor for retention by Lessor or, if the Lessees properly exercise the Remarketing Option and fulfill all of the conditions of Section 14.6 hereof and neither Lessor nor the Agent rejects such purchase offer pursuant to Section 14.6, then each Lessee shall, on such Lease Termination Date, and at its own cost, transfer possession of the remarketed Leased Properties leased by it to the independent purchaser thereof, in each case by surrendering the same into the possession of Lessor or such purchaser, as the case may be, free and clear of all Liens other than Lessor Liens, in as good condition as it was on the Completion Date therefor in the case of new Construction, or the Funding Date (as modified by Alterations permitted by this Lease), ordinary wear and tear excepted, and in compliance in all material respects with Applicable Law. Each Lessee shall, on and within a reasonable time before and after the Lease Termination Date, cooperate with Lessor and the independent purchaser of any Leased Property leased by such Lessee in order to facilitate the ownership and operation by such purchaser of such Leased Property after the Lease Termination Date, which cooperation shall include the following, all of which such Lessee shall do on or before the Lease Termination Date or as soon thereafter as is reasonably practicable: providing all books and records regarding the related Lessee’s maintenance of such Leased Property and all know-how, data and technical information relating thereto, providing a copy of the Plans and Specifications within the possession or control of such Lessee or Concord, or its agent, granting or assigning all licenses (to the extent assignable without third party consent) necessary for the operation and maintenance of such Leased Property, and cooperating in seeking and obtaining all necessary Governmental Action. Each Lessee shall have also paid the cost of

29

all Alterations commenced prior to the Lease Termination Date. The obligations of such Lessee under this Article XIV shall survive the expiration or termination of this Lease.

         Section 14.9 Renewal. Subject to the conditions set forth herein, Concord may, by written notice to Lessor and the Agent given not later than six months and not earlier than sixteen months, prior to the scheduled Lease Termination Date, request to renew this Lease for one period of five years, commencing on the date following such Lease Termination Date. No later than the date that is 60 days prior to the Lease Termination Date, the Agent will notify Concord whether or not Lessor and the Lenders consent to such renewal request (which consent may be granted or denied in the Lessor’s and each Lender’s sole discretion and may be conditioned on such conditions precedent as may be specified by Lessor or such Lender). If the Agent fails to respond in such time frame, such failure shall be deemed to be a rejection of such request.

ARTICLE XV.
LESSEE’S EQUIPMENT

         After any repossession of any Leased Property by Lessor or the Agent (whether or not this Lease has been terminated), the related Lessee, at its expense and so long as such removal of such trade fixture, personal property or equipment shall not result in a violation of Applicable Law, shall, within a reasonable time after such repossession or within ninety (90) days after such Lessee’s receipt of Lessor’s written request (whichever shall first occur), remove all of such Lessee’s trade fixtures, personal property and equipment from such Leased Property (to the extent that the same can be readily removed from such Leased Property without causing material damage to such Leased Property); provided, however, that such Lessee shall not remove any Funded Equipment (or that constitutes a replacement of such property). Any of a Lessee’s trade fixtures, personal property and equipment not so removed by such Lessee within such period shall be considered abandoned by such Lessee, and title thereto shall without further act vest in Lessor, and may be appropriated, sold, destroyed or otherwise disposed of by Lessor without notice to any Lessee and without obligation to account therefor and the related Lessee will pay Lessor, upon written demand, all reasonable costs and expenses incurred by Lessor in removing, storing or disposing of the same and all costs and expenses incurred by Lessor to repair any damage to such Leased Property caused by such removal. Each Lessee will immediately repair at its expense all damage to such Leased Property caused by any such removal (unless such removal is effected by Lessor, in which event such Lessee shall pay all reasonable costs and expenses incurred by Lessor for such repairs). Lessor shall have no liability in exercising Lessor’s rights under this Article XV, nor shall Lessor be responsible for any loss of or damage to any Lessee’s personal property and equipment except to the extent due to Lessor’s gross negligence or willful misconduct.

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ARTICLE XVI.
RIGHT TO PERFORM FOR LESSEE

         If any Lessee shall fail to perform or comply with any of its agreements contained herein, Lessor may perform or comply with such agreement (provided that, unless there is imminent danger of cancellation or termination of insurance or forfeiture or material damage to a Leased Property or Lessor’s interest therein, Lessor shall give Concord five (5) Business Days’ prior notice of its intent to so perform or comply), and Lessor shall not thereby be deemed to have waived any default caused by such failure, and the amount of such payment and the amount of the expenses of Lessor (including actual and reasonable attorneys’ fees and expenses) incurred in connection with such payment or the performance of or compliance with such agreement, as the case may be, shall be deemed Supplemental Rent, payable by the related Lessee to Lessor within thirty (30) days after written demand therefor.

ARTICLE XVII.
MISCELLANEOUS

         Section 17.1 Reports. To the extent required under Applicable Law and to the extent it is reasonably practical for a Lessee to do so, such Lessee shall prepare and file in timely fashion, or, where such filing is required to be made by Lessor or it is otherwise not reasonably practical for a Lessee to make such filing, Lessee shall prepare and deliver to Lessor (with a copy to the Agent) within a reasonable time prior to the date for filing and Lessor shall file, any material reports with respect to the condition or operation of such Leased Property that shall be required to be filed with any Governmental Authority.

         Section 17.2 Binding Effect; Successors and Assigns; Survival. The terms and provisions of this Lease, and the respective rights and obligations hereunder of Lessor and the Lessees, shall be binding upon their respective successors, legal representatives and assigns (including, in the case of Lessor, any Person to whom Lessor may transfer any Leased Property or any interest therein in accordance with the provisions of the Operative Documents), and inure to the benefit of their respective permitted successors and assigns, and the rights granted hereunder to the Agent and the Lenders shall inure (subject to such conditions as are contained herein) to the benefit of their respective permitted successors and assigns. Each Lessee hereby acknowledges that Lessor has assigned all of its right, title and interest to, in and under this Lease to the Agent and the Lenders pursuant to the Loan Agreement and related Operative Documents, and that all of Lessor’s rights hereunder may be exercised by the Agent.

         Section 17.3 Quiet Enjoyment. Lessor covenants that it will not interfere in the related Lessee’s or any of its permitted sublessees’ quiet use and enjoyment of the Leased Properties in accordance with this Lease during the Lease Term, so long as no Event of Default

31

has occurred and is continuing. Such right of quiet use and enjoyment is independent of, and shall not affect, Lessor’s rights otherwise to initiate legal action to enforce the obligations of the Lessees under this Lease.

         Section 17.4 Notices. Unless otherwise specified herein, all notices, offers, acceptances, rejections, consents, requests, demands or other communications to or upon the respective parties hereto shall be in writing and shall be deemed to have been given as set forth in Section 8.2 of the Master Agreement. All such notices, offers, acceptances, rejections, consents, requests, demands or other communications shall be addressed as follows or to such other address as any of the parties hereto may designate by written notice:

If to Lessor:	Atlantic Financial Group, Ltd. 2808 Fairmount, Suite 250 LB9 Dallas, Texas 75201 Attn: Stephen Brookshire Facsimile: 214-871-2799
If to Concord or any other Lessee:	Concord EFS, Inc. 1100 Carr Road Wilmington, Delaware 19809 Attn: Mr. Edward T. Haslam and Marcia Heister, Esq. Facsimile: 302-791-8764 and 302-791-8762
If to Agent:	SunTrust Bank 6410 Poplar Avenue, Suite 320 Memphis, Tennessee 38119 Attn: Bryan Ford Facsimile: 901-766-7565
with a copy to:	SunTrust Capital Markets, Inc. 303 Peachtree Street, 24th Floor MC 3951 Atlanta, Georgia 30308 Attn: Peter Kantor Facsimile: 404-230-1344

                                          If to a Lender, to the address provided in the Master Agreement.

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         Section 17.5 Severability. Any provision of this Lease that shall be prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction, and Lessee shall remain liable to perform its obligations hereunder except to the extent of such unenforceability. To the extent permitted by Applicable Law, each Lessee hereby waives any provision of law that renders any provision hereof prohibited or unenforceable in any respect.

         Section 17.6 Amendment; Complete Agreements. Neither this Lease nor any of the terms hereof may be terminated, amended, supplemented, waived or modified orally, except by an instrument in writing signed by Lessor and Concord in accordance with the provisions of Section 8.4 of the Master Agreement. This Lease, together with the applicable Lease Supplement and the other Operative Documents, is intended by the parties as a final expression of their lease agreement and as a complete and exclusive statement of the terms thereof, all negotiations, considerations and representations between the parties having been incorporated herein and therein. No course of prior dealings between the parties or their officers, employees, agents or Affiliates shall be relevant or admissible to supplement, explain, or vary any of the terms of this Lease or any other Operative Document. Acceptance of, or acquiescence in, a course of performance rendered under this or any prior agreement between the parties or their Affiliates shall not be relevant or admissible to determine the meaning of any of the terms of this Lease or any other Operative Document. No representations, undertakings, or agreements have been made or relied upon in the making of this Lease other than those specifically set forth in the Operative Documents.

         Section 17.7 Construction. This Lease shall not be construed more strictly against any one party, it being recognized that both of the parties hereto have contributed substantially and materially to the preparation and negotiation of this Lease.

         Section 17.8 Headings. The Table of Contents and headings of the various Articles and Sections of this Lease are for convenience of reference only and shall not modify, define or limit any of the terms or provisions hereof.

         Section 17.9 Counterparts. This Lease may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument.

         Section 17.10 GOVERNING LAW. THIS LEASE SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF GEORGIA APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, EXCEPT AS TO MATTERS RELATING

33

TO THE CREATION OF THE LEASEHOLD OR MORTGAGE ESTATES HEREUNDER, AND THE EXERCISE OF RIGHTS AND REMEDIES WITH RESPECT THERETO, WHICH SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATES IN WHICH SUCH ESTATES ARE LOCATED.

         Section 17.11 Discharge of Lessee’s Obligations by its Subsidiaries or Affiliates. Lessor agrees that performance of any Lessee’s obligations hereunder by one or more of such Lessee’s Subsidiaries or Affiliates shall constitute performance by Lessee of such obligations to the same extent and with the same effect hereunder as if such obligations were performed by such Lessee, but no such performance shall excuse any Lessee from any obligation not performed by it or on its behalf under the Operative Documents.

         Section 17.12 Liability of Lessor Limited. Except as otherwise expressly provided below in this Section 17.12, it is expressly understood and agreed by and between each Lessee, Lessor and their respective successors and assigns that nothing herein contained shall be construed as creating any liability of Lessor or any of its Affiliates or any of their respective officers, directors, employees or agents, individually or personally, for any failure to perform any covenant, either express or implied, contained herein, all such liability, if any, being expressly waived by each Lessee and by each and every Person now or hereafter claiming by, through or under any Lessee, and that, so far as Lessor or any of its Affiliates or any of their respective officers, directors, employees or agents, individually or personally, is concerned, each Lessee and any Person claiming by, through or under any Lessee shall look solely to the right, title and interest of Lessor in and to the Leased Properties and any proceeds from Lessor’s sale or encumbrance thereof (provided, however, that no Lessee shall be entitled to any double recovery) for the performance of any obligation under this Lease and under the Operative Documents and the satisfaction of any liability arising therefrom (provided that Lessor shall be liable for actual damages resulting from its or any of its Affiliate’s gross negligence, willful misconduct, misrepresentation and breach of its covenants set forth in Section 5.17 of the Master Agreement, except to the extent imputed to Lessor by virtue of any Lessee’s action or failure to act).

         Section 17.13 Estoppel Certificates. Each party hereto agrees that at any time and from time to time during the Lease Term, it will promptly, but in no event later than thirty (30) days after request by the other party hereto, execute, acknowledge and deliver to such other party or to any prospective purchaser (if such prospective purchaser has signed a commitment or letter of intent to purchase any Leased Property or any part thereof or any Note), assignee or mortgagee or third party designated by such other party, a certificate stating (a) that this Lease is unmodified and in force and effect (or if there have been modifications, that this Lease is in force and effect as modified, and identifying the modification agreements); (b) the date to which Basic Rent has been paid; (c) whether or not there is any existing default by any Lessee in the payment of Basic Rent or any other sum of money hereunder, and whether or not there is any other existing default by either party with respect to which a notice of default has been served, and, if there is any such

34

default, specifying the nature and extent thereof; (d) whether or not, to the actual knowledge of the signer, there are any setoffs, defenses or counterclaims against enforcement of the obligations to be performed hereunder existing in favor of the party executing such certificate and (e) other items that may be reasonably requested; provided that no such certificate may be requested unless the requesting party has a good faith reason for such request.

         Section 17.14 No Joint Venture. Any intention to create a joint venture, partnership or other fiduciary relationship between Lessor and any Lessee is hereby expressly disclaimed.

         Section 17.15 No Accord and Satisfaction. The acceptance by Lessor of any sums from any Lessee (whether as Basic Rent or otherwise) in amounts which are less than the amounts due and payable by the Lessees hereunder is not intended, nor shall be construed, to constitute an accord and satisfaction of any dispute between Lessor and any Lessee regarding sums due and payable by any Lessee hereunder, unless Lessor specifically deems it as such in writing.

         Section 17.16 No Merger. In no event shall the leasehold interests, estates or rights of any Lessee hereunder, or of the holder of any Notes secured by a security interest in this Lease, merge with any interests, estates or rights of Lessor in or to the Leased Properties, it being understood that such leasehold interests, estates and rights of each Lessee hereunder, and of the holder of any Notes secured by a security interest in this Lease, shall be deemed to be separate and distinct from Lessor’s interests, estates and rights in or to the Leased Properties, notwithstanding that any such interests, estates or rights shall at any time or times be held by or vested in the same person, corporation or other entity.

         Section 17.17 Survival. The obligations of each Lessee to be performed under this Lease prior to the Lease Termination Date and the obligations of each Lessee pursuant to Articles III, X, XI, XIII, Sections 14.2, 14.3, 14.4, 14.5, 14.8, Articles XV, and XVI, and Sections 17.10 and 17.12 shall survive the expiration or termination of this Lease. The extension of any applicable statute of limitations by Lessor, any Lessee, the Agent or any Indemnitee shall not affect such survival.

         Section 17.18 Chattel Paper. To the extent that this Lease constitutes chattel paper (as such term is defined in the Uniform Commercial Code in any applicable jurisdiction), no security interest in this Lease may be created through the transfer or possession of any counterpart other than the sole original counterpart, which shall be identified as the original counterpart by the receipt of the Agent.

         Section 17.19 Time of Essence. Time is of the essence of this Lease.

35

         Section 17.20 Recordation of Lease. Each Lessee will, at its expense, cause each Lease Supplement, or a memorandum of lease in form and substance reasonably satisfactory to Lessor and such Lessee (if permitted by Applicable Law) to be recorded in the proper office or offices in the States and the municipalities in which the Land is located. Lessor agrees to execute and deliver a memorandum of lease, provided the form and substance thereof is reasonably satisfactory to Lessor.

         Section 17.21 Investment of Security Funds. The parties hereto agree that any amounts not payable to a Lessee pursuant to any provision of Article VIII, X or XIV or this Section 17.21 shall be held by the Agent (or Lessor if the Loans have been fully paid) as security for the obligations of the Lessees under this Lease and the Master Agreement and of Lessor under the Loan Agreement. At such time as such amounts are payable to the Lessee, such amounts, net of any amounts previously applied to the Lessees’ obligations hereunder or under the Master Agreement (which application is hereby agreed to by Lessee), shall be paid to the related Lessee. Any such amounts which are held by the Agent (or Lessor if the Loans have been fully paid) pending payment to a Lessee shall until paid to such Lessee, as provided hereunder or until applied against the Lessees’ obligations herein and under the Master Agreement and distributed as provided in the Loan Agreement or herein (after the Loan Agreement is no longer in effect) in connection with any exercise of remedies hereunder, be invested by the Agent or Lessor, as the case may be, as directed from time to time in writing by Lessee (provided, however, if an Event of Default has occurred and is continuing it will be directed by the Agent or, if the Loans have been fully paid, Lessor) and at the expense and risk of the Lessees, in Permitted Investments. Any gain (including interest received) realized as the result of any such investment (net of any fees, commissions and other expenses, if any, incurred in connection with such investment) shall be applied in the same manner as the principal invested. Lessee upon demand shall pay to the Agent or Lessor, as appropriate, the amount of any loss incurred in connection with all such investments and the liquidation thereof.

         Section 17.22 Ground Leases. Each Lessee will, at its expense, timely perform all of the obligations of Lessor, in its capacity as ground lessee, under each Ground Lease and, if requested by Lessor shall provide satisfactory evidence to Lessor of such performance.

         Section 17.23 Land and Building. If any Building and the Land on which such Building is located are subject to separate Lease Supplements, at any time that the related Lessee exercises an option to purchase such Building or such Land, or to renew this Lease with respect to such Building or such Land, or is obligated to purchase such Building or such Land as a result of an Event of Loss, an Event of Taking or an Event of Default, such purchase or renewal shall be made simultaneously with respect to all of such Building and such Land.

         Section 17.24 Joint and Several. Each obligation of each Lessee hereunder shall be a joint and several obligation of all of the Lessees.

36

         Section 17.25 Construction Land Interests. Notwithstanding any other provision of this Lease or any of the Operative Documents, with respect to each Construction Land Interest, to the extent the terms and conditions of the Construction Agency Agreement are inconsistent with the terms of this Lease, the Construction Agency Agreement shall control with respect to such Construction Land Interest and take priority over any other provision hereof or any of the Operative Documents from the date hereof until the earlier of the Completion Date for such Leased Property or the Construction Term Expiration Date.

         Section 17.26 IDB Documentation. If any Leased Property is subject to an IDB Lease, this Lease shall be deemed to be a sublease as to such Leased Property. Each Lessee hereby agrees to perform timely all of its obligations and all obligations of Lessor under all IDB Documentation related to any Leased Property.

[Signature page follows]

37

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

Witnessed:		CONCORD EFS, INC., as a Lessee
By:	/s/ Debra Kerr Name:Debra Kerr	By:	/s/ E. T. Haslam Name:Edward T. Haslam Title:Chief Financial Officer
By:	/s/ Linda Moses Name: Linda Moses

LEASE
AGREEMENT

S-1

		ATLANTIC FINANCIAL GROUP, LTD., as Lessor
		By:	Atlantic Financial Managers, Inc., its General Partner
Witnessed:
By:	/s/ Pattie Keath Name: Pattie Keath	By:	/s/ Stephen Brookshire Name: Stephen Brookshire Title: President
By:	/s/ Sean Allen Name: Sean Allen

LEASE
AGREEMENT

S-2

STATE OF Texas

COUNTY OF Dallas )
)
)
ss.:

         The foregoing Lease Agreement was acknowledged before me, the undersigned Notary Public, in the County of Dallas, Texas, this 11th day of July, 2002, by Stephen Brookshire, as President of Atlantic Financial Group, Ltd., on behalf of such partnership.

[Notarial Seal]	/s/ Lori L. Decker Notary Public
My commission expires:

STATE OF Delaware
COUNTY OF New Castle )
)
)

ss.:

         The foregoing Lease Agreement was acknowledged before me, the undersigned Notary Public, in the County of New Castle, Delaware, this 10th day of July, 2002, by Edward T. Haslam, as Chief Financial Officer, of Concord EFS, Inc., a Delaware corporation, on behalf of the corporation.

[Notarial Seal] /s/Debra S. Kerr
Notary Public

My commission expires:      

LEASE
AGREEMENT

N-1

Receipt of this original counterpart of the foregoing Lease is hereby acknowledged as of the date hereof.

SUNTRUST BANK, as the Agent
By:
	Name:
	Title:

LEASE
AGREEMENT

S-2

Recording requested by	EXHIBIT A TO
and when recorded mail to:	THE LEASE

LEASE SUPPLEMENT NO. __ AND MEMORANDUM OF LEASE

         THIS LEASE SUPPLEMENT NO.      (this “Lease Supplement”) dated as of [                     ], between ATLANTIC FINANCIAL GROUP, LTD., as lessor (the “Lessor”), and [CONCORD EFS, INC., a Delaware corporation,] as lessee (the “Related Lessee”).

         WHEREAS Lessor is the owner of the Land described on Schedule I hereto and wishes to lease the Land together with any Building and other improvements thereon or which thereafter may be constructed thereon pursuant to the Lease to Lessee;

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

         SECTION 1. Definitions; Interpretation. For purposes of this Lease Supplement, capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to them in Appendix A to the Master Lease Agreement, dated as of July 12, 2002 (as amended and supplemented from time to time, the “Lease”), among the Lessees named therein and Lessor; and the rules of interpretation set forth in Appendix A to the Lease shall apply to this Lease Supplement.

         SECTION 2. The Properties. Attached hereto as Schedule I is the description of certain Land (the “Subject Property”). Effective upon the execution and delivery of this Lease Supplement by Lessor and Lessee, such Land, together with any Building and other improvements thereon or which thereafter may be constructed thereon shall be subject to the terms and provisions of the Lease and Lessor hereby grants, conveys, transfers and assigns to the Related Lessee those interests, rights, titles, estates, powers and privileges provided for in the Lease with respect to the Subject Property.

A-1

         SECTION 3. Amendments to Lease with Respect to Subject Property. Effective upon the execution and delivery of this Lease Supplement by Lessor and the Related Lessee, the following terms and provisions shall apply to the Lease with respect to the Subject Property:

[Insert Applicable Sections per Local Law
as contemplated by the Master Agreement]

         SECTION 4. Ratification; Incorporation. Except as specifically modified hereby, the terms and provisions of the Lease are hereby ratified and confirmed and remain in full force and effect. The terms of the Lease (as amended by this Lease Supplement) are by this reference incorporated herein and made a part hereof.

         SECTION 5. Original Lease Supplement. The single executed original of this Lease Supplement marked “THIS COUNTERPART IS THE ORIGINAL EXECUTED COUNTERPART” on the signature page thereof and containing the receipt of the Agent therefor on or following the signature page thereof shall be the original executed counterpart of this Lease Supplement (the “Original Executed Counterpart”). To the extent that this Lease Supplement constitutes chattel paper, as such term is defined in the Uniform Commercial Code as in effect in any applicable jurisdiction, no security interest in this Lease Supplement may be created through the transfer or possession of any counterpart other than the Original Executed Counterpart.

         SECTION 6. GOVERNING LAW. THIS LEASE SUPPLEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF GEORGIA, BUT EXCLUDING ALL OTHER CHOICE OF LAW AND CONFLICTS OF LAW RULES OF SUCH STATE, EXCEPT AS TO MATTERS RELATING TO THE CREATION OF THE LEASEHOLD AND MORTGAGE ESTATES HEREUNDER, AND THE EXERCISE OF RIGHTS AND REMEDIES WITH RESPECT THERETO, WHICH SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE IN WHICH SUCH ESTATES ARE LOCATED.

         SECTION 7. Counterpart Execution. This Lease Supplement may be executed in any number of counterparts and by each of the parties hereto in separate counterparts, all such counterparts together constituting but one and the same instrument.

A-2

         IN WITNESS WHEREOF, each of the parties hereto has caused this Lease Supplement to be duly executed by an officer thereunto duly authorized as of the date and year first above written.

Witnessed:	ATLANTIC FINANCIAL GROUP, LTD.,
	as the Lessor
By:	By: Atlantic Financial Managers,
	Inc., its General Partner
Name:
By:	By:
Name:	Name:
	Title:
Witnessed:	[CONCORD EFS, INC.],
	as Related Lessee
By:	By:
Name:	Name:
	Title:
By:
Name:

S-1

STATE OF _______________	)
	)	ss.:
COUNTY OF _____________	)

         The foregoing Lease Supplement was acknowledged before me, the undersigned Notary Public, in the County of _______________, _____   _____, this _________ day of _______________ , ____________________ , by ______________________, as ________________________ of Atlantic Financial Group, Ltd., on behalf of such partnership.

[Notarial Seal]
	Notary Public

My commission expires: _____________

STATE OF _______________	)
	)	ss.:
COUNTY OF _____________	)

         The foregoing Lease Supplement was acknowledged before me, the undersigned Notary Public, in the County of ________________, this _____   _____ day of _______________, __________________, by __________________________ as ______________________________ of [Concord EFS, Inc., a Delaware] corporation, on behalf of the corporation.

[Notarial Seal]
	Notary Public

My commission expires: ______________

N-1

         Receipt of this original counterpart of the foregoing Lease Supplement is hereby acknowledged as of the date hereof.

SUNTRUST BANK,
as the Agent
By:
	Name:
	Title:

APPENDIX A
to
Master Agreement, Lease,
Loan Agreement and Construction Agency Agreement

DEFINITIONS AND INTERPRETATION

         A.     Interpretation. In each Operative Document, unless a clear contrary intention appears:

         (i) the singular number includes the plural number and vice versa;

         (ii) reference to any Person includes such Person’s successors and assigns but, if applicable, only if such successors and assigns are permitted by the Operative Documents;

         (iii) reference to any gender includes each other gender;

         (iv) reference to any agreement (including any Operative Document), document or instrument means such agreement, document or instrument as amended, supplemented or modified and in effect from time to time in accordance with the terms thereof and, if applicable, the terms of the other Operative Documents and reference to any promissory note includes any promissory note which is an extension or renewal thereof or a substitute or replacement therefor;

         (v) reference to any Applicable Law or Requirement of Law means such Applicable Law or Requirement of Law as amended, modified, codified, replaced or reenacted, in whole or in part, and in effect from time to time, including rules and regulations promulgated thereunder and reference to any section or other provision of any Applicable Law or Requirement of Law means that provision of such Applicable Law from time to time in effect and constituting the substantive amendment, modification, codification, replacement or reenactment of such section or other provision;

         (vi) reference in any Operative Document to any Article, Section, Appendix, Schedule or Exhibit means such Article or Section thereof or Appendix, Schedule or Exhibit thereto;

         (vii) “hereunder”, “hereof”, “hereto” and words of similar import shall be deemed references to an Operative Document as a whole and not to any particular Article, Section, paragraph or other provision of such Operative Document;

         (viii) “including” (and with correlative meaning “include”) means including without limiting the generality of any description preceding such term;

         (ix) “or” is not exclusive; and

         (x) relative to the determination of any period of time, “from” means “from and including” and “to” means “to but excluding”.

         B.     Accounting Terms. In each Operative Document, unless expressly otherwise provided, all terms of an accounting character used in the Operative Documents shall be interpreted, all accounting determinations under the Operative Documents shall be made, and all financial statements required to be delivered under the Master Agreement shall be prepared, in accordance with GAAP.

         C.     Conflict in Operative Documents. If there is any conflict between any Operative Documents, each such Operative Document shall be interpreted and construed, if possible, so as to avoid or minimize such conflict but, to the extent (and only to the extent) of such conflict, the Master Agreement shall prevail and control.

         D.     Legal Representation of the Parties. The Operative Documents were negotiated by the parties with the benefit of legal representation and any rule of construction or interpretation otherwise requiring any Operative Document to be construed or interpreted against any party shall not apply to any construction or interpretation hereof or thereof.

         E.     Defined Terms. Unless a clear contrary intention appears, terms defined herein have the respective indicated meanings when used in each Operative Document.

         “1998 Lease” means the Lease Agreement, dated as of May 22, 1998, between Electronic Payment Services, Inc. and the Lessor.

