10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2009

or

¨ 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: 001-13561

ENTERTAINMENT PROPERTIES TRUST

(Exact name of registrant as specified in its charter)

Maryland	43-1790877
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

30 West Pershing Road, Suite 201 Kansas City, Missouri	64108
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (816) 472-1700

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
Common shares of beneficial interest, par value $.01 per share	New York Stock Exchange
7.75% Series B cumulative redeemable preferred shares of beneficial interest, par value $.01 per share	New York Stock Exchange
5.75% Series C cumulative convertible preferred shares of beneficial interest, par value $.01 per share	New York Stock Exchange
7.375% Series D cumulative redeemable preferred shares of beneficial interest, par value $.01 per share	New York Stock Exchange
9.00% Series E cumulative convertible preferred shares of beneficial interest, par value $.01 per share	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:

None.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes x            No  ¨

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act.

Yes ¨            No  x

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  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes ¨            No  ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer x	Accelerated filer ¨
Non-accelerated filer   ¨	Smaller reporting company ¨
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

Yes ¨            No  x

The aggregate market value of the common shares of beneficial interest (“common shares”) of the registrant held by non-affiliates, based on the closing price on the last business day of the registrant’s most recently completed second fiscal quarter, as reported on the New York Stock Exchange, was $881,273,562.

At February 25, 2010, there were 42,780,270 common shares outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s definitive Proxy Statement for the 2010 Annual Meeting of Shareholders to be filed with the Commission pursuant to Regulation 14A are incorporated by reference in Part III of this Annual Report on Form 10-K.

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CAUTIONARY STATEMENT CONCERNING FORWARD LOOKING STATEMENTS

With the exception of historical information, certain statements contained or incorporated by reference herein constitute forward-looking statements as such term is defined in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The forward-looking statements may refer to our financial condition, results of operations, plans, objectives, acquisition or disposition of properties, future expenditures for development projects, capital resources, future financial performance and business. Forward-looking statements are not guarantees of performance. They involve numerous risks, uncertainties and assumptions. Our future results, financial condition and business may differ materially from those expressed in these forward-looking statements. You can find many of these statements by looking for words such as “will be,” “continue,” “hope,” “goal,” “forecast,” “approximates,” “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans” “would,” “may” or other similar expressions in this Annual Report on Form 10-K. In addition, references to our budgeted amounts are forward looking statements. Factors that could materially and adversely affect us include, but are not limited to, the factors listed below:

• General international, national, regional and local business and economic conditions;

• Current levels of market volatility are unprecedented;

• Failure of current governmental efforts to stimulate the economy;

• The downturn in the credit markets;

• The failure of a bank to fund a request by us to borrow money;

• Failure of banks in which we have deposited funds;

• Defaults in the performance of lease terms by our tenants;

• Defaults by our customers and counterparties on their obligations owed to us;

• A borrower’s bankruptcy or default;

• A significant development project may not be completed as planned;

• The obsolescence of older multiplex theaters owned by some of our tenants;

• Risks of operating in the entertainment industry;

• Our ability to compete effectively;

• The majority of our megaplex theater properties are leased by a single tenant;

• A single tenant leases or is the mortgagor of all our ski area investments;

• A single tenant leases all of our charter schools;

• Risks associated with use of leverage to acquire properties;

• Financing arrangements that require lump-sum payments;

• Our ability to sustain the rate of growth we have had in recent years;

• Our ability to raise capital;

• Covenants in our debt instrument that limit our ability to take certain actions;

• Risks of acquiring and developing properties and real estate companies;

• The lack of diversification of our investment portfolio;

• Our continued qualification as a REIT;

• The ability of our subsidiaries to satisfy their obligations;

• Financing arrangements that expose us to funding or purchase risks;

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• We have a limited number of employees and the loss of personnel could harm operations;

• Fluctuations in the value of real estate income and investments;

• Risks relating to real estate ownership, leasing and development, for example local conditions such as an oversupply of space or a reduction in demand for real estate in the area, competition from other available space, whether tenants and users such as customers of our tenants consider a property attractive, changes in real estate taxes and other expenses, changes in market rental rates, the timing and costs associated with property improvements and rentals, changes in taxation or zoning laws or other governmental regulation, whether we are able to pass some or all of any increased operating costs through to tenants, and how well we manage our properties;

• Our ability to secure adequate insurance and risk of potential uninsured losses, including from natural disasters;

• Risks involved in joint ventures;

• Risks in leasing multi-tenant properties;

• A failure to comply with the Americans with Disabilities Act or other laws;

• Risks of environmental liability;

• Our real estate investments are relatively illiquid;

• We own assets in foreign countries;

• Risks associated with owning or financing properties for which the tenant’s or mortgagor’s operations may be impacted by weather conditions and climate change;

• Risks associated with the ownership of vineyards;

• Our ability to pay dividends in cash or at current rates;

• Fluctuations in interest rates;

• Fluctuations in the market prices for our shares;

• Certain limits on change in control imposed under law and by our Declaration of Trust and Bylaws;

• Policy changes obtained without the approval of our shareholders;

• Equity issuances could dilute the value of our shares;

• Risks associated with changes in the Canadian exchange rate; and

• Changes in laws and regulations, including tax laws and regulations.

These forward-looking statements represent our intentions, plans, expectations and beliefs and are subject to numerous assumptions, risks and uncertainties. Many of the factors that will determine these items are beyond our ability to control or predict. For further discussion of these factors see “Item 1A. Risk Factors” in this Annual Report on Form 10-K.

For these statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. You are cautioned not to place undue reliance on our forward-looking statements, which speak only as of the date of this Annual Report on Form 10-K or the date of any document incorporated by reference herein. All subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. We do not undertake any obligation to release publicly any revisions to our forward-looking statements to reflect events or circumstances after the date of this Annual Report on Form 10-K.

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TABLE OF CONTENTS

		Page
PART I		6
Item 1.	Business	6
Item 1A.	Risk Factors	12
Item 1B.	Unresolved Staff Comments	27
Item 2.	Properties	27
Item 3.	Legal Proceedings	35
Item 4.	Submission of Matters to a Vote of Security Holders	35
PART II		36
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	36
Item 6.	Selected Financial Data	39
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	41
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	68
Item 8.	Financial Statements and Supplementary Data	70
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	142
Item 9A.	Controls and Procedures	142
Item 9B.	Other Information	144
PART III		144
Item 10.	Directors, Executive Officers and Corporate Governance	144
Item 11.	Executive Compensation	144
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	144
Item 13.	Certain Relationships and Related Transactions, and Director Independence	145
Item 14.	Principal Accountant Fees and Services	145
PART IV		145
Item 15.	Exhibits and Financial Statement Schedules	145

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PART I

Item 1. Business

General

Entertainment Properties Trust (“we,” “us,” “our,” “EPR” or the “Company”) was formed on August 22, 1997 as a Maryland real estate investment trust (“REIT”), and an initial public offering of common shares of beneficial interest (“common shares”) was completed on November 18, 1997. EPR develops, owns, leases and finances properties for consumer preferred high-quality businesses. As further explained under “Growth Strategies” below, our investments are guided by a focus on inflection opportunities that are associated with or support enduring uses, excellent executions, attractive economics and an advantageous market position.

We are a self-administered REIT. As of December 31, 2009, our real estate portfolio was comprised of approximately $2.1 billion in assets (before accumulated depreciation). This portfolio includes 95 megaplex theatre properties (including four joint venture properties) located in 33 states, the District of Columbia and Ontario, Canada, nine theatre-anchored entertainment retail centers (including three joint venture properties) located in four states and Ontario, Canada, and land parcels leased to restaurant and retail operators or available for development adjacent to several of our theatre properties. We also own a metropolitan ski area located in Ohio, ten wineries and eight vineyards located in California and Washington and 22 public charter schools located in eight states and the District of Columbia.

As of December 31, 2009, our real estate portfolio of megaplex theatre properties consisted of 7.8 million square feet and was 100% occupied, and our remaining real estate portfolio consisted of 4.1 million square feet and was 92% occupied. The combined real estate portfolio consisted of 11.9 million square feet and was 97% occupied. Our theatre properties are leased to twelve different leading theatre operators. At December 31, 2009, approximately 43% of our megaplex theatre properties were leased to American Multi-Cinema, Inc. (“AMC”), a subsidiary of AMC Entertainment, Inc. (“AMCE”).

As further described in Note 5 to the consolidated financial statements in this Annual Report on Form 10-K, as of December 31, 2009, our real estate mortgage loan portfolio consisted of nine notes receivable with a carrying value of $522.9 million, including related accrued interest and net of a loan loss reserve. Our real estate mortgage loan portfolio at December 31, 2009 includes mortgage notes receivable with a carrying value of $163.3 million, including accrued interest, secured by a water-park anchored entertainment village located in Kansas (the first phase of which opened in July 2009) and two water-parks in Texas. We also have a mortgage note receivable for a planned resort development in Sullivan County, New York with a carrying value of $133.1 million, including accrued interest, and a mortgage note receivable denominated in Canadian dollars that had a carrying value of US $90.9 million at December 31, 2009, including accrued interest and net of a loan loss reserve of US $35.8 million. The Canadian denominated mortgage was provided to a partnership for the purpose of developing a 13 level entertainment retail center in downtown Toronto in Ontario, Canada. The development of this center was completed in May 2008 at a total cost of approximately $330 million Canadian, and contains approximately 330,000 square feet of net rentable area and 25,000 square feet of digital and static signage. We have signed a purchase agreement to acquire this center in early 2010; however, our purchase of this center is subject to various conditions. As a result, we can offer no assurance

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that this transaction will be completed or that it will be completed on the terms presently contemplated. See Item 7 - “Management Discussion and Analysis of Financial Condition and Results of Operations - Recent Developments” for more information regarding these three mortgage notes receivable. Additionally, we have five mortgage notes receivable with a combined total carrying value of $135.6 million, including accrued interest, secured by ten metropolitan ski areas and related development land covering approximately 6,063 acres located in New Hampshire, Vermont, Missouri, Indiana, Ohio and Pennsylvania.

Our total investments were $2.8 billion at December 31, 2009. Total investments is a non-GAAP financial measure defined herein as the sum of the carrying values of rental properties (before accumulated depreciation), property under development, mortgage notes receivable (including related accrued interest receivable), investment in joint ventures, intangible assets (before accumulated amortization) and notes receivable. Below is a reconciliation of the carrying value of total investments to the consolidated balance sheet at December 31, 2009 (in thousands):

Rental properties, net of accumulated depreciation	$	1,854,629
Add back accumulated depreciation on rental properties		258,638
Property under development		12,729
Mortgage notes and related accrued interest receivable, net		522,880
Investment in joint ventures		4,080
Investment in a direct financing lease, net		169,850
Intangible assets, net of accumulated amortization		6,727
Add back accumulated amortization on intangible assets		6,887
Notes receivable and related accrued interest receivable, net		7,204
Total investments	$	2,843,624

Management believes that total investments is a useful measure for management and investors as it illustrates across which asset categories the Company’s funds have been invested. Of our total investments of $2.8 billion at December 31, 2009, $2.0 billion or 71% related to megaplex theatres, entertainment retail centers and other retail parcels, and $836.8 million or 29% related to recreational and specialty properties. Furthermore, of the $836.8 million related to recreational and specialty properties, $148.6 million related to metropolitan ski areas, $218.2 million related to vineyards and wineries, $173.6 million related to public charter schools, $163.3 million related to the water-park anchored entertainment village development in Kansas and two Texas water-parks, and $133.1 million related to the planned resort development discussed above. At December 31, 2009, Peak Resorts, Inc. (“Peak”) is the lessee of our metropolitan ski area in Ohio and is the mortgagor on five notes receivable secured by ten metropolitan ski areas and related development land. Similarly, affiliates of Schools, Inc. (“Imagine”) are the lessees of all of our charter schools.

As further described in Note 2 to the consolidated financial statements included in this Annual Report on Form 10-K, during the year ended December 31, 2009, $35.9 million, or approximately 13% of our total revenue was derived from our four entertainment retail centers in Ontario, Canada and the mortgage note receivable secured by property in Canada described above. The Company’s wholly-owned subsidiaries that hold the Canadian entertainment retail centers, third party debt and mortgage note receivable represent approximately $228.6 million or 16% of the Company’s net assets as of December 31, 2009.

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We aggregate the financial information of all our investments into one reportable segment because our investments have similar economic characteristics and because we do not internally report and we are not internally organized by investment or transaction type.

We believe destination entertainment, entertainment-related, recreational and specialty properties are important sectors of the real estate industry and that, as a result of our focus on properties in these sectors and the industry relationships of our management, we have a competitive advantage in providing capital to operators of these types of properties. Our principal business objective is to be the nation’s leading destination entertainment, entertainment-related, recreation and specialty real estate company by continuing to acquire, finance or develop high-quality properties. Our investments are generally structured as long-term triple-net leases that require the tenants to pay substantially all expenses associated with the operation and maintenance of the property, or as long-term mortgages with economics similar to our triple-net lease structure.

As discussed below, we believe attractive investment opportunities are available to us that will enable us to continue to grow our asset base. Due to the downturn in the economy and distress in the capital markets, for most of 2009 we were primarily focused on maintaining adequate liquidity and funding our existing commitments. We completed our amended and restated line of credit in June 2009, six months ahead of its maturity, and as conditions became more favorable in the capital markets toward the latter part of 2009 and our cost of capital improved, we began making new investments. Going forward, we will continue to assess the state of the capital markets, our relative cost of capital and our liquidity position in making new investment decisions. For more information regarding our business, including our investments and capital formation, see Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” including the sections therein titled “Recent Developments” and “Liquidity and Capital Resources.”

Megaplex Theatres

A significant portion of our assets consist of megaplex theatres. Megaplex theatres typically have at least 10 screens with stadium-style seating (seating with elevation between rows to provide unobstructed viewing) and are equipped with amenities that significantly enhance the audio and visual experience of the patron. We believe the development of new generation megaplex theatres, including the introduction of digital cinema technology, has accelerated the obsolescence of many of the previous generation of multiplex movie theatres by setting new standards for moviegoers, who, in our experience, have demonstrated their preference for the more attractive surroundings, wider variety of films, enhanced quality of visual presentation and superior customer service typical of megaplex theatres.

We expect the development of megaplex theatres to continue in the United States and abroad over the long-term. With the development of the stadium style megaplex theatre as the preeminent format for cinema exhibition, the older generation of smaller sloped theatres has generally experienced a significant downturn in attendance and performance. As a result of the significant capital commitment involved in building megaplex theatres and the experience and industry relationships of our management, we believe we will continue to have opportunities to provide capital to exhibition businesses within the United States and abroad that seek to develop and/or operate these properties. In addition, the recent distress in the credit markets has also created opportunities to buy existing megaplex theatres at higher yields than in the past as certain current owners seek to generate cash.

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Entertainment Retail Centers

We continue to seek opportunities for the development of additional restaurant, retail and other entertainment venues around our existing portfolio. The opportunity to capitalize on the traffic generation of our market-dominant theatres to create entertainment retail centers (“ERC’s”) not only strengthens the execution of the megaplex movie theatre but adds diversity to our tenant and asset base. We have and will continue to evaluate our existing portfolio for additional development of retail and entertainment density, and we will also continue to evaluate the purchase or financing of existing ERC’s that have demonstrated strong financial performance and meet our quality standards. The leasing and property management requirements of our ERC’s are generally met through the use of third-party professional service providers.

Recreational and Specialty Properties

The venue replacement cycle in theatrical exhibition represents what we consider an inflection opportunity, a demand for new capital stimulated by a need to upgrade to new technologies and related amenities. We expect other destination retail, recreational and specialty properties to undergo similar transformations stimulated by growth, renewal and/or restructuring. We have begun and expect to continue to pursue opportunities to provide capital for such new generations of attractive and successful properties in selected niche markets.

Business Objectives and Strategies

Our long-term primary business objective is to enhance shareholder value by achieving predictable and increasing Funds From Operations (“FFO”) and dividends per share (See Item 7 – “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Funds From Operations” for a discussion of FFO), through the acquisition, development and financing of high-quality properties that meet our Five Star Investment Strategy. We intend to achieve this objective by continuing to execute the Growth Strategies, Operating Strategies and Capitalization Strategies described below:

Growth Strategies

As a part of our growth strategy, we will consider acquiring or developing additional megaplex theatre properties, and acquiring or developing single-tenant entertainment, entertainment-related, recreational or specialty properties. We will also consider acquiring or developing additional ERC’s. We may also pursue opportunities to provide mortgage financing for these same property types in certain situations where this structure is more advantageous than owning the underlying real estate.

Our investing strategy centers on five guiding principles which we call our Five Star Investment Strategy:

Inflection Opportunity

We look for a new generation of facilities emerging as a result of age, technology, or change in the lifestyle of consumers which create development, renewal or restructuring opportunities requiring significant capital.

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Enduring Value

We look for real estate that supports activities that are commercially successful and have a reasonable basis for continued and sustainable customer demand in the future. Further, we seek circumstances where the magnitude of change in the new generation of facilities adds substantially to the customer experience.

Excellent Execution

We seek attractive locations and best-of-class executions that create market-dominant properties which we believe create a competitive advantage and enhance sustainable customer demand within the category despite a potential change in tenant. We minimize the potential for turnover by seeking quality tenants with a reliable track record of customer service and satisfaction.

Attractive Economics

We seek investments that provide accretive returns initially and increasing returns over time with rent escalators and percentage rent features that allow participation in the financial performance of the property. Further, we are interested in investments that provide a depth of opportunity to invest sufficient capital to be meaningful to our total financial results and also provide a diversity by market, geography or tenant operator.

Advantageous Position

In combination with the preceding principles, when investing we look for a competitive advantage such as unique knowledge of the category, access to industry information, a preferred tenant relationship, or other relationships that provide access to sites and development projects.

Operating Strategies

Lease Risk Minimization

To avoid initial lease-up risks and produce a predictable income stream, we typically acquire single-tenant properties that are leased under long-term leases. We believe our willingness to make long-term investments in properties offers our tenants financial flexibility and allows tenants to allocate capital to their core businesses. Although we will continue to emphasize single-tenant properties, we have acquired and may continue to acquire multi-tenant properties we believe add shareholder value.

Lease Structure

We have structured our property acquisitions and leasing arrangements to achieve a positive spread between our cost of capital and the rentals paid by our tenants. We typically structure leases on a triple-net basis under which the tenants bear the principal portion of the financial and operational responsibility for the properties. During each lease term and any renewal periods, the leases typically provide for periodic increases in rent and/or percentage rent based upon a percentage of the tenant’s gross sales over a pre-determined level. In our multi-tenant property leases and some of our theatre leases, we generally require the tenant to pay a common area maintenance (“CAM”) charge to defray its pro rata share of insurance, taxes and maintenance costs.

Mortgage Structure

We have structured our mortgages to achieve economics similar to our triple-net lease structure with a positive spread between our cost of capital and the interest paid by our tenants. During each mortgage term and any renewal periods, the notes typically provide for periodic increases in interest and/or participating features based upon a percentage of the tenant’s gross sales over a pre-determined level.

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Tenant and Customer Relationships

We intend to continue developing and maintaining long-term working relationships with theatre, restaurant, retail, entertainment, recreation and specialty business operators and developers by providing capital for multiple properties on an international, national or regional basis, thereby creating efficiency and value for both the operators and the Company.

Portfolio Diversification

We will endeavor to further diversify our asset base by property type, geographic location and tenant or customer. In pursuing this diversification strategy, we will target theatre, restaurant, retail, recreation and specialty business operators that we view as leaders in their market segments and have the ability to compete effectively and perform under their agreements with the Company.

Development

We intend to continue developing properties that meet our guiding principles. We generally do not begin development of a single tenant property without a signed lease providing for rental payments during the development period that are commensurate with our level of capital investment. In the case of a multi-tenant development, we generally require a significant amount of the development to be pre-leased prior to construction to minimize lease-up risk. Going forward, we are de-emphasizing the investment in large-scale development projects with other partners in favor of smaller development projects which we control. In addition, to minimize overhead costs and to provide the greatest amount of flexibility, we generally outsource construction management to third party firms.

Capitalization Strategies

Debt and Equity Financing

In 2009 we deleveraged our balance sheet primarily by issuing equity in excess of debt during the year. Our debt to total capitalization ratio (i.e. long-term debt of the Company as a percentage of equity plus total liabilities) was reduced from 48% at December 31, 2008 to 43% at December 31, 2009. We expect to maintain a debt to total capitalization ratio of between 40% and 50% throughout 2010. While deleveraging the balance sheet mitigates the growth in per share results, we believe reduced leverage and an emphasis on liquidity are prudent during the current economic downturn.

Our sources of equity financing consist of the issuance of common shares as well as the issuance of preferred shares (including convertible preferred shares). In addition to larger underwritten registered public offerings of both common and preferred shares, we have also offered shares pursuant to registered public offerings through the direct share purchase component of our Dividend Reinvestment and Direct Share Purchase Plan (“DSP Plan”). While such offerings are generally smaller than a typical underwritten public offering, issuing common shares under the direct share purchase component of our DSP Plan allows us to access capital on a more frequent basis in a cost-effective manner. We expect to opportunistically access the equity markets in the future and, depending primarily on the size and timing of our equity capital needs, may continue to issue shares under the direct share purchase component of our DSP Plan.

Joint Ventures

We will examine and may pursue potential additional joint venture opportunities with institutional investors or developers if the investments to which they relate meet our guiding principles discussed above. We may employ higher leverage in joint ventures.

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Payment of Regular Distributions

We have paid and expect to continue to pay quarterly dividend distributions to our common and preferred shareholders. Our Series B cumulative redeemable preferred shares (“Series B preferred shares”) have a dividend rate of 7.75%, our Series C cumulative convertible preferred shares (“Series C preferred shares”) have a dividend rate of 5.75%, our Series D cumulative redeemable preferred shares (“Series D preferred shares”) have a dividend rate of 7.375%, and our Series E cumulative convertible preferred shares (“Series E preferred shares”) have a dividend rate of 9.00%. Among the factors the Company’s board of trustees (“Board of Trustees”) considers in setting the common share distribution rate are the applicable REIT tax rules and regulations that apply to distributions, the Company’s results of operations, including FFO per share, and the Company’s Cash Available for Distribution (defined as net cash flow available for distribution after payment of operating expenses, debt service, and other obligations).

Competition

We compete for real estate financing opportunities with other companies that invest in real estate, as well as traditional financial sources such as banks and insurance companies. REITs have financed and may continue to seek to finance destination entertainment, entertainment-related, recreational or specialty properties as new properties are developed or become available for acquisition.

Employees

As of December 31, 2009, we had 22 full time employees.

Principal Executive Offices

The Company’s principal executive offices are located at 30 W. Pershing Road, Suite 201, Kansas City, Missouri 64108; telephone (816) 472-1700.

Materials Available on Our Website

Our internet website address is www.eprkc.com. We make available, free of charge, through our website copies of our Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”) as soon as reasonably practicable after we electronically file such material with, or furnish it to the Securities and Exchange Commission (the “Commission” or “SEC”). You may also view our Code of Business Conduct and Ethics, Company Governance Guidelines, Independence Standards for Trustees and the charters of our audit, nominating/company governance, finance and compensation committees on our website. Copies of these documents are also available in print to any person who requests them.

Item 1A. Risk Factors

There are many risks and uncertainties that can affect our current or future business, operating results, financial performance or share price. Here is a brief description of some of the important factors which could adversely affect our current or future business, operating results, financial condition or share price. This discussion includes a number of forward-looking statements. See “Forward Looking Statements.”

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Risks That May Impact Our Financial Condition or Performance

There can be no assurance as to the impact of the U.S. government’s attempts to stimulate the economy and approve new regulations on the banking system, financial markets, real estate markets and economy as a whole.

In response to the economic crises affecting the banking system, financial markets, real estate markets and our economy as a whole, President Obama signed the American Recovery and Reinvestment Act of 2009 (“ARRA”) into law on February 17, 2009. The administration is also supporting further regulation of the financial industry and various legislative initiatives have been proposed. There can be no assurance what impact the ARRA or other initiatives will have on the banking system, financial markets, real estate markets or the general economy. Although we are not one of the institutions that will be directly affected by the ARRA, and may not be directly affected by those other initiatives should they become law, their ultimate effects on the financial markets and the economy in general could materially and adversely affect our business, financial condition and results of operations, or the trading price of our common stock.

Current levels of market volatility are unprecedented.

The capital and credit markets have been experiencing extreme volatility and disruption for more than 12 months. In many cases, the markets have exerted downward pressure on stock prices and credit capacity for certain issuers. Our plans for growth require regular access to the capital and credit markets. If market disruption and volatility continue or worsen, access to capital and credit markets could be disrupted making growth through acquisitions and development projects difficult or impractical to pursue until such time as markets stabilize.

The downturn in the credit markets has increased the cost of borrowing and has made financing difficult to obtain, each of which may have a material adverse effect on our results of operations and business.

The economic downturn has had an adverse impact on the credit markets and, as a result, credit has become more expensive and difficult to obtain. Some lenders are imposing more stringent restrictions on the terms of credit and there has been a general reduction in the amount of credit available in the markets in which we conduct business, particularly in the mortgage-backed securities market that we have used in the past. The negative impact on the tightening of the credit markets may have a material adverse effect on us resulting from, but not limited to, an inability to finance the acquisition or development of properties on favorable terms, if at all, increased financing costs or financing with increasingly restrictive covenants.

The negative impact of the adverse changes in the credit markets on the real estate sector generally or our inability to obtain financing on favorable terms, if at all, may have a material adverse effect on our results of operations, business, financial condition or performance.

The failure of a bank to fund a request (or any portion of such request) by us to borrow money under one of our existing credit facilities could reduce our ability to make additional investments and pay distributions.

We have existing credit facilities with several banking institutions. If any of these banking institutions which are a party to such credit facilities fails to fund a request (or any portion of such request) by us to borrow money under one of these existing credit facilities, our ability to make investments in our business, fund our operations and pay debt service and dividends could be reduced, each of which could result in a decline in the value of your investment.

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The failure of any bank in which we deposit our funds could reduce the amount of cash we have available to pay distributions and make additional investments.

We have diversified our cash and cash equivalents between several banking institutions in an attempt to minimize exposure to any one of these entities. However, the Federal Deposit Insurance Corporation, or “FDIC,” only insures interest-bearing accounts in amounts up to $250,000 per depositor per insured bank. We currently have cash and cash equivalents and restricted cash deposited in certain financial institutions in excess of federally insured levels. If any of the banking institutions in which we have deposited funds ultimately fails, we may lose our deposits over $250,000. The loss of our deposits may have a material adverse effect on our financial condition.

We depend on leasing space to tenants on economically favorable terms and collecting rent from our tenants, who may not be able to pay.

At any time, a tenant may experience a downturn in its business that may weaken its financial condition. Similarly, a general decline in the economy may result in a decline in demand for space at our commercial properties. Our financial results depend significantly on leasing space at our properties to tenants on economically favorable terms. In addition, because a majority of our income comes from leasing real property, our income, funds available to pay indebtedness and funds available for distribution to our shareholders will decrease if a significant number of our tenants cannot pay their rent or if we are not able to maintain our levels of occupancy on favorable terms. If tenants of a property cannot pay their rent or we are not able to maintain our levels of occupancy on favorable terms, there is also a risk that the fair value of the underlying property will be considered less than its carrying value and we may have to take a charge against earnings. In addition, if a tenant does not pay its rent, we might not be able to enforce our rights as landlord without delays and might incur substantial legal costs.

If a tenant becomes bankrupt or insolvent, that could diminish or eliminate the income we expect from that tenant’s leases. If a tenant becomes insolvent or bankrupt, we cannot be sure that we could recover the premises from the tenant promptly or from a trustee or debtor-in-possession in a bankruptcy proceeding relating to the tenant. On the other hand, a bankruptcy court might authorize the tenant to terminate its leases with us. If that happens, our claim against the bankrupt tenant for unpaid future rent would be subject to statutory limitations that might be substantially less than the remaining rent owed under the leases. In addition, any claim we have for unpaid past rent would likely not be paid in full and we would also have to take a charge against earnings for any accrued straight-line rent receivable related to the leases.

We are exposed to the credit risk of our customers and counterparties and their failure to meet their financial obligations could adversely affect our business.

Our business is subject to credit risk. There is a risk that a customer or counterparty will fail to meet its obligations when due, particularly given the current state of the economy. Customers and counterparties that owe us money may default on their obligations to us due to bankruptcy, lack of liquidity, operational failure or other reasons. Although we have procedures for reviewing credit exposures to specific customers and counterparties to address present credit concerns, default risk may arise from events or circumstances that are difficult to detect or foresee. Some of our risk management methods depend upon the evaluation of information regarding markets, clients or other matters that are publicly available or otherwise accessible by us. That information may not, in all cases, be accurate, complete, up-to-date or properly evaluated. In addition, concerns about, or a default by, one customer or counterparty could lead to significant liquidity problems, losses or defaults by other customers or counterparties, which in turn could adversely affect us. We may be materially and adversely affected in the event of a significant default by our customers and counterparties.

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We could be adversely affected by a borrower’s bankruptcy or default.

If a borrower becomes bankrupt or insolvent or defaults under its loan, that could force us to declare a default and foreclose on any available collateral. As a result, future interest income recognition related to the applicable note receivable could be significantly reduced or eliminated. There is also a risk that the fair value of the collateral, if any, will be less than the carrying value of the note and accrued interest receivable at the time of a foreclosure and we may have to take a charge against earnings. If a property serves as collateral for a note, we may experience costs and delays in recovering the property in foreclosure or finding a substitute operator for the property. If a mortgage we hold is subordinated to senior financing secured by the property, our recovery would be limited to any amount remaining after satisfaction of all amounts due to the holder of the senior financing. In addition, to protect our subordinated investment, we may desire to refinance any senior financing. However, there is no assurance that such refinancing would be available or, if it were to be available, that the terms would be attractive.

We previously made several investments with a developer, including a significant loan commitment on a planned resort development. There can be no assurance that the resort development will be completed or that the deterioration of the developer’s financial condition or sources of liquidity will not have a material adverse effect on the resort development or our other investments with the developer.

Concord Resorts, LLC (“Concord Resorts”) owes us in excess of $133.1 million pursuant to a secured first mortgage loan related to a planned resort development in Sullivan County, New York. Our commitment to advance additional funds is no longer applicable due to the developer’s continuing inability to meet the required terms. Concord Resorts has ceased making interest payments to us as contractually obligated under the loan agreement and is therefore in default. Because the resort development is delayed indefinitely, there can be no assurance that our investment in Concord Resorts (the net carrying value of which was $133.1 million at September 30, 2009) may not be subject to an impairment loss, which could result in a material adverse impact on our financial condition and results of operations.

In addition, Concord Resorts is controlled by Louis Cappelli, a real estate developer with whom we have several other investments, including the entertainment retail centers in New Rochelle, New York and White Plains, New York and $30 million of loans to Mr. Cappelli and his affiliates. During the quarter ended September 30, 2009, we recorded an impairment charge for our interest in the White Plains entertainment retail center of $35.8 million, and have established a $28.0 million loan loss reserve on impaired loans to Mr. Cappelli and his affiliates. On December 31, 2009, we filed a petition with the Western District of Missouri seeking payment of amounts due under the various loans to Mr. Cappelli and his affiliates, including Concord Resorts, and a declaratory judgment that we have no obligation to make an additional advance to Concord Resorts under any prior loan commitment. There can be no assurance that the cancellation or indefinite delay of the Concord Resorts development, or the deterioration of Mr. Cappelli’s financial condition or sources of liquidity, would not have a material adverse effect on our investments with Mr. Cappelli and our ability to collect amounts due under the loans to Mr. Cappelli and his affiliates.

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Our theatre tenants may be adversely affected by the obsolescence of any older multiplex theatres they own or by any overbuilding of megaplex theatres in their markets.

The development of megaplex movie theatres has rendered many older multiplex theatres obsolete. To the extent our tenants own a substantial number of multiplexes, they have been, or may in the future be, required to take significant charges against their earnings resulting from the impairment of these assets. Megaplex theatre operators have also been and could in the future be adversely affected by any overbuilding of megaplex theatres in their markets and the cost of financing, building and leasing megaplex theatres.

Operating risks in the entertainment industry may affect the ability of our tenants to perform under their leases.

The ability of our tenants to operate successfully in the entertainment industry and remain current on their lease obligations depends on a number of factors, including the availability and popularity of motion pictures, the performance of those pictures in tenants’ markets, the allocation of popular pictures to tenants and the terms on which the pictures are licensed. Neither we nor our tenants control the operations of motion picture distributors. Megaplex theatres represent a greater capital investment, and generate higher rents, than the previous generation of multiplex theatres. For this reason, the ability of our tenants to operate profitably and perform under their leases could be dependent on their ability to generate higher revenues per screen than multiplex theatres typically produce. The success of “out-of-home” entertainment venues such as megaplex theatres, entertainment retail centers and recreational properties also depends on general economic conditions and the willingness of consumers to spend time and money on out-of-home entertainment.

Real estate is a competitive business.

Our business operates in highly competitive environments. We compete with a large number of real estate property owners and developers, some of which may be willing to accept lower returns on their investments. Principal factors of competition are rent or interest charged, attractiveness of location, the quality of the property and breadth and quality of services provided. If our competitors offer space at rental rates below the rental rates we are currently charging our tenants, we may lose potential tenants, and we may be pressured to reduce our rental rates below those we currently charge in order to retain tenants when our tenants’ leases expire. Our success depends upon, among other factors, trends of the national and local economies, financial condition and operating results of current and prospective tenants and customers, availability and cost of capital, construction and renovation costs, taxes, governmental regulations, legislation and population trends.

A single tenant represents a substantial portion of our lease revenues.

Approximately 43% of our megaplex theatre properties are leased to AMC, one of the nation’s largest movie exhibition companies. AMCE has guaranteed AMC’s performance under substantially all of their leases. We have diversified and expect to continue to diversify our real estate portfolio by entering into lease transactions with a number of other leading operators. Nevertheless, our revenues and our continuing ability to pay shareholder dividends are currently substantially dependent on AMC’s performance under its leases and AMCE’s performance under its guarantee.

We believe AMC occupies a strong position in the industry and we intend to continue acquiring and leasing back or developing new AMC theatres. However, AMC and AMCE are susceptible to the same risks as our other tenants described herein. If for any reason AMC failed to perform under its lease obligations and AMCE did not perform under its guarantee, we could be required to reduce or suspend our shareholder dividends and may not have sufficient funds to support operations until substitute tenants are obtained. If that happened, we cannot predict when or whether we could obtain substitute quality tenants on acceptable terms.

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A single tenant leases or is the mortgagor of all our investments related to metropolitan ski areas and a single tenant leases all of our charter schools.

Peak is the lessee of our metropolitan ski area in Ohio and is the mortgagor on five notes receivable secured by ten metropolitan ski areas and related development land. Similarly, Imagine is the lessee of all of our charter schools. If Peak failed to perform under its lease and mortgage loan obligations, and/or Imagine failed to perform under its master lease, we may need to reduce our shareholder dividends and may not have sufficient funds to support operations until substitute operators are obtained. If that happened, we cannot predict when or whether we could obtain quality substitute tenants or mortgagors on acceptable terms.

There are risks inherent in having indebtedness and the use of such indebtedness to fund acquisitions.

We currently utilize debt to fund portions of our operations and acquisitions. In a rising interest rate environment, the cost of our variable rate debt and any new variable rate debt will increase. We have used leverage to acquire properties and expect to continue to do so in the future. Although the use of leverage is common in the real estate industry, our use of debt exposes us to some risks. If a significant number of our tenants fail to make their lease payments and we don’t have sufficient cash to pay principal and interest on the debt, we could default on our debt obligations. A substantial amount of our debt financing is secured by mortgages on our properties. If we fail to meet our mortgage payments, the lenders could declare a default and foreclose on those properties. In addition, if the tenants of properties in the borrowing bases of our revolving credit facility or term loans default on their leases or mortgage obligations, or if the properties otherwise fail to qualify for inclusion in the borrowing bases, that could trigger pay-down requirements and may limit the amounts we are able to borrow under the credit facility and the term loans in the future.

Most of our debt instruments contain balloon payments which may adversely impact our financial performance and our ability to pay distributions.

Some of our financing arrangements may require us to make a lump-sum or “balloon” payment at maturity. There can be no assurance that we will be able to refinance such debt on favorable terms or at all. To the extent we cannot refinance such debt on favorable terms or at all, we may be forced to dispose of properties on disadvantageous terms or pay higher interest rates, either of which would have an adverse impact on our financial performance and ability to make distributions to our shareholders.

We have grown rapidly through acquisitions and other investments. We may not be able to maintain this rapid growth and our failure to do so could adversely affect our share price.

We have experienced rapid growth in recent years. We may not be able to maintain a similar rate of growth in the future or manage our growth effectively. Our failure to do so may have a material adverse effect on our share price.

We must obtain new financing in order to grow.

As a REIT, we are required to distribute at least 90% of our taxable net income to shareholders in the form of dividends. Other than deciding to make these distributions in our common shares, we are limited in our ability to use internal capital to acquire properties and must continually raise new capital in order to continue to grow and diversify our investment portfolio. Our ability to raise new capital depends in part on factors beyond our control, including conditions in equity

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and credit markets, conditions in the industries in which our tenants are engaged and the performance of real estate investment trusts generally. We continually consider and evaluate a variety of potential transactions to raise additional capital, but we cannot assure that attractive alternatives will always be available to us, nor that our share price will increase or remain at a level that will permit us to continue to raise equity capital publicly or privately.

Covenants in our debt instruments could adversely affect our financial condition and our acquisitions and development activities.

The mortgages on our properties contain customary covenants such as those that limit our ability, without the prior consent of the lender, to further mortgage the applicable property or to discontinue insurance coverage. Our revolving credit facility, our term loan and other loans that we may obtain in the future contain certain cross-default provisions as well as customary restrictions, requirements and other limitations on our ability to incur indebtedness, including covenants that limit our ability to incur debt based upon the level of our ratio of total debt to total assets, our ratio of secured recourse debt to total assets, our ratio of EBITDA to interest expense and fixed charges. Our ability to borrow under our credit facilities and our term loan is also subject to compliance with certain other covenants. In addition, failure to comply with our covenants could cause a default under the applicable debt instrument, and we may then be required to repay such debt with capital from other sources. Under those circumstances, other sources of capital may not be available to us, or be available only on unattractive terms. Additionally, our ability to satisfy current or prospective lenders’ insurance requirements may be adversely affected if lenders generally insist upon greater insurance coverage against acts of terrorism than is available to us in the marketplace or on commercially reasonable terms.

We rely on debt financing, including borrowings under our revolving credit facility, our term loan and debt secured by individual properties, to finance our acquisition and development activities and for working capital. If we are unable to obtain financing from these or other sources, or to refinance existing indebtedness upon maturity, our financial condition and results of operations would likely be adversely affected.

We may acquire or develop properties or acquire other real estate related companies and this may create risks.

We may acquire or develop properties or acquire other real estate related companies when we believe that an acquisition or development is consistent with our business strategies. We may not, however, succeed in consummating desired acquisitions or in completing developments on time. In addition, we may face competition in pursuing acquisition or development opportunities that could increase our costs. Difficulties in integrating acquisitions may prove costly or time-consuming and could divert management’s attention. Acquisitions or developments in new markets or industries where we do not have the same level of market knowledge may expose us to unanticipated risks in those markets and industries to which we are unable to effectively respond and, as a result, our performance in those new markets and industries and overall may be worse than anticipated. In addition, there is no assurance that planned third party financing related to acquisition and development opportunities will be provided on a timely basis or at all, thus increasing the risk that such opportunities are delayed or fail to be completed as originally contemplated. We may also abandon acquisition or development opportunities that we have begun pursuing and consequently fail to recover expenses already incurred and have devoted management time to a matter not consummated. Furthermore, our acquisitions of new properties or companies will expose us to the liabilities of those properties or companies, some of which we may not be aware at the time of acquisition. In addition, development of our existing properties presents similar risks.

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Our real estate investments are concentrated in entertainment, entertainment-related and recreational properties and a significant portion of those investments are in megaplex theatre properties, making us more vulnerable economically than if our investments were more diversified.

We acquire, develop or finance entertainment, entertainment-related and recreational properties. A significant portion of our investments are in megaplex theatre properties. Although we are subject to the general risks inherent in concentrating investments in real estate, the risks resulting from a lack of diversification become even greater as a result of investing primarily in entertainment, entertainment-related and recreational properties. These risks are further heightened by the fact that a significant portion of our investments are in megaplex theatre properties. Although a downturn in the real estate industry could significantly adversely affect the value of our properties, a downturn in the entertainment, entertainment-related and recreational industries could compound this adverse affect. These adverse effects could be more pronounced than if we diversified our investments to a greater degree outside of entertainment, entertainment-related and recreational properties or, more particularly, outside of megaplex theater properties.

If we fail to qualify as a REIT, we would be taxed as a corporation, which would substantially reduce funds available for payment of dividends to our shareholders.

If we fail to qualify as a REIT for federal income tax purposes, we will be taxed as a corporation. We are organized and believe we qualify as a REIT, and intend to operate in a manner that will allow us to continue to qualify as a REIT. However, we cannot assure you that we will remain qualified in the future. This is because qualification as a REIT involves the application of highly technical and complex provisions of the Internal Revenue Code on which there are only limited judicial and administrative interpretations, and depends on facts and circumstances not entirely within our control. In addition, future legislation, new regulations, administrative interpretations or court decisions may significantly change the tax laws, the application of the tax laws to our qualification as a REIT or the federal income tax consequences of that qualification.

If we fail to qualify as a REIT we will face tax consequences that will substantially reduce the funds available for payment of dividends:

• We would not be allowed a deduction for dividends paid to shareholders in computing our taxable income and would be subject to federal income tax at regular corporate rates

• We could be subject to the federal alternative minimum tax and possibly increased state and local taxes

• Unless we are entitled to relief under statutory provisions, we could not elect to be treated as a REIT for four taxable years following the year in which we were disqualified

• We could be subject to tax penalties and interest

In addition, if we fail to qualify as a REIT, we will no longer be required to pay dividends. As a result of these factors, our failure to qualify as a REIT could adversely affect the market price for our shares.

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We depend on dividends and distributions from our direct and indirect subsidiaries. The creditors of these subsidiaries are entitled to amounts payable to them by the subsidiaries before the subsidiaries may pay any dividends or distributions to us.

Substantially all of our assets are held through our subsidiaries. We depend on these subsidiaries for substantially all of our cash flow. The creditors of each of our direct and indirect subsidiaries are entitled to payment of that subsidiary’s obligations to them, when due and payable, before distributions may be made by that subsidiary to its equity holders. Thus, our ability to make distributions to holders of our common and preferred shares depends on our subsidiaries’ ability first to satisfy their obligations to their creditors and then to make distributions to us.

Our development financing arrangements expose us to funding and purchase risks.

Our ability to meet our construction financing obligations which we have undertaken or may enter into in the future depends on our ability to obtain equity or debt financing in the required amounts. There is no assurance we can obtain this financing or that the financing rates available will ensure a spread between our cost of capital and the rent or interest payable to us under the related leases or mortgage notes receivable. As a result, we could fail to meet our construction financing obligations which, in turn, could result in failed projects and related foreclosures and penalties, each of which could have a material adverse impact on our results of operations and business.

We have a limited number of employees and loss of personnel could harm our operations and adversely affect the value of our common shares.

We had 22 full-time employees as of December 31, 2009 and, therefore, the impact we may feel from the loss of an employee may be greater than the impact such a loss would have on a larger organization. We are dependent on the efforts of the following individuals: David M. Brain, our President and Chief Executive Officer; Gregory K. Silvers, our Vice President, Chief Operating Officer, General Counsel and Secretary; Mark A. Peterson, our Vice President and Chief Financial Officer; Morgan G. Earnest, our Vice President and Chief Investment Officer and Michael L. Hirons, our Vice President - Finance. While we believe that we could find replacements for our personnel, the loss of their services could harm our operations and adversely affect the value of our common shares.

Risks That Apply to our Real Estate Business

Real estate income and the value of real estate investments fluctuate due to various factors.

The value of real estate fluctuates depending on conditions in the general economy and the real estate business. These conditions may also limit our revenues and available cash.

The factors that affect the value of our real estate include, among other things:

• international, national, regional and local economic conditions;

• consequences of any armed conflict involving, or terrorist attack against, the United States;

• our ability to secure adequate insurance;

• local conditions such as an oversupply of space or a reduction in demand for real estate in the area;

• competition from other available space;

• whether tenants and users such as customers of our tenants consider a property attractive;

• the financial condition of our tenants, including the extent of tenant bankruptcies or defaults;

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• whether we are able to pass some or all of any increased operating costs through to tenants;

• how well we manage our properties;

• fluctuations in interest rates;

• changes in real estate taxes and other expenses;

• changes in market rental rates;

• the timing and costs associated with property improvements and rentals;

• changes in taxation or zoning laws;

• government regulation;

• our failure to continue to qualify as a real estate investment trust;

• availability of financing on acceptable terms or at all;

• potential liability under environmental or other laws or regulations; and general competitive factors.

The rents and interest we receive and the occupancy levels at our properties may decline as a result of adverse changes in any of these factors. If our revenues decline, we generally would expect to have less cash available to pay our indebtedness and distribute to our shareholders. In addition, some of our unreimbursed costs of owning real estate may not decline when the related rents decline.

There are risks associated with owning and leasing real estate.

Although our lease terms obligate the tenants to bear substantially all of the costs of operating the properties, investing in real estate involves a number of risks, including:

• The risk that tenants will not perform under their leases, reducing our income from the leases or requiring us to assume the cost of performing obligations (such as taxes, insurance and maintenance) that are the tenant’s responsibility under the lease

• The risk that changes in economic conditions or real estate markets may adversely affect the value of our properties

• The risk that local conditions could adversely affect the value of our properties

• We may not always be able to lease properties at favorable rates or certain tenants may require significant capital expenditures by us to conform existing properties to their requirements.

• We may not always be able to sell a property when we desire to do so at a favorable price

• Changes in tax, zoning or other laws could make properties less attractive or less profitable

If a tenant fails to perform on its lease covenants, that would not excuse us from meeting any debt obligation secured by the property and could require us to fund reserves in favor of our lenders, thereby reducing funds available for payment of dividends. We cannot be assured that tenants will elect to renew their leases when the terms expire. If a tenant does not renew its lease or if a tenant defaults on its lease obligations, there is no assurance we could obtain a substitute tenant on acceptable terms. If we cannot obtain another quality tenant, we may be required to modify the property for a different use, which may involve a significant capital expenditure and a delay in re-leasing the property.

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Some potential losses are not covered by insurance.

Our leases require the tenants to carry comprehensive liability, casualty, workers’ compensation, extended coverage and rental loss insurance on our properties. We believe the required coverage is of the type, and amount, customarily obtained by an owner of similar properties. We believe all of our properties are adequately insured. However, there are some types of losses, such as catastrophic acts of nature, acts of war or riots, for which we or our tenants cannot obtain insurance at an acceptable cost. If there is an uninsured loss or a loss in excess of insurance limits, we could lose both the revenues generated by the affected property and the capital we have invested in the property. We would, however, remain obligated to repay any mortgage indebtedness or other obligations related to the property. Since September 11, 2001, the cost of insurance protection against terrorist acts has risen dramatically. There can be no assurance our tenants will be able to obtain terrorism insurance coverage, or that any coverage they do obtain will adequately protect our properties against loss from terrorist attack.

Joint ventures may limit flexibility with jointly owned investments.

We may continue to acquire or develop properties in joint ventures with third parties when those transactions appear desirable. We would not own the entire interest in any property acquired by a joint venture. Major decisions regarding a joint venture property may require the consent of our partner. If we have a dispute with a joint venture partner, we may feel it necessary or become obligated to acquire the partner’s interest in the venture. However, we cannot ensure that the price we would have to pay or the timing of the acquisition would be favorable to us. If we own less than a 50% interest in any joint venture, or if the venture is jointly controlled, the assets and financial results of the joint venture may not be reportable by us on a consolidated basis. To the extent we have commitments to, or on behalf of, or are dependent on, any such “off-balance sheet” arrangements, or if those arrangements or their properties or leases are subject to material contingencies, our liquidity, financial condition and operating results could be adversely affected by those commitments or off-balance sheet arrangements.

Our multi-tenant properties expose us to additional risks.

Our entertainment retail centers in Westminster, Colorado, New Rochelle, New York, White Plains, New York, Burbank, California and Ontario, Canada, and similar properties we may seek to acquire or develop in the future, involve risks not typically encountered in the purchase and lease-back of megaplex theatres which are operated by a single tenant. The ownership or development of multi-tenant retail centers could expose us to the risk that a sufficient number of suitable tenants may not be found to enable the center to operate profitably and provide a return to us. This risk may be compounded by the failure of existing tenants to satisfy their obligations due to various factors, including the current economic crisis. These risks, in turn, could cause a material adverse impact to our results of operations and business.

Retail centers are also subject to tenant turnover and fluctuations in occupancy rates, which could affect our operating results. Multi-tenant retail centers also expose us to the risk of potential “CAM slippage,” which may occur when CAM fees paid by tenants are exceeded by the actual cost of taxes, insurance and maintenance at the property.

Failure to comply with the Americans with Disabilities Act and other laws could result in substantial costs.

Our theatres must comply with the Americans with Disabilities Act (“ADA”). The ADA requires that public accommodations reasonably accommodate individuals with disabilities and that new construction or alterations be made to commercial facilities to conform to accessibility guidelines. Failure to comply with the ADA can result in injunctions, fines, damage awards to private parties and additional capital expenditures to remedy noncompliance. Our leases require the tenants to comply with the ADA.

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Our properties are also subject to various other federal, state and local regulatory requirements. We do not know whether existing requirements will change or whether compliance with future requirements will involve significant unanticipated expenditures. Although these expenditures would be the responsibility of our tenants, if tenants fail to perform these obligations, we may be required to do so.

Potential liability for environmental contamination could result in substantial costs.

Under federal, state and local environmental laws, we may be required to investigate and clean up any release of hazardous or toxic substances or petroleum products at our properties, regardless of our knowledge or actual responsibility, simply because of our current or past ownership of the real estate. If unidentified environmental problems arise, we may have to make substantial payments, which could adversely affect our cash flow and our ability to make distributions to our shareholders. This is because:

• As owner we may have to pay for property damage and for investigation and clean-up costs incurred in connection with the contamination

• The law may impose clean-up responsibility and liability regardless of whether the owner or operator knew of or caused the contamination

• Even if more than one person is responsible for the contamination, each person who shares legal liability under environmental laws may be held responsible for all of the clean-up costs

• Governmental entities and third parties may sue the owner or operator of a contaminated site for damages and costs

These costs could be substantial and in extreme cases could exceed the value of the contaminated property. The presence of hazardous substances or petroleum products or the failure to properly remediate contamination may adversely affect our ability to borrow against, sell or lease an affected property. In addition, some environmental laws create liens on contaminated sites in favor of the government for damages and costs it incurs in connection with a contamination. Most of our loan agreements require the Company or a subsidiary to indemnify the lender against environmental liabilities. Our leases require the tenants to operate the properties in compliance with environmental laws and to indemnify us against environmental liability arising from the operation of the properties. We believe all of our properties are in material compliance with environmental laws. However, we could be subject to strict liability under environmental laws because we own the properties. There is also a risk that tenants may not satisfy their environmental compliance and indemnification obligations under the leases. Any of these events could substantially increase our cost of operations, require us to fund environmental indemnities in favor of our lenders, limit the amount we could borrow under our revolving credit facility and term loan, and reduce our ability to service our debt and pay dividends to shareholders.

Real estate investments are relatively non-liquid.

We may desire to sell a property in the future because of changes in market conditions, poor tenant performance or default of any mortgage we hold, or to avail ourselves of other opportunities. We may also be required to sell a property in the future to meet debt obligations or avoid a default. Specialty real estate projects such as megaplex theatres cannot always be sold quickly, and we cannot assure you that we could always obtain a favorable price. In addition, the Internal Revenue Code limits our ability to sell our properties. We may be required to invest in the restoration or modification of a property before we can sell it. The inability to respond promptly to changes in the performance of our property portfolio could adversely affect our financial condition and ability to service debt and make distributions to our shareholders.

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There are risks in owning assets outside the United States.

Our properties in Canada and the property securing our Canadian mortgage financing are subject to the risks normally associated with international operations. The rentals under our Canadian leases, the debt service on our Canadian mortgage financing and the payments to be received on our Canadian mortgage receivable are payable or collectible (as applicable) in Canadian dollars, which could expose us to losses resulting from fluctuations in exchange rates to the extent we have not hedged our position. Canadian real estate and tax laws are complex and subject to change, and we cannot assure you we will always be in compliance with those laws or that compliance will not expose us to additional expense. We may also be subject to fluctuations in Canadian real estate values or markets or the Canadian economy as a whole, which may adversely affect our Canadian investments.

Additionally, we have made small initial investments in projects located in China and may enter other international markets, which may have similar risks as described above as well as unique risks associated with a specific country.

There are risks in owning or financing properties for which the tenant’s or mortgagor’s operations may be impacted by weather conditions and climate change.

We have acquired and financed metropolitan ski areas as well as vineyards and wineries, and may continue to do so in the future. The operators of these properties, our tenants or mortgagors, are dependent upon the operations of the properties to pay their rents and service their loans. The ski area operator’s ability to attract visitors is influenced by weather conditions and climate change in general, each of which may impact the amount of snowfall during the ski season. Adverse weather conditions may discourage visitors from participating in outdoor activities. In addition, unseasonably warm weather may result in inadequate natural snowfall, which increases the cost of snowmaking, and could render snowmaking wholly or partially ineffective in maintaining quality skiing conditions. Excessive natural snowfall may materially increase the costs incurred for grooming trails and may also make it difficult for visitors to obtain access to the ski resorts. Prolonged periods of adverse weather conditions, or the occurrence of such conditions during peak visitation periods, could have a material adverse effect on the operator’s financial results and could impair the ability of the operator to make rental payments or service our loans.

The ability to grow quality wine grapes and a sufficient quantity of wine grapes is influenced by weather conditions and climate change. Droughts, freezes and other weather conditions or phenomena, such as “El Nino,” may adversely affect the timing, quality or quantity of wine grape harvests, and this can have a material adverse effect on the operating results of our vineyard and winery operators. In these circumstances, the ability of our tenants to make rental payments or service our loans could be impaired.

Wineries and vineyards are subject to a number of risks associated with the agricultural industry.

Winemaking and wine grape growing are subject to a variety of agricultural risks. In addition to weather, various diseases, pests, fungi and viruses can affect the quality and quantity of wine grapes and negatively impact the profitability of our tenants. Furthermore, wine grape growing requires adequate water supplies. The water needs of our properties are generally supplied through wells and reservoirs located on the properties. Although we believe that there are adequate water supplies to meet the needs of all of our properties, a substantial reduction in water

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supplies could result in material losses of wine crops and vines. If our tenants suffer a downturn in their business due to any of the factors described above, they may be unable to make their lease or loan payments, which could adversely affect our results of operations and financial condition.

Risks That May Affect the Market Price of our Shares

We cannot assure you we will continue paying cash dividends at current rates.

Our dividend policy is determined by our Board of Trustees. Our ability to continue paying dividends on our common shares, to pay dividends on our preferred shares at their stated rates or to increase our common share dividend rate will depend on a number of factors, including our liquidity, our financial condition and results of future operations, the performance of lease and mortgage terms by our tenants and customers, our ability to acquire, finance and lease additional properties at attractive rates, and provisions in our loan covenants. If we do not maintain or increase our common share dividend rate, that could have an adverse effect on the market price of our common shares and possibly our preferred shares. Furthermore, if the Board of Trustees decides to pay dividends on our common shares partially or substantially all in common shares, that could have an adverse effect on the market price of our common shares and possibly our preferred shares.