         “2000 Lease” means the Master Lease Agreement, dated as of November 15, 2000, among Electronic Payment Services, Inc., the other Subsidiaries of Concord party thereto and the Lessor.

         “A Loan” means the A Percentage of Fundings made pursuant to the Loan Agreement and the Master Agreement.

         “A Note” is defined in Section 2.2 of the Loan Agreement.

         “A Percentage” means 83.5%.

         “Acquisition Related Special Charges” for any fiscal quarter means charges to income related specifically to acquisitions by Concord and its Subsidiaries accounted for during such

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fiscal quarter, it being understood that Acquisition Related Special Charges shall not include write-downs of goodwill, other charges related to future performance and costs and accruals for restructuring or accrual charges of Concord or any restructuring or accrual charges of Concord or any of its Subsidiaries for its operations that are not specifically related to such acquisition.

         “Acquisition Related Special Gains” for any fiscal quarter means gains arising from any write-up of assets resulting from acquisitions, earnings of any Person acquired realized by such Person prior to the acquisition and any gain resulting from extraordinary or non-recurring items resulting from acquisitions, in each case realized by Concord or any of its Subsidiaries during such fiscal quarter.

         “Address” means with respect to any Person, its address set forth in Schedule 8.2 to the Master Agreement or such other address as it shall have identified to the parties to the Master Agreement in writing in the manner provided for the giving of notices thereunder.

         “Adjusted LIBO Rate” means, with respect to each Rent Period for a LIBOR Advance, the rate obtained by dividing (A) LIBOR for such Rent Period by (B) a percentage equal to 1 minus the then stated maximum rate (stated as a decimal) of all reserves requirements (including, without limitation, any marginal, emergency, supplemental, special or other reserves) applicable to any member bank of the Federal Reserve System in respect of Eurocurrency liabilities as defined in Regulation D (or against any successor category of liabilities as defined in Regulation D).

         “Adjusted Net Income” for any fiscal quarter means the Consolidated Net Income (or Deficit) for such fiscal quarter adjusted to eliminate any and all Acquisition Related Special Charges and Acquisition Related Special Gains for such fiscal quarter.

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

         “Affiliate” of any Person means any other Person directly or indirectly controlling, controlled by, or under common control with, such Person, whether through the ownership of voting securities, by contract or otherwise. For purposes of this definition, “control” (including with correlative meanings, the terms “controlling”, “controlled by”, and “under common control with”) as applied to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of that Person.

         “After-Tax Basis” means (a) with respect to any payment to be received by an Indemnitee (which, for purposes of this definition, shall include any Tax Indemnitee), the amount of such payment supplemented by a further payment or payments so that, after deducting from such payments the amount of all Taxes (net of any current credits, deductions or other Tax benefits arising from the payment by the Indemnitee of any amount, including Taxes, for which the payment to be received is made) imposed currently on the Indemnitee by any Governmental Authority or taxing authority with respect to such payments, the balance of such payments shall

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be equal to the original payment to be received and (b) with respect to any payment to be made by any Indemnitee, the amount of such payment supplemented by a further payment or payments so that, after increasing such payment by the amount of any current credits or other Tax benefits realized by the Indemnitee under the laws of any Governmental Authority or taxing authority resulting from the making of such payments, the sum of such payments (net of such credits or benefits) shall be equal to the original payment to be made; provided, however, for the purposes of this definition, and for purposes of any payment to be made to either a Lessee or an Indemnitee on an after-tax basis, it shall be assumed that (i) federal, state and local taxes are payable at the highest combined marginal federal and state statutory income tax rate (taking into account the deductibility of state income taxes for federal income tax purposes) applicable to corporations from time to time and (ii) such Indemnitee or such Lessee has sufficient income to utilize any deductions, credits (other than foreign tax credits, the use of which shall be determined on an actual basis) and other Tax benefits arising from any payments described in clause (b) of this definition.

         “Agent” means SunTrust Bank, a Georgia banking corporation, in its capacity as agent under the Master Agreement and the Loan Agreement.

         “Agent’s Fee Letter” means the Agent’s Fee Letter, dated as of July 12, 2002, between the Agent and Concord.

         “Alterations” means, with respect to any Leased Property, fixtures, alterations, improvements, modifications and additions to such Leased Property.

         “Applicable Law” means all applicable laws (including Environmental Laws), rules, regulations (including proposed, temporary and final income tax regulations), statutes, treaties, codes, ordinances, permits, certificates, orders and licenses of and interpretations by, any Governmental Authority, and applicable judgments, decrees, injunctions, writs, orders or like action of any court, arbitrator or other administrative, judicial or quasi-judicial tribunal or agency of competent jurisdiction (including those pertaining to health, safety or the environment (including, without limitation, wetlands) and those pertaining to the construction, use or occupancy of any Leased Property).

         “Applicable Margin” means (i) 0 for Base Rate Advances and (ii) for LIBOR Advances, (A) 0.50%, if the Funded Debt to Tangible Capitalization Ratio for the most recently ended fiscal quarter is less than 15%, (B) 0.75%, if the Funded Debt to Tangible Capitalization Ratio for the most recently ended fiscal quarter is equal to or greater than 15%, but less than 25%, (C) 1.00%, if the Funded Debt to Tangible Capitalization Ratio for the most recently ended fiscal quarter is equal to or greater than 25%.

         “Appraisal” is defined in Section 3.1 of the Master Agreement.

         “Appraiser” means an MAI appraiser reasonably satisfactory to the Agent.

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         “Architect” means with respect to any Leased Property the architect engaged in connection with the construction of the related Building, if any, who may be an employee of the General Contractor for such Leased Property.

         “Architect’s Agreement” means, with respect to any Leased Property, the architectural services agreement, if any, between the Construction Agent (or a Lessee) and the related Architect.

         “Assignment and Assumption” means an assignment and assumption agreement, substantially in the form of Exhibit F to the Master Agreement.

         “Assignment of Lease and Rents” means, with respect to any Leased Property, the Assignment of Lease and Rents, dated as of the related Closing Date, from the Lessor to the Agent, substantially in the form of Exhibit B to the Master Agreement.

         “Authority” means a development or similar authority of any state, county or municipality that is an issuer of Bonds.

         “Award” means any award or payment received by or payable to the Lessor or a Lessee on account of any Condemnation or Event of Taking (less the actual costs, fees and expenses, including reasonable attorneys’ fees, incurred in the collection thereof, for which the Person incurring the same shall be reimbursed from such award or payment).

         “B Loan” means the B Percentage of Fundings made pursuant to the Loan Agreement and the Master Agreement.

         “B Note” is defined in Section 2.2 of the Loan Agreement.

         “B Percentage” means 5.0%.

         “Banking Agency” means any Governmental Authority charged with the regulation of financial institutions.

         “Bankruptcy Code” means the Bankruptcy Reform Act of 1978, as amended.

         “Base Rate” means (with any change in the Base Rate to be effective as of the date of change of either of the following rates) the higher of (i) the rate which the Agent publicly announces from time to time as its prime lending rate, as in effect from time to time, and (ii) the Federal Funds Rate, as in effect from time to time, plus one-half of one percent (0.50%) per annum. The Agent’s prime lending rate is a reference rate and does not necessarily represent the lowest or best rate actually charged to customers; the Agent may make commercial loans or other

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loans at rates of interest at, above or below the Agent’s prime lending rate. The Base Rate is determined daily.

         “Base Rate Advance” means that portion of the Funded Amount bearing interest at the Base Rate.

         “Base Term” means, with respect to any Leased Property, (a) the period commencing on the related Closing Date and ending on July 12, 2009 or (b) such shorter period as may result from earlier termination of the Lease as provided therein.

         “Basic Rent” means the rent payable pursuant to Section 3.1 of the Lease, determined in accordance with the following: each installment of Basic Rent payable on any Payment Date shall be in an amount equal to the sum of (A) the aggregate amount of Lender Basic Rent payable on such Payment Date, plus (B) the aggregate amount of Lessor Basic Rent payable on such Payment Date, in each case for the Leased Property or Properties that are then subject to the Lease.

         “Benefit Arrangement” means at any time an employee benefit plan within the meaning of Section 3(3) of ERISA which is not a Plan or a Multiemployer Plan and which is maintained or otherwise contributed to by any member of the ERISA Group.

         “Board” means the Board of Governors of the Federal Reserve System and any successor thereto or to the functions thereof.

         “Board of Directors”, with respect to a corporation, means either the Board of Directors or any duly authorized committee of that Board which pursuant to the by-laws of such corporation has the same authority as that Board as to the matter at issue.

         “Bonds” means industrial revenue or development bonds issued by a state, county or municipal authority in connection with any Leased Property.

         “Building” means, with respect to any Leased Property, the buildings, structures and improvements located or to be located on the related Land, along with all fixtures used or useful in connection with the operation of such Leased Property, including, without limitation, all furnaces, boilers, compressors, elevators, fittings, pipings, connectives, conduits, ducts, partitions, equipment and apparatus of every kind and description now or hereafter affixed or attached to the Building, equipment, if any, financed by the Lessor and/or the Lenders and all Alterations (including all restorations, repairs, replacements and rebuilding of such buildings, improvements and structures) thereto (but in each case excluding trade fixtures and Lessee Equipment).

         “Business Day” means any day other than a Saturday, Sunday or other day on which banks are required or authorized to be closed for business in Atlanta, Georgia and, if the

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applicable Business Day relates to a LIBOR Advance, on which trading is not carried on by and between banks in the London interbank market.

         “Capitalized Leases” means leases under which any Obligor is the lessee or obligor, the discounted future rental payment obligations under which are capitalized or are required to be capitalized on the balance sheet of the lessee or obligor in accordance with GAAP.

         “Cash Collateral Account” is defined in Section 2.6 of the Master Agreement.

         “Cash Collateral Trustee” is defined in Section 2.6 of the Master Agreement.

         “Casualty” means an event of damage or casualty relating to all or part of any Leased Property that does not constitute an Event of Loss.

         “Claims” means liabilities, obligations, damages, losses, demands, penalties, fines, claims, actions, suits, judgments, proceedings, settlements, utility charges, costs, expenses and disbursements (including, without limitation, reasonable legal fees and expenses) of any kind and nature whatsoever.

         “Closing Date” means with respect to each parcel of Land, the date on which (i) such Land is acquired by the Lessor pursuant to a Purchase Agreement or such Land is leased to the Lessor pursuant to a Ground Lease and (ii) the initial Funding occurs with respect to such Land under the Master Agreement.

         “Code” or “Tax Code” means the Internal Revenue Code of 1986, as amended.

         “Commitment” means as to each Funding Party, its obligation to make Fundings as investments in each Leased Property (in the case of the Lessor), or to make Loans to the Lessor (in the case of the Lenders), in an aggregate amount not to exceed at any one time outstanding the amount set forth for such Funding Party on Schedule 2.2 to the Master Agreement (as it may be adjusted from time to time pursuant to Section 6 of the Master Agreement).

         “Commitment Fee” is defined in Section 2.2(h) of the Master Agreement.

         “Commitment Fee Percentage” means (i) 0.10%, if the Funded Debt to Tangible Capitalization Ratio for the most recently ended fiscal quarter is less than 15%, (ii) 0.15%, if the Funded Debt to Tangible Capitalization Ratio for the most recently ended fiscal quarter is equal to or greater than 15%, but less than 25%, and (iii) 0.20%, if the Funded Debt to Tangible Capitalization Ratio for the most recently ended fiscal quarter is equal to or greater than 25%.

         “Commitment Percentage” means as to any Funding Party, at a particular time, the percentage of the aggregate Commitments in effect at such time represented by such Funding Party’s Commitment, as such percentage is shown for such Funding Party on Schedule 2.2 to the

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Master Agreement (as it may be adjusted from time to time pursuant to Section 6 of the Master Agreement).

         “Completion Date” with respect to any Leased Property means the Business Day on which the conditions specified in Section 3.5 of the Master Agreement have been satisfied or waived with respect to such Leased Property.

         “Concord” means Concord EFS, Inc., a Delaware corporation.

         “Condemnation” means any condemnation, requisition, confiscation, seizure or other taking or sale of the use, occupancy or title to any Leased Property or any part thereof in, by or on account of any actual eminent domain proceeding or other action by any Governmental Authority or other Person under the power of eminent domain or any transfer in lieu of or in anticipation thereof, which in any case does not constitute an Event of Taking. A Condemnation shall be deemed to have “occurred” on the earliest of the dates that use is prevented or occupancy or title is taken.

         “Consolidated or consolidated” means, with reference to any term defined herein, shall mean that term as applied to the accounts of Concord and its Subsidiaries, consolidated in accordance with GAAP.

         “Consolidated EBITR” means with respect to any fiscal period, the result (determined with respect to the same period and without duplication) of the following: (a) Consolidated Net Income (or Deficit); plus (b) all taxes included as an expense of Concord and its Subsidiaries in the determination of Consolidated Net Income (or Deficit); plus (c) interest included as an expense of Concord and its Subsidiaries in the determination of Consolidated Net Income (or Deficit); plus (d) all Rents included as an expense of Concord and its Subsidiaries in the determination of Consolidated Net Income (or Deficit).

         “Consolidated Net Income (or Deficit)” means with respect to any fiscal period, the consolidated net income (or deficit) of Concord and its Subsidiaries, after deduction of all expenses, taxes, and other proper charges, determined in accordance with GAAP.

         “Consolidated Tangible Net Worth” means, at any date the sum of capital surplus, earned surplus and capital stock, minus deferred charges (including, but not limited to, unamortized debt discount and expense, organization expenses and development expenses), intangibles and treasury stock of Concord and its consolidated Subsidiaries, all determined as of such date in accordance with GAAP.

         “Construction” means, with respect to any Leased Property, the construction of the related Building pursuant to the related Plans and Specifications.

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         “Construction Agency Agreement” means the Construction Agency Agreement, dated as of July 12, 2002, between Concord and the Lessor.

         “Construction Agency Event of Default” is defined in Section 5.1 of the Construction Agency Agreement.

         “Construction Agent” means Concord in its capacity as construction agent pursuant to the Construction Agency Agreement.

         “Construction Budget” is defined in Section 2.4 of the Construction Agency Agreement.

         “Construction Commencement Date” is defined in Section 2.3 of the Construction Agency Agreement.

         “Construction Conditions” means the conditions set forth in Section 3.5 of the Master Agreement.

         “Construction Contract” means, with respect to any Leased Property, that certain construction contract, if any, between a Lessee or the Construction Agent and a General Contractor for the Construction of the related Building, provided that such contract shall be assigned to the Lessor, and such assignment shall be consented to by such General Contractor, pursuant to an assignment of such construction contract substantially in the form of the Security Agreement and Assignment set forth as Exhibit C to the Master Agreement.

         “Construction Costs” with respect to any Leased Property means the acquisition cost of the related Land, all costs incurred in connection with the design, development and construction of the Building on the related Land, as well as the costs of excavating, grading, landscaping and other work undertaken to prepare the Land for construction of a Building, the purchase price of all Funded Equipment related to such Leased Property and all other fees, costs and expenses incurred in connection with the acquisition, development and construction of such Leased Property, including all interest on the Loans and Yield in the Lessor’s Invested Amount related to such Leased Property accrued during the Construction Term therefor, planning, engineering, development, architects’, consultants’, brokers’, attorneys’ and accountants’ fees, appraisal costs, survey costs, insurance costs, transaction costs, demolition costs, permitting costs, costs for title insurance and other soft costs related to such Leased Property.

         “Construction Failure Payment” means, with respect to any Leased Property and as of any date of calculation, an amount equal to (i) 100% of the related Land Acquisition Cost, plus (ii) 89.9% of an amount equal to the costs of acquiring any Building located on the related Land as of the Closing Date therefor, plus the Construction Costs (exclusive of Land Acquisition Cost) that are capitalizable in accordance with GAAP as construction costs incurred as of such date of calculation or incurred by the Agent or any of the Funding Parties after the occurrence of a Construction Agency Event of Default, minus Force Majeure Losses related to such Leased Property.

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         “Construction Force Majeure Declaration” is defined in Section 3.4 of the Construction Agency Agreement.

         “Construction Force Majeure Event” means, with respect to any Leased Property:

(a)	an act of God arising after the related Closing Date, or
(b)	any change in any Applicable Law arising after such Closing Date and relating to the use of the Land or the construction of a Building on the Land, or
(c)	strikes, lockouts, labor troubles, unavailability of materials, riots, insurrections or other causes beyond a Lessee’s control

which prevents the Construction Agent from completing the Construction prior to the Scheduled Construction Termination Date and which could not have been avoided or which cannot be remedied by the Construction Agent through the exercise of all commercially reasonable efforts or the expenditure of funds and, in the case of (b) above, the existence or potentiality of which was not known to and could not have been discovered prior to such Closing Date through the exercise of reasonable due diligence by the Construction Agent.

         “Construction Land Interest” means each parcel of Land, including any Building or portion thereof thereon, for which the Completion Date has not yet occurred.

         “Construction Term” means, with respect to any Leased Property, the period commencing on the related Closing Date and ending on the related Construction Term Expiration Date, or such shorter period as may result from earlier termination of the Lease as provided therein.

         “Construction Term Expiration Date” means, with respect to any Leased Property, the earliest of the following:

(a)	the related Completion Date,
(b)	the date on which the aggregate Funded Amounts equal the Commitments, and
(c)	the related Scheduled Construction Termination Date.

         “Contractual Obligation”, as applied to any Person, means any provision of any Securities issued by that Person or any indenture, mortgage, deed of trust, contract, undertaking, agreement, instrument or other document to which that Person is a party or by which it or any of its properties is bound or to which it or any of its properties is subject (including, without limitation, any restrictive covenant affecting any of the properties of such Person).

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         “Covered Administrative Action” means any adverse administrative action against or involving EPS or any Subsidiary with respect to their respective business, operations or condition, including without limitation any (i) commitment letter, memorandum of understanding, notice of undercapitalized status or other requirement to submit a capital restoration plan or other similar arrangement related to the capital adequacy of EPS or any Subsidiary, (ii) supervisory agreement or other similar arrangement, (iii) notice of charges, (iv) temporary order suspending deposit insurance, (v) notice of intent to revoke deposit insurance, (vi) cease and desist order, (vii) order to suspend or remove any institution-affiliated party (as defined in 12 U.S.C. Section 1813(u)), (viii) notice of assessment of civil money penalties (including against any institution-affiliated party (as so defined)), (ix) directive, order, plan or material proposal relating to capital requirements, (x) proposed or final directive to take prompt regulatory action, notice of intention to reclassify, or order to dismiss a director or officer, (xi) proposal to require, or order requiring, divestiture or liquidation of any Subsidiary pursuant to 12 U.S.C. Section 1831o(f)(2)(I), (xii) proposed or final order restricting the ability of EPS to make a capital distribution or (xiii) similar administrative notice or action.

         “Deed” means, with respect to any Land, a deed in the form customary in the applicable jurisdiction, dated the applicable Closing Date, from the applicable Seller to the Lessor, conveying such Land.

         “Default” means any Event of Default or Potential Event of Default.

         “Derivatives Obligations” of any Person means all obligations of such Person in respect of any rate swap transaction, basis swap, forward rate transaction, commodity swap, commodity option, equity or equity index swap, equity or equity index option, bond option, interest rate option, foreign exchange transaction, cap transaction, floor transaction, collar transaction, currency swap transaction, cross-currency rate swap transaction, currency option or any other similar transaction (including any option with respect to any of the foregoing transactions) or any combination of the foregoing transactions.

         “Distribution” means, with respect to any Person, the declaration or payment of any dividend on or in respect of any shares of any class of capital stock, other than (a) dividends payable solely in shares of common stock of such Person and (b) the payment of cash in lieu of the distribution of fractional shares in the event of any stock dividend or stock split; the purchase, redemption, or other retirement of any shares of any class of capital stock of such Person, directly or indirectly by such Person through a Subsidiary of such Person or otherwise, unless such capital stock shall be redeemed or reacquired through the exchange of such stock with stock of the same class, and except for the redemption, repurchase, or acquisition of stock of any Subsidiary by Concord; the return of capital by such Person to its shareholders as such; or any other distribution (whether of such or other property) on or in respect of any shares of any class of capital stock of such Person.

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

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         “Eligible Assignee” means a Person that at the time of any assignment is (a) a commercial bank organized under the laws of the United States or any state thereof or under the laws of a country which is a member of the Organization for Economic Cooperation and Development, having combined capital and surplus in excess of $500,000,000 or (b) a finance company, insurance company or other financial institution which in the ordinary course of business extends credit of the type extended hereunder and that has total assets in excess of $1,000,000,000.

         “Engineer” means, with respect to any Leased Property, the engineer engaged in connection with the construction of the related Building, if any, who may be an employee of the General Contractor for such Leased Property.

         “Engineer’s Agreement” means, with respect to any Leased Property, the engineering services agreement, if any, between the Construction Agent, in its capacity as agent for Lessor, and the related Engineer.

         “Environment” shall have the meaning set forth in 42 U.S.C. §9601(8) as defined on the date of the Master Agreement, and “Environmental” shall mean pertaining or relating to the Environment.

         “Environmental Audit” means, with respect to each parcel of Land, a Phase I Environmental Assessment, dated no more than 90 days prior to the related Closing Date, by an environmental services firm satisfactory to the Funding Parties and Concord.

         “Environmental Laws” means and includes the Resource Conservation and Recovery Act of 1976, (RCRA) 42 U.S.C. §§ 6901-6987, as amended by the Hazardous and Solid Waste Amendments of 1984, the Comprehensive Environmental Response, Compensation and Liability Act, as amended by the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C. §§ 9601-9657, (CERCLA), the Hazardous Materials Transportation Act of 1975, 49 U.S.C. §§ 1801-1812, the Toxic Substances Control Act, 15 U.S.C. §§ 2601-2671, the Clean Air Act, 42 U.S.C. §§ 7401 et seq., the Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. §§ 136 et seq., and all similar federal, state and local environmental laws, ordinances, rules, orders, statutes, decrees, judgments, injunctions, codes and regulations, and any other federal, state or local laws, ordinances, rules, codes and regulations, relating to the environment, human health or natural resources or the regulation or control of or imposing liability or standards of conduct concerning human health, the environment, Hazardous Materials or the clean-up or other remediation of any Leased Property, or any part thereof, as any of the foregoing may have been from time to time amended, supplemented or supplanted.

         “EPS” means Electronic Payment Services, Inc., a Delaware corporation.

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         “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time or any successor federal statute, and the regulations promulgated and rulings issued thereunder.

         “ERISA Group” means Concord, any Subsidiary and all members of a controlled group of corporations and all trades and businesses (whether or not incorporated) under common control which, together with Concord and any Subsidiary, are treated as a single employer with Concord under Section 414 of the Code.

         “ERISA Reportable Event” means a reportable event (other than a reportable event described in Subsections 4043(b)(2)-(4) and 4043(b)(6)-(9), which do not require a thirty (30) day notice to the PBGC) with respect to a Guaranteed Pension Plan within the meaning of Section 4043 of ERISA and the regulations promulgated thereunder as to which the requirement of notice has not been waived.

         “Event of Default” means any event or condition designated as an “Event of Default” in Article XII of the Lease.

         “Event of Loss” is defined in Section 10.1 of the Lease.

         “Event of Taking” is defined in Section 10.2 of the Lease.

         “Executive Officer” means with respect to any Person, the Chief Executive Officer, President, Vice Presidents (if elected by the Board of Directors of such Person), Chief Financial Officer, Treasurer, Secretary and any Person holding comparable offices or duties (if elected by the Board of Directors of such Person).

         “Fair Market Sales Value” means, with respect to any Leased Property or any portion thereof, the fair market sales value as determined by an independent appraiser chosen by the related Lessee and reasonably acceptable to the Lessor and the Agent (unless an Event of Default has occurred and is continuing, in which case the appraiser shall be chosen by the Agent), that would be obtained in an arm’s-length transaction between an informed and willing buyer (other than a lessee currently in possession) and an informed and willing seller, under no compulsion, respectively, to buy or sell and neither of which is related to the Lessor or any Lessee, for the purchase of such Leased Property. Such fair market sales value shall be calculated as the value for such Leased Property, assuming, in the determination of such fair market sales value, that such Leased Property is in the condition and repair required to be maintained by the terms of the Lease (unless such fair market sales value is being determined for purposes of Section 13.1 of the Lease and except as otherwise specifically provided in the Lease or the Master Agreement, in which case this assumption shall not be made; it being understood that if such fair market sales value is being determined for purposes of the Construction Agency Agreement, such value shall be determined for the related Leased Property in its then state of completion, but assuming that all construction had been done in accordance with the standards required pursuant to the Construction Agency Agreement).

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         “Fair Value” of any Leased Property means the sum of (i) the Land Acquisition Cost for such Leased Property, plus (ii) the cost of acquiring any Building located on the related Land on the Closing Date for such Leased Property and all Construction Costs for such Leased Property that are capitalizable as construction costs in accordance with GAAP.

         “Federal Funds Rate” means, for any period, a fluctuating interest rate per annum equal for each day during such period to the weighted average of the rates on overnight Federal funds transactions with member banks of the Federal Reserve System arranged by Federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations for such day on such transactions received by the Agent from three Federal funds brokers of recognized standing selected by it.

         “Final Rent Payment Date” with respect to any Leased Property is defined in Section 13.1(e) of the Lease.

         “Fixed Charges” means for any fiscal period, the sum of (i) the expenses of Concord and its Subsidiaries for such period for interest payable with respect to Indebtedness (including, without limitation, imputed interest on Capitalized Leases) and all fees paid on account of or with respect thereto, plus (ii) regularly scheduled principal payments made or required to be made on account of Indebtedness (including, without limitation, Capitalized Leases) for such period, plus (iii) Rents paid during such period, in each case determined in accordance with GAAP.

         “Force Majeure Losses” means, with respect to any Leased Property and as of any date of calculation, the loss incurred by the Lessor in connection with a Construction Force Majeure Event with respect to which a Construction Force Majeure Declaration has been made, measured by the sum of (i) the lower of (A) the insurance proceeds paid with respect thereto plus the related deductible amount and (B) the reduction in Fair Market Sales Value of the Leased Property as a result of the Construction Force Majeure Event as set forth in an Appraisal, plus (ii) other direct costs incurred by the Lessor that the Lessor has consented to in accordance with Section 3.4 of the Construction Agency Agreement in connection with such Construction Force Majeure Event to the extent such costs are not covered by insurance; provided that insurance proceeds shall be used in such calculation only to the extent the event giving rise to the loss can be remediated for an amount equal to the resulting insurance proceeds plus the deductible; provided, further, that it is expressly understood and agreed that Force Majeure Losses shall not include the costs of repairing damage occasioned not as a result of the Construction Force Majeure Event, but as a result of the Construction Agent’s failure to take all reasonable steps to minimize the damages caused by such Construction Force Majeure Event.

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         “Funded Amount” means, as to the Lessor, the Lessor’s Invested Amounts (excluding Yield thereon to the extent not capitalized pursuant to Section 2.3(c) of the Master Agreement), and, as to each Lender, the outstanding principal amount of such Lender’s Loans.

         “Funded Debt” means at any time, an amount equal to the sum of the then outstanding balances of (a) Capitalized Leases, plus (b) other Indebtedness for borrowed money or other extensions of credit excluding the Net Investment Debt Amount.

         “Funded Debt to Tangible Capitalization Ratio” as of the last day of any fiscal quarter means the ratio, referenced as a percentage, of (i) the Funded Debt of Concord and its Subsidiaries, on a Consolidated basis, as of such day to (ii) the sum of (A) the amount in clause (i), plus (B) the Consolidated Tangible Net Worth as of such day.

         “Funded Equipment” means equipment, furnishings and other personal property that is located at or in a Leased Property and that has been financed or purchased with the proceeds of Fundings.

         “Funding” means any funding by the Funding Parties pursuant to Section 2.2 of the Master Agreement.

         “Funding Date” means each Closing Date and each other date on which a Funding occurs under Section 2 of the Master Agreement.

         “Funding Parties” means the Lessor and the Lenders, collectively.

         “Funding Party Balance” means, with respect to any Leased Property, (i) for the Lessor as of any date of determination, an amount equal to the sum of the outstanding related Lessor’s Invested Amount, all accrued and unpaid Yield on such outstanding related Lessor’s Invested Amount, all unpaid related fees owing to the Lessor under the Operative Documents, and all other related amounts owing to the Lessor by the Lessees under the Operative Documents, and (ii) for any Lender as of any date of determination, an amount equal to the sum of the outstanding related Loans of such Lender, all accrued and unpaid interest thereon, all unpaid related fees owing to such Lender under the Operative Documents, and all other related amounts owing to such Lender by the Lessees under the Operative Documents.

         “Funding Request” is defined in Section 2.2 of the Master Agreement.

         “Funding Termination Date” means the earlier of (i) July 12, 2004 and (ii) the termination of the Commitments pursuant to Section 5.2 of the Loan Agreement.

         “Future Value” means, with respect to any component of the Limited Recourse Value Percentage, the accreted value of such component as of the end of the Basic Term or the date of calculation, respectively, that is giving effect to the time value of money using the Implicit Rate.

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         “GAAP” means principles that are (i) consistent with the principles promulgated or adopted by the Financial Accounting Standards Board and its predecessors, as in effect from time to time and (ii) consistently applied with past financial statements of Concord adopting the same principles; provided that in each case referred to in this definition of “GAAP” a certified public accountant would, insofar as the use of such accounting principles impertinent, be in a position to deliver an unqualified opinion (other than qualification regarding changes in GAAP) as to financial statements in which such principles have been properly applied.

         “General Partner” means Atlantic Financial Managers, Inc., a Texas corporation.

         “Governmental Action” means all permits, authorizations, registrations, consents, approvals, waivers, exceptions, variances, orders, judgments, decrees, licenses, exemptions, publications, filings, notices to and declarations of or with, or required by, any Governmental Authority, or required by any Applicable Law and shall include, without limitation, all citings, environmental and operating permits and licenses that are required for the use, occupancy, zoning and operation of any Leased Property.

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

         “Ground Lease” means, with respect to any Land, the ground lease between the related Ground Lessor and the Lessor pursuant to which a leasehold estate is conveyed in the Land to the Lessor.

         “Ground Lessor” means, as to any Land, the ground lessor of such Land.

         “Guarantor” means Concord EFS, Inc., a Delaware corporation.

         “Guaranty Agreement” means the Guaranty Agreement, dated as of July 12, 2002, issued by Concord.

         “Hazardous Material” or “Hazardous Substance” means any substance, waste or material which is toxic, explosive, corrosive, flammable, infectious, radioactive, carcinogenic, mutagenic or otherwise hazardous, including petroleum, crude oil or any fraction thereof, petroleum derivatives, by products and other hydrocarbons, or which is or becomes regulated under any Environmental Law by any Governmental Authority, including any agency, department, commission, board or instrumentality of the United States, any jurisdiction in which a Leased Property is located or any political subdivision thereof and also including, without limitation, asbestos, urea formaldehyde foam insulation, polychlorinated biphenyls (“PCBs”) and radon gas.

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         “IDB Documentation” means the Bonds, each IDB Lease and all other agreements, documents, contracts and instruments entered into in connection with any Bonds or IDB Property.

         “IDB Lease” means a lease between the Lessor and an Authority with respect to a Leased Property.

         “IDB Property” means each Leased Property that is the subject of Bonds.

         “Implicit Rate” means 2.423% per annum.

         “Indebtedness” means all obligations, contingent and otherwise, that in accordance with GAAP should be classified upon the consolidated balance sheet of Concord and its Subsidiaries as liabilities, or to which reference should be made by footnotes thereto, including in any event and whether or not so classified: (a) all obligations for borrowed money or other extensions of credit whether or not secured or unsecured, absolute or contingent, including, without limitation, unmatured reimbursement obligations with respect to letters of credit or guarantees issued for the account of or on behalf of Concord and its Subsidiaries, and all obligations representing the deferred purchase price of property, other than accounts payable arising in the ordinary course of business, (b) all obligations evidenced by bonds, notes, debentures or other similar instruments; (c) all liabilities secured by any mortgage, pledge, security interest, lien, charge, or other encumbrance existing on property owned or acquired subject thereto, whether or not the liability secured thereby shall have been assumed; (d) all guarantees, endorsements(other than endorsements in the ordinary course of business of negotiable instruments or documents for deposit or collection), indemnities owed to third parties and other contingent obligations whether direct or indirect in respect of indebtedness of others or otherwise, including any obligations with respect to Derivative Obligations, any obligation to supply funds to or in any manner to invest in, directly or indirectly, the debtor, to purchase indebtedness, or to assure the owner of indebtedness against loss, through an agreement to purchase goods, supplies, or services for the purpose of enabling the debtor to make payment of the indebtedness held by such owner or otherwise, and the obligations to reimburse the issuer in respect of any letters of credit; (e) that portion of all obligations arising under Capital Leases that is required to be capitalized on the consolidated balance sheet of Concord and its Subsidiaries; and (f) all redeemable preferred stock of Concord or its Subsidiaries valued at the greater of its voluntary or involuntary liquidation preference plus accrued and unpaid dividends.

         “Indemnitee” means SunTrust Bank, in its individual capacity and in its capacity as Agent, and each Lender, and the Lessor, and their respective Affiliates, successors, permitted assigns, permitted transferees, employees, officers, directors and agents; provided, however, that in no event shall any Lessee be an Indemnitee; provided, further that with respect to any indemnification arising with respect to any Leased Property during the Construction Period for such Leased Property, the Indemnitee shall only be the Lessor (except as provided in Section 7.2 of the Master Agreement).

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         “Initial Closing Date” means the Closing Date for the first Leased Property acquired by the Lessor.

         “Joinder Agreement” means an agreement substantially in the form of Exhibit E to the Master Agreement pursuant to which a Subsidiary of Concord shall become a Lessee.

         “Land” means the land described in the related Lease Supplement.

         “Land Acquisition Costs” with respect to any Leased Property means the Funded Amounts advanced for the purpose of acquiring the related Land, including any earnest money deposits and all other amounts payable under the related Purchase Agreement, together with all interest and transaction expenses allocated to Land Acquisition Costs and capitalizable as land acquisition costs in accordance with GAAP.

         “Laws” means all ordinances, statutes, rules, regulations, orders, injunctions, writs, treaties or decrees of any Governmental Authority, or of any court or similar entity established by any thereof.

         “Lease” means the Master Lease Agreement, dated as of July 12, 2002 together with each Lease Supplement thereto, among the Lessees and the Lessor.

         “Lease Balance” means, with respect to all of the Leased Properties, as of any date of determination, an amount equal to the aggregate sum of the outstanding Funded Amounts of all Funding Parties, all accrued and unpaid interest on the Loans, all accrued and unpaid Yield on the Lessor’s Invested Amounts, all unpaid fees owing to the Funding Parties under the Operative Documents, all other amounts owing to the Funding Parties by the Lessees under the Operative Documents.

         “Lease Supplement” means a supplement to the Lease substantially in the form of Exhibit A thereto.

         “Lease Term” means (a) the Base Term, as it may be renewed pursuant to Section 14.9 of the Lease or (b) such shorter period as may result from earlier termination of the Lease as provided therein.

         “Lease Termination Date” means the last day of the Lease Term.

         “Leased Property” means Land and the related Building(s), including the related Funded Equipment. For purposes of the Lease, “Leased Property” means the Land identified in a Lease Supplement and the Buildings and Funded Equipment related thereto, unless the context provides otherwise. “Leased Property” shall not include any inventory of any Lessee or any Lessee

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Equipment. As used in this definition, “related” means such amounts arising with respect to such Leased Property.

         “Leased Property Balance” means, with respect to any Leased Property, as of any date of determination, an amount equal to the aggregate sum of the outstanding related Funded Amounts of all Funding Parties, all accrued and unpaid interest on the related Loans, all accrued and unpaid Yield on the related Lessor Invested Amounts, all related unpaid fees owing to the Funding Parties under the Operative Documents, and all other amounts owing to the Funding Parties by any Lessee under the Operative Documents with respect to such Leased Property. As used in this definition, “related” means such amounts arising with respect to such Leased Property.

         “Lender Basic Rent” means, for any Rent Period under the Lease, the aggregate amount of interest accrued on the Loans pursuant to Section 2.4 of the Loan Agreement during such Rent Period.

         “Lenders” means such financial institutions as are, or who may hereafter become, parties to the Loan Agreement as lenders to the Lessor.

         “Lending Office” for each Lender means the office such Lender designates in writing from time to time to Concord and the Agent.

         “Lessee” is defined in the preamble to the Master Agreement. The “related” Lessee with respect to any Leased Property means the Lessee that is party to the Lease Supplement for such Leased Property.

         “Lessee Equipment” means equipment and other personalty not financed or purchased with the proceeds of Fundings.

         “Lessor” is defined in the preamble to the Master Agreement.

         “Lessor Basic Rent” means, for any Rent Period under the Lease, the aggregate amount of Yield accrued and unpaid on the Lessor’s Invested Amounts pursuant to Section 2.3(a) of the Master Agreement during such Rent Period.

         “Lessor Liens” means Liens on or against any Leased Property, the Lease, any other Operative Document or any payment of Rent (a) which result from any act or omission of, or any Claim against, the Lessor or any of its Affiliates (including the General Partner) unrelated to the Transaction or from Lessor’s failure to perform as required under the Operative Documents or (b) which result from any Tax owed by the Lessor or any of its Affiliates (including the General Partner), except any Tax for which a Lessee or Concord is obligated to indemnify (including, without limitation, in the foregoing exception, any assessments with respect to any Leased

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Property noted on the related Title Policy or assessed in connection with any construction or development by a Lessee or the Construction Agent).

         “Lessor Rate” is defined in the Lessor Yield Letter.

         “Lessor Yield Letter” means the letter agreement, dated as of July 12, 2002, between Concord and the Lessor.

         “Lessor’s Invested Amount” means the amounts funded by the Lessor pursuant to Section 2 of the Master Agreement that are not proceeds of Loans by a Lender, as such amount may be increased during the related Construction Term pursuant to Section 2.3(c) of the Master Agreement.

         “LIBOR” means, for any Rent Period, with respect to LIBOR Advances the offered rate for deposits in U.S. Dollars, for a period comparable to the Rent Period and in an amount comparable to such Advances, appearing on the Telerate Screen Page 3750 as of 11:00 A.M. (London, England time) on the day that is two London Business Days prior to the first day of the Rent Period. If two or more of such rates appear on the Telerate Screen Page 3750, the rate for that Rent Period shall be the arithmetic mean of such rates. If the foregoing rate is unavailable from the Telerate Screen for any reason, then such rate shall be determined by the Agent from the Reuters Screen LIBO Page or, if such rate is also unavailable on such service, then on any other interest rate reporting service of recognized standing designated in writing by the Agent to Concord and the Funding Parties; in any such case rounded, if necessary, to the next higher 1/100 of 1.0%, if the rate is not such a multiple.

         “LIBOR Advance” means that portion of the Funded Amount bearing interest at a rate based on the Adjusted LIBO Rate.

         “Lien” means, with respect to any asset, any mortgage, deed to secure debt, deed of trust, lien, pledge, charge, security interest, security title, preferential arrangement which has the practical effect of constituting a security interest or encumbrance, or encumbrance or servitude of any kind in respect of such asset to secure or assure payment of indebtedness, whether by consensual agreement or by operation of statute or other law, or by any agreement, contingent or otherwise, to provide any of the foregoing.

         “Limited Event of Default” means an Event of Default under (i) paragraph (e), (j), (k) or (m) of Article XII of the Lease, solely if the breach of the related covenant, representation or warranty was based on (A) paragraph (e) of Article XII of the 1998 Lease or Section 5.3(b), 5.4, 5.6 or 5.14 of the Master Agreement (as defined in the 1998 Lease) or (B) a subjective interpretation of the term “diligently,” “reasonable,” “reasonably,” “practical,” “necessary,” “adequate,” “usually,” “desirable,” “reasonably likely,” “material,” “materially,” “Material Adverse Effect,” “materially adversely affect,” “material adverse change,” “materially and adversely affects,” “material adverse effect,” “adverse,” “adversely,” “substantial,” or

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“substantially”, or any Event of Default based solely on the subjective interpretation of any term (1) that gives rise to a cross default under paragraph (e) of Article XII or (2) in any covenant, representation or Event of Default added to the Operative Documents pursuant to the terms of Section 5.6 of the Master Agreement; provided, however, if the Event of Default, covenant or representation or warranty relates to the use of the Leased Property, then such Event of Default, covenant or representation or warranty will not be deemed a Limited Event of Default, (ii) paragraph (f) of Article XII of the Lease solely if such breach is based on a subjective interpretation of “Solvent” or (iii) paragraph (l) of Article XII of the Lease if the breach is the result of a hostile takeover not consented to by Concord.

         “Limited Recourse Amount” means, as of any date of determination, an amount equal to: the Future Value of: (i) 89.9% of the aggregate Fair Value of all of the Leased Properties minus (ii) the present value, as of the Initial Closing Date, of any minimum lease payments required to be made as of the Initial Closing Date and up to the date of determination that were included in Concord’s 90% test as described in paragraph 7(d) of FASB, Accounting for Leases, using a discount rate of 2.423%.

         “Loan” shall have the meaning specified in Section 2.1 of the Loan Agreement.

         “Loan Agreement” means the Loan Agreement, dated as of July 12, 2002, among the Lessor, the Agent and the Lenders.

         “Loan Documents” means the Loan Agreement, the Notes, the Assignments of Lease and Rents, the Mortgages and all documents and instruments executed and delivered in connection with each of the foregoing.

         “Loan Event of Default” means any of the events specified in Section 5.1 of the Loan Agreement, provided that any requirement for the giving of notice, the lapse of time, or both, or any other condition, event or act has been satisfied.

         “Loan Potential Event of Default” means any event, condition or failure which, with notice or lapse of time or both, would become a Loan Event of Default.

         “Loss Proceeds” is defined in Section 10.6 of the Lease.

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

         “Margin Stock” means “margin stock” as defined in Regulation T, U or X.

         “Master Agreement” means the Master Agreement, dated as of July 12, 2002, among the Guarantor, the Lessees, the Subsidiary Guarantors, the Lessor, the Agent and the Lenders.

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         “Material Adverse Effect” means with respect to any event or occurrence of whatever nature (including any adverse determination in any litigation, arbitration or governmental investigation or proceeding), (i) a materially adverse effect on the ability of Guarantor or any other Obligor to perform its obligations under any Operative Document, (ii) a materially adverse effect on the financial condition, operations, business, prospects or assets of Concord and its Subsidiaries, taken as a whole, (iii) a materially adverse effect on the value or useful life of any Leased Property, or the legality, validity or enforceability of any of the Operative Documents or (iv) a materially adverse effect on the status, perfection or priority of the Agent’s or any Funding Party’s interest in any Leased Property.

         “Material Contract” means (a) any contract or other agreement written or oral, of Concord or any of its Subsidiaries involving monetary liability of or to any such Person in an amount in excess of $15,000,000 per year, or (b) any other contract or agreement, written or oral, of Concord or any of its Subsidiaries the failure to comply with which could reasonably be expected to have a Material Adverse Effect.

         “Monthly Payment Date” means the last Business Day of each calendar month.

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

         “Mortgage” means, with respect to any Leased Property, that certain mortgage, deed of trust or security deed, dated as of the related Closing Date, by the Lessor to the Agent, in the form of Exhibit D attached to the Master Agreement, with such modifications as are satisfactory to the Lessor and the Agent in conformity with Applicable Law to assure customary remedies in favor of the Agent in the jurisdiction where the Leased Property is located.

         “Multiemployer Plan” means any multiemployer plan within the meaning of Section 3(37) of ERISA maintained or contributed to by Concord or any member of the ERISA Group.

         “Net Investment Debt Amount” on any date means an amount equal to the lesser of (i) the principal of the Indebtedness of EFS National Bank (or any successor thereto, so long as such entity is a Subsidiary of Concord) or any Subsidiary of EFS National Bank incurred for the purpose of investing in U.S. treasury notes and other U.S. governmental agencies, quasi-governmental agencies and government sponsored agencies or instrumentalities, such as obligations of the Federal Home Loan Mortgage Corp., Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation, so long as such obligations are backed by the full faith and credit of the U.S. government, and (ii) the fair market value as of such date of the investments purchased or maintained with the proceeds of such Indebtedness, provided that in no event shall the Net Investment Debt Amount exceed the amount set forth opposite the appropriate year:

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Year	Amount
2002	$	100,000,000
2003	$	150,000,000
2004	$	200,000,000
2005 and each year thereafter	$	250,000,000

         “Net Selling Price” for any Leased Property means the selling price therefor, net of all related taxes, attorneys’ fees, escrow costs, recording fees, transfer fees, title insurance costs, costs of surveys and environmental reports, brokers’ fees, advertising costs, carrying costs incurred by the Agent or any Funding Party (including, without limitation, amounts expended by the Agent or any Funding Party to insure, protect, maintain or operate such Leased Property) and all other expenses and prorations associated with such sale.

         “Notes” means the A Note and the B Note issued by the Lessor under the Loan Agreement, and any and all notes issued in replacement or exchange therefor in accordance with the provisions thereof.

         “Obligations” means all indebtedness (whether principal, interest, fees or otherwise), obligations and liabilities of the Guarantor and each Lessee to the Funding Parties (including without limitation all extensions, renewals, modifications, rearrangements, restructures, replacements and refinancings thereof, whether or not the same involve modifications to interest rates or other payment terms of such indebtedness, obligations and liabilities), whether arising under any of the Operative Documents or otherwise, and whether now existing or hereafter created, absolute or contingent, direct or indirect, joint or several, secured or unsecured, due or not due, contractual or tortious, liquidated or unliquidated, arising by operation of law or otherwise, or acquired by Funding Parties outright, conditionally or as collateral security from another, including but not limited to the obligation of the Guarantor and each Lessee to repay future advances by the Funding Parties, whether or not made pursuant to commitment and whether or not presently contemplated by the Guarantor or any Lessee and the Funding Parties under the Operative Documents.

         “Obligors” means the Guarantor, the Subsidiary Guarantors, the Construction Agent and the Lessees, collectively.

         “Officer’s Certificate” of a Person means a certificate signed by the Chairman of the Board or the President or any Executive Vice President or any Senior Vice President or any other Vice President or the Treasurer or any Assistant Treasurer or the Controller or any Assistant Controller or the Secretary of such Person.

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         “Operative Documents” means the Master Agreement, the Purchase Agreements, the Deeds, the Lease, the Security Agreement and Assignment, the Notes, the Loan Agreement, the Guaranty Agreement, the Swap Documents, the Subsidiary Guaranty, the Assignments of Lease and Rents, the Mortgages, the Ground Leases, the Construction Agency Agreement, the Joinder Agreements, Lessor Yield Letter and the other documents delivered in connection with the transactions contemplated by the Master Agreement.

         “Overdue Rate” means the lesser of (a) the highest interest rate permitted by Applicable Law and (b) an interest rate per annum (calculated on the basis of a 365-day (or 366-day, if appropriate) year equal to (i) in the case of each LIBOR Rate Advance, 2.0% in excess of the rate then applicable to such LIBOR Rate Advance until the end of the applicable Rent Period and thereafter 2.0% above the Base Rate in effect from time to time, (ii) in the case of Base Rate Advances, 2% above the Base Rate in effect from time to time and (iii) in the case of Yield, 2% above the Lessor Rate.

         “Partnership Agreement” means the Agreement of Limited Partnership of AFG, dated as of February 28, 1996, among the General Partner and the persons listed on Schedule A thereto as limited partners.

         “Payment Date” means the last day of each Rent Period (and if such Rent Period is longer than three months, the day that is 90 days after the first day of such Rent Period) or, if such day is not a Business Day, the next Business Day.

         “Payment Date Notice” is defined in Section 2.3(d) of the Master Agreement.

         “PBGC” means the Pension Benefit Guaranty Corporation, and any successor thereto.

         “Permitted Investments” means: (a) direct obligations of the United States of America, or of any agency thereof, or obligations guaranteed as to principal and interest by the United States of America, or of any agency thereof, in either case maturing not more than 90 days from the date of acquisition thereof; (b) certificates of deposit issued by any Lender or by any bank or trust company organized under the laws of the United States of America or any state thereof and having capital, surplus and undivided profits of at least $500,000,000, maturing not more than 90 days from the date of acquisition thereof; (c) commercial paper rated A-1 or better or P-1 by Standard & Poor’s Corporation or Moody’s Investors Services, Inc., respectively, maturing not more than six months from the date of acquisition thereof; (d) commercial paper of any Lender (or any Affiliate thereof located in the United States of America) that is rated
A-1 or better or P-1 by Standard and Poor’s Corporation or Moody’s Investors Services, Inc., respectively, maturing not more than six months from the date of acquisition thereof; (e) repurchase agreements entered into with any Lender or with any bank or trust company satisfying the conditions of clause (b) hereof that is secured by any obligation of the type described in clauses (a) through (d) of this definition; and (f) money market funds acceptable to the Required Lenders.

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         “Permitted Lease Balance” with respect to any Leased Property means (i) the Leased Property Balance therefor, minus (ii) the Force Majeure Losses, if any, related to such Leased Property.

         “Permitted Liens” means the following with respect to any Leased Property: (a) the respective rights and interest of the related Lessee, the Lessor, the Agent and any Lender, as provided in the Operative Documents, (b) Liens for Taxes either not yet due or being contested in good faith and by appropriate proceedings, so long as enforcement thereof is stayed pending such proceedings, (c) materialmen’s, mechanics’, workers’, repairmen’s, employees’ or other like Liens arising after the related Closing Date in the ordinary course of business for amounts either not yet due or being contested in good faith and by appropriate proceedings, so long as enforcement thereof is stayed pending such proceedings or such Liens are bonded over, (d) Liens arising after such Closing Date out of judgments or awards with respect to which at the time an appeal or proceeding for review is being prosecuted in good faith, so long as the enforcement thereof has been stayed pending such appeal or review, (e) easements, rights of way, reservations, servitudes and rights of others against the Land which do not materially and adversely affect the value or the utility of such Leased Property, (f) other Liens incidental to the conduct of the related Lessee’s business which were not incurred in connection with the borrowing of money or the obtaining of advances or credit and which do not in the aggregate materially detract from the value of such Leased Property or materially impair the use thereof, (g) assignments and subleases expressly permitted by the Operative Documents, (h) Liens in favor of municipalities agreed to by the related Lessee that do not affect the value or utility of the related Leased Property and (i) Liens created by the IDB Documentation.

         “Person” means an individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, nonincorporated organization or government or any agency or political subdivision thereof.

         “Plan” means at any time an employee pension benefit plan (other than a Multiemployer Plan) which is covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Code and either (a) is maintained by any member of the ERISA Group or (b) has at any time within the preceding five years been maintained, or contributed to, by any Person which was at such time a member of the ERISA Group for employees of any Person which was at such time a member of the ERISA Group.

         “Plans and Specifications” means with respect to any Building the final plans and specifications for such Building prepared by the Architect, and, if applicable, referred to by the Appraiser in the Appraisal, as such Plans and Specifications may be hereafter amended, supplemented or otherwise modified from time to time.

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

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         “Purchase Agreement” means with respect to any Land, the purchase agreement with the Seller for the conveyance of such Land to the Lessor.

         “Purchase Option” is defined in Section 14.1 of the Lease.

         “Quarterly Payment Date” means the last Business Day of each March, June, September and December of each year.

         “Recourse Deficiency Amount” means for any Leased Property, an amount equal to (i) the A Percentage times (ii) the Fair Value of such Leased Property.

         “Release” means the release, deposit, disposal or leak of any Hazardous Material into or upon or under any land or water or air, or otherwise into the environment, including, without limitation, by means of burial, disposal, discharge, emission, injection, spillage, leakage, seepage, leaching, dumping, pumping, pouring, escaping, emptying, placement and the like.

         “Release Date” means, with respect to any Leased Property, the earlier of (i) the date that the Lease Balance has been paid in full, and (ii) the date on which the Agent gives notice to the Lessor that the Lenders release any and all interest they may have in such Leased Property, and all proceeds thereof, and any rights to direct, consent or deny consent to any action by the Lessor with respect to such Leased Property.

         “Remarketing Option” is defined in Section 14.6 of the Lease.

         “Rent” means Basic Rent and Supplemental Rent, collectively.

         “Rent Period” means (i) in the case of Base Rate Advances, means the period from, and including, a Quarterly Payment Date to, but excluding, the next succeeding Quarterly Payment Date; and (ii) with respect to any LIBOR Advance:

(1)	initially, the period commencing on the borrowing or conversion date, as the case may be, with respect to such LIBOR Advance and ending one, two, three or six months thereafter, as selected by Concord in its Funding Notice or Payment Date Notice, as the case may be, given with respect thereto; and
(2)	thereafter, each period commencing on the last day of the next preceding Rent Period applicable to such LIBOR Advance and ending one, two, three or six months thereafter, as selected by Concord by irrevocable notice to the Agent in its related Payment Date Notice;

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provided, however that:

         (a) The initial Rent Period for any Funding shall commence on the Funding Date of such Funding and each Rent Period occurring thereafter in respect of such Funding shall commence on the day on which the next preceding Rent Period expires;

         (b) If any Rent Period would otherwise expire on a day which is not a Business Day, such Rent Period shall expire on the next succeeding Business Day, provided that if any Rent Period in respect of LIBOR Advances would otherwise expire on a day that is not a Business Day but is a day of the month after which no further Business Day occurs in such month, such Rent Period shall expire on the next preceding Business Day;

         (c) Any Rent Period in respect of LIBOR Advances which begins on a day for which there is no numerically corresponding day in the calendar month at the end of such Rent Period shall, subject to paragraph (d) below, expire on the last Business Day of such calendar month;

         (d) No Rent Period shall extend beyond the Lease Termination Date; and

         (e) At any one time, there shall be no more than five (5) Rent Periods.

         “Rents” means all consideration paid in the ordinary course of business by Concord and its Subsidiaries to any Person for the use or occupation of property under any operating lease to which Concord or any of its Subsidiaries is the lessee or obligor, determined in accordance with GAAP.

         “Report” is defined in Section 7.6 of the Master Agreement.

         “Required Funding Parties” means, at any time, Funding Parties holding an aggregate outstanding principal amount of Funded Amounts equal to at least 51% of the aggregate outstanding principal amount of all Funded Amounts.