Market interest rates may have an effect on the value of our shares.

One of the factors that investors may consider in deciding whether to buy or sell our common shares or preferred shares is our dividend rate as a percentage of our share price, relative to market interest rates. If market interest rates increase, prospective investors may desire a higher dividend on our common shares or seek securities paying higher dividends or interest.

Market prices for our shares may be affected by perceptions about the financial health or share value of our tenants and mortgagors or the performance of REIT stocks generally.

To the extent any of our tenants or customers, or their competition, report losses or slower earnings growth, take charges against earnings or enter bankruptcy proceedings, the market price for our shares could be adversely affected. The market price for our shares could also be affected by any weakness in the performance of REIT stocks generally or weakness in any of the sectors in which our tenants and customers operate.

Limits on changes in control may discourage takeover attempts which may be beneficial to our shareholders.

There are a number of provisions in our Declaration of Trust, Bylaws, Maryland law and agreements we have with others which could make it more difficult for a party to make a tender offer for our shares or complete a takeover of the Company which is not approved by our Board of Trustees. These include:

• A staggered Board of Trustees that can be increased in number without shareholder approval

• A limit on beneficial ownership of our shares, which acts as a defense against a hostile takeover or acquisition of a significant or controlling interest, in addition to preserving our REIT status

• The ability of the Board of Trustees to issue preferred or common shares, to reclassify preferred or common shares, and to increase the amount of our authorized preferred or common shares, without shareholder approval

• Limits on the ability of shareholders to remove trustees without cause

• Requirements for advance notice of shareholder proposals at shareholder meetings

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• Provisions of Maryland law restricting business combinations and control share acquisitions not approved by the Board of Trustees

• Provisions of Maryland law protecting corporations (and by extension REITs) against unsolicited takeovers by limiting the duties of the trustees in unsolicited takeover situations

• Provisions in Maryland law providing that the trustees are not subject to any higher duty or greater scrutiny than that applied to any other director under Maryland law in transactions relating to the acquisition or potential acquisition of control

• Provisions of Maryland law creating a statutory presumption that an act of the trustees satisfies the applicable standards of conduct for trustees under Maryland law

• Provisions in loan or joint venture agreements putting the Company in default upon a change in control

• Provisions of employment agreements with our officers calling for share purchase loan forgiveness (under certain conditions), severance compensation and vesting of equity compensation upon a change in control

Any or all of these provisions could delay or prevent a change in control of the Company, even if the change was in our shareholders’ interest or offered a greater return to our shareholders.

We may change our policies without obtaining the approval of our shareholders.

Our operating and financial policies, including our policies with respect to acquiring or financing real estate or other companies, growth, operations, indebtedness, capitalization and dividends, are exclusively determined by our Board of Trustees. Accordingly, our shareholders do not control these policies.

Dilution could affect the value of our shares.

Our future growth will depend in part on our ability to raise additional capital. If we raise additional capital through the issuance of equity securities, the interests of holders of our common shares could be diluted. Likewise, our Board of Trustees is authorized to cause us to issue preferred shares in one or more series, the holders of which would be entitled to dividends and voting and other rights as our Board of Trustees determines, and which could be senior to or convertible into our common shares. Accordingly, an issuance by us of preferred shares could be dilutive to or otherwise adversely affect the interests of holders of our common shares. As of December 31, 2009, our Series C preferred shares are convertible, at each of the holder’s option, into our common shares at a conversion rate of 0.3572 common shares per $25.00 liquidation preference, which is equivalent to a conversion price of approximately $69.99 per common share (subject to adjustment in certain events). Additionally, as of December 31, 2009, our Series E preferred shares are convertible, at each of the holder’s option, into our common shares at a conversion rate of 0.4512 common shares per $25.00 liquidation preference, which is equivalent to a conversion price of approximately $55.41 per common share (subject to adjustment in certain events). Depending upon the number of Series C and Series E preferred shares being converted at one time, a conversion of Series C and Series E preferred shares could be dilutive to or otherwise adversely affect the interests of holders of our common shares.

Changes in foreign currency exchange rates may have an impact on the value of our shares.

The functional currency for our Canadian operations and mortgage note receivable is the Canadian dollar. As a result, our future earnings could be affected by fluctuations in the exchange rate between U.S. and Canadian dollars, which in turn could affect our share price. We have attempted to mitigate our exposure to Canadian currency exchange risk by having both our

26

Canadian lease rentals and the debt service on our Canadian mortgage financing payable in the same currency. We have also entered into foreign currency exchange contracts to hedge in part our exposure to exchange rate fluctuations. Foreign currency derivatives are subject to future risk of loss. We do not engage in purchasing foreign exchange contracts for speculative purposes.

Additionally, we may enter other international markets which pose similar currency fluctuation risks as described above.

Tax reform could adversely affect the value of our shares.

There have been a number of proposals in Congress for major revision of the federal income tax laws, including proposals to adopt a flat tax or replace the income tax system with a national sales tax or value-added tax. Any of these proposals, if enacted, could change the federal income tax laws applicable to REITS, subject us to federal tax or reduce or eliminate the current deduction for dividends paid to our shareholders, any of which could negatively affect the market for our shares.

Item 1B. Unresolved Staff Comments

There are no unresolved comments from the staff of the SEC required to be disclosed herein as of the date of this Annual Report on Form 10-K.

Item 2. Properties

As of December 31, 2009, our real estate portfolio consisted of 95 megaplex theatre properties and various restaurant, retail and other properties located in 33 states, the District of Columbia and Ontario, Canada. Except as otherwise noted, all of the real estate investments listed below are owned or ground leased directly by us. The following table lists our properties, their locations, acquisition dates, number of theatre screens, number of seats, gross square footage, and the tenant.

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Property	Location	Acquisition date	Screens	Seats	Building (gross sq. ft)	Tenant
Megaplex Theatre Properties:
Grand 24 (8)	Dallas, TX	11/97	24	5,067	98,175	AMC
Mission Valley 20 (1) (8)	San Diego, CA	11/97	20	4,361	84,352	AMC
Promenade 16 (8)	Los Angeles, CA	11/97	16	2,860	129,822	AMC
Ontario Mills 30 (8)	Ontario, CA	11/97	30	5,469	131,534	AMC
Lennox 24 (1) (8)	Columbus, OH	11/97	24	4,412	98,261	AMC
West Olive 16 (8)	Creve Coeur, MO	11/97	16	2,817	60,418	AMC
Studio 30 (8)	Houston, TX	11/97	30	6,032	136,154	AMC
Huebner Oaks 24 (8)	San Antonio, TX	11/97	24	4,400	96,004	AMC
First Colony 24 (1) (29)	Sugar Land, TX	11/97	24	5,098	107,690	AMC
Oakview 24 (9) (30)	Omaha, NE	11/97	24	5,098	107,402	AMC
Leawood Town Center 20 (31)	Leawood, KS	2/98	20	2,995	75,224	AMC
Gulf Pointe 30 (2) (34)	Houston, TX	3/98	30	6,008	130,891	AMC
South Barrington 30 (35)	South Barrington, IL	3/98	30	6,210	130,757	AMC
Cantera 30 (2) (4)	Warrenville, IL	4/98	30	6,210	130,757	AMC
Mesquite 30 (2) (33)	Mesquite, TX	4/98	30	6,008	130,891	AMC
Hampton Town Center 24 (37)	Hampton, VA	6/98	24	5,098	107,396	AMC
Raleigh Grand 16 (3)	Raleigh, NC	8/98	16	2,596	51,450	Carolina Cinemas
Pompano 18 (3)	Pompano Beach, FL	11/98	18	3,424	73,637	Muvico
Paradise 24 (22)	Davie, FL	11/98	24	4,180	96,497	Cinemark
Boise Stadium 21 (1) (3)	Boise, ID	12/98	21	4,734	140,300	Regal
Aliso Viejo Stadium 20 (21)	Aliso Viejo, CA	12/98	20	4,352	98,557	Regal
Westminster 24 (6)	Westminster, CO	6/99	24	4,812	89,260	AMC
Woodridge 18 (2) (9)	Woodridge, IL	6/99	18	4,384	82,000	AMC
Cary Crossroads 20 (9)	Cary, NC	12/99	20	3,936	77,475	Regal
Tampa Starlight 20 (9)	Tampa, FL	1/00	20	3,928	84,000	Muvico
Palm Promenade 24 (9)	San Diego, CA	2/00	24	4,586	88,610	AMC
Elmwood Palace 20 (9)	Harahan, LA	3/02	20	4,357	90,391	AMC
Hammond Palace 10 (9)	Hammond, LA	3/02	10	1,531	39,850	AMC
Houma Palace 10 (9)	Houma, LA	3/02	10	1,871	44,450	AMC
Westbank Palace 16 (9)	Harvey, LA	3/02	16	3,176	71,607	AMC
Clearview Palace 12 (1)(9)	Metairie, LA	3/02	12	2,495	70,000	AMC
Olathe Studio 30 (9)	Olathe, KS	6/02	30	5,731	100,000	AMC
Forum 30 (9)	Sterling Heights, MI	6/02	30	5,041	107,712	AMC
Cherrydale 16 (9)	Greenville, SC	6/02	16	2,744	52,800	Regal
Livonia 20 (9)	Livonia, MI	8/02	20	3,808	76,106	AMC
Hoffman Town Centre 22 (1)(9)	Alexandria, VA	10/02	22	4,150	132,903	AMC
Colonel Glenn 18 (3)	Little Rock, AR	12/02	18	4,122	79,330	Rave Cinemas
AmStar Cinema 16 (16)	Macon, GA	3/03	16	2,950	66,400	Southern
Star Southfield 20 (8)	Southfield, MI	5/03	20	7,000	112,119	AMC
Southwind 12 (27)	Lawrence, KS	6/03	12	2,481	42,497	Wallace
Veterans 24 (10)	Tampa, FL	6/03	24	4,580	94,774	AMC
New Roc City 18 and IMAX (11)	New Rochelle, NY	10/03	18	3,400	103,000	Regal
Harbour View Grande 16 (8)	Suffolk, VA	11/03	16	3,036	61,500	Regal
Columbiana Grande 14 (13)	Columbia, SC	11/03	14	3,000	56,705	Regal
The Grande 18	Hialeah, FL	12/03	18	4,900	77,400	Cobb
Mississauga 16 (7) (49)	Mississauga, ON	3/04	16	3,856	92,971	AMC
Oakville 24 (7) (49)	Oakville, ON	3/04	24	4,772	89,290	AMC
Whitby 24 (7) (49)	Whitby, ON	3/04	24	4,688	89,290	AMC
Kanata 24 (7) (49)	Kanata, ON	3/04	24	4,764	89,290	AMC
Mesa Grand 24 (20)	Mesa, AZ	3/04	24	4,530	94,774	AMC
Deer Valley 30 (3)	Phoenix, AZ	3/04	30	5,877	113,768	AMC
Hamilton 24 (3)	Hamilton, NJ	3/04	24	4,268	95,466	AMC
Subtotal Megaplex Theatres, carried over to next page			1,109	222,203	4,781,907

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Property	Location	Acquisition date	Screens	Seats	Building (gross sq. ft)	Tenant
Megaplex Theatre Properties:
Subtotal from previous page	n/a	n/a	1,109	222,203	4,781,907	n/a
Grand Prairie 18 (8)	Peoria, IL	7/04	18	4,063	82,330	Rave Review Cinemas
Lafayette Grand 16 (1) (17)	Lafayette, LA	7/04	16	2,744	61,579	Southern
Northeast Mall 18 (19)	Hurst, TX	11/04	18	3,886	94,000	Rave Cinemas
The Grand 18 (24)	D’Iberville, MS	12/04	18	2,984	48,000	Southern
Avenue 16 (8)	Melbourne, FL	12/04	16	3,600	75,850	Rave Review Cinemas
Mayfaire Cinema 16 (14)	Wilmington, NC	2/05	16	3,050	57,338	Regal
East Ridge 18 (32)	Chattanooga, TN	3/05	18	4,133	82,330	Rave Review Cinemas
Burbank 16 (12)	Burbank, CA	3/05	16	4,232	86,551	AMC
ShowPlace 12 (26)	Indianapolis, IN	6/05	12	2,200	45,270	Kerasotes
The Grand 14 (8)	Conroe, TX	6/05	14	2,400	45,000	Southern
The Grand 18 (28)	Hattiesburg, MS	9/05	18	2,675	57,367	Southern
Auburn Stadium 10 (5)	Auburn, CA	12/05	10	1,573	32,185	Regal
Arroyo Grande Stadium 10 (2) (18)	Arroyo Grande, CA	12/05	10	1,714	34,500	Regal
Modesto Stadium 10 (15)	Modesto, CA	12/05	10	1,885	38,873	Regal
Manchester Stadium 16 (25)	Fresno, CA	12/05	16	3,860	80,600	Regal
Firewheel 18 (36)	Garland, TX	3/06	18	3,156	72,252	AMC
Columbia 14 (1) (8)	Columbia, MD	3/06	14	2,512	77,731	AMC
White Oak Village Cinema 14 (8)	Garner, NC	4/06	14	2,626	50,810	Regal
The Grand 18 (1) (8)	Winston Salem, NC	7/06	18	3,496	75,605	Southern
Valley Bend 18 (8)	Huntsville, AL	8/06	18	4,150	90,200	Rave Review Cinemas
Cityplace 14	Kalamazoo, MI	11/06	14	2,770	70,000	Rave Review Cinemas
Bayou 15 (8)	Pensacola, FL	12/06	15	3,361	74,400	Rave Review Cinemas
The Grand 16 (1) (39)	Slidell, LA	12/06	16	2,750	62,300	Southern
City Center 15: Cinema de Lux (23)	White Plains, NY	5/07	15	3,500	80,000	National Amusements
Pier Park Grand 16 (8)	Panama City Beach, FL	5/07	16	3,496	75,605	Southern
Kalispell Stadium 14 (8)	Kalispell, MT	8/07	14	2,000	44,650	Signature
Four Seasons Station Grand 18 (1) (8)	Greensboro, NC	11/07	18	3,343	74,517	Southern
Glendora 12 (1)	Glendora, CA	10/08	12	2,264	50,710	AMC
Ann Arbor 20	Ypsilanti, MI	12/09	20	5,602	131,098	Rave Cinemas
Buckland Hills 18	Manchester, CT	12/09	18	4,317	87,700	Rave Cinemas
Centreville 12	Centreville, VA	12/09	12	3,094	73,500	Rave Cinemas
Davenport 18	Davenport, IA	12/09	18	3,772	93,755	Rave Cinemas
Fairfax Corner 14	Fairfax, VA	12/09	14	3,544	74,689	Rave Cinemas
Flint West 14	Flint, MI	12/09	14	3,493	85,911	Rave Cinemas
Hazlet 12	Hazlet, NJ	12/09	12	3,000	58,300	Rave Cinemas
Huber Heights 16	Huber Heights, OH	12/09	16	3,511	95,830	Rave Cinemas
North Haven 12	North Haven, CT	12/09	12	2,704	70,195	Rave Cinemas
Preston Crossings 16	Okolona, KY	12/09	16	3,264	79,453	Rave Cinemas
Ritz Center 16	Voorhees, NJ	12/09	16	3,098	62,658	Rave Cinemas
Stonybrook 20	Louisville, KY	12/09	20	3,194	84,202	Rave Cinemas
The Greene 14	Beaver Creek, OH	12/09	14	3,211	73,634	Rave Cinemas
West Springfield 15	West Springfield, MA	12/09	15	3,775	111,166	Rave Cinemas
Western Hills 14	Cincinnati, OH	12/09	14	3,152	63,829	Rave Cinemas
Subtotal Megaplex Theatres			1,768	359,357	7,848,380

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Property	Location	Acquisition date	Screens	Seats	Building (gross sq. ft)	Tenant
Retail, Restaurant and Other Properties:
On The Border (8)	Mesquite, TX	1/99	—	—	6,683	Brinker International
Texas Roadhouse (8)	Mesquite, TX	1/99	—	—	6,400	Texas Roadhouse
Westminster Promenade (8)	Westminster, CO	6/99	—	—	135,226	Multi-Tenant
Texas Land & Cattle (8)	Houston, TX	5/00	—	—	7,733	Tx.C.C., Inc.
Wing Factory (8)	Houston, TX	5/00	—	—	6,575	Wing Factory
Cheddar’s Casual Cafe (8)	Mesquite, TX	5/00	—	—	7,918	Cheddars
Cherrydale Shops (9)	Greenville, SC	6/02	—	—	10,000	Multi-Tenant
Johnny Carino’s (8)	Mesquite, TX	3/03	—	—	6,200	Kona Rest. Group, Inc.
Star Southfield Center(8)	Southfield, MI	5/03	—	—	48,478	Multi-Tenant
New Roc City (11)	New Rochelle, NY	10/03	—	—	343,809	Multi-Tenant
Harbour View Station(8)	Suffolk, VA	11/03	—	—	21,416	Multi-Tenant
Kanata Entertainment Centrum (7) (49)	Kanata, ON	3/04	—	—	308,089	Multi-Tenant
Mississauga Entertainment Centrum (7) (49)	Mississauga, ON	3/04	—	—	89,777	Multi-Tenant
Oakville Entertainment Centrum (7) (49)	Oakville, ON	3/04	—	—	134,222	Multi-Tenant
Whitby Entertainment Centrum (7) (49)	Whitby, ON	3/04	—	—	124,620	Multi-Tenant
V-Land (8)	Warrenville, IL	7/04	—	—	11,755	V-Land Warrenville
Stir Crazy (8)	Warrenville, IL	11/04	—	—	7,500	Stir Crazy Café
Burbank Village (12)	Burbank, CA	3/05	—	—	34,713	Multi-Tenant
La Cantina (8)	Houston, TX	8/05	—	—	9,000	La Cantina Gulf Fwy, Inc.
Mad River Mountain (37)(40)	Bellefontaine, OH	11/05	—	—	48,427	Mad River Mountain
Vacant (formerly Sizzler)	Arroyo Grande, CA	12/05	—	—	5,850	Vacant
Havens Wine Cellars (41) (38)	Yountville, CA	12/06	—	—	11,960	Vacant
Rack and Riddle (38) (42)	Hopland, CA	4/07	—	—	76,000	Rb Wine Associates
City Center at White Plains (23)	White Plains, NY	5/07	—	—	317,943	Multi-Tenant
Austell Promenade (8)	Austell, GA	7/07	—	—	18,410	East-West Promenade
Cosentino Wineries (44)	Pope Valley, Lockeford and Clements, CA	8/07	—	—	71,540	Vacant
EOS Estate Winery (43)	Pasa Robles, CA	8/07	—	—	120,000	Sapphire Wines
Imagine College Prep	St. Louis, MO	10/07	—	—	103,000	Imagine Schools, Inc.
East Mesa Charter Elementary	Mesa, AZ	10/07	—	—	45,214	Imagine Schools, Inc.
Rosefield Charter Elementary	Surprise, AZ	10/07	—	—	45,578	Imagine Schools, Inc.
Academy of Columbus	Columbus, OH	10/07	—	—	71,949	Imagine Schools, Inc.
South Lake Charter Elementary	Clermont, FL	10/07	—	—	39,956	Imagine Schools, Inc.
Renaissance Public School Academy	Mt. Pleasant, MI	10/07	—	—	36,278	Imagine Schools, Inc.
100 Academy of Excellence	Las Vegas, NV	10/07	—	—	59,060	Imagine Schools, Inc.
Imagine Charter Elementary	Phoenix, AZ	10/07	—	—	47,186	Imagine Schools, Inc.
Groveport Community School	Groveport, OH	10/07	—	—	66,420	Imagine Schools, Inc.
Harvard Avenue Charter School	Cleveland, OH	10/07			57,652	Imagine Schools, Inc.
Hope Community Charter School	Washington, DC	10/07	—	—	34,962	Imagine Schools, Inc.
Marietta Charter School	Marietta, GA	10/07	—	—	24,503	Imagine Schools, Inc.
Crotched Mountain	Bennington, NH	2/08	—	—	34,100	Crotched Mountain
Buena Vista Winery & Vineyards (38) (45)	Sonoma, CA	6/08	—	—	105,735	Ascentia Wine Estates
Columbia Winery (38) (46)	Sunnyside, WA	6/08	—	—	35,880	Ascentia Wine Estates
Gary Farrell Winery (38) (47)	Healdsburg, CA	6/08	—	—	21,001	Ascentia Wine Estates
Geyser Peak Winery & Vineyards (38) (48)	Geyserville, CA	6/08	—	—	360,813	Ascentia Wine Estates
Academy of Academic Success	St. Louis, MO	6/08	—	—	66,644	Imagine Schools, Inc.
Academy of Careers Elementary	St. Louis, MO	6/08	—	—	43,975	Imagine Schools, Inc.
Subtotal Retail, Restaurant and Other Properties, carried over to next page			—	—	3,290,150

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Property	Location	Acquisition date	Screens	Seats	Building (gross sq. ft)	Tenant
Retail, Restaurant and Other Properties:
Subtotal from previous page	n/a	n/a	—	—	3,290,150	n/a
Academy of Careers Middle School	St. Louis, MO	6/08	—	—	56,213	Imagine Schools, Inc.
Academy of Environmental Science & Math	St. Louis, MO	6/08	—	—	153,000	Imagine Schools, Inc.
International Academy of Mableton	Mableton, GA	6/08	—	—	43,188	Imagine Schools, Inc.
Master Academy	Fort Wayne, IN	6/08	—	—	161,500	Imagine Schools, Inc.
Renaissance Academy (Kensington Campus)	Kansas City, MO	6/08	—	—	53,763	Imagine Schools, Inc.
Renaissance Academy (Wallace Campus)	Kansas City, MO	6/08	—	—	79,940	Imagine Schools, Inc.
Romig Road Community School	Akron, OH	6/08	—	—	40,400	Imagine Schools, Inc.
Wesley International Academy	Atlanta, GA	6/08	—	—	40,358	Imagine Schools, Inc.
Harbour View Marketplace	Suffolk, VA	6/09	—	—	80,280	Multi-Tenant
Carneros Vintners Custom Crush (50)	Sonoma, CA	10/09	—	—	58,292	Carneros Vintners, Inc.
Subtotal Retail, Restaurant and Other Properties			—	—	4,057,084
Total			1,768	359,357	11,905,464

(1) Third party ground leased property. Although we are the tenant under the ground leases and have assumed responsibility for performing the obligations thereunder, pursuant to the leases, the theatre tenants are responsible for performing our obligations under the ground leases.

(2) In addition to the theatre property itself, we have acquired land parcels adjacent to the theatre property, which we have or intend to lease or sell to restaurant or other entertainment themed operators.

(3) Property is included as security for $72.8 million in mortgage notes payable.

(4) Property is included in the Atlantic-EPR I joint venture.

(5) Property is included as security for a $6.2 million mortgage notes payable.

(6) Property is included as security for a $11.8 million mortgage note payable.

(7) Property is included as security for a $102.0 million mortgage note payable.

(8) Property is included in the borrowing base for a $215.0 million revolving credit facility.

(9) Property is included as security for $119.4 million mortgage notes payable.

(10) Property is included in the Atlantic-EPR II joint venture.

(11) Property is included as security for a $60.7 million mortgage note payable and $4.0 million credit facility.

(12) Property is included as security for a $33.8 million mortgage note payable.

(13) Property is included as security for a $7.9 million mortgage note payable.

(14) Property is included as security for a $7.4 million mortgage note payable.

(15) Property is included as security for a $4.7 million mortgage note payable.

(16) Property is included as security for a $6.2 million mortgage note payable.

(17) Property is included as security for a $8.7 million mortgage note payable.

(18) Property is included as security for a $4.8 million mortgage note payable.

(19) Property is included as security for a $14.1 million mortgage note payable.

(20) Property is included as security for a $15.0 million mortgage note payable.

(21) Property is included as security for a $20.4 million mortgage note payable.

(22) Property is included as security for a $20.4 million mortgage note payable.

(23) Property is included as security for a $113.3 million mortgage note payable and $5.0 million credit facility.

(24) Property is included as security for a $11.0 million mortgage note payable.

(25) Property is included as security for a $11.3 million mortgage note payable.

(26) Property is included as security for a $4.9 million mortgage note payable.

(27) Property is included as security for a $4.6 million mortgage note payable.

(28) Property is included as security for a $9.9 million mortgage note payable.

(29) Property is included as security for a $17.7 million mortgage note payable.

(30) Property is included as security for a $15.3 million mortgage note payable.

(31) Property is included as security for a $14.7 million mortgage note payable.

(32) Property is included as security for a $12.1 million mortgage note payable.

(33) Property is included as security for a $21.0 million mortgage note payable.

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(34) Property is included as security for a $24.8 million mortgage note payable.

(35) Property is included as security for a $25.6 million mortgage note payable.

(36) Property is included as security for a $16.7 million mortgage note payable

(37) Property is included as security for a $117.6 million term loan payable.

(38) Property is included as security under the $160.0 million credit facility.

(39) Property is included as security for $10.6 million bond payable.

(40) Property includes approximately 324 acres of land.

(41) Property includes approximately 10 acres of land.

(42) Property includes approximately 35 acres of land.

(43) Property includes approximately 60 acres of land.

(44) Property includes approximately 225 acres of land.

(45) Property includes approximately 693 acres of land.

(46) Property includes approximately 17 acres of land.

(47) Property includes approximately 23 acres of land.

(48) Property includes approximately 207 acres of land.

(49) Property is located in Ontario, Canada

(50) Property includes approximately 20 acres of land.

As of December 31, 2009, our portfolio of megaplex theatre properties consisted of 7.8 million square feet and was 100% occupied, and our portfolio of retail, restaurant and other properties consisted of 4.1 million square feet and was 92% occupied. The combined portfolio consisted of 11.9 million square feet and was 97% occupied. For the year ended December 31, 2009, approximately 73% of our rental revenue and 60% of total revenue was derived from theatre tenants. The following table sets forth information regarding EPR’s megaplex theatre portfolio as of December 31, 2009 (dollars in thousands). This data does not include the two megaplex theatre properties held by our unconsolidated joint ventures.

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Megaplex Theatre Portfolio
Year	Total Number of Leases Expiring	Square Footage	Revenue for the Year Ended December 31, 2009 (1)		% of Rental Revenue
2010	4	443,883	$	11,399	7.0%
2011	4	390,837		9,510	5.9%
2012	3	290,316		7,177	4.4%
2013	4	499,935		14,200	8.7%
2014	-	-		-	-
2015	-	-		-	-
2016	2	189,519		3,911	2.5%
2017	3	224,497		4,592	2.8%
2018	5	491,044		13,207	8.1%
2019	7	647,264		21,444	13.2%
2020	7	415,753		8,783	5.4%
2021	3	218,023		6,740	4.1%
2022	9	636,822		15,828	9.7%
2023	2	129,181		2,361	1.5%
2024	9	754,472		17,165	10.6%
2025	7	452,191		13,672	8.4%
2026	5	347,710		7,132	4.4%
2027	3	194,772		3,939	2.4%
2028	1	50,710		1,044	0.6%
2029	15	1,245,920		532	0.3%
	93	7,622,849	$	162,636	100.0%

(1) Consists of rental revenue and tenant reimbursements.

Our properties are located in 33 states, the District of Columbia and in the Canadian province of Ontario. The following table sets forth certain state-by-state and Ontario, Canada information regarding our real estate portfolio as of December 31, 2009 (dollars in thousands). This data does not include the two theatre properties owned by our unconsolidated joint ventures.

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Location	Building (gross sq. ft)	Revenue for the year ended December 31, 2009 (1)		% of Rental     Revenue
California	1,722,198	$	41,921	18.8%
Ontario, Canada	1,017,549		35,669	16.0%
Texas	961,566		22,748	10.2%
New York	844,752		21,798	9.8%
Michigan	631,424		11,335	5.1%
Florida	557,389		12,669	5.7%
Virginia	551,684		8,675	3.9%
Louisiana	440,177		8,275	3.7%
North Carolina	387,195		7,937	3.5%
Ohio	379,981		2,939	1.3%
Illinois	314,342		8,181	3.7%
Colorado	224,486		6,084	2.7%
Kansas	217,721		4,878	2.2%
New Jersey	216,424		2,402	1.1%
Arizona	208,542		4,149	1.9%
Kentucky	163,655		91	0.0%
Connecticut	157,895		94	0.0%
Idaho	140,300		2,081	0.9%
South Carolina	119,505		3,484	1.6%
Massachusets	111,166		27	0.0%
Nebraska	107,402		2,746	1.2%
Mississippi	105,367		2,580	1.2%
Iowa	93,755		41	0.0%
Alabama	90,200		1,955	0.9%
Georgia	84,810		1,306	0.6%
Tennessee	82,330		1,633	0.7%
Arkansas	79,330		1,693	0.8%
Maryland	77,731		1,254	0.6%
Missouri	60,418		2,288	1.0%
Indiana	45,270		663	0.3%
Montana	44,650		902	0.4%
Washington	35,880		387	0.2%
New Hampshire	34,100		37	0.0%
	10,309,194	$	222,922	100%

(1) Consists of rental revenue and tenant reimbursements.

Office Location

Our executive office is located in Kansas City, Missouri and is leased from a third party landlord. The office occupies approximately 19,513 square feet with annual rentals of $322 thousand. The lease expired in December 2009 and we continue to lease the space on a month-to-month basis.

Tenants and Leases

Our existing leases on rental property (on a consolidated basis - excluding unconsolidated joint venture properties) provide for aggregate annual rentals of approximately $200 million (not including periodic rent escalations or percentage rent). The megaplex theatre leases have an

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average remaining base term lease life of approximately 12 years and may be extended for predetermined extension terms at the option of the tenant. The theatre leases are typically triple-net leases that require the tenant to pay substantially all expenses associated with the operation of the properties, including taxes, other governmental charges, insurance, utilities, service, maintenance and any ground lease payments.

Property Acquisitions in 2009

The following table lists the significant rental properties we acquired or developed during 2009:

Property	Location	Tenant	Development Cost/ Purchase Price
Harbour View Marketplace	Suffolk, VA	Multi-Tenant	$13.4 million
	Sonoma County,
Carneros Custom Crush Facility	California	Carneros Vintners, Inc.	$12.5 million
Equipment at Buena Vista, Columbia,
Gary Farrel and Geyser Peak Wineries	Various	Ascentia Wine Estates	$8.5 million
15 Theatre Portfolio	Various	Rave Cinemas, LLC	$121.5 million

Item 3. Legal Proceedings

On December 31, 2009, the Company filed a petition with the Western District Court of Missouri against Louis Cappelli, Concord Resorts, LLC, and certain of their affiliates seeking payment of all amounts due under various loans made to them by the Company that are currently in default. The Company is also seeking a declaratory judgment that no further investments are required to be made by us under any prior commitment.

Except as disclosed above, other than routine litigation and administrative proceedings arising in the ordinary course of business, we are not presently involved in any litigation nor, to our knowledge, is any litigation threatened against us or our properties, which is reasonably likely to have a material adverse effect on our liquidity or results of operations.

Item 4. Submission of Matters to a Vote of Security Holders

No matters were submitted to a vote of security holders during the fourth quarter of the year ended December 31, 2009.

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PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

The following table sets forth, for the quarterly periods indicated, the high and low sales prices per share for our common shares on the New York Stock Exchange (“NYSE”) under the trading symbol “EPR” and the distributions declared.

	High		Low		Distribution
2009:
Fourth quarter	$	36.61	$	30.37	$	0.6500
Third quarter		35.19		19.40		0.6500
Second quarter		25.15		15.30		0.6500
First quarter		30.62		12.70		0.6500
2008:
Fourth quarter	$	54.62	$	18.81	$	0.8400
Third quarter		59.02		48.03		0.8400
Second quarter		56.31		48.23		0.8400
First quarter		55.54		42.76		0.8400

The closing price for our common shares on the NYSE on February 25, 2010 was $38.30 per share.

We declared quarterly distributions to common shareholders aggregating $2.60 per common share in 2009 and $3.36 per common share in 2008.

While we intend to continue paying regular quarterly dividends, future dividend declarations will be at the discretion of the Board of Trustees and will depend on our actual cash flow, our financial condition, capital requirements, the annual distribution requirements under the REIT provisions of the Code, debt covenants and other factors the Board of Trustees deems relevant. The actual cash flow available to pay dividends may be affected by a number of factors, including the revenues received from rental properties and mortgage notes, our operating expenses, debt service on our borrowings, the ability of tenants and customers to meet their obligations to us and any unanticipated capital expenditures. Our Series B preferred shares have a fixed dividend rate of 7.75%, our Series C preferred shares have a fixed dividend rate of 5.75%, our Series D preferred shares have a fixed dividend rate of 7.375% and our Series E preferred shares have a fixed dividend rate of 9.00%.

During the year ended December 31, 2009, the Company did not sell any unregistered securities.

On February 25, 2010, there were approximately 617 holders of record of our outstanding common shares.

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Issuer Purchases of Equity Securities

Period	Total Number of Shares Purchased		Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs
October 1 through October 31, 2009 common stock	-			-	-		-
November 1 through October 31, 2009 common stock	-			-	-		-
December 1 through December 31, 2009 common stock	69,925	(1)		32.47	-		-
Total	69,925		$	32.47	-	$	-

⁽¹⁾ The repurchase of equity securities during December of 2009 was completed in conjunction with an employee stock option exercise. This repurchase was not made pursuant to a publicly announced plan or program. This amount also includes the forfeiture of former employees’ nonvested shares due to the employees’ termination of services with the Company.

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Stock Performance Chart

Total Return Analysis
	12/31/2004	12/31/2005	12/31/2006	12/31/2007	12/31/2008	12/31/2009
Entertainment Properties Trust	$100.00	$96.88	$147.20	$125.38	$85.85	$113.29
MSCI US REIT Index	$100.00	$110.37	$149.91	$124.95	$77.79	$99.56
Russell 2000 Index	$100.00	$104.56	$123.75	$121.83	$80.66	$102.59

   Source: Zacks Investment Research, Inc.

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Item 6. Selected Financial Data

Operating statement data

(Unaudited, dollars in thousands except per share data)

	Years Ended December 31,
	2009			2008		2007		2006		2005
Rental revenue	$	204,610		202,581		185,873		167,168		144,838
Tenant reimbursements		18,312		20,883		18,499		14,450		12,508
Other income		2,890		2,241		2,402		3,274		3,517
Mortgage and other financing income		44,999		60,435		28,841		10,968		4,882
Total revenue		270,811		286,140		235,615		195,860		165,745
Property operating expense		28,839		26,775		23,010		18,764		16,101
Other expense		2,611		2,103		4,205		3,486		2,985
General and administrative expense		15,177		15,286		12,717		12,087		7,249
Costs associated with loan refinancing		117		-		-		673		-
Interest expense, net		72,715		70,951		60,505		48,866		43,749
Transaction costs		3,321		1,628		253		428		-
Provision for loan losses		70,954		-		-		-		-
Impairment charges		42,158		-		-		-		-
Depreciation and amortization		47,720		43,829		37,422		31,021		27,473
Income (loss) before gain on sale of land, equity in income from joint ventures and discontinued operations		(12,801	)	125,568		97,503		80,535		68,188
Gain on sale of land		-		-		129		345		-
Equity in income from joint ventures		895		1,962		1,583		759		728
Income (loss) from continuing operations	$	(11,906	)	127,530		99,215		81,639		68,916
Discontinued operations:
Income (loss) from discontinued operations		-		(26	)	839		650		178
Gain on sale of real estate		-		119		3,240		-		-
Net income		(11,906	)	127,623		103,294		82,289		69,094
Add: Net loss (income) attributable to noncontrolling interests		19,913		2,353		1,370		-		(34	)
Net income attributable to Entertainment Properties Trust		8,007		129,976		104,664		82,289		69,060
Preferred dividend requirements		(30,206	)	(28,266	)	(21,312	)	(11,857	)	(11,353	)
Series A preferred share redemption costs		-		-		(2,101	)	-		-
Net income (loss) available to common shareholders	$	(22,199	)	101,710		81,251		70,432		57,707
Per share data attributable to Entertainment Properties Trust shareholders:
Basic earnings per share data:
Income (loss) from continuing operations available to common shareholders	$	(0.61	)	3.29		2.87		2.65		2.28
Income from discontinued operations		-		-		0.15		0.03		0.01
Net income (loss) available to common shareholders	$	(0.61	)	3.29		3.02		2.68		2.29
Diluted earnings per share data:
Income (loss) from continuing operations available to common shareholders	$	(0.61	)	3.26		2.83		2.61		2.25
Income from discontinued operations		-		-		0.15		0.03		0.01
Net income (loss) available to common shareholders	$	(0.61	)	3.26		2.98		2.64		2.26
Shares used for computation (in thousands):
Basic		36,122		30,910		26,929		26,317		25,159
Diluted		36,122		31,177		27,304		26,689		25,504
Cash dividends declared per common share	$	2.60		3.36		3.04		2.75		2.50

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Balance sheet data

(Unaudited, dollars in thousands)

	Years Ended December 31,
	2009			2008	2007	2006	2005
Net real estate investments	$	1,867,358		1,765,861	1,671,622	1,413,484	1,302,067
Mortgage notes and related accrued interest receivable, net		522,880		508,506	325,442	76,093	44,067
Total assets		2,680,732		2,633,925	2,171,633	1,571,279	1,414,165
Common dividends payable		27,880		27,377	21,344	18,204	15,770
Preferred dividends payable		7,552		7,552	5,611	3,110	2,916
Long-term debt		1,141,423		1,262,368	1,081,264	675,305	714,591
Total liabilities		1,212,775		1,341,274	1,145,533	714,123	742,509
Noncontrolling interests		(4,905	)	15,217	18,207	4,474	5,235
Equity		1,467,957		1,292,651	1,026,100	857,156	671,656

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with the Consolidated Financial Statements and Notes thereto included in this Annual Report on Form 10-K. The forward-looking statements included in this discussion and elsewhere in this Annual Report on Form 10-K involve risks and uncertainties, including anticipated financial performance, business prospects, industry trends, shareholder returns, performance of leases by tenants, performance on loans to customers and other matters, which reflect management’s best judgment based on factors currently known. See “Forward Looking Statements.” Actual results and experience could differ materially from the anticipated results and other expectations expressed in our forward-looking statements as a result of a number of factors, including but not limited to those discussed in this Item and in Item 1A, “Risk Factors.”

Overview

Our principal business objective is to be the nation’s leading destination entertainment, entertainment-related, recreation and specialty real estate company by continuing to develop, acquire or finance high-quality properties. As of December 31, 2009, our total assets exceeded $2.6 billion, and included investments in 95 megaplex theatre properties (including four joint venture properties) and various restaurant, retail, entertainment, destination recreational and specialty properties located in 33 states, the District of Columbia and Ontario, Canada. As of December 31, 2009, we had invested approximately $12.7 million in development land and construction in progress and approximately $522.9 million (including accrued interest and net of the loan loss reserve of $35.8 million) in mortgage financing for entertainment, recreational and specialty properties, including certain such properties under development.

As of December 31, 2009, our real estate portfolio of megaplex theatre properties consisted of 7.8 million square feet and was 100% occupied, and our remaining real estate portfolio consisted of 4.1 million square feet and was 92% occupied. The combined real estate portfolio consisted of 11.9 million square feet and was 97% occupied. Our theatre properties are leased to twelve different leading theatre operators. At December 31, 2009, approximately 43% of our megaplex theatre properties were leased to AMC.

Substantially all of our single-tenant properties are leased pursuant to long-term, triple-net leases, under which the tenants typically pay all operating expenses of a property, including, but not limited to, all real estate taxes, assessments and other governmental charges, insurance, utilities, repairs and maintenance. A majority of our revenues are derived from rents received or accrued under long-term, triple-net leases. Tenants at our multi-tenant properties are typically required to pay common area maintenance charges to reimburse us for their pro rata portion of these costs.

Our real estate mortgage portfolio consists of nine mortgage notes. Of the outstanding gross balance of $558.7 million at December 31, 2009, four notes comprise $423.1 million of the balance and the remainder of $135.6 million relates to financing provided for ski areas. Two of the four mortgage notes, totaling $163.3 million at December 31, 2009, are secured by a water-park anchored entertainment village in Kansas City, Kansas (the first phase of which opened in July 2009) as well as two other water-parks in Texas. The other two mortgage notes, together totaling $259.8 million at December 31, 2009, relate to the Toronto Dundas Square Project, an entertainment retail center in Ontario, Canada that was completed in May 2008, and a planned casino and resort development in Sullivan County, New York.

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We incur general and administrative expenses including compensation expense for our executive officers and other employees, professional fees and various expenses incurred in the process of identifying, evaluating, acquiring and financing additional properties and mortgage notes. We are self-administered and managed by our Board of Trustees and executive officers. Our primary non-cash expense is the depreciation of our properties. We depreciate buildings, improvements on our properties and furniture, fixtures and equipment over a 3 to 40 year period for tax purposes and financial reporting purposes.

Our property acquisitions and financing commitments are financed by cash from operations, borrowings under our revolving credit facilities, term loan facilities and long-term mortgage debt, and the sale of equity securities. It has been our strategy to structure leases and financings to ensure a positive spread between our cost of capital and the rentals paid by our tenants. We have primarily acquired or developed new properties that are pre-leased to a single tenant or multi-tenant properties that have a high occupancy rate. We do not typically develop or acquire properties that are not significantly pre-leased. We have also entered into certain joint ventures and we have provided mortgage note financing as described above. We intend to continue entering into some or all of these types of arrangements in the foreseeable future, subject to our ability to do so in light of the current financial and economic environment.

Historically, our primary challenges have been locating suitable properties, negotiating favorable lease or financing terms, and managing our portfolio as we have continued to grow. We believe the knowledge and industry relationships of our management have facilitated opportunities for us to acquire, finance and lease properties. However, due to the downturn in the economy and distress in the capital markets, for most of 2009 we were primarily focused on maintaining adequate liquidity and a strong balance sheet. During this time period we tempered our focus on making new investments and primarily funded remaining commitments related to existing investments. As a result, our capital spending for the year ended December 31, 2009 was much lower than it had been for the past several years. In addition, we completed our amended and restated line of credit in June 2009, six months ahead of its maturity, and we deleveraged our balance sheet primarily through periodic equity issuances under the direct share purchase component of our DSP Plan, each of which were previously disclosed in our Quarterly Reports on Form 10-Q.

As conditions became more favorable in the capital markets toward the latter part of 2009 and our cost of capital improved, we issued common shares in a larger registered public offering and began making new investments, including the acquisition and leasing of fifteen theaters in December 2009 and five public charter schools in January 2010, together totaling approximately $165 million. We expect to have additional investment opportunities in 2010, and we will continue to assess the state of the capital markets, our relative cost of capital and our liquidity position in making our investment decisions.

Throughout the remainder of 2010, we expect to maintain a debt to total capitalization ratio of between 40% and 50%. Depending on our capital needs, we will seek both debt and equity capital and will consider issuing additional shares under the direct share purchase component of our DSP Plan. While additional equity issuances mitigate the growth of per share results, we believe reduced leverage and an emphasis on liquidity continues to be prudent during these challenging times.

Developments in the credit and equity markets and the economic downturn in 2008 and 2009 have also had a significant impact on the ability of our development partners to fully finance

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developments in process or to refinance development projects upon completion. As a result, the development of the water-park anchored entertainment village in Kansas was downsized and will now open in phases (the first phase opened in July 2009). Because of the down-sizing and as a condition to provide additional funding, the collateral for our mortgage note related to this project was increased by adding mortgages on two other water parks in Texas that are owned and operated by affiliates of the entity that owns the Kansas property. Additionally, the planned casino and resort development in Sullivan County, New York has been downsized from an estimated $1 billion to an estimated $600 million and is currently delayed due to the developer’s issues in obtaining financing. As a result of these delays, the developer ceased making interest payments on our mortgage note receivable and no income was recognized on this note in 2009. Furthermore, there can be no assurance that the developer will ultimately obtain the financing necessary to complete this project. On December 31, 2009, we commenced litigation against Mr. Cappelli and his affiliates seeking payment of amounts due under various loans to them and a declaratory judgment that no further investments are required to be made by us under any prior commitment. With respect to our second mortgage investment in the Toronto Dundas Square Project, due to the inability of the developer to sell or restructure the project upon completion, this property is in receivership. We expect to become the owner of the property in early 2010. See “Recent Developments” for more information regarding these investments.

Certain of our customers, particularly our vineyard and winery tenants and certain non-theatre retail tenants, have also experienced the effects of the economic downturn, which has generally resulted in a reduction in sales and profitability. As a result, we have seen more credit issues with these tenants than in the past, and this trend may continue in 2010. With respect to our vineyard and winery investments, we have reclaimed possession of four properties from two tenants for failure to pay rent. With respect to our entertainment retail centers, we had one lease with Circuit City and one lease with Filene’s Basement (both at our entertainment retail center in White Plains, New York) as well as one lease with Bally’s and two leases with two corporately owned Bennigan’s at other locations. Each of these tenants has either liquidated or filed bankruptcy proceedings. Revenue from these tenants totaled approximately $790 thousand for the year ended December 31, 2009, and $1.3 million of outstanding receivables at December 31, 2009 related to these tenants has been fully reserved. Other smaller tenants at our entertainment retail centers have also experienced difficulty during the economic downturn. If consumer spending continues to decline, there could be additional pressure on retailers’ financial performance which could in turn affect their performance under our leases. Revenue from entertainment retail centers, excluding megaplex theaters, was approximately $45.0 million or 17.0 % of our total revenue for the year ended December 31, 2009; however, excluding megaplex movie theatres, no one retail tenant in aggregate represented more than $2.1 million or 0.8 % of total Company revenues for the year ended December 31, 2009.

As a result of these issues, as of December 31, 2009, $259.8 million of mortgage notes and $39.5 million of notes receivable were considered impaired and during the year ended December 31, 2009, provision for loan losses of $34.8 million related to mortgage notes receivable and $36.2 million related to the notes receivable were recognized. In addition, during the year ended December 31, 2009, we recorded an impairment charge of $35.8 million related to our entertainment retail center in White Plains, New York and an impairment charge of $6.4 million related to our investments in vineyards and wineries. See “Recent Developments” below for additional discussion.

Our business is subject to a number of risks and uncertainties, including those described in “Risk Factors” in Item 1A of this report.

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Critical Accounting Policies

The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions in certain circumstances that affect amounts reported in the accompanying consolidated financial statements and related notes. In preparing these financial statements, management has made its best estimates and assumptions that affect the reported assets and liabilities. The most significant assumptions and estimates relate to consolidation, revenue recognition, depreciable lives of the real estate, the valuation of real estate, accounting for real estate acquisitions, estimating reserves for uncollectible receivables and the accounting for mortgage and other notes receivable. Application of these assumptions requires the exercise of judgment as to future uncertainties and, as a result, actual results could differ from these estimates.

Consolidation

We consolidate certain entities if we are deemed to be the primary beneficiary in a variable interest entity (“VIE”), as defined in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic on Consolidation (“Topic 810”). The equity method of accounting is applied to entities in which we are not the primary beneficiary as defined in Topic 810, or do not have effective control, but can exercise influence over the entity with respect to its operations and major decisions.

Revenue Recognition

Rents that are fixed and determinable are recognized on a straight-line basis over the minimum terms of the leases. Base rent escalation in other leases is dependent upon increases in the Consumer Price Index (“CPI”) and accordingly, management does not include any future base rent escalation amounts on these leases in current revenue. Most of our leases provide for percentage rents based upon the level of sales achieved by the tenant. These percentage rents are recognized once the required sales level is achieved. Lease termination fees are recognized when the related leases are canceled and we have no continuing obligation to provide services to such former tenants.

Direct financing lease income is recognized on the effective interest method to produce a level yield on funds not yet recovered. Estimated unguaranteed residual values at the date of lease inception represent management’s initial estimates of fair value of the leased assets at the expiration of the lease, not to exceed original cost. Significant assumptions used in estimating residual values include estimated net cash flows over the remaining lease term and expected future real estate values. The estimated unguaranteed residual value is reviewed on an annual basis or more frequently if necessary. We evaluate the collectibility of our direct financing lease receivable to determine whether it is impaired. A direct financing lease receivable is considered to be impaired when, based on current information and events, it is probable that we will be unable to collect all amounts due according to the existing contractual terms. When a direct financing lease receivable is considered to be impaired, the amount of loss is calculated by comparing the recorded investment to the value determined by discounting the expected future cash flows at the direct financing lease receivable’s effective interest rate or to the value of the underlying collateral, less costs to sell, if such receivable is collateralized.

Real Estate Useful Lives

We are required to make subjective assessments as to the useful lives of our properties for the purpose of determining the amount of depreciation to reflect on an annual basis with respect to

44

those properties. These assessments have a direct impact on our net income. Depreciation and amortization are provided on the straight-line method over the useful lives of the assets, as follows:

Buildings	40 years
Tenant improvements	Base term of lease or useful life, whichever is shorter
Furniture, fixtures and equipment	3 to 25 years

Impairment of Real Estate Values

We are required to make subjective assessments as to whether there are impairments in the value of our rental properties. These estimates of impairment may have a direct impact on our consolidated financial statements.

We assess the carrying value of our rental properties whenever events or changes in circumstances indicate that the carrying amount of a property may not be recoverable. Certain factors that may occur and indicate that impairments may exist include, but are not limited to: underperformance relative to projected future operating results, tenant difficulties and significant adverse industry or market economic trends. If an indicator of possible impairment exists, a property is evaluated for impairment by comparing the carrying amount of the property to the estimated undiscounted future cash flows expected to be generated by the property. If the carrying amount of a property exceeds its estimated future cash flows on an undiscounted basis, an impairment charge is recognized in the amount by which the carrying amount of the property exceeds the fair value of the property. Management estimates fair value of our rental properties utilizing independent appraisals and based on projected discounted cash flows using a discount rate determined by management to be commensurate with the risk inherent in the Company. During the three months ended September 30, 2009, we recorded an impairment charge related to our entertainment retail center in White Plains, New York. Additionally, during the three months ended December 31, 2009, we recorded an impairment charge related to four of our vineyard and winery properties. For further detail, see Note 4 to the consolidated financial statements in this Annual Report on Form 10-K.

Real Estate Acquisitions

Upon acquisitions of real estate properties, we record the fair value of acquired tangible assets (consisting of land, building, tenant improvements, and furniture, fixtures and equipment) and identified intangible assets and liabilities (consisting of above and below market leases, in-place leases, tenant relationships and assumed financing that is determined to be above or below market terms) as well as any noncontrolling interest in accordance with FASB ASC Topic 805 on Business Combinations (“Topic 805”). In addition, in accordance with Topic 805, acquisition-related costs in connection with business combinations are expensed as incurred, rather than capitalized.

Allowance for Doubtful Accounts

Management makes quarterly estimates of the collectibility of its accounts receivable related to base rents, tenant escalations (straight-line rents), reimbursements and other revenue or income. Management specifically analyzes trends in accounts receivable, historical bad debts, customer credit worthiness, current economic trends and changes in customer payment terms when evaluating the adequacy of its allowance for doubtful accounts. In addition, when customers are in bankruptcy, management makes estimates of the expected recovery of pre-petition administrative and damage claims. These estimates have a direct impact on our net income.

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Mortgage Notes and Other Notes Receivable

Mortgage notes and other notes receivable, including related accrued interest receivable, consist of loans that we originated and the related accrued and unpaid interest income as of the balance sheet date. Mortgage notes and other notes receivable are initially recorded at the amount advanced to the borrower and we defer certain loan origination and commitment fees, net of certain origination costs, and amortize them over the term of the related loan. Interest income on performing loans is accrued as earned. We evaluate the collectibility of both interest and principal for each loan to determine whether it is impaired. A loan is considered to be impaired when, based on current information and events, we determine it is probable that we will be unable to collect all amounts due according to the existing contractual terms. When a loan is considered to be impaired, the amount of loss is calculated by comparing the recorded investment to the value determined by discounting the expected future cash flows at the loan’s effective interest rate or to the fair value of the underlying collateral, less costs to sell, if the loan is collateral dependent. For impaired loans, interest income is recognized on a cash basis, unless we determine based on the loan to estimated fair value ratio the loan should be on the cost recovery method, and any cash payments received would then be reflected as a reduction of principal. Interest income recognition is recommenced if and when the impaired loan becomes contractually current and performance is demonstrated to be resumed. We determined certain of our mortgage and other notes receivable were impaired at December 31, 2009 and, based on a review of the underlying collateral, we recorded a provision for loan losses of $71.0 million for the year ended December 31, 2009. For further detail, see Notes 5 and 9 to the consolidated financial statements in this Annual Report on Form 10-K.

Recent Developments

Amendment and Restatement of Revolving Credit Facility

On June 30, 2009, we amended and restated our revolving credit facility (“the facility”). The size of the facility decreased from $235 million to $215 million and includes an accordion feature in which the facility can be increased to up to $300 million subject to certain conditions, including lender consent. The facility continues to be supported by a borrowing base of assets, and is now secured by a pledge of the equity of each entity that holds a borrowing base asset. The facility bears interest at a floating rate equal to LIBOR (subject to a 2% floor) plus 3.5%. Alternatively, we can elect to have interest accrue at the base rate plus 3.5%. The base rate is defined as the greater of the prime rate, the federal funds rate plus 0.5%, or the then current 30-day LIBOR (subject to a 2% floor). The facility has a term expiring October 26, 2011 with a one year extension available at our option, subject to certain terms and conditions including the payment of an extension fee. As a result of this amendment and restatement, we expensed certain unamortized financing costs, totaling approximately $117 thousand, in the second quarter of 2009.

The facility also requires us to grant mortgage liens on the underlying borrowing base properties if the ratio of our consolidated debt to the value of our consolidated assets exceeds specified thresholds. As of December 31, 2009, this ratio was below the specified thresholds and we have not granted any mortgage liens on the underlying borrowing base properties. The financial covenant relating to minimum liquidity now requires us to maintain “excess availability” under the facility for the 90-day period preceding the maturity date of a loan related to a planned casino and resort development in Sullivan County, New York, in an amount equal to at least the unpaid balance of such loan. This loan had an unpaid balance of $56.3 million as of December 31, 2009.

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Debt Financing

On February 25, 2009, VinREIT, LLC (“VinREIT”), a subsidiary that holds our vineyard and winery assets, obtained a $4.0 million term loan under VinREIT’s $160.0 million credit facility. The loan matures on December 1, 2017 and is secured by fixtures and equipment. The loan bears interest at LIBOR plus 2.00%. Subsequent to the closing of this loan, approximately $63.3 million of the facility remains available for funding prior to September 26, 2010. The net proceeds from the loan were used to pay down outstanding indebtedness under our revolving credit facility.

Issuances of Common Shares

During January 2009, we issued pursuant to a registered public offering 1,551,000 common shares under the direct share purchase component of the DSP Plan. These shares were sold at an average price of $23.86 per share and total net proceeds after expenses were approximately $36.8 million.

During February 2009, we issued pursuant to a registered public offering 339,000 common shares under the direct share purchase component of the DSP Plan. These shares were sold at an average price of $22.12 per share and total net proceeds after expenses were approximately $7.5 million.

During August 2009, we issued pursuant to a registered public offering 652,000 common shares under the direct share purchase component of the DSP Plan. These shares were sold at an average price of $30.65 per share and total net proceeds after expenses were approximately $19.9 million.

During September 2009, we issued pursuant to a registered public offering 911,000 common shares under the direct share purchase component of the DSP Plan. These shares were sold at an average price of $32.92 per share and total net proceeds after expenses were approximately $29.9 million.

On November 16, 2009, we issued pursuant to a registered public offering 6,325,000 common shares (including the exercise of the over-allotment option of 825,000 shares) at a purchase price of $31.50. Total net proceeds to us after underwriting discounts and expenses were approximately $190.6 million.

Impairment Charges

Our entertainment retail center in White Plains, New York, held in a consolidated joint venture, was acquired with mortgage financing that had a loan to fair value ratio of approximately 70% at the time of the acquisition of our interests in May 2007. The loan is personally guaranteed by the principals of our minority partner, one of which is Mr. Cappelli who either personally, or through his related interests, in default on several other obligations to us (see Notes 5 and 9 to the consolidated financial statements in this Annual Report on Form 10-K). The debt on this center is due in October 2010, and absent any improvement in the performance of the asset, the lender will likely require additional credit support and fees to extend the loan. Any such extension would also require the cooperation of the partners in the joint venture. Without a resolution of our disputes with the principals of our minority partner, there can be no assurance that the minority partner will cooperate with us on this matter. Given that the debt is currently non-recourse to us, we may

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elect not to further support the joint venture, which may include a decision to surrender the property at the loan’s maturity to the senior lender. Accordingly, we performed an impairment assessment of this asset as of September 30, 2009. It was determined that the carrying value of the asset exceeded the estimated fair value by $35.8 million, and an impairment charge was recorded at September 30, 2009 for this amount, which was comprised of $32.4 million related to real estate investment and $3.4 million related to in-place leases. Our management determined the fair value of the asset taking into account various factors, including an independent appraisal prepared as of September 30, 2009, which indicated a fair value of $118.0 million. In accordance with the FASB ASC Topic 810 and our policy for allocation of income and loss for this joint venture, a loss of $15.1 million related to the impairment charge was allocated to the noncontrolling interest related to this venture. The noncontrolling interest related to White Plains was a deficit balance of $9.0 million at December 31, 2009 which is recorded as a component of equity.

Additionally, during the three months ended December 31, 2009, we determined that four of our vineyard and winery properties were impaired as payments were not being received per the contractual terms. It was determined that the carrying value of the assets exceeded the estimated fair value by $6.4 million, and an impairment charge was recorded as of December 31, 2009 for this amount. Management determined the fair value of the assets taking into account various factors, including an independent appraisal prepared as of December 31, 2009 which indicated a total fair value of $35.0 million.

Investments

On December 3, 2009, we completed a purchase of vineyard and winery equipment from our tenant, Ascentia Wine Estates, for a total investment of $8.5 million and this equipment was leased back to the tenant.

On December 18, 2009, we acquired 15 theatre properties for a total investment of $121.5 million. The properties are located in Connecticut, Massachusetts, New Jersey, Virginia, Kentucky, Ohio, Michigan, and Iowa, have a total 231 screens and 52,731 seats and are operated by an affiliate of Rave Cinemas, LLC. The theatres are leased under a long-term triple-net master lease.

During the year ended December 31, 2009, we completed the development of a winemaking and storage facility in Sonoma, California for a total development cost of approximately $12.5 million. The facility consists of approximately 58 thousand square feet and 20 acres of land, is operated by Carneros Vintners, Inc. and is leased under a long-term triple-net lease.

During the year ended December 31, 2009, we completed the initial phase of development of an entertainment retail center adjacent to one of our megaplex theatres in Suffolk, Virginia for a total development cost of $13.4 million. The Harbour View Marketplace is approximately 80 thousand square feet and the anchor tenant occupies approximately 48 thousand square feet under a long-term ground lease.

Concord Resorts

On August 20, 2008, we entered into an agreement to provide a secured first mortgage loan of $225.0 million to Concord Resorts, LLC (“Concord Resorts”), an entity controlled by Mr. Cappelli, related to a planned casino and resort development in Sullivan County, New York. Our investment is secured by a first mortgage on the resort complex real estate totaling 1,584 acres. In addition, we have a second mortgage on the remaining 139 acres of the casino related real estate and the loan is

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personally guaranteed by Mr. Cappelli. We have certain rights to convert our mortgage interest into fee ownership as the project is further developed. The net carrying value of this mortgage note receivable at December 31, 2009 was $133.1 million which was funded under our original $225.0 million secured first mortgage commitment.

Due to the economic downturn, certain other lenders on the development have either reduced their commitments or withdrawn from the project. The planned initial phase of the casino and resort development has been downsized from an estimated $1 billion to an estimated $600 million and Mr. Cappelli is attempting to secure the necessary financing. The New York legislature has passed legislation authorizing the benefits of a special reduced tax rate on gaming receipts in Sullivan County, New York if at least $600 million is invested and 1,000 new jobs are created. As a result of these issues, the development project has been delayed, and there can be no assurance that Mr. Cappelli will obtain the financing necessary to complete the project. Due to these challenges, Concord Resorts has ceased making interest payments to us as contractually obligated under the loan agreement. We have evaluated our mortgage note receivable for impairment and have determined it was impaired during the quarter ended March 31, 2009 due to the inability of the borrower to meet its contractual obligations per the agreement. Our accounting policy is to recognize interest income on impaired loans on a cash basis. Accrual interest income recognition for book purposes was ceased on January 1, 2009 and therefore no interest income has been recorded during the year ended December 31, 2009. Interest income recognized on this mortgage note receivable for the year ended December 31, 2008 was $6.2 million. Our management determined that no loan loss reserve was necessary for this note considering current factors, including current economic and market conditions, and taking into account an independent appraisal as of April 30, 2009 of the primary collateral, 1,584 acres of land, which indicated a value significantly in excess of the loan balance. On December 31, 2009, we commenced litigation against Mr. Cappelli and his affiliates seeking amounts due under various loans to them and a declaratory judgment that no further investments are required to be made by us under any prior commitment.

Toronto Dundas Square Project

During the year ended December 31, 2009, we invested an additional $7.6 million Canadian (“CAD”) ($7.2 million U.S.) bringing the total investment to CAD $133.1 million ($126.7 million U.S.) in the mortgage note receivable from Metropolis Limited Partnership (the “Partnership”) related to the construction of the Toronto Dundas Square Project, a 13 level entertainment retail center in downtown Toronto that was completed in May 2008 for a total cost of approximately CAD $330 million. Additionally, as of December 31, 2009, we had posted irrevocable stand-by letters of credit related to this project totaling $1.5 million U.S. which are expected to be cancelled or drawn upon during 2010. The loan is denominated in Canadian dollars and is secured by a second mortgage on the Toronto Dundas Square Project.

A group of banks (“the bank syndicate”) has provided first mortgage construction financing to the Partnership totaling approximately CAD $119.0 million ($113.2 million U.S.) as of December 31, 2009. In April 2009, we along with the bank syndicate elected to pursue a receivership after it became apparent that a restructuring of the existing equity interests was no longer possible. On April 27, 2009, the court appointed a receiver who is overseeing the sale of the property. On January 8, 2010, we signed a purchase agreement to become the owner of the property and we expect the transaction to close in early 2010. While there can be no assurance that we will be able to successfully refinance the existing first mortgage, we have finalized the term of a credit facility with a group of banks to provide CAD $100 million first mortgage financing that is expected to close in conjunction with the purchase. We expect to consolidate the financial results of the property subsequent to the purchase.

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We have evaluated this mortgage note receivable for impairment. Because repayment of the mortgage note receivable did not meet the contractual terms of the agreement, we determined the loan was impaired during the quarter ended March 31, 2009 and ceased accruing interest income as of January 1, 2009 on the loan for book purposes. Accordingly, no interest income was recognized for the year ended December 31, 2009 and no interest income will be recognized in future periods. Interest income recognized on this loan for the years ended December 31, 2008 and 2007 was CAD $17.9 million ($16.9 million U.S.) and CAD $13.5 million ($12.8 million U.S.). Furthermore, our management reviewed the fair value of the property at September 30, 2009, taking into account a bid from a third party for the second mortgage receivable which implied an overall property value of approximately CAD $217 million ($206.5 million U.S.) and an independent appraisal completed in September 2009, and determined a provision for loan loss of CAD $37.6 million ($34.8 million U.S.) was necessary. Therefore, the net carrying value of this mortgage note receivable at December 31, 2009 was CAD $95.5 million ($90.9 million U.S.).

Transaction costs

During the year ended December 31, 2009, we incurred transaction costs of $3.3 million due to the write off of costs associated with terminated transactions as well as costs that were expensed as incurred in accordance with FASB ASC Topic 810 related to the acquisition of the Toronto Dundas Square project.

Cappelli Related Notes

We also have two $10 million notes receivable that were due on February 28, 2009 and March 1, 2009, respectively. The notes bear interest at 10%. Neither note was repaid at maturity. One of the notes is due from our minority joint venture partner in New Roc, an entertainment retail center in New Rochelle, New York, and this note is secured by such partner’s interest. The minority joint venture partner is an entity controlled by Mr. Cappelli and Mr. Cappelli has also personally guaranteed the loan. The other note is due from Mr. Cappelli personally and in conjunction with this note, we received an option to purchase 50% of Mr. Cappelli’s interest (or Mr. Cappelli’s related interests) in three other projects.

We have evaluated these two notes receivable for impairment, and have determined that they were impaired during the quarter ended March 31, 2009 due to the inability of the borrower to meet its contractual obligations per the original agreements. Accordingly, accrual interest income recognition was ceased on January 1, 2009. Interest income of $834 thousand has been recorded during the year ended December 31, 2009 which represents payments received by us. The latest interest payments related to these two notes receivable were received by us in June of 2009. Interest income recognized on these loans for the years ended December 31, 2008 and 2007 was $1.8 million and $1.0 million, respectively. Our management evaluated the fair value of the underlying collateral of the notes and has concluded that a loan loss reserve of $18.0 million was necessary at December 31, 2009. For further detail, see Note 9 to the consolidated financial statements in this Annual Report on Form 10-K.

Additionally, we have a $10 million note receivable that is due May 8, 2017 and bears interest at 10%. The note is due from our minority joint venture partner in City Center at White Plains, an entertainment retail center in White Plains, New York, and the note is secured by such partner’s interest. The minority joint venture partner is an entity controlled by Mr. Cappelli and another individual, and each personally guarantees the loan.

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No interest payments have been received by us on this note receivable since the June interest payment received in June of 2009. We evaluated this note receivable for impairment and determined that it was impaired during the quarter ended September 30, 2009 due to the inability of the borrower to meet its contractual obligations per the original agreement. Accordingly, accrual interest income recognition was ceased on July 1, 2009. Interest income of $500 thousand has been recorded during the year ended December 31, 2009 which represents payments received by us prior to July 1, 2009. Interest income recognized on this loan for the years ended December 31, 2008 and 2007 was $997 thousand and $261 thousand, respectively. Our management evaluated the fair value of the underlying collateral of the note and has concluded that a loan loss reserve of $10.0 million was necessary at December 31, 2009. For further detail, see Note 9 to the consolidated financial statements in this Annual Report on Form 10-K.

Other Mortgage Notes and Notes Receivable

On January 26, 2009, we entered into a credit agreement with Rb Wine Associates, LLC (“Rb Wine”) to provide a $2.0 million revolving credit facility that matures on January 1, 2010. This note is secured by certain pledge agreements and other collateral including personal guarantees from the principals of Rb Wine. During the year ended December 31, 2009, we advanced $1.4 million under this credit facility. Interest accrued on the outstanding principal balance at an annual rate of 15% and was payable monthly at an annual rate of 9.25% with the remaining accrued but unpaid interest and principal due at maturity, which was January 1, 2010. On November 30, 2009, the credit agreement was amended and interest now accrues on the outstanding principal balance at an annual rate of 6% with principal and all accrued interest due on January 1, 2011. Because the interest and principal payments are not being received per the contractual terms of the original agreement, this note was considered impaired during the quarter ended December 31, 2009 and is included in the $9.5 million of impaired notes receivable discussed further below.

On February 20, 2009, we entered into a $3.0 million promissory note with Sapphire Wines LLC. The note bears interest at 15% and matured on November 1, 2009. This note is secured by certain pledge agreements and other collateral. Because interest and principal payments have not been received per the contractual terms of the agreement, this note was considered impaired during the quarter ended March 31, 2009 and is included in the $9.5 million of impaired notes receivable discussed further below.

On May 8, 2009, we received payment in full on our mortgage note receivable and related accrued interest of $3.7 million from Prairie Creek Properties, LLC. We advanced $3.5 million during the year ended December 31, 2007 under this agreement for the development of an approximately 9,000 seat amphitheatre in Hoffman Estates, Illinois.

On June 26, 2009, we received payment in full on our note receivable and related accrued interest of $1.0 million from an affiliate of one of our theatre operators. We advanced $1.0 million during the year ended December 31, 2007 under this agreement for the development of a megaplex theatre.

During the year ended December 31, 2009, we advanced $29.0 million under our secured mortgage loan agreements with SVV I, LLC and an affiliate of SVV I, LLC (together “SVVI”) for the development of a water-park anchored entertainment village in Kansas City, Kansas, the first phase of which opened in July 2009. On May 6, 2009, we reduced our commitment on this project from $175.0 million to $163.5 million and added to our collateral position by placing a mortgage on two other water-parks, located in New Braunfels and South Padre Island, Texas owned and operated by the entities controlled by the principals of SVVI. The mortgage note on the property in Kansas City, Kansas and the mortgage note on the Texas properties have cross-default and cross-collateral provisions. Pursuant to the mortgage on the Texas properties,

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only a seasonal line of credit secured by the Texas parks totaling not more than $5.0 million at any time ranks superior to our collateral position. Furthermore, the interest rates increased from LIBOR plus 3.5% to 7% on July 4, 2009, and the loans were extended from September 30, 2012 to May 1, 2019. Interest income will continue to be recognized on the accrual basis. SVVI is required to fund a debt service reserve for off-season fixed payments (those due from September to May). The reserve is to be funded by equal monthly installments during the months of June, July and August. As a result of the delayed opening of the Kansas water-park in July of 2009 as well as additional start up investment required by SVVI, this reserve has not been fully funded as of December 31, 2009. SVVI is currently pursuing alternative financing sources to fully fund the reserve account. We will also receive a percentage of revenue from all three parks after certain threshold levels are achieved that may increase the return on our invested capital from 7% to as high as 10%. Through December 31, 2009, we have funded approximately $163.3 million on the mortgage notes.

Additionally, we have three notes receivable totaling $9.5 million at December 31, 2009 that are impaired due to the inability of the borrowers to meet their contractual obligations per the original agreements. Accordingly, accrual interest income recognition was ceased for two of these notes on January 1, 2009 and on December 1, 2009 for the other note. Interest income of $510 thousand has been recorded during the year ended December 31, 2009. Interest income recognized on these loans for the years ended December 31, 2008 and 2007 was $450 thousand and $187 thousand, respectively. Our management evaluated the fair value of the underlying collateral of the notes and has concluded that a loan loss reserve of $8.2 million was necessary at December 31, 2009. For further detail, see Note 9 to the consolidated financial statements in this Annual Report on Form 10-K.

Tenant Defaults

Both Bally’s and Circuit City have filed bankruptcy proceedings. Bally’s has rejected our lease and has vacated its space at our entertainment retail center in New Rochelle, New York. Circuit City terminated its lease and vacated its space at our entertainment retail center in White Plains, New York. Revenue from these tenants totaled approximately $790 thousand, $2.5 million and $2.3 million for the years ended December 31, 2009, 2008 and 2007, respectively. There were outstanding receivables of $248 thousand related to these tenants at December 31, 2009 that have been fully reserved.

Additionally, at our entertainment retail center in White Plains, New York, we had one lease with Filene’s Basement who vacated the center despite a substantial remaining lease term. This tenant was disputing certain non-compete provisions in its lease and we were working on a settlement; however, on May 4, 2009, Filene’s Basement filed bankruptcy proceedings and rejected our lease. Revenue from this tenant totaled approximately $2.6 million and $2.5 million for the years ended December 31, 2008 and 2007 and no revenue was recognized for this tenant for the year ended December 31, 2009. There were outstanding receivables of $1.1 million related to this tenant at December 31, 2009 that have been fully reserved.

During the year ended December 31, 2009, two of our vineyard and winery tenants defaulted under the provisions of their leases for failure to pay rent at four properties. Revenue from these tenants totaled approximately $388 thousand for the year ended December 31, 2009. Total annual rent related to these properties prior to default was $2.5 million. Outstanding receivables of $383 thousand (including $266 thousand of straight-line rent) from one of the tenants was written off during the year ended December 31, 2009 and outstanding receivables of $626 thousand related to the other tenant at December 31, 2009 have been fully reserved. We reclaimed possession of the four properties and they are being operated through a wholly-owned taxable REIT subsidiary.

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Results of Operations

Year ended December 31, 2009 compared to year ended December 31, 2008

Rental revenue was $204.6 million for the year ended December 31, 2009 compared to $202.6 million for the year ended December 31, 2008. The $2.0 million increase resulted primarily from the acquisitions and developments completed in 2008 and 2009 and base rent increases on existing properties, partially offset by a reduction in rent from defaulting tenants and the impact of a weaker Canadian dollar exchange rate. Percentage rents of $1.5 million and $1.7 million were recognized during the year ended December 31, 2009 and 2008, respectively. Straight-line rents of $2.5 million and $3.9 million were recognized during the year ended December 31, 2009 and 2008, respectively.

Tenant reimbursements totaled $18.3 million for the year ended December 31, 2009 compared to $20.9 million for the year ended December 31, 2008. These tenant reimbursements arise from the operations of our retail centers. The $2.6 million decrease is primarily due to vacancies related to certain non-theatre retail tenants and the impact of a weaker Canadian dollar exchange rate for the year ended December 31, 2009 compared to the year ended December 31, 2008.

Other income was $2.9 million for the year ended December 31, 2009 compared to $2.2 million for the year ended December 31, 2008. The increase of $0.7 million is primarily due to a gain of $0.9 million recognized upon settlement of foreign currency forward contracts, partially offset by a $0.3 million decrease in income from a family bowling center in Westminster, Colorado operated through a wholly-owned taxable REIT subsidiary.

Mortgage and other financing income for the year ended December 31, 2009 was $45.0 million compared to $60.4 million for the year ended December 31, 2008. The $15.4 million decrease relates to less interest income recognized during the year ended December 31, 2009 due to impairment of certain of our mortgage and other notes receivable as further discussed in Note 5 to the consolidated financial statements in this Annual Report on Form 10-K.

Our property operating expense totaled $28.8 million for the year ended December 31, 2009 compared to $26.8 million for the year ended December 31, 2008. These property operating expenses arise from the operations of our retail centers. The increase of $2.0 million resulted primarily from an increase in the provision for bad debts, included in property operating expense, of $2.6 million to a total of $4.6 million for the year ended December 31, 2009. Partially offsetting this increase is the impact of a weaker Canadian dollar exchange rate.

Other expense totaled $2.6 million for the year ended December 31, 2009 compared to $2.1 million for the year ended December 31, 2008. The $0.5 million decrease is primarily due to no expense recognized upon settlement of foreign currency forward contracts during the year ended December 31, 2009. This is partially offset by an increase in property operating expenses at certain vineyard and winery properties that are being operated through a wholly-owned taxable REIT subsidiary.

Our general and administrative expense totaled $15.2 million for the year ended December 31, 2009 compared to $15.3 million for the year ended December 31, 2008. The decrease of $0.1 million is due to a decrease in payroll related expenses, partially offset primarily by increases in professional fees and travel expenses.

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Costs associated with loan refinancing for the year ended December 31, 2009 were $0.1 million. These costs related to the amendment and restatement of our revolving credit facility and consisted of the write-off of $0.1 million of certain unamortized financing costs. No such costs were incurred during the year ended December 31, 2008.

Our net interest expense increased by $1.7 million to $72.7 million for the year ended December 31, 2009 from $71.0 million for the year ended December 31, 2008. This increase resulted from the increase in the average long-term debt outstanding used to finance our real estate acquisitions and fund our new mortgage notes receivable as well as increased costs associated with our amended and restated revolving credit facility as further discussed in Note 10 to the consolidated financial statements in this Annual Report on Form 10-K.

Transaction costs totaled $3.3 million for the year ended December 31, 2009 compared to $1.6 million for the year ended December 31, 2008. The increase of $1.7 million is due to the write off of costs associated with terminated transactions as well as costs that were expensed as incurred in accordance with FASB ASC Topic 810 related to the acquisition of the Toronto Dundas Square project.

Provision for loan losses for the year ended December 31, 2009 was $71.0 million and related to a mortgage note receivable and other notes receivable as further discussed in Notes 5 and 9 to the consolidated financial statements in this Annual Report on Form 10-K. There was no provision for loan losses for the year ended December 31, 2008.

Impairment charges for the year ended December 31, 2009 were $42.2 million and related to our entertainment retail center in White Plains, New York and certain of our winery and vineyard properties. For further detail, see Note 4 to the consolidated financial statements in this Annual Report on Form 10-K. There were no impairment charges recorded for the year ended December 31, 2008.

Depreciation and amortization expense totaled $47.7 million for the year ended December 31, 2009 compared to $43.8 million for the year ended December 31, 2008. The $3.9 million increase resulted primarily from asset acquisitions completed in 2008 and 2009.

Equity in income from joint ventures totaled $0.9 million for the year ended December 31, 2009 compared to $2.0 million for the year ended December 31, 2008. The $1.1 million decrease resulted from the investment in the remaining 50% ownership of CS Fund I on April 2, 2008, which is classified as a direct financing lease.

Loss from discontinued operations totaled $0.03 million for the year ended December 31, 2008 and was due to the sale of a land parcel in Powder Springs, Georgia in June of 2008. There was no income or loss from discontinued operations for the year ended December 31, 2009.

The gain on sale of real estate from discontinued operations of $0.1 million for the year ended December 31, 2008 was due to the sale of a land parcel in Powder Springs, Georgia in June of 2008. There was no gain on sale of real estate from discontinued operations for the year ended December 31, 2009.

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Net loss attributable to noncontrolling interests totaled $19.9 million for the year ended December 31, 2009 compared to $2.4 million for the year ended December 31, 2008 and primarily relates to the consolidation of a VIE in which our variable interest is debt. The increase is due to a greater net loss incurred by the VIE due to the impairment charge at our entertainment retail center in White Plains, New York. For further discussion, see Note 4 to the consolidated financial statements in this Annual Report on Form 10-K.

Preferred dividend requirements for the year ended December 31, 2009 were $30.2 million compared to $28.3 million for the same period in 2008. The $1.9 million increase is due to the issuance of 3.5 million Series E convertible preferred shares in April of 2008.

Year ended December 31, 2008 compared to year ended December 31, 2007

Rental revenue was $202.6 million for the year ended December 31, 2008 compared to $185.9 million for the year ended December 31, 2007. The $16.7 million increase resulted primarily from the acquisitions and developments completed in 2007 and 2008 and base rent increases on existing properties. Percentage rents of $1.7 million and $2.1 million were recognized during the year ended December 31, 2008 and 2007, respectively. The $0.4 million decrease in percentage rents resulted primarily from minimum rent escalations for certain properties which in turn increased the break point in revenue after which percentage rent is due. Straight-line rents of $3.9 million and $4.5 million were recognized during the year ended December 31, 2008 and 2007, respectively.

Tenant reimbursements totaled $20.9 million for the year ended December 31, 2008 compared to $18.5 million for the year ended December 31, 2007. These tenant reimbursements arise from the operations of our retail centers. Of the $2.4 million increase, $1.6 million is due to our May 8, 2007 acquisition of a 66.67% interest in the joint ventures that own an entertainment retail center in White Plains, New York. The remaining increase is due to increases in tenant reimbursements, primarily driven by the expansion and leasing of the gross leasable area at our retail centers in Ontario, Canada.

Other income was $2.2 million for the year ended December 31, 2008 compared to $2.4 million for the year ended December 31, 2007. The decrease of $0.2 million is primarily due to a decrease in income from a family bowling center in Westminster, Colorado operated through a wholly-owned taxable REIT subsidiary.

Mortgage and other financing income for the year ended December 31, 2008 was $60.4 million compared to $28.8 million for the year ended December 31, 2007. The $31.6 million increase relates to the increased real estate lending activities during 2008 compared to 2007 and our investment in a direct financing lease as discussed in Note 6 to the consolidated financial statements in this Annual Report on Form 10-K.

Our property operating expense totaled $26.8 million for the year ended December 31, 2008 compared to $23.0 million for the year ended December 31, 2007. These property operating expenses arise from the operations of our retail centers. The increase of $3.8 million is primarily due to an increase of $2.7 million in property operating expense related to our May 8, 2007 acquisition of a 66.67% interest in the joint ventures that own an entertainment retail center in White Plains, New York as well as increases in property operating expenses at other our retail centers, primarily those in Ontario, Canada. The provision for bad debts, included in property operating expense, increased by $0.8 million to $2.0 million for the year ended December 31, 2008.

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Other expense totaled $2.1 million for the year ended December 31, 2008 compared to $4.2 million for the year ended December 31, 2007. Of the $2.1 million decrease, $1.7 million is due to less expense recognized upon settlement of foreign currency forward contracts during the year ended December 31, 2008 compared to the year ended December 31, 2007. The remaining decrease of $0.4 is due to a decrease in expense from a family bowling center in Westminster, Colorado operated through a wholly-owned taxable REIT subsidiary.

Our general and administrative expense totaled $15.3 million for the year ended December 31, 2008 compared to $12.7 million for the year ended December 31, 2007. The increase of $2.6 million is due primarily to increases in payroll and related expenses attributable to increases in base and incentive compensation, additional employees and amortization resulting from grants of nonvested shares to management and an increase in professional fees.

Our net interest expense increased by $10.5 million to $71.0 million for the year ended December 31, 2008 from $60.5 million for the year ended December 31, 2007. Approximately $2.3 million of the increase resulted from the acquisition of a 66.67% interest in the joint ventures that own an entertainment retail center in White Plains, New York that had outstanding mortgage debt of $119.7 million as of the May 8, 2007 acquisition date. The remainder of the increase resulted from increases in long-term debt used to finance our real estate acquisitions and fund our mortgage notes receivable.

Transaction costs totaled $1.6 million for the year ended December 31, 2008 compared to $0.3 million for the year ended December 31, 2007. The increase of $1.3 million is due to the write off of costs associated with terminated transactions.

Depreciation and amortization expense totaled $43.8 million for the year ended December 31, 2008 compared to $37.4 million for the year ended December 31, 2007. The $6.4 million increase resulted primarily from real estate acquisitions completed in 2007 and 2008.

Equity in income from joint ventures totaled $2.0 million for the year ended December 31, 2008 compared to $1.6 million for the year ended December 31, 2007. The $0.4 million increase resulted from the Company’s investment in a 50% ownership interest of CS Fund I on October 30, 2007. We acquired the remaining 50% ownership of CS Fund I on April 2, 2008 as discussed in Note 6 to the consolidated financial statements in this Annual Report on Form 10-K.

Loss from discontinued operations totaled $0.03 million for the year ended December 31, 2008 compared to income from discontinued operations of $0.84 million for the year ended December 31, 2007. The $0.87 million decrease is due primarily to the recognition of $0.7 million in development fees in 2007 related to a parcel adjacent to our megaplex theatre in Pompano, Florida. The development rights, along with two income-producing tenancies, were sold to a developer group in June of 2007.

The gain on sale of real estate from discontinued operations of $0.1 million for the year ended December 31, 2008 was due to the sale of a land parcel in Powder Springs, Georgia in June of 2008. The gain on sale of real estate from discontinued operations of $3.2 million for the year ended December 31, 2007 was due to the sale of a parcel that included two leased properties adjacent to our megaplex theatre in Pompano, Florida.

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Net loss attributable to noncontrolling interests totaled $2.4 million for the year ended December 31, 2008 compared to $1.4 million for the year ended December 31, 2007 and primarily relates to the consolidation of a VIE in which our variable interest is debt. The increase is due to a greater net loss incurred by the VIE at our entertainment retail center in White Plains, New York. Additionally, there was $0.3 million and $0.1 million in minority interest expense for year ended December 31, 2008 and 2007, respectively, due to our VinREIT operations.

Preferred dividend requirements for the year ended December 31, 2008 were $28.3 million compared to $21.3 million for the same period in 2007. The $7.0 million increase is due to the issuance of 3.5 million Series E convertible preferred shares in April of 2008 and the issuance of 4.6 million Series D preferred shares in May of 2007. This was partially offset by the redemption of 2.3 million Series A preferred shares in May of 2007. The Series A preferred share redemption costs of $2.1 million for the year ended December 31, 2007 was due to the redemption of the Series A preferred shares on May 29, 2007 and primarily consists of a noncash charge for the excess of the redemption value over the carrying value of these shares. There was no such expense incurred during the year ended December 31, 2008.

Liquidity and Capital Resources

Cash and cash equivalents were $23.1 million at December 31, 2009. In addition, we had restricted cash of $12.9 million at December 31, 2009. Of the restricted cash at December 31, 2009, $4.9 million relates to cash held for our borrowers’ debt service reserves for mortgage notes receivable and the balance represents deposits required in connection with debt service, payment of real estate taxes and capital improvements.

Mortgage Debt, Credit Facilities and Term Loan

As of December 31, 2009, we had total debt outstanding of $1.1 billion. As of December 31, 2009, $1.0 billion of debt outstanding was fixed rate mortgage debt secured by a substantial portion of our rental properties and mortgage notes receivable, with a weighted average interest rate of approximately 5.9%. This $1.0 billion of fixed rate mortgage debt includes $203.9 million of LIBOR based debt that has been converted to fixed rate debt with interest rate swaps as further described below.

As described in Note 10 to the consolidated financial statements included in this Annual Report on Form 10-K, our revolving credit facility was amended on June 30, 2009. At December 31, 2009, we had $35.0 million in debt outstanding under our $215.0 million revolving credit facility, with interest at a floating rate. The facility has a term expiring October 26, 2011 with a one year extension available at our option, subject to certain terms and conditions including the payment of an extension fee. The amount that we are able to borrow on our revolving credit facility is a function of the values and advance rates, as defined by the credit agreement, assigned to the assets included in the borrowing base less outstanding letters of credit and less other liabilities, excluding our $117.6 million term loan, that are recourse obligations of the Company. As of December 31, 2009, our total availability under the revolving credit facility was $178.5 million.

Through December 31, 2009, VinREIT, a subsidiary that holds our vineyard and winery assets, had drawn nine term loans aggregating $96.7 million in initial principal under our $160.0 million credit facility. These term loans have maturities ranging from December 1, 2017 to June 5, 2018, are 30% recourse to us and have stated interest rates of LIBOR plus 175 basis points on loans secured by real property and LIBOR plus 200 basis points on loans secured by fixtures and equipment. We entered into seven interest rate swaps during 2008 that fixed the interest rates on the outstanding loans at a weighted average rate of 5.2%. Term loans can be drawn through

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September 26, 2010 under the credit facility. The credit facility provides for an aggregate advance rate of 65% based on the lesser of cost or appraised value. At December 31, 2009, the term loans outstanding under the credit facility had an aggregate balance of $93.6 million and approximately $63.3 million of the facility remains available. The credit facility also contains an accordion feature, whereby, subject to lender approval, we may obtain additional term loan commitments in an aggregate principal amount not to exceed $140.0 million.

Our principal investing activities are acquiring, developing and financing entertainment, entertainment-related, recreational and specialty properties. These investing activities have generally been financed with mortgage debt and the proceeds from equity offerings. Our revolving credit facility and our term loans are also used to finance the acquisition or development of properties, and to provide mortgage financing. Continued growth of our rental property and mortgage financing portfolios will depend in part on our continued ability to access funds through additional borrowings and securities offerings. We anticipate that our cash on hand, cash from operations, and funds available under our revolving credit facility will provide adequate liquidity to fund our operations, make interest and principal payments on our debt, and allow distributions to our shareholders and avoid corporate level federal income or excise tax in accordance with REIT Internal Revenue Code requirements.

Certain of our long-term debt agreements contain customary restrictive covenants related to financial and operating performance as well as certain cross-default provisions. At December 31, 2009, we were in compliance with all restrictive covenants.

Liquidity Requirements

Short-term liquidity requirements consist primarily of normal recurring corporate operating expenses, debt service requirements and distributions to shareholders. We meet these requirements primarily through cash provided by operating activities. Net cash provided by operating activities was $148.8 million, $146.3 million and $131.6 million for the years ended December 31, 2009, 2008 and 2007, respectively. Net cash used in investing activities was $192.0 million, $492.0 million and $420.6 million for the years ended December 31, 2009, 2008 and 2007, respectively. Net cash provided by financing activities was $15.7 million, $381.2 million and $294.3 million for the years ended December 31, 2009, 2008 and 2007, respectively. We anticipate that our cash on hand, cash from operations, and funds available under our revolving credit facility will provide adequate liquidity to fund our operations, make interest and principal payments on our debt, and allow distributions to our shareholders and avoid corporate level federal income or excise tax in accordance with REIT Internal Revenue Code requirements.

Long-term liquidity requirements at December 31, 2009 consisted primarily of maturities of long-term debt. Contractual obligations as of December 31, 2009 are as follows (in thousands):

	Year ended December 31,
Contractual Obligations	2010			2011		2012	2013	2014	Thereafter	Total
Long Term Debt Obligations	$	196,051	(1)	178,247	(2)	93,198	119,339	152,503	402,085	1,141,423
Interest on Long Term Debt Obligations		63,472		52,277		44,063	34,264	25,649	42,804	262,529
Total	$	259,523		230,524		137,261	153,603	178,152	444,889	1,403,952

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⁽¹⁾ In addition to recurring principal payments, this amount includes $56.25 million in debt maturing in September 2010 related to the planned resort development in Sullivan County, New York and $112.5 million in debt maturing in October 2010 secured by our entertainment retail center in White Plains, New York. The $112.5 million related to White Plains is extendable for two to four years based on meeting certain conditions including a minimum net operating income threshold. As further discussed in Note 4 to the consolidated financial statements in this Annual Report on Form 10-K, we may elect to surrender this property at the loan’s maturity. In any event, we do not anticipate this loan, which is non-recourse to us, will be a liquidity event to the Company at the October 2010 maturity.

⁽²⁾ In addition to recurring principal payments, this amount includes $115.5 million of maturing debt secured by one theatre and one ski resort as well as five mortgage notes receivable. This debt is extendable at the company’s option until October 26, 2012. This amount also includes $35.0 million related to the revolving credit facility due October 26, 2011. This facility has a one year extension available at our option subject to certain conditions.

We have also posted $1.5 million of irrevocable stand-by letters of credit related to the Toronto Dundas Square Project as further described in Note 5 to the consolidated financial statements in this Annual Report on Form 10-K.

Additionally, our unconsolidated joint ventures, Atlantic EPR-I and Atlantic EPR-II, have mortgage notes payable at December 31, 2009 of $15.0 million and $13.0 million which mature in May 2010 and September 2013, respectively.

Commitments

We have agreed to finance $9.6 million in development costs for expansion at three of our existing public charter school properties. Development costs are advanced by us in periodic draws. If we determine that construction is not being completed in accordance with the terms of the development agreement, we can discontinue funding construction draws. We have agreed to lease the additional space to the operator at pre-determined rates.

On October 31, 2007, we entered into a guarantee agreement for economic development revenue bonds with a total principal amount of $22.0 million related to three theatres in Louisiana, maturing on October 31, 2037. The bonds were issued by Southern Theatres for the purpose of financing the development and construction of three megaplex theatres in Louisiana. We earn an annual fee of 1.75% on the outstanding principal amount of the bonds and the fee is paid by Southern Theatres monthly. We evaluated this guarantee in connection with the provisions of FASB ASC Topic 450 on Guarantees (“Topic 450”). Based on certain criteria, Topic 450 requires a guarantor to record an asset and a liability at inception. Accordingly, we had recorded $4.0 million as a deferred asset included in accounts receivable and $4.0 million included in other liabilities in the accompanying consolidated balance sheet as of December 31, 2008, which represented management’s estimate of the fair value of the guarantee at inception which will be realized over the term of the guarantee. During the third quarter of 2009, the outstanding principal amount of the bonds was reduced from $22 million to $14.4 million due to a principal repayment. Accordingly, we reduced the asset and liability recorded to reflect the decrease in the outstanding principal balance. We have recorded $2.6 million as a deferred asset included in accounts receivable and $2.6 million included in other liabilities in the accompanying consolidated balance sheet as of December 31, 2009.

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We have certain commitments related to our mortgage note investments that we may be required to fund in the future. We are generally obligated to fund these commitments at the request of the borrower or upon the occurrence of events outside of our direct control. As of December 31, 2009, we had four mortgage notes receivable with commitments totaling approximately $20 million. If commitments are funded in the future, interest will be charged at rates consistent with the existing investments.

Liquidity Analysis

In analyzing our liquidity, we generally expect that our cash provided by operating activities will meet our normal recurring operating expenses, recurring debt service requirements and distributions to shareholders.

Considering extensions, our only consolidated debt maturity in 2010 is a $56.25 million mortgage note payable due in September 2010. The $112.5 million mortgage note that is due in October 2010 has a two to four year extension option, upon meeting certain conditions and is related to our entertainment retail center in White Plains, New York that is held in a consolidated joint venture. As further described in Note 4 to the consolidated financial statements in this Annual Report on Form 10-K, the Company may elect not to further support the joint venture, which may include a decision to surrender the property at the loan’s maturity. In any event, we do not anticipate this loan, which is non-recourse to us, will be a liquidity event to the Company at the October 2010 maturity.

Our cash commitments, as described above, include additional amounts expected to be funded in 2010 of $9.6 million for the public charter school expansions and additional commitments under various mortgage notes receivable totaling $20.0 million. Of the $20.0 million of commitments, approximately $900 thousand is expected to be funded in 2010. In addition to these commitments, as discussed above we expect to fund the refinancing shortfall related to the Toronto Dundas Square Project which is estimated to be approximately CAD $20.0 million ($19.0 million U.S. using exchange rates at December 31, 2009) as well as the costs to close the transaction, estimated to be up to CAD $10 million.

Our sources of liquidity for 2010 to pay the above commitments and the acquisition of the Toronto Dundas Square Project include the remaining amount available under our revolving credit facility of $178.5 million at December 31, 2009 and unrestricted cash on hand at December 31, 2009 of $23.1 million. Accordingly, while there can be no assurance, we expect that our sources of cash will significantly exceed our expected uses of cash over the remainder of 2010.

In looking at liquidity requirements beyond 2010 and considering extensions, we have no debt maturities in 2011. We have approximately $212.6 million of debt maturities in 2012 including the revolving credit facility and term loan, and excluding the mortgage note payable related to our entertainment retail center in White Plains discussed above.

We believe that we will be able to repay, extend, refinance or otherwise settle our debt obligations for 2010 and thereafter as the debt comes due, and that we will be able to fund our remaining commitments as necessary. However, there can be no assurance that additional financing or capital will be available, or that terms will be acceptable or advantageous to us.

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Our primary use of cash after paying operating expenses, debt service, distributions to shareholders and funding existing commitments is in growing our investment portfolio through the acquisition, development and financing of additional properties. We expect to finance these investments with borrowings under our revolving credit facility, as well as long-term debt and equity financing alternatives. The availability and terms of any such financing will depend upon market and other conditions. If we borrow the maximum amount available under our revolving credit facility, there can be no assurance that we will be able to obtain additional investment financing (See “Risk Factors”).

Off Balance Sheet Arrangements

At December 31, 2009, we had a 21.9% and 22.1% investment interest in two unconsolidated real estate joint ventures, Atlantic-EPR I and Atlantic-EPR II, respectively, which are accounted for under the equity method of accounting. We do not anticipate any material impact on our liquidity as a result of commitments involving those joint ventures. We recognized income of $565, $538 and $491 (in thousands) from our investment in the Atlantic-EPR I joint venture during the years ended December 31, 2009, 2008 and 2007, respectively. We recognized income of $330, $324 and $301 (in thousands) from our investment in the Atlantic-EPR II joint venture during the years ended December 31, 2009, 2008 and 2007, respectively. The joint ventures have two mortgage notes payable each secured by a megaplex theatre. The notes held by Atlantic EPR-I and Atlantic EPR-II total $15.0 million and $13.0 million, respectively, at December 31, 2009, and mature in May 2010 and September 2013, respectively. Condensed financial information for Atlantic-EPR I and Atlantic-EPR II joint ventures is included in Note 7 to the consolidated financial statements included in this Quarterly Report on Form 10-K.

The joint venture agreements for Atlantic-EPR I and Atlantic-EPR II allow our partner, Atlantic of Hamburg, Germany (“Atlantic”), to exchange up to a maximum of 10% of its ownership interest per year in each of the joint ventures for common shares of the Company or, at our discretion, the cash value of those shares as defined in each of the joint venture agreements. During 2008, we paid Atlantic-EPR I and Atlantic-EPR II cash of $133 and $79 (in thousands), respectively, in exchange for additional ownership in each joint venture of 0.7%. During 2009, we paid Atlantic cash of $109 and $9 (in thousands), respectively, in exchange for additional ownership of 0.7% and 0.2% for Atlantic-EPR I and Atlantic-EPR II, respectively. During January of 2010, the Company paid Atlantic cash of $51 (in thousands) in exchange for additional ownership of 0.2% for Atlantic-EPR I. These exchanges did not impact total partners’ equity in either Atlantic-EPR I or Atlantic-EPR II.

Capital Structure and Coverage Ratios

We believe that our shareholders are best served by a conservative capital structure. Therefore, we seek to maintain a conservative debt level on our balance sheet and solid interest, fixed charge and debt service coverage ratios. We expect to maintain our leverage ratio (i.e. total-long term debt of the Company as a percentage of equity plus total liabilities) between 40% and 50%. However, the timing and size of our equity offerings may cause us to temporarily operate over this threshold. At December 31, 2009, our leverage ratio was 43%. Our long-term debt as a percentage of our total market capitalization at December 31, 2009 was 37%; however, we do not manage to a ratio based on total market capitalization due to the inherent variability that is driven by changes in the market price of our common shares. We calculate our total market capitalization of $3.0 billion by aggregating the following at December 31, 2009:

• Common shares outstanding of 42,872,420 multiplied by the last reported sales price of our common shares on the NYSE of $35.27 per share, or $1.5 billion;

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• Aggregate liquidation value of our Series B preferred shares of $80 million;

• Aggregate liquidation value of our Series C convertible preferred shares of $135 million;

• Aggregate liquidation value of our Series D preferred shares of $115 million;

• Aggregate liquidation value of our Series E convertible preferred shares of $86 million and

• Total long-term debt of $1.1 billion

Our interest coverage ratio for the years ended December 31, 2009, 2008 and 2007 was 3.1 times, 3.4 times and 3.2 times, respectively. Interest coverage is calculated as the interest coverage amount (as calculated in the following table) divided by interest expense, gross (as calculated in the following table). We consider the interest coverage ratio to be an appropriate supplemental measure of a company’s ability to meet its interest expense obligations and management believes it is useful to investors in this regard. Our calculation of the interest coverage ratio may be different from the calculation used by other companies, and therefore, comparability may be limited. This information should not be considered as an alternative to any U.S. generally accepted accounting principles (“GAAP”) liquidity measures. The following table shows the calculation of our interest coverage ratios (unaudited, dollars in thousands):

	Year Ended December 31,
	2009			2008		2007
Net income (loss)	$	(11,906	)	127,623		103,294
Interest expense, gross		73,390		72,658		61,376
Interest cost capitalized		(600	)	(797	)	(494	)
Depreciation and amortization		47,720		43,829		37,422
Share-based compensation expense to management and trustees		4,307		3,965		3,249
Gain on sale of land		-		-		(129	)
Costs associated with loan refinancing		117		-		-
Straight-line rental revenue		(2,483	)	(3,851	)	(4,497	)
Gain on sale of real estate from discontinued operations		-		(119	)	(3,240	)
Depreciation and amortization of discontinued operations		-		-		58
Transaction costs		3,321		1,628		253
Provision for loan losses		70,954		-		-
Impairment charges		42,158		-		-
Interest coverage amount	$	226,978		244,936		197,292
Interest expense, net	$	72,715		70,951		60,505
Interest income		75		910		377
Interest cost capitalized		600		797		494
Interest expense, gross	$	73,390		72,658		61,376
Interest coverage ratio		3.1		3.4		3.2

The interest coverage amount per the above table is a non-GAAP financial measure and should not be considered an alternative to any GAAP liquidity measures. It is most directly comparable to the GAAP liquidity measure, “Net cash provided by operating activities,” and is not directly

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comparable to the GAAP liquidity measures, “Net cash used in investing activities” and “Net cash provided by financing activities.” The interest coverage amount can be reconciled to “Net cash provided by operating activities” per the consolidated statements of cash flows included in this Annual Report on Form 10-K as follows (unaudited, dollars in thousands):

	Year Ended December 31,
	2009			2008		2007
Net cash provided by operating activities	$	148,817		146,256		131,590
Equity in income from joint ventures		895		1,962		1,583
Distributions from joint ventures		(986	)	(2,262	)	(1,239	)
Amortization of deferred financing costs		(3,663	)	(3,290	)	(2,905	)
Increase in mortgage notes accrued interest receivable		1,324		20,519		14,921
Increase (decrease) in restricted cash		148		(794	)	308
Increase in accounts receivable, net		(1,583	)	3,889		4,642
Increase (decrease) in notes and accrued interest receivable		(530	)	(261	)	259
Increase in direct financing lease receivable		3,762		2,285		-
Increase in other assets		3,471		2,612		1,799
Decrease (increase) in accounts payable and accrued liabilities		(104	)	2,534		(5,923	)
Decrease (increase) in unearned rents		1,799		1,848		(4,381	)
Straight-line rental revenue		(2,483	)	(3,851	)	(4,497	)
Interest expense, gross		73,390		72,658		61,376
Interest cost capitalized		(600	)	(797	)	(494	)
Transaction costs		3,321		1,628		253
Interest coverage amount	$	226,978		244,936		197,292

Our fixed charge coverage ratio was 2.2 times for the year ended December 31, 2009 and 2.4 times for each of the years ended December 31, 2008 and 2007. The fixed charge coverage ratio is calculated in exactly the same manner as the interest coverage ratio, except that preferred share dividends are also added to the denominator. We consider the fixed charge coverage ratio to be an appropriate supplemental measure of a company’s ability to make its interest and preferred share dividend payments and management believes it is useful to investors in this regard. Our calculation of the fixed charge coverage ratio may be different from the calculation used by other companies and, therefore, comparability may be limited. This information should not be considered as an alternative to any GAAP liquidity measures. The following table shows the calculation of our fixed charge coverage ratios (unaudited, dollars in thousands):

	Year Ended December 31,
	2009		2008	2007
Interest coverage amount	$	226,978	244,936	197,292
Interest expense, gross		73,390	72,658	61,376
Preferred share dividends		30,206	28,266	21,312
Fixed charges	$	103,596	100,924	82,688
Fixed charge coverage ratio		2.2	2.4	2.4

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Our debt service coverage ratio for the years ended December 31, 2009, 2008 and 2007 was 2.3 times, 2.6 times and 2.5 times, respectively. The debt service coverage ratio is calculated in exactly the same manner as the interest coverage ratio, except that recurring principal payments are also added to the denominator. We consider the debt service coverage ratio to be an appropriate supplemental measure of a company’s ability to make its debt service payments and management believes it is useful to investors in this regard. Our calculation of the debt service coverage ratio may be different from the calculation used by other companies and, therefore, comparability may be limited. This information should not be considered as an alternative to any GAAP liquidity measures. The following table shows the calculation of our debt service coverage ratios (unaudited, dollars in thousands):

	Year Ended December 31,
	2009		2008	2007
Interest coverage amount	$	226,978	244,936	197,292
Interest expense, gross		73,390	72,658	61,376
Recurring principal payments		25,174	23,331	18,257
Debt service	$	98,564	95,989	79,633
Debt service coverage ratio		2.3	2.6	2.5

Funds From Operations (FFO)

The National Association of Real Estate Investment Trusts (“NAREIT”) developed FFO as a relative non-GAAP financial measure of performance of an equity REIT in order to recognize that income-producing real estate historically has not depreciated on the basis determined under GAAP and management provides FFO herein because it believes this information is useful to investors in this regard. FFO is a widely used measure of the operating performance of real estate companies and is provided here as a supplemental measure to GAAP net income available to common shareholders and earnings per share. FFO, as defined under the NAREIT definition and presented by us, is net income available to common shareholders, computed in accordance with GAAP, excluding gains and losses from sales of depreciable operating properties, plus real estate related depreciation and amortization, and after adjustments for unconsolidated partnerships, joint ventures and other affiliates. Adjustments for unconsolidated partnerships, joint ventures and other affiliates are calculated to reflect FFO on the same basis. FFO is a non-GAAP financial measure. FFO does not represent cash flows from operations as defined by GAAP and is not indicative that cash flows are adequate to fund all cash needs and is not to be considered an alternative to net income or any other GAAP measure as a measurement of the results of our operations or our cash flows or liquidity as defined by GAAP. It should also be noted that not all REITs calculate FFO the same way so comparisons with other REITs may not be meaningful.

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The following table summarizes our FFO, including per share amounts, for the years ended December 31, 2009, 2008 and 2007 (in thousands, except per share information):

	Year ended December 31,
	2009			2008			2007
Net income available to common shareholders of Entertainment Properties Trust	$	(22,199	)	$	101,710		$	81,251
Real estate depreciation and amortization		46,947			43,051			36,758
Allocated share of joint venture depreciation		263			510			387
Gain on sale of real estate from discontinued operations		-			-			(3,240	)
Noncontrolling interest		(20,143	)		(2,630	)		(1,436	)
FFO available to common shareholders		4,868			142,641			113,720
FFO available to common shareholders of Entertainment Properties Trust	$	4,868		$	142,641		$	113,720
Preferred dividends for Series C		-			7,763			7,763
Diluted FFO available to common shareholders of Entertainment Properties Trust		4,868			150,404			121,483
FFO per common share attributable to Entertainment Properties Trust:
Basic	$	0.13		$	4.61		$	4.22
Diluted		0.13			4.54			4.16
Shares used for computation (in thousands):
Basic		36,122			30,910			26,929
Diluted		36,236			33,094			29,202
Weighted average shares outstanding - diluted EPS		36,236			31,177			27,304
Effect of dilutive Series C preferred shares		-			1,917			1,898
Adjusted weighted average shares outstanding - diluted		36,236			33,094			29,202
Other financial information:
Dividends per common share	$	2.60			3.36			3.04

The additional 1.9 million common shares that would result from the conversion of our 5.75% Series C cumulative convertible preferred shares and the additional 1.6 million common shares that would result from the conversion of our 9.0% Series E cumulative convertible preferred shares (issued on April 2, 2008) and the corresponding add-back of the preferred dividends declared on those shares are not included in the calculation of diluted earnings per share for the years ended December 31, 2009, 2008 and 2007 because the effect is anti-dilutive. However, because a conversion of the 5.75% Series C cumulative convertible preferred shares would be dilutive to FFO per share for the years ended December 31, 2008 and 2007, these adjustments have been made in the calculation of diluted FFO per share for these periods.

As discussed in Note 14 to the consolidated financial statements in this Annual Report on Form 10-K, our nonvested share awards are considered participating securities and are included in the calculation of earnings per share under the two-class method as required by the Earnings Per Share Topic of the FASB ASC. Prior-period earnings per share data was computed using the treasury stock method and has been adjusted retrospectively, which lowered basic and diluted FFO per share by $0.05 and $0.03 for the year ended December 31, 2008, respectively and lowered basic and diluted FFO per share by $0.04 and $0.02 for the year ended December 31, 2007, respectively.

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Adjusted Funds From Operations (AFFO)

In addition to FFO, AFFO is presented by adding to FFO non-cash impairment charges and provision for loan losses, transaction costs, non-real estate depreciation and amortization, deferred financing fees amortization, costs associated with loan refinancing and share-based compensation expense to management and trustees; subtracting maintenance capital expenditures (including second generation tenant improvements and leasing commissions), straight-lined rental revenue and the non-cash portion of mortgage and other financing income. AFFO is a widely used measure of the operating performance of real estate companies and is provided here as a supplemental measure to GAAP net income available to common shareholders and earnings per share, and management provides AFFO herein because it believes this information is useful to investors in this regard. AFFO is a non-GAAP financial measure and should not be considered an alternative to any GAAP liquidity measures. AFFO does not represent cash flows from operations as defined by GAAP and is not indicative that cash flows are adequate to fund all cash needs and is not to be considered an alternative to net income or any other GAAP measure as a measurement of the results of our operations or our cash flows or liquidity as defined by GAAP. It should also be noted that not all REITs calculate AFFO the same way so comparisons with other REITs may not be meaningful.

The following table summarizes our AFFO for the years ended December 31, 2009, 2008 and 2007 (in thousands):

	Year ended December 31,
	2009			2008			2007
Diluted FFO available to common shareholders of Entertainment Properties Trust	$	4,868		$	150,404		$	121,483
Adjustments:
Non-cash impairment charges and provision for loan losses		113,112			-			-
Transaction costs		3,321			1,628			253
Non-real estate depreciation and amortization		773			778			664
Deferred financing fees amortization		3,663			3,290			2,905
Costs associated with loan refinancing		117			-			-
Share-based compensation expense to management and trustes		4,307			3,965			3,249
Maintenance capital expenditures (1)		(1,513	)		(4,312	)		(1,453	)
Straight-lined rental revenue		(2,483	)		(3,851	)		(4,497	)
Non-cash portion of mortgage and other financing income		(7,197	)		(24,230	)		(15,090	)
AFFO available to common shareholdersof Entertainment Properties Trust		118,968			127,672			107,514

(1) Includes maintenance capital expenditures and second generation tenant improvements and leasing commissions.

Impact of Recently Issued Accounting Standards

In June 2009, the FASB issued a pronouncement establishing the “FASB Accounting Standards Codification” (“ASC”), which officially launched July 1, 2009, to become the source of authoritative U.S. generally accepted accounting principles (“GAAP”) recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under authority of federal securities laws are also sources of authoritative U.S. GAAP for SEC registrants. The standard is effective for financial statements issued for interim and annual periods ending after September 15, 2009. The Company has adopted this standard in accordance with GAAP.

66

In June 2009, the FASB issued SFAS No. 167, Amendments to FASB Interpretation No. 46R (“SFAS No. 167”) to be included in ASC 810 “Consolidation”. SFAS No. 167 amends FIN 46R to require an analysis to determine whether a variable interest gives a company a controlling financial interest in a variable interest entity. This statement requires an ongoing reassessment of and eliminates the quantitative approach previously required for determining whether a company is the primary beneficiary. This statement is effective for interim and annual reporting periods beginning after November 15, 2009. Accordingly, the Company adopted SFAS No. 167 during the first quarter of 2010 and the adoption did not have a material impact on its financial position or results of operations.

In January 2010, the FASB issued ASU No. 2010-06, Fair Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements (“ASU No. 2010-6”). This statement requires new disclosures and clarifies existing disclosure requirements about fair value measurement. ASU No. 2010-06 only applies to disclosures related to estimated fair values as disclosed in Note 12 to the consolidated financial statements in this Annual Report on Form 10-K. This statement is effective for interim and annual reporting periods beginning after December 15, 2009 and is not expected to have a significant impact on our footnote disclosures.

Inflation

Investments by EPR are financed with a combination of equity and debt. During inflationary periods, which are generally accompanied by rising interest rates, our ability to grow may be adversely affected because the yield on new investments may increase at a slower rate than new borrowing costs.

All of our megaplex theatre leases provide for base and participating rent features. To the extent inflation causes tenant revenues at our properties to increase over baseline amounts, we would participate in those revenue increases through our right to receive annual percentage rent.