         “Required Lenders” means, at any time, Lenders holding an aggregate outstanding principal amount of Loans equal to at least 51% of the aggregate outstanding principal amount of all Loans.

         “Requirements of Law” for any Person means the articles or certificate of incorporation and bylaws or other organizational or governing documents of such Person, and any law, treaty, rule or regulation, or determination of an arbitrator or a court or other governmental authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.

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         “Reuters Screen” means, when used in connection with any designated page and LIBOR, the display page so designated on the Reuters Monitor Money Rates Service (or such other page as may replace that page on that service for the purpose of displaying rates comparable to LIBOR).

         “Scheduled Construction Termination Date” means with respect to any Building the earlier of (A) two (2) years after the Closing Date for the related Land and (B) the Funding Termination Date.

         “SEC” means the United States Securities and Exchange Commission.

         “Securities Act” means the Securities Act of 1933, as amended.

         “Securities Exchange Act” means the Securities Exchange Act of 1934, as amended.

         “Security Agreement and Assignment” means, with respect to any Leased Property, the Security Agreement and Assignment (Construction Contract, Architect’s Agreement, Engineer’s Agreement, Permits, Licenses and Governmental Approvals, and Plans, Specifications and Drawings) from the Construction Agent to the Lessor, substantially in the form of Exhibit C to the Master Agreement.

         “Significant Subsidiary” means, at the date of determination, any Subsidiary (i) whose consolidated total assets equals or exceeds five percent (5%) of the consolidated total assets of the Guarantor, or (ii) whose consolidated net income for the most recently completed four quarters equals or exceeds five percent (5%) of the Guarantor’s consolidated net income for such period, provided that “Significant Subsidiary” shall not include any Subsidiary of Concord that is a national bank or a federal savings bank, or any subsidiary of such national bank or federal savings bank. The Significant Subsidiaries as of the Initial Closing Date are listed on Schedule 1 to the Master Agreement.

         “Solvent” means, with respect to any Person as of any date, that on such date (i) the fair value of the property of such Person is greater than the total amount of liabilities, including, without limitation, contingent liabilities, of such Person, (ii) the present fair salable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become matured, (iii) such Person is able to realize upon its assets and pay its debts and other liabilities, contingent obligations and other commitments as they mature in the normal course of business, (iv) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay as such debts and liabilities mature, and (v) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person’s property would constitute unreasonably small capital after giving due consideration to the prevailing practice in the industry in which such Person is engaged. In computing the amount of contingent liabilities at anytime, it

28

is intended that such liabilities will be computed at the amount which, in light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

         “Star” means Star Systems, LLC, a Delaware limited liability company.

         “Subsidiary” means any corporation, association, partnership, trust, limited liability company or other business entity of which the designated parent shall at any time own directly or indirectly through a Subsidiary or Subsidiaries at least a majority (by number of votes or controlling interests) of the outstanding Voting Interests.

         “Subsidiary Guarantors” means each Significant Subsidiary.

         “Subsidiary Guaranty” means the Subsidiary Guaranty Agreement, dated as of July 12, 2002, issued by the Subsidiary Guarantors.

         “Supplemental Rent” means any and all amounts, liabilities and obligations other than Basic Rent which any Lessee assumes or agrees or is otherwise obligated to pay under the Lease or any other Operative Document (whether or not designated as Supplemental Rent) to the Lessor, the Agent, any Lender or any other party, including, without limitation, amounts under Article XVI of the Lease, and indemnities and damages for breach of any covenants, representations, warranties or agreements, and all overdue or late payment charges in respect of any Funded Amount.

         “Swap Documents” means the ISDA Master Agreement, dated as of April 3, 1998, between SunTrust Bank and EPS, together with all schedules and confirmations related thereto (including the amended confirmation dated July 13, 2000).

         “Tax Code” means the Internal Revenue Code of 1986, as amended and in effect from time to time.

         “Tax Indemnitee” means, with respect to each Leased Property, (i) so long as such Leased Property is a Construction Land Interest, the Lessor and its Affiliates, successors, permitted assigns, permitted transferees, employees, officers, directors and agents and (ii) from and after the Completion Date for such Leased Property, the Lessor, SunTrust Bank, in its individual capacity and in its capacity as Agent, each Lender and their respective Affiliates, successors, permitted assigns, permitted transferees, employees, officers, directors and agents; provided, however, that in no event shall any Lessee be a Tax Indemnitee.

         “Taxes” means any present or future taxes, levies, imposts, duties, fees, assessments, deductions, withholdings or other charges of whatever nature, including without limitation, income, receipts, excise, property, sales, transfer, license, payroll, withholding, social security and franchise taxes now or hereafter imposed or levied by the United States, or any state, local or

29

foreign government or by any department, agency or other political subdivision or taxing authority thereof or therein and all interest, penalties, additions to tax and similar liabilities with respect thereto.

         “Telerate” means, when used in connection with any designated page and LIBOR, the display page so designated on the Dow Jones Telerate Service (or such other page as may replace that page on that service for the purpose of displaying rates comparable to LIBOR).

         “Ten Percent Subsidiary” means each of (i) EPS, (ii) Star and (iii) any other Subsidiary of Concord that is not a Subsidiary of either Star or EPS and (A) whose consolidated total assets equals or exceeds ten percent (10%) of the consolidated total assets of the Guarantor, or (B) whose consolidated net income for the most recently completed four quarters equals or exceeds ten percent (10%) of the Guarantor’s consolidated net income for such period, provided that “Ten Percent Subsidiary” shall not include any Subsidiary of Concord that is a national bank or federal savings bank, or any subsidiary of such national bank or federal savings bank.

         “Title Insurance Company” means the company that has or will issue the title policies with respect to a Leased Property, which company shall be reasonably acceptable to the Funding Parties.

         “Title Policy” is defined in Section 3.1 of the Master Agreement.

         “Transaction” means all the transactions and activities referred to in or contemplated by the Operative Documents.

         “UCC” means the Uniform Commercial Code of Georgia, as in effect from time to time.

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         “Voting Interests” means stock or similar ownership interests, of any class or classes (however designated), the holders of which are at the time entitled, as such holders, (a) to vote for the election of a majority of the directors (or persons performing similar functions) of the corporation, association, partnership, trust or other business entity involved, or (b) to control, manage, or conduct the business of the corporation, partnership, association, trust or other business entity involved.

         “Withholding Taxes” is defined in Section 7.5(f) of the Master Agreement.

         “Yield” is defined in Section 2.3 of the Master Agreement.

31 EX-10.3 5 w64721exv10w3.htm CONSTRUCTION AGENCY AGREEMENT, DATED JULY 12,2002

Exhibit 10.3

CONSTRUCTION AGENCY AGREEMENT

dated as of July 12, 2002

among

ATLANTIC FINANCIAL GROUP, LTD.

and

CONCORD EFS, INC.,
as Construction Agent

TABLE OF CONTENTS

			Page
ARTICLE I		DEFINITIONS		1
	1.1.	Defined Terms		1
ARTICLE II		APPOINTMENT OF CONSTRUCTION AGENT		2
	2.1.	Appointment		2
	2.2.	Acceptance; Construction		2
	2.3.	Commencement of Construction		2
	2.4.	Supplements to this Agreement		2
	2.5.	Term		3
	2.6.	Identification of Properties; Construction Documents		3
	2.7.	Scope of Authority		3
	2.8.	Covenants of the Construction Agent		5
	2.9.	Insurance		6
ARTICLE III		THE BUILDINGS		12
	3.1.	Amendments; Modifications		12
	3.2.	Casualty and Condemnation		12
	3.3.	Indemnity		13
	3.4.	Construction Force Majeure Events		13
ARTICLE IV		PAYMENT OF FUNDS		14
	4.1.	Funding of Property Acquisition Costs and Property Buildings Costs		14
ARTICLE V		CONSTRUCTION AGENCY EVENTS OF DEFAULT		15
	5.1.	Construction Agency Events of Default		15
	5.2.	Damages		16
	5.3.	Remedies; Remedies Cumulative		16
	5.4.	Limitation on Construction Agent’s Recourse Liability		17
	5.5.	Construction Agent’s Right to Purchase		18
	5.6.	Construction Return Procedures		18
ARTICLE VI		NO CONSTRUCTION AGENCY FEE		19
	6.1.	Lease as Fulfillment of Lessor’s Obligations		19
ARTICLE VII		LESSOR’S RIGHTS; CONSTRUCTION AGENT’S RIGHTS		20
	7.1.	Exercise of the Lessor’s Rights		20
	7.2.	Lessor’s Right to Cure Construction Agent’s Defaults		20
ARTICLE VIII		MISCELLANEOUS		20
	8.1.	Successors and Assigns		20

i

		Page
8.2.	Notices		20
8.3.	GOVERNING LAW		20
8.4.	Amendments and Waivers		20
8.5.	Counterparts		21
8.6.	Severability		21
8.7.	Headings and Table of Contents		21
8.8.	Jurisdiction; Waivers		21

ii

EXHIBITS

Exhibit A Form of Supplement to Construction Agency Agreement

iii

CONSTRUCTION AGENCY AGREEMENT

         CONSTRUCTION AGENCY AGREEMENT, dated as of July 12, 2002 (as amended, supplemented or otherwise modified from time to time, this “Agreement”), between ATLANTIC FINANCIAL GROUP, LTD., a Texas limited partnership, (the “Lessor”), and CONCORD EFS, INC., a Delaware corporation (“Concord”, and in its capacity as construction agent, the “Construction Agent”).

PRELIMINARY STATEMENT

         A.     Lessor, Concord, as Guarantor, Concord and certain subsidiaries of Concord that may become party thereto, as Lessees, Electronic Payment Services, Inc., Star Systems, LLC and other Significant Subsidiaries of Concord that are or may become party thereto, as Subsidiary Guarantors, the Lenders signatory thereto and SunTrust Bank, as agent for such Lenders (in such capacity, the “Agent”) are parties to that certain Master Agreement, dated as of July 12, 2002 (as amended, supplemented or otherwise modified from time to time pursuant thereto, the “Master Agreement”).

         B.     Subject to the terms and conditions hereof, (i) the Lessor desires to appoint Concord as the Construction Agent to act as its sole and exclusive agent for the identification and acquisition of the Land pursuant to the Master Agreement and construction of the Buildings in accordance with the Plans and Specifications and pursuant to the Master Agreement, and (ii) the Construction Agent desires, for the benefit of the Lessor, to cause the Buildings to be constructed in accordance with the Plans and Specifications and pursuant to the Master Agreement and this Agreement, in each case in accordance with the terms herein set forth.

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

ARTICLE I

DEFINITIONS

         1.1. Defined Terms. Capitalized terms used but not otherwise defined in this Agreement shall have the meanings set forth in Appendix A to the Master Agreement.

ARTICLE II

APPOINTMENT OF CONSTRUCTION AGENT

         2.1. Appointment. Pursuant to and subject to the terms and conditions set forth herein and in the Master Agreement and the other Operative Documents, the Lessor hereby irrevocably designates and appoints Concord as the Construction Agent to act as its exclusive agent for (i) the identification and acquisition from time to time of Land to be acquired or leased by the Lessor and leased or subleased to a Lessee and (ii) the construction of the Buildings in accordance with the Plans and Specifications on such Land.

         2.2. Acceptance; Construction. Concord hereby unconditionally accepts the designation and appointment as Construction Agent. The Construction Agent will cause the Buildings to be constructed on the Land substantially in accordance with the Plans and Specifications and in accordance with the Operative Documents, and to be equipped in all material respects with all Applicable Law and insurance requirements. If a Leased Property will be leased by a Lessee other than Concord, Concord may appoint such Lessee as its sub-construction agent with respect to such Leased Property, provided that such appointment shall not affect Concord’s obligations hereunder, which obligations shall be primary and shall remain in full force and effect.

         2.3. Commencement of Construction. Subject to Construction Force Majeure Events, the Construction Agent hereby agrees, unconditionally and for the benefit of the Lessor, to cause Construction of a Building to commence on each parcel of Land as soon as is reasonably practicable, in its reasonable judgment, after the Closing Date in respect of such Land. For purposes hereof, Construction of a Building shall be deemed to commence on the date after the Closing Date for the related Leased Property (the “Construction Commencement Date”) on which excavation for the foundation for such Building or any other Construction of such Building commences. Without limiting the foregoing, no phase of such Construction shall be undertaken until all permits then required for such phase have been issued therefor.

         2.4. Supplements to this Agreement. On the Closing Date of each parcel of Land, the Lessor and the Construction Agent shall each execute and deliver to the Agent a supplement to this Agreement in the form of Exhibit A to this Agreement, appropriately completed, pursuant to which the Lessor and the Construction Agent shall, among other things, each acknowledge and agree that the Construction of such parcel of Land will be governed by the terms of this Agreement. Following the execution and delivery of a supplement to this Agreement as provided above, such supplement and all supplements previously delivered under this Agreement shall constitute a part of this Agreement. On or prior to the Closing Date of each parcel of Land, the Construction Agent shall prepare and deliver to the Lessor and the Agent a construction budget (the “Construction Budget”) for the related Leased Property, setting forth in reasonable detail the budget for the Construction of the proposed Building on such Land in accordance with the Plans and Specifications therefor, and all related costs, including the capitalized interest and Yield expected to accrue during the related Construction Term; such Construction Budget shall include a line item for the amount of self-insurance or deductibles applicable to such Leased Property (it

2

being understood that the Construction Agent shall have no liability with respect to self-insurance or deductibles with respect to any Leased Property during the Construction Term therefor).

         2.5. Term. This Agreement shall commence on the date hereof and shall terminate with respect to any given Leased Property upon the first to occur of:

         (a) payment by the Lessee of the Leased Property Balance and termination of the Lease with respect to such Leased Property in accordance with the Lease;

         (b) the expiration or earlier termination of the Lease;

         (c) termination of this Agreement pursuant to Article V hereof;

         (d) the Completion Date for such Leased Property and the completion of all punch list items as set forth in Section 2.8(d); and

         (e) the payment by the Construction Agent of the Leased Property Balance or the Construction Failure Payment with respect to such Leased Property pursuant to this Agreement.

         2.6. Identification of Properties; Construction Documents. The Construction Agent may execute any of its duties and obligations under this Agreement by or through agents, architects, consultants, contractors, developers, Affiliates, employees, engineers or attorneys-in-fact, and the Construction Agent shall enter into such agreements with architects, contractors, developers, consultants, engineers and such other agents as the Construction Agent deems necessary or desirable for the construction of the Buildings pursuant hereto (the “Construction Documents”); provided, however, that no such delegation shall limit or reduce in any way the Construction Agent’s duties and obligations under this Agreement; provided, further, that contemporaneously with, or promptly after, the execution and delivery of a Construction Document, the Construction Agent will execute and deliver to the Lessor the Security Agreement and Assignment, pursuant to which the Construction Agent assigns to the Lessor, among other things, all of the Construction Agent’s rights under and interests in such Construction Documents. Each construction contract shall be with a reputable general contractor with experience in constructing projects that are similar in scope and type to the proposed Building, and shall provide for a guaranteed maximum project cost (within sixty (60) days of the Closing Date for the related Leased Property) and a commercially reasonable retainage amount (but in no event less than 10% of the related project cost) through substantial completion; it being understood that full payment may be made to subcontractors whose work has been fully performed and approved by the Construction Agent.

         2.7. Scope of Authority. (A) Subject to the terms, conditions, restrictions and limitations set forth in the Operative Documents, the Lessor hereby expressly authorizes the Construction

3

Agent, or any agent or contractor of the Construction Agent, and the Construction Agent unconditionally agrees, for the benefit of the Lessor, to take all action necessary or desirable for the performance and satisfaction of all of the Construction Agent’s obligations hereunder with respect to the Construction Land Interests acquired or leased by the Lessor, including, without limitation:

         (i) the identification and assistance with the acquisition or lease of Land in accordance with the terms and conditions of the Master Agreement;

         (ii) overseeing, directing, supervising and monitoring all design and supervisory functions relating to the construction of the Buildings and all engineering work related to the construction of the Buildings;

         (iii) negotiating and entering into all contracts or arrangements to procure the equipment and services necessary to construct the Buildings on such terms and conditions as are customary and reasonable in light of local standards and practices;

         (iv) obtaining all necessary permits, licenses, consents, approvals and other authorizations, including those required under Applicable Law (including Environmental Laws), from all Governmental Authorities in connection with the construction and the development of the Leased Property on the Land in accordance with the Plans and Specifications;

         (v) maintaining all books and records with respect to the construction, operation and management of the Leased Properties; and

         (vi) performing any other acts necessary or appropriate in connection with the identification, and acquisition (or leasing) and development of the Land and construction of the Buildings in accordance with the Plans and Specifications, and all other functions typically undertaken for the construction and development of similar properties.

         (b)  Neither the Construction Agent nor any of its Affiliates or agents shall enter into any contract which would, directly or indirectly, impose any liability or obligation on the Lessor unless such contract expressly contains an acknowledgment by the other party or parties thereto that the obligations of the Lessor are non-recourse, and that the Lessor shall have no personal liability with respect to such obligations. Any contract entered into by the Construction Agent or any of its Affiliates or agents not meeting the requirements of the foregoing sentence shall be ineffective. Subject to the foregoing, the Lessor shall execute such documents and take such other actions as the Construction Agent shall reasonably request, at the Construction Agent’s expense, to permit the Construction Agent to perform its duties hereunder.

         (c)  Subject to the terms and conditions of this Agreement and the other Operative Documents, the Construction Agent shall have sole management and control over the means,

4

methods, sequences and procedures with respect to the Construction. The parties agree and acknowledge that the Construction Agent shall be in possession and control of each Leased Property during the Construction Term therefor.

         2.8. Covenants of the Construction Agent. The Construction Agent hereby covenants and agrees that it will:

         (a) following the Construction Commencement Date for each parcel of Land subject to this Agreement, but subject to Construction Force Majeure Events, cause construction of a Building on such Land to be prosecuted diligently and without undue interruption substantially in accordance with the Plans and Specifications for such Land, in accordance with the Construction Budget for such Leased Property and in compliance in all material respects with all Applicable Law and insurance requirements;

         (b) notify the Lessor and the Agent in writing not less than five (5) Business Days after the occurrence of each Construction Force Majeure Event;

         (c) take all reasonable and practical steps to cause the Completion Date for such Leased Property to occur on or prior to the Scheduled Construction Termination Date for such Leased Property, subject to the occurrence of Construction Force Majeure Events, and cause all Liens (including, without limitation, Liens or claims for materials supplied or labor or services performed in connection with the construction of the Buildings), other than Permitted Liens and Lessor Liens, to be discharged or bonded off if disputed in good faith by appropriate proceedings by the Construction Agent;

         (d) following the Completion Date for each Leased Property, (A) cause all outstanding punch list items with respect to the Buildings on such Leased Property to be completed within ninety (90) days after said Completion Date and (B) provide to the Lessor a list, in reasonable detail, of all Funded Equipment related to such Leased Property; and

         (e) at all times during Construction, cause all title to all personalty financed by the Lessor on or within such Leased Property to be and remain vested in the Lessor and cause to be on file with the applicable filing office or offices all necessary documents under Article 9 of the Uniform Commercial Code to perfect Lessor’s interest therein free of all Liens other than Permitted Liens and Lessor Liens, it being understood and acknowledged that such Lessor’s rights, title and interest in and to said personalty have been assigned to, or for the benefit of, the Agent pursuant to the Operative Documents;

         (f) not enter into any agreements or arrangements with any Person (other than the Funding Parties pursuant to the Operative Documents) that would result in any claim against, or liability of, the Agent or any Funding Party resulting from the fact that any

5

Leased Property is not completed on or prior to the Scheduled Construction Termination Date therefor; and

         (g) take all reasonable and practical steps to minimize the disruption of the construction process arising from Construction Force Majeure Events.

         2.9. Insurance.

         (a)  Insurance by the Construction Agent: The Construction Agent shall cause to be procured, and maintain in full force and effect during the Construction Term, insurance policies with insurance companies authorized to do business in each jurisdiction in which the Leased Properties under Construction are located with a Best Insurance Reports rating of “A” or better and a financial size category of “VIII” or higher, with limits and coverage provisions as set forth below.

         (i) General Liability Insurance. Liability insurance on an occurrence basis for the Construction Agent’s and Lessor’s liability arising out of claims for personal injury (including bodily injury and death) and property damage. Such insurance shall provide coverage for products-completed operations, contractual and personal injury liability with a $1,000,000 limit per occurrence for combined bodily injury and property damage with policy aggregates of $2,000,000 (other than products-completed operations) and $1,000,000 for products-completed operations. A maximum deductible or self-insured retention of $5,000 per occurrence shall be allowed. In no event will the Construction Agent be obligated pursuant to this Agreement to pay the amount of any deductible or self insurance retention that does not exceed the amount permitted by this Agreement.

         (ii) Automobile Liability Insurance. Automobile liability insurance for the Construction Agent’s and Lessor’s liability arising out of claims for bodily injury and property damage covering all leased, non-owned and hired vehicles used in the performance of the Construction Agent’s obligations under this Agreement with a $1,000,000 limit per accident for combined bodily injury and property damage and containing appropriate no-fault insurance provisions wherever applicable. A maximum deductible or self-insured retention of $5,000 per occurrence shall be allowed.

         (iii) Excess Liability Insurance. Liability insurance in excess of the insurance coverage required in clauses (i) and (ii) above with a limit of $10,000,000 per occurrence and in the aggregate.

         (iv) Builder’s Risk Insurance. Property damage insurance on an “all risk” basis insuring the Construction Agent and Lessor, as their interests may appear, including coverage against loss or damage from the perils of earth movement (including but not limited to earthquake, landslide, subsidence and volcanic eruption), flood, strike, riot and civil commotion.

6

         a. Property Covered. The builder’s risk insurance shall provide coverage for (i) the Buildings, structures, machinery, equipment, facilities, fixtures, supplies and other property constituting a part of the Leased Property under Construction, (ii) property of others in the care, custody or control of the Construction Agent in connection with the Leased Property, but not contractor’s tools, machinery, plant and equipment including spare parts and accessories not destined to become a permanent part of the Leased Property, (iii) all preliminary works, temporary works and interconnection works and (iv) all foundations and other property below the surface of the ground.

         b. Additional Coverages. The builder’s risk policy shall insure (i) the cost (including labor) of preventive measures to reduce or prevent further loss (ii) inland transit with sublimits sufficient to insure the largest single shipment to or from the Leased Property site from anywhere within North America, (iii) attorney’s fees, engineering and other consulting costs, and permit fees directly incurred in order to repair or replace damaged insured property in the amount of $100,000, (iv) expediting expenses (defined as reasonable extra costs incurred after an insured loss to make temporary repairs and expedite the permanent repair of the damaged property) with a sublimit in the amount of $25,000, (v) off-site storage to insure the full replacement value of any property or equipment not stored on the Leased Property site with a sublimit of $150,000, and (vi) demolition expenses, removal of undamaged portion, and increased cost of construction due to operation of laws or codes with a sublimit of twenty-five percent (25%) of the amount of the physical loss or damage.

         c. Special Clauses. The builder’s risk policy shall include (i) a 72 hour flood/windstorm/earthquake clause, (ii)unintentional errors and omissions clause, (iii) a requirement that the insurer pay losses within 60 days after receipt of an acceptable proof of loss and (iv) an extension clause allowing the policy period to be extended up to 60 days without modification to the terms and conditions of the policy and payment of the premium on a pro-rata basis.

         d. Prohibited Exclusions. The builder’s risk policy shall not contain any (i) coinsurance provisions, (ii) exclusion for ensuing direct physical loss or damage resulting from freezing, (iii) exclusion for physical loss or damage covered under any guarantee or warranty arising out of an insured peril, or (iv) exclusion for resultant physical loss or damage caused by ordinary wear and tear, gradual deterioration, faulty workmanship, design or materials.

         e. Sum Insured. The builder’s risk policy shall (i) be on a completed value form, (ii) insure 100% of the completed insurable value of the Building(s), (iii) value losses at replacement cost, without deduction for physical depreciation

7

or obsolescence including custom duties, taxes and fees and (iv) insure loss or damage from earth movement and flood with separate sublimits equal to the anticipated cost of the related Leased Property.

         f. Deductible. The builder’s risk insurance may have a deductible not in excess of $5,000.

         (v) Faulty Design. The Construction Agent hereby represents and warrants that, with respect to each Leased Property, the agreements with the Architect provide for $5,000,000 in coverage, and with the contractor provide for at least $5,000,000 in coverage, for faulty workmanship, design or materials.

         (vi) Delayed Startup Insurance. Delayed startup coverage insuring the Lessor and covering the Lessor’s accrued and capitalized interest and Yield for a six month period as a result of loss or damage insured by the builder’s risk insurance resulting in a delay in completion of the Building(s) beyond their anticipated date of completion.

Such insurance shall (a) have a deductible of not greater than 10 days per occurrence during the Construction Term, (b) have an indemnity period not less than six months, (c) cover loss sustained when access to the Leased Property site is prevented due to an insured peril at premises in the vicinity of the Leased Property site with a sublimit of $100,000, (d) cover loss sustained due to the action of a public authority preventing access to the Leased Property site due to imminent or actual loss or destruction arising from an insured peril at premises in the vicinity of the Leased Property site with a sublimit of $100,000, (e) not contain any form of a coinsurance provision or include a waiver of such provisions, (f) insure loss caused by damage to finished equipment or machinery while awaiting shipment at a supplier’s premises, and (g) cover losses relating to real estate tax assessments, insurance expenses, architect’s and engineer’s fees to repair or replace lost or work, legal and accounting fees, construction management fees, testing and permitting expenses, marketing and administration expenses and overhead.

(vii) Endorsements. All policies of liability insurance required to be maintained by the Construction Agent shall be endorsed as follows.
a.	To name the Lessor as the loss payee with respect to property insurance;
b.	To name the Lessor, the Lenders and the Agent as additional insureds with respect to all liability insurance;
c.	To provide a severability of interests and cross liability clause; and

8

         d.   That the insurance shall be primary and not excess to or contributing with any insurance or self-insurance maintained by the Lessor or the additional insureds.

          (viii) Waiver of Subrogation. The Construction Agent hereby waives any and every claim for recovery from the Lessor, the Lenders and the Agent for any and all loss or damage covered by any of the insurance policies to be maintained under this Agreement to the extent that such loss or damage is recovered under any such policy. If the foregoing waiver will preclude the assignment of any such claim to the extent of such recovery, by subrogation (or otherwise), to an insurance company (or other person), the Construction Agent (or other appropriate party) shall give written notice of the terms of such waiver to each insurance company which has issued, or which may issue in the future, any such policy of insurance (if such notice is required by the insurance policy) and shall cause each such insurance policy to be properly endorsed by the issuer thereof to, or to otherwise contain one or more provisions that, prevent the invalidation of the insurance coverage provided thereby by reason of such waiver.

         (b)  Conditions.