Our leases and mortgage notes receivable also generally provide for escalation in base rents or interest in the event of increases in the Consumer Price Index, with generally a limit of 2% per annum, or fixed periodic increases. Alternatively, during deflationary periods, our leases and mortgage notes receivable with escalations in base rents or interest dependent on increases in the Consumer Price Index may be adversely affected.

Our leases are generally triple-net leases requiring the tenants to pay substantially all expenses associated with the operation of the properties, thereby minimizing our exposure to increases in costs and operating expenses resulting from inflation. A portion of our megaplex theatre, retail and restaurant leases are non-triple-net leases. These leases represent approximately 25% of our total real estate square footage. To the extent any of those leases contain fixed expense reimbursement provisions or limitations, we may be subject to increases in costs resulting from inflation that are not fully passed through to tenants.

67

Item 7A.  Quantitative and Qualitative Disclosures About Market Risk

We are exposed to market risks, primarily relating to potential losses due to changes in interest rates and foreign currency exchange rates. We seek to mitigate the effects of fluctuations in interest rates by matching the term of new investments with new long-term fixed rate borrowings whenever possible. We also have a $215.0 million secured revolving credit facility with $35.0 million outstanding as of December 31, 2009, a $160.0 million term loan facility with $93.6 million outstanding as of December 31, 2009, a $10.7 million bond, a $56.25 million term loan and a $117.6 million term loan, all of which bear interest at a floating rate. As further described in Note 10 to the consolidated financial statements in this Annual Report on Form 10-K, $89.9 million term loans under the term loan facility are LIBOR based debt that has been converted to a fixed rate with seven interest rate swaps and the $117.6 million term loan includes $114.0 million of LIBOR based debt that has been converted to a fixed rate with two interest rate swaps.

We are subject to risks associated with debt financing, including the risk that existing indebtedness may not be refinanced or that the terms of such refinancing may not be as favorable as the terms of current indebtedness. The majority of our borrowings are subject to mortgages or contractual agreements which limit the amount of indebtedness we may incur. Accordingly, if we are unable to raise additional equity or borrow money due to these limitations, our ability to make additional real estate investments may be limited.

The fair value of our debt as of December 31, 2009 and 2008 is estimated by discounting the future cash flows of each instrument using current market rates including current market spreads.

The following table presents the principal amounts, weighted average interest rates, and other terms required by year of expected maturity to evaluate the expected cash flows and sensitivity to interest rate changes as of December 31 (including the impact of the interest rate swap agreements described below):

Expected Maturities (in millions)

	2010	2011	2012	2013	2014	Thereafter	Total	Estimated Fair Value
December 31, 2009:
Fixed rate debt	$    138.2	140.4	92.8	118.9	152.0	390.0	1,032.3	1,020.6
Average interest rate	5.7%	5.9%	6.5%	5.8%	6.3%	5.8%	5.9%	5.9%
Variable rate debt	$      57.8	37.8	0.4	0.5	0.5	12.1	109.1	109.1
Average interest rate (as of December 31, 2009)	5.9%	5.2%	2.2%	2.2%	2.2%	0.5%	5.0%	5.0%
	2009	2010	2011	2012	2013	Thereafter	Total	Estimated Fair Value
December 31, 2008:
Fixed rate debt	$      23.4	137.6	139.8	92.1	127.2	521.6	1,041.7	1,044.0
Average interest rate	6.0%	5.7%	5.9%	6.5%	5.7%	5.9%	5.9%	5.8%
Variable rate debt	$      1.2	206.5	2.4	-	-	10.6	220.7	210.8
Average interest rate (as of December 31, 2008)	4.7%	4.0%	4.7%	-	-	1.9%	3.9%	5.6%

On November 26, 2007, we entered into two interest rate swap agreements to fix the interest rate on $114.0 million of the outstanding term loan. These agreements each have outstanding notional amounts of $57.0 million, a termination date of October 26, 2012 and a fixed rate of 5.81%.

68

On March 13, 2008, we entered into two interest rate swap agreements to fix the interest rates on the two initial outstanding term loans described in Note 10 to the consolidated financial statements in this Annual Report on Form 10-K with an aggregate notional amount of $9.5 million. At December 31, 2009, these agreements have outstanding notional amounts of $4.5 million and $4.7 million, termination dates of December 1, 2017 and March 5, 2018 and fixed rates of 5.76% and 5.78%, respectively.

In September 2008, we entered into five interest rate swap agreements to fix the interest rates on the remaining outstanding term loans described in Note 10 to the consolidated financial statements in this Annual Report on Form 10-K with an aggregate notional amount of $83.1 million. At December 31, 2009, four of these agreements have aggregate outstanding notional amounts of $73.4 million, a termination date of October 7, 2013 and fixed rates of 5.11%. The remaining agreement has an outstanding notional amount of $7.4 million at December 31, 2009, a termination date of December 1, 2017 and a fixed rate of 5.63%.

We financed the acquisition of our four Canadian properties with non-recourse fixed rate mortgage loans from a Canadian lender in the original aggregate principal amount of approximately U.S. $97 million. The loans were made and are payable by us in Canadian dollars (CAD), and the rents received from tenants of the properties are payable in CAD. We have also provided a secured mortgage construction loan with a net carrying value of CAD $95.5 million as further discussed in Note 5 to the consolidated financial statements in this Annual Report on Form 10-K.

We have partially mitigated the impact of foreign currency exchange risk on our Canadian properties by matching Canadian dollar debt financing with Canadian dollar rents. To further mitigate our foreign currency risk in future periods on the four Canadian properties, during the second quarter of 2007, we entered into a cross currency swap with a notional value of $76.0 million CAD and $71.5 million U.S. The swap calls for monthly exchanges from January 2008 through February 2014 with us paying CAD based on an annual rate of 17.16% of the notional amount and receiving U.S. dollars based on an annual rate of 17.4% of the notional amount. There is no initial or final exchange of the notional amounts. The net effect of this swap is to lock in an exchange rate of $1.05 CAD per U.S. dollar on approximately $13 million of annual CAD denominated cash flows. These foreign currency derivatives should hedge a significant portion of our expected CAD denominated FFO of these four Canadian properties through February 2014 as their impact on our reported FFO when settled should move in the opposite direction of the exchange rates utilized to translate revenues and expenses of these properties.

In order to also hedge our net investment on the four Canadian properties, we entered into a forward contract with a notional amount of $100 million CAD and a February 2014 settlement date which coincides with the maturity of our underlying mortgage on these four properties. The exchange rate of this forward contract is approximately $1.04 CAD per U.S. dollar. This forward contract should hedge a significant portion of our CAD denominated net investment in these four centers through February 2014 as the impact on accumulated other comprehensive income from marking the derivative to market should move in the opposite direction of the translation adjustment on the net assets of our four Canadian properties.

We have not yet hedged any of our net investment in the CAD denominated mortgage receivable related to the Toronto Dundas Square Project. We expect to become the owner of this property in early 2010.

See Note 11 to the consolidated financial statements in this Annual Report on Form 10-K for additional information on our derivative financial instruments and hedging activities.

69

Item 8. Financial Statements and Supplementary Data

Entertainment Properties Trust

Contents

Report of Independent Registered Public Accounting Firm	71
Audited Financial Statements
Consolidated Balance Sheets	72
Consolidated Statements of Income	73
Consolidated Statements of Changes in Equity	74
Consolidated Statements of Comprehensive Income	75
Consolidated Statements of Cash Flows	76
Notes to Consolidated Financial Statements	78
Financial Statement Schedules
Schedule II – Valuation and Qualifying Accounts	137
Schedule III - Real Estate and Accumulated Depreciation	138

70

Report of Independent Registered Public Accounting Firm

The Board of Trustees and Shareholders

Entertainment Properties Trust:

We have audited the accompanying consolidated balance sheets of Entertainment Properties Trust (the Company) as of December 31, 2009 and 2008, and the related consolidated statements of income, changes in equity, comprehensive income, and cash flows for each of the years in the three-year period ended December 31, 2009. In connection with our audits of the consolidated financial statements, we have also audited the accompanying financial statement schedules listed in the Index at Item 15(2). These consolidated financial statements and financial statement schedules are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements and financial statement schedules based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Entertainment Properties Trust as of December 31, 2009 and 2008, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2009, in conformity with U.S. generally accepted accounting principles. Also in our opinion, the related financial statement schedules, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company’s internal control over financial reporting as of December 31, 2009, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated February 26, 2010 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

/s/ KPMG LLP

KPMG LLP

Kansas City, Missouri

February 26, 2010

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ENTERTAINMENT PROPERTIES TRUST

Consolidated Balance Sheets

(Dollars in thousands except share data)

	December 31,
	2009			2008
Assets
Rental properties, net of accumulated depreciation of $258,638 and $214,078 at December 31, 2009 and 2008, respectively	$	1,854,629		$	1,735,026
Property under development		12,729			30,835
Mortgage notes and related accrued interest receivable, net		522,880			508,506
Investment in a direct financing lease, net		169,850			166,089
Investment in joint ventures		4,080			2,493
Cash and cash equivalents		23,138			50,082
Restricted cash		12,857			11,004
Intangible assets, net		6,727			12,400
Deferred financing costs, net		12,136			10,741
Accounts receivable, net		33,289			33,405
Notes and related accrued interest receivable, net		7,204			40,338
Other assets		21,213			33,006
Total assets	$	2,680,732		$	2,633,925
Liabilities and Equity
Liabilities:
Accounts payable and accrued liabilities	$	28,411		$	35,665
Common dividends payable		27,880			27,377
Preferred dividends payable		7,552			7,552
Unearned rents and interest		7,509			8,312
Long-term debt		1,141,423			1,262,368
Total liabilities		1,212,775			1,341,274
Equity:
Common Shares, $.01 par value; 75,000,000 shares authorized; and 43,847,169 and 33,734,181 shares issued at December 31, 2009 and 2008, respectively		438			337
Preferred Shares, $.01 par value; 25,000,000 shares authorized: 3,200,000 Series B shares issued at December 31, 2009 and 2008; liquidation preference of $80,000,000		32			32
5,400,000 Series C convertible shares issued at December 31, 2009 and 2008; liquidation preference of $135,000,000		54			54
4,600,000 Series D shares issued at December 31, 2009 and 2008; liquidation preference of $115,000,000		46			46
3,450,000 Series E convertible shares issued at December 31, 2009 and 2008; liquidation preference of $86,250,000		35			35
Additional paid-in-capital		1,633,116			1,339,798
Treasury shares at cost: 974,749 and 860,084 common shares at December 31, 2009 and 2008, respectively		(29,968	)		(26,357	)
Loans to shareholders		(1,925	)		(1,925	)
Accumulated other comprehensive income (loss)		18,961			(6,169	)
Distributions in excess of net income		(147,927	)		(28,417	)
Entertainment Properties Trust shareholders’ equity		1,472,862			1,277,434
Noncontrolling interests		(4,905	)		15,217
Equity		1,467,957			1,292,651
Total liabilities and equity	$	2,680,732		$	2,633,925

See accompanying notes to consolidated financial statements.

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ENTERTAINMENT PROPERTIES TRUST

Consolidated Statements of Income

(Dollars in thousands except per share data)

	Year Ended December 31,
	2009			2008			2007
Rental revenue	$	204,610		$	202,581		$	185,873
Tenant reimbursements		18,312			20,883			18,499
Other income		2,890			2,241			2,402
Mortgage and other financing income		44,999			60,435			28,841
Total revenue		270,811			286,140			235,615
Property operating expense		28,839			26,775			23,010
Other expense		2,611			2,103			4,205
General and administrative expense		15,177			15,286			12,717
Costs associated with loan refinancing		117			-			-
Interest expense, net		72,715			70,951			60,505
Transaction costs		3,321			1,628			253
Provision for loan losses		70,954			-			-
Impairment charges		42,158			-			-
Depreciation and amortization		47,720			43,829			37,422
Income (loss) before gain on sale of land, equity in income from joint ventures and discontinued operations		(12,801	)		125,568			97,503
Gain on sale of land		-			-			129
Equity in income from joint ventures		895			1,962			1,583
Income (loss) from continuing operations	$	(11,906	)	$	127,530		$	99,215
Discontinued operations:
Income (loss) from discontinued operations		-			(26	)		839
Gain on sale of real estate		-			119			3,240
Net income (loss)		(11,906	)		127,623			103,294
Add: Net loss attributable to noncontrolling interests		19,913			2,353			1,370
Net income attributable to Entertainment Properties Trust		8,007			129,976			104,664
Preferred dividend requirements		(30,206	)		(28,266	)		(21,312	)
Series A preferred share redemption costs		-			-			(2,101	)
Net income (loss) available to common shareholders of Entertainment Properties Trust	$	(22,199	)	$	101,710		$	81,251
Per share data attributable to Entertainment Properties Trust common shareholders:
Basic earnings per share data:
Income (loss) from continuing operations available to common shareholders	$	(0.61	)	$	3.29		$	2.87
Income from discontinued operations		-			-			0.15
Net income (loss) available to common shareholders	$	(0.61	)	$	3.29		$	3.02
Diluted earnings per share data:
Income (loss) from continuing operations available to common shareholders	$	(0.61	)	$	3.26		$	2.83
Income from discontinued operations		-			-			0.15
Net income (loss) available to common shareholders	$	(0.61	)	$	3.26		$	2.98
Shares used for computation (in thousands):
Basic		36,122			30,910			26,929
Diluted		36,122			31,177			27,304

See accompanying notes to consolidated financial statements.

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Consolidated Statements of Changes in Equity

Years Ended December 31, 2009, 2008 and 2007

(Dollars in thousands)

	Entertainment Properties Trust Shareholders’ Equity																							Noncontrolling Interests			Total
	Common Stock			Preferred Stock					Additional paid-in capital			Treasury shares			Loans to shareholders			Accumulated other comprehensive income (loss)			Distributions in excess of net income
	Shares	Par		Shares		Par
Balance at December 31, 2006	27,153,411	$	272	10,900,000		$	109		$	883,639		$	(15,500	)	$	(3,525	)	$	12,501		$	(24,814	)	$	4,474			857,156
Shares issued to Trustees	5,760		—	—			—			354			—			—			—			—			—			354
Issuance of nonvested shares, including nonvested shares issued for the payment of bonuses	128,561		1	—			—			1,334			—			—			—			—			—			1,335
Amortization of nonvested shares	—		—	—			—			2,537			—			—			—			—			—			2,537
Share option expense	—		—	—			—			422			—			—			—			—			—			422
Foreign currency translation adjustment	—		—	—			—			—			—			—			30,022			—			—			30,022
Change in unrealized loss on derivatives	—		—	—			—			—			—			—			(6,529	)		—			—			(6,529	)
Net income	—		—	—			—			—			—			—			—			104,664			(1,370	)		103,294
Purchase of 24,740 common shares for treasury	—		—	—			—			—			(1,448	)		—			—			—			—			(1,448	)
Issuances of common shares, net of costs of $1,700	1,408,934		14	—			—			74,437			—			—			—			—			—			74,451
Issuance of preferred shares, net of costs of $3,900	—		—	4,600,000			46			111,079			—			—			—			—			—			111,125
Redemption of Series A preferred shares	—		—	(2,300,000	)		(23	)		(55,412	)		—			—			—			(2,101	)		—			(57,536	)
Stock option exercises, net	181,619		2	—			—			5,208			(5,941	)		—			—			—			—			(731	)
Dividends to common and preferred shareholders	—		—	—			—			—			—			—			—			(103,455	)		—			(103,455	)
Contributions from noncontrolling interests	—		—	—			—			—			—			—			—			—			15,248			15,248
Distributions paid to noncontrolling interests	—		—	—			—			—			—			—			—			—			(145	)		(145	)
Balance at December 31, 2007	28,878,285	$	289	13,200,000		$	132		$	1,023,598		$	(22,889	)	$	(3,525	)	$	35,994		$	(25,706	)	$	18,207			1,026,100
Shares issued to Trustees	6,300		—	—			—			332			—			—			—			—			—			332
Issuance of nonvested shares, including nonvested shares issued for the payment of bonuses	120,691		1	—			—			1,991			—			—			—			—			—			1,992
Amortization of nonvested shares	—		—	—			—			3,179			—			—			—			—			—			3,179
Share option expense	—		—	—			—			446			—			—			—			—			—			446
Foreign currency translation adjustment	—		—	—			—			—			—			—			(48,760	)		—			—			(48,760	)
Change in unrealized gain on derivatives	—		—	—			—			—			—			—			6,597			—			—			6,597
Payment received on shareholder loan	—		—	—			—			—			—			1,600			—			—			—			1,600
Net income	—		—	—			—			—			—			—			—			129,976			(2,353	)		127,623
Purchase of 16,771 common shares for treasury	—		—	—			—			—			(777	)		—			—			—			—			(777	)
Issuances of common shares, net of costs of $10,700	4,646,991		46	—			—			224,306			—			—			—			—			—			224,352
Issuance of preferred shares, net of costs of $2,800	—		—	3,450,000			35			83,403			—			—			—			—			—			83,438
Stock option exercises, net	81,914		1	—			—			2,543			(2,691	)		—			—			—			—			(147	)
Dividends to common and preferred shareholders	—		—	—			—			—			—			—			—			(132,687	)		—			(132,687	)
Distributions paid to noncontrolling interests	—		—	—			—			—			—			—			—			—			(637	)		(637	)
Balance at December 31, 2008	33,734,181	$	337	16,650,000		$	167		$	1,339,798		$	(26,357	)	$	(1,925	)	$	(6,169	)	$	(28,417	)	$	15,217			1,292,651
Restricted share units issued to Trustees	—		—	—			—			390			—			—			—			—			—			390
Issuance of nonvested shares, including nonvested shares issued for the payment of bonuses	218,797		2	—			—			2,413			—			—			—			—			—			2,415
Cancellation of 5,411 employee nonvested shares	—		—	—			—			180			(180	)		—			—			—			—			—
Amortization of nonvested shares	—		—	—			—			3,257			—			—			—			—			—			3,257
Share option expense	—		—	—			—			679			—			—			—			—			—			679
Foreign currency translation adjustment	—		—	—			—			—			—			—			34,325			—			—			34,325
Change in unrealized gain/loss on derivatives	—		—	—			—			—			—			—			(9,195	)		—			—			(9,195	)
Net income (loss)	—		—	—			—			—			—			—			—			8,007			(19,913	)		(11,906	)
Purchase of 40,565 common shares for treasury	—		—	—			—			—			(1,201	)		—			—			—			—			(1,201	)
Issuances of common shares, net of costs of $727	9,793,263		98	—			—			284,975			—			—			—			—			—			285,073
Stock option exercises, net	100,928		1	—			—			1,424			(2,230	)		—			—			—			—			(805	)
Dividends to common and preferred shareholders	—		—	—			—			—			—			—			—			(127,517	)		—			(127,517	)
Distributions paid to noncontrolling interests	—		—	—			—			—			—			—			—			—			(209	)		(209	)
Balance at December 31, 2009	43,847,169	$	438	16,650,000		$	167		$	1,633,116		$	(29,968	)	$	(1,925	)	$	18,961		$	(147,927	)	$	(4,905	)	$	1,467,957

See accompanying notes to consolidated financial statements.

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Consolidated Statements of Comprehensive Income

(Dollars in thousands)

	Year Ended December 31,
	2009			2008			2007
Net income (loss)	$	(11,906	)	$	127,623		$	103,294
Other comprehensive income (loss):
Foreign currency translation adjustment		34,325			(48,760	)		30,022
Change in unrealized gain (loss) on derivatives		(9,195	)		6,597			(6,529	)
Comprehensive income		13,224			85,460			126,787
Comprehensive loss attributable to the noncontrolling interests		19,913			2,353			1,370
Comprehensive income attributable to Entertainment Properties Trust	$	33,137		$	87,813		$	128,157

See accompanying notes to consolidated financial statements.

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Consolidated Statements of Cash Flows

(Dollars in thousands)

	Year Ended December 31,
	2009			2008			2007
Operating activities:
Net income (loss)	$	(11,906	)	$	127,623		$	103,294
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Provision for loan losses		70,954			-			-
Non-cash impairment charges		42,158			-			-
Costs associated with loan refinancing		117			-			-
Gain on sale of land		-			-			(129	)
Income from discontinued operations		-			(93	)		(4,079	)
Equity in income from joint ventures		(895	)		(1,962	)		(1,583	)
Distributions from joint ventures		986			2,262			1,239
Depreciation and amortization		47,720			43,829			37,422
Amortization of deferred financing costs		3,663			3,290			2,905
Share-based compensation expense to management and trustees		4,307			3,965			3,249
Decrease (increase) in restricted cash		(148	)		794			(308	)
Increase in mortgage notes accrued interest receivable		(1,324	)		(20,519	)		(14,921	)
Decrease (increase) in accounts receivable, net		1,583			(3,889	)		(4,642	)
Decrease (increase) in notes receivable and accrued interest receivable		530			261			(259	)
Increase in direct financing lease receivable		(3,762	)		(2,285	)		-
Increase in other assets		(3,471	)		(2,612	)		(1,799	)
Increase (decrease) in accounts payable and accrued liabilities		104			(2,534	)		5,923
Increase (decrease) in unearned rents		(1,799	)		(1,848	)		4,381
Net operating cash provided by continuing operations		148,817			146,282			130,693
Net operating cash provided (used) by discontinued operations		-			(26	)		897
Net cash provided by operating activities		148,817			146,256			131,590
Investing activities:
Acquisition of rental properties and other assets		(135,112	)		(142,861	)		(77,710	)
Investment in consolidated joint ventures		-			-			(31,291	)
Investment in unconsolidated joint ventures		(1,677	)		(117	)		(39,711	)
Investment in mortgage notes receivable		(35,945	)		(180,730	)		(222,558	)
Proceeds from mortgage note receivable paydown		3,512			-			-
Investment in promissory notes receivable		(4,108	)		(10,149	)		(21,310	)
Proceeds from promissory note receivable paydown		1,000			-			-
Investment in direct financing lease, net		-			(124,043	)		-
Net proceeds from sale of land		-			-			694
Additions to properties under development		(19,672	)		(35,038	)		(35,770	)
Net cash used in investing activities of continuing operations		(192,002	)		(492,938	)		(427,656	)
Net proceeds from sale of real estate from discontinued operations		-			986			7,008
Net cash used in investing activities		(192,002	)		(491,952	)		(420,648	)
Financing activities:
Proceeds from long-term debt facilities		132,006			548,490			742,975
Principal payments on long-term debt		(267,174	)		(346,156	)		(473,989	)
Deferred financing fees paid		(5,017	)		(3,899	)		(2,553	)
Net proceeds from issuance of common shares		284,965			224,214			74,451
Net proceeds from issuance of preferred shares		-			83,438			111,125
Redemption of preferred shares		-			-			(57,536	)
Impact of stock option exercises, net		(805	)		(147	)		(731	)
Proceeds from payment on shareholder loan		-			1,600			-
Purchase of common shares for treasury		(1,201	)		(777	)		(1,448	)
Distributions paid to noncontrolling interests		(209	)		(637	)		(140	)
Dividends paid to shareholders		(126,907	)		(124,930	)		(97,815	)
Net cash provided by financing activities		15,658			381,196			294,339
Effect of exchange rate changes on cash		583			(588	)		475
Net increase (decrease) in cash and cash equivalents		(26,944	)		34,912			5,756
Cash and cash equivalents at beginning of the year		50,082			15,170			9,414
Cash and cash equivalents at end of the year	$	23,138		$	50,082		$	15,170

Supplemental information continued on next page.

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Consolidated Statements of Cash Flows

(Dollars in thousands)

Continued from previous page.

	Year ended December 31,
	2009			2008			2007
Supplemental schedule of non-cash activity:
Acquisition of interest in joint venture assets in exchange for assumption of debt and other liabilities at fair value	$	-		$	-		$	136,029
Transfer of property under development to rental property	$	38,990		$	26,742		$	32,595
Issuance of nonvested shares, including nonvested shares issued for payment of bonuses	$	4,368		$	6,028		$	8,756
Supplemental disclosure of cash flow information:
Cash paid during the year for interest	$	70,124		$	69,160		$	56,664
Cash paid (received) during the year for income taxes	$	(383	)	$	(429	)	$	419

See accompanying notes to consolidated financial statements.

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Notes to Consolidated Financial Statements

December 31, 2009, 2008 and 2007

1. Organization

Description of Business

Entertainment Properties Trust (the Company) is a Maryland real estate investment trust (REIT) organized on August 29, 1997. The Company develops, owns, leases and finances megaplex theatres, entertainment retail centers (centers generally anchored by an entertainment component such as a megaplex theatre and containing other entertainment-related properties), and destination recreational and specialty properties. The Company’s properties are located in the United States and Canada.

2. Summary of Significant Accounting Policies

Principles of Consolidation

The consolidated financial statements include the accounts of Entertainment Properties Trust and its subsidiaries, all of which are wholly-owned except for those subsidiaries discussed below.

The Company consolidates certain entities if it is deemed to be the primary beneficiary in a variable interest entity (VIE), as defined in Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic on Consolidation. The equity method of accounting is applied to entities in which the Company is not the primary beneficiary as defined in the Consolidation Topic of the FASB ASC, or does not have effective control, but can exercise influence over the entity with respect to its operations and major decisions.

The Company reports its noncontrolling interests as required by the Consolidation Topic of the FASB ASC. Noncontrolling interest is the portion of equity (net assets) in a subsidiary not attributable, directly or indirectly, to a parent. The ownership interests in the subsidiary that are held by owners other than the parent are noncontrolling interests. Such noncontrolling interests are reported on the consolidated balance sheets within equity, separately from the Company’s equity. On the consolidated statements of income, revenues, expenses and net income or loss from less-than-wholly-owned subsidiaries are reported at the consolidated amounts, including both the amounts attributable to the Company and noncontrolling interests. Consolidated statements of changes in shareholder’s equity are included for both quarterly and annual financial statements, including beginning balances, activity for the period and ending balances for equity, noncontrolling interests and total equity. The Company does not have any redeemable noncontrolling interests under the scope of FASB ASC Topic 480 on Distinguishing Liabilities from Equity.

As further explained in Note 8, the Company owns 96% of the membership interests of VinREIT, LLC (VinREIT). Net income attributable to noncontrolling interest related to VinREIT was $231 thousand, $277 thousand and $66 thousand for the years ended December 31, 2009, 2008 and 2007, respectively, representing GWP’s portion of the annual cash flow. Total noncontrolling interest in VinREIT included in the accompanying consolidated balance sheets was $133 thousand and $117 thousand at December 31, 2009 and 2008, respectively.

As further explained in Note 8, New Roc Associates, LP (New Roc) is owned 71.4% by the Company. There was no net income attributable to noncontrolling interest related to New Roc for the years ended December 31, 2009, 2008 and 2007. Total noncontrolling interest in New Roc included in the accompanying consolidated balance sheets was $3.9 million for both December 31, 2009 and 2008.

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Notes to Consolidated Financial Statements

December 31, 2009, 2008 and 2007

As further explained in Note 8, LC White Plains Retail LLC, LC White Plains Recreation LLC and Cappelli Group LLC (together the White Plains entities), as well as Suffolk Retail LLC (Suffolk), are VIEs in which the Company has been deemed to be the primary beneficiary. Accordingly, the financial statements of these VIEs have been consolidated into the Company’s financial statements. Net loss attributable to noncontrolling interest related to the White Plains entities was $20.1 million, 2.6 million and $1.4 million, respectively, for the years ended December 31, 2009, 2008 and 2007. There was no net income or loss attributable to noncontrolling interest related to Suffolk for the years ended December 31, 2009, 2008 or 2007. Total noncontrolling interest in the White Plains entities was ($9.0 million) and $11.2 million as of December 31, 2009 and 2008, respectively. Total noncontrolling interest in Suffolk was $3.0 thousand as of December 31, 2009 and 2008.

Use of Estimates

Management of the Company has made a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities to prepare these consolidated financial statements in conformity with accounting principles generally accepted in the United States of America. Actual results could differ from those estimates.

Rental Properties

Rental properties are carried at cost less accumulated depreciation. Costs incurred for the acquisition and development of the properties are capitalized. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which generally are estimated to be 40 years for buildings and 3 to 25 years for furniture, fixtures and equipment. Tenant improvements, including allowances, are depreciated over the shorter of the base term of the lease or the estimated useful life. Expenditures for ordinary maintenance and repairs are charged to operations in the period incurred. Significant renovations and improvements which improve or extend the useful life of the asset are capitalized and depreciated over their estimated useful life.

Management reviews a property for impairment whenever events or changes in circumstances indicate that the carrying value of a property may not be recoverable. The review of recoverability is based on an estimate of undiscounted future cash flows expected to result from its use and eventual disposition. If impairment exists due to the inability to recover the carrying value of the property, an impairment loss is recorded to the extent that the carrying value of the property exceeds its estimated fair value.

Accounting for Acquisitions

Upon acquisitions of real estate properties, the Company records the fair value of acquired tangible assets (consisting of land, building, tenant improvements, and furniture, fixtures and equipment) and identified intangible assets and liabilities (consisting of above and below market

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Notes to Consolidated Financial Statements

December 31, 2009, 2008 and 2007

leases, in-place leases, tenant relationships and assumed financing that is determined to be above or below market terms) as well as any noncontrolling interest in accordance with FASB ASC Topic 805 on Business Combinations (“Topic 805”). In addition, in accordance with Topic 805, acquisition-related costs in connection with business combinations are expensed as incurred, rather than capitalized. Costs related to such transactions, as well as costs associated with terminated transactions, are included in the accompanying Consolidated Statements of Income as transaction costs. Transaction costs totaled $3.3 million, $1.6 million and $253 thousand for the years ended December 31, 2009, 2008 and 2007, respectively.

Most of the Company’s rental property acquisitions do not involve in-place leases. In such cases, the fair value of the tangible assets is determined based on recent independent appraisals and management judgment. Because the Company typically executes these leases simultaneously with the purchase of the real estate, no value is ascribed to in-place leases in these transactions.

For rental property acquisitions involving in-place leases, the fair value of the tangible assets is determined by valuing the property as if it were vacant based on management’s determination of the relative fair values of the assets. Management determines the “as if vacant” fair value of a property using recent independent appraisals or methods similar to those used by independent appraisers. The aggregate value of intangible assets or liabilities is measured based on the difference between the stated price plus capitalized costs and the property as if vacant.

In determining the fair value of acquired in-place leases, the Company considers many factors. On a lease-by-lease basis, management considers the present value of the difference between the contractual amounts to be paid pursuant to the leases and management’s estimate of fair market lease rates. For above market leases, management considers such differences over the remaining non-cancelable lease terms and for below market leases, management considers such differences over the remaining initial lease terms plus any fixed rate renewal periods. The capitalized above-market lease values are amortized as a reduction of rental income over the remaining non-cancelable terms of the respective leases. The capitalized below market lease values are amortized as an increase to rental income over the remaining initial lease terms plus any fixed rate renewal periods. Management considers several factors in determining the discount rate used in the present value calculations, including the credit risks associated with the respective tenants. If debt is assumed in the acquisition, the determination of whether it is above or below market is based upon a comparison of similar financing terms for similar rental properties at the time of the acquisition.

The fair value of acquired in-place leases also includes management’s estimate, on a lease-by-lease basis, of the present value of the following amounts: (i) the value associated with avoiding the cost of originating the acquired in-place leases (i.e. the market cost to execute the leases, including leasing commissions, legal and other related costs); (ii) the value associated with lost revenue related to tenant reimbursable operating costs estimated to be incurred during the assumed re-leasing period, (i.e. real estate taxes, insurance and other operating expenses); (iii) the value associated with lost rental revenue from existing leases during the assumed re-leasing period; and (iv) the value associated with avoided tenant improvement costs or other inducements to secure a tenant lease. These values are amortized over the remaining initial lease term of the respective leases.

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Notes to Consolidated Financial Statements

December 31, 2009, 2008 and 2007

The Company also determines the value, if any, associated with customer relationships considering factors such as the nature and extent of the Company’s existing business relationship with the tenants, growth prospects for developing new business with the tenants and expectation of lease renewals. The value of customer relationship intangibles is amortized over the remaining initial lease terms plus any renewal periods.

Management of the Company reviews the carrying value of intangible assets for impairment on an annual basis. Intangible assets consist of the following at December 31 (in thousands):

	2009		2008
In-place leases, net of accumulated amortization of $6.9 million and $7.1 million, respectively	$	6,034	11,707
Goodwill		693	693
Total intangible assets, net	$	6,727	12,400

In-place leases, net at December 31, 2009 of approximately $6.0 million, relate to four entertainment retail centers in Ontario, Canada that were purchased on March 1, 2004 and one entertainment retail center in Burbank, California that was purchased on March 31, 2005. The in-place leases related to one entertainment retail center in White Plains, New York that was purchased on May 8, 2007 were subsequently written-off due to an impairment charge recognized for the quarter ended September 30, 2009 as further discussed in Note 4. Goodwill at December 31, 2009 and 2008 relates solely to the acquisition of New Roc that was acquired on October 27, 2003. Amortization expense related to in-place leases is computed using the straight-line method and was $3.2 million, $2.7 million and $1.8 million for the years ended December 31, 2009, 2008 and 2007, respectively. The weighted average life for these in-place leases at December 31, 2009 is 5.4 years.

Future amortization of in-place leases at December 31, 2009 is as follows (in thousands):

	Amount
Year:
2010	$	1,182
2011		1,182
2012		1,182
2013		1,180
2014		623
Thereafter		685
Total	$	6,034

Deferred Financing Costs

Deferred financing costs are amortized over the terms of the related long-term debt obligations or mortgage note receivable as applicable.

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Notes to Consolidated Financial Statements

December 31, 2009, 2008 and 2007

Capitalized Development Costs

The Company capitalizes certain costs that relate to property under development including interest and a portion of internal legal personnel costs.

Operating Segment

The Company aggregates the financial information of all its investments into one reportable segment because the investments all have similar economic characteristics and because the Company does not internally report and is not internally organized by investment or transaction type.

Revenue Recognition

Rents that are fixed and determinable are recognized on a straight-line basis over the minimum terms of the leases. Base rent escalation on leases that are dependent upon increases in the Consumer Price Index (CPI) is recognized when known. Straight-line rent receivable is included in accounts receivable and was $26.1 million and $23.1 million at December 31, 2009 and 2008, respectively. In addition, most of the Company’s tenants are subject to additional rents if gross revenues of the properties exceed certain thresholds defined in the lease agreements (percentage rents). Percentage rents are recognized at the time when specific triggering events occur as provided by the lease agreements. Percentage rents of $1.5 million, $1.7 million and $2.1 million were recognized for the years ended December 31, 2009, 2008 and 2007, respectively. Lease termination fees are recognized when the related leases are canceled and the Company has no obligation to provide services to such former tenants. No termination fees were recognized during the years ended December 31, 2009, 2008 and 2007.

Direct financing lease income is recognized on the effective interest method to produce a level yield on funds not yet recovered. Estimated unguaranteed residual values at the date of lease inception represent management’s initial estimates of fair value of the leased assets at the expiration of the lease, not to exceed original cost. Significant assumptions used in estimating residual values include estimated net cash flows over the remaining lease term and expected future real estate values. The estimated unguaranteed residual value is reviewed on an annual basis to determine if there are other than temporary impairments. The Company evaluates on an annual basis during the second quarter (or more frequently if necessary) the collectibility of its direct financing lease receivable and unguaranteed residual value to determine whether they are impaired. A direct financing lease receivable is considered to be impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the existing contractual terms. When a direct financing lease receivable is considered to be impaired, the amount of loss is calculated by comparing the recorded investment to the value determined by discounting the expected future cash flows at the direct financing lease receivable’s effective interest rate or to the fair value of the underlying collateral, less costs to sell, if such receivable is collateralized.

Allowance for Doubtful Accounts

Accounts receivable is reduced by an allowance for amounts that may become uncollectible in the future. The Company’s accounts receivable balance is comprised primarily of rents and operating

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Notes to Consolidated Financial Statements

December 31, 2009, 2008 and 2007

cost recoveries due from tenants as well as accrued rental rate increases to be received over the life of the existing leases. The Company regularly evaluates the adequacy of its allowance for doubtful accounts. The evaluation primarily consists of reviewing past due account balances and considering such factors as the credit quality of the Company’s tenants, historical trends of the tenant and/or other debtor, current economic conditions and changes in customer payment terms. Additionally, with respect to tenants in bankruptcy, the Company estimates the expected recovery through bankruptcy claims and increases the allowance for amounts deemed uncollectible. If the Company’s assumptions regarding the collectibility of accounts receivable prove incorrect, the Company could experience write-offs of the accounts receivable or accrued straight-line rents receivable in excess of its allowance for doubtful accounts. The allowance for doubtful accounts was $4.9 million and $2.3 million at December 31, 2009 and 2008.

Mortgage Notes and Other Notes Receivable

Mortgage notes and other notes receivable, including related accrued interest receivable, consist of loans originated by the Company and the related accrued and unpaid interest income as of the balance sheet date. Mortgage notes and other notes receivable are initially recorded at the amount advanced to the borrower and the Company defers certain loan origination and commitment fees, net of certain origination costs, and amortizes them over the term of the related loan. Interest income on performing loans is accrued as earned. The Company evaluates the collectibility of both interest and principal of each of its loans to determine whether it is impaired. A loan is considered to be impaired when, based on current information and events, the Company determines that it is probable that it will be unable to collect all amounts due according to the existing contractual terms. When a loan is considered to be impaired, the amount of loss is calculated by comparing the recorded investment to the value determined by discounting the expected future cash flows at the loan’s effective interest rate or to the fair value of the underlying collateral, less costs to sell, if the loan is collateral dependent. For impaired loans, interest income is recognized on a cash basis, unless the Company determines based on the loan to estimated fair value ratio the loan should be on the cost recovery method, and any cash payments received would then be reflected as a reduction of principal. Interest income recognition is recommenced if and when the impaired loan becomes contractually current and performance is demonstrated to be resumed.

Income Taxes

The Company operates in a manner intended to enable it to qualify as a REIT under the Internal Revenue Code (the Code). A REIT which distributes at least 90% of its taxable income to its shareholders each year and which meets certain other conditions is not taxed on that portion of its taxable income which is distributed to its shareholders. The Company intends to continue to qualify as a REIT and distribute substantially all of its taxable income to its shareholders.

In 2004, the Company acquired certain real estate operations that are subject to income tax in Canada. Also in 2004, the Company formed certain taxable REIT subsidiaries, as permitted under the Code, through which it conducts certain business activities. The taxable REIT subsidiaries are subject to federal and state income taxes on their net taxable income. Temporary differences between income for financial reporting purposes and taxable income for the Canadian operations and the taxable REIT subsidiaries relate primarily to depreciation, amortization of

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Notes to Consolidated Financial Statements

December 31, 2009, 2008 and 2007

deferred financing costs and straight line rents. As of December 31, 2009 and 2008, respectively, the Canadian operations and the taxable REIT subsidiaries had deferred tax assets totaling approximately $12.1 million and $8.7 million and deferred tax liabilities totaling approximately $4.3 million and $3.4 million. As there is no assurance that the Canadian operations and the taxable REIT subsidiaries will generate taxable income in the future beyond the reversal of temporary taxable differences, the deferred tax assets have been offset by a valuation allowance such that there is no net deferred tax asset at December 31, 2009 and 2008. Furthermore, the Company qualified as a REIT and distributed the necessary amount of taxable income such that no federal income taxes were due for the years ended December 31, 2009, 2008 and 2007. Accordingly, no provision for income taxes was recorded for any of those years. If the Company fails to qualify as a REIT in any taxable year, it will be subject to federal income taxes at regular corporate rates (including any applicable alternative minimum tax) and may not be able to qualify as a REIT for four subsequent taxable years. Even if the Company qualifies for taxation as a REIT, the Company is subject to certain state and local taxes on its income and property, and federal income and excise taxes on its undistributed taxable income.

In June 2006, the Financial Accounting Standards Board (FASB) issued guidance that clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and it prescribes a recognition threshold and measurement attribute criteria for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.

The Company adopted these provisions of FASB ASC Topic 740, “Income Taxes” on January 1, 2007. The Company does not have any material unrecognized tax positions, and therefore, thus adoption did not have a material impact on the Company’s financial position or results of operations.

The Company’s policy is to recognize estimated interest and penalties as general and administrative expense. The Company believes that it has appropriate support for the income tax positions taken on its tax returns and that its accruals for tax liabilities are adequate for all open years (after 2006 for federal and state and after 2004 for Canada) based on an assessment of many factors including past experience and interpretations of tax laws applied to the facts of each matter.

Concentrations of Risk

American Multi-Cinema, Inc. (AMC) is the lessee of a substantial portion (43%) of the megaplex theatre rental properties held by the Company (including joint venture properties) at December 31, 2009 as a result of a series of sale leaseback transactions pertaining to a number of AMC megaplex theatres. A substantial portion of the Company’s rental revenues (approximately $97.3 million or 48%, $97.4 million or 48%, and $95.6 million or 51% for the years ended December 31, 2009, 2008 and 2007, respectively) result from the rental payments by AMC under the leases, or its parent, AMC Entertainment, Inc. (AMCE), as the guarantor of AMC’s obligations under the leases. AMCE had total assets of $3.7 billion and $3.8 billion, total liabilities of $2.7 billion and $2.7 billion and total stockholders’ equity of $1.0 billion and $1.1 billion at April 2, 2009 and April 3, 2008, respectively. AMCE had a net loss of $81.2 million for the fifty-two weeks ended

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Notes to Consolidated Financial Statements

December 31, 2009, 2008 and 2007

April 2, 2009 and net earnings of $43.4 million for the fifty-three weeks ended April 3, 2008. In addition, AMCE had net earnings of $16.9 million for the thirty-nine weeks ended December 31, 2009. AMCE has publicly held debt and the foregoing financial information was reported in its consolidated financial information which is publicly available.

For the years ended December 31, 2009, 2008 and 2007, respectively, approximately $35.9 million, or 13.3%, $37.6 million or 13.1%, and $35.8 million, or 15.2%, of total revenue was derived from the Company’s four entertainment retail centers in Ontario, Canada. For the years ended December 31, 2008 and 2007, respectively, $54.4 million, or 19% and $48.5 million, or 20.6%, of our total revenue was derived from the Company’s four entertainment retail centers in Ontario, Canada combined with the mortgage financing interest related to the Company’s mortgage note receivable held in Canada and initially funded on June 1, 2005. For the year ended December 31, 2009, no mortgage financing interest income was recognized related to the Company’s mortgage note receivable held in Canada as further described in Note 5. The Company’s wholly owned subsidiaries that hold the Canadian entertainment retail centers, third party debt and mortgage note receivable (net of loan loss reserve) represent approximately $228.6 million or 16% and $219.5 million or 17% of the Company’s net assets as of December 31, 2009 and 2008, respectively.

Cash Equivalents

Cash equivalents include bank demand deposits and shares of highly liquid institutional money market mutual funds for which cost approximates market value.

Restricted Cash

Restricted cash represents cash held for a borrower’s debt service reserve for mortgage notes receivable and also deposits required in connection with debt service, payment of real estate taxes and capital improvements.

Share-Based Compensation

Share-based compensation to employees of the Company is determined pursuant to the Annual Incentive Program and the Long-Term Incentive Plan. Share-based compensation to non-employee trustees of the Company is determined pursuant to the director compensation program. Prior to May 9, 2007, all common shares and options to purchase common shares (share options) were issued under the 1997 Share Incentive Plan. The 2007 Equity Incentive Plan was approved by shareholders at the May 9, 2007 annual meeting and this plan replaced the 1997 Share Incentive Plan. Accordingly, all common shares and options to purchase common shares granted on or after May 9, 2007 are issued under the 2007 Equity Incentive Plan.

The Company accounts for share based compensation under the FASB ASC Topic on Stock Compensation. Share based compensation expense consists of share option expense, amortization of nonvested share grants, and shares and share units issued to non-employee Trustees for payment of their annual retainers. Share based compensation is included in general and administrative expense in the accompanying consolidated statements of income, and totaled $4.3 million, $4.0 million and $3.2 million for the years ended December 31, 2009, 2008 and 2007, respectively.

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Notes to Consolidated Financial Statements

December 31, 2009, 2008 and 2007

Share Options

Share options are granted to employees pursuant to the Long-Term Incentive Plan and to non-employee Trustees for their service to the Company. The fair value of share options granted is estimated at the date of grant using the Black-Scholes option pricing model. Share options granted to employees vest over a period of four to five years and share option expense for these options is recognized on a straight-line basis over the vesting period. Share options granted to non-employee Trustees vest immediately but may not be exercised for a period of one year from the grant date. Share option expense for non-employee Trustees is recognized on a straight-line basis over the year of service by the non-employee Trustees.

The expense related to share options included in the determination of net income for the years ended December 31, 2009, 2008 and 2007 was $679 thousand, $446 thousand and $422 thousand, respectively. The following assumptions were used in applying the Black-Scholes option pricing model at the grant dates: risk-free interest rate of 2.6% to 2.8% and 3.2% to 3.5% and 4.8% in 2009, 2008 and 2007, respectively, dividend yield of 6.5% to 6.6%, 6.7% and 5.2% to 5.4% in 2009, 2008 and 2007, respectively, volatility factors in the expected market price of the Company’s common shares of 31.4% to 37.5%, 23.2% and 19.5% to 19.8% in 2009, 2008 and 2007, respectively, no expected forfeitures and an expected life of eight years. The Company uses historical data to estimate the expected life of the option and the risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant. Additionally, expected volatility is computed based on the average historical volatility of the Company’s publicly traded shares.

Nonvested Shares Issued to Employees

The Company grants nonvested shares to employees pursuant to both the Annual Incentive Program and the Long-Term Incentive Plan. The Company amortizes the expense related to the nonvested shares awarded to employees under the Long-Term Incentive Plan and the premium awarded under the nonvested share alternative of the Annual Incentive Program on a straight-line basis over the future vesting period (three to five years). Total expense recognized related to all nonvested shares was $3.3 million, $3.2 million and $2.5 million for the years ended December 31, 2009, 2008 and 2007, respectively.

Shares Issued to Non-Employee Trustees

Prior to 2009, the Company issued shares to non-employee Trustees for payment of their annual retainers. These shares vested immediately but could not be sold for a period of one year from the grant date. This expense was amortized by the Company on a straight-line basis over the year of service by the non-employee Trustees. Total expense recognized related to shares issued to non-employee Trustees was $111 thousand, $340 thousand and $290 thousand for the years ended December 31, 2009, 2008 and 2007, respectively.

Restricted Share Units Issued to Non-Employee Trustees

In 2009, the Company issued restricted share units to non-employee Trustees for payment of their annual retainers. The fair value of the share units granted was based on the share price at the date of grant. The share units vest upon the earlier of the day preceding the next annual meeting of shareholders or a change of control. The settlement date for the shares is selected by the non-employee

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Notes to Consolidated Financial Statements

December 31, 2009, 2008 and 2007

trustee, and ranges from three years from the grant date to upon termination of service. This expense was amortized by the Company on a straight-line basis over the year of service by the non-employee Trustees. Total expense recognized related to shares issued to non-employee Trustees was $260 thousand for the year ended December 31, 2009. No expense was recognized related to these shares for the years ended December 31, 2008 and 2007.

Foreign Currency Translation

The Company accounts for the operations of its Canadian properties and mortgage note in Canadian dollars. The assets and liabilities related to the Company’s Canadian properties and mortgage note are translated into U.S. dollars at current exchange rates; revenues and expenses are translated at average exchange rates. Resulting translation adjustments are recorded as a separate component of comprehensive income.

Derivative Instruments

The Company has acquired certain derivative instruments to reduce exposure to fluctuations in foreign currency exchange rates and variable interest rates. The Company has established policies and procedures for risk assessment and the approval, reporting and monitoring of derivative financial instrument activities. These derivatives consist of foreign currency forward contracts, cross currency swaps and interest rate swaps.

As required by the Derivatives and Hedging Topic of the FASB ASC, the Company records all derivatives on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Derivatives may also be designated as hedges of the foreign currency exposure of a net investment in a foreign operation. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. The Company may enter into derivative contracts that are intended to economically hedge certain of its risk, even though hedge accounting does not apply or the Company elects not to apply hedge accounting under the Derivatives and Hedging Topic of the FASB ASC.

Reclassifications

Certain reclassifications have been made to the prior period amounts to conform to the current period presentation.

Subsequent Events

The Company evaluated subsequent events through the time of filing these financial statements with the SEC on February 26, 2010.

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Notes to Consolidated Financial Statements

December 31, 2009, 2008 and 2007

3. Rental Properties

The following table summarizes the carrying amounts of rental properties as of December 31, 2009 and 2008 (in thousands):

	2009			2008
Buildings and improvements	$	1,558,465		1,452,500
Furniture, fixtures & equipment		68,227		62,090
Land		486,575		434,514
		2,113,267		1,949,104
Accumulated depreciation		(258,638	)	(214,078	)
Total	$	1,854,629		1,735,026

Depreciation expense on rental properties was $43.2 million, $40.2 million and $34.8 million for the years ended December 31, 2009, 2008 and 2007, respectively.

On December 3, 2009, the Company completed a purchase of vineyard and winery equipment from its tenant, Ascentia Wine Estates, for a total investment of $8.5 million and this equipment was leased back to the tenant.

On December 18, 2009, the Company acquired 15 theatre properties for a total investment of $121.5 million. The properties are located in Connecticut, Massachusetts, New Jersey, Virginia, Kentucky, Ohio, Michigan, and Iowa, have a total 231 screens and 52,731 seats and are operated by an affiliate of Rave Cinemas, LLC. The theatres are leased under a long-term triple-net master lease.

During the year ended December 31, 2009, the Company completed the development of a winemaking and storage facility in Sonoma, California for a total development cost of approximately $12.5 million. The facility consists of approximately 58 thousand square feet and 20 acres of land, is operated by Carneros Vintners, Inc. and is leased under a long-term triple-net lease.

During the year ended December 31, 2009, the Company completed the initial phase of development of an entertainment retail center adjacent to one of our megaplex theatres in Suffolk, Virginia for a total development cost of $13.4 million. The Harbour View Marketplace is approximately 80 thousand square feet and the anchor tenant occupies approximately 48 thousand square feet under a long-term ground lease. At December 31, 2009, there is approximately $5.6 million in property under development at this center.

4. Impairment Charges

The Company’s entertainment retail center in White Plains, New York, held in a consolidated joint venture, was acquired with mortgage financing that had a loan to fair value ratio of more than 70% at the time of the Company’s acquisition of its interests in May 2007. The loan is

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Notes to Consolidated Financial Statements

December 31, 2009, 2008 and 2007

personally guaranteed by the principals of our minority partner, one of which is the same individual that is either personally, or through his related interests, in default on several other obligations to the Company (see Notes 5 and 8 below). The debt on this center is due in October 2010, and absent any improvement in the performance of the asset, the lender will likely require additional credit support and fees to extend the loan. Any such extension would also require the cooperation of the partners in the joint venture. Without a resolution of our disputes with the principals of our minority partner, there can be no assurance that the Company and the minority partner will cooperate. Given that the debt is currently non-recourse to the Company, the Company may elect not to further support the joint venture, which may include a decision to surrender the property at the loan’s maturity. Accordingly, the Company performed an impairment assessment of this asset as of September 30, 2009. It was determined that the carrying value of the asset exceeded the estimated fair value by $35.8 million, and an impairment charge was recorded at September 30, 2009 for this amount, which was comprised of $32.4 million related to real estate investment and $3.4 million related to in-place leases. Management determined the fair value of the asset taking into account various factors, including an independent appraisal prepared as of September 30, 2009 which indicated a fair value of $118.0 million. In accordance with the FASB ASC Topic on Consolidation and the Company’s policy for allocation of income and loss for this joint venture, a loss of $15.1 million related to the impairment charge was allocated to the noncontrolling interest related to this venture. The noncontrolling interest related to White Plains was a deficit balance of $9.0 million at December 31, 2009 which is recorded as a component of equity.

Additionally, during the three months ended December 31, 2009, the Company determined that four of its vineyard and winery properties were impaired as payments were not being received per the contractual terms. It was determined that the carrying value of the assets exceeded the estimated fair value by $6.4 million, and an impairment charge was recorded as of December 31, 2009 for this amount. Management determined the fair value of the assets taking into account various factors, including an independent appraisal prepared as of December 31, 2009 which indicated a total fair value of $35.0 million.

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Notes to Consolidated Financial Statements

December 31, 2009, 2008 and 2007

5. Investment in Mortgage Notes

Investment in mortgage notes, including related accrued interest receivable, at December 31, 2009 and 2008 consists of the following (in thousands):

	2009			2008
(1) Mortgage note and related accrued interest receivable, LIBOR plus 3.5%	$	—		3,651
(2) Mortgage note and related accrued interest receivable, 10.00%, due April 2, 2010		32,848		29,735
(3) Mortgage note and related accrued interest receivable, 15.0%		126,658		103,289
(4) Mortgage note and related accrued interest receivable, 11.00%, due September 10, 2010		133,119		134,150
(5) Mortgage notes and related accrued interest receivable, 7.00%, due May 1, 2019		163,298		134,948
(6) Mortgage note, 9.53%, due March 10, 2027		8,000		8,000
(7) Mortgage notes, 10.15%, due April 3, 2027		62,500		62,500
(8) Mortgage note, 9.40%, due October 30, 2027		32,233		32,233
Total mortgage notes and related accrued interest receivable	$	558,656		508,506
Less: loan loss reserves		(35,776	)	—
Total mortgage notes and related accrued interest receivable, net	$	522,880		508,506

(1) On December 28, 2007, a wholly-owned subsidiary of the Company entered into a secured first mortgage loan agreement for $27.0 million with Prairie Creek Properties, LLC for the development of an approximately 9,000 seat amphitheatre in Hoffman Estates, Illinois. The Company advanced $3.5 million during the year ended December 31, 2007 under this agreement. On May 8, 2009, the Company received payment in full on its mortgage note receivable and related accrued interest of $3.7 million from Prairie Creek Properties, LLC.

(2) On April 4, 2007, a wholly-owned subsidiary of the Company entered into a secured first mortgage loan agreement for $25.0 million with Peak Resorts, Inc. (Peak) for the further development of Mount Snow. The loan is secured by approximately 696 acres of development land. The carrying value of this mortgage note receivable at December 31, 2009 was $32.8 million, including related accrued interest receivable of $7.8 million. All principal and accrued interest from inception of the loan is due at maturity. Per the terms of the note agreement, Peak has the option to roll the principal and related accrued interest receivable at the April 2, 2010 maturity date into the $62.5 million note referenced in (7) below.

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Notes to Consolidated Financial Statements

December 31, 2009, 2008 and 2007

(3) The Company’s second mortgage note and related accrued interest receivable is denominated in Canadian dollars (CAD) and during the year ended December 31, 2009, a wholly-owned subsidiary of the Company invested an additional CAD $7.6 million ($7.2 million U.S.) bringing the total investment to CAD $133.1 million ($126.7 million U.S.) in the mortgage note receivable from Metropolis Limited Partnership (the Partnership) related to the construction of the Toronto Dundas Square Project, a 13 level entertainment retail center in downtown Toronto that was completed in May 2008 for a total cost of approximately CAD $330 million. Additionally, as of December 31, 2009, the Company had posted irrevocable stand-by letters of credit related to this project totaling $1.5 million U.S which are expected to be cancelled or drawn upon during 2010. The loan is denominated in Canadian dollars and is secured by a second mortgage on the Toronto Dundas Square Project.