         (i) Adjustment of Losses. Losses, if any, with respect to any Leased Property under any damage policies required to be carried under this Section 2.9 shall be adjusted with the insurance companies, including the filing of appropriate proceedings, as follows: (x) so long as no Construction Agency Event of Default shall have occurred and be continuing, and provided that the Construction Agent is required, or has agreed, to repair the damage or if the purchase option has been exercised, such losses will be adjusted by the Construction Agent, (y) if any Construction Agency Event of Default shall have occurred and be continuing or Construction Force Majeure Event declared, or if the Construction Agent is not required to, and has not agreed to, repair the damage, such losses shall be adjusted by the Lessor with the consent of the Construction Agent (which consent shall not be unreasonably withheld or delayed). The party which shall be entitled to adjust losses may appear in any proceeding or action to negotiate, prosecute, adjust or appeal any claim for any award, compensation or insurance payment on account of any Casualty at such party’s reasonable request, and the other party shall participate in any such proceeding, action, negotiation, prosecution or adjustment. The Construction Agent may incur no expenses with respect to loss adjustment without the prior consent, not to be unreasonably withheld, of the Lessor. Adjustment expenses shall be funded through Advances. The parties hereto agree that this Agreement shall control the rights of the parties hereto in and to any such award, compensation or insurance payment relating to any Casualty affecting a Construction Land Interest.

         (ii) Application of Insurance Proceeds. All proceeds of insurance maintained pursuant to this Section 2.9 on account of any damage or destruction of any Leased Property (or part thereof) subject to Construction shall be paid to Lessor, provided that (i)

9

if no Construction Agency Event of Default shall have occurred and (ii) subject to Section 3.4, the Construction Agent has undertaken to repair the damage and has demonstrated to the reasonable satisfaction of the Lessor that the application of such insurance proceeds, together with the remaining Commitment, are sufficient to cause the construction to be completed on or prior to the Scheduled Construction Termination Date, such funds shall be held by Lessor in a segregated account and disbursed to the Construction Agent to pay costs incurred by the Construction Agent to effect the repair of the Leased Property. If the Construction cannot be completed on or prior to the Scheduled Construction Termination Date, the parties agree to discuss the issue of disbursement of insurance proceeds to the Construction Agent in good faith and after such discussion the Lessor shall make a determination in the exercise of its sole discretion. Any proceeds of insurance paid to Lessor pursuant in this Section 2.9, not used to repair the Leased Property and held by Lessor shall be applied to the account of Construction Agent to reduce the Lease Balance.

         (iii) Additional Insurance. Any additional insurance obtained by the Construction Agent or the Lessor shall provide that it shall not interfere with or in any way limit the insurance described in this Section 2.9 or increase the amount of any premium payable with respect to any insurance described in such Section. The proceeds of any such additional insurance will be for the account of the party maintaining such additional insurance.

         (iv) Payment of Premiums. The Construction Agent shall cause to be paid all premiums for the insurance required hereunder from the proceeds of Advances. The Construction Agent shall renew or replace, or cause to be renewed or replaced, each insurance policy required hereunder prior to the expiration date thereof for the duration of the Construction Term.

         (v) Policy Cancellation and Change. All policies of insurance required to be maintained pursuant to this Section 2.9 shall be endorsed so that if at any time they are cancelled, or their coverage is reduced (by any party including the insured) so as to affect the interests of the Lessor, the Agent or any Lender such cancellation or reduction shall not be effective as to the Lessor, the Agent or such Lender for 30 days, except for non-payment of premium which shall be for 10 days, after written notice from such insurer of such cancellation or reduction.

         (vi) Miscellaneous Policy Provisions. All property damage insurance policies, (i) shall not include any annual or term aggregate limits of liability or clause requiring the payment of additional premium to reinstate the limits after loss except for insurance covering the perils of flood, earth movement and sabotage, (ii) shall include the Lessor as a named insured as its interest may appear, and (iii) shall include a clause requiring the insurer to make final payment on any claim within 60 days after the submission of proof of loss and its acceptance by the insurer.

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         (vii) Separation of Interests. All policies shall insure the interests of the Lessor, the Agent and each Lender regardless of any breach or violation by the Construction Agent or any other Person of warranties, declarations or conditions contained in such policies, any action or inaction of the Construction Agent or others, or any foreclosure relating to the Leased Property or any change in ownership of all or any portion of the Leased Property.

         (viii) Acceptable Policy Terms and Conditions. All policies of insurance required to be maintained pursuant to this Section 2.9 shall contain terms and conditions reasonably acceptable to the Lessor.

         (c)  Evidence of Insurance. On the related Construction Commencement Date and on an annual basis at least 10 days prior to each policy anniversary, the Construction Agent shall furnish, or cause to be furnished, the Lessor with (1) certificates of insurance or binders, in a form acceptable to the Lessor, evidencing all of the insurance required by the provisions of this Section 2.9. Such certificates of insurance/binders shall be executed by each insurer or by an authorized representative of each insurer. Such certificates of insurance/binders shall identify underwriters, the type of insurance, the insurance limits and the policy term and shall specifically list the special provisions enumerated for such insurance required by this Section 2.9. Upon request, the Construction Agent will promptly furnish the Lessor with copies of all insurance binders and certificates of such insurance relating to the insurance required to be maintained hereunder.

         (d)  Reports. The Construction Agent will advise the Lessor in writing promptly of (i) any default in the payment of any premium and of any other act or omission on the part of the Construction Agent which may invalidate or render unenforceable, in whole or in part, any insurance being maintained by the Construction Agent pursuant to this Section 2.9 and (ii) the unavailability of any insurance in the commercial market.

         (e)  No Duty of Lessor to Verify or Review. No provision of this Section 2.9 or any provision of this Agreement or the other Operative Documents shall impose on the Lessor any duty or obligation to verify the existence or adequacy of the insurance coverage maintained by the Construction Agent, nor shall the Lessor be responsible for any representations or warranties made by or on behalf of the Construction Agent to any insurance company or underwriter. Any failure on the part of the Lessor to pursue or obtain the evidence of the insurance required by this Agreement from the Construction Agent and/or failure of the Lessor to point out any non-compliance of such evidence of insurance shall not constitute a waiver of any of the insurance requirements in this Agreement.

Notwithstanding anything herein to the contrary, the Construction Agent shall not be responsible for the payment of any insurance deductible amounts.

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ARTICLE III

THE BUILDINGS

         3.1. Amendments; Modifications. The Construction Agent may, subject to the conditions, restrictions and limitations set forth herein and in the Operative Documents (but not otherwise), at any time during the term hereof revise, amend or modify the Plans and Specifications and the related Construction Documents without the consent of the Lessor; provided, however, that the Lessor’s prior written consent will be required in the following instances: (x) such revision, amendment or modification by its terms would result in the Completion Date of the Buildings occurring after the Scheduled Construction Termination Date, or (y) such revision, amendment or modification would result in the cost for such Leased Property exceeding the then remaining Commitments, minus the then remaining costs for completing each other Leased Property for which the Completion Date has not occurred, or increase the Construction Budget therefor by an amount in excess of 10% thereof, or (z) the aggregate effect of such revision, amendment or modification, when taken together with any previous or contemporaneous revision, amendment or modification to the Plans and Specifications for such Leased Property, would be to reduce the Fair Market Sales Value of such Leased Property in a material respect when completed.

         3.2. Casualty and Condemnation. If a Casualty or Condemnation occurs during the Construction Term for a Construction Land Interest, the Construction Agent shall promptly notify the Lessor in writing of such occurrence, together with an estimate of the costs of rebuilding or restoring the affected Construction Land Interest and the estimated time to complete such rebuilding or restoration. If the insurance proceeds or Awards, as the case may be, resulting from such Casualty or Condemnation are sufficient to cover the estimated costs of repair or rebuilding, the Lessor shall make such proceeds available to the Construction Agent to pay, or to reimburse the Construction Agent for, the costs of such rebuilding or restoration, and the Construction Agent shall promptly and diligently cause such restoration or rebuilding to be completed. In the event that the proceeds of the applicable insurance or Awards are insufficient to cover the costs of such rebuilding or restoration, either, at the Lessor’s option, (i) the Lessor shall make available to the Construction Agent Advances to cover any deficiency between such insurance proceeds or Awards, as the case may be, and the cost of such rebuilding or restoration, in which case the Construction Agent shall promptly and diligently cause such restoration or rebuilding to be completed, or (ii) the Construction Agent shall return the affected Construction Land Interest to the Lessor in accordance with the provisions of Section 5.3(a), (in which event, the Lessor shall be entitled to retain all of the applicable insurance proceeds or Awards). In no event shall the Construction Agent have any responsibility to the Lessor to pay any deficiency between the insurance proceeds or Awards, as the case may be, and the related Leased Property Balance, so long as the Construction Agent has complied with its obligations, including its obligations to maintain insurance, pursuant to this Agreement.

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         3.3. Indemnity. During the Construction Term for each Leased Property, the Construction Agent agrees to assume liability for, and to indemnify, protect, defend, save and hold harmless the Lessor, on an After-Tax Basis, from and against, any and all Claims that may be imposed on, incurred by or asserted or threatened to be asserted, against the Lessor, whether or not the Lessor shall also be indemnified as to any such Claim by any other Person, in any way relating to or arising out of (i) any event, condition or circumstance within the Construction Agent’s control, (ii) fraud, misapplication of funds, illegal acts or willful misconduct on the part of the Construction Agent, or (iii) any event described in paragraph (f) of Article XII of the Lease with respect to the Construction Agent (unless such event would constitute a Limited Event of Default pursuant to clause (ii) of the definition thereof). As used in clause (i) of the foregoing sentence, the term “within the Construction Agent’s control” shall mean caused by or arising from any failure by any Obligor to comply with any of its obligations under the Operative Documents (including its insurance obligations, unless such insurance is not available in the commercial market), any representation or warranty by any Obligor in any of the Operative Documents being inaccurate, any negligence or wilful misconduct of any Obligor, or any claim by any third party against the Lessor based upon the action or inaction of or by any Obligor; provided, however, that if such Claim is related to an inability or the failure to complete the construction of a Leased Property on or prior to Scheduled Construction Termination Date therefor and such Claim does not arise out of or result from events or circumstances described in the foregoing clause (ii) or (iii), the Construction Agent’s liability shall be limited to an amount equal to the Construction Failure Payment. Any Claims that are incurred by any Indemnified Party for which the Construction Agent is not obligated to indemnify pursuant to this Section 3.3 or the Master Agreement shall, if requested by the Agent by written notice to Lessor, be capitalized, and result in an increase to the Funded Amounts related to the relevant Leased Property. The foregoing indemnities are in addition to, and not in limitation of, the indemnities with respect to environmental claims set forth in Section 7.2 of the Master Agreement. The provisions of Section 7.3 of the Master Agreement shall apply to any amounts that the Construction Agent is requested to pay pursuant to this Section 3.3.

         3.4. Construction Force Majeure Events. If a Construction Force Majeure Event that results in, or could reasonably be expected to result in, a Force Majeure Loss (including any losses that result from a Construction Force Majeure Event that prevents, or could reasonably be expected to prevent, the Construction Agent from completing Construction prior to the Scheduled Construction Termination Date) occurs, the Construction Agent shall promptly provide the Lessor with written notice thereof within ten (10) Business Days of the Construction Agent’s knowledge of the occurrence thereof (the “Construction Force Majeure Declaration”). Upon receipt of the Construction Force Majeure Declaration, Lessor and the Construction Agent shall consult with each other as to what steps, if any, are to be taken to remediate such Construction Force Majeure Event, including consulting as to the appropriateness of an extension of the Scheduled Construction Termination Date. The Construction Agent shall take all reasonable and practical steps to minimize the disruption of the construction process and all steps reasonably necessary to prevent further damage arising from such Construction Force Majeure Event. The Construction Agent shall be entitled to reimbursement from Lessor for any costs

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directly related to minimizing the disruption and to preventing further damage of such Construction Force Majeure Event through the proceeds of Fundings pursuant to, and subject to the terms and conditions of, the Master Agreement. The Construction Agent shall, within thirty (30) days of the delivery of the Construction Force Majeure Declaration, submit to the Lessor a budget detailing the costs that would be incurred in remediating such Construction Force Majeure Event and a schedule for effecting the same. The Construction Agent will commence such remediation only upon receipt of written authorization from the Lessor to do so, which authorization (or denial thereof) shall be given by written notice to Construction Agent not later than fifteen (15) Business Days after Lessor’s receipt of the budget referred to in the preceding sentence. The Lessor in its sole discretion may elect to continue Construction and make Advances for such remediation or terminate this Agreement with respect to the affected Leased Property. If the Lessor elects to terminate this Agreement with respect to the affected Leased Property, subject to Construction Agent’s right to purchase such Leased Property in accordance with Section 5.5 hereof, the Construction Agent shall within thirty (30) days of receipt of written notice of termination return the affected Leased Property to the Lessor in accordance with the procedures set forth in Section 5.6.

         In the event the Lessor elects to continue Construction after receipt of a Construction Force Majeure Declaration, the Lessor shall make available to the Construction Agent, so long as no Construction Agency Event of Default shall have occurred and be continuing, all insurance proceeds payable to the Lessor with respect to such event to the extent necessary to remediate such event.

ARTICLE IV

PAYMENT OF FUNDS

         4.1. Funding of Property Acquisition Costs and Property Buildings Costs. (a) In connection with the acquisition or lease of any Land and during the course of the construction of the Buildings on any Land, the Construction Agent may request that the Lessor advance funds for the payment of Construction Costs, and the Lessor will comply with such request to the extent provided for under, and subject to the conditions, restrictions and limitations contained in, the Master Agreement and the other Operative Documents.

         (b) The proceeds of any funds made available to the Lessor to pay Construction Costs shall be made available to the Construction Agent in accordance with the Funding Request relating thereto and the terms of the Master Agreement. The Construction Agent will use such proceeds only to pay the Construction Costs for the Leased Properties set forth in the Funding Request relating to such funds.

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         (c)  After the Closing Date for a Leased Property, the Construction Agent shall not become personally liable for any Construction Costs, or pay any Construction Costs from its own funds, but only with the proceeds of Advances.

ARTICLE V

CONSTRUCTION AGENCY EVENTS OF DEFAULT

         5.1. Construction Agency Events of Default. If any one or more of the following events (each a “Construction Agency Event of Default”) shall occur and be continuing:

         (a) the Construction Agent fails to apply any funds paid by, or on behalf of, the Lessor to the Construction Agent for Construction Costs to the payment of Construction Costs for such Leased Property, and such failure continues for five (5) Business Days after such payment is due and owing;

         (b) subject to Construction Force Majeure Events, the Construction Commencement Date with respect to any Leased Property shall fail to occur for any reason on or prior to the date that is one year after the Closing Date with respect to such Leased Property;

         (c) the Completion Date with respect to any Leased Property shall fail to occur for any reason on or prior to the earlier of the Funding Termination Date and the Scheduled Construction Termination Date for such Leased Property;

         (d) any Event of Default shall have occurred and be continuing; or

         (e) the Construction Agent shall fail to observe or perform in any material respect any term, covenant or condition of this Agreement (except those specified in clauses (a) through (d) above), and such failure shall remain uncured for a period of thirty (30) days after notice thereof to the Construction Agent;

then, in any such event, the Lessor may, in addition to the other rights and remedies provided for in this Article, immediately terminate this Agreement as to any Leased Property or Properties or all of the Leased Properties, separately, successively or concurrently (all in Lessor’s sole discretion) by giving the Construction Agent written notice of such termination, and upon the giving of such notice, this Agreement shall terminate as to such Leased Property or Properties or all of the Leased Properties (as the case may be) and all rights of the Construction Agent and, subject to the terms of the Operative Documents, all obligations of the Lessor under this Agreement with respect to such Leased Property or Properties or all of the Leased Properties (as the case may be) shall cease. Subject to Section 5.4, The Construction Agent shall pay upon demand all reasonable costs, expenses, losses, expenditures and damages (including, without

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limitation, attorneys’ fees and disbursements) actually incurred by or on behalf of the Lessor in connection with any Construction Agency Event of Default.

         5.2. Damages. The termination of this Agreement pursuant to Section 5.1 shall in no event relieve the Construction Agent of its liability and obligations hereunder, all of which shall survive any such termination.

         5.3. Remedies; Remedies Cumulative. (A) If a Construction Agency Event of Default shall have occurred and be continuing under Section 5.1(b), 5.1(c), 5.1(d) (other than a Lease Event of Default under paragraph (f) of Article XII of the Lease, unless such event would constitute a Limited Event of Default pursuant to clause (ii) of the definition thereof) or 5.1(e) other than as a result of Construction Agent’s fraudulent or illegal acts, misapplication of funds or willful misconduct, then, in each case, the Lessor shall have all rights and remedies available under the Operative Documents or available at law, equity or otherwise (subject to the limitations set forth herein), including the right to terminate this Agreement by giving Construction Agent written notice of such termination. Upon the giving of such notice, all rights and all obligations of the Construction Agent under this Agreement shall cease, except for such rights and obligations as by their terms are to continue beyond such termination, including Section 5.6(f) hereof and Lessor shall have the right to require Construction Agent to pay immediately upon receipt of notice from Lessor the Construction Failure Payment for all of the Construction Land Interests; provided that the Construction Agent has the option to purchase the Leased Property in accordance with Section 5.5 hereof, which shall constitute a cure of such Construction Agency Event of Default as provided therein.

         In the event Construction Agent does not purchase the Leased Property pursuant to the terms hereof, the related Lessee(s) shall return the Leased Property to Lessor within ten (10) Business Days of the declaration of the Construction Agency Event of Default in accordance with Section 5.6 hereof and Lessor shall have the right to sell the Leased Property to an unaffiliated third party and to require Construction Agent to pay to Lessor, immediately upon receipt of the termination notice, cash in an amount equal to the Construction Failure Payment for all of the Construction Land Interests. The Net Selling Price for such Leased Property shall be distributed in accordance with Section 3.4 of the Loan Agreement.

         (b)  If a Construction Agency Event of Default shall have occurred and be continuing under Sections 5.1(a) or 5.1(d) (as the result of an Event of Default under paragraph (f) of Article XII of the Lease, unless such event would constitute a Limited Event of Default pursuant to clause (ii) of the definition thereof), or otherwise as the result of fraud, misapplication of funds, illegal acts or wilful misconduct on the part of the Construction Agent, Lessor shall have the right to terminate this Agreement by giving Construction Agent written notice of such termination, and upon the giving of such notice, all rights and all obligations of the Construction Agent under this Agreement shall cease, except for such rights and obligations as by their terms are to continue beyond such termination, including Section 5.6(f) hereof and Lessor shall have the right to require Construction Agent to pay immediately upon receipt of notice from Lessor the

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Lease Balance then outstanding. In addition, but subject to the Construction Agent’s purchase right under Section 5.5, the Lessor may sell the Leased Property, and the Net Selling Price derived from any such sale shall be distributed first, to Lessor in the amount of the Lease Balance to the extent not previously paid by the Construction Agent, second, to the extent the Construction Agent has paid to the Lessor the Lease Balance, to the Construction Agent to reimburse it to the extent of its payment of the Lease Balance, but if no such payment was made, to the Lessor, and third to the Lessor. The Lessor shall have all the rights and remedies afforded Lessor by Applicable Law and the Operative Documents. If the Construction Agent does not purchase the Leased Property, it shall return the Leased Property to the Lessor within ten (10) Business Days of the declaration of the Construction Agency Event of Default in accordance with Section 5.6 hereof.

         (c)  Remedies Cumulative. Subject to the limitations on the Construction Agent’s liability pursuant to Section 5.4 hereof, no failure to exercise and no delay in exercising, on the part of the Lessor any right, remedy, power or privilege under this Agreement or under the other Operative Documents shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege under this Agreement preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. Subject to the limitations on the Construction Agent’s liability pursuant to Section 5.4 hereof, the rights, remedies, powers and privileges provided in this Agreement and in the other Operative Documents are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.

         5.4. Limitation on Construction Agent’s Recourse Liability. Subject to the last sentence of this Section 5.4, notwithstanding anything contained herein or in any other Operative Document to the contrary, upon the occurrence and during the continuance of a Construction Agency Event of Default with respect to any Leased Property described in Section 5.1(b), 5.1(c), 5.1(d) (other than a Lease Event of Default under paragraph (f) of Article XII of the Lease, unless such event constitutes a Limited Event of Default pursuant to clause (ii) of the definition thereof) or 5.1(e), the aggregate maximum recourse liability of the Construction Agent with respect to such default to the Lessor or any Person claiming by, through or under the Lessor under the Operative Documents, shall be limited to the Construction Failure Payment for such Leased Property, provided that if such Construction Agency Event of Default results solely from a Construction Force Majeure Event, then the Construction Agent shall have no obligation to pay the Construction Failure Payment with respect to the related Leased Property. The Construction Agent nonetheless acknowledges and agrees that (i) the Lessor shall be entitled to recover from the applicable Leased Property (including through any reletting and/or sale of such Leased Property or any portion thereof) the entire outstanding Lease Balance (and, to the extent sales proceeds exceed the Lease Balance, amounts in excess of the Lease Balance as provided in Section 5.3(a) and (b)), all accrued and unpaid interest, accrued Yield and other amounts then due and owing to the Lessor under the Operative Documents and all other costs and expenses of the Lessor incurred in connection with such Leased Property (including without limitation, any costs incurred in connection with the construction of the Building(s) and other improvements and/or any reletting or sale of such Leased Property or any portion thereof) from and after the

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date of such return and (ii) the foregoing recourse limitations are exclusive of any amounts due and owing under Article III hereof. If a Construction Agency Event of Default occurs due to the fraud, misapplication of funds, illegal acts or wilful misconduct on the part of the Construction Agent or any event described in paragraph (f) of Article XII of the Lease, the Construction Agent shall be obligated to pay the Lease Balance as set forth herein.

         5.5. Construction Agent’s Right to Purchase. If a Construction Agency Event of Default hereunder relates only to a specific Leased Property or specific Leased Properties but not all Leased Properties, the Construction Agent shall have the right, at its option, to cure such Construction Agency Event of Default by purchasing (a “Construction Purchase”) such affected Leased Property or Properties for the Leased Property Balance(s) therefor from the Lessor within ten (10) Business Days of the delivery of the notice of termination referred to in Section 5.3(a) or (b) in accordance with the terms and subject to the conditions, restrictions and limitations of Section 14.5 of the Lease, in which case no Construction Agency Event of Default shall be deemed to have occurred hereunder for the purposes of the other Operative Documents.

         5.6. Construction Return Procedures. In the case of any return of any Leased Property to the Lessor pursuant to Section 3.4 or Article V hereof (a “Construction Return”), the Construction Agent shall, at its cost and expense, do each of the following on or prior to the return date specified by the Lessor in a written notice to the Construction Agent given at least ten (10) Business Days prior thereto:

         (a)  the Construction Agent shall, on or prior to the return date, execute and deliver to the Lessor (or to the Lessor’s designee): (i) a deed with respect to all of the interest of the Lessee and the Construction Agent in the Leased Property containing representations and covenants of grantor to the Lessor (or such other Person) solely regarding the absence of Liens (other than Lessor Liens and the Liens of the Operative Documents (other than Liens in favor of the related Lessee)), (ii) an agreement granting easements and rights of way to such Leased Property as reasonably deemed necessary by the Lessor, (iii) a bill of sale without warranty (except as to the absence of liens other than Lessor Liens and the Lien of the Operative Documents) with respect to all of the interest of the Lessee and the Construction Agent in all personalty and equipment financed by the Funding Parties and (iv) an assignment of such Construction Agent’s entire interest in such Leased Property (which shall include an assignment of all such Construction Agent’s right, title and interest in and to all awards, compensation and insurance proceeds payable in connection with any Casualty, Condemnation or Construction Force Majeure Event affecting such Leased Property and an assignment of leases of such Leased Property), in the case of the documents referred to in clauses (i), (ii) and (iv) in recordable form and otherwise in conformity with local custom and free and clear of any Liens other than Lessor Liens and the Lien of the Operative Documents;

         (b)  the Construction Agent shall, on the construction return date, pay over to the Agent (as assignee of the Lessor) any awards, compensation and insurance previously received by the Construction Agent in connection with such Leased Property which have not been applied in

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connection with the Construction, repair or maintenance of the Leased Property except such amounts as may be necessary to reimburse the Construction Agent for expenditures incurred in connection with such Construction, repair or maintenance during the Construction Term which have not been reimbursed;

         (c)  The Construction Agent shall execute and deliver to the Lessor a statement of termination of this Agreement and each of the other Operative Documents with respect to the affected Leased Property to be executed by the Funding Parties and delivered to the Construction Agent;

         (d)  the Construction Agent shall, on or prior to the return date, vacate the Leased Property and transfer possession of such Leased Property to the Lessor or any Person designated by the Lessor, in each case by surrendering the same into the possession of the Lessor or such Person, as the case may be, free and clear of all Liens (other than Lessor Liens and the liens of the Operative Documents) in compliance with all Applicable Law (including Environmental Laws);

         (e)  on or prior to the return date, the Construction Agent shall deliver to the Lessor or any Person designated by the Lessor copies of all Construction Documents, permits, licenses, books and records regarding the maintenance of such Leased Property and the Construction Agent’s interest in such Leased Property, and a current copy of the Plans and Specifications; and

         (f)  the Construction Agent shall take all actions reasonably requested by the Lessor to fully assign to the Lessor all of its rights and claims in, to and under, all of the Construction Documents, and all permits and other governmental authorizations related to such Leased Property or the Construction.

ARTICLE VI

NO CONSTRUCTION AGENCY FEE

         6.1. Lease as Fulfillment of Lessor’s Obligations. Subject to Article IV hereof, all obligations, duties and requirements imposed upon or allocated to the Construction Agent shall be performed by the Construction Agent at the Construction’s Agent’s sole cost and expense, and the Construction Agent will not be entitled to, and the Lessor shall not have any obligation to pay, any agency fee or other fee or compensation, and the Construction Agent shall not be entitled to, and the Lessor shall not have any obligation to make or pay, any reimbursement therefor, it being understood that this Agreement is being entered into as consideration for and as an inducement to the Lessor entering into the Lease and the other Operative Documents.

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ARTICLE VII

LESSOR’S RIGHTS; CONSTRUCTION AGENT’S RIGHTS

         7.1. Exercise of the Lessor’s Rights. The Construction Agent hereby acknowledges and agrees that the rights and powers of the Lessor under this Agreement have been assigned to, and may be exercised by, the Agent, for the benefit of the Lenders, pursuant to the Loan Agreement and the related Operative Documents.

         7.2. Lessor’s Right to Cure Construction Agent’s Defaults. The Lessor, without waiving or releasing any obligation or Construction Agency Event of Default, may, upon prior written notice to the Construction Agent (but shall be under no obligation to), remedy any Construction Agency Event of Default for the account of and at the sole cost and expense of the Construction Agent. All reasonable out of pocket costs and expenses so incurred (including actual and reasonable fees and expenses of counsel), together with interest thereon at the Overdue Rate from the date on which such sums or expenses are paid by the Lessor, shall be paid by the Construction Agent to the Lessor on demand; provided that such amount shall not exceed the Construction Failure Payment for the related Leased Property.

ARTICLE VIII

MISCELLANEOUS

         8.1. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the Lessor, the Construction Agent and their respective legal representatives, successors and permitted assigns. The Construction Agent shall not assign its rights or obligations hereunder (except as expressly permitted herein) without the prior written consent of the Lessor and the Agent.

         8.2. Notices. All notices, consents, directions, approvals, instructions, requests, demands and other communications required or permitted by the terms hereof to be given to any Person shall be given in writing in the manner provided in, shall be sent to the respective addresses set forth in, and the effectiveness thereof shall be governed by the provisions of, Section 8.2 of the Master Agreement.

         8.3. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF GEORGIA, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.

         8.4. Amendments and Waivers. Subject to Section 8.4 of the Master Agreement, the Lessor and the Construction Agent may from time to time, enter into written amendments, supplements or modifications hereto.

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         8.5. Counterparts. This Agreement may be executed on any number of separate counterparts and all of said counterparts taken together shall be deemed to constitute one and the same agreement.

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

         8.7. Headings and Table of Contents. The headings and table of contents contained in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

         8.8. Jurisdiction; Waivers. The Lessor and the Construction Agent hereby acknowledge that the terms of Section 8.11 of the Master Agreement apply to this Agreement.

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

CONCORD EFS, INC.

By      /s/ E. T. Haslam
            Name: Edward T. Haslam
            Title: Chief Financial Officer

ATLANTIC FINANCIAL GROUP, LTD.

By:      Atlantic Financial Managers, Inc.,
            its General Partner

By      /s/ Stephen S. Brookshire
            Name: Stephen S. Brookshire
            Title: President

CONSTRUCTION
AGENCY AGREEMENT

S-1

EXHIBIT A

Supplement to Construction Agency Agreement

         SUPPLEMENT to Construction Agency Agreement, dated as of                     , 200_, between ATLANTIC FINANCIAL GROUP, LTD., a Texas limited partnership (the “Lessor”), and CONCORD EFS, INC., a Delaware corporation (in its capacity as construction agent, the “Construction Agent”). Capitalized terms used but not otherwise defined herein shall have the meanings given them in the Construction Agency Agreement.

         The Lessor and the Construction Agent are parties to that certain Construction Agency Agreement, dated as of July 12, 2002 (as amended, supplemented or otherwise modified, the “Construction Agency Agreement”), pursuant to which (i) the Lessor has appointed the Construction Agent as its sole and exclusive agent in connection with the construction of the Buildings in accordance with the Plans and Specifications, and (ii) the Construction Agent has agreed, for the benefit of the Lessor, to cause the construction of the Buildings to be completed in accordance with the Plans and Specifications.

         Subject to the terms and conditions of the Construction Agency Agreement, the Lessor and the Construction Agent desire that the terms of the Construction Agency Agreement apply to the Land described in Schedule 1 and wish to execute this Supplement to provide therefor.

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

         1.     The Construction Agent agrees to act as Construction Agent and to perform its obligations under the Construction Agency Agreement in connection with the completion of construction of the Building on the Land described in Schedule 1 in accordance with the Plans and Specifications for such Land. The Construction Agent hereby represents and warrants to Lessor that the Construction Agent has heretofore delivered to Lessor a true, correct and complete copy of the Plans and Specifications for the Building on the Land described in Schedule 1 or, if not available on the date hereof, will deliver such Plans and Specifications as soon as available.

         2. Each of the Lessor and the Construction Agent acknowledges and agrees that the construction of the Buildings on the Land described in Schedule 1 shall be governed by the terms of the Construction Agency Agreement.

A-1

         3.     The anticipated construction budget relating to the construction and development of the Building on the Land described in Schedule 1 is $               . [The acquisition cost of the Land described in Schedule 1 is $               .]*/

         4.     This Supplement shall, upon its execution and delivery, constitute a part of the Construction Agency Agreement.

*/ May not be applicable if Ground Lease is used.

A-2

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

CONCORD EFS, INC.

By
      Name:
      Title:

ATLANTIC FINANCIAL GROUP, LTD.

By:      Atlantic Financial Managers, Inc.,
            its General Partner

By
      Name:
      Title:

A-3

Schedule 1 to Supplement

Description of Land Interest EX-10.4 6 w64721exv10w4.htm LOAN AGREEMENT, DATED AS OF JULY 12, 2002

Exhibit 10.4

LOAN AGREEMENT

Dated as of July 12, 2002

among

ATLANTIC FINANCIAL GROUP, LTD.
as Lessor and Borrower,

the financial institutions party hereto,

as Lenders

and

SUNTRUST BANK,
as Agent

TABLE OF CONTENTS

		Page
SECTION 1.	DEFINITIONS; INTERPRETATION		1
SECTION 2.	AMOUNT AND TERMS OF COMMITMENTS; REPAYMENT AND PREPAYMENT OF LOANS		1
	SECTION 2.1 Commitment		1
	SECTION 2.2 Notes		2
	SECTION 2.3 Scheduled Principal Repayment		2
	SECTION 2.4 Interest		2
	SECTION 2.5 Allocation of Loans to Leased Properties		3
	SECTION 2.6 Prepayment		3
SECTION 3.	RECEIPT, DISTRIBUTION AND APPLICATION OF CERTAIN PAYMENTS IN RESPECT OF LEASE AND LEASED PROPERTY; RELEASE		3
	SECTION 3.1 Distribution and Application of Rent Payments		3
	SECTION 3.2 Distribution and Application of Purchase Payment		3
	SECTION 3.3 Distribution and Application to Funding Party Balances of Lessee Payment of Recourse Deficiency Amount Upon Exercise of Remarketing Option		4
	SECTION 3.4 Distribution and Application to Funding Party Balances of Remarketing Proceeds of Leased Property		4
	SECTION 3.5 Distribution and Application of Payments Received When an Event of Default Exists		5
	SECTION 3.6 Distribution of Other Payments		6
	SECTION 3.7 Timing of Agent Distributions		7
	SECTION 3.8 Release of Leased Properties		7
SECTION 4.	THE LESSOR; EXERCISE OF REMEDIES UNDER LEASE		7
	SECTION 4.1 Covenant of Lessor		7
	SECTION 4.2 Lessor Obligations Nonrecourse; Payment from Certain Lease Obligations and Certain Proceeds of Leased Property Only		8
	SECTION 4.3 Exercise of Remedies Under the Lease		9
SECTION 5.	LOAN EVENTS OF DEFAULT; REMEDIES		10
	SECTION 5.1 Loan Events of Default		10
	SECTION 5.2 Remedies		11

		Page
SECTION 6.	THE AGENT		12
	SECTION 6.1 Appointment		12
	SECTION 6.2 Delegation of Duties		12
	SECTION 6.3 Exculpatory Provisions		12
	SECTION 6.4 Reliance by Agent		12
	SECTION 6.5 Notice of Default		13
	SECTION 6.6 Non-Reliance on Agent and Other Lenders		13
	SECTION 6.7 Indemnification		14
	SECTION 6.8 Agent in Its Individual Capacity		14
	SECTION 6.9 Successor Agent		14
SECTION 7.	MISCELLANEOUS		15
	SECTION 7.1 Amendments and Waivers		15
	SECTION 7.2 Notices		15
	SECTION 7.3 No Waiver; Cumulative Remedies		15
	SECTION 7.4 Successors and Assigns		15
	SECTION 7.5 Counterparts		15
	SECTION 7.6 GOVERNING LAW		15
	SECTION 7.7 Survival and Termination of Agreement		16
	SECTION 7.8 Entire Agreement		16
	SECTION 7.9 Severability		16
EXHIBITS
EXHIBIT A-1	Form of A Note
EXHIBIT A-2	Form of B Note

         THIS LOAN AGREEMENT (as it may be amended or modified from time to time in accordance with the provisions hereof, this “Loan Agreement”) dated as of July 12, 2002 is among ATLANTIC FINANCIAL GROUP, LTD., a Texas limited partnership, as Lessor and borrower (the “Lessor”); SUNTRUST BANK and the other financial institutions which are, or may from time to time become, parties hereto as lenders (the “Lenders”) and SUNTRUST BANK, Georgia banking corporation, as agent for the Lenders (in such capacity, the “Agent”).

PRELIMINARY STATEMENT

         In accordance with the terms and provisions of the Master Agreement, the Lease, this Loan Agreement and the other Operative Documents, (i) the Lessor contemplates acquiring the Leased Properties and leasing the Leased Properties to the Lessees, (ii) Concord, as Construction Agent for the Lessor, wishes, in certain instances, to construct Buildings on the Land for the Lessor and, when completed, to lease the Buildings, or to cause the Buildings to be leased, from the Lessor as part of the Leased Properties under the Lease, (iii) Concord wishes to obtain, and the Lessor is willing to provide, funding for the acquisition of the Land and any Buildings thereon or, in certain instances, the construction of the Buildings, and (iv) the Lessor wishes to obtain, and the Lenders are willing to provide, financing of a portion of the funding for the acquisition of the Land and any Buildings thereon and, if applicable, the construction of the Buildings.

         In consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

         SECTION 1. DEFINITIONS; INTERPRETATION

         Unless the context shall otherwise require, capitalized terms used and not defined herein shall have the meanings assigned thereto in Appendix A to the Master Agreement, dated as of July 12, 2002 (as it may be amended or modified from time to time, the “Master Agreement”), among Concord EFS, Inc., as Guarantor, Concord EFS, Inc. and certain Subsidiaries of Concord EFS, Inc. that may hereafter become party thereto, as Lessees, Electric Payment Services, Inc., [Bank] and certain other Significant Subsidiaries that may hereafter become party thereto, as Subsidiary Guarantors, the Lessor, the Lenders and the Agent for all purposes hereof; and the rules of interpretation set forth in Appendix A hereto shall apply to this Loan Agreement.

         SECTION 2. AMOUNT AND TERMS OF COMMITMENTS; REPAYMENT AND PREPAYMENT OF LOANS

         SECTION 2.1 Commitment. (a) Subject to the terms and conditions hereof and of the Master Agreement, each Lender agrees to make term loans to the Lessor (“Loans”) from time to time during the period from and including the Initial Closing Date through the Funding Termination Date, on each Closing Date and on each subsequent Funding Date, in the amounts required under Section 2.2 of the Master Agreement. Each such Loan shall consist of an A Loan

in the amount of such Lender’s pro rata share of the A Percentage of the aggregate amount to be funded by the Funding Parties on such date and a B Loan in the amount of such Lender’s pro rata share of the B Percentage of the aggregate amount to be funded by the Funding Parties on such date.

         SECTION 2.2 Notes. The A Loans made by each Lender to the Lessor shall be evidenced by a note of the Lessor (an “A Note”), substantially in the form of Exhibit A-1 with appropriate insertions, and the B Loans made by each Lender to the Lessor shall be evidenced by a note of the Lessor (a “B Note”) substantially in the form of Exhibit A-2 with appropriate insertions, each duly executed by the Lessor and payable to the order of the Agent, on behalf of the Lenders, and in a principal amount equal to the A Percentage of the aggregate Commitments and the B Percentage of the aggregate Commitments, respectively (or, if less, the aggregate unpaid principal amount of all A Loans or B Loans, as the case may be, made by the Lenders to the Lessor). The Notes shall be dated the Initial Closing Date and delivered to the Agent in accordance with Section 3.2 of the Master Agreement. The Agent is hereby authorized to record the date and amount of each Loan made by each Lender to the Lessor on the Notes or in its records, and each Lender is hereby authorized to record the date and amount of each Loan made by such Lender to the Lessor in its records, but the failure by the Agent or any Lender to so record such Loan shall not affect or impair any obligations with respect thereto. Each Note shall (i) be stated to mature no later than the final Lease Termination Date and (ii) bear interest from the date a Loan is made on the unpaid principal amount thereof from time to time outstanding at the applicable interest rate per annum determined as provided in, and payable as specified in, Section 2.4. Upon the occurrence of an Event of Default under clause (f) of Article XII of the Lease, or upon Acceleration as described in Section 4.3(b) hereof, each Note shall automatically become due and payable in full.

         SECTION 2.3 Scheduled Principal Repayment. On the Lease Termination Date, the Lessor shall pay the aggregate unpaid principal amount of all Loans as of such date.

         SECTION 2.4 Interest. (a) Each Loan related to a LIBOR Advance shall bear interest during each Rent Period at a rate equal to the sum of (i) the Adjusted LIBO Rate for such Rent Period, computed using the actual number of days elapsed and a 360 day year, plus (ii) the Applicable Margin per annum; each Loan related to a Base Rate Advance shall bear interest at a rate equal to the sum of (i) the Base Rate in effect from time to time, computed using the actual number of days elapsed and a 360 day year, plus (ii) the Applicable Margin per annum.

         (b) If all or a portion of the principal amount of or interest on the Loans shall not be paid when due (whether at the stated maturity, by acceleration or otherwise), such overdue amount shall, without limiting the rights of the Lenders under Section 5, bear interest at the Overdue Rate, in each case from the date of nonpayment until paid in full (as well after as before judgment).

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         (c)  Interest accruing on each Loan with respect to any Leased Property during the Construction Term of such Leased Property shall be added to the principal amount of such Loan from time to time. Following the date each Loan is made (or in the case of Loans with respect to a Construction Land Interest, the Construction Term Expiration Date), interest on such Loan shall be payable in arrears on each Payment Date with respect thereto.

         (d)  Any change in the interest rate on the Loans resulting from a change in the Base Rate shall become effective as of the opening of business on the day on which such Base Rate changes as provided in the definition thereof.

         SECTION 2.5 Allocation of Loans to Leased Properties. Pursuant to each Funding Request, each Loan shall be allocated to the Leased Property, the cost of acquisition or construction of which the proceeds of such Loan are used to pay. For purposes of the Operative Documents, the “related Loans” with respect to any Leased Property or Loans “related to” any Leased Property shall mean those Loans allocated to such Leased Property as set forth in the foregoing sentence.

         SECTION 2.6 Prepayment. Except in conjunction with a payment by a Lessee or the Construction Agent of the Lease Balance, a Construction Failure Payment or a Leased Property Balance pursuant to the terms of the Lease or the Construction Agency Agreement, the Lessor shall have no right to prepay the Loans.

         SECTION 3. RECEIPT, DISTRIBUTION AND APPLICATION OF CERTAIN PAYMENTS IN RESPECT OF LEASE AND LEASED PROPERTY; RELEASE; SECURITY INTEREST

         SECTION 3.1 Distribution and Application of Rent Payments.

         (a)  Basic Rent. Each payment of Basic Rent(and any payment of interest on overdue installments of Basic Rent) received by the Agent shall be distributed pro rata to the Funding Parties to be applied to the amounts of accrued and unpaid interest (including overdue interest) on the Loans and accrued and unpaid Yield (including overdue Yield).

         (b)  Supplemental Rent. Each payment of Supplemental Rent received by the Agent shall be paid to or upon the order of the Person owed the same in accordance with the Operative Documents.

         SECTION 3.2 Distribution and Application of Purchase Payment. With respect to any Leased Property, the payment by a Lessee of:

         (a)  the purchase price for a consummated sale of such Leased Property received by the Agent in connection with such Lessee’s exercise of a Purchase Option under Section 14.1 of

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the Lease or such Lessee’s or the Construction Agent’s exercise of its option to purchase such Leased Property under Section 5.3 of the Construction Agency Agreement, or

         (b)  such Lessee’s compliance with its obligation to purchase the Leased Property in accordance with Section 14.2 or 14.3 of the Lease, or

         (c)  the payment by such Lessee to Agent of the Leased Property Balance therefor in accordance with Section 10.1 or Section 10.2 of the Lease,

         shall be distributed by Agent as promptly as possible, to the Funding Parties pro rata in accordance with, and for application to, their respective Funding Party Balances in respect of such Leased Property or Leased Properties (including, in the case of the Lenders, both that portion of the A Loans and that portion of the B Loans allocated to such Leased Property or Leased Properties).

         SECTION 3.3 Distribution and Application to Funding Party Balances of Lessee Payment of Recourse Deficiency Amount Upon Exercise of Remarketing Option. With respect to any Leased Property, the payment by a Lessee of the Recourse Deficiency Amount with respect to such Leased Property to the Agent on the Lease Termination Date in accordance with Section 14.6 or Section 14.7 of the Lease following the Lessees’ exercise of the Remarketing Option, shall be applied by the Agent to the outstanding principal of the A Loans in respect of such Leased Property. With respect to any Leased Property, the payment by a Lessee or the Construction Agent of the Construction Failure Payment with respect thereto pursuant to the Construction Agency Agreement shall be applied by the Agent, first to the accrued and unpaid interest on, and the outstanding principal of, the A Loans in respect of such Leased Property, second to the accrued and unpaid interest on, and outstanding principal of, the B Loans related to such Leased Property and third to the accrued and unpaid Yield on, and outstanding Lessor’s Invested Amount related to such Leased Property.

         SECTION 3.4 Distribution and Application to Funding Party Balances of Remarketing Proceeds of Leased Property. Any payments received by the Lessor as proceeds from the sale of any Leased Property sold pursuant to the Lessees’ exercise of the Remarketing Option pursuant to Section 14.6 or 14.7 of the Lease, or after the payment of the related Construction Failure Payment pursuant to the Construction Agency Agreement, shall be distributed (or applied, in the case of clause third below) by the Lessor as promptly as possible (it being understood that any such payment received by the Lessor on a timely basis and in accordance with the provisions of the Lease shall be distributed on the date received in the funds so received) in the following order of priority:

         first, to the extent not previously deducted from such proceeds, to the Agent and the Funding Parties as reimbursement for any and all remarketing, sale, closing or other transfer costs, prorations or commissions (including broker fees, appraisal costs, legal fees and expenses and transfer taxes), or paid or incurred by the Agent or any Funding

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Party in connection with such Leased Property and not reimbursed by the Lessees, pro rata according to the amount of such costs and fees;

         second, in an amount up to the Permitted Lease Balance, to the Lenders pro rata for application to their Loans in respect of all of such Leased Property, an amount equal to such Loans;

         third, in an amount up to any remaining Permitted Lease Balance, to the Lessor for application to the Lessor’s Invested Amounts in respect of such Leased Property, an amount equal to such Lessor’s Invested Amounts;

         fourth, in an amount up to any remaining Permitted Lease Balance, to the Funding Parties pro rata for application to any other amount owing to the Funding Parties under the Operative Documents with respect to such Leased Property, an amount equal to such other amounts;

         fifth, to the related Lessee or the Construction Agent, as the case may be, to reimburse such Lessee or the Construction Agent for the Recourse Deficiency Amount or the Construction Failure Payment with respect to such Leased Property paid by such Lessee or the Construction Agent, as the case may be;

         sixth, to the Lenders pro rata for application to their remaining Loans (if any) in respect of such Leased Property, an amount equal to such Loans;

         seventh, to the Lessor for application to the remaining Lessor’s Invested Amount with respect to such Leased Property (if any), an amount equal to such Lessor’s Invested Amount;

         eighth, to the Funding Parties pro rata for application to any other amount owing to the Funding Parties under the Operative Documents with respect to such Leased Property, an amount equal to such other amounts; and

         ninth, (i) if sold by a Lessee pursuant to Section 14.6 of the Lease, the excess, if any, to such Lessee, and (ii) otherwise, the excess, if any, to the Lessor.

         SECTION 3.5 Distribution and Application of Payments Received When an Event of Default Exists.

(a)  Proceeds of Leased Property. Any payments received by the Lessor or the Agent when an Event of Default exists as

         (i) proceeds from the sale of any or all of the Leased Property sold pursuant to the exercise of the Lessor’s remedies pursuant to Article XIII of the Lease, or

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         (ii) proceeds of any amounts from any insurer or any Governmental Authority in connection with an Event of Loss or Event of Taking

         shall if received by the Lessor be paid to the Agent as promptly as possible, and shall be distributed or applied in the following order of priority prior to the Release Date:

         first, to the Agent for any amounts expended by it in connection with such Leased Property or the Operative Documents and not previously reimbursed to it;

         second, to the Lenders pro rata for application to their Funding Party Balances in respect of all of the Leased Properties, an amount equal to such Funding Party Balances;

         third, to the Lessor for application to its Funding Party Balances in respect of all of the Leased Properties, an amount equal to such Funding Party Balances; and

         fourth, to the related Lessee or the Person or Persons otherwise legally entitled thereto, the excess, if any; and

on and after such Release Date (and any application otherwise required under this Section 3 has been made) such amounts shall be paid over to the Lessor and shall be distributed or applied by the Lessor, first to the Lessor for application to any amounts owed to it in respect of such Leased Property, and second to the related Lessee or the Person or Persons otherwise legally entitled thereto, the excess, if any.

         (b)  Proceeds of Recoveries from Lessee. Any payments received by any Funding Party when an Event of Default exists from a Lessee as a payment in accordance with the Lease shall be paid to the Agent as promptly as possible, and shall then be distributed or applied by the Agent as promptly as possible in the order of priority set forth in paragraph (a) above.

         SECTION 3.6 Distribution of Other Payments. All payments under Section 7.6 of the Master Agreement shall be made first, to the Lenders, pro rata, until their Funding Party Balances have been paid in full, and second, to the Lessor who shall be entitled to retain all such remaining amounts. Except as otherwise provided in this Section 3, any payment received by the Lessor which is to be paid to Agent pursuant hereto or for which provision as to the application thereof is made in an Operative Document but not elsewhere in this Section 3 shall, if received by the Lessor, be paid forthwith to the Agent and when received shall be distributed forthwith by the Agent to the Person and for the purpose for which such payment was made in accordance with the terms of such Operative Document. If the Agent has any funds related to the Leased Properties remaining after all amounts payable to the Agent and the Funding Parties shall have been paid in full, the Agent shall distribute such funds to Concord or whomsoever shall be legally entitled thereto.

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         SECTION 3.7 Timing of Agent Distributions. Payments received by the Agent in immediately available funds before 12:00 p.m. (noon), Atlanta, Georgia time, on any Business Day shall be distributed to the Funding Parties in accordance with and to the extent provided in this Section 3 on such Business Day. Payments received by the Agent in immediately available funds after 12:00 p.m. (noon), Atlanta, Georgia time shall be distributed to the Funding Parties in accordance with and to the extent provided in this Section 3 on the next Business Day.

         SECTION 3.8 Release of Leased Properties. (a) If one or more of the Lessees shall at any time purchase any or all of the Leased Properties pursuant to Section 13.3 or Section 14.1 of the Lease, or if any or all of the Leased Properties shall be sold in accordance with, and the Lessees otherwise satisfy each of the obligations and conditions set forth in, Section 14.6 of the Lease in respect thereof, then, upon application of such amounts to prepay the related Loans pursuant to Section 2.6 and the Agent’s and the Lenders’ receipt of all accrued interest and any other payments due and owing from the Lessees and/or the Lessor to the Agent and the Lenders on such date in respect thereof, such Leased Property or Properties, as the case may be, shall be released from the applicable Mortgage and the Assignment of Lease and Rents, to the extent relating to such Leased Property or Properties, and UCC-3 termination statements shall be filed in all of the appropriate offices with respect to such Leased Property or Properties, all at the Lessees’ expense.

         (b)  Upon the termination of the Lenders’ Commitments and the payment in full of all of the Loans and all other amounts owing by the Lessees and/or the Lessor hereunder or under any other Operative Document to the Lessor, the Agent and the Lenders (other than unasserted indemnities), the Leased Properties shall be released from the Mortgages and Assignments of Lease and Rents and UCC-3 termination statements shall be filed in all of the appropriate offices, all at the Lessees’ expense.

         (c)  Upon request of the Lessor or a Lessee following a release of any Leased Property described in clause (a) or (b) above, the Agent shall, at the sole cost and expense of the Lessees, execute and deliver to the Lessor or the requesting Lessee such documents as the Lessor or such Lessee shall reasonably request to evidence such release, including, if requested, a release of the Assignments of Lease and Rents to the extent relating to such Leased Property.

         (d)  Upon the termination of the Lenders’ Commitments and the payment in full of all of the Loans and all other amounts owing to the Lenders hereunder or under any other Operative Document and the Lessor Invested Amounts and all other amounts owing to the Lessor and the Agent under the Operative Documents (other than unasserted indemnities), all remaining moneys shall be paid out to Concord.

         SECTION 4. THE LESSOR; EXERCISE OF REMEDIES UNDER LEASE

         SECTION 4.1 Covenant of Lessor. So long as any Lender’s Commitment remains in effect, any Loan remains outstanding and unpaid or any other amount is owing to any Lender

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with respect to its Funding Party Balances, subject to Section 4.2, the Lessor will promptly pay all amounts payable by it under this Loan Agreement and the Notes issued by it in accordance with the terms hereof and thereof and shall duly perform each of its obligations under this Loan Agreement and the Notes. The Lessor agrees to provide to the Agent a copy of each estoppel certificate that the Lessor proposes to deliver pursuant to Section 17.13 of the Lease at least five (5) days prior to such delivery and to make any corrections thereto reasonably requested by the Agent prior to such delivery. The Lessor shall keep each Leased Property owned by it free and clear of all Lessor Liens. The Lessor shall not reject any sale of any Leased Property pursuant to Section 14.6 of the Lease unless all of the related Loans have been paid in full or the Lenders consent to such rejection. In the event that the Lenders reject any sale of any Leased Property pursuant to Section 14.6 of the Lease, the Lessor agrees to take such action as the Lenders reasonably request to effect a sale or other disposition of such Leased Property, provided that the Lessor shall not be required to expend its own funds in connection with such sale or disposition. In the event that the Construction Agent returns any Leased Property to the Lessor pursuant to Section 5.3(a) of the Construction Agency Agreement, unless all of the related Loans are paid in full, the Lessor agrees to take such action as the Lenders reasonably request to complete the Construction, or to effect a sale or other disposition, of such Leased Property, provided that the Lessor shall not be required to expend its own funds in connection therewith. During the Construction Term for each Leased Property, the Lessor agrees to assume liability for, and to indemnify, protect, defend, save and hold harmless the Agent and each Lender, on an After-Tax Basis from and against, any and all Claims that may be imposed on, incurred by or asserted or threatened to be asserted against the Agent or any Lender, in any way relating to or arising out of the circumstances set forth in clauses (i) through (iv) of the first sentence of Section 3.3 of the Construction Agency Agreement, provided that the Lessor shall only be obligated pursuant to this sentence to the extent that the Lessor receives payment from the Construction Agent or any other Person with respect to such Claim.

         SECTION 4.2 Lessor Obligations Nonrecourse; Payment from Certain Lease Obligations and Certain Proceeds of Leased Property Only. All payments to be made by the Lessor in respect of the Loans, the Notes and this Loan Agreement shall be made only from certain payments received under the Lease, the Guaranty Agreement, the Subsidiary Guaranty and the Construction Agency Agreement and certain proceeds of the Leased Properties and only to the extent that the Lessor or the Agent shall have received sufficient payments from such sources to make payments in respect of the Loans in accordance with Section 3. Each Lender agrees that it will look solely to such sources of payments to the extent available for distribution to such Lender as herein provided and that neither the Lessor nor the Agent is or shall be personally liable to any Lender for any amount payable hereunder or under any Note. Nothing in this Loan Agreement, the Notes or any other Operative Document shall be construed as creating any liability (other than for willful misconduct or gross negligence) of the Lessor individually to pay any sum or to perform any covenant, either express or implied, in this Loan Agreement, the Notes or any other Operative Documents (all such liability, if any, being expressly waived by each Lender) and that each Lender, on behalf of itself and its successors and assigns, agrees in the case of any liability of the Lessor hereunder or thereunder (except for such liability

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attributable to its willful misconduct or gross negligence) that it will look solely to those certain payments received under the Lease, the Guaranty Agreement, the Subsidiary Guaranty and the Construction Agency Agreement and those certain proceeds of the Leased Properties, provided, however, that the Lessor in its individual capacity shall in any event be liable with respect to (i) the removal of Lessor’s Liens or involving its gross negligence, willful misconduct, misrepresentation or breach of contract (other than the failure to make payments in respect of the Loans) or (ii) failure to turn over payments the Lessor has received in accordance with Section 3; and provided further that the foregoing exculpation of the Lessor shall not be deemed to be exculpations of any Lessee or any other Person.