A group of banks (the bank syndicate) has provided first mortgage construction financing to the Partnership totaling approximately CAD $119.0 million ($113.2 million U.S.) as of December 31, 2009. In April 2009, the bank syndicate and the Company elected to pursue a receivership after it became apparent that a restructuring of the existing equity interests was no longer possible. On April 27, 2009, the court appointed a receiver who is overseeing the sale of the property. On January 8, 2010 the Company signed a purchase agreement to acquire this center in early 2010; however, the purchase of this center is subject to various conditions. As a result, the Company can offer no assurance that this transaction will be completed. The Company has finalized the terms of a credit facility with a group of banks to provide CAD $100 million first mortgage financing that is expected to close in conjunction with the purchase. The Company expects to consolidate the financial results of the property subsequent to the purchase.

The Company has evaluated this mortgage note receivable for impairment. Because repayment of the mortgage note receivable did not meet the contractual terms of the agreement, the Company determined the loan was impaired during the quarter ended March 31, 2009 and ceased accruing interest income as of January 1, 2009 on the loan for book purposes. Accordingly, no interest income was recognized for the year ended December 31, 2009 and no interest income will be recognized in future periods. Interest income recognized on this loan for the years ended December 31, 2008 and 2007 was CAD $17.9 million ($16.9 million U.S.) and CAD $13.5 million ($12.8 million U.S.), respectively. Furthermore, management of the Company reviewed the fair value of the property at September 30, 2009, taking into account a bid from a third party for the second mortgage receivable which implied an overall property value of approximately CAD $217 million ($206.5 million U.S.) and an independent appraisal completed in September 2009, and determined a provision for loan loss of CAD $37.6 million ($34.8 million U.S.) was necessary. Therefore, the net carrying value of this mortgage note receivable at December 31, 2009 was CAD $95.5 million ($90.9 million U.S.).

The Company received origination fees of CAD $250 thousand ($237 thousand U.S.) for the year ended December 31, 2007, in connection with this second mortgage note receivable and the fees were amortized through May 31, 2008.

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Notes to Consolidated Financial Statements

December 31, 2009, 2008 and 2007

(4) On August 20, 2008, a wholly-owned subsidiary of the Company entered into an agreement to provide a secured first mortgage loan of $225.0 million to Concord Resorts, LLC (Concord Resorts), an entity controlled by Louis Cappelli (Mr. Cappelli), related to a planned casino and resort development in Sullivan County, New York. The Company’s investment is secured by a first mortgage on the resort complex real estate totaling 1,584 acres. In addition, the Company has a second mortgage on the remaining 139 acres of the casino related real estate and the loan is personally guaranteed by Mr. Cappelli. The Company has certain rights to convert its mortgage interest into fee ownership as the project is further developed. The net carrying value of this mortgage note receivable at December 31, 2009 was $133.1 million which was funded under the original $225.0 million secured first mortgage commitment.

Due to the economic downturn, certain other lenders on the development have either reduced their commitments or withdrawn from the project. The planned initial phase of the casino and resort development has been downsized from an estimated $1 billion to an estimated $600 million and Mr. Cappelli is attempting to secure the necessary financing. In June of 2009, the New York legislature passed legislation authorizing the benefits of a special reduced tax rate on gaming receipts in Sullivan County, New York if at least $600 million is invested and 1,000 new jobs are created. As a result of these issues, the development project has been delayed, and there can be no assurance that Mr. Cappelli will obtain the financing necessary to complete the project. Due to these challenges, Concord Resorts has ceased making interest payments to the Company as contractually obligated under the loan agreement. The Company has evaluated its mortgage note receivable for impairment and has determined it was impaired during the quarter ended March 31, 2009 due to the inability of the borrower to meet its contractual obligations per the agreement. The Company’s accounting policy is to recognize interest income on impaired loans on a cash basis. Accrual interest income recognition for book purposes was ceased on January 1, 2009 and therefore no interest income has been recorded during the year ended December 31, 2009. Interest income recognized on this mortgage note receivable for the year ended December 31, 2008 was $6.2 million. Management of the Company determined that no loan loss reserve was necessary for this note considering current factors, including current economic and market conditions, and taking into account an independent appraisal as of April 30, 2009 of the primary collateral, 1,584 acres of land, which indicated a value significantly in excess of the loan balance. On December 31, 2009, the Company commenced litigation against Mr. Cappelli and his affiliates seeking payment of amounts due under various loans to them and a declaratory judgment that no further investments are required to be made by us under any prior commitment.

(5) On March 13, 2007, a wholly-owned subsidiary of the Company entered into a secured mortgage loan agreement with SVV I, LLC and an affiliate of SVV I, LLC (together SVVI) for the development of a water-park anchored entertainment village in Kansas City, Kansas, the first phase of which opened in July 2009. The Company advanced $29.0 million and $39.3 million during the years ended December 31, 2009 and 2008, respectively, under this agreement. On May 6, 2009, the Company reduced its commitment on this project from $175.0 million to $163.5 million and added to its collateral position by placing a mortgage on two other water-parks, located in New Braunfels and South Padre Island, Texas, owned and operated by the entities controlled by the principals of SVVI. The mortgage note on the property in Kansas City, Kansas and the mortgage note on the Texas properties have cross-default and cross-collateral provisions. Pursuant to the mortgage on the Texas properties, only a seasonal line of credit secured by the Texas parks totaling not more than $5.0 million at any time ranks superior to the Company’s

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Notes to Consolidated Financial Statements

December 31, 2009, 2008 and 2007

collateral position. Furthermore, the interest rates increased from LIBOR plus 3.5% points to 7% on July 4, 2009, and the loans were extended from September 30, 2012 to May 1, 2019. Interest income will continue to be recognized on the accrual basis. SVVI is required to fund a debt service reserve for off-season fixed payments (those due from September to May). The reserve is to be funded by equal monthly installments during the months of June, July and August. As a result of the delayed opening of the Kansas water-park in July of 2009 as well as additional start up investment required by SVVI, this reserve has not been fully funded as of December 31, 2009. SVVI is currently pursuing alternative financing sources to fully fund the reserve account. The Company also will receive a percentage of revenue from all three parks after certain threshold levels are achieved that may increase the return on the Company’s invested capital from 7% to as high as 10%. The carrying value of this mortgage note receivable at December 31, 2009 was $163.3 million with no accrued interest receivable. SVV I, LLC is a VIE, but it was determined that the Company was not the primary beneficiary of this VIE. The Company’s maximum exposure to loss associated with SVVI, LLC is limited to the Company’s outstanding mortgage note and related accrued interest receivable.

(6) On March 10, 2006, a wholly-owned subsidiary of the Company provided a secured mortgage loan of $8.0 million to SNH Development, Inc. The secured property is the Crotched Mountain Ski Resort located in Bennington, New Hampshire. The property serves the Boston and Southern New Hampshire markets and has approximately 308 acres. This loan is guaranteed by Peak, which operates the property. Peak is currently required to fund debt service reserves on April 30^th of each year for the following 12 months of debt service payments. Monthly interest payments are transferred to the Company from these debt service reserves. Annually, this interest rate increases based on a formula dependent in part on increases in the CPI.

(7) On April 4, 2007, a wholly-owned subsidiary of the Company entered into two secured first mortgage loan agreements totaling $73.5 million with Peak of which $62.5 million has been advanced as of December 31, 2009. The loans are secured by two ski resorts located in Vermont and New Hampshire. Mount Snow is approximately 2,378 acres and is located in both West Dover and Wilmington, Vermont. Mount Attitash is approximately 1,250 acres and is located in Bartlett, New Hampshire. Peak is currently required to fund debt service reserves on April 30^th of each year for the following 12 months of debt service payments. Monthly interest payments are transferred to the Company from these debt service reserves. Annually, this interest rate increases based on a formula dependent in part on increases in the CPI.

(8) On October 30, 2007, a wholly-owned subsidiary of the Company entered into a secured first mortgage loan agreement for $31.0 million with Peak, which was subsequently amended to $41.0 million. As of December 31, 2009, $32.2 million had been advanced under this agreement. The loan is secured by seven ski resorts located in Missouri, Indiana, Ohio and Pennsylvania with a total of approximately 1,431 acres. Peak is currently required to fund debt service reserves on April 30^th of each year for the following 12 months of debt service payments. Monthly interest payments are transferred to the Company from these debt service reserves. Annually, this interest rate increases based on a formula dependent in part on increases in the CPI.

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Notes to Consolidated Financial Statements

December 31, 2009, 2008 and 2007

The following summarizes the activity within the allowance for loan losses related to mortgage notes receivable for the year ended December 31, 2009 (in thousands):

	2009
Allowance for loan losses at January 1	$	—
Provision for loan losses		34,757
Charge-offs		—
Recoveries		—
Impact of foreign currency translation on ending balance		1,019
Allowance for loan losses at December 31	$	35,776

There was no allowance for loan losses at December 31, 2008 or any activity in this account for the year ended December 31, 2008.

6. Investment in a Direct Financing Lease

The Company’s investment in a direct financing lease relates to the Company’s master lease of 22 public charter school properties. Investment in a direct financing lease, net represents estimated unguaranteed residual values of leased assets and net unpaid rentals, less related deferred income. The following table summarizes the carrying amounts of investment in a direct financing lease, net as of December 31, 2009 and 2008 (in thousands):

	2009			2008
Total minimum lease payments receivable	$	539,475		$	555,869
Estimated unguaranteed residual value of leased assets		162,093			162,093
Less deferred income (1)		(531,718	)		(551,873	)
Investment in a direct financing lease, net	$	169,850		$	166,089

⁽¹⁾ Deferred income is net of $1.7 million of initial direct costs.

Additionally, the Company has determined that no allowance for losses was necessary at December 31, 2009 and 2008.

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Notes to Consolidated Financial Statements

December 31, 2009, 2008 and 2007

The Company’s direct financing lease has expiration dates ranging from approximately 22 to 24 years. Future minimum rentals receivable on this direct financing lease at December 31, 2009 are as follows (in thousands):

	Amount
Year:
2010	$	16,765
2011		17,269
2012		17,787
2013		18,320
2014		18,870
Thereafter		450,464
Total	$	539,475

7. Unconsolidated Real Estate Joint Ventures

At December 31, 2009, the Company had a 21.9% and 22.1% investment interest in two unconsolidated real estate joint ventures, Atlantic-EPR I and Atlantic-EPR II, respectively. The Company accounts for its investment in these joint ventures under the equity method of accounting.

The Company recognized income of $565, $538 and $491 (in thousands) from its investment in the Atlantic-EPR I joint venture during 2009, 2008 and 2007, respectively. The Company also received distributions from Atlantic-EPR I of $622, $602 and $556 (in thousands) during 2009, 2008 and 2007, respectively. Condensed financial information for Atlantic-EPR I is as follows as of and for the years ended December 31, 2009, 2008 and 2007 (in thousands):

	2009		2008	2007
Rental properties, net	$	27,313	27,957	28,501
Cash		141	141	141
Long-term debt (due May 2010)		15,001	15,416	15,795
Partners’ equity		12,356	12,582	12,844
Rental revenue		4,432	4,410	4,323
Net income		2,443	2,402	2,280

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Notes to Consolidated Financial Statements

December 31, 2009, 2008 and 2007

The Company recognized income of $330, $324 and $301 (in thousands) from its investment in the Atlantic-EPR II joint venture during 2009, 2008 and 2007, respectively. The Company also received distributions from Atlantic-EPR II of $364, $364 and $345 (in thousands) during 2009, 2008 and 2007, respectively. Condensed financial information for Atlantic-EPR II is as follows as of and for the years ended December 31, 2009, 2008 and 2007 (in thousands):

	2009		2008	2007
Rental properties, net	$	21,498	21,958	22,419
Cash		139	538	99
Long-term debt (due September 2013)		12,950	13,280	13,587
Note payable to EPR		117	117	117
Partners’ equity		8,317	8,459	8,613
Rental revenue		2,876	2,867	2,778
Net income		1,331	1,331	1,304

The joint venture agreements for Atlantic-EPR I and Atlantic-EPR II allow the Company’s partner, Atlantic of Hamburg, Germany (“Atlantic”), to exchange up to a maximum of 10% of its ownership interest per year in each of the joint ventures for common shares of the Company or, at our discretion, the cash value of those shares as defined in each of the joint venture agreements. During 2008, the Company paid Atlantic-EPR I and Atlantic-EPR II cash of $133 and $79 (in thousands), respectively, in exchange for additional ownership in each joint venture of 0.7%. During 2009, the Company paid Atlantic cash of $109 and $9 (in thousands), respectively, in exchange for additional ownership of 0.7% and 0.2% for Atlantic-EPR I and Atlantic-EPR II, respectively. During January of 2010, the Company paid Atlantic cash of $51 (in thousands) in exchange for additional ownership of 0.2% for Atlantic-EPR I. These exchanges did not impact total partners’ equity in either Atlantic-EPR I or Atlantic-EPR II.

On April 2, 2008, the Company acquired, through a wholly-owned subsidiary, the remaining 50% ownership interest in CS Fund I and CS Fund I became a wholly-owned subsidiary. Prior to the date of this acquisition, CS Fund I was accounted for as an unconsolidated real estate joint venture. From January 1, 2008 to April 1, 2008, the Company recognized income of $1.1 million and received distributions of $1.3 million related to this investment. For the year ended December 31, 2007, the Company recognized income of $791 (in thousands) and received distributions of $338 (in thousands) related to this investment.

In addition, as of December 31, 2009, the Company had invested $1.6 million in unconsolidated joint ventures for projects located in China.

8. Consolidated Real Estate Joint Ventures

The Company owns 96% of the membership interests of VinREIT, LLC (VinREIT) and accordingly, the financial statements of VinREIT have been consolidated into the Company’s financial statements. VinREIT owns ten wineries and eight vineyards located in California and Washington. The Company’s partner in VinREIT is Global Wine Partners (U.S.), LLC (GWP). GWP provides certain consulting services to VinREIT in connection with the acquisition, development, administration and marketing of vineyard properties and wineries.

As detailed in the operating agreement, GWP is entitled to receive a 1% origination fee on winery and vineyard investments and 4% of the annual cash flow of VinREIT after a charge for debt service. GWP may receive additional amounts upon certain events and after certain hurdle rates of return are achieved by us. Net income attributable to noncontrolling interest related to

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Notes to Consolidated Financial Statements

December 31, 2009, 2008 and 2007

VinREIT was $231 thousand, $277 thousand and $66 thousand for the years ended December 31, 2009, 2008 and 2007, respectively, representing GWP’s portion of the annual cash flow. The Company’s consolidated statements of income include net income related to VinREIT of $4.3 million, $6.2 million and $1.9 million for the years ended December 31, 2009, 2008 and 2007, respectively. The Company received operating distributions from VinREIT of $6.2 million, $8.6 million and $1.0 million during 2009, 2008 and 2007, respectively.

The Company acquired a 71.4% ownership interest in New Roc Associates, LP (New Roc) on October 27, 2003 in exchange for cash of $25 million. New Roc owns an entertainment retail center encompassing 446 thousand square feet located in New Rochelle, New York. The results of New Roc’s operations have been included in the consolidated financial statements since the date of acquisition.

As detailed in the limited partnership agreement, income or loss is allocated as follows: first, to the Company to allow its capital account to equal its cumulative preferred return of 10.142% of its original limited partnership investment, or $2.5 million per year; second, to the Company’s partner in New Roc, LRC Industries L.T.D. (LRC), to allow its capital account to equal its cumulative preferred return of 8% of its original limited partnership investment, or $800 thousand per year; third, as necessary to cause the capital account balance of the Company to equal the sum of its cumulative preference amount plus its invested capital; fourth, as necessary to cause the capital account balance of LRC to equal the sum of its cumulative preference amount plus its invested capital; fifth, after giving effect to the above, among the partners as necessary to cause the portion of each partner’s capital account balance exceeding such partner’s total preference amount to be in proportion to the partners’ then respective ownership interests; and sixth, any balance among the partners in proportion to their then respective ownership interests. The Company’s consolidated statements of income include net income related to New Roc of $938 (in thousands), $1.8 and $1.5 (in millions) for the years ended December 31, 2009, 2008 and 2007, respectively. As described in Note 9, the Company also had a $10 million note receivable from LRC at December 31, 2009, 2008 and 2007.

As detailed in the limited partnership agreement, cash flow is distributed as follows: first, to the Company to allow for a preferred return of 10.142% of its original limited partnership investment, or $2.5 million per year, less a prorata share of capital expenditures; second, to LRC to allow for a preferred return of 8% of its original limited partnership investment, or $800 thousand per year, less a prorata share of capital expenditures; third, in proportion to the partners’ ownership interests for any undistributed capital expenditures; and fourth, until all current year distributions and the amount of debt service payments equals $8.9 million (the Trigger Level), cash flow shall be distributed 85% to the Company and 15% to LRC. After the Trigger Level has been reached for the applicable fiscal year, cash flow shall be distributed 60% to the Company and 40% to LRC. The Company received distributions from New Roc of $2.4 million and $2.5 million during 2008 and 2007, respectively. During 2009, New Roc, which is currently managed by affiliates of Mr. Cappelli, made no distributions to the Company although New Roc had cash available for distribution at December 31, 2009.

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Notes to Consolidated Financial Statements

December 31, 2009, 2008 and 2007

At any time after March 8, 2007, LRC has the right to exchange its interest in New Roc for common shares of the Company or the cash value of those shares, at the Company’s option, as long as the net operating income (NOI) of New Roc during the preceding 12 months exceeds $8.9 million, and certain other conditions are met. The number of common shares of the Company issuable to LRC would equal 75% of LRC’s capital in New Roc (up to 100% if New Roc’s NOI is between $8.9 million and $10.0 million), divided by the greater of the Company’s book value per share or the average closing price of the Company’s common shares. New Roc’s NOI was approximately $7.1 million for the year ended December 31, 2009 and LRC’s capital in New Roc was approximately $3.6 million.

On May 8, 2007, the Company acquired Class A shares in both LC White Plains Retail LLC and LC White Plains Recreation LLC in exchange for $10.5 million. These two entities (together “the White Plains LLCs”) own City Center at White Plains, a 390 thousand square foot entertainment retail center in White Plains, New York that is anchored by a 15 screen megaplex theatre operated by National Amusements. The Class A shares have an initial capital account balance of $10.5 million, a 66.67% voting interest and a 10% preferred return, as further described below.

Cappelli Group, LLC holds the Class B shares in the White Plains LLCs. The Class B shares have an initial capital account balance of $25 million and a 9% preferred return as further described below. City Center Group LLC holds the Class C and Class D shares in the White Plains LLCs. The Class C and Class D shares each have an initial capital account balance of $5 million, the Class C shares have a 33.33% voting interest and preferred returns for each of these classes are further described below.

As detailed in the operating agreements of the White Plains LLCs, cash flow is distributed as follows: first to the Company to allow for a preferred return of 10% on the original capital account of its Class A shares, or $1.05 million, second to Cappelli Group to allow for a preferred return of 9% on the original capital account of its Class B shares, or $2.25 million, third to City Center Group LLC to allow for a preferred return of 10% on the original capital account of its Class C shares, or $0.5 million, fourth to City Center Group LLC to allow for a preferred return of 10% on the original capital account of its Class D shares, or $0.5 million. The operating agreements provide several other priorities of cash flow related to return on and return of subsequent capital contributions that rank below the above four preferred returns. The final priority calls for the remaining cash flow to be distributed 66.67% to the Company’s Class A shares and 33.33% to City Center Group LLC’s Class C shares. If the cash flow of the White Plains LLCs is not sufficient to pay any of the preferred returns described above, the preferred returns remain undistributed, but are due upon a liquidation or refinancing event. Upon liquidation or refinancing, after all undistributed preferred returns and return of capital accounts are paid, any remaining cash is distributed 66.67% to the Company and 33.33% to City Center Group LLC.

Additionally, the Company loaned $20 million to Cappelli Group, LLC which is secured by the Cappelli Group, LLC’s Class B shares of the White Plains LLCs. The note has a stated maturity of May 8, 2027 and bears interest at the rate of 10%. Cappelli Group, LLC is only required to

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Notes to Consolidated Financial Statements

December 31, 2009, 2008 and 2007

make cash interest payments on the $20 million note payable to the extent that they have received cash distributions on their Class B shares of the White Plains LLCs. The White Plains LLC’s are required to pay Cappelli Group, LLC’s Class B distributions directly to the Company to the extent there is accrued interest receivable on the $20 million note.

The Cappelli Group, LLC as well as the White Plains LLCs are VIEs and the Company has been determined to be the primary beneficiary of each of these VIEs. As further discussed below, the financial statements of these VIEs have been consolidated into the Company’s December 31, 2008 and 2007 financial statements. The $20 million note between the Company and Cappelli Group, LLC and the related interest income and expense have been eliminated. Cappelli Group’s income statement for the years ended December 31, 2009, 2008 and 2007 is presented below (in thousands):

	2009		2008	2007
Equity in losses of White Plains LLCs	$	18,143	652	113
Interest expense		2,000	1,978	1,322
Net loss	$	20,143	2,630	1,435

Pursuant to the Consolidation Topic of the FASB ASC, the Company consolidated Cappelli Group LLC’s net loss of $20.1 million, $2.6 million and $1.4 million and recognized a corresponding amount of net income attributable to noncontrolling interest for the years ended December 31, 2009, 2008 and 2007, respectively, since the Company’s only variable interest in Cappelli Group LLC is debt. The Cappelli Group LLC’s equity, after the net loss allocations, is reflected as noncontrolling interest in the Company’s consolidated balance sheets and was a debit balance of $19.2 million at December 31, 2009 and a credit balance of $934 thousand at December 31, 2008.

The Company also consolidated the net loss of the White Plains LLCs of $42.9 million (including an impairment charge of $35.8 million as further described in Note 5), $1.5 million and $164 thousand for the years ended December 31, 2009, 2008 and 2007, respectively, of which $24.8 million and $18.1 million for the year ended December 31, 2009, $892 thousand and $652 thousand for the year ended December 31, 2008 and $51 thousand and $113 thousand for the year ended December 31, 2007, was allocated to the Company and to Cappelli Group, LLC, respectively, based on relative cash distributions received from the White Plains LLCs. The $18.1 million, $652 thousand and $113 thousand for the years ended December 31, 2009, 2008 and 2007, respectively, of net losses allocated to Cappelli Group LLC has been eliminated in consolidation against Cappelli Group LLC’s corresponding equity in losses of the White Plains LLCs.

As described in Note 9, during the year ended December 31, 2007, the Company also provided a $10.0 million loan to City Center Group LLC.

As of December 31, 2009, the Company held a 50% ownership interest in Suffolk. During the year ended December 31, 2009, Suffolk completed the initial phase of development of an entertainment retail center adjacent to one of the Company’s megaplex theatres in Suffolk,

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Notes to Consolidated Financial Statements

December 31, 2009, 2008 and 2007

Virginia for a total development cost of $13.4 million. Additionally, as of December 31, 2009, the Company has loaned $21.4 million to Suffolk including related accrued interest receivable of $3.3 million. The note bears interest at a rate of 10%. Suffolk is a VIE and it was determined that the Company is the primary beneficiary of this VIE. Accordingly, the Company consolidates the financial statements of Suffolk and eliminates the note, related accrued interest receivable and payable, as well as related interest income and expense. At December 31, 2009, there is approximately $5.6 million in property under development at this center.

As detailed in the operating agreement of Suffolk, cash flow is first disbursed to the Company to reduce the balance owed on the accrued interest receivable and principal on the loan. Once the interest and principal on the loan are paid in full, available cash is allocated to the partners in accordance with their ownership percentages.

9. Notes Receivable

Investment in notes, including related accrued interest receivable, net, at December 31, 2009 and 2008 consists of the following (in thousands):

	2009			2008
(1) Note and related accrued interest receivable, 10.00%, due on demand	$	10,000		$	10,083
(2) Note and related accrued interest receivable, 10.00%, due on demand		10,000			10,083
(3) Note and related accrued interest receivable, LIBOR + 3.50%		-			1,005
(4) Note and related accrued interest receivable, 15.00%, due on demand		3,000			-
(5) Revolving credit facility and related accrued interest receivable, 6.00%, due January 1, 2011		1,416			-
(6) Note and related accrued interest receivable, 9.23%, due August 31, 2012		3,751			3,785
(7) Note and related accrued interest receivable, 12.00%, due April 1, 2013		5,074			5,113
(8) Note and related accrued interest receivable, 10.00%, due May 8, 2017		10,000			10,083
(9) Other		160			186
Total notes and related accrued interest receivable	$	43,401		$	40,338
Less: Loan loss reserves		(36,197	)		-
Total notes and related accrued interest receivable, net	$	7,204		$	40,338

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Notes to Consolidated Financial Statements

December 31, 2009, 2008 and 2007

(1) On February 29, 2008, the Company loaned $10 million to Mr. Cappelli. Through his related interests, Mr. Cappelli is the developer and minority interest partner of the Company’s New Roc and White Plains entertainment retail centers located in the New York metropolitan area. The note bears interest at 10% and matured on February 28, 2009. As part of this transaction, the Company also received an option to purchase 50% of Mr. Cappelli’s interests (or Mr. Cappelli’s related interests) in three other projects in the New York metropolitan area.

The Company has evaluated this note receivable for impairment, and has determined that it was impaired during the quarter ended March 31, 2009 due to the inability of the borrower to meet its contractual obligations per the original agreement. Accordingly, accrual interest income recognition was ceased on January 1, 2009. Interest income of $417 thousand has been recorded during the year ended December 31, 2009 which represents payments received by the Company. The latest payment related to this note receivable was received by the Company in June of 2009. Interest income from this loan was $839 thousand for the year ended December 31, 2008. Management of the Company has evaluated the fair value of the underlying collateral of the note and determined that the value of the option was nominal as in the current capital constrained environment, and given the status of the Company’s relationship with Mr. Cappelli, the Company would not exercise this option. Additionally, due to the uncertainty of Mr. Cappelli’s ability to complete developments in progress, the Company did not attribute value to his personal recourse. Through this analysis, the Company has concluded that a loan loss reserve of $10.0 million was necessary at December 31, 2009.

(2) The Company loaned $5 million to its New Roc minority joint venture partner in 2003 in connection with the acquisition of its interest in New Roc and is personally guaranteed by Mr. Cappelli. This note bears interest at 10%, requires monthly interest payments and matured on March 1, 2009. The note is secured by the minority partner’s interest in the partnership. In April 2007, the Company loaned an additional $5 million to the minority partner under this same note agreement.

The Company has evaluated this note receivable for impairment, and has determined that it was impaired during the quarter ended March 31, 2009 due to the inability of the borrower to meet its contractual obligations per the original agreement. Accordingly, accrual interest income recognition was ceased on January 1, 2009. Interest income of $417 thousand has been recorded during the year ended December 31, 2009 which represents payments received by the Company. The latest payment related to this note receivable was received by the Company in June of 2009. Interest income from this loan was $1.0 million and $996 thousand for the years ended December 31, 2008 and 2007, respectively. Management of the Company has evaluated the fair value of the underlying collateral of the note using an analysis of the distribution waterfall of the partnership, estimated current capitalization rates and the estimated net operating income of the partnership. Additionally, due to the uncertainty of Mr. Cappelli’s ability to complete developments in progress, the Company did not attribute value to his personal guarantee. Through this analysis, the Company has concluded that a loan loss reserve of $8.0 million was necessary at December 31, 2009.

(3) On June 26, 2009, the Company received payment in full on its note receivable and related accrued interest of $1.0 million from an affiliate of one of its theatre operators. The Company advanced $1.0 million during the year ended December 31, 2007 under this agreement for the development of a megaplex theatre.

(4) On February 20, 2009, a wholly-owned subsidiary of the Company entered into a $3.0 million promissory note with Sapphire Wines LLC. The note bears interest at 15% and it matured on November 1, 2009. This note is secured by certain pledge agreements and other collateral, including a personal guarantee of the principal of Sapphire Wines LLC.

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Notes to Consolidated Financial Statements

December 31, 2009, 2008 and 2007

The Company has evaluated this note receivable for impairment, and has determined that it was impaired during the quarter ended March 31, 2009 due to the inability of the borrower to meet its contractual obligations per the original agreement. Accordingly, accrual interest income was ceased. Interest income of $106 thousand has been recorded during the year ended December 31, 2009 which represents payments received by the Company. Management of the Company has evaluated the fair value of the underlying collateral of the note and determined that due to current conditions in the wine industry, the Company believes it is unlikely that the principal of Sapphire Wines LLC could satisfy his obligation as guarantor of the note and that there is minimal value to the pledge agreement and other collateral. Therefore, the Company has concluded that a loan loss reserve of $3.0 million was necessary at December 31, 2009.

(5) On January 26, 2009, a wholly-owned subsidiary of the Company entered into a credit agreement with Rb Wine Associates, LLC (Rb Wine) to provide a $2.0 million revolving credit facility. This note is secured by certain pledge agreements and other collateral including personal guarantees from the principals of Rb Wine. During the year ended December 31, 2009, the Company advanced $1.4 million under this credit facility. Interest accrued on the outstanding principal balance at an annual rate of 15% and was payable monthly at an annual rate of 9.25% with the remaining accrued but unpaid interest and principal due at maturity which was January 1, 2010. On November 30, 2009, the credit agreement was amended and interest now accrues on the outstanding principal balance at an annual rate of 6% with principal and all accrued interest due on January 1, 2011.

The Company has evaluated this note receivable for impairment, and has determined that it was impaired during the quarter ended December 31, 2009 due to the inability of the borrower to meet its contractual obligations per the original agreement. Accordingly, accrual interest income recognition was ceased on December 1, 2009. Interest income from this loan was $147 thousand for the year ended December 31, 2009. Management of the Company has evaluated the fair value of the underlying collateral of the note due to the amendment of the credit agreement and has concluded that a loan loss reserve of $123 thousand was necessary at December 31, 2009 based on an analysis of the present value of the expected future cash flows of the note.

(6) The Company has a note receivable from Mosaica Education, Inc. of $3.8 million at December 31, 2009. This note was amended in 2009 to extend the maturity date from August 1, 2010 to August 31, 2012 and to make monthly payments interest only. This note continues to bears interest at 9.23%. The note is secured by certain pledge agreements and other collateral. The Company also has the right to call the note and 120 days after such notice to the borrower, the note becomes due and payable, including all related accrued interest. Interest income from this loan was approximately $350 thousand for each of the years ended December 31, 2009, 2008 and 2007.

(7) The Company has a note receivable from a tenant, Sapphire Wines, LLC, of $5.1 million at December 31, 2009. This note bears interest at 12.0%, requires monthly interest payments and matures on April 1, 2013. This note is secured by certain pledge agreements and other collateral, including a personal guarantee of the principal of Sapphire Wines LLC.

The Company has evaluated this note receivable for impairment, and has determined that it was impaired during the quarter ended March 31, 2009 due to the inability of the borrower to meet its contractual obligations per the original agreement. Accordingly, accrual interest income recognition was ceased on January 1, 2009. Interest income of $257 thousand has been recorded during the year ended December 31, 2009 which represents payments received by the Company.

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Notes to Consolidated Financial Statements

December 31, 2009, 2008 and 2007

Interest income from this loan was $450 thousand and $187 thousand for the years ended December 31, 2008 and 2007, respectively. Management of the Company has evaluated the fair value of the underlying collateral of the note and determined that due to current conditions in the wine industry, the Company believes it is unlikely that the principal of Sapphire Wines LLC could satisfy his obligation as guarantor of the note and that there is minimal value to the pledge agreement and other collateral. Therefore, the Company has concluded that a loan loss reserve of $5.1 million was necessary at December 31, 2009.

(8) During the year ended December 31, 2007, the Company loaned $10 million to City Center Group, LLC, a minority joint venture partner of the White Plains LLC’s. This note bears interest at 10%, requires monthly interest payments, and matures on May 8, 2017. The note is secured by rights to the economic interest of the Class C and Class D interests in the White Plains LLCs, and is personally guaranteed by two of the shareholders of City Center Group LLC.

The Company evaluated this note receivable for impairment and determined that it was impaired during the quarter ended September 30, 2009 due to the inability of the borrower to meet its contractual obligations per the original agreement. Accordingly, accrual interest income recognition was ceased on July 1, 2009. Interest income of $500 thousand has been recorded during the year ended December 31, 2009 which represents payments received by the Company prior to July 1, 2009. Interest income from this loan was $997 thousand and $261 thousand for the years ended December 31, 2008 and 2007. Management of the Company has evaluated the fair value of the underlying collateral of the note taking into account an independent appraisal as of September 30, 2009 of the property held by the White Plains LLC’s, which resulted in an impairment charge on this property as further discussed in Note 4. Additionally, due to the uncertainty of Mr. Cappelli’s ability to complete developments in progress, the Company did not attribute value to the guarantees of the shareholders of City Center Group LLC (one of which is Mr. Cappelli). Through this analysis, the Company has concluded that a loan loss reserve of $10.0 million was necessary at December 31, 2009.

(9) The Company has one other note receivable totaling $160 thousand with an interest rate of 6.33% at December 31, 2009.

The following summarizes the activity within the allowance for loan losses related to notes receivable for the year ended December 31, 2009 (in thousands):

	2009
Allowance for loan losses at January 1	$	—
Provision for loan losses		36,197
Charge-offs		—
Recoveries		—
Allowance for loan losses at December 31	$	36,197

There was no allowance for loan losses at December 31, 2008 or any activity in this account for the year ended December 31, 2008.

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Notes to Consolidated Financial Statements

December 31, 2009, 2008 and 2007

10. Long-Term Debt

Long term debt at December 31, 2009 and 2008 consists of the following (in thousands):

	2009		2008
(1) Mortgage note payable, variable rate at LIBOR + 3.50%, (LIBOR floor of 2.50%), due September 10, 2010	$	56,250	$	56,250
(2) Mortgage note payable, 5.60%, due October 7, 2010, two to four year extension at Company’s option upon meeting certain conditions		113,333		113,917
(3) Revolving variable rate credit facility at LIBOR + 3.50% (LIBOR floor of 2.00%), due October 26, 2011, one year extension available at Company’s option		35,000		149,000
(4) Term loan payable, $114,000 fixed through interest rate swaps at 5.81%, $3,600 at December 31, 2009 at variable rate of LIBOR + 1.75%, due October 26, 2011, one year extension available at Company’s option		117,600		118,800
(5) Mortgage notes payable, 6.57%-6.73%, due October 1, 2012		45,808		47,056
(6) Mortgage note payable, 6.63%, due November 1, 2012		25,608		26,302
(7) Mortgage notes payable, 4.26%-9.01%, due February 10, 2013		119,373		125,424
(8) Mortgage note payable, 6.84%, due March 1, 2014		102,008		91,583
(9) Mortgage note payable, 5.58%, due April 1, 2014		60,671		61,742
(10) Mortgage note payable, 5.56%, due June 5, 2015		33,763		34,311
(11) Mortgage notes payable, 5.77%, due November 6, 2015		72,779		74,443
(12) Mortgage notes payable, 5.84%, due March 6, 2016		40,898		41,798
(13) Mortgage notes payable, 6.37%, due June 30, 2016		29,132		29,712
(14) Mortgage notes payable, 6.10%, due October 1, 2016		26,187		26,716
(15) Mortgage notes payable, 6.02%, due October 6, 2016		19,746		20,149
(16) Mortgage note payable, 6.06%, due March 1, 2017		10,991		11,207
(17) Mortgage note payable, 6.07%, due April 6, 2017		11,310		11,530
(18) Mortgage notes payable, 5.73%-5.95%, due May 1, 2017		52,438		53,494
(19) Mortgage notes payable, 5.86%, due August 1, 2017		26,826		27,352
(20) Term loans payable, $89,898 at December 31, 2009 fixed through interest rate swaps at 5.11%-5.78%, $3,699 at December 31, 2009 at variable rates of LIBOR + 1.75%-2.00%, due December 1, 2017-June 5, 2018		93,597		92,120
(21) Mortgage note payable, 6.19%, due February 1, 2018		16,667		17,133
(22) Mortgage note payable, 7.37%, due July 15, 2018		11,803		12,694
(23) Bond payable, variable rate, due October 1, 2037		10,635		10,635
(24) Mortgage note payable, 5.50%		4,000		4,000
(25) Mortgage note payable, 5.00%		5,000		5,000
Total	$	1,141,423	$	1,262,368

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Notes to Consolidated Financial Statements

December 31, 2009, 2008 and 2007

(1) The Company’s mortgage note payable is due September 10, 2010. The mortgage is secured by the mortgage note receivable due on the same date entered into with Concord Resorts, LLC in conjunction with the planned resort development as discussed in Note 5, which had a carrying value of approximately $133.1 million. The mortgage loan bears interest at LIBOR plus 350 basis points, and in the event LIBOR is less than 2.5%, LIBOR shall be deemed to be 2.5% for purposes of calculating the applicable interest rate for the period. The loan is recourse to the Company and requires monthly interest only payments, with all outstanding principal due at maturity.

(2) The Company’s mortgage note payable is due October 7, 2010 and can be extended for an additional two to four years at the Company’s option upon meeting certain conditions including a minimum net operating income threshold. The note payable is secured by one theatre and retail mix property, which had a net book value of approximately $117.2 million, net of an impairment charge of $35.8 million at December 31, 2009. The note had an initial balance of $115.0 million and required monthly principal payments of $42 thousand plus interest through October 2009, and $83 thousand plus interest from November 2009 through the maturity date, with a final principal payment due at maturity of $112.5 million. For further discussion related to this note payable, see Note 4.

(3) The Company’s $215 million revolving credit facility is due October 26, 2011. On June 30, 2009, the Company amended and restated its revolving credit facility (the facility). The size of the facility decreased from $235 million to $215 million and includes an accordion feature in which the facility can be increased to up to $300 million subject to certain conditions, including lender consent. The facility continues to be supported by a borrowing base of assets, and is now secured by a pledge of the equity of each entity that holds a borrowing base asset. The facility is secured by 21 theatre properties and seven retail mix properties, which had a net book value of approximately $338.5 million at December 31, 2009. The facility bears interest at a floating rate equal to LIBOR (subject to a 2% floor) plus 3.5%. Alternatively, the Company can elect to have interest accrue at the base rate plus 3.5%. The base rate is defined as the greater of the prime rate, the federal funds rate plus 0.5%, or the then current 30-day LIBOR (subject to a 2% floor). The facility has a one year extension available at the Company’s option, subject to certain terms and conditions including the payment of an extension fee. As a result of this amendment and restatement, the Company expensed certain unamortized financing costs, totaling approximately $117 thousand, in the second quarter of 2009. The note requires monthly payments of interest with the outstanding principal due at maturity. The amount that the Company is able to borrow on their revolving credit facility is a function of the values and advance rates, as defined by the credit agreement, assigned to the assets included in the borrowing base less outstanding letters of credit and less certain other liabilities that are recourse obligations of the Company. As of December 31, 2009, the Company’s total availability under the revolving credit facility was $178.5 million.

The facility also requires the Company to grant mortgage liens on the underlying borrowing base properties if the ratio of its consolidated debt to the value of its consolidated assets exceeds specified thresholds. As of December 31, 2009, this ratio was below the specified thresholds and

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Notes to Consolidated Financial Statements

December 31, 2009, 2008 and 2007

the Company has not granted any mortgage liens on the underlying borrowing base properties. The financial covenant relating to minimum liquidity now requires the Company to maintain “excess availability” under the facility for the 90-day period preceding the maturity date of a loan related to development of a planned casino and resort in Sullivan County, New York, in an amount equal to at least the unpaid balance of such loan. This loan had an unpaid balance of $56.3 million as of December 31, 2009.

(4) The Company’s term loan is due October 26, 2011 with a one year extension available at the Company’s option. The term loan has a stated interest rate of LIBOR plus 175 basis points and is secured by one theatre and one ski resort, which had a total net book value of approximately $33.3 million at December 31, 2009. In addition, the loan is secured by five mortgage notes receivable, which had a carrying value of approximately $266.0 million including accrued interest receivable at December 31, 2009. The loan had an initial balance of $120.0 million and bears interest at LIBOR plus 175 basis points (2.00% at December 31, 2009). Due to interest rate swaps entered into on November 26, 2007, $114.0 million of the principal amount bears interest at an effective rate of 5.81%. Interest is payable monthly and the loan is recourse to the Company. Principal payments of $300 thousand are required quarterly with a final principal payment at maturity of $115.5 million.

(5) The Company’s mortgage notes payable due October 1, 2012 are secured by two theatre properties, which had a net book value of approximately $36.8 million at December 31, 2009. The notes had an initial balance of $48.4 million and the monthly payments are based on a 20 year amortization schedule. The notes require monthly principal and interest payments of approximately $365 thousand with a final principal payment at maturity of approximately $42.0 million.

(6) The Company’s mortgage note payable due November 1, 2012 is secured by one theatre property, which had a net book value of approximately $26.2 million at December 31, 2009. The note had an initial balance of $27.0 million and the monthly payments are based on a 20 year amortization schedule. The note requires monthly principal and interest payments of approximately $203 thousand with a final principal payment at maturity of approximately $23.4 million.

(7) The Company’s mortgage notes payable due February 10, 2013 are secured by thirteen theatre properties and one theatre and retail mix property, which had a net book value of approximately $211.5 million at December 31, 2009. The notes had an initial balance of $155.5 million of which approximately $98.6 million has monthly payments that are interest only and $56.9 million has monthly payments based on a 10 year amortization schedule. The notes require monthly principal and interest payments of approximately $1.1 million with a final principal payment at maturity of approximately $99.2 million. The weighted average interest rate on these notes is 5.63%.

(8) The Company’s mortgage note payable due March 1, 2014 is secured by four theatre and retail mix properties in Ontario, Canada, which had a net book value of approximately $216.2 million at December 31, 2009. The mortgage note payable is denominated in Canadian dollars

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Notes to Consolidated Financial Statements

December 31, 2009, 2008 and 2007

(CAD). The note had an initial balance of CAD $128.6 million and the monthly payments are based on a 20 year amortization schedule. The note requires monthly principal and interest payments of approximately CAD $977 thousand with a final principal payment at maturity of approximately CAD $85.6 million. At December 31, 2009 and 2008, the outstanding balance in Canadian dollars was CAD $107.2 million and CAD $111.5 million, respectively.

(9) The Company’s mortgage note payable due April 1, 2014 is secured by one theatre and retail mix property, which had a net book value of approximately $85.9 million at December 31, 2009. The note had an initial balance of $66.0 million and the monthly payments are based on a 30 year amortization schedule. The note requires monthly principal and interest payments of approximately $378 thousand with a final principal payment at maturity of approximately $55.3 million.

(10) The Company’s mortgage note payable due June 5, 2015 is secured by one theatre and retail mix property, which had a net book value of approximately $50.7 million at December 31, 2009. The note had an initial balance of $36.0 million and the monthly payments are based on a 30 year amortization schedule. The note requires monthly principal and interest payments of approximately $206 thousand with a final principal payment at maturity of approximately $30.1 million.

(11) The Company’s mortgage notes payable due November 6, 2015 are secured by six theatre properties, which had a net book value of approximately $83.3 million at December 31, 2009. The notes had an initial balance of $79.0 million and the monthly payments are based on a 25 year amortization schedule. The notes require monthly principal and interest payments of approximately $498 thousand with a final principal payment at maturity of approximately $60.7 million.

(12) The Company’s mortgage notes payable due March 6, 2016 are secured by two theatre properties, which had a net book value of approximately $35.8 million at December 31, 2009. The notes had an initial balance of $44.0 million and the monthly payments are based on a 25 year amortization schedule. The notes require monthly principal and interest payments of approximately $279 thousand with a final principal payment at maturity of approximately $33.9 million.

(13) The Company’s mortgage notes payable due June 30, 2016 are secured by two theatre properties, which had a net book value of approximately $34.7 million at December 31, 2009. The notes had an initial balance of $31.0 million and the monthly payments are based on a 25 year amortization schedule. The notes require monthly principal and interest payments of approximately $207 thousand with a final principal payment at maturity of approximately $24.4 million.

(14) The Company’s mortgage notes payable due October 1, 2016 are secured by four theatre properties, which had a net book value of approximately $29.4 million at December 31, 2009. The notes had an initial balance of $27.8 million and the monthly payments are based on a 25 year amortization schedule. The notes require monthly principal and interest payments of approximately $180 thousand with a final principal payment at maturity of approximately $21.6 million.

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Notes to Consolidated Financial Statements

December 31, 2009, 2008 and 2007

(15) The Company’s mortgage notes payable due October 6, 2016 are secured by three theatre properties, which had a net book value of approximately $22.1 million at December 31, 2009. The notes had an initial balance of $20.9 million and the monthly payments are based on a 25 year amortization schedule. The notes require monthly principal and interest payments of approximately $135 thousand with a final principal payment at maturity of approximately $16.2 million.

(16) The Company’s mortgage note payable due March 1, 2017 is secured by one theatre property, which had a net book value of approximately $11.3 million at December 31, 2009. The note had an initial balance of $11.6 million and the monthly payments are based on a 25 year amortization schedule. The note requires monthly principal and interest payments of approximately $75 thousand with a final principal payment at maturity of approximately $9.0 million.

(17) The Company’s mortgage note payable due April 6, 2017 is secured by one theatre property, which had a net book value of approximately $10.3 million at December 31, 2009. The note had an initial balance of $11.9 million and the monthly payments are based on a 30 year amortization schedule. The note requires monthly principal and interest payments of approximately $77 thousand with a final principal payment at maturity of approximately $9.2 million.

(18) The Company’s mortgage notes payable due May 1, 2017 are secured by five theatre properties, which had a net book value of approximately $46.3 million at December 31, 2009. The notes had an initial balance of $55.0 million and the monthly payments are based on a 25 year amortization schedule. The notes require monthly principal and interest payments of approximately $348 thousand with a final principal payment at maturity of approximately $42.4 million. The weighted average interest rate on these notes is 5.81%.

(19) The Company’s mortgage notes payable due August 1, 2017 are secured by two theatre properties, which had a net book value of approximately $25.1 million at December 31, 2009. The notes had an initial balance of $28.0 million and the monthly payments are based on a 25 year amortization schedule. The notes require monthly principal and interest payments of approximately $178 thousand with a final principal payment at maturity of approximately $21.7 million.

(20) The Company’s term loans drawn under a credit facility of $160.0 million are due December 1, 2017 to June 5, 2018 and are 30% recourse to the Company. The terms loans are secured by the real property and equipment at four wineries and six vineyards with a net book value of approximately $150.0 million at December 31, 2009. The term loans have stated interest rates of LIBOR plus 175 basis points on loans secured by real property and LIBOR plus 200 basis points on loans secured by fixtures and equipment. Term loans can be drawn through September 26, 2010 under the credit facility. The credit facility provides for an aggregate advance rate of 65% based on the lesser of cost or appraised value. The credit facility contains an accordion feature, whereby, subject to lender approval, the Company may obtain additional revolving credit and term loan commitments in an aggregate principal amount not to exceed $140.0 million.

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Notes to Consolidated Financial Statements

December 31, 2009, 2008 and 2007

The initial disbursement under the credit facility consisted of two term loans secured by real property with initial balances of $4.6 million and $4.8 million that mature on December 1, 2017 and March 5, 2018, respectively. Due to two interest rate swaps entered into on March 14, 2008, the $4.6 million and $4.8 million balances bear interest at effective rates of 5.76% and 5.78%, respectively. Principal and interest are payable monthly with a final principal payment at maturity of $3.7 million for each of these loans. On March 24, 2008 and August 20, 2008, the Company obtained $3.2 million and $5.1 million, respectively, of term loans secured by fixtures and equipment under the facility. These term loans mature on December 1, 2017. Due to an interest rate swap entered into on September 15, 2008, the balances bear interest at an effective rate of 5.63%. Principal and interest are payable monthly and these loans will be fully amortized at maturity. On September 26, 2008, the Company obtained four term loans secured by real property with an aggregate principal amount of $74.9 million under the facility that mature on June 5, 2018. Due to four interest rate swaps entered into simultaneously, these loans bear interest at an effective rate of 5.11%. Principal and interest are payable monthly with a final aggregate principal payment at maturity of $59.1 million. Additionally, on February 25, 2009, the Company obtained one term loan with a principal amount of $4.0 million. The loan matures on December 1, 2017, is secured by fixtures and equipment and bears interest at LIBOR plus 2.00%. Principal and interest is due monthly and this loan will be fully amortized at maturity. Subsequent to the closing of these loans, approximately $63.3 million of the facility remains available.

(21) The Company’s mortgage note payable due February 1, 2018 is secured by one theatre property which had a net book value of approximately $21.5 million at December 31, 2009. The mortgage loan had an initial balance of $17.5 million and the monthly payments are based on a 20 year amortization schedule. The mortgage loan bears interest at 6.19% and requires monthly principal and interest payments of approximately $127 thousand with a final principal payment at maturity of approximately $11.6 million.

(22) The Company’s mortgage note payable due July 15, 2018 is secured by one theatre property, which had a net book value of approximately $19.7 million at December 31, 2009. The note had an initial balance of $18.9 million and the monthly payments are based on a 20 year amortization schedule. The notes require monthly principal and interest payments of approximately $151 thousand with a final principal payment at maturity of approximately $843 thousand.

(23) The Company’s bond payable due October 1, 2037 is secured by one theatre, which had a net book value of approximately $10.6 million at December 31, 2009, and bears interest at a variable rate which resets on a weekly basis and was 0.28% at December 31, 2009. The bond requires monthly interest payments with a final principal payment at maturity of approximately $10.6 million.

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Notes to Consolidated Financial Statements

December 31, 2009, 2008 and 2007

(24) The Company’s mortgage note payable is secured by one theatre and retail mix property, which had a net book value of approximately $85.9 million at December 31, 2009, and bears interest at 5.50%. The note requires monthly payments of interest only and provides for the conversion from construction loan to a ten year permanent loan upon completion of construction. However, as of December 31, 2009, this conversion had not yet been completed.

(25) The Company’s mortgage note payable is secured by one theatre and retail mix property, which had a net book value of approximately $117.2 million at December 31, 2009, and bears interest at 5.00%. The note requires monthly payments of interest only and provides for the conversion from construction loan to a ten year permanent loan upon completion of construction. However, as of December 31, 2009, this conversion had not yet been completed.

Certain of the Company’s long-term debt agreements contain customary restrictive covenants related to financial and operating performance as well as certain cross-default provisions. At December 31, 2009, the Company was in compliance with all restrictive covenants.

Principal payments due on long-term debt obligations subsequent to December 31, 2009 (without consideration of any extensions) are as follows (in thousands):

	Amount
Year:
2010	$	196,051
2011		178,247
2012		93,198
2013		119,339
2014		152,503
Thereafter		402,085
Total	$	1,141,423

The Company capitalizes a portion of interest costs as a component of property under development. The following is a summary of interest expense, net for the years ended December 31, 2009, 2008 and 2007 (in thousands):

	2009			2008		2007
Interest on credit facilty and mortgage loans	$	68,968		68,681		58,018
Amortization of deferred financing costs		3,663		3,290		2,905
Credit facility and letter of credit fees		759		687		453
Interest cost capitalized		(600	)	(797	)	(494	)
Interest income		(75	)	(910	)	(377	)
Interest expense, net	$	72,715		70,951		60,505

11. Derivative Instruments

Risk Management Objective of Using Derivatives

The Company is exposed to the effect of changes in foreign currency exchange rates and interest rates on its LIBOR based borrowings. The Company limits this risk by following established risk management policies and procedures including the use of derivatives. The Company’s objective in using derivatives is to add stability to reported earnings and to manage its exposure to foreign exchange and interest rate movements or other identified risks. To accomplish this objective, the Company primarily uses interest rate swaps, cross currency swaps and foreign currency forwards.

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Notes to Consolidated Financial Statements

December 31, 2009, 2008 and 2007

Cash Flow Hedges of Interest Rate Risk

The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements on its LIBOR based borrowings. To accomplish this objective, the Company currently uses interest rate swaps as its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.

On November 26, 2007, the Company entered into two interest rate swap agreements to fix the interest rate on $114.0 million of an outstanding term loan. These agreements each have outstanding notional amounts of $57.0 million, a termination date of October 26, 2012 and a fixed rate of 5.81%.

In March 2008, the Company entered into two interest rate swap agreements to fix the interest rates on the two initial outstanding term loans described in Note 10 with an aggregate notional amount of $9.5 million. At December 31, 2009, these agreements have outstanding notional amounts of $4.5 million and $4.7 million, termination dates of December 1, 2017 and March 5, 2018 and fixed rates of 5.76% and 5.78%, respectively.

In September 2008, the Company entered into five interest rate swap agreements to fix the interest rates on the remaining outstanding term loans described in Note 10 with an aggregate initial notional amount of $83.1 million. At December 31, 2009, four of these agreements have aggregate outstanding notional amounts of $73.4 million, a termination date of October 7, 2013 and fixed rates of 5.11%. The remaining agreement has an outstanding notional amount of $7.4 million at December 31, 2009, a termination date of December 1, 2017 and a fixed rate of 5.63%.

At December 31, 2009, the Company had nine interest rate swaps outstanding that were designated as cash flow hedges of interest rate risk and had a combined outstanding notional amount of $203.9 million.

The effective portion of changes in the fair value of interest rate derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive income and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. During the years ended December 31, 2009, 2008 and 2007, such derivatives were used to hedge the variable cash flows associated with existing variable-rate debt. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings. No hedge ineffectiveness on cash flow hedges was recognized during the years ended December 31, 2009, 2008 and 2007.

Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt. As of December 31, 2009, the Company estimates that during the twelve months ending December 31, 2010, $6.6 million will be reclassified from accumulated other comprehensive income to interest expense.

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Notes to Consolidated Financial Statements

December 31, 2009, 2008 and 2007

Cash Flow Hedges of Foreign Exchange Risk

The Company is exposed to foreign currency exchange risk against its functional currency, the US dollar, on its four Canadian properties and its mortgage note receivable denominated in Canadian dollars. The Company uses a cross currency swap to mitigate its exposure to fluctuations in the CAD to U.S. dollar exchange rate on its four Canadian properties. This foreign currency derivative should hedge a significant portion of the Company’s expected CAD denominated cash flow of the four Canadian properties through February 2014 as their impact on the Company’s cash flow when settled should move in the opposite direction of the exchange rates utilized to translate revenues and expenses of these properties.

At December 31, 2009, the Company’s cross-currency swap had a fixed notional value of $76.0 million CAD and $71.5 million U.S. The net effect of this swap is to lock in an exchange rate of $1.05 CAD per U.S. dollar on approximately $13 million of annual CAD denominated cash flows.

The effective portion of changes in the fair value of foreign currency derivatives designated and that qualify as cash flow hedges of foreign exchange risk is recorded in accumulated other comprehensive income and subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. The ineffective portion of the change in fair value of the derivative, as well as amounts excluded from the assessment of hedge effectiveness, is recognized directly in earnings. No hedge ineffectiveness on foreign currency derivatives has been recognized for the years ended December 31, 2009, 2008 and 2007.

Net Investment Hedges

As discussed above, the Company is exposed to fluctuations in foreign exchange rates on its four Canadian properties and its mortgage note receivable denominated in Canadian dollars. As such, the Company also uses currency forward agreements to hedge its exposure to changes in foreign exchange rates on these investments. Currency forward agreements involve fixing the CAD to U.S. dollar exchange rate for delivery of a specified amount of foreign currency on a specified date. The currency forward agreements are typically cash settled in US dollars for their fair value at or close to their settlement date. In order to hedge the net investment in the Company’s four Canadian properties, the Company entered into a forward contract with a fixed notional value of $100 million CAD and $96.1 million U.S. with a February 2014 settlement which coincides with the maturity of the Company’s underlying mortgage on these four properties. The exchange rate of this forward contract is approximately $1.04 CAD per U.S. dollar. This forward contract should hedge a significant portion of the Company’s CAD denominated net investment in these four centers through February 2014 as the impact on accumulated other comprehensive income from marking the derivative to market should move in the opposite direction of the translation adjustment on the net assets of its four Canadian properties.

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Notes to Consolidated Financial Statements

December 31, 2009, 2008 and 2007

For foreign currency derivatives designated as net investment hedges, the effective portion of changes in the fair value of the derivatives are reported in accumulated other comprehensive income as part of the cumulative translation adjustment. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings. No hedge ineffectiveness on net investment hedges has been recognized for the years ended December 31, 2009, 2008 and 2007. Amounts are reclassified out of accumulated other comprehensive income into earnings when the hedged net investment is either sold or substantially liquidated.

See Note 12 for disclosures relating to the fair value of the Company’s derivative instruments. Below is a summary of the effect of derivative instruments on the consolidated statement of income for the year ended December 31, 2009:

Effect of Derivative Instruments on the Consolidated Statement of Income

for the year ended December 31, 2009

(Dollars in thousands)

Description	Amount of Gain or (Loss) Recognized in AOCI on Derivative (Effective Portion)			Amount of Income or (Expense) Reclassified from AOCI into Earnings (Effective Portion)			Amount of Gain or (Loss) Recognzied in Earnings on Derivative (Ineffective Portion)
Interest Rate Swaps	$	5,269		$	(7,121	)*	$	-
Cross Currency Swaps		(7,440	)		918	**		-
Currency Forward Agreements		(7,024	)		-			-
Total	$	(9,195	)	$	(6,203	)	$	-

*Included in “Interest expense” in accompanying consolidated statements of income.

**Included in “Other income” in the accompanying consolidated statements of income.

Credit-risk-related Contingent Features

The Company has agreements with each of its interest rate derivative counterparties that contain a provision where if the Company defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then the Company could also be declared in default on its interest rate derivative obligations.

As of December 31, 2009, the fair value of derivatives in a liability position related to these agreements was $10.3 million. If the Company breached any of the contractual provisions of the derivative contracts, it would be required to settle its obligations under the agreements at their termination value of $10.8 million.

12. Fair Value Disclosures

The FASB ASC Topic on Fair Value Measurements (Topic 820) defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. It applies to reported balances that are required or permitted to be measured at fair value and does

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Notes to Consolidated Financial Statements

December 31, 2009, 2008 and 2007

not require any new fair value measurements of reported balances. Topic 820 emphasizes that fair value is a market-based measurement, not an entity-specific measurement. Therefore, a fair value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, Topic 820 establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy).

Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates, foreign exchange rates, and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liability, which are typically based on an entity’s own assumptions, as there is little, if any, related market activity. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability.

Derivative Financial Instruments

The Company uses interest rate swaps, foreign currency forwards and cross currency swaps to manage its interest rate and foreign currency risk. The valuation of these instruments is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves, foreign exchange rates, and implied volatilities. The fair values of interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash receipts and the discounted expected variable cash payments. The variable cash payments are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves. To comply with the provisions of Topic 820, the Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of its derivative contracts for the effect of nonperformance risk, the Company has considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees.

Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives also utilize Level 3 inputs, such as estimates of current credit spreads, to evaluate the

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Notes to Consolidated Financial Statements

December 31, 2009, 2008 and 2007

likelihood of default by itself and its counterparties. As of December 31, 2009, the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are significant to the overall valuation of its currency forward agreements, cross currency swaps and two of its interest rate swaps and therefore, has classified these derivatives as Level 3 within the fair value reporting hierarchy.

The table below presents the Company’s assets and liabilities measured at fair value on a recurring basis as of December 31, 2009, aggregated by the level in the fair value hierarchy within which those measurements fall and by derivative type.

Assets and Liabilities Measured at Fair Value on a Recurring Basis at December 31, 2009

(Dollars in thousands)

Description	Quoted Prices in Active Markets for Identical Assets (Level I)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)			Balance at December 31, 2009
Interest Rate Swaps*	$	-	$	(9,988	)	$	(307	)	$	(10,295	)
Cross Currency Swaps**	$	-	$	-		$	192		$	192
Currency Forward Agreements**	$	-	$	-		$	1,049		$	1,049

*Included in “Accounts payable and accrued liabilities” in the accompanying consolidated balance sheet.

**Included in “Other Assets” in the accompanying consolidated balance sheet.

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Notes to Consolidated Financial Statements

December 31, 2009, 2008 and 2007

The table below presents a reconciliation of the Company’s beginning and ending balances of liabilities having fair value measurements based on significant unobservable inputs (Level 3) for the year ended December 31, 2009.

Level 3 Fair Value Measurements for the Year Ended December 31, 2009

(Dollars in thousands)

Description	Beginning Balance as of December 31, 2008	Transfers into Level 3			Transfers out of Level 3		Gains (Losses) Included in Income	Gains (Losses) Included in OCI			Total Gains (Losses)			Ending Balance as of December 31, 2009
Interest Rate Swaps	-	$	(15,564	)	$	7,983	-	$	7,274		$	7,274		$	(307	)
Cross Currency Swaps	-		5,474			-	-	$	(5,282	)	$	(5,282	)	$	192
Currency Forward Agreements	-		14,059			-	-	$	(13,010	)	$	(13,010	)	$	1,049

Non-recurring fair value measurements

The table below presents the Company’s assets measured at fair value on a non-recurring basis as of December 31, 2009, aggregated by the level in the fair value hierarchy within which those measurements fall.

Assets Measured at Fair Value on a Non-Recurring Basis at December 31, 2009

(Dollars in thousands)

Description	Quoted Prices in Active Markets for Identical Assets (Level I)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance at December 31, 2009
Rental properties, net	$	-	$	-	$	152,213	$	152,213
Mortgage notes and related accrued interest receivable, net	$	-	$	-	$	90,882	$	90,882
Notes and related accrued interest receivable, net	$	-	$	-	$	3,293	$	3,293

During the three months ended September 30, 2009, the Company recognized a nonrecurring non-cash impairment charge of $35.8 million relating to adjustment to a property carrying value. Management of the Company estimated the fair value of the property taking into account an independent appraisal completed in October 2009 as further described in Note 4. Based on this input, the Company determined that its valuation of this investment was classified within Level 3 of the fair value hierarchy.

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Notes to Consolidated Financial Statements

December 31, 2009, 2008 and 2007

During the three months ended September 30, 2009, the Company measured one mortgage note receivable at fair value as a result of the establishment of the allowance for loan losses as further discussed in Note 5. Management estimated the fair value of the underlying collateral for this note and the Company determined that its valuation of this investment was classified within Level 3 of the fair value hierarchy. Additionally, the Company measured six notes receivable at fair value as a result of the establishment of the allowance for loan losses as further discussed in Note 9. Management estimated the fair value of the underlying collateral for these notes and the Company determined that its valuation of these investments was classified within Level 3 of the fair value hierarchy.

Fair Value of Financial Instruments

Management compares the carrying value and the estimated fair value of the Company’s financial instruments. The following methods and assumptions were used by the Company to estimate the fair value of each class of financial instruments at December 31, 2009 and 2008:

    Mortgage notes receivable and related accrued interest receivable:

The fair value of the Company’s mortgage notes and related accrued interest receivable as of December 31, 2009 and 2008 is estimated by discounting the future cash flows of each instrument using current market rates. At December 31, 2009, the Company had a carrying value of $522.9 million in fixed rate mortgage notes receivable outstanding, including related accrued interest and net of loan loss reserve, with a weighted average interest rate of approximately 9.14%. The fixed rate mortgage notes bear interest at rates of 7.00% to 15.00%. Discounting the future cash flows for fixed rate mortgage notes receivable using an estimated weighted average market rate of 9.77%, management estimates the fixed rate mortgage notes receivable’s fair value to be approximately $519.4 million at December 31, 2009.

At December 31, 2008, the Company had a carrying value of $369.9 million in fixed rate mortgage notes receivable outstanding, including related accrued interest, with a weighted average interest rate of approximately 12.77%. The fixed rate mortgage notes bear interest at rates of 9.00% to 15.00%. Discounting the future cash flows for fixed rate mortgage notes receivable using an estimated weighted average market rate of 15.14%, management estimates the fixed rate mortgage notes receivable’s fair value to be approximately $345.2 million at December 31, 2008.

At December 31, 2008, the Company had a carrying value of $138.6 million in variable rate mortgage notes receivable outstanding, including related accrued interest, with a weighted average interest rate of approximately 5.40%. The variable mortgage notes bear interest rates of LIBOR plus 350 basis points. Discounting the future cash flows for variable rate mortgage notes receivable using an estimated weighted average market rate of 7.65%, management estimates the variable rate mortgage notes receivable’s fair value to be approximately $128.7 million at December 31, 2008.

    Investment in a direct financing lease, net:

The fair value of the Company’s investment in a direct financing lease as of December 31, 2009 is estimated by discounting the future cash flows of the instrument using current market rates. At December 31, 2009, the Company had an investment in a direct financing lease with a carrying value of $169.9 million and a weighted average effective interest rate of 12.01%. The

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Notes to Consolidated Financial Statements

December 31, 2009, 2008 and 2007

investment in direct financing lease bears interest at effective interest rates of 11.90% to 12.40%. The carrying value of the investment in a direct financing lease approximates the fair market value at December 31, 2009.

At December 31, 2008, the Company had an investment in a direct financing lease with a carrying value of $166.1 million and a weighted average effective interest rate of 12.0%. The investment in direct financing lease bears interest at effective interest rates of 11.9% to 12.4%. Discounting the future cash flows for the investment in a direct financing lease using an estimated market rate of 14.26%, management estimates the investment in a direct financing lease’s fair value to be approximately $140.8 million at December 31, 2008.

    Cash and cash equivalents, restricted cash:

Due to the highly liquid nature of our short term investments, the carrying values of our cash and cash equivalents and restricted cash approximate the fair market values.

    Accounts receivable, net:

The carrying values of accounts receivable approximate the fair market value at December 31, 2009 and 2008.

    Notes and related accrued interest receivable, net:

The fair value of the Company’s notes and related accrued interest receivable as of December 31, 2009 is estimated by discounting the future cash flows of each instrument using current market rates. At December 31, 2009, the Company had a carrying value of $7.2 million in fixed rate notes receivable outstanding, including related accrued interest and net of loan loss reserve, with a weighted average interest rate of approximately 8.80%. The fixed rate notes bear interest at rates of 6.33% to 15.00%. Discounting the future cash flows for fixed rate notes receivable using an estimated market rate of 9.34%, management estimates the fixed rate notes receivable’s fair value to be approximately $7.1 million at December 31, 2009.

At December 31, 2008, the Company had a carrying value of $38.9 million in fixed rate notes receivable outstanding with a weighted average interest rate of approximately 9.78%. The fixed rate notes bear interest at rates of 6.00% to 10.00%. Discounting the future cash flows for fixed rate notes receivable using an estimated market rate of 12.03%, management estimates the fixed rate notes receivable’s fair value to be approximately $37.1 million at December 31, 2008.

At December 31, 2008, the Company had a carrying value of $1.0 million in a variable rate mortgage note receivable outstanding with an interest rate of 5.40%. The variable note bears interest at a rate of LIBOR plus 350 basis points. Discounting the future cash flows for the variable rate note receivable using an estimated market rate of 7.65%, management estimates the variable rate mortgage note receivable’s fair value to be approximately $1.0 million at December 31, 2008.

    Derivative instruments:

Derivative instruments are carried at their fair market value.

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Notes to Consolidated Financial Statements

December 31, 2009, 2008 and 2007

    Debt instruments:

The fair value of the Company’s debt as of December 31, 2009 is estimated by discounting the future cash flows of each instrument using current market rates. At December 31, 2009, the Company had a carrying value of $313.0 million in variable rate debt outstanding with an average weighted interest rate of approximately 5.37%. Discounting the future cash flows for variable rate debt using an estimated market rate of 5.55%, management estimates the variable rate debt’s fair value to be approximately $304.3 million at December 31, 2009. As described in Note 10, $203.9 million of variable rate debt outstanding at December 31, 2009 has been converted to a fixed rate by interest rate swap agreements.

At December 31, 2008, the Company had a carrying value of $426.8 million in variable rate debt outstanding with an average weighted interest rate of approximately 4.68%. Discounting the future cash flows for variable rate debt using an estimated market rate of 5.65%, management estimates the variable rate debt’s fair value to be approximately $412.4 million at December 31, 2008. As described in Note 10, $206.1 million of variable rate debt outstanding at December 31, 2008 has been converted to a fixed rate by interest rate swap agreements.

At December 31, 2009, the Company had a carrying value of $828.4 million in fixed rate long-term debt outstanding with an average weighted interest rate of approximately 6.01%. Discounting the future cash flows for fixed rate debt using an estimated market rate of 5.89%, management estimates the fixed rate debt’s fair value to be approximately $825.4 million at December 31, 2009.

At December 31, 2008, the Company had a carrying value of $835.6 million in fixed rate long-term debt outstanding with an average weighted interest rate of approximately 5.99%. Discounting the future cash flows for fixed rate debt using an estimated market rate of 5.84%, management estimates the fixed rate debt’s fair value to be approximately $842.4 million at December 31, 2008.

    Accounts payable and accrued liabilities:

The carrying value of accounts payable and accrued liabilities approximates fair value due to the short term maturities of these amounts.

    Common and preferred dividends payable:

The carrying values of common and preferred dividends payable approximate fair value due to the short term maturities of these amounts.

13. Common and Preferred Shares

Common Shares

The Board of Trustees declared cash dividends totaling $2.60 per common share for the year ended December 31, 2009 and $3.36 per common share for the year ended December 31, 2008.

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Notes to Consolidated Financial Statements

December 31, 2009, 2008 and 2007

Of the total dividends calculated for tax purposes, the amounts characterized as ordinary income, return of capital and long-term capital gain for 2009 and 2008 are as follows:

Cash dividends paid per common share for the year ended December 31, 2009:

Record date	Cash payment date	Cash distribution per share		Taxable ordinary income	Return of capital	Long-term capital gain	Unrecaptured Sec. 1250 gain
12-31-08	01-15-09	$	0.8400	0.8205	0.0195	—	—
03-31-09	04-15-09		0.6500	0.6349	0.0151	—	—
06-30-09	07-15-09		0.6500	0.6349	0.0151	—	—
09-30-09	10-15-09		0.6500	0.6349	0.0151	—	—
Total for 2009 (1)		$	2.7900	2.7252	0.0648	—	—
			100.0%	97.7%	2.3%	—

Cash dividends paid per common share for the year ended December 31, 2008:

Record date	Cash payment date	Cash distribution per share		Taxable ordinary income	Return of capital	Long-term capital gain	Unrecaptured Sec. 1250 gain
12-31-07	01-15-08	$	0.7600	0.7314	0.0286	—	—
03-31-08	04-15-08		0.8400	0.8084	0.0316	—	—
06-30-08	07-15-08		0.8400	0.8084	0.0316	—	—
09-30-08	10-15-08		0.8400	0.8084	0.0316	—	—
Total for 2008 (1)		$	3.2800	3.1565	0.1235	—	—
			100.0%	96.2%	3.8%	—

⁽¹⁾ Differences between totals and details relate to rounding.

During January 2009, the Company issued pursuant to a registered public offering 1,551,000 common shares under the direct share purchase component of the Company’s Dividend Reinvestment and Direct Share Purchase Plan. These shares were sold at an average price of $23.86 per share and total net proceeds after expenses were approximately $36.8 million. Additionally, during February 2009, the Company issued pursuant to a registered public offering 339,000 common shares under this plan. These shares were sold at an average price of $22.12 per share and total net proceeds after expenses were approximately $7.5 million.

During August 2009, the Company issued pursuant to a registered public offering 652,000 common shares under the direct share purchase component of the Company’s Dividend Reinvestment and Direct Share Purchase Plan. These shares were sold at an average price of $30.65 per share and total net proceeds after expenses were approximately $19.9 million. Additionally, during September 2009, the Company issued pursuant to a registered public offering 911,000 common shares under this plan. These shares were sold at an average price of $32.92 per share and total net proceeds after expenses were approximately $29.9 million.

On November 16, 2009, the Company issued pursuant to a registered public offering 6,325,000 common shares (including the exercise of the over-allotment option of 825,000 shares) at a purchase price of $31.50. Total net proceeds to the Company after underwriting discounts and expenses were approximately $190.6 million.

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Notes to Consolidated Financial Statements

December 31, 2009, 2008 and 2007

The proceeds from the above public offerings were used to pay down the Company’s revolving credit facility and remaining net proceeds were invested in interest-bearing accounts and short-term interest-bearing securities which are consistent with the qualification as a REIT under the Internal Revenue Code.

Series A Preferred Shares

On May 29, 2002, the Company issued 2.3 million 9.50% Series A cumulative redeemable preferred shares (“Series A preferred shares”) in a registered public offering On May 29, 2007, the Company completed the redemption of all 2.3 million outstanding 9.50% Series A preferred shares. The shares were redeemed at a redemption price of $25.39 per share. This price is the sum of the $25.00 per share liquidation preference and a quarterly dividend per share of $0.59375 prorated through the redemption date. In conjunction with the redemption, the Company recognized both a non-cash charge representing the original issuance costs that were paid in 2002 and also other redemption related expenses. The aggregate reduction to net income available to common shareholders was approximately $2.1 million ($0.08 per fully diluted common share) for year ended December 31, 2007.

Series B Preferred Shares

On January 19, 2005, the Company issued 3.2 million 7.75% Series B cumulative redeemable preferred shares (“Series B preferred shares”) in a registered public offering for net proceeds of $77.5 million, before expenses. The Company pays cumulative dividends on the Series B preferred shares from (and including) the date of original issuance in the amount of $1.9375 per share each year, which is equivalent to 7.75% of the $25 liquidation preference per share. Dividends on the Series B preferred shares are payable quarterly in arrears, and began on April 15, 2005. The Company may not redeem the Series B preferred shares before January 19, 2010, except in limited circumstances to preserve the Company’s REIT status. On or after January 19, 2010, the Company may, at its option, redeem the Series B preferred shares in whole at any time or in part from time to time, by paying $25 per share, plus any accrued and unpaid dividends up to and including the date of redemption. The Series B preferred shares generally have no stated maturity, will not be subject to any sinking fund or mandatory redemption, and are not convertible into any of the Company’s other securities. Owners of the Series B preferred shares generally have no voting rights, except under certain dividend defaults. The Board of Trustees declared cash dividends totaling $1.9375 per Series B preferred share for each of the years ended December 31, 2009 and 2008.

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Notes to Consolidated Financial Statements

December 31, 2009, 2008 and 2007

Of the total dividends calculated for tax purposes, the amounts characterized as ordinary income, return of capital and long-term capital gain for 2009 and 2008 are as follows:

Cash dividends paid per Series B preferred share for the year ended December 31, 2009:

Record date	Cash payment date	Cash distribution per share		Taxable ordinary income	Return of capital	Long-term capital gain
12-31-08	01-15-09	$	0.4844	0.4844	—	—
03-31-09	04-15-09		0.4844	0.4844	—	—
06-30-09	07-15-09		0.4844	0.4844	—	—
09-30-09	10-15-09		0.4844	0.4844	—	—
Total for 2009 (1)		$	1.9375	1.9375	—	—
			100.0%	100.0%	—	—

Cash dividends paid per Series B preferred share for the year ended December 31, 2008:

Record date	Cash payment date	Cash distribution per share		Taxable ordinary income	Return of capital	Long-term capital gain
12-31-07	01-15-08	$	0.4844	0.4844	—	—
03-31-08	04-15-08		0.4844	0.4844	—	—
06-30-08	07-15-08		0.4844	0.4844	—	—
09-30-08	10-15-08		0.4844	0.4844	—	—
Total for 2008 (1)		$	1.9375	1.9375	—	—
			100.0%	100.0%	—	—

⁽¹⁾ Differences between totals and details relate to rounding.

Series C Convertible Preferred Shares

On December 22, 2006, the Company issued 5.4 million 5.75% Series C cumulative convertible preferred shares (“Series C preferred shares”) in a registered public offering for net proceeds of approximately $130.8 million, after expenses. The Company will pay cumulative dividends on the Series C preferred shares from the date of original issuance in the amount of $1.4375 per share each year, which is equivalent to 5.75% of the $25 liquidation preference per share. Dividends on the Series C preferred shares are payable quarterly in arrears, and began on January 15, 2007 with a pro-rated quarterly payment of $0.0359 per share. The Company does not have the right to redeem the Series C preferred shares except in limited circumstances to preserve the Company’s REIT status. The Series C preferred shares have no stated maturity and will not be subject to any sinking fund or mandatory redemption. As of December 31, 2009, the Series C preferred shares are convertible, at the holder’s option, into the Company’s common shares at a conversion rate of 0.3572 common shares per Series C preferred share, which is equivalent to a conversion price of $69.99 per common share. This conversion ratio may increase over time upon certain specified triggering events including if the Company’s common dividend per share exceeds a quarterly threshold of $0.6875.

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Notes to Consolidated Financial Statements

December 31, 2009, 2008 and 2007

Upon the occurrence of certain fundamental changes, the Company will under certain circumstances increase the conversion rate by a number of additional common shares or, in lieu thereof, may in certain circumstances elect to adjust the conversion rate upon the Series C preferred shares becoming convertible into shares of the public acquiring or surviving company.

On or after January 15, 2012, the Company may, at its option, cause the Series C preferred shares to be automatically converted into that number of common shares that are issuable at the then prevailing conversion rate. The Company may exercise its conversion right only if, at certain times, the closing price of the Company’s common shares equals or exceeds 135% of the then prevailing conversion price of the Series C preferred shares.

Owners of the Series C preferred shares generally have no voting rights, except under certain dividend defaults. Upon conversion, the Company may choose to deliver the conversion value to the owners in cash, common shares, or a combination of cash and common shares.

The Board of Trustees declared cash dividends totaling $1.4375 per Series C preferred share for each of the years ended December 31, 2009 and 2008, respectively.

Of the total dividends calculated for tax purposes, the amounts characterized as ordinary income, return of capital and long-term capital gain for 2009 and 2008 are as follows:

Cash dividends paid per Series C preferred share for the year ended December 31, 2009:

Record date	Cash payment date	Cash distribution per share		Taxable ordinary income	Return of capital	Long-term capital gain
12-31-08	01-15-09		0.3594	0.3594
03-31-09	04-15-09		0.3594	0.3594	—	—
06-30-09	07-15-09		0.3594	0.3594	—	—
09-30-09	10-15-09		0.3594	0.3594	—	—
Total for 2009 (1)		$	1.4375	1.4375	—	—
			100.0%	100.0%	—	—

Cash dividends paid per Series C preferred share for the year ended December 31, 2008:

Record date	Cash payment date	Cash distribution per share		Taxable ordinary income	Return of capital	Long-term capital gain
12-31-07	01-15-08		0.3594	0.3594
03-31-08	04-15-08		0.3594	0.3594	—	—
06-30-08	07-15-08		0.3594	0.3594	—	—
09-30-08	10-15-08		0.3594	0.3594	—	—
Total for 2008 (1)		$	1.4375	1.4375	—	—
			100.0%	100.0%	—	—

⁽¹⁾ Differences between totals and details relate to rounding.

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Notes to Consolidated Financial Statements

December 31, 2009, 2008 and 2007

Series D Preferred Shares

On May 25, 2007, the Company issued 4.6 million 7.375% Series D cumulative redeemable preferred shares (“Series D preferred shares”) in a registered public offering for net proceeds of approximately $111.1 million, after expenses. The Company pays cumulative dividends on the Series D preferred shares from the date of original issuance in the amount of $1.844 per share each year, which is equivalent to 7.375% of the $25 liquidation preference per share. Dividends on the Series D preferred shares are payable quarterly in arrears, and were first payable on July 16, 2007 with a pro-rated quarterly payment of $0.1844 per share. The Company may not redeem the Series D preferred shares before May 25, 2012, except in limited circumstances to preserve the Company’s REIT status. On or after May 25, 2012, the Company may, at its option, redeem the Series D preferred shares in whole at any time or in part from time to time, by paying $25 per share, plus any accrued and unpaid dividends up to and including the date of redemption. The Series D preferred shares generally have no stated maturity, will not be subject to any sinking fund or mandatory redemption, and are not convertible into any of the Company’s other securities. Owners of the Series D preferred shares generally have no voting rights, except under certain dividend defaults. The net proceeds from this offering were used to redeem the Company’s 9.50% Series A preferred shares and to pay down the Company’s revolving credit facility.

The Board of Trustees declared cash dividends totaling $1.8438 per Series D preferred share for each of the years ended December 31, 2009 and 2008.

Of the total dividends calculated for tax purposes, the amounts characterized as ordinary income, return of capital and long-term capital gain for 2009 and 2008 are as follows:

Cash dividends paid per Series D preferred share for the year ended December 31, 2009:

Record date	Cash payment date	Cash distribution per share		Taxable ordinary income	Return of capital	Long-term capital gain
12-31-08	01-15-09		0.4609	0.4609
03-31-09	04-15-09		0.4609	0.4609	—	—
06-30-09	07-15-09		0.4609	0.4609	—	—
09-30-09	10-15-09		0.4609	0.4609	—	—
Total for 2009 (1)		$	1.8438	1.8438	—	—
			100.0%	100.0%	—	—

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Notes to Consolidated Financial Statements

December 31, 2009, 2008 and 2007

Cash dividends paid per Series D preferred share for the year ended December 31, 2008:

Record date	Cash payment date	Cash distribution per share		Taxable ordinary income	Return of capital	Long-term capital gain
12-31-07	01-15-08		0.4609	0.4609
03-31-08	04-15-08		0.4609	0.4609	—	—
06-30-08	07-15-08		0.4609	0.4609	—	—
09-30-08	10-15-08		0.4609	0.4609	—	—
Total for 2008 (1)		$	1.8438	1.8438	—	—
			100.0%	100.0%	—	—

⁽¹⁾ Differences between totals and details relate to rounding

Series E Convertible Preferred Shares

On April 2, 2008, the Company issued 3.5 million 9.00% Series E cumulative convertible preferred shares (“Series E preferred shares”) in a registered public offering for net proceeds of approximately $83.4 million, after expenses. The Company will pay cumulative dividends on the Series E preferred shares from the date of original issuance in the amount of $2.25 per share each year, which is equivalent to 9.00% of the $25 liquidation preference per share. Dividends on the Series E preferred shares are payable quarterly in arrears, and began on July 15, 2008 with a pro-rated quarterly payment of $0.65 per share. The Company does not have the right to redeem the Series E preferred shares except in limited circumstances to preserve the Company’s REIT status. The Series E preferred shares have no stated maturity and will not be subject to any sinking fund or mandatory redemption. As of December 31, 2009, the Series E preferred shares are convertible, at the holder’s option, into the Company’s common shares at a conversion rate of 0.4512 common shares per Series E preferred share, which is equivalent to a conversion price of $55.41 per common share. This conversion ratio may increase over time upon certain specified triggering events including if the Company’s common dividend per share exceeds a quarterly threshold of $0.84.

Upon the occurrence of certain fundamental changes, the Company will under certain circumstances increase the conversion rate by a number of additional common shares or, in lieu thereof, may in certain circumstances elect to adjust the conversion rate upon the Series E preferred shares becoming convertible into shares of the public acquiring or surviving company.

On or after April 20, 2013, the Company may, at its option, cause the Series E preferred shares to be automatically converted into that number of common shares that are issuable at the then prevailing conversion rate. The Company may exercise its conversion right only if, at certain times, the closing price of the Company’s common shares equals or exceeds 150% of the then prevailing conversion price of the Series E preferred shares.

Owners of the Series E preferred shares generally have no voting rights, except under certain dividend defaults. Upon conversion, the Company may choose to deliver the conversion value to the owners in cash, common shares, or a combination of cash and common shares.

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Notes to Consolidated Financial Statements

December 31, 2009, 2008 and 2007

The Board of Trustees declared cash dividends totaling $2.25 and $1.775 per Series E preferred share for the years ended December 31, 2009 and 2008, respectively.

Of the total dividends calculated for tax purposes, the amounts characterized as ordinary income, return of capital and long-term capital gain for 2009 and 2008 are as follows:

Cash dividends paid per Series E preferred share for the year ended December 31, 2009:

Record date	Cash payment date	Cash distribution per share		Taxable ordinary income	Return of capital	Long-term capital gain
12-31-08	01-15-09		0.5625	0.5625
03-31-09	04-15-09		0.5625	0.5625	—	—
06-30-09	07-15-09		0.5625	0.5625	—	—
09-30-09	10-15-09		0.5625	0.5625	—	—
Total for 2009 (1)		$	2.2500	2.2500	—	—
			100.0%	100.0%	—	—

Cash dividends paid per Series E preferred share for the year ended December 31, 2008:

Record date	Cash payment date	Cash distribution per share		Taxable ordinary income	Return of capital	Long-term capital gain
06-30-08	07-15-08		0.6500	0.6500	—	—
09-30-08	10-15-08		0.5625	0.5625	—	—
Total for 2008 (1)		$	1.2125	1.2125	—	—
			100.0%	100.0%	—	—

⁽¹⁾ Differences between totals and details relate to rounding

14. Earnings Per Share

The following table summarizes the Company’s common shares used for computation of basic and diluted earnings per share for the years ended December 31, 2009, 2008 and 2007 (amounts in thousands except per share information):

	Year Ended December 31, 2009
	Income (numerator)			Shares (denominator)		Per Share     Amount
Basic earnings:
Loss from continuing operations	$	(11,906	)		36,122	$	(0.33	)
Add: net loss attributable to noncontrolling interests		19,913			—	$	0.55
Income from continuing operations attributable to Entertainment Properties Trust	$	8,007			36,122	$	0.22
Preferred dividend requirements		(30,206	)		—		(0.83	)
Loss from continuing operations available to common shareholders of Entertainment Properties Trust	$	(22,199	)	$	36,122		(0.61	)

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Notes to Consolidated Financial Statements

December 31, 2009, 2008 and 2007

	Year Ended December 31, 2008
	Income (numerator)			Shares (denominator)		Per Share Amount
Basic earnings:
Income from continuing operations	$	127,530			30,910	$	4.12
Add: net loss attributable to noncontrolling interests		2,353			-		0.08
Income from continuing operations attributable to Entertainment Properties Trust	$	129,883			30,910	$	4.20
Preferred dividend requirements		(28,266	)		-		(0.91	)
Income from continuing operations available to common shareholders of Entertainment Properties Trust	$	101,617		$	30,910	$	3.29
Effect of dilutive securities:
Share options		-			267		(0.03	)
Diluted earnings: Income from continuing operations attributable to Entertainment Properties Trust	$	101,617			31,177	$	3.26
Income from continuing operations available to common shareholders of Entertainment Properties Trust	$	101,617			30,910	$	3.29
Income from discontinued operations		93			-		-
Income available to common shareholders of Entertainment Properties Trust		101,710			30,910		3.29
Effect of dilutive securities:
Share options		-			267		(0.03	)
Diluted earnings attributable to Entertainment Properties Trust	$	101,710			31,177	$	3.26

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Notes to Consolidated Financial Statements

December 31, 2009, 2008 and 2007

	Year Ended December 31, 2007
	Income (numerator)			Shares (denominator)	Per Share Amount
Basic earnings:
Income from continuing operations	$	99,215		26,929	$	3.69
Add: net loss attributable to noncontrolling interests		1,370		-		0.05
Income from continuing operations attributable to Entertainment Properties Trust	$	100,585		26,929	$	3.74
Preferred dividend requirements		(21,312	)	-		(0.79	)
Series A preferred share redemption costs		(2,101	)	-		(0.08	)
Income from continuing operations available to common shareholders of Entertainment Properties Trust	$	77,172		26,929	$	2.87
Effect of dilutive securities:
Share options		-		375		(0.04	)
Diluted earnings: Income from continuing operations attributable to Entertainment Properties Trust	$	77,172		27,304	$	2.83
Income from continuing operations available to common shareholders of Entertainment Properties Trust	$	77,172		26,929	$	2.87
Income from discontinued operations		4,079		-		0.15
Income available to common shareholders of Entertainment Properties Trust		81,251		26,929		3.02
Effect of dilutive securities:
Share options		-		375		(0.04	)
Diluted earnings attributable to Entertainment Properties Trust	$	81,251		27,304	$	2.98

The dilutive effect of potential common shares from the exercise of share options is included in diluted earnings per share except in those periods with a loss from continuing operations. For the year ended December 31, 2009, there were 113 thousand potential common shares from the exercise of share options that were excluded from the calculation of diluted earnings per share as the effect was anti-dilutive.

The additional 1.9 million common shares that would result from the conversion of the Company’s 5.75% Series C cumulative convertible preferred shares and the additional 1.6 million common shares that would result from the conversion of the Company’s 9.0% Series E cumulative convertible preferred shares (issued on April 2, 2008) and the corresponding add-back of the preferred dividends declared on those shares are not included in the calculation of diluted earnings per share for the years ended December 31, 2009, 2008 and 2007 because the effect is anti-dilutive.

The Company’s nonvested share awards are considered participating securities and are included in the calculation of earnings per share under the two-class method as required by the Earnings Per Share Topic of the FASB ASC. Prior-period earnings per share data was computed using the treasury stock method and has been adjusted retrospectively, which lowered basic and diluted earnings per share by $0.03 and $0.02, respectively, for the year ended December 31, 2008, and by $0.02 and $0.01, respectively, for the year ended December 31, 2007.

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Notes to Consolidated Financial Statements

December 31, 2009, 2008 and 2007

During the second quarter of 2009, the Company issued 20,508 restricted share units to its non-employee trustees. The restricted share units are entitled to receive dividend payments from the date of grant and are therefore considered participating securities under the two-class method. As such, the weighted average shares used in the computation of basic earnings per share include the nonvested restricted share units.

15. Equity Incentive Plan

All grants of common shares and options to purchase common shares were issued under the 1997 Share Incentive Plan prior to May 9, 2007, and under the 2007 Equity Incentive Plan on and after May 9, 2007. Under the 2007 Equity Incentive Plan, an aggregate of 1,950,000 common shares, options to purchase common shares and restricted share units, subject to adjustment in the event of certain capital events, may be granted. At December 31, 2009, there were 1,059,818 shares available for grant under the 2007 Equity Incentive Plan.

Share Options

Share options granted under both the 1997 Share Incentive Plan and the 2007 Equity Incentive Plan have exercise prices equal to the fair market value of a common share at the date of grant. The options may be granted for any reasonable term, not to exceed 10 years, and for employees typically become exercisable at a rate of 20% per year over a five–year period, however, this was reduced to a rate of 25% per year over a four year period for options granted in the first quarter of 2009. For non-employee Trustees, share options are vested upon issuance, however, the share options may not be exercised for a one year period subsequent to the grant date. The Company generally issues new common shares upon option exercise. A summary of the Company’s share option activity and related information is as follows:

	Number of shares		Option price per share	Weighted avg. exercise price
Outstanding at December 31, 2006	981,673		$  14.00 - $  43.75	$	28.33
Exercised	(181,620	)	16.05 -     41.65		28.68
Granted	106,945		60.03 -     65.50		64.15
Outstanding at December 31, 2007	906,998		$  14.00 - $  65.50	$	32.49
Exercised	(81,914	)	19.30 -     42.46		31.06
Granted	86,033		47.20 -     52.72		47.84
Outstanding at December 31, 2008	911,117		$  14.00 - $  65.50	$	34.07
Exercised	(100,928	)	14.13 -     14.13		14.13
Granted	422,093		18.18 -     19.41		18.36
Forfeited	(23,994	)	18.18 -     60.03		32.73
Outstanding at December 31, 2009	1,208,288		$  14.00 - $  65.50	$	30.27

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Notes to Consolidated Financial Statements

December 31, 2009, 2008 and 2007

The weighted average fair value of options granted was $2.68, $4.31 and $7.91 during 2009, 2008 and 2007, respectively. The intrinsic value of stock options exercised was $1.9 million during each of the years ended December 31, 2009 and 2008 and $6.1 million during the year ended December 31, 2007.

At December 31, 2009, stock-option expense to be recognized in future periods was $1.5 million as follows (in thousands):

	Amount
Year:
2010	$	621
2011		487
2012		338
2013		17
2014		—
Total	$	1,463

The following table summarizes outstanding options at December 31, 2009:

Exercise price range	Options outstanding	Weighted avg. life remaining	Weighted avg. exercise price		Aggregate intrinsic value (in thousands)
$14.00 - 19.99	508,239	7.7
20.00 - 29.99	251,127	3.0
30.00 - 39.99	79,267	4.3
40.00 - 49.99	254,768	6.6
50.00 - 59.99	10,000	8.4
60.00 - 65.50	104,887	7.1
	1,208,288	6.2	$	30.27	$	11,615

The following table summarizes exercisable options at December 31, 2009:

Exercise price range	Options outstanding	Weighted avg. life remaining	Weighted avg. exercise price		Aggregate intrinsic value (in thousands)
$ 14.00 - 19.99	103,009	2.5
20.00 - 29.99	264,127	3.0
30.00 - 39.99	82,222	4.3
40.00 - 49.99	141,162	6.1
50.00 - 59.99	10,000	8.4
60.00 - 65.50	48,785	7.1
	649,305	4.1	$	32.18	$	4,857

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Notes to Consolidated Financial Statements

December 31, 2009, 2008 and 2007

Nonvested Shares

A summary of the Company’s nonvested share activity and related information is as follows:

	Number of shares		Weighted avg. grant date fair value		Weighted avg. life remaining
Outstanding at December 31, 2008	282,328		$	52.22
Granted	218,797			18.12
Vested	(96,309	)		50.61
Forfeited	(5,411	)		33.17
Outstanding at December 31, 2009	399,405			34.19	1.06

The holders of nonvested shares have voting rights and receive dividends from the date of grant. These shares vest ratably over a period of three to five years. The fair value of the nonvested shares that vested was $2.8 million, $3.6 million and $3.5 million for the years ended December 31, 2009, 2008 and 2007, respectively. At December 31, 2009, unamortized share-based compensation expense related to nonvested shares was $6.1 million and will be recognized in future periods as follows (in thousands):

	Amount
Year:
2010	$	2,795
2011		2,282
2012		1,000
2013		—
Total	$	6,077

Restricted Share Units

A summary of the Company’s restricted share unit activity and related information is as follows:

	Number of Shares	Weighted Average Grant Date Fair Value		Weighted Average Life Remaining
Outstanding at December 31, 2008	—	$	—
Granted	20,508		19.02
Vested	—		—
Outstanding at December 31, 2009	20,508		19.02	0.36

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Notes to Consolidated Financial Statements

December 31, 2009, 2008 and 2007

The holders of restricted share units have voting rights and receive dividends from the date of grant. The share units vest upon the earlier of the day preceding the next annual meeting of shareholders or a change of control. The settlement date for the shares is selected by the non-employee trustee, and ranges from three years from the grant date to upon termination of service. At December 31, 2009, unamortized share-based compensation expense related to restricted share units was $130 thousand. There was no unamortized share-based compensation expense related to restricted share units at December 31, 2008 and 2007.

16. Related Party Transactions

In 2000, the Company loaned an aggregate of $3.5 million to Company executives. The loans were made in order for the executives to purchase common shares of the Company at the market value of the shares on the date of the loan, as well as to repay borrowings on certain amounts previously loaned. The loans are recourse to the executives’ assets and bear interest at 6.24%, are due on January 1, 2011 and interest is payable at maturity. During July of 2008, a former executive paid to the Company the $1.6 million of principal on his loan which reduces the aggregate carrying value of these loans to $1.9 million (before accrued interest) at December 31, 2008. Interest income from these loans totaled $315 thousand, $351 thousand and $369 thousand for the years ended December 31, 2009, 2008 and 2007, respectively. These loans were issued with terms that include a Loan Forgiveness Program, under which the compensation committee of the Board of Trustees may forgive a portion of the above referenced indebtedness after application of proceeds from the sale of shares, following a change in control of the Company. The compensation committee may also forgive the debt incurred upon termination of employment by reason of death, disability, normal retirement or without cause. These loans can be repaid with cash or with shares of the Company. At December 31, 2009 and 2008, accrued interest receivable on these loans, included in other assets in the accompanying consolidated balance sheets, was $3.4 million and $3.1 million, respectively. Subsequent to year-end, the Company’s Chief Executive Officer paid $1.2 million on his loan by delivering 35,000 common shares to the Company.

The Company loaned $5 million to its New Roc minority joint venture partner in 2003 in connection with the acquisition of its interest in New Roc. During 2007, the Company loaned an additional $5 million to the same partner. See Note 9 for additional information on this note.

The Company loaned $10 million to a minority joint venture partner of the White Plains entities in 2007 in connection with the acquisition of its interest in these entities. See Note 9 for additional information on this note.

The Company loaned $10 million to Mr. Cappelli in 2008. Through his related interests, Mr.Cappelli is the developer and minority interest partner of the Company’s New Roc and White Plains entertainment retail centers. See Note 9 for additional information on this note.

In 2008, Donald Brain, the brother of the Company’s Chief Executive Officer, acquired a 33.33% interest in the Company’s partner in VinREIT, Global Wine Partners (U.S.), LLC (GWP). The Company’s Board of Trustees was informed of Donald Brain’s acquisition of such interest, and affirmed VinREIT’s business relationship with GWP. There was no modification to the operating agreement of VinREIT, and future amendments or modifications to the operating agreement or relationship with GWP will require the Board of Trustee’s approval.

132

ENTERTAINMENT PROPERTIES TRUST

Notes to Consolidated Financial Statements

December 31, 2009, 2008 and 2007

17. Operating Leases

Most of the Company’s rental properties are leased under operating leases with expiration dates ranging from 1 to 24 years. Future minimum rentals on non-cancelable tenant operating leases at December 31, 2009 are as follows (in thousands):

	Amount
Year:
2010	$	209,711
2011		196,300
2012		185,521
2013		176,661
2014		159,091
Thereafter		1,139,748
Total	$	2,067,032

The Company leases its executive office from an unrelated landlord and such lease expired in December 2009. Rental expense for this lease totaled approximately $363 thousand, $319 thousand and $212 thousand for the years ended December 31, 2009, 2008 and 2007, respectively, and is included as a component of general and administrative expense in the accompanying consolidated statements of income. The Company continues to lease its office space on a month-to-month basis.

18. Quarterly Financial Information (unaudited)

Summarized quarterly financial data for the years ended December 31, 2009 and 2008 are as follows (in thousands, except per share data):

	March 31		June 30	September 30		December 31
2009:
Total revenue	$	66,704	66,717	68,122		69,268
Net income (loss)		24,095	25,995	(75,362	)	13,366
Net income (loss) available to common shareholders of Entertainment Properties Trust		17,777	20,152	(66,843	)	6,715
Basic net income (loss) per common share		0.52	0.58	(1.89	)	0.17
Diluted net income (loss) per common share		0.52	0.58	(1.89	)	0.17

133

ENTERTAINMENT PROPERTIES TRUST

Notes to Consolidated Financial Statements

December 31, 2009, 2008 and 2007

	March 31		June 30	September 30	December 31
2008:
Total revenue	$	65,859	68,755	74,967	76,559
Net income		26,615	30,933	35,570	34,505
Net income available to common shareholders of Entertainment Properties Trust		21,511	23,859	28,506	27,834
Basic net income per per common share		0.76	0.78	0.89	0.85
Diluted net income per common share		0.76	0.77	0.88	0.84

All periods have been adjusted to reflect the impact of the operating properties sold during 2008 and 2007, which are reflected as discontinued operations on the accompanying consolidated statements of income for the years ended December 31, 2008 and 2007.

Certain reclassifications have been made to the prior period amounts to conform to the current period presentation. As discussed in Note 14, prior period earnings per share amounts have been adjusted retrospectively due to the adoption two-class method as required by the Earnings Per Share Topic of the FASB ASC.

19. Discontinued Operations

Included in discontinued operations for the years ended December 31, 2008 and 2007 is a land parcel sold in June of 2008 for $1.1 million. The land parcel was previously leased under a ground lease. Additionally, included in discontinued operations for the year ended December 31, 2007 is a parcel including two leased properties sold in June of 2007 for $7.7 million, aggregating 107 thousand square feet.

The operating results relating to assets sold are as follows (in thousands):

	Year ended December 31,
	2008			2007
Rental revenue	$	-		$	262
Tenant reimbursements		-			76
Other income		-			700
Total revenue		-			1,038
Property operating expense		26			141
Depreciation and amortization		-			58
Income before gain on sale of real estate		(26	)		839
Gain on sale of real estate		119			3,240
Net income	$	93		$	4,079

134

ENTERTAINMENT PROPERTIES TRUST

Notes to Consolidated Financial Statements

December 31, 2009, 2008 and 2007

20. Other Commitments and Contingencies

The Company has agreed to finance $9.6 million in development costs for expansion at three of its existing public charter school properties. Development costs are advanced by the Company in periodic draws. If the Company determines that construction is not being completed in accordance with the terms of the development agreement, the Company can discontinue funding construction draws. The Company has agreed to lease the expansion facility to the operator at pre-determined rates.

The Company has provided a guarantee of the payment of certain economic development revenue bonds related to three theatres in Louisiana for which the Company earns a fee at an annual rate of 1.75% over the 30 year term of the bond. The Company evaluated this guarantee in connection with the provisions of the FASB ASC Topic 450 on Guarantees (Topic 450). Based on certain criteria, Topic 450 requires a guarantor to record an asset and a liability at inception. Accordingly, the Company had recorded $4.0 million as a deferred asset included in accounts receivable and $4.0 million included in other liabilities in the accompanying consolidated balance sheet as of December 31, 2008, which represented management’s estimate of the fair value of the guarantee at inception which will be realized over the term of the guarantee. During the third quarter of 2009, the outstanding principal amount of the bonds was reduced from $22 million to $14.4 million due to a principal repayment. Accordingly, the Company reduced the asset and liability recorded to reflect the decrease in the outstanding principal balance. The Company has recorded $2.6 million as a deferred asset included in accounts receivable and $2.6 million included in other liabilities in the accompanying consolidated balance sheet as of December 31, 2009. No amounts have been accrued as a loss contingency related to this guarantee because payment by the Company is not probable.

The Company has certain commitments related to its mortgage note investments that it may be required to fund in the future. The Company is generally obligated to fund these commitments at the request of the borrower or upon the occurrence of events outside of its direct control. As of December 31, 2009, the Company had four mortgage notes receivable with commitments totaling approximately $20 million. If commitments are funded in the future, interest will be charged at rates consistent with the existing investments.

As discussed in Note 5, the Company could become the owner of the Toronto Dundas Square Project as a result of the receivership process. On January 8, 2010, the Company signed a purchase agreement to acquire this center in early 2010; however, the purchase of this center is subject to various conditions. As a result, the Company can offer no assurance that this transaction will be completed. The Company has finalized the terms of a credit facility with a group of banks to provide CAD $100 million first mortgage financing that is expected to close in conjunction with the purchase. The Company expects to consolidate the financial results of the property subsequent to the purchase.

135

ENTERTAINMENT PROPERTIES TRUST

Notes to Consolidated Financial Statements

December 31, 2009, 2008 and 2007

21. Subsequent Events

On January 22, 2010, the Company acquired five public charter school properties from Imagine Schools, Inc. and funded one expansion for an existing public charter school property for a purchase price of $44.1 million. The properties are leased under a long-term triple-net master lease that is classified as a direct financing lease. The five properties are located in Florida, Indiana and Ohio. As a part of this transaction, the Company has agreed to finance $4.4 million in development costs for an expansion at two of its existing public charter school properties.

136

Entertainment Properties Trust

Schedule II - Valuation and Qualifying Accounts

December 31, 2009

Description	Balance at December 31, 2008	Additions During 2009	Deductions During 2009		Balance at December 31, 2009
Reserve for Doubtful Accounts	2,265,000	4,559,000	(1,914,000	)	4,910,000
Allowance for Loan Losses	—	71,972,000	—		71,972,000

See accompanying report of independent registered public accounting firm.

Entertainment Properties Trust

Schedule II - Valuation and Qualifying Accounts

December 31, 2008

Description	Balance at December 31, 2007	Additions During 2008	Deductions During 2008		Balance at December 31, 2008
Reserve for Doubtful Accounts	1,083,000	2,015,000	(833,000	)	2,265,000

See accompanying report of independent registered public accounting firm.

There was no allowance for loan losses for the year ended December 31, 2008

Entertainment Properties Trust

Schedule II - Valuation and Qualifying Accounts

December 31, 2007

Description	Balance at December 31, 2006	Additions During 2007	Deductions During 2007		Balance at December 31, 2007
Reserve for Doubtful Accounts	1,123,000	1,301,000	(1,341,000	)	1,083,000

See accompanying report of independent registered public accounting firm.