         SECTION 4.3 Exercise of Remedies Under the Lease.

         (a)  Event of Default. With respect to any Potential Event of Default as to which notice thereof by the Lessor to a Lessee is a requirement to cause such Potential Event of Default to become an Event of Default, the Lessor agrees to give such notice to such Lessee promptly upon receipt of a written request by any Lender or the Agent. The Lessor shall not, without the prior written consent of the Required Lenders, waive any Event of Default.

         (b)  Acceleration of Lease Balance. When an Event of Default exists, the Lessor, upon the direction of the Required Lenders, shall exercise such remedies under Article XIII of the Lease as are directed by the Required Lenders, including demanding payment in full of the Lease Balance by the Lessees (the “Acceleration”). Following the Acceleration, the Lessor shall consult with the Lenders regarding actions to be taken in response to such Event of Default. The Lessor (1) shall not, without the prior written consent of the Required Lenders and (2) shall (subject to the provisions of this Section), if so directed by the Required Lenders, do any of the following: commence eviction or foreclosure proceedings, or file a lawsuit against any Lessee under the Lease, or sell the Leased Properties, or exercise other remedies against the Lessees, the Subsidiary Guarantors or the Guarantor under the Operative Documents in respect of such Event of Default; provided, however, that any payments received by the Lessor shall be distributed in accordance with Section 3. Notwithstanding any such consent, direction or approval by the Required Lenders of any such action or omission, the Lessor shall not have any obligation to follow such direction if the same would, in the Lessor’s reasonable judgment, require the Lessor to expend its own funds or expose the Lessor to expense, or unless Required Lenders provide to the Lessor an indemnity, in form and substance reasonably acceptable to the Lessor, for such liability, loss or damage or unless and until the Lenders advance to the Lessor an amount which is sufficient, in the Lessor’s reasonable judgment, to cover such liability, expense, loss or damage (excluding the Lessor’s pro rata share thereof, if any). Notwithstanding the foregoing, on and after the related Release Date (and any application otherwise required under Section 3 has been made): the Lenders shall have no rights to such Leased Property or any proceeds thereof; the Lenders shall have no rights to direct or give consent to any actions with respect to such Leased Property and the proceeds thereof; the Lessor shall have absolute discretion (but in all events subject to the terms of the Operative Documents) with respect to such exercise of remedies with respect to such Leased Property, and the proceeds thereof, including, without limitation, any foreclosure or sale of such Leased Property; and the Lessor shall have no liability to the Lenders

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with respect to the Lessor’s actions or failure to take any action with respect to such Leased Property.

         SECTION 5. LOAN EVENTS OF DEFAULT; REMEDIES

         SECTION 5.1 Loan Events of Default. Each of the following events shall constitute a Loan Event of Default (whether any such event shall be voluntary or involuntary or come about or be effected by operation of law or pursuant to or in compliance with any judgment, decree or order of any court or any order, rule or regulation of any Governmental Authority) and each such Loan Event of Default shall continue so long as, but only as long as, it shall not have been remedied:

         (a)  Lessor shall fail to distribute in accordance with the provisions of Section 3 any amount received by the Lessor pursuant to the Lease, the Master Agreement or any other Operative Document within two (2) Business Days of receipt thereof if and to the extent that the Agent or the Lenders are entitled to such amount or a portion thereof; or

         (b)  the Lessor shall fail to pay to the Agent, within two (2) Business Days of the Lessor’s receipt thereof, any amount which a Lessee is required, pursuant to the Operative Documents, to pay to the Agent but erroneously pays to the Lessor; or

         (c)  failure by the Lessor to perform in any material respect any other covenant or condition herein or in any other Operative Document to which the Lessor is a party, which failure shall continue unremedied for thirty (30) days after receipt by the Lessor of written notice thereof from the Agent or any Lender; or

         (d)  any representation or warranty of the Lessor contained in any Operative Document or in any certificate required to be delivered thereunder shall prove to have been incorrect in a material respect when made and shall not have been cured within thirty (30) days of receipt by the Lessor of written notice thereof from the Agent or any Lender; or

         (e)  the Lessor or the General Partner shall become bankrupt or make an assignment for the benefit of creditors or consent to the appointment of a trustee or receiver; or a trustee or a receiver shall be appointed for the Lessor or the General Partner or for substantially all of its property without its consent and shall not be dismissed or stayed within a period of sixty (60) days; or bankruptcy, reorganization or insolvency proceedings shall be instituted by or against the Lessor or the General Partner and, if instituted against the Lessor or the General Partner, shall not be dismissed or stayed for a period of sixty (60) days; or

         (f) any Event of Default shall occur and be continuing.

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         SECTION 5.2 Remedies.

         (a)  Upon the occurrence of a Loan Event of Default hereunder, (i) if such event is a Loan Event of Default specified in clause (e) of Section 5.1 with respect to the Lessor, automatically the Lenders’ Commitments shall terminate and the outstanding principal of, and accrued interest on, the Loans shall be immediately due and payable, and (ii) if such event is any other Loan Event of Default, upon written request of the Required Lenders, the Agent shall, by notice of default to the Lessor, declare the Commitments of the Lenders to be terminated forthwith and the outstanding principal of, and accrued interest on, the Loans to be immediately due and payable, whereupon the Commitments of the Lenders shall immediately terminate and the outstanding principal of, and accrued interest on, the Loans shall become immediately due and payable.

         (b)  When a Loan Event of Default exists, the Agent may, and upon the written instructions of the Required Lenders shall, exercise any or all of the rights and powers and pursue any and all of the remedies available to it hereunder, under the Notes, the Mortgages and the Assignments of Lease and Rents and shall have and may exercise any and all rights and remedies available under the Uniform Commercial Code or any provision of law. When a Loan Event of Default exists, the Agent may, and upon the written instructions of the Required Lenders shall, have the right to exercise all rights of the Lessor under the Lease pursuant to the terms and in the manner provided for in the Mortgages and the Assignments of Lease and Rents.

         (c) Except as expressly provided above, no remedy under this Section 5.2 is intended to be exclusive, but each shall be cumulative and in addition to any other remedy provided under this Section 5.2 or under the other Operative Documents or otherwise available at law or in equity. The exercise by the Agent or any Lender of any one or more of such remedies shall not preclude the simultaneous or later exercise of any other remedy or remedies. No express or implied waiver by the Agent or any Lender of any Loan Event of Default shall in any way be, or be construed to be, a waiver of any future or subsequent Loan Event of Default. The failure or delay of the Agent or any Lender in exercising any rights granted it hereunder upon any occurrence of any of the contingencies set forth herein shall not constitute a waiver of any such right upon the continuation or recurrence of any such contingencies or similar contingencies and any single or partial exercise of any particular right by the Agent or any Lender shall not exhaust the same or constitute a waiver of any other right provided herein.

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         SECTION 6. THE AGENT

         SECTION 6.1 Appointment. Each Lender hereby irrevocably designates and appoints the Agent as the agent of such Lender under this Loan Agreement and the other Operative Documents, and each such Lender irrevocably authorizes the Agent, in such capacity, to take such action on its behalf under the provisions of this Loan Agreement and the other Operative Documents and to exercise such powers and perform such duties as are expressly delegated to the Agent by the terms of this Loan Agreement and the other Operative Documents, together with such other powers as are reasonably incidental thereto. Notwithstanding any provision to the contrary elsewhere in this Loan Agreement, the Agent shall not have any duties or responsibilities, except those expressly set forth herein, or any fiduciary relationship with any Lender, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Loan Agreement or any other Operative Document or otherwise exist against the Agent.

         SECTION 6.2 Delegation of Duties. The Agent may execute any of its duties under this Loan Agreement and the other Operative Documents by or through agents or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. The Agent shall not be responsible for the negligence or misconduct of any agents or attorneys-in-fact selected by it with reasonable care.

         SECTION 6.3 Exculpatory Provisions. Neither the Agent nor any of its officers, directors, employees, agents, attorneys-in-fact or Affiliates shall be (a) liable for any action lawfully taken or omitted to be taken by it or such Person under or in connection with this Loan Agreement or any other Operative Document (except for its or such Person’s own gross negligence or willful misconduct) or (b) responsible in any manner to any of the Lenders for any recitals, statements, representations or warranties made by the Lessor or any Lessee or any officer thereof contained in this Loan Agreement or any other Operative Document or in any certificate, report, statement or other document referred to or provided for in, or received by the Agent under or in connection with, this Loan Agreement or any other Operative Document or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Loan Agreement or any other Operative Document or for any failure of the Lessor or any Lessee to perform its obligations hereunder or thereunder. The Agent shall not be under any obligation to any Lender to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Loan Agreement or any other Operative Document, or to inspect the properties, books or records of the Lessor or any Lessee.

         SECTION 6.4 Reliance by Agent. The Agent shall be entitled to rely, and shall be fully protected in relying, upon any Note, writing, resolution, notice, consent, certificate, affidavit, letter, telecopy, telex or teletype message, statement, order or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons and upon advice and statements of legal counsel (including, without limitation, counsel to the Lessor or any Lessee), independent accountants and other experts

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selected by the Agent. The Agent may deem and treat the payee of any Note as the owner thereof for all purposes unless a written notice of assignment, negotiation or transfer thereof shall have been filed with the Agent. The Agent shall be fully justified in failing or refusing to take any action under this Loan Agreement or any other Operative Document unless it shall first receive such advice or concurrence of the Required Lenders as it deems appropriate or it shall first be indemnified to its satisfaction by the Funding Parties against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. Subject to the Operative Documents, the Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Loan Agreement and the other Operative Documents in accordance with a request of the Required Lenders, and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Lenders and all future holders of the Notes.

         SECTION 6.5 Notice of Default. The Agent shall not be deemed to have knowledge or notice of the occurrence of any Loan Potential Event of Default or Loan Event of Default hereunder unless the Agent has received notice from a Lender referring to this Loan Agreement, describing such Loan Potential Event of Default or Loan Event of Default and stating that such notice is a “notice of default”. In the event that the Agent receives such a notice, the Agent shall give notice thereof to the Lenders. The Agent shall take such action, subject to the Operative Documents with respect to such Loan Potential Event of Default or Loan Event of Default as shall be reasonably directed by the Required Lenders; provided that unless and until the Agent shall have received such directions, the Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Loan Potential Event of Default or Loan Event of Default as it shall deem advisable in the best interests of the Lenders.

         SECTION 6.6 Non-Reliance on Agent and Other Lenders. Each Lender expressly acknowledges that neither the Agent nor any of its officers, directors, employees, agents, attorneys-in-fact or Affiliates has made any representations or warranties to it and that no act by the Agent hereinafter taken, including any review of the affairs of the Lessor, the Guarantor, any Subsidiary Guarantor or any Lessee, shall be deemed to constitute any representation or warranty by the Agent to any Lender. Each Lender represents to the Agent that it has, independently and without reliance upon the Agent or any other Lender, and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, operations, property, financial and other condition and creditworthiness of the Lessor, the Guarantor, each Subsidiary Guarantor and each Lessee and made its own decision to make its Loans hereunder and enter into this Loan Agreement. Each Lender also represents that it will, independently and without reliance upon the Agent or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under this Loan Agreement and the other Operative Documents, and to make such investigation as it deems necessary to inform itself as to the business, operations, property, financial and other condition and creditworthiness of the Lessor, the Guarantor, each Subsidiary Guarantor and each Lessee. Except for notices, reports and other documents expressly required to be furnished to the Lenders by the Agent hereunder, the Agent shall not have any duty or responsibility to provide any Lender

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with any credit or other information concerning the business, operations, property, condition (financial or otherwise), prospects or creditworthiness of the Lessor, the Guarantor, any Subsidiary Guarantor or any Lessee which may come into the possession of the Agent or any of its officers, directors, employees, agents, attorneys-in-fact or Affiliates.

         SECTION 6.7 Indemnification. The Lenders agree to indemnify the Agent in its capacity as such (to the extent not reimbursed by a Lessee and without limiting the obligation of any Lessee to do so), ratably according to the percentage each Lender’s Commitment bears to the total Commitments of all of the Lenders on the date on which indemnification is sought under this Section 6.7 (or, if indemnification is sought after the date upon which the Lenders’ Commitments shall have terminated and the Loans shall have been paid in full, ratably in accordance with the percentage that each Lender’s Commitment bears to the Commitments of all of the Lenders immediately prior to such date), from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind whatsoever which may at any time (including, without limitation, at any time following the payment of the Notes) be imposed on, incurred by or asserted against the Agent in any way relating to or arising out of, the Commitments, this Loan Agreement, any of the other Operative Documents or any documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby or any action taken or omitted by the Agent under or in connection with any of the foregoing; provided that no Lender shall be liable for the payment of any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting solely from the Agent’s gross negligence or willful misconduct. The agreements in this Section 6.7 shall survive the payment of the Notes and all other amounts payable hereunder.

         SECTION 6.8 Agent in Its Individual Capacity. The Agent and its Affiliates may make loans to, accept deposits from and generally engage in any kind of business with the Lessor, the Guarantor, any Subsidiary Guarantor or any Lessee as though the Agent were not the Agent hereunder and under the other Operative Documents. With respect to Loans made or renewed by it, the Agent shall have the same rights and powers under this Loan Agreement and the other Operative Documents as any Lender and may exercise the same as though it were not the Agent, and the terms “Lender” and “Lenders” shall include the Agent in its individual capacity. Each Lender acknowledges that the Agent in its individual capacity has had and continues to have other business relations and transactions with Concord, certain of its Subsidiaries and the Lessor.

         SECTION 6.9 Successor Agent. The Agent may resign as Agent upon 20 days’ notice to the Lenders and Concord effective upon the appointment of a successor agent. If the Agent shall resign as Agent under this Loan Agreement and the other Operative Documents, then the Required Lenders shall appoint a successor agent for the Lenders, which successor agent shall be a commercial bank organized under the laws of the United States of America or any State thereof or under the laws of another country which is doing business in the United States of America and having a combined capital, surplus and undivided profits of at least $100,000,000,

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whereupon such successor agent shall succeed to the rights, powers and duties of the Agent, and the term “Agent” shall mean such successor agent effective upon such appointment and approval, and the former Agent’s rights, powers and duties as Agent shall be terminated, without any other or further act or deed on the part of such former Agent or any of the parties to this Loan Agreement or any holders of the Notes. After any retiring Agent’s resignation as Agent, all of the provisions of this Section 6 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Agent under this Loan Agreement and the other Operative Documents.

         SECTION 7. MISCELLANEOUS

         SECTION 7.1 Amendments and Waivers. Neither this Loan Agreement, any Note, nor any terms hereof or thereof may be amended, supplemented or modified except in accordance with the provisions of Section 8.4 of the Master Agreement.

         SECTION 7.2 Notices. Unless otherwise specified herein, all notices, requests, demands or other communications to or upon the respective parties hereto shall be given in accordance with Section 8.2 of the Master Agreement.

         SECTION 7.3 No Waiver; Cumulative Remedies. No failure to exercise and no delay in exercising, on the part of the Agent or any Lender, any right, remedy, power or privilege hereunder, shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.

         SECTION 7.4 Successors and Assigns. This Loan Agreement shall be binding upon and inure to the benefit of the Lessor, the Agent, the Lenders, all future holders of the Notes and their respective successors and permitted assigns.

         SECTION 7.5 Counterparts. This Loan Agreement may be executed by one or more of the parties to this Loan Agreement on any number of separate counterparts and all of said counterparts taken together shall be deemed to constitute one and the same agreement. A set of the counterparts of this Loan Agreement signed by all the parties hereto shall be lodged with the Lessor and the Agent.

         SECTION 7.6 GOVERNING LAW. THIS LOAN AGREEMENT AND THE NOTES AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS LOAN AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF GEORGIA.

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SECTION 7.7 Survival and Termination of Agreement. All covenants, agreements, representations and warranties made herein and in any certificate, document or statement delivered pursuant hereto or in connection herewith shall survive the execution and delivery of this Loan Agreement, and the Notes and shall continue in full force and effect so long as any Note or any amount payable to any Lender under or in connection with this Loan Agreement or the Notes is unpaid, at which time this Loan Agreement shall terminate.

         SECTION 7.8 Entire Agreement. This Loan Agreement and the other Operative Documents set forth the entire agreement of the parties hereto with respect to its subject matter, and supersedes all previous understandings, written or oral, with respect thereto.

         SECTION 7.9 Severability. Any provision of this Loan Agreement or of the Notes which is prohibited, unenforceable or not authorized in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition, unenforceability or non-authorization without invalidating the remaining provisions hereof or thereof or affecting the validity, enforceability or legality of any such provision in any other jurisdiction.

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         IN WITNESS THEREOF, the parties hereto have caused this Loan Agreement to be duly executed and delivered by their proper and duly authorized officers as of the day and year first above written.

SUNTRUST BANK, as Agent
By:	/s/ Bryan W. Ford Name: Bryan W. Ford Title: Director

LOAN AGREEMENT

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ATLANTIC FINANCIAL GROUP, LTD., as Lessor and Borrower
By:	Atlantic Financial Managers, Inc., its General Partner
	By: /s/ Stephen Brookshire Name: Stephen Brookshire Title: President

LOAN AGREEMENT

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SUNTRUST BANK, as a Lender
By:	/s/ Bryan W. Ford Name: Bryan W. Ford Title: Director

LOAN AGREEMENT

S-3 EX-10.5 7 w64721exv10w5.htm GUARANTY AGREEMENT, DATED AS OF JULY 12, 2002

Exhibit 10.5

GUARANTY AGREEMENT

from

CONCORD EFS, INC.

Dated as of July 12, 2002

TABLE OF CONTENTS

		Page
SECTION 1.	Guaranty		1
SECTION 2.	Bankruptcy		2
SECTION 3.	Continuing Guaranty		2
SECTION 4.	Reinstatement		3
SECTION 5.	Certain Actions		3
SECTION 6.	Application; Set-Off		3
SECTION 7.	Waiver		4
SECTION 8.	Assignment		4
SECTION 9.	Miscellaneous		4

GUARANTY AGREEMENT

         THIS GUARANTY AGREEMENT, dated as of July 12, 2002 (as amended or otherwise modified from time to time, this “Guaranty”), is made by CONCORD EFS, INC., a Delaware corporation (“Guarantor”).

WITNESSETH:

         WHEREAS, Concord EFS, Inc., as Guarantor, Guarantor and certain Subsidiaries of Guarantor that are or may become party thereto, as Lessees, Electronic Payment Services, Inc., [Bank] and certain other Significant Subsidiaries that may become party thereto, as Subsidiary Guarantors, Atlantic Financial Group, Ltd., as Lessor, the financial institutions party thereto, as Lenders, and SunTrust Bank, as Agent, have entered into that certain Master Agreement, dated as of July 12, 2002 (as it may be modified, amended or restated from time to time as and to the extent permitted thereby, the “Master Agreement”; and, unless otherwise defined herein, terms which are defined or defined by reference in the Master Agreement (including Appendix A thereto) shall have the same meanings when used herein as such terms have therein); and

         WHEREAS, it is a condition precedent to the Funding Parties consummating the transactions to be consummated on the Initial Closing Date that the Guarantor execute and deliver this Guaranty; and

         WHEREAS, it is in the best interests of the Guarantor that the transactions contemplated by the Master Agreement be consummated on the Initial Closing Date; and

         WHEREAS, this Guaranty, and the execution, delivery and performance hereof, have been duly authorized by all necessary corporate action of the Guarantor; and

         WHEREAS, this Guaranty is offered by the Guarantor as an inducement to the Funding Parties to consummate the transactions contemplated in the Master Agreement, which transactions, if consummated, will be of benefit to the Guarantor;

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

         SECTION 1. Guaranty. The Guarantor hereby unconditionally guarantees to the Agent and the Funding Parties the full and prompt payment when due, whether by acceleration or otherwise, and at all times thereafter, and the full and prompt performance, of all of the Liabilities (as hereinafter defined), including rent, interest and earnings on any such Liabilities whether accruing before or after any bankruptcy or insolvency case or proceeding involving the

Guarantor or any other Person and, if rent, interest or earnings on any portion of such obligations ceases to accrue by operation of law by reason of the commencement of such case or proceeding, including such rent, interest and earnings as would have accrued on any such portion of such obligations if such case or proceeding had not commenced, and further agrees to pay all reasonable expenses (including reasonable attorneys’ fees and legal expenses) actually paid or incurred by each of the Funding Parties in endeavoring to collect the Liabilities, or any part thereof, and in enforcing this Guaranty. The term “Liabilities”, as used herein, shall mean all of the following, in each case howsoever created, arising or evidenced, whether direct or indirect, joint or several, absolute or contingent, or now or hereafter existing, or due or to become due: (i) all amounts payable by the Lessees or the Construction Agent to the Agent and the Funding Parties under the Lease (including, without limitation, Basic Rent, Supplemental Rent and the Recourse Deficiency Amount), the Master Agreement, the Construction Agency Agreement or any other Operative Document, (ii) all principal of the Notes and interest accrued thereon, and all additional amounts and other sums at any time due and owing, and required to be paid, to the Funding Parties under the terms of the Master Agreement, the Loan Agreement, the Construction Agency Agreement, the Assignments of Lease and Rents, the Mortgages, the Notes or any other Operative Document and (iii) all obligations of EPS under the Swap Documents; provided, however, that the Guarantor will not be obligated to pay to the Agent and Funding Parties under this Guaranty any amounts greater than the Lessees and the Construction Agent would have had to pay to the Agent and the Funding Parties under the Lease, the Master Agreement, the Construction Agency Agreement and the other Operative Documents, plus the amounts EPS would have had to pay under the Swap Documents, assuming that such documents were enforced in accordance with their terms (and without giving effect to any discharge or limitation thereon resulting or arising by reason of the bankruptcy or insolvency of a Lessee or the Construction Agent), plus all actual and reasonable costs of enforcing this Guaranty.

         By way of extension but not in limitation of any of its other obligations hereunder, the Guarantor stipulates and agrees that in the event any foreclosure proceedings are commenced with respect to any Leased Property and result in the entering of a foreclosure judgment, any such foreclosure judgment, to the extent related to the Liabilities and payable to any of the Funding Parties, shall be treated as part of the Liabilities, and the Guarantor unconditionally guarantees the full and prompt payment of such judgment.

         SECTION 2. Bankruptcy. The Guarantor agrees that, in the event any bankruptcy, reorganization or insolvency proceeding shall be instituted by or against the Guarantor and, if instituted against the Guarantor, shall not be dismissed or stayed for a period of sixty days, and if such event shall occur at a time when any of the Liabilities may not then be due and payable, the Guarantors will pay to the Funding Parties forthwith the full amount which would be payable hereunder by the Guarantor if all Liabilities were then due and payable.

         SECTION 3. Continuing Guaranty. THIS GUARANTY SHALL IN ALL RESPECTS BE A CONTINUING, ABSOLUTE AND UNCONDITIONAL GUARANTY OF PROMPT

2

AND COMPLETE PAYMENT AND PERFORMANCE (AND NOT MERELY OF COLLECTION), AND SHALL REMAIN IN FULL FORCE AND EFFECT (NOTWITHSTANDING, WITHOUT LIMITATION, THE DISSOLUTION OF GUARANTOR) UNTIL THE TERMINATION OF THE COMMITMENTS AND THE FULL AND FINAL PAYMENT OF ALL OF THE LIABILITIES.

         SECTION 4. Reinstatement. The Guarantor further agrees that, if at any time all or any part of any payment theretofore applied to any of the Liabilities is or must be rescinded or returned for any reason whatsoever (including, without limitation, the insolvency, bankruptcy or reorganization of the Guarantor or any Lessee), such Liabilities shall, for the purposes of this Guaranty, to the extent that such payment is or must be rescinded or returned, be deemed to have continued in existence, notwithstanding such application, and this Guaranty shall continue to be effective or be reinstated, as the case may be, as to such Liabilities, all as though such application had not been made.

         SECTION 5. Certain Actions. The Funding Parties may, from time to time at their discretion and without notice to the Guarantor, take any or all of the following actions: (a) retain or obtain (i) a security interest in any Lessee’s interests in the Lease or the Leased Property and (ii) a lien or a security interest hereafter granted by any Person upon or in any property, in each case to secure any of the Liabilities or any obligation hereunder; (b) retain or obtain the primary or secondary obligation of any obligor or obligors, in addition to the Guarantor, with respect to any of the Liabilities; (c) extend or renew for one or more periods (regardless of whether longer than the original period), or release or compromise any obligation of the Guarantor hereunder or any obligation of any nature of any other obligor (including, without limitation, the Lessor and the Lessees) with respect to any of the Liabilities; (d) release or fail to perfect its Lien upon or security interest in, or impair, surrender, release or permit any substitution or exchange for, all or any part of any property securing any of the Liabilities or any obligation hereunder, or extend or renew for one or more periods (regardless of whether longer than the original period) or release or compromise any obligations of any nature of any obligor with respect to any such property; and (e) resort to the Guarantor for payment of any of the Liabilities, regardless of whether the Agent or any other Person shall have resorted to any property securing any of the Liabilities or any obligation hereunder or shall have proceeded against any Lessee or any other obligor primarily or secondarily obligated with respect to any of the Liabilities (all of the actions referred to in this clause (e) being hereby expressly waived by the Guarantor).

         SECTION 6. Application; Set-Off. Any amounts received by any Funding Party from whatever source on account of the Liabilities shall be applied by it toward the payment of such of the Liabilities, and in such order of application, as is set forth in the Operative Documents.

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         To secure all obligations of the Guarantor hereunder, each Funding Party and the Agent shall have a right to set-off, without demand or notice of any kind, at any time and from time to time when any amount shall be due and payable by the Guarantor hereunder against any and all balances, credits, deposits, accounts or moneys of or in the Guarantor’s name now or hereafter, for any reason or purpose whatsoever, in the possession or control of, or in transit to, any Funding Party, the Agent or any agent or bailee for any Funding Party, and apply any such amounts toward the payment of the Liabilities then due in such order as in accordance with the Operative Documents.

         SECTION 7. Waiver. The Guarantor hereby expressly waives: (a) notice of the acceptance of this Guaranty; (b) notice of the existence or creation or non-payment of all or any of the Liabilities; (c) presentment, demand, notice of dishonor, protest, and all other notices whatsoever; and (d) all diligence in collection or protection of or realization upon the Liabilities or any thereof, any obligation hereunder, or any security for or guaranty of any of the foregoing.

         SECTION 8. Assignment. Subject to Article VI of the Master Agreement, each Funding Party may, from time to time, whether before or after any discontinuance of this Guaranty, at its sole discretion and without notice to the Guarantor, assign or transfer any or all of its portion of the Liabilities or any interest therein; and, notwithstanding any such assignment or transfer or any subsequent assignment or transfer thereof, such Liabilities shall be and remain Liabilities for the purposes of this Guaranty, and each and every such immediate and successive assignee or transferee of any of the Liabilities or of any interest therein shall, to the extent of such assignee’s or transferee’s interest in the Liabilities, be entitled to the benefits of this Guaranty to the same extent as if such assignee or transferee were such Funding Party.