There was no allowance for loan losses for the year ended December 31, 2007

137

Entertainment Properties Trust

Schedule III - Real Estate and Accumulated Depreciation

December 31, 2009

(Dollars in thousands)

						Additions
				Initial cost		(Dispositions)		Gross Amount at December 31, 2009
Description	Market	Encumbrance		Land	Buildings, Equipment & improvements	(Impairments) Subsequent to acquisition		Land	Buildings, Equipment & improvements	Total	Accumulated depreciation	Date acquired	Depreciation life
Grand 24	Dallas, TX	$	1,466	3,060	15,281	—		3,060	15,281	18,341	4,393	11/97	40 years
Mission Valley 20	San Diego, CA		1,857	—	16,028	—		—	16,028	16,028	4,608	11/97	40 years
Promenade 16	Los Angeles, CA		3,250	6,021	22,104	—		6,021	22,104	28,125	6,355	11/97	40 years
Ontario Mills 30	Los Angeles, CA		2,882	5,521	19,450	—		5,521	19,450	24,971	5,592	11/97	40 years
Lennox 24	Columbus, OH		1,464	—	12,685	—		—	12,685	12,685	3,647	11/97	40 years
West Olive 16	St. Louis, MO		1,135	4,985	12,602	—		4,985	12,602	17,587	3,623	11/97	40 years
Studio 30	Houston, TX		3,008	6,023	20,037	—		6,023	20,037	26,060	5,761	11/97	40 years
Huebner Oaks 24	San Antonio, TX		1,924	3,006	13,662	—		3,006	13,662	16,668	3,928	11/97	40 years
First Colony 24	Houston, TX		17,714	—	19,100	67		—	19,167	19,167	5,750	11/97	40 years
Oakview 24	Omaha, NE		18,312	5,215	16,700	59		5,215	16,759	21,974	5,028	11/97	40 years
Leawood Town Center 20	Kansas City, MO		14,706	3,714	12,086	43		3,714	12,129	15,843	3,639	11/97	40 years
On The Border	Dallas, TX		62	879	—	—		879	—	879	—	11/97	n/a
Cheddar’s Causal Café	Dallas, TX		62	565	—	—		565	—	565	—	11/97	20 years
Wing Factory	Houston, TX		93	652	—	857		652	857	1,509	369	11/97	20 years
Texas Land & Cattle	Dallas, TX		93	1,519	—	—		1,519	—	1,519	—	11/97	n/a
Gulf Pointe 30	Houston, TX		24,784	4,304	21,496	76		4,304	21,572	25,876	6,427	2/98	40 years
South Barrington 30	Chicago, IL		25,608	6,577	27,723	98		6,577	27,821	34,398	8,230	3/98	40 years
Mesquite 30	Dallas, TX		21,024	2,912	20,288	72		2,912	20,360	23,272	5,938	4/98	40 years
Hampton Town Center 24	Norfolk, VA		18,405	3,822	24,678	88		3,822	24,766	28,588	7,120	6/98	40 years
Pompano 18	Pompano Beach, FL		10,134	6,771	9,899	3,350		6,771	13,249	20,020	3,544	8/98	40 years
Raleigh Grand 16	Raleigh, NC		6,541	2,919	5,559	—		2,919	5,559	8,478	1,575	8/98	40 years
Paradise 24	Miami, FL		20,449	2,000	13,000	8,512		2,000	21,512	23,512	5,826	11/98	40 years
Aliso Viejo 20	Los Angeles, CA		20,449	8,000	14,000	—		8,000	14,000	22,000	3,850	12/98	40 years
Bosie Stadium 21	Boise, ID		14,648	—	16,003	—		—	16,003	16,003	4,401	12/98	40 years
Texas Roadhouse Grill	Atlanta, GA		62	886	—	—		886	—	886	—	3/99	n/a
Roadhouse Grill	Atlanta, GA		57	868	—	(868	)	—	—	—	—	3/99	n/a
Woodridge 18	Chicago, IL		6,824	9,926	8,968	—		9,926	8,968	18,894	2,354	6/99	40 years
Tampa Starlight 20	Tampa, FL		8,650	6,000	12,809	975		6,000	13,784	19,784	3,253	6/99	40 years
Westminster 24	Denver, CO		11,803	5,850	17,314	—		5,850	17,314	23,164	3,499	6/99	40 years
Cary Crossroads 20	Cary, NC		7,305	3,352	11,653	155		3,352	11,808	15,160	2,952	12/99	40 years
Palm Promenade 24	San Diego, CA		11,486	7,500	17,750	—		7,500	17,750	25,250	4,401	2/00	40 years
Westminster Promenade	Denver, CO		1,657	6,204	12,600	6,551		6,204	19,151	25,355	3,568	12/01	40 years
Westbank Palace 16	Westbank, LA		7,689	4,378	12,330	—		4,378	12,330	16,708	2,415	3/02	40 years
Houma Palace 10	Houma, LA		4,325	2,404	6,780	—		2,404	6,780	9,184	1,328	3/02	40 years
Hammond Palace 10	Hammond, LA		4,205	2,404	6,780	(565	)	1,839	6,780	8,619	1,328	3/02	40 years
Elmwood Palace 20	Elmwood, LA		11,053	5,264	14,820	—		5,264	14,820	20,084	2,902	3/02	40 years
Clearview Palace 12	Clearview, LA		5,767	—	11,740	—		—	11,740	11,740	2,299	3/02	40 years
Forum 30	Sterling Heights, MI		13,456	5,975	17,956	3,400		5,975	21,356	27,331	4,764	6/02	40 years
Olathe Studio 30	Olathe, KS		9,611	4,000	15,935	—		4,000	15,935	19,935	2,988	6/02	40 years
Cherrydale 16	Greenville, SC		3,965	1,600	6,400	—		1,600	6,400	8,000	1,200	6/02	40 years
Cherrydale Shops	Greenville, SC		—	60	1,170	—		60	1,170	1,230	219	6/02	40 years
Livonia 20	Livonia, MI		11,005	4,500	17,525	—		4,500	17,525	22,025	3,249	8/02	40 years
Subtotals carried over to next page		$	348,990	149,636	524,911	22,870		148,203	549,214	697,417	142,323

138

Entertainment Properties Trust

Schedule III - Real Estate and Accumulated Depreciation

December 31, 2009

(Dollars in thousands)

						Additions
				Initial cost		(Dispositions)		Gross Amount at December 31, 2009
Description	Market	Encumbrance		Land	Buildings, Equipment & improvements	(Impairments) Subsequent to acquisition		Land	Buildings, Equipment & improvements	Total	Accumulated depreciation	Date acquired	Depreciation life
Subtotal from previous page	n/a		348,990	149,636	524,911	22,870		148,203	549,214	697,417	142,323	n/a	n/a
Hoffman Town Centre 22	Alexandria, VA		11,053	—	22,035	—		—	22,035	22,035	3,994	10/02	40 years
Colonel Glenn 18	Little Rock, AR		10,042	3,858	7,990	—		3,858	7,990	11,848	1,415	12/02	40 years
AmStar Cinema 16	Macon, GA		6,205	1,982	5,056	—		1,982	5,056	7,038	853	3/03	40 years
Johnny Carino’s	Mesquite, TX		62	789	990	—		789	990	1,779	169	3/03	40 years
Star Southfield Center	Southfield, MI		1,416	8,000	20,518	4,346		8,000	24,864	32,864	5,559	5/03	40 years
Southwind 12	Lawrence, KS		4,579	1,500	3,526	—		1,500	3,526	5,026	580	6/03	40 years
New Roc City	New Rochelle, NY		64,671	6,100	97,601	95		6,100	97,696	103,796	17,895	10/03	40 years
Harbour View Station	Suffolk, VA		1,248	3,256	9,206	2,646		3,256	11,852	15,108	1,439	11/03	40 years
Columbiana Grande 14	Columbiana, SC		7,870	1,000	10,534	(2,447	)	1,000	8,087	9,087	1,294	11/03	40 years
The Grande 18	Hialeah, FL		—	7,985	—	—		7,985	—	7,985	—	12/03	n/a
Kanata Centrum	Toronto, Ontario		33,790	11,989	43,723	30,574		11,989	74,297	86,286	9,286	3/04	40 years
Oakville Centrum	Toronto, Ontario		27,615	11,989	28,249	4,559		11,989	32,808	44,797	4,487	3/04	40 years
Mississauga Centrum	Toronto, Ontario		18,462	11,036	21,018	14,236		14,473	31,817	46,290	4,267	3/04	40 years
Whitby Centrum	Toronto, Ontario		22,142	12,179	26,235	22,615		15,643	45,386	61,029	6,640	3/04	40 years
Deer Valley 30	Phoenix, AZ		14,832	4,276	15,934	—		4,276	15,934	20,210	2,290	3/04	40 years
Mesa Grand 24	Phoenix, AZ		15,036	4,446	16,565	—		4,446	16,565	21,011	2,381	3/04	40 years
Hamilton 24	Hamilton, NJ		16,583	4,869	18,143	—		4,869	18,143	23,012	2,608	3/04	40 years
Grand Prairie 18	Peoria, IL		1,148	2,948	11,177	—		2,948	11,177	14,125	1,514	7/04	40 years
Lafayette Grand 16	Lafayette, LA		8,732	—	10,318	—		—	10,318	10,318	1,413	7/04	40 years
Vland Multi-tenant Retail	Warrenville, IL		157	1,936	—	114		2,050	—	2,050	—	7/04	n/a
Stir Crazy	Warrenville, IL		157	1,983	900	—		1,983	900	2,883	315	9/04	15 years
Northeast Mall 18	Hurst, TX		14,096	5,000	11,729	1,015		5,000	12,744	17,744	1,627	11/04	40 years
The Grand 18	D’Iberville, MS		10,991	2,001	8,043	2,432		2,001	10,475	12,476	1,210	12/04	40 years
Avenue 16	Melbourne, FL		1,280	3,817	8,830	320		3,817	9,150	12,967	1,144	12/04	40 years
Splitz	Westminster, CO		—	—	2,213	335		—	2,548	2,548	314	12/04	40 years
Mayfaire Cinema 16	Wilmington, NC		7,427	1,650	7,047	—		1,650	7,047	8,697	866	2/05	40 years
East Ridge 18	Chatanooga, TN		12,120	2,798	11,467	—		2,798	11,467	14,265	1,386	3/05	40 years
Burbank Village	Burbank, CA		33,763	16,584	35,016	3,342		16,584	38,358	54,942	4,258	3/05	40 years
Savannah Land	Savannah, GA		—	2,783	—	(586	)	2,197	—	2,197	—	5/05	n/a
ShowPlace 12	Indianapolis, IN		4,889	1,481	4,565	—		1,481	4,565	6,046	514	6/05	40 years
The Grand 14	Conroe, TX		963	1,836	8,230	—		1,836	8,230	10,066	925	6/05	40 years
Etouffee	Southfield, MI		—	—	1,200	54		—	1,254	1,254	135	8/05	40 years
La Cantina	Houston, TX		93	1,482	1,365	(170	)	1,237	1,440	2,677	421	8/05	15 years
The Grand 18	Hattiesburg, MS		9,922	1,978	7,733	2,432		1,978	10,165	12,143	1,004	9/05	40 years
Mad River Mountain	Bellefontaine, OH		5,996	5,108	5,994	1,500		5,251	7,351	12,602	1,187	11/05	40 years
Manchester Stadium 16	Fresno, CA		11,310	7,600	11,613	—		7,600	11,613	19,213	1,336	12/05	40 years
Modesto Stadium 10	Modesto, CA		4,662	2,542	3,910	—		2,542	3,910	6,452	399	12/05	40 years
Vacant (formerly Sizzler)	Arroyo Grande, CA		—	444	534	—		444	534	978	55	12/05	40 years
Arroyo Grande Stadium 10	Arroyo Grande, CA		4,809	2,641	3,810	—		2,641	3,810	6,451	389	12/05	40 years
Auburn Stadium 10	Auburn, CA		6,228	2,178	6,185	—		2,178	6,185	8,363	631	12/05	40 years
Columbia 14	Columbia, MD		994	—	12,204	—		—	12,204	12,204	1,144	3/06	40 years
Subtotals carried over to next page		$	744,333	313,680	1,046,317	110,282		318,574	1,151,705	1,470,279	229,667

139

Entertainment Properties Trust

Schedule III - Real Estate and Accumulated Depreciation

December 31, 2009

(Dollars in thousands)

						Additions
				Initial cost		(Dispositions)		Gross Amount at December 31, 2009
Description	Market	Encumbrance		Land	Buildings, Equipment & improvements	(Impairments) Subsequent to acquisition		Land	Buildings, Equipment & improvements	Total	Accumulated depreciation	Date acquired	Depreciation life
Subtotal from previous page	n/a		744,333	313,680	1,046,317	110,282		318,574	1,151,705	1,470,279	229,667	n/a	n/a
Firewheel 18	Garland TX		16,667	8,028	14,825	—		8,028	14,825	22,853	1,390	3/06	40 years
White Oak Village Cinema 14	Garner, NC		715	1,305	6,899	—		1,305	6,899	8,204	632	4/06	40 years
The Grand 18	Winston-Salem, NC		1,004	—	12,153	1,925		—	14,078	14,078	1,232	7/06	40 years
Valley Bend 18	Huntsville, AL		1,700	3,508	14,802	—		3,508	14,802	18,310	1,233	8/06	40 years
Cityplace 14	Kalamazoo, MI		—	5,125	12,216	—		5,125	12,216	17,341	942	11/06	40 years
Bayou 15	Pensacola, FL		1,830	5,316	15,099	—		5,316	15,099	20,415	1,132	12/06	40 years
Havens Wine Cellars	Yountville, CA		4,675	2,527	4,873	650		2,527	5,523	8,050	701	12/06	40 years
The Grand 16	Slidell, LA		10,635	—	11,499	—		—	11,499	11,499	862	12/06	40 years
Rack & Riddle	Hopland, CA		15,566	1,015	5,724	26,082		1,015	31,806	32,821	1,977	4/07	40 years
City Center	White Plains, NY		118,333	28,201	130,022	(32,365	)	22,433	103,425	125,858	8,607	5/07	40 years
Pier Park Grand 16	Panama City Beach, FL		1,357	6,486	11,156	—		6,486	11,156	17,642	720	5/07	40 years
Austell Promenade	Austell, GA		—	1,596	—	—		1,596	—	1,596	—	7/07	n/a
Kalispell Stadium 14	Kalispell, MT		800	2,505	7,323	—		2,505	7,323	9,828	427	8/07	40 years
EOS Estate Winery	Pasa Robles, CA		—	1,576	19,725	169		2,145	19,325	21,470	1,393	8/07	40 years
Cosentino Wineries	Pope Valley, Lockeford, and Clements, CA		—	5,249	13,431	(1,901	)	5,249	11,530	16,779	1,888	8/07	40 years
Four Seasons Station Grand 18	Greensboro, NC		1,004	—	12,606	—		—	12,606	12,606	657	11/07	40 years
Crotched Mountain	Bennington, NJ		—	404	—	—		404	—	404	—	2/08	n/a
Buena Vista Winery & Vineyards	Sonoma, CA		38,558	30,405	30,171	1,557		30,405	31,727	62,132	2,844	6/08	40 years
Columbia Winery	Sunnyside, WA		2,665	112	3,944	2,737		112	6,681	6,793	148	6/08	40 years
Gary Farrell Winery	Healdsburg, CA		4,136	2,135	4,209	439		2,135	4,648	6,783	158	6/08	40 years
Geyser Peak Winery & Vineyards	Geyserville, CA		27,996	14,353	31,131	3,767		14,353	34,898	49,251	1,535	6/08	40 years
Caneros Vintners Custom Crush	Sonoma, CA		—	2,772	10,023	—		2,772	10,023	12,795	—	6/08	40 years
Glendora 12	Glendora, CA		—	—	10,588	—		—	10,588	10,588	309	10/08	40 years
Harbour View Marketplace	Suffolk, VA		—	3,382	9,971	—		3,382	9,971	13,352	184	6/09	40 years
Ann Arbor 20	Ypsilanti, MI		—	4,716	227	—		4,716	227	4,943	—	12/09	40 years
Buckland Hills 18	Manchester, CT		—	3,628	11,474	—		3,628	11,474	15,102	—	12/09	40 years
Centreville 12	Centreville, VA		—	3,628	1,769	—		3,628	1,769	5,397	—	12/09	40 years
Davenport 53 18	Davenport, IA		—	3,637	6,068	—		3,637	6,068	9,705	—	12/09	40 years
Fairfax Corner 14	Fairfax, VA		—	2,630	11,791	—		2,630	11,791	14,421	—	12/09	40 years
Flint West 14	Flint, MI		—	1,270	1,723	—		1,270	1,723	2,993	—	12/09	40 years
Hazlet 12	Hazlet, NJ		—	3,719	4,716	—		3,719	4,716	8,435	—	12/09	40 years
Huber Heights 16	Huber Heights, OH		—	970	3,891	—		970	3,891	4,861	—	12/09	40 years
North Haven 12	North Haven, CT		—	5,442	1,061	—		5,442	1,061	6,503	—	12/09	40 years
Preston Crossings 16	Okolona, KY		—	5,379	3,311	—		5,379	3,311	8,690	—	12/09	40 years
Ritz Center 16	Voorhees, NJ		—	1,723	9,614	—		1,723	9,614	11,337	—	12/09	40 years
Stonybrook 20	Louisville, KY		—	4,979	6,567	—		4,979	6,567	11,546	—	12/09	40 years
The Greene 14	Beaver Creek, OH		—	1,578	6,630	—		1,578	6,630	8,208	—	12/09	40 years
West Springfield 15	West Springfield, MA		—	2,540	3,755	—		2,540	3,755	6,295	—	12/09	40 years
Western Hills 14	Cincinnati, OH		—	1,361	1,742	—		1,361	1,742	3,103	—	12/09	40 years
Mortgage Note Related Encumbrances			149,449	—	—	—		—	—	—	—	n/a	n/a
Development Property			—	12,729	—	—		12,729	—	12,729	—	Various	n/a
Total		$	1,141,423	499,609	1,513,045	113,342		499,304	1,626,692	2,125,996	258,638

140

Entertainment Properties Trust

Schedule III - Real Estate and Accumulated Depreciation (continued)

Reconciliation

(Dollars in thousands)

December 31, 2009

Real Estate:
Reconciliation:
Balance at beginning of the year	$	1,979,939
Acquisition and development of rental properties during the year		146,057
Disposition of rental properties during the year		—
Balance at close of year	$	2,125,996
Accumulated Depreciation
Reconciliation:
Balance at beginning of the year	$	214,078
Depreciation during the year		44,560
Balance at close of year	$	258,638

See accompanying report of independent registered public accounting firm.

141

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None

Item 9A. Controls and Procedures

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that as of the end of the period covered by this report our disclosure controls and procedures were effective to ensure that information required to be disclosed by us in reports we file or submit under the Exchange Act is (1) recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms, and (2) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

Our disclosure controls were designed to provide reasonable assurance that the controls and procedures would meet their objectives. Our management, including the Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls will prevent all errors and fraud. A control system, no matter how well designed and operated, can provide only reasonable assurance of achieving the designed control objectives and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusions of two or more people, or by management override of the control. Because of the inherent limitations in a cost-effective, maturing control system, misstatements due to error or fraud may occur and not be detected.

There have not been any changes in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) during the fourth quarter of the fiscal year to which this report relates that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Management’s Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act. Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our evaluation under the framework in Internal Control – Integrated Framework, our management concluded that our internal control over financial reporting was effective as of December 31, 2009. KPMG, LLP, the independent registered public accounting firm that audited the consolidated financial statements included in this Annual Report on Form 10-K, has issued an attestation report on our internal control over financial reporting.

142

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements, errors or fraud. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of or compliance with the policies or procedures may deteriorate.

Report of Independent Registered Public Accounting Firm

The Board of Trustees and Shareholders

Entertainment Properties Trust:

We have audited Entertainment Properties Trust’s (the Company) internal control over financial reporting as of December 31, 2009, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2009, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

143

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of the Company as of December 31, 2009 and 2008, and the related consolidated statements of income, equity and comprehensive income, and cash flows for each of the years in the three-year period ended December 31, 2009, and our report dated February 26, 2010 expressed an unqualified opinion on those consolidated financial statements.

/s/ KPMG LLP

KPMG LLP

Kansas City, Missouri

February 26, 2010

Item 9B. Other Information

None.

PART III

Item 10. Directors, Executive Officers and Corporate Governance

The Company’s definitive Proxy Statement for its Annual Meeting of Shareholders to be held on May 12, 2010 (the “Proxy Statement”), contains under the captions “Election of Trustees”, “Company Governance”, “Executive Officers”, and “Section 16(a) Beneficial Ownership Reporting Compliance” the information required by Item 10 of this Annual Report on Form 10-K, which information is incorporated herein by this reference.

We have adopted a Code of Business Conduct and Ethics that applies to our Chief Executive Officer, Chief Financial Officer, and all other officers, employees and trustees. The Code of Business Conduct and Ethics may be viewed on our website at www.eprkc.com.

Item 11. Executive Compensation

The Proxy Statement contains under the captions “Election of Trustees”, “Executive Compensation”, and “Compensation Committee Report”, the information required by Item  11 of this Annual Report on Form 10-K, which information is incorporated herein by this reference.

Item  12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The Proxy Statement contains under the captions “Share Ownership” and “Equity Compensation Plan Information” the information required by Item 12 of this Annual Report on Form 10-K, which information is incorporated herein by this reference.

144

Item 13. Certain Relationships and Related Transactions, and Director Independence

The Proxy Statement contains under the caption “Transactions Between the Company and Trustees, Officers or their Affiliates” the information required by Item 13 of this Annual Report on Form 10-K, which information is incorporated herein by this reference.

Item 14. Principal Accounting Fees and Services

The Proxy Statement contains under the caption “Ratification of Appointment of Independent Registered Public Accounting Firm” the information required by Item 14 of this Annual Report on Form 10-K, which information is incorporated herein by this reference.

PART IV

Item 15. Exhibits and Financial Statement Schedules

(1) Financial Statements:

Report of Independent Registered Public Accounting Firm

Consolidated Balance Sheets as of December 31, 2009 and 2008

Consolidated Statements of Income for the years ended December 31, 2009, 2008 and 2007

Consolidated Statements of Changes in Equity for the years ended December 31, 2009, 2008 and 2007

Consolidated Statements of Comprehensive Income for the years ended December 31, 2009, 2008 and 2007

Consolidated Statements of Cash Flows for the years ended December 31, 2009, 2008, and 2007.

Notes to Consolidated Financial Statements

(2) Financial Statement Schedules:

Schedule II – Valuation and Qualifying Accounts

Schedule III – Real Estate and Accumulated Depreciation

(3) Exhibits

The exhibits listed in the Exhibit Index immediately preceding the exhibits are filed as part of this Annual Report on Form 10-K or incorporated by reference as indicated below.

145

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

	ENTERTAINMENT PROPERTIES TRUST
Dated: February 26, 2010	By	/s/ David M. Brain
		David M. Brain, President and Chief Executive
		Officer (Principal Executive Officer)
Dated: February 26, 2010	By	/s/ Mark A. Peterson
		Mark A. Peterson, Vice President, Chief Financial
		Officer and Treasurer (Principal Financial Officer
		and Principal Accounting Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature and Title	Date
/s/ Robert J. Druten Robert J. Druten, Chairman of the Board	February 26, 2010
/s/ David M. Brain David M. Brain, President, Chief Executive Officer (Principal Executive Officer) and Trustee	February 26, 2010
/s/ Mark A. Peterson Mark A. Peterson, Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer and Principal Accounting Officer)	February 26, 2010
/s/ Jack A. Newman, Jr. Jack A. Newman, Jr., Trustee	February 26, 2010
/s/ James A. Olson James A. Olson, Trustee	February 26, 2010
/s/ Barrett Brady Barrett Brady, Trustee	February 26, 2010

146

Exhibit Index

The Company has incorporated by reference certain exhibits as specified below pursuant to Rule 12b-32 under the Exchange Act.

3.1	Amended and Restated Declaration of Trust of the Company, which is attached as Exhibit 3.2 to the Company’s Form 8-K (Commission File No. 001-13561) filed on June 7, 1999, is hereby incorporated by reference as Exhibit 3.1
3.2	Amendment to Amended and Restated Declaration of Trust of the Company, which is attached as Exhibit 3.1 to the Company’s Form 8-K (Commission File No. 001-13561) filed on January 11, 2005, is hereby incorporated by reference as Exhibit 3.2
3.3	Amendment to Amended and Restated Declaration of Trust of Entertainment Properties Trust filed December 19, 2006, which is attached as Exhibit 3.1 to the Company’s Form 8-K (Commission File No. 001-13561) filed December 21, 2006, is hereby incorporated by reference as Exhibit 3.3
3.4	Amendment to Amended and Restated Declaration of Trust of Entertainment Properties Trust filed May 1, 2007, which is attached as Exhibit 3.1 to the Company’s Form 8-K (Commission File No. 001-13561) filed May 4, 2007, is hereby incorporated by reference as Exhibit 3.4
3.5	Amendment to Amended and Restated Declaration of Trust of Entertainment Properties Trust filed December 7, 2009, which is attached as Exhibit 3.1 to the Company’s Form 8-K (Commission File No. 001-13561) filed December 7, 2009, is hereby incorporated by reference as Exhibit 3.5
3.6	Articles Supplementary designating the powers, preferences and rights of the 9.50% Series A Cumulative Redeemable Preferred Shares, which is attached as Exhibit 4.4 to the Company’s Form 8-A12B (Commission File No. 001-13561) filed on May 24, 2002, is hereby incorporated by reference as Exhibit 3.6
3.7	Articles Supplementary designating the powers, preferences and rights of the 7.75% Series B Cumulative Redeemable Preferred Shares, which is attached as Exhibit 4.6 to the Company’s Form 8-A12BA (Commission File No. 001-13561) filed on January 14, 2005, and to the Company’s Form 8-K filed on January 14, 2005, is hereby incorporated by reference as Exhibit 3.7
3.8	Articles Supplementary designating the powers, preferences and rights of the 5.75% Series C Cumulative Convertible Preferred Shares, which is attached as Exhibit 3.2 to the Company’s Form 8-K (Commission File No. 001-13561) filed December 21, 2006, is hereby incorporated by reference as Exhibit 3.8
3.9	Articles Supplementary designating the powers, preferences and rights of the 7.375% Series D Cumulative Redeemable Preferred Shares, which is attached as Exhibit 3.2 to the Company’s Form 8-K (Commission File No. 001-13561) filed May 4, 2007, is hereby incorporated by reference as Exhibit 3.9

147

3.10	Articles Supplementary designating powers, preferences and rights of the 9.0% Series E Cumulative Convertible Preferred Shares, which is attached as Exhibit 3.1 to the Company’s Form 8-K (Commission File No. 001-13561) filed on April 2, 2008, is hereby incorporated by reference as Exhibit 3.10
3.11	Bylaws of the Company, which are attached as Exhibit 3.2 to the Company’s Form 8-K (Commission File No. 001-13561) filed on December 11, 2008, are hereby incorporated by reference as Exhibit 3.11
4.1	Form of share certificate for common shares of beneficial interest of the Company, which is attached as Exhibit 4.5 to the Company’s Registration Statement on Form S-11, as amended, (Registration No. 333-35281), is hereby incorporated by reference as Exhibit 4.1
4.2	Form of 9.50% Series A Cumulative Redeemable Preferred Share Certificate, which is attached as Exhibit 4.5 to the Company’s Form 8-A12B (Commission File No. 001-13561) filed on May 24, 2002, is hereby incorporated by reference as Exhibit 4.2
4.3	Form of 7.75% Series B Cumulative Redeemable Preferred Share Certificate, which is attached as Exhibit 4.7 to the Company’s Form 8-A12B (Commission File No. 001-13 561) filed on January 12, 2005, is hereby incorporated by reference as Exhibit 4.3
4.4	Form of 5.75% Series C Cumulative Convertible Preferred Shares Certificate, which is attached as Exhibit 4.1 to the Company’s Form 8-K (Commission File No. 001-13561) filed December 21, 2006, is hereby incorporated by reference as Exhibit 4.4
4.5	Form of 7.375% Series D Cumulative Redeemable Preferred Shares Certificate, which is attached as Exhibit 4.1 to the Company’s Form 8-K (Commission File No. 001-13561) filed May 4, 2007, is hereby incorporated by reference as Exhibit 4.5
4.6	Form of 9.00% Series E Cumulative Convertible Preferred Shares, which is attached as Exhibit 4.1 to the Company’s Form 8-K (Commission File No. 001-13561) filed on April 2, 2008, is incorporated by reference as Exhibit 4.6.
4.7	Registration Rights Agreement among Entertainment Properties Trust, Whitby Centrum Limited Partnership, Oakville Centrum Limited Partnership, Kanata Centrum Limited Partnership, Courtney Square Limited Partnership and 2041197 Ontario Ltd., dated February 24, 2004, which is attached as Exhibit 10.10 to the Company’s Form 8-K/A (Commission File No. 001-13561) filed on March 16, 2004, is hereby incorporated by reference as Exhibit 4.7
4.8	Agreement Regarding Ownership Limit Waiver between the Company and Cohen & Steers Capital Management, Inc., which is attached as Exhibit 4.7 to the Company’s Form 8-K (Commission File No. 001-13561) filed on January 19, 2005, is hereby incorporated by reference as Exhibit 4.8
4.9	Agreement Regarding Ownership Limit Waiver between the Company and ING Clarion Real Estate Securities, which is attached as Exhibit 4.1 to the Company’s Form 8-K (Commission File No. 001-13561) filed on May 14, 2007, is hereby incorporated by reference as Exhibit 4.9
4.10	Agreement Regarding Ownership Limit Waiver between the Company and Blackrock, Inc. and its subsidiaries which is attached hereto as Exhibit 4.10

148

10.1	Amended and Restated Master Credit Agreement dated June 30, 2009 among Entertainment Properties Trust, 30 West Pershing, LLC, EPT Downreit II, Inc., EPT Huntsville, Inc., EPT Pensacola, Inc., Megaplex Four, Inc. Westcol Center, LLC, EPT Melbourne, Inc. and KeyBank National Association as Administrative Agent and Lender, KeyBanc Capital Markets and JP Morgan Securities, Inc. as Joint Lead Arrangers and Book Managers, RBC Capital Markets as Joint Lead Arranger and Book Manager and Syndication Agent, JPMorgan Chase Bank, N.A. as Syndication Agent and the other Lenders party thereto, which is attached hereto as Exhibit 10.1
10.2	Collateral Pledge and Security Agreement, dated June 30, 2009, between Theater Sub, Inc. and KeyBank National Association, as agent, which is attached as Exhibit 4.2 to the Company’s Form 8-K (Commission File No. 001-13561) filed on July 1, 2009, is hereby incorporated by reference as Exhibit 10.2
10.3	Collateral Pledge and Security Agreement, dated June 30, 2009, between Entertainment Properties Trust and KeyBank National Association, as agent, which is attached as Exhibit 4.3 to the Company’s Form 8-K (Commission File No. 001-13561) filed on July 1, 2009, is hereby incorporated by reference as Exhibit 10.3
10.4	Collateral Pledge and Security Agreement, dated June 30, 2009, between 30 West Pershing, LLC and KeyBank National Association, as agent, which is attached as Exhibit 4.4 to the Company’s Form 8-K (Commission File No. 001-13561) filed on July 1, 2009, is hereby incorporated by reference as Exhibit 10.4
10.5	Collateral Pledge and Security Agreement, dated June 30, 2009, between MegaPlex Four, Inc. and KeyBank National Association, as agent, which is attached as Exhibit 4.5 to the Company’s Form 8-K (Commission File No. 001-13561) filed on July 1, 2009, is hereby incorporated by reference as Exhibit 10.5
10.6	Limited Guaranty, dated June 30, 2009, issued by Theatre Sub, Inc., which is attached as Exhibit 4.6 to the Company’s Form 8-K (Commission File No. 001-13561) filed on July 1, 2009, is hereby incorporated by reference as Exhibit 10.6
10.7	Master Credit Agreement, dated as of October 26, 2007, among Entertainment Properties Trust, EPT 301, LLC, KeyBank National Association, as Administrative Agent and Lender, KeyBanc Capital Markets, as Sole Lead Arranger and Sole Book Manager, and the other lenders party thereto and Morgan Stanley Bank, as documentation agent thereto, which is attached as Exhibit 4.1 to the Company’s Form 8-K (Commission File No. 001-13561) filed on October 31, 2007, is hereby incorporated by reference as Exhibit 10.7
10.8	Amendment No. 1 to Master Credit Agreement dated June 30, 2009 among Entertainment Properties Trust, EPT 301, LLC, KeyBank National Association, as Administrative Agent and Lender, KeyBanc Capital Markets, as Sole Lead Arranger and Sole Book Manager, and the other lenders party thereto and Morgan Stanley Bank, as Documentation Agent thereto, which is attached as Exhibit 4.7 to the Company’s Form 8-K (Commission File No. 001-13561) filed on July 1, 2009, is hereby incorporated by reference as Exhibit 10.8

149

10.9	Collateral Pledge and Security Agreement, dated as of October 26, 2007, by and between Entertainment Properties Trust and KeyBank National Association, individually and as administrative agent for itself and the lenders under the Master Credit Agreement dated October 26, 2007, which is attached as Exhibit 4.2 to the Company’s Form 8-K (Commission File No. 001-13561) filed on October 31, 2007, is hereby incorporated by reference as Exhibit 10.9
10.10	Mississauga Entertainment Centrum Agreement dated November 14, 2003 among Courtney Square Ltd., EPR North Trust and Entertainment Properties Trust, which is attached as Exhibit 10.1 to the Company’s Form 8-K (Commission File No. 001-13561) filed March 15, 2004, is hereby incorporated by reference as Exhibit 10.10
10.11	Oakville Entertainment Centrum Agreement dated November 14, 2003 among Penex Winston Ltd., EPR North Trust and Entertainment Properties Trust, which is attached as Exhibit 10.2 to the Company’s Form 8-K (Commission File No. 001-13561) filed March 15, 2004, is hereby incorporated by reference as Exhibit 10.11
10.12	Whitby Entertainment Centrum Agreement dated November 14, 2003 among Penex Whitby Ltd., EPR North Trust and Entertainment Properties Trust, which is attached as Exhibit 10.3 to the Company’s Form 8-K (Commission File No. 001-13561) filed March 15, 2004, is hereby incorporated by reference as Exhibit 10.12
10.13	Kanata Entertainment Centrum Agreement dated November 14, 2003 among Penex Kanata Ltd., Penex Main Ltd., EPR North Trust and Entertainment Properties Trust, which is attached as Exhibit 10.4 to the Company’s Form 8-K (Commission File No. 001-13561) filed March 15, 2004, is hereby incorporated by reference as Exhibit 10.13
10.14	Amending Agreements among Courtney Square Ltd., EPR North Trust and Entertainment Properties Trust, which are attached as Exhibit 10.5 to the Company’s Form 8-K (Commission File No. 001-13561) filed March 15, 2004, are hereby incorporated by reference as Exhibit 10.14
10.15	Amending Agreements among Penex Winston Ltd., EPR North Trust and Entertainment Properties Trust, which are attached as Exhibit 10.6 to the Company’s Form 8-K (Commission File No. 001-13561) filed March 15, 2004, are hereby incorporated by reference as Exhibit 10.15
10.16	Amending Agreements among Penex Whitby Ltd., EPR North Trust and Entertainment Properties Trust, which are attached as Exhibit 10.7 to the Company’s Form 8-K (Commission File No. 001-13561) filed March 15, 2004, are hereby incorporated by reference as Exhibit 10.16
10.17	Amending Agreements among Penex Kanata Ltd., Penex Main Ltd., EPR North Trust and Entertainment Properties Trust, which are attached as Exhibit 10.8 to the Company’s Form 8-K (Commission File No. 001-13561) filed March 15, 2004, are hereby incorporated by reference as Exhibit 10.17
10.18	Note Purchase Agreement dated February 24, 2004 among Entertainment Properties Trust and Courtney Square Limited Partnership, Whitby Centrum Limited Partnership, Oakville Centrum Limited Partnership and Kanata Centrum Limited Partnership, which is attached as Exhibit 10.9 to the Company’s Form 8-K (Commission File No. 001-13561) filed March 15, 2004, is hereby incorporated by reference as Exhibit 10.18

150

10.19	Form of Indemnification Agreement entered into between the Company and each of its trustees and officers, which is attached as Exhibit 10.8 to Amendment No. 1, filed October 28, 1997, to the Company’s Registration Statements on Form S-11 (Registration No. 333-35281), is hereby incorporated by reference as exhibit 10.19
10.20	Form of Indemnification Agreement, which is attached as Exhibit 10.2 to the Company’s Form 8-K (Commission File No. 001-13561) filed on May 14, 2007, is hereby incorporated by reference as Exhibit 10.20
10.21*	Deferred Compensation Plan for Non-Employee Trustees, which is attached as Exhibit 10.10 to Amendment No. 2, filed November 5, 1997, to the Company’s Registration Statement on Form S-11 (Registration No. 333-35281), is hereby incorporated by reference as Exhibit 10.21
10.22*	Annual Incentive Program, which is attached as Exhibit 10.11 to Amendment No. 2, filed November 5, 1997, to the Company’s Registration Statement on Form S-11 (Registration No. 333-35281), is hereby incorporated by reference as Exhibit 10.22
10.23*	First Amended and Restated 1997 Share Incentive Plan included as Appendix D to the Company’s definitive proxy statement filed April 8, 2004 (Commission File No. 001-13561), is hereby incorporated by reference as Exhibit 10.23
10.24*	Form of 1997 Share Incentive Plan Restricted Shares Award Agreement, which is attached as Exhibit 10.14 to the Company’s Form 10-K (Commission File No. 001-13561) filed February 28, 2007, is hereby incorporated by reference as Exhibit 10.24
10.25*	Form of Option Certificate Issued Pursuant to Entertainment Properties Trust 1997 Share Incentive Plan, which is attached as Exhibit 10.15 to the Company’s Form 10-K (Commission File No. 001-13561) filed February 28, 2007, is hereby incorporated by reference as Exhibit 10.25
10.26*	2007 Equity Incentive Plan, as amended, which is attached as Exhibit 10.2 to the Company’s Form 8-K filed May 20, 2009 (Commission File No. 001-13561), is hereby incorporated by reference as Exhibit 10.26
10.27*	Form of 2007 Equity Incentive Plan Nonqualified Share Option Agreement for Employee Trustees, which is attached as Exhibit 10.2 to the Company’s Registration Statement on Form S-8 (Registration No. 333-142831) filed on May 11, 2007, is hereby incorporated by reference as Exhibit 10.27
10.28*	Form of 2007 Equity Incentive Plan Nonqualified Share Option Agreement for Non-Employee Trustees, which is attached as Exhibit 10.3 to the Company’s Registration Statement on Form S-8 (Registration No. 333-142831) filed on May 11, 2007, is hereby incorporated by reference as Exhibit 10.28
10.29*	Form of 2007 Equity Incentive Plan Restricted Shares Agreement for Employees, which is attached as Exhibit 10.4 to the Company’s Registration Statement on Form S-8 (Registration No. 333-142831) filed on May 11, 2007, is hereby incorporated by reference as Exhibit 10.29

151

10.30*	Form of 2007 Equity Incentive Plan Restricted Shares Agreement for Non-Employee Trustees, which is attached as Exhibit 10.3 to the Company’s Form 8-K filed May 20, 2009 (Commission File No. 001-13561), is hereby incorporated by reference as Exhibit 10.30
10.31*	Employment Agreement, entered into as of February 28, 2007, by Entertainment Properties Trust and David M. Brain, which is attached as Exhibit 10.16 to the Company’s Form 10-K (Commission File No. 001-13561) filed February 28, 2007, is hereby incorporated by reference as Exhibit 10.31
10.32*	Employment Agreement, entered into as of February 28, 2007, by Entertainment Properties Trust and Gregory K. Silvers, which is attached as Exhibit 10.17 to the Company’s Form 10-K (Commission File No. 001-13561) filed February 28, 2007, is hereby incorporated by reference as Exhibit 10.32
10.33*	Employment Agreement, entered into as of February 28, 2007, by Entertainment Properties Trust and Mark A. Peterson, which is attached as Exhibit 10.18 to the Company’s Form 10-K (Commission File No. 001-13561) filed February 28, 2007, is hereby incorporated by reference as Exhibit 10.33
10.34*	Employment Agreement, entered into as of February 28, 2007, by Entertainment Properties Trust and Michael L. Hirons, which is attached as Exhibit 10.19 to the Company’s Form 10-K (Commission File No. 001-13561) filed February 28, 2007, is hereby incorporated by reference as Exhibit 10.34
10.35*	Employment Agreement, entered into as of May 14, 2009, by Entertainment Properties Trust and Morgan G. Earnest II, which is attached as Exhibit 10.1 to the Company’s Form 8-K (Commission File No. 001-13561) filed May 20, 2009, is hereby incorporated by reference as Exhibit 10.35
10.36	Form of Loan Agreement, dated as of June 29, 1998, between EPT DownREIT II, Inc., as Borrower, and Archon Financial, L.P., as Lender, which is attached as Exhibit 10.15 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 1998 (Commission File No. 001-13561), is hereby incorporated by reference as Exhibit 10.36
10.37	Limited Partnership Interest Purchase Agreement, dated October 27, 2003, among EPT New Roc GP, Inc., EPT New Roc, LLC, LRC Industries, Inc., DKH — New Roc Associates, L.P., LC New Roc Inc. and New Roc Associates, L.P., which is attached as Exhibit 10.1 to the Company’s Form 8-K dated October 27, 2003 and filed November 12, 2003 (Commission File No. 001-13561), is hereby incorporated by reference as Exhibit 10.37
10.38	Second Amended and Restated Agreement of Limited Partnership of New Roc Associates, L.P., which is attached as Exhibit 10.2 to the Company’s Form 8-K filed November 12, 2003 (Commission File No. 001-13561), is hereby incorporated by reference as Exhibit 10.38

152

10.39	Loan Agreement, dated February 27, 2003, among Flik, Inc., as Borrower, EPT DownREIT, Inc., as Indemnitor, and Secore Financial Corporation, as Lender, which is attached as Exhibit 10.21 to the Company’s Form 8-K filed March 4, 2003 (Commission File No. 001-13561), is hereby incorporated by reference as Exhibit 10.39
10.40	Agreement with Fred L. Kennon which is attached as Exhibit 10.1 to the Company’s Form 10-Q (Commission File No. 001-13561) filed August 3, 2006, is hereby incorporated by reference as Exhibit 10.40
10.41*	Entertainment Properties Trust 2007 Equity Incentive Plan, as amended, which is attached as Exhibit 10.1 to the Company’s Registration Statement on Form S-8 (Commission File No. 333-142831) filed May 11, 2007, is hereby incorporated by reference as Exhibit 10.41
12.1	Computation of Ratio of Earnings to Fixed Charges is attached hereto as Exhibit 12.1
12.2	Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Distributions is attached hereto as Exhibit 12.2
21	The list of the Company’s Subsidiaries is attached hereto as Exhibit 21
23	Consent of KPMG LLP is attached hereto as Exhibit 23
31.1	Certification of David M. Brain pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 is attached hereto as Exhibit 31.1
31.2	Certification of Mark A. Peterson pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 is attached hereto as Exhibit 31.2
32.1	Certification by Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, is attached hereto as Exhibit 32.1
32.2	Certification by Chief Financial Officer pursuant to 18 USC 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, is attached hereto as Exhibit 32.2

* Management contracts or compensatory plans

PLEASE NOTE: Pursuant to the rules and regulations of the Securities and Exchange Commission, we have filed or incorporated by reference the agreements referenced above as exhibits to this Annual Report on Form 10-K. The agreements have been filed to provide investors with information regarding their respective terms. The agreements are not intended to provide any other factual information about the Company or its business or operations. In particular, the assertions embodied in any representations, warranties and covenants contained in the agreements may be subject to qualifications with respect to knowledge and materiality different from those applicable to investors and may be qualified by information in confidential disclosure schedules not included with the exhibits. These disclosure schedules may contain information that modifies, qualifies and creates exceptions to the representations, warranties and covenants set forth in the agreements. Moreover, certain representations, warranties and covenants in the agreements may have been used for the purpose of allocating risk between the parties, rather than establishing matters as facts. In addition, information concerning the subject matter of the representations, warranties and covenants may have changed after the date of the respective agreement, which subsequent information may or may not be fully reflected in the Company’s public disclosures. Accordingly, investors should not rely on the representations, warranties and covenants in the agreements as characterizations of the actual state of facts about the Company or its business or operations on the date hereof.

153

EX-4.10

Exhibit 4.10

AGREEMENT REGARDING OWNERSHIP LIMIT WAIVER

THIS AGREEMENT is entered into as of December 4, 2009, by Entertainment Properties Trust, a Maryland real estate investment trust (“EPR”), Blackrock, Inc. and its subsidiaries (“Purchaser”).

RECITALS

A. EPR has elected, effective for its taxable years ending on and after December 31, 1997, to be treated as a real estate investment trust (‘REIT”) for purposes of the Internal Revenue Code of 1986, as amended (the “Code”). EPR’s Amended and Restated Declaration of Trust (“Declaration of Trust”) contains certain ownership limitations relating to EPR’s qualification as a REIT, including a limitation on the percentage of EPR’s outstanding shares of beneficial interest (“Shares”) that any Person (as defined in the Declaration of Trust) may own (the “Ownership Limit”).

B. Article Ninth, Section 11 of the Declaration of Trust provides that the Board of Trustees of EPR (the “Board”), in its sole discretion, may exempt a Person from the Ownership Limit if such Person provides to the Board such representations and undertakings as the Board, in its sole and absolute discretion, may require, and such Person agrees that any violation of such representations and undertakings or any attempted violation thereof will result in an application of the remedies set forth in Article Ninth of the Declaration of Trust (“Article Ninth”) with respect to shares held in excess of the Ownership Limit (“Excess Shares”).

C. Purchaser has requested that the Board grant a waiver of the Ownership Limit that will permit Purchaser, on behalf of certain existing and future managed accounts and funds (the “BlackRock Investors” and, together with Purchaser, the “BlackRock Group”), to acquire common shares of beneficial interest, par value $0.01 per share (the “Common Shares”) in the amount described herein, and the Board desires to grant such waiver, conditioned upon the continued accuracy of the representations and undertakings made by Purchaser in this Agreement.

In consideration of the foregoing and the mutual promises and covenants contained herein, the parties agree as follows:

1. REPRESENTATIONS AND WARRANTIES OF EPR

EPR represents and warrants that the Board has approved an exemption from the Ownership Limit for the ownership of Common Shares by the BlackRock Group, conditioned upon Purchaser’s representations and undertakings in this Agreement, permitting the BlackRock Group, on behalf of certain accounts and institutions, to own Common Shares, provided that in no event is the BlackRock Group authorized to hold in the aggregate more than 15% of the issued and outstanding Common Shares.

2. REPRESENTATIONS AND WARRANTIES OF PURCHASER

Purchaser represents and warrants to and agrees with EPR as follows:

2.1 In connection with, and as a condition to, the grant by the Board of an exemption from the Ownership Limit to permit the BlackRock Group to hold up to an aggregate of 15% (but not more than 15%) of the issued and outstanding Common Shares, Purchaser represents to EPR and covenants that no person or entity who would be considered to be an “individual” for purposes of Section 542(a)(2) of the Code would be considered, after taking into account the ownership attribution rules under Section 544 of the Code (as modified by Sections 856(h)(1)(B) and 856(h)(3) of the Code), the beneficial owner of more than 9.8% of the issued and outstanding Shares (assuming for this purpose that such “individual” is not considered to own any Shares other than solely by reason of the BlackRock Group’s ownership of Shares). Purchaser acknowledges and agrees that, if at any time the foregoing covenant and representation would not be accurate, the maximum number of Common Shares that the BlackRock Group could own would be automatically reduced (without the requirement for any action by EPR) to the number of Common Shares that would cause the covenant in the preceding sentence to be accurate.

2.2 Purchaser acknowledges that, notwithstanding the waiver of the Ownership Limit granted pursuant to this Agreement, the Board is not granting an exemption from any other ownership restrictions set forth in Article Ninth or with respect to any Shares other than the Common Shares.

2.3 Purchaser acknowledges that EPR is a “domestically controlled REIT” under the Code, and agrees that EPR may take such actions as the Board, in its sole and absolute discretion, deems necessary and advisable to preserve EPR’s status as a “domestically controlled REIT” under the Code, and to ensure that EPR is not “closely held” within the meaning of Section 856(h) of the Code, including but not limited to the designation of any Common Shares or other securities of EPR the acquisition of which by the BlackRock Group could cause EPR to become “closely held” or to lose its status as a “domestically controlled REIT,” as Excess Shares subject to the Excess Share provisions of Article Ninth; provided, however, that if the Board takes action under this Section 2.3 resulting in Common Shares or other securities of EPR held by the BlackRock Group to be treated as Excess Shares, then the Board shall provide the Purchaser with 30 days’ written notice prior to the effective date of such action, and the BlackRock Group shall have up to 180 days from the effective date of such action to dispose of the Common Shares owned in excess of the Ownership Limit before the Company may take any remedial action against the BlackRock Group, but only to the extent such notice and time to cure does not result in EPR losing its status as a “domestically controlled REIT” under the Code, or causes EPR to become “closely held” within the meaning of Section 856(h) of the Code.

2.4 Purchaser acknowledges and agrees that any violation of its representations, warranties or covenants in this Section 2 will result in the application of the remedies set forth in Article Ninth in respect to any of the Shares that constitute Excess Shares in accordance with Article Ninth.

2

3. MISCELLANEOUS

3.1 Additional Actions and Documents

Each of the parties hereby agrees to use its reasonable best efforts to cause to be taken such further actions, to execute, deliver and file or use its reasonable best efforts to cause to be executed, delivered and filed such further documents, and to obtain such consents, as may be necessary or as may be reasonably requested in order to fully effectuate the purposes, terms and conditions of this Agreement.

3.2 Assignment

Neither party may assign its rights and obligations under this Agreement, in whole or in part, without the prior written consent of the other party, and any such assignment contrary to the terms hereof shall be null and void and of no force and effect. In no event shall the assignment by any party of its respective rights or obligations under this Agreement release such party from its liabilities and obligations hereunder.

3.3 Amendment

This Agreement constitutes the full and entire understanding of the parties with respect to the subject matters herein. No amendment, modification or discharge of this Agreement shall be valid or binding unless set forth in writing and duly executed and delivered by the party against whom enforcement of the amendment, modification, or discharge is sought.

3.4 Waiver

No waiver shall be valid against any party hereto unless made in writing and signed by the party against whom enforcement of such waiver is sought and then only to the extent expressly specified therein.

3.5 Governing Law

This Agreement shall be governed by and construed under the laws of the State of Maryland (without regard for the choice of law provisions thereof).

3.6 Severability

If any clause or provision of this Agreement operates or would prospectively operate to invalidate this Agreement in whole or in part, then only such clause or provision shall be ineffective, and the remainder of this Agreement shall remain operative and in full force and effect.

3.7 Incorporation of Recitals

The recitals hereto are incorporated herein as part of this Agreement.

3

3.8 Execution in Counterparts

This Agreement may be executed in counterparts. All counterparts shall collectively constitute a single Agreement.

IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date set forth above.

ENTERTAINMENT PROPERTIES TRUST
By:	/s/ Mark A. Peterson
Name:	Mark A. Peterson
Title:	Vice President
BLACKROCK, INC.
By:	/s/ Karen Clark
Name:	Karen Clark
Title:	Managing Director

4

EX-10.1

Exhibit 10.1

EXECUTION VERSION

AMENDED AND RESTATED

MASTER CREDIT AGREEMENT

DATED AS OF JUNE 30, 2009

Among

ENTERTAINMENT PROPERTIES TRUST;

30 WEST PERSHING, LLC;

EPT DOWNREIT II, INC.;

EPT HUNTSVILLE, INC.;

EPT PENSACOLA, INC.;

MEGAPLEX FOUR, INC.

WESTCOL CENTER, LLC; AND

EPT MELBOURNE, INC.

(individually and collectively, the “Borrowers” or the “Borrower”)

THE LENDERS WHICH ARE OR MAY BECOME PARTIES TO THIS AGREEMENT,

KEYBANK NATIONAL ASSOCIATION,

As Administrative Agent and Lender,

KEYBANC CAPITAL MARKETS, and

JP MORGAN SECURITIES, INC. As Joint Lead Arrangers and Book Managers,

and

RBC CAPITAL MARKETS^*, as Joint Lead Arranger and Book Manager and

Syndication Agent,

and

JPMORGAN CHASE BANK, N.A., as Syndication Agent

^* RBC Capital Markets is the global brand name for the corporate and investment banking businesses of Royal Bank of Canada and its affiliates.

TABLE OF CONTENTS

		Page
§1.	DEFINITIONS AND RULES OF INTERPRETATION	2
§1.1	Definitions	2
§1.2	Rules of Interpretation	25
§1.3	Accounting Terms and Determinations	25
§2.	THE REVOLVING CREDIT FACILITY	26
§2.1	Revolving Credit Loans	26
§2.2	The Increased Loan Amount	27
§2.3	Facility Unused Fee	29
§2.4	Intentionally Deleted	29
§2.5	Intentionally Deleted	29
§2.6	Interest on Loans	29
§2.7	Requests for Revolving Credit Loans	30
§2.8	Funds for Revolving Credit Loans	31
§2.9	Use of Proceeds	31
§2.10	Letters of Credit	32
§2.11	Appointment of Borrower Agent	35
§3.	REPAYMENT OF THE LOANS	36
§3.1	Stated Maturity	36
§3.2	Mandatory Prepayments	36
§3.3	Optional Prepayments	37
§3.4	Partial Prepayments	37
§3.5	Extension Option	37
§3.6	Effect of Prepayments	37
§4.	CERTAIN GENERAL PROVISIONS	37
§4.1	Conversion Options	37
§4.2	Closing Fee	38
§4.3	Agent’s Fee	38
§4.4	Funds for Payments	39
§4.5	Computations	40
§4.6	Inability to Determine LIBOR	40

§4.7	Illegality	41
§4.8	Additional Interest	41
§4.9	Additional Costs, Etc	42
§4.10	Capital Adequacy	43
§4.11	Indemnity of Borrower	43
§4.12	Default Interest; Late Charge	43
§4.13	Certificate	44
§4.14	Limitation on Interest	44
§4.15	Certain Provisions Relating to Increased Costs	44
§5.	BORROWING BASE PROPERTY AND BORROWING BASE PROPERTY REPLACEMENT	45
§5.1	Intentionally Deleted	45
§5.2	Intentionally Deleted	45
§5.3	Replacement or Addition of Borrowing Base Properties	45
§5.4	Release of Borrowing Base Property	46
§6.	REPRESENTATIONS AND WARRANTIES	47
§6.1	Corporate Authority, Etc	47
§6.2	Governmental Approvals	53
§6.3	Title to Properties	53
§6.4	Financial Statements	53
§6.5	No Material Changes	54
§6.6	Franchises, Patents, Copyrights, Etc	54
§6.7	Litigation	54
§6.8	No Materially Adverse Contracts, Etc	54
§6.9	Compliance with Other Instruments, Laws, Etc	54
§6.10	Tax Status	55
§6.11	No Event of Default	55
§6.12	Holding Company and Investment Company Acts	55
§6.13	Absence of UCC Financing Statements, Etc	55
§6.14	Setoff, Etc	55
§6.15	Certain Transactions	55
§6.16	Employee Benefit Plans	56
§6.17	Disclosure	56
§6.18	Trade Name; Place of Business	56

§6.19	Regulations T, U and X	56
§6.20	Environmental Compliance	57
§6.21	Subsidiaries	59
§6.22	Leases	59
§6.23	Property	59
§6.24	Brokers	61
§6.25	Other Debt	61
§6.26	Solvency	61
§6.27	No Bankruptcy Filing	61
§6.28	No Fraudulent Intent	61
§6.29	Transaction in Best Interests of Borrower; Consideration	61
§6.30	Capitalization	61
§6.31	Notice of REIT Status	62
§6.32	Intentionally Deleted	62
§6.33	Certificates of Occupancy; Licenses	62
§6.34	Insurance	62
§6.35	Intentionally Deleted	62
§7.	AFFIRMATIVE COVENANTS	62
§7.1	Punctual Payment	62
§7.2	Maintenance of Office	63
§7.3	Records and Accounts	63
§7.4	Financial Statements, Certificates and Information	63
§7.5	Notices	65
§7.6	Existence; Maintenance of Properties; Rating Agency Surveillance	67
§7.7	Insurance	68
§7.8	Taxes; Liens	68
§7.9	Inspection of Properties and Books	69
§7.10	Compliance with Laws, Contracts, Licenses, and Permits	69
§7.11	Further Assurances	69
§7.12	Management	70
§7.13	Intentionally Deleted	70
§7.14	Business Operations	70
§7.15	Registered Servicemark	70

§7.16	Deposit of Proceeds; Other Bank Accounts	70
§7.17	Distributions of Income to the Borrower	70
§7.18	Borrowing Base Property	71
§7.19	Intentionally Deleted	71
§7.20	Plan Assets	71
§7.21	Certificates of Occupancy; Licenses	71
§7.22	Intentionally Deleted	71
§7.23	Ground Leases	72
§8.	NEGATIVE COVENANTS	74
§8.1	Restrictions on Indebtedness	74
§8.2	Restrictions on Liens, Etc	75
§8.3	Restrictions on Investments	76
§8.4	Merger, Consolidation	77
§8.5	Independent Directors	77
§8.6	Compliance with Environmental Laws	78
§8.7	Distributions	78
§8.8	Asset Sales	78
§8.9	Development Activity	78
§8.10	Restriction on Prepayment of Indebtedness	78
§8.11	Zoning and Contract Changes and Compliance	79
§8.12	Derivative Obligations	79
§8.13	Subsidiaries Guarantees and Pledges	79
§8.14	Organizational Document Amendments	79
§9.	FINANCIAL COVENANTS	80
§9.1	Borrowing Base	80
§9.2	Intentionally Deleted	80
§9.3	Total Debt to Total Asset Value	80
§9.4	Maximum Permitted Investments	80
§9.5	Tangible Net Worth	81
§9.6	Interest Rate Protection	81
§9.7	Minimum Interest Coverage Ratio	81
§9.8	Maximum Distributions	81
§9.9	Intentionally Deleted	81

§9.10	Maximum Secured Debt	81
§9.11	Minimum Fixed Charge Coverage Ratio	82
§10.	CLOSING CONDITIONS	82
§10.1	Loan Documents	82
§10.2	Certified Copies of Organizational Documents	82
§10.3	Resolutions	82
§10.4	Incumbency Certificate; Authorized Signers	82
§10.5	Opinion of Counsel	82
§10.6	Payment of Fees	83
§10.7	Insurance	83
§10.8	Performance; No Default	83
§10.9	Representations and Warranties	83
§10.10	Proceedings and Documents	83
§10.11	Eligible Real Estate Qualification Documents	83
§10.12	Compliance Certificate	83
§10.13	Stockholder and Partner Consents	83
§10.14	Other	83
§11.	CONDITIONS TO ALL BORROWINGS	84
§11.1	Prior Conditions Satisfied	84
§11.2	Representations True; No Default	84
§11.3	No Legal Impediment	84
§11.4	Governmental Regulation	84
§11.5	Proceedings and Documents	84
§11.6	Borrowing Documents	84
§12.	EVENTS OF DEFAULT; ACCELERATION; ETC	85
§12.1	Events of Default and Acceleration	85
§12.2	Limitation of Cure Periods	88
§12.3	Termination of Commitments	89
§12.4	Remedies	89
§12.5	Distribution of Collateral Proceeds	90
§13.	SETOFF	90
§13.1	Setoff	90
§13.2	Additional Rights	91

§14.	THE AGENT	91
§14.1	Authorization	91
§14.2	Employees and Agents	91
§14.3	No Liability	91
§14.4	No Representations	92
§14.5	Payments	92
§14.6	Holders of Notes	93
§14.7	Indemnity	93
§14.8	Agent as Lender	93
§14.9	Resignation; Removal	94
§14.10	Duties in the Case of Enforcement	94
§14.11	Request for Agent Action	94
§14.12	Intentionally Deleted	95
§14.13	Replacement of Holdout Lender	95
§15.	EXPENSES	96
§16.	INDEMNIFICATION	96
§16.1	Lender Indemnification	96
§16.2	Borrower Must Notify	97
§16.3	Remedies	97
§16.4	Limitations	98
§16.5	Obligations Absolute	98
§17.	SURVIVAL OF COVENANTS, ETC	98
§18.	ASSIGNMENT AND PARTICIPATION	98
§18.1	Conditions to Assignment by Lenders	98
§18.2	Register	98
§18.3	New Notes	99
§18.4	Participations	99
§18.5	Pledge by Lender	100
§18.6	No Assignment by Borrower	100
§18.7	Disclosure	100
§18.8	Amendments to Loan Documents	101
§19.	NOTICES	101
§20.	RELATIONSHIP	103

§21	USURY	103
§22.	GOVERNING LAW; CONSENT TO JURISDICTION AND SERVICE	103
§23	POWER OF ATTORNEY	104
§24.	HEADINGS	104
§25.	COUNTERPARTS	104
§26.	ENTIRE AGREEMENT, ETC 115	104
§27.	WAIVER OF JURY TRIAL AND CERTAIN DAMAGE CLAIMS	104
§28.	DEALINGS WITH THE BORROWER	105
§29.	CONSENTS, AMENDMENTS, WAIVERS, ETC	105
§30.	SEVERABILITY	106
§31.	TIME OF THE ESSENCE	106
§32.	NO UNWRITTEN AGREEMENTS	106
§33.	REPLACEMENT NOTES	106
§34.	NO THIRD PARTIES BENEFITED	107
§35.	HONORARY TITLES	107
§36.	USA PATRIOT ACT NOTICE	107

AMENDED AND RESTATED

MASTER CREDIT AGREEMENT

THIS AMENDED AND RESTATED MASTER CREDIT AGREEMENT (as amended, modified or supplemented from time to time this “Agreement”) is made as of the 30th day of June, 2009, by and among 30 WEST PERSHING, LLC, a limited liability company duly organized and validly existing under the laws of the State of Missouri (“Pershing”), EPT DOWNREIT II, INC., a corporation duly organized and validly existing under the laws of the State of Missouri (“DownREIT”), EPT HUNTSVILLE, INC., a corporation duly organized and validly existing under the laws of the State of Delaware (“Huntsville”), EPT PENSACOLA, INC., a corporation duly organized and validly existing under the laws of the Sate of Missouri (“Pensacola”), MEGAPLEX FOUR, INC., a corporation duly organized and validly existing under the laws of the Sate of Missouri (“Megaplex Four”), WESTCOL CENTER, LLC, a limited liability company duly organized and validly existing under the laws of the State of Delaware (“Westcol”), EPT MELBOURNE, INC., a corporation duly organized and validly existing under the laws of the State of Missouri (“Melbourne”) and ENTERTAINMENT PROPERTIES TRUST, a real estate investment trust duly organized and validly existing under the laws of the State of Maryland (“EPR”) having its principal place of business at c/o Entertainment Properties Trust, 30 Pershing Road, Suite 201, Kansas City, MO 64108 (individually and collectively, jointly and severally, Pershing, DownREIT, Huntsville, Pensacola, Megaplex Four, Westcol, Melbourne and any other Borrower-SPE (as defined in §1.1 herein) and EPR are referred to as the “Borrowers” or the “Borrower”, and each individually may also be referred to as a “Borrower”), the Lenders (as defined herein) and KEYBANK NATIONAL ASSOCIATION, as administrative agent (“Keybank” and/or the “Agent”).