         SECTION 9. Miscellaneous. No delay in the exercise of any right or remedy shall operate as a waiver thereof, and no single or partial exercise of any right or remedy shall preclude other or further exercise thereof or the exercise of any other right or remedy; nor shall any modification or waiver of any of the provisions of this Guaranty be binding upon any Funding Party except as expressly set forth in a writing duly signed and delivered on its behalf. No action permitted hereunder shall in any way affect or impair any Funding Party’s rights or the Guarantor’s obligations under this Guaranty. For the purposes of this Guaranty, Liabilities shall include all of the obligations described in the definition thereof, notwithstanding any right or power of any Lessee, the Construction Agent or the Lessor or anyone else to assert any claim or defense (other than final payment or full performance) as to the invalidity or unenforceability of any such obligation, and no such claim or defense shall affect or impair the obligations of the Guarantor hereunder. The Guarantor hereby acknowledges that there are no conditions to the effectiveness of this Guaranty.

         This Guaranty shall be binding upon the Guarantor and upon the Guarantor’s successors and permitted assigns; and all references herein to the Guarantor shall be deemed to include any successor or successors thereof, whether immediate or remote, to such Person; provided that the

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Guarantor shall not assign its obligations hereunder without the prior written consent of the Funding Parties.

         Wherever possible each provision of this Guaranty shall be interpreted in such manner as to be effective and valid under Applicable Law, but if any provision of this Guaranty shall be prohibited by or invalid thereunder, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Guaranty.

         The Guarantor: (a) submits for itself and its property in any legal action or proceeding relating to this Guaranty, or for recognition and enforcement of any judgment in respect thereof, to the non-exclusive general jurisdiction of the Courts of the State of Georgia, the courts of the United States of America for the Northern District of Georgia, and appellate courts from any thereof; (b) consents that any such action or proceedings may be brought to such courts, and waives any objection that it may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient court and agrees not to plead or claim the same; and (c) agrees that nothing herein shall affect the right to effect service of process in any manner permitted by law or shall limit the right of the Funding Parties to sue in any other jurisdiction.

         All notices, demands, declarations, consents, directions, approvals, instructions, requests and other communications required or permitted by this Guaranty shall be in writing and shall be deemed to have been duly given when addressed to the appropriate Person and delivered in the manner specified in Section 8.2 of the Master Agreement.

         THIS GUARANTY SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF GEORGIA, WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES.

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

CONCORD EFS, INC.
By:	/s/ E. T. Haslam
	Name Printed: Edward T. Haslam
	Title: Chief Financial Officer

GUARANTY

S-1 EX-10.6 8 w64721exv10w6.htm LETTER AGREEMENT, DATED SEPTEMBER 11, 2002

Exhibit 10.6

[CONCORD EFS, INC. LETTERHEAD]

September 11, 2002

Mr. Richard Buchignani
6065 River Oaks Cove
Memphis, TN 38120

Dear Richard:

I am pleased to confirm our offer of employment as Vice Chairman and General Counsel of Concord EFS, Inc. Your salary will be $275,000 annualized. In addition to your salary, the following compensation stipulations also apply:

BONUS: You are eligible to participate in Concord’s Annual Bonus Program consistent with members of the Executive Management Staff.

STOCK OPTIONS: You will be granted 25,000 stock options effective October 4, 2002 and will be eligible to participate in the Concord Stock Option Plan as outlined in the Concord EFS, Inc. 2002 Incentive Stock Option Plan, as amended, subject in all respects to the terms of the Plan and the Option Agreement evidencing this grant.

BENEFITS: You are eligible to participate in our healthcare plan (to include health, disability, and term life), our 401(k) plan, and our Senior Executive Retirement Savings Plan.

Upon termination, death, disability, change of control, or change of position or location, Concord will pay one year’s salary to your or your designated beneficiary(s). Options will continue to vest during the one-year period.

Concord will also pay for professional organization dues, CLE, seminars, and other customary expenses related to your position.

If you are in agreement with the terms of this offer, please acknowledge your acceptance by signing in the space provided below and return one copy to me.

Richard, I am looking forward to welcoming you to Concord as a member of our Executive Management Team.

Sincerely,

/s/ Dan M. Palmer

Dan M. Palmer
Chairman and CEO

/s/ J. Richard Buchignani	9/18/02
Richard Buchignani	Date

JMF/kw

EX-10.7 9 w64721exv10w7.htm LETTER AGREEMENT, DATED AUGUST 30, 2002

CONFIDENTIAL MATERIAL APPEARING IN THIS DOCUMENT WAS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH THE SECURITIES AND EXCHANGE ACT OF 1934, AS AMENDED, AND 17 C.F.R. 240.24B-2 AND 200.80. OMITTED INFORMATION WAS REPLACED WITH ASTERISKS

Exhibit 10.7

[Concord EFS, Inc. Letterhead]

August 30, 2002

Bond Isaacson
5216 Providence Country Club Drive
Charlotte, NC. 28277

Dear Bond,

I am pleased to confirm our offer of employment as an Executive Vice President of Concord, EFS, Inc.

Your salary will be $500,000.00 annualized. In addition to your salary, the following compensation stipulations also apply:

RELOCATION: Concord has agreed to assist you with all costs associated with relocation.

SIGNING BONUS: You will receive a signing bonus in your first pay period of $500,000.00. This bonus is granted under the terms of a prorated 12-month payback provision (enclosed).

STOCK OPTIONS: You will be granted 400,000 STOCK OPTIONS effective October 4, 2002.

ADDITIONAL COMPENSATION:

In May 2003, you will be granted a bonus of $600,000.00.

In May 2004, you will be granted a bonus of $600,000.00.

Additionally, for every large financial institution included in the following list that you renew or extend as a client of Concord, you will receive a bonus of $500,000.00.

***

CONFIDENTIAL MATERIAL APPEARING IN THIS DOCUMENT WAS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION IN ACCORDANCE WITH THE SECURITIES AND EXCHANGE ACT OF 1934, AS AMENDED, AND 17 C.F.R. 240.24B-2 AND 200.80. OMITTED INFORMATION WAS REPLACED WITH ASTERISKS

If you renew or extend *** of the *** financial institutions listed above as a client of Concord, you will receive a bonus of $2,000,000.00.

You are eligible to participate in our healthcare plan, our 401(k) plan and our Senior Executive Retirement Savings Plan.

Bond, I am certainly looking forward to welcoming you to Concord as a member of our Executive Management Team, and developing a mutually beneficial working relationship.

Sincerely,

/s/ Ed Labry

Ed Labry
President
Concord EFS, Inc.

/s/ Bond Isaacson	September 6, 2002
Bond Isaacson	Date

SIGN-ON BONUS RE-PAY AGREEMENT

EMPLOYEE NAME: Bond Isaacson

With regards to the sign-on bonus I will receive as part of my employment offer, I agree that if I am terminated for cause or voluntarily resign my employment with Concord less than one year following my receipt of such bonus payment, I will reimburse Concord the amount paid to me. I agree that the amount of the reimbursement to Concord will be pro-rated based on each full month of employment I complete following such payment. I further authorize Concord to deduct from my final paycheck(s), severance, paid time off, or other benefits any amounts due and owing to Concord pursuant to this Agreement. In the event the amount deducted from my final paycheck(s), severance, paid time-off or other benefits is less than the amount I owe Concord pursuant to this Agreement, I agree to pay Concord the full balance due within 30 days of the termination of my employment. I also agree to bear all legal and administrative costs incurred by Concord in enforcing this Agreement.

Signature: /s/ Bond Isaacson

Date: 11/9/02

Witness /s/ Bonnie M. Isaacson

EX-99.1 10 w64721exv99w1.htm CERTIFICATION OF CHIEF EXECUTIVE OFFICER

Exhibit   99.1

Certification Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

           In connection with the Quarterly Report of Concord EFS, Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2002, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Dan M. Palmer, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)      The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)      The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: November 13, 2002	By:  /s/ Dan M. Palmer
	Dan M. Palmer
	Chief Executive Officer

EX-99.2 11 w64721exv99w2.htm CERTIFICATION OF PRESIDENT

Exhibit   99.2

Certification Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

           In connection with the Quarterly Report of Concord EFS, Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2002, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Edward A. Labry III, President of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: November 13, 2002	By:  /s/ Edward A. Labry III
	Edward A. Labry III
	President

EX-99.3 12 w64721exv99w3.htm CERTIFICATION OF CHIEF FINANCIAL OFFICER

Exhibit 99.3

Certification Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

           In connection with the Quarterly Report of Concord EFS, Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2002, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Edward T. Haslam, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)      The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)      The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: November 13, 2002	By: /s/ Edward T. Haslam
	Edward T. Haslam
	Chief Financial Officer

EX-99.4 13 w64721exv99w4.htm CAUTIONARY STATEMENTS

EXHIBIT 99.4

CONCORD EFS, INC.
CAUTIONARY STATEMENTS

          Press releases and the reports and other documents we file with the Securities and Exchange Commission may contain or incorporate by reference forward-looking statements made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements reflect management’s expectations, estimates, and assumptions, based on information available at the time the document, or any document incorporated therein by reference, was prepared. These forward-looking statements include, but are not limited to, statements regarding future events, plans, goals, objectives, and expectations. The words “anticipate,” “believe,” “estimate,” “expect,” “plan,” “intend,” “likely,” “will,” “should,” and similar expressions are intended to identify forward-looking statements. Forward-looking statements are not guarantees of future performance and involve risks, uncertainties, and other factors which may cause our actual performance or achievements to be materially different from any future results, performance, or achievements expressed or implied by those statements. Important factors that could cause our actual results to differ materially from those in forward-looking statements include, but are not limited to, those indicated below. We undertake no obligation to publicly update or revise any forward-looking statements to reflect changed assumptions, the occurrence of anticipated or unanticipated events, or changes to future results over time. You are cautioned not to rely on forward-looking statements.

1.           If we fail to successfully execute our corporate consolidation plans, our business, operating results, and financial condition could be adversely affected.

          We typically initiate consolidation plans to integrate our acquisitions and to exit existing businesses. The plans are intended, among other things, to eliminate operational redundancies and functionally integrate acquired organizations into Concord. We cannot assure you that we will be able to combine our operations without encountering difficulties or experiencing the loss of key employees or customers or that the expected benefits from such combinations will be realized. If we are unsuccessful in executing our consolidation plans, our business, operating results, and financial condition could be adversely affected.

2.           If we lose key personnel or are unable to attract additional qualified personnel as we grow, our business could be adversely affected.

          We are dependent upon the ability and experience of a number of our key management personnel who have substantial experience with our operations, the rapidly changing electronic payment processing industry, and the selected markets in which we offer our services. It is possible that the loss of the services of one or a combination of our senior executives or key managers would have an adverse effect on our operations. Our success also depends on our ability to continue to attract, manage, and retain other qualified middle management and technical and clerical personnel as we grow. We cannot assure you that we will continue to attract or retain such personnel.

3.           Loss of key customers could adversely affect our business, operating results, and financial condition.

          As a result of our competitive business environment, we experience some customer attrition. Customer attrition is due to several factors, including losses to competitors, business acquisitions and mergers, and business closures. We cannot assure you that any of our customer contracts will be renewed or, if renewed, will be renewed on terms as favorable to us as at present. If they are not renewed, or if they are renewed on less favorable terms, we may not be able to reduce our costs in proportion to the lost revenue, because many of our costs are fixed. For example, we have a number of significant contracts that by their terms terminate on December 31, 2004. Increased attrition or renewal on less favorable terms could have an adverse effect on our business, operating results, and financial condition.

4.           We face significant competition in each of our lines of business.

          All the businesses we are engaged in are all highly competitive. The level of competition has increased in recent years, and other service providers have established a sizable market share in some of the service areas in which we compete. We expect that the level of competition will continue to increase. For example, competitors to our debit network, which consist of other national and regional debit networks, continue to consolidate as large banks merge and combine their debit networks and as shared debit networks continue to combine into larger, super-regional conglomerates. The continued expansion of the national debit networks operated by VISA and MasterCard also places increasing competitive pressure on other networks as banks seek to consolidate their network affiliations. Further, several of our competitors and potential competitors have greater capital and technological, management, and marketing resources than we have, and we cannot assure you that we will continue to be able to compete successfully with such entities. The competitive pricing pressures that would result from any increase in competition could adversely affect our margins and may have an adverse effect on our business, operating results, and financial condition.

5.           Current or future card association rules and practices could adversely affect our business, transaction volumes, operating results, and financial condition.

          EFS National Bank is a member of the VISA and MasterCard organizations and is a registered processor of Discover, American Express, and Diners Club transactions. We compete directly with VISA and MasterCard in the provision of transaction processing services. Further, the rules of the credit card associations are set by member banks or, in the case of Discover, American Express, and Diners Club, by the card issuers, and some of those banks and issuers are our competitors with respect to these services. With respect to our electronic benefits transfer (EBT) business, the governmental issuers of the benefits set the rules governing such transactions, and the financial institutions or processors hired by the government administer them. We cannot assure you that the credit card associations will maintain our registrations or that the current card association or EBT rules allowing us to market and provide transaction processing services will remain in effect. The termination of our member registration or our status as a certified processor and changes in card association or EBT rules, including any that limit our ability to provide transaction processing and marketing services, could have an adverse effect on our business, transaction volumes, operating results, and financial condition. In addition, if we were precluded from processing any of these card association transactions, there can be no assurance that our processing clients would continue to use us to process transactions in other networks.

          In addition, our STAR_sm network, as a result of the combination of the STAR, MAC_®, and Cash Station^® networks, is the first regional debit network that may potentially be viewed as achieving national status in terms of size and

geographic coverage. Current VISA and MasterCard rules prohibit their members from issuing the debit cards or credit cards of any competing national network, with the exception of each other. These rules also prohibit the coexistence of competing national marks on their credit and branded debit cards. If VISA or MasterCard were to determine that STAR is a competing national network and mark, they could attempt to prohibit their members from issuing STAR-branded cards and/or prohibit the coexistence of the STAR mark with the VISA and/or MasterCard marks on debit and credit cards. If this occurred, we cannot predict whether, when forced to choose between us and other brands, issuing banks would favor us over VISA or MasterCard. Further, we could lose access to the VISA or MasterCard network and cardholders, which could adversely affect our business, automated teller machine (ATM) transactions, personal identification number (PIN)-secured and signature debit transactions, credit card transactions, operating results, and financial condition.

          Card issuers who participate in both STAR and VISA or MasterCard networks also may provide incentives for cardholders to use VISA or MasterCard signature-based systems instead of our STAR PIN-based system. Such incentives may adversely affect our business, operating results, and financial condition.

          In addition, VISA’s combined PIN-based and signature debit product called VISA Check Card II could adversely impact our Network Services business if a significant number of financial institutions issue the product or if VISA reinstitutes its original rule prohibiting the placement of competing debit marks on the product.

6.           We must remain current with rapid technological change.

          Our ability to provide services is heavily dependent upon our use of and access to computing and telecommunications technology. The businesses we are engaged in have been characterized by rapid technological change. We cannot assure you that we will be able to continue to incorporate new developments in technology or that the costs involved in doing so will not be substantial.

7.           Acquisitions involve risks that could cause our actual growth to differ from our expectations.

          We expect to continue to seek selective acquisitions as an element of our growth strategy. It is possible that recent or future acquisitions could have an adverse effect upon our operating results, particularly in the fiscal quarters immediately following the completion of such transactions while the operations of the acquired entities are being integrated into our operations. For example, we may not be able to successfully integrate acquired businesses in a timely manner. We may also incur substantial costs, delays, or other operational or financial problems in connection with such acquisitions, including during the integration process. In addition, we could incur additional indebtedness to finance acquisitions.

8.           If additional state taxes are imposed on us, our business, operating results, and financial condition could be adversely affected.

          Transaction processing companies like us may be subject to state taxation of certain portions of their fees charged to customers for their services. Application of this tax is an ongoing issue in the industry, and the states have not yet adopted uniform guidelines implementing these regulations. If we are required to pay these taxes and are unable to pass this tax expense through to our customers, our business, operating results, and financial condition could be adversely affected.

9.           Continued consolidation in the banking and retail industries could adversely affect our growth.

• Our Network Services business could be adversely affected. As banks consolidate, our ability to successfully offer our Network Services will depend in part on whether the institutions that survive those consolidations are willing to outsource their ATM and debit processing to third-party vendors like us and whether those institutions have preexisting relationships with any of our competitors. Larger institutions with more geographically dispersed customer bases may wish to consolidate their network participation with fewer networks having the broadest geographic coverage and the best service offerings. As regional networks continue to consolidate, we may lose network business if we are unable to continue to offer a range of products that is competitive in terms of geographic distribution as well as quality and breadth of service. Larger banks that continue to participate in our network may also process proportionately fewer ATM transactions through our network as more transactions can be handled within the bank’s own internal systems.

• Our Payment Services business could lose customers, and fee revenue could decrease. Continued consolidation in the retail industry, which makes up a substantial portion of our customer base for Payment Services, could impede our ability to grow as the survivors of such consolidation may have relationships with competitors or may be more interested in pursuing internal processing options due to their increased scale. Larger merchants with larger transaction volumes may also demand lower fees which could result in lower operating margins for us.

10.        We are subject to the business cycles and credit risk of our merchant customers.

          A recessionary economic environment could have a negative impact on our customers, particularly smaller merchants and trucking companies, which could, in turn, negatively impact our business, operating results, and financial condition. If our customers make fewer sales of their products and services, we will have fewer transactions to process, resulting in lower revenue. Similarly, if the dollar amount of those sales is smaller, we will have smaller transactions to process, also resulting in lower revenue.

          In addition, in a recessionary environment our merchant customers could experience a higher rate of bankruptcy filings which could adversely affect us financially. For example, we bear credit risk for billing disputes between credit card holders and bankrupt merchants. In the event a billing dispute between a credit card holder and a merchant is not resolved in favor of the merchant, the transaction is normally charged back to the merchant, and the purchase price is refunded to the cardholder. However, if that merchant files for bankruptcy or is otherwise unable or unwilling to pay, we must bear the credit risk for the full transaction amount of these chargebacks. Billing disputes would include instances where a customer ordered goods or services on credit, but those goods and services are not delivered by the defunct merchant. We cannot assure you that chargebacks will not increase in the future. Increases in chargebacks that are not paid by merchants could have an adverse effect on our business, operating results, and financial condition.

11.        The outcome of litigation involving VISA and MasterCard could have a negative impact on our business.

          VISA and MasterCard have been sued by the Department of Justice (DOJ) for alleged violation of the federal antitrust laws arising out of their respective functionally identical policies of (1) allowing members in the respective organization to issue cards participating in the other organization’s system and (2) prohibiting their members from issuing cards in competing systems other than VISA, MasterCard, or Citigroup, the largest owner/member of VISA and MasterCard. The potential impact of this litigation on us depends upon whether or not the DOJ is successful, and if it is successful, the relief ordered by the court. We do not currently issue cards in either system and have not been deemed to operate a competing system by either VISA or MasterCard. If VISA and MasterCard are permitted to prohibit members from issuing cards in competing systems, however, there could be a significant negative impact on us if VISA or MasterCard were then to deem the STAR debit network to be a competing system for these purposes.

          VISA and MasterCard also have been sued in a class action case brought by merchants who allege that VISA and MasterCard have (1) unlawfully tied merchant acceptance of VISA and MasterCard signature debit cards to merchant acceptance of VISA and MasterCard credit cards and (2) attempted and conspired to monopolize the market for debit cards, a market in which we compete against VISA and MasterCard. The potential impact of this litigation on us depends upon whether or not the plaintiffs are successful and, if they are successful, the relief ordered by the court or, if they are not successful, the business practices adopted by VISA and MasterCard as a result.

12.        Utility and system interruptions or processing errors could adversely affect our business, operating results, and financial condition.

          In order to process transactions promptly, our computer equipment and network servers must be functional on a 24-hour basis, which requires access to telecommunications facilities and the availability of electricity. Further, with respect to certain processing services for the STAR debit network, we are dependent on the systems and services of a third party vendor. Telecommunications services and the electricity supply are susceptible to disruption. Computer system interruptions and other processing errors, whether involving our own systems or our third party vendor’s system, may result from such disruptions or from human error or other unrelated causes. Any extensive or long-term disruptions in our processing services could cause us to incur substantial additional expense, which could have an adverse effect on our business, operating results, and financial condition.

13.        We may be susceptible to fraud occurring at the merchant level.

          Merchant fraud includes recording false sales transactions or false credits by the merchant or its customers. Under some circumstances we bear the risk of incidents of merchant fraud. It is possible that incidents of merchant fraud could increase in the future. Increased incidents of merchant fraud could have an adverse effect on our business, operating results, and financial condition. As part of our processing business, we sponsor the participation of a variety of independent sales organizations, financial institutions, and other entities into debit, credit, and EBT networks. As sponsor, we could bear the credit and fraud risk of those entities under some circumstances. Increased bankruptcy or incidence of fraud among these institutions could have an adverse effect on our business, operating results, and financial condition.

14.        Changes in card association fees, products, or practices could increase our costs or otherwise limit our operations.

          From time to time, VISA, MasterCard, Discover, American Express, and Diners Club increase the organization and/or processing fees (known as interchange fees) that they charge. For example, in April 2002 MasterCard

increased its fees, and in October 2002 VISA increased its fees. It is possible that competitive pressures will result in our absorbing a portion of such increases in the future, which would increase our operating costs, reduce our profit margin, and adversely affect our business, operating results, and financial condition. Furthermore, the rules and regulations of the various card associations and networks prescribe certain capital requirements. Any increase in the capital level required would further limit our use of capital.

15.        Revenue growth in ATM processing could slow because of market saturation or restrictions on surcharging.

          Revenue from “convenience fees” or “surcharges” imposed by owners of ATMs, including us, has been a significant factor in the recent growth in our ATM processing business, since such fees have encouraged ATM owners to deploy additional terminals. There have been initiatives at the federal, state, and local levels to limit surcharges, although state and local initiatives have generally been overturned by the courts. To the extent that ATM deployment does not continue to grow at recent rates due to the enactment and successful enforcement of statutory restrictions on surcharges, the availability of fewer favorable retail ATM locations, market saturation, or other factors, demand for our ATM processing services may not continue to grow at recent rates or may decline.

16.        Rules and regulations governing financial institutions and changes to those rules and regulations could limit our business.

          We are a financial holding company and a bank holding company subject to regulation under the Bank Holding Company Act of 1956, as amended, and to regulation by the Board of Governors of the Federal Reserve System (Federal Reserve). Our bank subsidiary, EFS National Bank, is a national banking association established under the National Bank Act and is subject to additional regulation by the Office of the Comptroller of the Currency as well as the Federal Reserve. The Federal Deposit Insurance Corporation insures the domestic deposits of EFS National Bank under the Federal Deposit Insurance Act. The restrictions imposed by these and other laws governing the activities of national banks and their holding companies and related regulations and restrictions imposed by regulatory agencies limit our discretion and the discretion of EFS National Bank and its affiliates in operating their businesses. These limitations include:

• restrictions on engaging in activities that are not approved by the Federal Reserve as financial in nature or incidental or complementary to a financial activity,

• restrictions on mergers and acquisitions involving companies engaged in activities other than those approved by the Federal Reserve as financial in nature or incidental or complementary to a financial activity,

• narrower constraints on activities, mergers, and acquisitions if EFS National Bank does not remain well capitalized and well managed or does not maintain “satisfactory” ratings under the Community Reinvestment Act,

• minimum capital requirements at both the holding company and bank levels,

• restrictions on dividends by EFS National Bank,

• restrictions on intercompany transactions, and

• restrictions on tie-ins involving the products or services of EFS National Bank.

          Our failure to comply with financial institution rules and regulations applicable to us could have a material adverse effect on us, including regulatory enforcement proceedings, incurring financial or other penalties, being subject to cease and desist orders, and, in certain cases, being required to divest our depository institution subsidiary EFS National Bank.

          Material changes in applicable federal or state regulation of financial institutions could increase our operating costs, change the competitive environment, or otherwise adversely affect us. We cannot assure you that these laws and regulations will not be amended or interpreted differently by regulatory authorities, or that new laws and regulations will not be adopted, which could adversely affect our business, operating results, and financial condition.

          In addition, we are subject to the financial privacy provisions of the Gramm-Leach-Bliley Act (the GLB Act). As a result, certain consumer financial information that we receive may be subject to limitations on reuse and redisclosure under the GLB Act. Additionally, pending legislation at the state and federal levels may further restrict our information gathering and disclosure practices. Existing and potential future privacy laws may limit our ability to develop new products and services that make use of certain data gathered through our Network Services and Payment Services businesses.

          The USA Patriot Act, which includes a number of provisions designed to enhance the United States regime for combatting money laundering and terrorist financing, also may affect our business, operating results, and financial condition. We offer products and services that assist financial institutions in complying with the USA Patriot Act. However, the USA Patriot Act, and particularly its requirements for verification of the identity of customers engaging in various types of financial transactions, may also depress demand for other transaction processing services. These new provisions to address money laundering and terrorist financing also create new compliance risks, with potentially significant consequences from violations, including monetary penalties and adverse consideration in regulatory applications.

17.        The timing and extent of changes in interest rates could have a significant impact on the returns on our investments.

          Expectations regarding and the actual timing of changes in the Federal Funds interest rate could impact the returns on our investable funds. A significant portion of our available-for-sale securities are fixed income securities with values that generally move in the opposite direction of changes in interest rates. This has little impact if we hold the securities to maturity, but if we sell a fixed income security before maturity, the amount of our gain or loss could vary dramatically with fluctuations in interest rates.

          The Federal Reserve generally lowers interest rates to stimulate the economy and generally raises interest rates to fight inflation. Given that the Federal Reserve has lowered interest rates several times in the past two years, our investment income has been and could continue to be negatively affected as our cash flow from receipt of interest payments and proceeds from securities sold, called, or matured is reinvested in lower yielding securities due to declining interest rates.

          In the event that interest rates rise, our investment portfolio could decrease in value and some expected maturities could lengthen, which would impact our investment strategies.

18.        The price of our common stock could be volatile.

          In recent years, there has been and may continue to be significant volatility in the market price for our common stock. Factors such as changes in quarterly operating results, the gain or loss of significant contracts, the entry of new competitors into our markets, changes in management, announcements of technological innovations or new products by us or our competitors, and general events and circumstances beyond our control could have a significant impact on the future market price of our common stock and the relative volatility of such market price. In the past, following periods of volatility in the market price of a company’s securities, securities class action litigation has often been instituted against that company. Following volatility in the market price of our common stock, various securities fraud class action lawsuits and shareholder derivative actions were filed against us, our directors, and certain of our officers.

19.        We face certain litigation risks.

          We are party to lawsuits in the normal course of our business. Also, we and our directors and certain of our officers have been named as defendants in a number of securities fraud class action lawsuits and shareholder derivative actions. Litigation can be expensive, lengthy, and disruptive to normal business operations. Moreover, the results of complex legal proceedings are difficult to predict. An unfavorable resolution or settlement of a particular lawsuit could have an adverse effect on our business, operating results, and financial condition. -----END PRIVACY-ENHANCED MESSAGE-----

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