R E C I T A L S

WHEREAS, pursuant to the terms and conditions of that certain Amended and Restated Master Credit Agreement dated as of January 31, 2006, as the same has been modified or amended from time to time (the “A&R Credit Agreement”) by and among EPR and certain of its direct or indirect subsidiaries, as borrowers (the “Initial Borrower”) and Keybank as lender and agent and the other lenders parties to that agreement from time to time, such lenders extended to the Initial Borrower a revolving credit facility in the maximum principal amount of Two Hundred Million and 00/100 Dollars ($200,000,000.00);

WHEREAS, Huntsville and Pensacola are wholly-owned Subsidiaries of Pershing;

WHEREAS, DownREIT is a wholly owned Subsidiary of Theatre Sub, Inc., a corporation duly organized and validly existing under the laws of the State of Missouri (“Theatre Sub”);

WHEREAS, Theatre Sub and Westcol are wholly owned Subsidiaries of Megaplex Four;

WHEREAS, Pershing, Megaplex Four and Melbourne are wholly-owned Subsidiaries of EPR

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WHEREAS, this Agreement refinances the debt under the A&R Credit Agreement and is made by and among the Borrowers, Agent and Lenders in substitution and replacement for the A&R Credit Agreement in its entirety, and any reference to the A&R Credit Agreement shall mean the A&R Credit Agreement, as amended and restated in its entirety hereby; and

WHEREAS, this Agreement sets forth the terms and conditions upon which the Lenders have agreed to, among other things, extend the revolving credit facility to the Borrowers up to a maximum amount of $215,000,000.00 (subject to increases as set forth in §2.2 herein);

NOW, THEREFORE, in consideration of the recitals herein and mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by each of the parties hereto, the parties hereby agree that the A&R Credit Agreement is hereby amended and restated in its entirety as follows:

§1. DEFINITIONS AND RULES OF INTERPRETATION.

§1.1 Definitions. The following terms shall have the meanings set forth in this §l or elsewhere in the provisions of this Agreement referred to below:

Adjusted EBITDA. EBITDA for the most recent quarter ended, less the Replacement Reserve amount.

Advance. Any advance of proceeds under the Loans hereunder.

Affiliate. An Affiliate, as applied to any Person, shall mean any other Person directly or indirectly controlling, controlled by, or under common control with, that Person. 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 (a) the possession, directly or indirectly, of the power to vote ten percent (10%) or more of the stock, shares, voting trust certificates, beneficial interest, partnership interests, member interests or other interests having voting power for the election of directors of such Person or otherwise to direct or cause the direction of the management and policies of that Person, whether through the ownership of voting securities or by contract or otherwise, or (b) the ownership of ten percent (10%) or more of the (i) partnership or other ownership interest of any other Person (other than as a limited partner of such other Person) or, (ii) a managing member’s interest in a limited liability company.

Agent. KeyBank National Association, acting as administrative agent for the Lenders, and its permitted successors and assigns in such capacity in accordance with the terms of this Agreement.

Agent’s Head Office. The Agent’s head office located at 225 Franklin Street, 18^th Floor, Boston, Massachusetts 02110, or at such other location as the Agent may designate from time to time by notice to the Borrowers and the Lenders.

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Agent’s Special Counsel. Burns & Levinson LLP or such other counsel as selected by Agent.

Agreement. Has the meaning provided in the preamble hereto.

Applicable Margins. The “Applicable LIBOR Margin” and the “Applicable Base Rate Margin” which are used in calculating the interest rate applicable to the LIBOR Rate Loans and the Base Rate Loans shall be as set forth below (for purposes of this Agreement, “bps” shall mean and refer to basis points):

LIBOR Margin	Base Rate Margin
350 bps	350 bps

A&R Credit Agreement. See Recitals.

Assignment and Acceptance Agreement. See §18.1.

Assumed Debt Service. Interest expense incurred plus regularly scheduled amortization payments calculated based upon the amount outstanding under the Facility (including Letter of Credit exposure) with debt service calculated based upon 30-year mortgage-style amortization and interest calculated at the greater of: (a) the actual interest rate then in effect; (b) the 10-year Treasury then in effect plus 275 bps; and (c) 7.00%.

Assumed Debt Service Constant. The ratio, expressed as a percentage, of Assumed Debt Service divided by that amount Outstanding under the Facility, including any Letter of Credit exposure.

Balance Sheet Date. March 31, 2009.

Bankruptcy Code. Title 11, U.S.C.A., as amended from time to time or any successor statute thereto.

Base Rate. The greater of (a) the fluctuating annual rate of interest announced from time to time by the Agent at the Agent’s Head Office as its “prime rate”, or (b) one half of one percent (0.5%) above the Federal Funds Effective Rate, or (c) the then current thirty (30) day LIBOR. The Base Rate is a reference rate and does not necessarily represent the lowest or best rate being charged to any customer, and which such rate serves as the basis upon which effective rates of interest are calculated for obligations making reference thereto. Any change in the rate of interest payable hereunder resulting from a change in the Base Rate shall become effective as of the opening of business on the day on which such change in the Base Rate becomes effective, without notice or demand of any kind.

Base Rate Loans. Any Loan(s) hereunder bearing interest by reference to the Base Rate.

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Base Rent. With respect to any Lease, the minimum periodic contractual rent payable thereunder, excluding reimbursement or recovery of common area maintenance or other property operating expenses and excluding percentage rent.

Borrower(s). As defined in the preamble hereto, and which such term shall include the Borrower-SPE.

Borrower-SPE. Individually, collectively, jointly and severally, Pershing, DownREIT, Huntsville, Pensacola, Megaplex Four, Westcol and Melbourne and any other wholly-owned Subsidiary of EPR, Pershing, Megaplex Four or Theatre Sub which owns a Borrowing Base Property and otherwise meets the definition and requirements of a Special Purpose Entity, is approved by the Agent, and executes and delivers to the Agent, a joinder to this Agreement in form and substance satisfactory to the Agent.

Borrowing Base. The amount which is the least of (a) the Maximum Commitment Amount, and (b) sixty percent (60%) of Borrowing Base Asset Value, and (c) the sum of (i) Underwriteable Cash Flow generated by Megaplex Movie Theatres and other Entertainment-Related Retail Improvements (whether subject to a Lease or an EPR Senior First Mortgage) divided by 1.75, and then further divided by the Assumed Debt Service Constant, and (ii) Underwriteable Cash Flow generated by assets other than Megaplex Movie Theatres and other Entertainment-Related Retail Improvements divided by 1.85 and then further divided by the Assumed Debt Service Constant; provided however, that in no event shall assets that are not Megaplex Movie Theatres or other Entertainment-Related Retail Improvements exceed in the aggregate twenty-five percent (25%) of the Borrowing Base. Notwithstanding the aforesaid, the Borrowing Base will at all times consist of at least ten (10) Borrowing Base Properties, and no single property shall account for more than twenty (20%) percent of the total Borrowing Base Asset Value.

Borrowing Base Asset Value. With respect to the Borrowing Base Properties, the aggregate amount of Underwriteable Cash Flow as of the end of the most recent quarter, with pro forma adjustments for any assets acquired or sold during the relevant period, annualized, and then capitalized at the rate of (i) 10% for any Megaplex Movie Theatres and other Entertainment-Related Retail Improvements, and (ii) 11% for all Borrowing Base Properties that are not Megaplex Movie Theatres or Entertainment-Related Retail Improvements.

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Borrowing Base Property or Borrowing Base Properties. The Eligible Real Estate owned or leased by the Borrower-SPE or subject to an EPR Senior First Mortgage, to be included in the calculation of Borrowing Base, and which has been approved by Agent and Required Lenders in their sole discretion. Insofar as Borrowing Base Property consists of Eligible Real Estate that is subject to an EPR Senior First Mortgage, the term “Borrowing Base Property” shall be deemed to refer to such Eligible Real Estate or the related EPR Senior Property Loan, as the context may require. The initial Borrowing Base Property shall consist of the below listed Megaplex Movie Theatres and Entertainment-Related Retail Improvements which shall contain the following properties (collectively, as listed below, the “Initial Eligible Real Estate”):

Name	Location
Harbour View 16	Suffolk, VA
Peoria Rave	Peoria, IL
Conroe	Conroe, TX
White Oak Village	Garner, NC
Grand 18-Winston Salem	Winston Salem, NC
Columbia Mall 14	Columbia, MD
Panama City-Grand 16	Panama City, FL
Kalispell 14	Kalispell, MT
Grand 18-Greensboro	Greensboro, NC
Southfield	Southfield, MI
Southfield Retail	Southfield, MI
Harbour View Retail	Suffolk, VA
AMC Grand 24	Dallas, TX
AMC Huebner Oaks 24	San Antonio, TX
AMC Lennox 24	Columbus, OH
AMC Mission Valley 20	San Diego, CA
AMC Ontario Mills 30	Ontario, CA
AMC Promenade 16	Los Angeles, CA

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AMC Studio 30	Houston, TX
AMC West Olive 16	Los Angeles, CA
Huntsville	Huntsville, AL
Melbourne	Melbourne, FL
Pensacola Bayou 15	Pensacola, FL
Cantera Retail	Chicago, IL
Gulf Pointe Retail	Houston, TX
Mesquite Retail	Mesquite, TX
Powder Springs Retail	Atlanta, GA
Westcol Retail	Westminster, CO

Subsequent to Closing hereunder, the Borrowers may add other Eligible Real Estate or substitute other Eligible Real Estate for all or a portion of the Initial Eligible Real Estate subject to the compliance with the terms of this Agreement.

Borrowing Base Property Net Operating Income (or Borrowing Base Property NOI). With respect to any Borrowing Base Property, for any period, the aggregate of actual recurring “property revenues” earned and received by Borrower-SPE in such period (provided however that any amounts accrued shall only include those amounts not more than 45 days delinquent in arrears) for the Borrowing Base Property (including base rent and expense reimbursement, but excluding straight line and percentage rent), (or in the case of Borrowing Base Properties subject to EPR Senior First Mortgages, the related mortgage loan interest income) and all as otherwise determined in accordance with GAAP together with recoveries from tenants as determined in accordance with GAAP, all such amounts shall be attributable to such period and accrued according to GAAP, less (i) all “property expenses” consisting solely of expenses incurred or accrued by the Borrower-SPE that are directly related to the operation and ownership of such Borrowing Base Property, including any real estate taxes, sales taxes, common area maintenance charges, accounting and administration, security, utilities, maintenance, janitorial, premiums for casualty and liability insurance or ground lease payments (excluding from the foregoing expenses for depreciation, amortization, interest and leasing commissions with respect to such Borrowing Base Property) actually paid by Borrower-SPE, and (ii) an allowance for property management expenses calculated at the greater of (A) three percent (3.0%) of Base Rent or (B) actual property management expenses (the “Management Expense”), and (iii) the Replacement Reserve (provided that the deduction described in this clause (iii) shall not apply to Borrowing Base Property consisting of land under development). If such period is less than a year, expenses described in clause (i) above that are payable less

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frequently than monthly during the course of a year (e.g., real estate taxes and insurance premiums) shall be adjusted by “straight lining” the amounts so that such expenses are accrued on a monthly basis over the course of a year and fairly stated for each period. In the event that information for trailing four (4) quarters or for any other period as may be required hereunder, is not available for a Borrowing Base Property, then, if such Borrowing Base Property is a new theatre or a new Lease executed by Tenant and Borrower-SPE in connection with the acquisition of a Borrowing Base Property, then for purposes of this calculation, “property revenues” shall mean the actual annual base rent on an effective triple net basis for the Borrowing Base Property, as provided for in the applicable Lease less the Management Expense and less the Replacement Reserve (or, in the case of a Borrowing Base Property encumbered by an EPR Senior First Mortgage, “property revenues” shall mean the actual interest income for the Borrowing Base Property). Additionally, as the Borrowing Base Property financial information becomes available (i.e. after the Borrowing Base Property has been in operation for one quarter, two quarters, etc.) such actual information shall be used, as adjusted, by “annualizing” the amounts so that such amounts are received on a monthly basis over the course of a year and fairly stated for each period, and as further adjusted for “property expenses,” Management Expense and Replacement Reserves.

Borrowing Base Property Replacement. Any substitution, replacement or addition of Borrowing Base Property hereunder, pursuant to § 5.3 and §12.

Building. With respect to each Property or parcel of Real Estate, all of the buildings, structures and improvements now or hereafter located thereon.

Business Day. Any day of the year on which commercial banks are not required or authorized by law to be closed for business in New York, New York or Boston, Massachusetts. If any day on which a payment is due is not a Business Day, then the payment shall be due on the next day following which is a Business Day. Further, in the event a payment is due on a specified day of the month, if there is no corresponding day for a payment in the given calendar month (i.e., there is no “February 30^th”), the payment shall be due on the last Business Day of the calendar month.

Capitalized Lease. A lease under which the discounted future rental payment obligations of the lessee or the obligor are required to be capitalized on the balance sheet of such Person in accordance with GAAP.

Capital Stock. With respect to any Person, any capital stock (including preferred stock), shares, interests, participations or other ownership interests (however designated) of such Person and any rights (other than debt securities convertible into or exchangeable for corporate stock), warrants or options to purchase any thereof.

CERCLA. See §6.20.

Change in Control. A Change in Control shall exist upon the occurrence of any of the following:

(a) any Person (including a Person’s Affiliates and associates) or group (as that term is understood under Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and the rules and regulations thereunder) shall have acquired after the Closing Date beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act) of a percentage (based on voting power, in the event different classes of stock shall have different voting powers) of the voting stock of any such other Person equal to at least fifty percent (50%); or

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(b) as of any date a majority of the managers or other controlling members of any Person consists of individuals who were not either (i) managers or otherwise controlling members or entities, as the case may be, of such Person as of the corresponding date of the previous year (provided, however, that the initial managers and controlling members for reference purposes of this clause (c)(i) shall be the managers and controlling members as of the Closing Date), (ii) selected or nominated to become managers or controlling members by the other managers or controlling members of said Person of which a majority consisted of individuals described in clause (c)(i) above, or (iii) selected or nominated to become managers or otherwise controlling members by such managers or controlling members of said Person of which a majority consisted of individuals or entities, as the case may be, described in clause (c)(i), above or individuals or entities, as the case may be, described in clause (c)(ii), above.

Closing Date. The first date on which all of the conditions set forth in §10 have been initially satisfied, and thereafter for any Loans, the Closing Date shall be deemed the date of the Advance or issuance of a Letter of Credit, provided that all of the conditions set forth in §10 and §11 have been satisfied.

Code. The Internal Revenue Code of 1986, as amended.

Collateral Agreements. Collectively, (i) those certain Collateral Pledge and Security Agreements dated as of the date herewith whereby EPR (and/or any of its Subsidiaries which have an ownership interest in any Borrower-SPE) pledge to the Agent, for the benefit of the Lenders, all of EPR and/or such Subsidiary’s equity interests in the Borrower SPEs.

Commission. The Securities and Exchange Commission.

Committed Loan. A loan made by a Lender pursuant to §2.1; provided that, if any such loan or loans (or portions thereof) are combined or subdivided pursuant to a Loan Request, the term “Committed Loan” shall refer to the combined principal amount resulting from such combination or to each of the separate principal amounts resulting from such subdivision, as the case may be.

Commitment. With respect to each Lender, the Revolving Credit Commitment of such Lender, as set forth on Schedule 1 hereto, as the same may be changed from time to time in accordance with the terms of this Agreement.

Commitment Percentage. With respect to each Lender, the percentage set forth on Schedule 1 hereto as such Lender’s percentage of the Total Commitment, as the same may be changed from time to time in accordance with the terms of this Agreement.

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Compliance Certificate. See §7.4(c).

Concord Debt. Indebtedness of EPR and its Subsidiaries (including, without limitation, EPT Concord, LLC) that is secured by or otherwise relates to Investments by such Persons in the Concord Project.

Concord Project. A planned development in Sullivan County, New York, expected to consist of a casino complex and a 1,580 acre resort complex. The resort complex is expected to consist of a 125-room spa hotel, a 350-room waterpark style hotel, a convention center and support facilities, a waterpark, two golf courses, and a retail and residential development.

Concord Value. The lower of cost or appraised value of EPR’s interest in the Concord Project and the GAAP carrying value of the $30 million of notes receivable from Louis Cappelli and related entities.

Condemnation Proceeds. All compensation, awards, damages, rights of action and proceeds awarded to the Borrowers by reason of any Taking, net of all reasonable amounts actually expended to collect the same.

Consolidated. With reference to any term defined herein, that term as applied to the accounts of a Person and its Subsidiaries, determined on a consolidated basis in accordance with GAAP.

Consolidated EBITDA. With respect to any period, an amount equal to the EBITDA of EPR and its Subsidiaries for such period determined on a consolidated basis in accordance with GAAP.

Consolidated Interest Incurred. For any period, interest incurred on all Indebtedness of EPR and its Subsidiaries (regardless of whether such interest was expensed or capitalized in accordance with GAAP), determined on a consolidated basis in accordance with GAAP excluding amortization of deferred loan costs.

Consolidated Tangible Net Worth. The total consolidated Tangible Net Worth of EPR and its Subsidiaries.

Contingent Obligations. As to any Person, means any obligation of such Person guaranteeing or intending to guaranty any Indebtedness, leases, dividends or other obligations (“primary obligations”) of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, including, without limitation, any obligation of such Person, whether or not contingent, (a) to purchase any such primary obligation or any property constituting direct or indirect security therefor, (b) to advance or supply funds (i) for the purchase or payment of any such primary obligation or (ii) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (c) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the payment of, or the ability of the primary obligor to make payment of, such primary obligation or (d) otherwise to assure or hold harmless the owner of such primary

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obligation against loss in respect thereof; provided that the term Contingent Obligation shall not include endorsements of instruments for deposit or collection in the ordinary course of business or contracting for purchase of real property in the ordinary course of business, or obligations, indemnifications or guarantees of liabilities other than with respect to the repayment of any Indebtedness, such as environmental indemnities or “bad acts” indemnities, unless such obligations, indemnifications or guarantees are being enforced by any applicable party entitled to rely thereon. The amount of any Contingent Obligation shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation in respect of which such Contingent Obligation is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such Person is required to perform thereunder) as determined by such Person in good faith.

Conversion/Continuation Request. A notice given by the Borrower to the Agent of its election to convert or continue a Loan in accordance with §4.1.

Debt Service. Consolidated Interest Incurred plus regularly scheduled amortization payments (excluding balloon maturities).

Default. See §12.1 herein.

Default Rate. See §4.12.

Derivative Obligations. All Interest Rate Contracts and other obligations of any Person in respect of any interest rate swap transaction, basis swap, forward rate transaction, commodity swap, commodity option, equity or equity index swap forward equity transaction, equity or equity index option, bond option, interest rate option, foreign exchange transaction, cap transaction, forward transaction, collar transaction, currency swap, 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. With respect to any Person, the declaration or payment of any cash dividend or distribution on or in respect of any shares of any class of capital stock or other beneficial interest of such Person; the purchase, redemption, exchange or other retirement by such Person of any shares of any class of capital stock or other beneficial interest of such Person, directly or indirectly through a Subsidiary of such Person or otherwise; the return of capital by such Person to its shareholders, partners, members or other owners as such; or any other distribution on or in respect of any shares of any class of capital stock or other beneficial interest of such Person; provided, however, that the dividend or distribution of common stock of a Person shall not constitute a Distribution with respect to such Person.

Dollars or $. Dollars in lawful currency of the United States of America.

Domestic Lending Office. Initially, the office of each Lender designated as such on Schedule 1 hereto; thereafter, such other office of such Lender, if any, located within the United States that will be making or maintaining Base Rate Loans.

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Drawdown Date. The date on which any Loan is made or is to be made, and the date on which any Loan which is made prior to the Maturity Date is converted in accordance with §4.1.

EBITDA. With respect to any Person (or any asset of any Person) for any period, all as determined in accordance with GAAP, an amount equal to the sum of (a) the Net Income of such Person (or attributable to such asset) for such period plus (b) depreciation and amortization, interest expensed and income taxes for such period minus (c) equity in earnings from unconsolidated Subsidiaries for such period plus (d) ordinary cash distributions (exclusive of any distributions received from capital events) actually received from such unconsolidated Subsidiaries for such period, minus (e) straight line rents for such period, minus (f) any gains (plus the losses) from extraordinary items or asset sales or writeups or forgiveness of debt for such period, plus (g) non-cash impairment charges, plus (h) acquisition –related expenses which are required to be deducted from net income under SFAS-141R. All of the foregoing to be calculated without duplication and with respect to (b) – (h), only to the extent the same has been included in the calculation of such net income.

Eligible Real Estate. Real Estate:

(a) (i) which is owned in fee by the Borrower-SPE; or (ii) which is encumbered by a ground lease to the Borrower-SPE, acceptable to the Agent in its reasonable discretion; or (iii) in which Borrower-SPE holds an EPR Senior First Mortgage, acceptable to the Agent in its reasonable discretion;

(b) which is located within the contiguous 48 States of the continental United States;

(c) which consists of one or more of the following income-producing properties:

(i) a Megaplex Movie Theatre;

(ii) Entertainment-Related Retail Improvements; or

(iii) real estate and/or improvements which are neither (i) or (ii) above, including without limitation, income producing land under development subject to a Lease or an EPR Senior First Mortgage;

(d) which is subject to a Lease to a third party (or parties) or to an EPR Senior First Mortgage, in each case which is not in default, and under which the Tenant, other approved tenant or EPR Mortgagor, as the case may be, is in actual occupancy of the property, provided however, that copies of all Leases or EPR Senior First Mortgages for any Borrowing Base Property shall be provided to Agent or any Lender upon request therefor;

(e) as to which all of the representations set forth in §6 of this Agreement concerning Borrowing Base Property are true and correct;

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(f) as to which the Agent and the Required Lenders, as applicable, have received and approved all Eligible Real Estate Qualification Documents, or will receive and approve them prior to inclusion of such Real Estate as a Borrowing Base Property;

(g) which does not cause a violation of the Borrowing Base; and

(h) which is approved by the Agent and Required Lenders in their sole discretion.

Eligible Real Estate Qualification Documents. See Schedule 3 attached hereto.

Employee Benefit Plan. Any employee benefit plan within the meaning of §3(3) of ERISA maintained or contributed to by either of the Borrower or any ERISA Affiliate, other than a Multiemployer Plan.

Entertainment-Related Retail Improvements. Real estate owned by the Borrower-SPE or encumbered by an EPR Senior First Mortgage that is used for retail purposes including but not limited to restaurants, bowling alleys, arcades, and other leisure venues that are adjacent to and complement the operation of a Megaplex Movie Theater.

Environmental Laws. See §6.20(a).

EPR Mortgagor. A party which borrows pursuant to the terms of an EPR Senior Property Loan, which such loan is secured by an EPR Senior First Mortgage and is otherwise evidenced by the EPR Senior Property Loan Documents.

EPR Senior First Mortgage. A first priority senior mortgage granted to Borrower-SPE by an EPR Mortgagor securing an EPR Senior Property Loan and encumbering any real estate and improvements thereon, and upon which no other lien exists except for liens for unpaid taxes, assessments and the like, not yet due and payable and liens on equipment and the like owned or leased by the EPR Mortgagor which are permitted pursuant to the terms of the related EPR Senior Property Loan Documents, consisting of purchase money liens or liens on capital leases.

EPR Senior Property Loan. A first priority mortgage loan made to the owner of any real estate and improvements thereon.

EPR Senior Property Loan Documents. Collectively, a promissory note from an EPR Mortgagor to Borrower-SPE, the EPR Senior First Mortgage serving as collateral for said note, along with any related assignment of leases and rents from said EPR Mortgagor to Borrower-SPE and any other documents or instruments delivered to Borrower-SPE evidencing or securing a EPR Senior Property Loan. This term may also refer to such loan documents evidencing more than one EPR Senior Property Loan.

Equity Issuance. The issuance and sale after March 31, 2009 by any of EPR or its Subsidiaries of any equity securities of EPR or its Subsidiaries to any Person who is not EPR or

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one of its Subsidiaries, including without limitation: (a) shares of its Capital Stock, (b) any shares of its Capital Stock pursuant to the exercise of options or warrants or (c) any shares of its Capital Stock pursuant to the conversion of any debt securities to equity.

Equity Rights. With respect to any Person, any subscriptions, options, warrants, commitments preemptive rights or agreements of any kind (including without limitation, any shareholders’ or voting trust agreements) for the issuance, sale, registration or voting of, or securities convertible into, any additional shares of capital stock of any class, or partnership or other ownership interests of any type, in such Person.

ERISA. The Employee Retirement Income Security Act of 1974, as amended and in effect from time to time.

ERISA Affiliate. Any Person which is treated as a single employer with the Borrower under §414 of the Code.

ERISA Reportable Event. A reportable event with respect to a Guaranteed Pension Plan within the meaning of §4043 of ERISA and the regulations promulgated thereunder as to which the requirement of notice has not been waived.

Event of Default. See §12.1.

Excess Availability. See §9.9.

Exhibitor EBITDAR. Shall be determined as follows:

(a) The actual EBITDA of the exhibitor/tenant at a Borrowing Base Property, which EBITDA is derived specifically from said Borrowing Base Property, plus the rent expense of that exhibitor/tenant at said Borrowing Base Property (the “Actual Exhibitor EBITDAR”). The Agent and Lenders recognize that the Borrowers are not entitled to receive full financial disclosure of the income statement of an exhibitor/tenant, which would allow the calculation of Actual Exhibitor EBITDAR, but may receive such information as a courtesy.

(b) In the event that such Actual Exhibitor EBITDAR is not available, then the calculation of Exhibitor EBITDAR shall be based upon the actual trailing 4 quarters revenue of the exhibitor/tenant at said Borrowing Base Property multiplied by an assumed Exhibitor EBITDAR margin of thirty-six percent (36%) (the “Assumed Exhibitor EBITDAR”).

(c) In the event that such Assumed Exhibitor EBITDAR is not available, then the calculation of Exhibitor EBITDAR shall be based upon the trailing 4 quarters box office receipts of the exhibitor/tenant at said Borrowing Base Property as determined by EDI Neilsen, divided by .70, to arrive at total revenues, and multiplied by an assumed Exhibitor EBITDAR margin of thirty-six percent (36%) (the “Neilsen Exhibitor EBITDAR”).

(d) Notwithstanding anything to the contrary contained herein, but subject to the defined term Underwriteable Cash Flow, for any exhibitor/tenant theatre which has been in operation for less than four (4) quarters, Exhibitor EBITDAR shall be deemed to equal the Borrowing Base Property Net Operating Income for such Borrowing Base Property.

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Further, notwithstanding anything to the contrary contained herein, where there is an assumed Exhibitor EBITDAR margin of thirty-six percent (36%), such margin shall be assumed, provided however, in the event that Agent determines in good faith that a thirty-six percent (36%) Exhibitor EBITDAR margin is no longer accurate, it may, from time to time, adjust the assumed Exhibitor EBITDAR margin for purposes of this calculation.

Facility. The credit facility described herein with respect to the Revolving Credit Loans up to the Facility Amount.

Facility Amount. The aggregate amount of the initial $215,000,000.00 Facility, plus any increase thereto pursuant to §2.2 herein.

Federal Funds Effective Rate. For any day, the rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, 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 the average of the quotations for such day on such transactions received by the Agent from three (3) Federal funds brokers of recognized standing selected by the Agent.

Fixed Charges. Debt Service plus the amount of any preferred dividends incurred for the applicable period.

FFO. With respect to EPR and its Subsidiaries on a consolidated basis, “funds from operations” as defined in accordance with resolutions adopted by the Board of Governors of the National Association of Real Estate Investment Trusts as in effect on the date of Closing, and as amended from time to time, subject, however, to the provisions of Section 1.3(b) herein and excluding the effect of any reduction in FFO attributable to the deduction of acquisition-related expenses required by SFAS-141R.

Full Advance Notice. See §2.7.

GAAP. Principles that are (a) consistent with the principles promulgated or adopted by the Financial Accounting Standards Board and its predecessors, as in effect from time to time and (b) consistently applied with past financial statements of the Person adopting the same principles; provided that a certified public accountant would, insofar as the use of such accounting principles is pertinent, be in a position to deliver an unqualified opinion (other than a qualification regarding changes in generally accepted accounting principles) as to financial statements in which such principles have been properly applied.

Guarantee. A Guarantee by any Person means any obligation, contingent or otherwise, of such Person directly or indirectly guaranteeing any Indebtedness or other obligation of any other Person and, without limiting the generality of the foregoing, any obligation, direct or indirect, contingent or otherwise, of such Person (i) to secure, purchase or

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pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation (whether arising by virtue of partnership arrangements, by agreement to keep-well, to purchase assets, goods, securities or services, to provide collateral security, to take-or-pay, or to maintain financial statement conditions or otherwise) or (ii) entered into for the purpose of assuring in any other manner the obligee of such Indebtedness or other obligation of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part), provided that the term Guarantee shall not include endorsements for collection or deposit in the ordinary course of business. The term “Guarantee” used as a verb has a corresponding meaning.

Guaranteed Pension Plan. Any employee pension benefit plan within the meaning of §3(2) of ERISA maintained or contributed to by the Borrowers or any ERISA Affiliate the benefits of which are guaranteed on termination in full or in part by the PBGC pursuant to Title IV of ERISA, other than a Multiemployer Plan.

Hazardous Substances. See §6.20(b).

Indebtedness. Indebtedness of any Person means at any date, without duplication, all obligations, contingent and otherwise, direct or indirect, in respect of (i) all obligations of such Person for borrowed money, (ii) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (iii) all obligations of such Person to pay the deferred purchase price of property or services, except trade accounts payable arising in the ordinary course of business, (iv) all obligations of such Person as lessee under Capitalized Leases, (v) all obligations of such Person to reimburse any bank or other Person in respect of amounts payable under a banker’s acceptance, (vi) all Redeemable Preferred Stock of such Person (in the event such Person is a corporation), (vii) all obligations of such Person to reimburse any bank or other Person in respect of amounts paid or to be paid under a letter of credit or similar instrument, (viii) all Indebtedness of others secured by a Lien on any asset of such Person, whether or not such Indebtedness is assumed by such Person, (ix) all obligations of such Person with respect to interest rate protection agreements, foreign currency exchange agreements or other hedging arrangements (valued as the termination value thereof computed in accordance with a method approved by the International Swap Dealers Association and agreed to by such Person in the applicable hedging agreement, if any), and (x) all Indebtedness of others Guaranteed by such Person.

Independent Director. An individual reasonably satisfactory to Agent, who (a) shall not be during such individual’s term as Independent Director and (b) shall not have been at any time during the preceding five (5) years (i) other than in his or her capacity as an Independent Director or other similar capacity, a partner, member or shareholder of, or an officer or employee of, any Borrower or any of its Subsidiaries or Affiliates, (ii) a customer or a supplier to any Borrower or any of its Subsidiaries or Affiliates, (iii) an individual controlling any such supplier or customer or (iv) a member of the immediate family of any officer, employee, supplier or customer of any other director of any Borrower or any of its Subsidiaries or Affiliates.

Insurance Proceeds. All insurance proceeds, damages, claims and rights of action and the right thereto under any insurance policies relating to any portion of any Borrowing Base Property, net of all reasonable amounts actually expended to collect the same.

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Interest Payment Date. As to each Loan, the third (3^rd) day of each calendar month during the term of such Loan.

Interest Period. With respect to each LIBOR Rate Loan (a) initially, the period commencing on the Drawdown Date of such LIBOR Rate Loan and ending one, two, three or six months thereafter, and (b) thereafter, each period commencing on the day following the last day of the next preceding Interest Period applicable to such Loan and ending on the last day of one of the periods set forth above, as selected by the Borrower in a Loan Request or Conversion/Continuation Request; provided that all of the foregoing provisions relating to Interest Periods are subject to the following:

(i) if any Interest Period with respect to a LIBOR Rate Loan would otherwise end on a day that is not a LIBOR Business Day, such Interest Period shall end on the next succeeding LIBOR Business Day, unless such next succeeding LIBOR Business Day occurs in the next calendar month, in which case such Interest Period shall end on the next preceding LIBOR Business Day, as determined conclusively by the Agent in accordance with the then current bank practice in London;

(ii) if the Borrower shall fail to give notice as provided in §4.1, the Borrower shall be deemed to have requested a conversion of the affected LIBOR Rate Loan to a Base Rate Loan on the last day of the then current Interest Period with respect thereto; and

(iii) no Interest Period relating to any LIBOR Rate Loan shall extend beyond the Maturity Date.

Notwithstanding anything to the contrary contained in this Agreement, in no event shall the Interest Period hereunder exceed one month at any time prior to the earlier to occur of (x) ninety (90) days after the Closing Date, or (y) the Agent declaring the syndication is complete hereunder.

Interest Rate Contracts. Interest rate swap, collar, cap or similar agreements providing interest rate protection.

Investments. With respect to any Person, all shares of capital stock, evidences of Indebtedness and other securities issued by any other Person and owned by such Person, all loans, advances, or extensions of credit to, or contributions to the capital of, any other Person, all purchases of the securities or business or integral part of the business of any other Person and commitments and options to make such purchases, all interests in real property, and all other investments; provided, however, that the term “Investment” shall not include (i) equipment, inventory and other tangible personal property acquired in the ordinary course of business, or (ii) current trade and customer accounts receivable for services rendered in the ordinary course of business and payable in accordance with customary trade terms. In determining the aggregate amount of Investments outstanding at any particular time: (a) there shall be included as an Investment all interest accrued with respect to Indebtedness constituting an Investment unless and until such interest is paid; (b) there shall be deducted in respect of each Investment any amount received as a return of capital; (c) there shall not be deducted in respect of any Investment any amounts received as earnings on such Investment, whether as dividends, interest

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or otherwise, except that accrued interest included as provided in the foregoing clause (a) may be deducted when paid; and (d) there shall not be deducted in respect of any Investment any decrease in the value thereof.

Issuing Lender. KeyBank, in its capacity as the Lender issuing the Letters of Credit or any other Lender that is designated by the Borrower and agrees to issue any Letters of Credit.

Lease Summaries. Summaries or abstracts of the material terms of the Leases. Such Lease Summaries shall be in form and substance reasonably satisfactory to the Agent.

Lease. Any leases, license and agreement relating to the use or occupation of space in any Building or of any Real Estate including without limitation any ground leases therefor (collectively, the “Leases”).

Lenders. KeyBank, the other lending institutions which are or may be a party hereto from time to time and any other Person which becomes an assignee of any rights and obligations of a Lender pursuant to §18 (but not including any participant as described in §18.4 as identified on Schedule 1 hereto).

Letter of Credit. Any standby letter of credit issued at the request of the Borrower and for the account of the Borrower in accordance with §2.10.

Letter of Credit Request. See §2.10(a).

Leverage Ratio. The percentage determined by dividing the Total Debt by the Total Asset Value.

LIBOR. As applicable to any Interest Period for any LIBOR Rate Loan, the greater of (i) two (2%) percent per annum, and (ii) the rate per annum as determined on the basis of the offered rates for deposits in Dollars, for the period of time comparable to such Interest Period which appears on the Reuters Screen LIBOR Page as of 11:00 a.m. London time on the day that is two (2) LIBOR Business Days preceding the first day of such Interest Period; provided, however, if the rate described above does not appear on such page on any applicable interest determination date, LIBOR shall be the rate for deposits in Dollars for a period substantially equal to the Interest Period on the Reuters Page “LIBO” (or such other page as may replace the LIBO Page on that service for the purpose of displaying such rates), as of 11:00 a.m. (London Time), on the day that is two (2) LIBOR Business Days prior to the beginning of such Interest Period. If the Reuters system is unavailable, then the rate for that date will be determined on the basis of the offered rates for deposits in Dollars for a period of time comparable to such Interest Period which are offered by four major banks in the London interbank market at approximately 11:00 a.m. London time, on the day that is two (2) LIBOR Business Days preceding the first day of such Interest Period as selected by Agent. The principal London office of each of the four major London banks will be requested to provide a quotation of its U.S. dollar deposit offered rate. If at least two such quotations are provided, the rate for that date will be the arithmetic mean of the quotations. If fewer than two quotations are provided, the rate for that date will be determined on the basis of the rates quoted for loans in

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Dollars to leading European banks for a period of time comparable to such Interest Period offered by major banks in New York City at approximately 11:00 a.m. (New York City time), on the day that is two (2) LIBOR Business Days preceding the first day of such Interest Period. In the event that Agent is unable to obtain any such quotation as provided above, it will be deemed that LIBOR pursuant to a LIBOR Rate Loan cannot be determined and the provisions of §4.6 shall apply. In the event that the Board of Governors of the Federal Reserve System shall impose a Reserve Percentage with respect to LIBOR deposits of Agent, then for any period during which such Reserve Percentage shall apply, LIBOR shall be equal to the amount determined above divided by an amount equal to 1 minus the Reserve Percentage.

LIBOR Business Day. Any day on which commercial banks are open for international business (including dealings in Dollar deposits) in London, England.

LIBOR Lending Office. Initially, the office of each Lender designated as such on Schedule 1 hereto; thereafter, such other office of such Lender, if any, that shall be making or maintaining LIBOR Rate Loans.

LIBOR Rate Loans. Collectively, the Revolving Credit LIBOR Rate Loans bearing interest by reference to LIBOR.

Lien. See §8.2.

Loan Documents. This Agreement, the Notes, the Letters of Credit, the Collateral Agreements and all other documents, instruments or agreements now or hereafter executed or delivered by or on behalf of the Borrower in connection with the Loans.

Loan Request. See §2.7.

Loans. Collectively, the Revolving Credit Loans.

Management Agreements. Agreements, whether written or oral, providing for the management of the Borrowing Base Properties or any of them.

Material Adverse Effect. A material adverse effect on (a) the business, properties, assets, condition (financial or otherwise) or results of operations of the Borrowers and any of their Subsidiaries considered as a whole; (b) the ability of the Borrowers to perform any of their obligations under the Loan Documents; or (c) the validity or enforceability of any of the Loan Documents or the rights or remedies of Agent or the Lenders thereunder.

Maturity Date. October 26, 2011, or such earlier date on which the Loans shall become due and payable pursuant to the terms hereof, or October 26, 2012, if said Maturity Date is extended pursuant to §3.5, herein, or such earlier date, so as to be co-terminus with the Term Loan Agreement.

Maximum Commitment Amount. The maximum availability under the Facility, including the sum of the aggregate amount undrawn on all Letters of Credit or drawn but not reimbursed under all Letters of Credit at any time, shall be $215,000,000.00 (unless otherwise increased pursuant to §2.2 herein).

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Megaplex Movie Theatre. A theater constructed or substantially remodeled subsequent to 1995 for the showing of first run motion pictures which theater contains at least fourteen screens, stadium style seating, digital sound and enhanced seat design.

Minority Interest. As to any Person, an ownership or other equity investment in any other Person, which investment is not consolidated with the accounts of such Person in accordance with GAAP.

Mortgages. Collectively, the mortgage(s) granted to Agent, on behalf of the Lenders, on any of the Borrowing Base Properties, as may be required hereunder.

Multiemployer Plan. Any multiemployer plan within the meaning of §3(37) of ERISA maintained or contributed to by the Borrower or any ERISA Affiliate.

Net Equity Proceeds. The aggregate consideration received by EPR and/or any of its Subsidiaries in respect of any Equity Issuance, net of (a) direct costs (including, without limitation, legal, accounting and investment banking fees and sales commissions) and (b) taxes paid or payable as a result thereof; it being understood, (i) that “Net Equity Proceeds” shall include, without limitation, any cash received upon the sale or other disposition of any non-cash consideration received by EPR and/or any of its Subsidiaries in any Equity Issuance, and (ii) that “Net Equity Proceeds” shall not include cash proceeds that are applied within thirty (30) days of the date of the related Equity Issuance to retire Capital Stock.

Net Income (or Loss). With respect to any Person (or any asset of any Person) for any period, the net income (or loss) of such Person (or attributable to such asset), determined in accordance with GAAP. The net income (or loss) of a Person shall include, without duplication, the allocable share of the net income (or loss) of any other Person in which a Minority Interest is owned by such Person based on the ownership of such Person in such other Person.

Net Rentable Area. With respect to any Real Estate, the floor area of any buildings, structures or improvements available for leasing to tenants determined in accordance with the Rent Roll for such Real Estate, the manner of such determination to be reasonably consistent for all Real Estate of the same type unless otherwise approved by the Agent.

Notes. Collectively, the Revolving Credit Notes.

Notice. See §19 herein.

Obligations. All indebtedness, obligations and liabilities of the Borrowers to any of the Lenders or the Agent, individually or collectively, under this Agreement or any of the other Loan Documents or in respect of any of the Loans, the Notes, the Letters of Credit or other instruments at any time evidencing any of the foregoing, whether existing on the date of this Agreement or arising or incurred hereafter, direct or indirect, joint or several, absolute or contingent, matured or unmatured, liquidated or unliquidated, secured or unsecured, arising by contract, operation of law or otherwise.

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Obligors, or Obligor. Collectively, Borrowers and any other party (other than Agent, a Lender or the Issuing Lender) that may become obligated under this Agreement (“Obligors”); individually, each Borrower which is or may become obligated under this Agreement (“Obligor”).

Outstanding. With respect to the Loans, the aggregate unpaid principal thereof as of any date of determination. With respect to Letters of Credit, the aggregate undrawn face amount of issued Letters of Credit.

PBGC. The Pension Benefit Guaranty Corporation created by §4002 of ERISA and any successor entity or entities having similar responsibilities.

Permitted Encumbrances. Each Lien granted pursuant to any of the Permitted Liens and the security interests and defects in title as set forth on Schedule B of the title insurance policies issued in connection with the Borrowing Base Properties, provided such security interests and defects in title shall not affect the operation, marketability or value of any Borrowing Base Property.

Permitted Liens. Liens, security interests and other encumbrances permitted by §8.2.

Person. Any individual, corporation, limited liability company, partnership, trust, unincorporated association, business, or other legal entity, and any government or any governmental agency or political subdivision thereof, including but not limited to the Borrowers.

Plan Assets. Assets of any employee benefit plan subject to Part 4, Subtitle A, Title I of ERISA.

Potential Borrowing Base Property. Any property of a Borrower which is not at the time included in the Borrowing Base and which consists of (i) Eligible Real Estate, or (ii) Real Estate which is capable of becoming Eligible Real Estate through the approval of the Required Lenders and the completion and delivery of Eligible Real Estate Qualification Documents.

Rating Agencies. Fitch, Inc., Standard & Poor’s Rating Services, Inc. or Moody’s Investors Service, Inc.

Real Estate. All real property in which EPR or any of its Subsidiaries has a fee, leasehold, mortgage or other interest, including, without limitation, the Borrowing Base Properties.

Record. The grid attached to any Note, or the continuation of such grid, or any other similar record, including computer records, maintained by the Agent with respect to any Loan referred to in such Note.

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Redeemable Preferred Stock. Any preferred stock issued by a Person which is at any time prior to the Maturity Date either (i) mandatorily redeemable (by sinking fund or similar payments or otherwise) or (ii) redeemable at the option of the holder thereof.

Register. See §18.2 herein.

REIT Status. With respect to EPR its status as a real estate investment trust as defined in §856(a) of the Code.

Release. See §6.20(c)(iii) herein.

Rent Roll. A report prepared by the Borrower showing for each Borrowing Base Property owned or leased by the Borrower-SPE its occupancy, lease expiration dates, lease rent and other information in substantially the form presented to the Lenders prior to the date hereof or in such other form as may have been approved by the Agent.

Replacement Reserve. (i) With respect to any Real Estate owned or leased by Borrower, an amount equal to twenty cents ($.20) per annum multiplied by the Net Rentable Area of such Real Estate, and (ii) with respect to any Real Estate that is subject to an EPR Senior First Mortgage, an amount equal to twenty cents ($.20) per annum multiplied by Borrower’s reasonable good faith estimate of what the “Net Rentable Area” of such Real Estate would have been had such Real Estate been subject to a Lease rather than an EPR Senior First Mortgage.

Required Lenders. As of any date, the Lenders (which may also include the Agent as a Lender) whose aggregate Commitment Percentage is equal to or greater than sixty-six and 2/3 percent (66-2/3%)of the Total Commitment.

Reserve Percentage. For any day with respect to a LIBOR Rate Loan, the maximum rate (expressed as a decimal) at which any Lender subject thereto would be required to maintain reserves (including, without limitation, all base, supplemental, marginal and other reserves) under Regulation D of the Board of Governors of the Federal Reserve System (or any successor or similar regulations relating to such reserve requirements) against “Eurocurrency Liabilities” (as that term is used in Regulation D or any successor or similar regulation), if such liabilities were outstanding. The Reserve Percentage shall be adjusted automatically on and as of the effective date of any change in the Reserve Percentage.

Revolving Credit Base Rate Loans. Revolving Credit Loans bearing interest calculated by reference to the Base Rate.

Revolving Credit Commitment. With respect to each Lender, the amount set forth on Schedule 1 hereto as the aggregate amount of such Lender’s Revolving Credit Commitment, as the same may be reduced or increased from time to time in accordance with the terms of this Agreement.

Revolving Credit Commitment Percentage. With respect to each Lender, the percentage set forth on Schedule 1 hereto as such Lender’s percentage of the aggregate Revolving Credit Commitments of all of the Lenders, which such percentage may be reduced as provided herein or increased pursuant to §2.2 herein.

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Revolving Credit LIBOR Rate Loans. Revolving Credit Loans bearing interest calculated by reference to LIBOR.

Revolving Credit Loan or Loans. An individual Revolving Credit Loan or the aggregate Revolving Credit Loans, as the case may be, in the maximum principal amount of $215,000,000.00 to be made by the Lenders hereunder as more particularly described in §2. Amounts drawn under a Letter of Credit shall also be considered Revolving Credit Loans as provided in §2.10(f).

Revolving Credit Notes. See §2.1(b) herein.

State. A state of the United States of America.

Subsidiary. Any corporation, association, partnership, trust, 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 or other economic interest and which are consolidated with the parent, including without limitation, under this Agreement, Borrower-SPE as a Subsidiary of EPR.

Survey. An instrument survey of each parcel of Borrowing Base Property prepared by a registered land surveyor which shall show the location of all buildings, structures, easements and utility lines on such property, shall be sufficient to remove the standard survey exception from the Title Policy, shall show that all buildings and structures are within the lot lines of the Borrowing Base Property and shall not show any encroachments by others (or to the extent any encroachments are shown, such encroachments shall be acceptable to the Agent in its reasonable discretion), shall show rights of way, adjoining sites, establish building lines and street lines, the distance to and names of the nearest intersecting streets and such other details as the Agent may reasonably require; and shall show whether or not the Borrowing Base Property is located in a flood hazard district as established by the Federal Emergency Management Agency or any successor agency or is located in any flood plain, flood hazard or wetland protection district established under federal, state or local law .

Surveyor Certification. With respect to each parcel of Borrowing Base Property, a certificate executed by the surveyor who prepared the Survey with respect thereto and containing such information relating to such parcel as the Title Insurance Company may reasonably require.

Taking. The taking or appropriation (including by deed in lieu of condemnation) of any Borrowing Base Property, or any part thereof or interest therein, for public or quasi-public use under the power of eminent domain, by reason of any public improvement or condemnation proceeding, or in any other manner or any damage or injury or diminution in value through condemnation, inverse condemnation or other exercise of the power of eminent domain.

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Tangible Net Worth. The equity of any Person as determined in accordance with GAAP, less the total book value of all assets of such Person properly classified as intangible assets under generally accepted accounting principles, including such items as goodwill, the purchase price of acquired assets in excess of the fair market value thereof, trademarks, trade names, service marks, brand names, copyrights, patents and licenses, and rights with respect to the foregoing.

Tenant. A tenant of the Borrower-SPE which leases space in a Borrowing Base Property pursuant to a Lease.

Term Loan Agreement. That certain Master Credit Agreement dated as of October 26, 2007 among EPT 301, LLC, EPR, KeyBank National Association, as agent thereunder, and the lenders from time to time party thereto, as the same may be amended or otherwise modified from time to time in accordance with its terms.

Third Party Information. Information provided by or in reliance on information provided by Tenants, EPR Mortgagors, or other independent sources acceptable to Agent, and upon which Borrower relies and has no knowledge or reason to believe is false, inaccurate or misleading in any respects.

Title Insurance Company. A nationally recognized title insurance company (and/or any other title insurance company or companies approved by the Agent in its sole discretion).

Title Policy. With respect to each parcel of Borrowing Base Property, an ALTA standard form title insurance policy (or, if such form is not available, an equivalent, legally promulgated form of mortgagee title insurance policy reasonably acceptable to the Title Insurance Company) issued by a Title Insurance Company insuring that the Borrower-SPE holds marketable fee simple title to or a valid and subsisting leasehold interest in such parcel.

TLS. The Toronto Life Square Project, which is a theatre-anchored project in downtown Toronto, Ontario on which EPR holds a second mortgage interest of approximately $125 million CAD (~$100 million US) behind a first mortgage construction loan of approximately $119 million CAD (~$95.2 million US). Beginning in 2009, EPR will not be recognizing interest income on its mortgage note in the GAAP financial statements since the TLS is being placed in receivership and taken to a forced sale by the first mortgage holder and EPR anticipates bidding for the TLS at the forced sale if an adequate third party bid is not presented. EPR will be obtaining new first mortgage debt on the TLS as the current lending group is not willing to extend their note.

TLS Off Balance Sheet First Mortgage Debt. The amount owed to the banks holding the first mortgage on TLS. Anticipated amount is approximately $119 million CAD.

TLS Pro-Forma Value. The current quarter’s USD denominated NOI, multiplied by 4 and capped at 10%. Current annualized NOI is approximately $15 million CAD.

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Total Asset Value. Without duplication, the sum of: (1) unrestricted cash and marketable securities held by EPR and its Subsidiaries; plus (2) Total Real Estate Value; plus (3) non-income producing real estate at cost of EPR and its Subsidiaries, plus (4) Concord Value, plus (5) TLS Pro-Forma Value until such asset is acquired or EPR’s interest is otherwise settled.

Total Commitment. The sum of the Commitments of the Lenders, as in effect from time to time not to exceed the lesser of (a) the Borrowing Base or (b) $215,000,000.00, as such amount may be increased pursuant to §2.2 herein.

Total Debt. With respect to EPR and any of its Subsidiaries, all Indebtedness, plus the face amount of any undrawn letters of credit, plus any Contingent Obligations, plus TLS Off Balance Sheet First Mortgage Debt.

Total Real Estate Value. EBITDA of EPR and its Subsidiaries for the most recent quarter, with pro forma adjustments for any assets acquired or sold during the relevant period, multiplied by four (4) (which is the annualization factor), and then divided by the applicable capitalization rate. Such capitalization rate shall be 10.00% for all Megaplex Movie Theatres and other Entertainment-Related Retail Improvements (including, without limitation, EPR Senior Property Loans secured by EPR Senior First Mortgages on Megaplex Movie Theatres or Entertainment-Related Retail Improvements), and 11% for assets that are not Megaplex Movie Theatres or other Entertainment-Related Retail Improvements.

Total Secured Debt. At any time, for EPR and its Subsidiaries, determined on a Consolidated basis, the sum of the following, but only if any Real Estate, or ownership interest of the owner thereof, is subject to a mortgage, deed of trust, deed to secure debt or similar instrument encumbering such Real Estate, or with respect to an owner of such Real Estate, a pledge of any equity interests in such Person with respect thereto: (i) all Indebtedness plus any other amounts that may constitute indebtedness for borrowed money; (ii) the deferred purchase price of Real Estate (not including escrow deposits given in connection with any such purchase); (iii) all Capitalized Leases in which a Borrower is the tenant; (iv) all obligations to reimburse any bank or other Person in respect of amounts paid or to be paid under a letter of credit or similar instrument; and (v) all Guarantees of Indebtedness incurred by Persons other than for Indebtedness already accounted for in the foregoing clauses (i) – (iv) hereof, and other than the Borrower and its Subsidiaries.

Type. As to any Revolving Credit Loan, its nature as a Base Rate Loan or a LIBOR Rate Loan.

Underwriteable Cash Flow. (1) With respect to Borrowing Base Property that is a Megaplex Movie Theatre (whether subject to a Lease or an EPR Senior First Mortgage), determined individually, the lesser of (A) the Borrowing Base Property NOI for the trailing 4 quarter period, or (B) the Exhibitor’s EBITDAR for such Borrowing Base Property for the trailing 4 quarter period, divided by 1.25. If a given Megaplex Movie Theatre has not been in operation for one year, part B will not apply; and (2) With respect to each Borrowing Base Property that is not a Megaplex Movie Theatre, the Borrowing Base Property NOI for the most recently ended quarter and then annualized.

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Unhedged Variable Rate Debt. Indebtedness that by its terms bears interest at a variable, not fixed, rate for which a swap, cap or similar arrangement effectively limiting the variability of such rate has not been entered into.

§1.2 Rules of Interpretation.

(a) A reference to any document or agreement shall include such document or agreement as amended, modified or supplemented from time to time in accordance with its terms and the terms of this Agreement.

(b) The definitions of terms herein shall apply equally to the singular and the plural forms of the terms defined.

(c) A reference to any law includes any amendment or modification of such law.

(d) A reference to any Person includes its permitted successors and permitted assigns.

(e) Accounting terms not otherwise defined herein have the meanings assigned to them by GAAP applied on a consistent basis by the accounting entity to which they refer.

(f) The words “include”, “includes” and “including” are not limiting.

(g) The words “approval” and “approved”, as the context requires, means an approval in writing given to the party seeking approval after full and fair disclosure to the party giving approval of all material facts necessary in order to determine whether approval should be granted.

(h) All terms not specifically defined herein or by GAAP, which terms are defined in the Uniform Commercial Code as in effect in the State of New York, have the meanings assigned to them therein.

(i) Reference to a particular “§”, refers to that section of this Agreement unless otherwise indicated.

(j) The words “herein”, “hereof”, “hereunder” and words of like import shall refer to this Agreement as a whole and not to any particular section or subdivision of this Agreement.

§1.3 Accounting Terms and Determinations.

(a) GAAP. Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time; provided that, if Borrower notifies Lender that Borrower requests an amendment to any provision hereof to eliminate the effect of any change occurring after the date hereof in

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GAAP or in the application thereof on the operation of such provision (or if Lender notifies Borrower that Lender requests an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith.

(b) FFO. If Borrower notifies Lender that the definition of FFO has been amended by the Board of Governors of the National Association of Real Estate Investment Trusts after the date of this Agreement and that Borrower requests an amendment to any provision hereof to eliminate the effect of any change occurring after the date hereof in FFO or in the application thereof on the operation of such provision (or if Lender notifies Borrower that Lender requests an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in FFO or in the application thereof, then such provision shall be interpreted on the basis of FFO as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith.

§2. THE REVOLVING CREDIT FACILITY.

§2.1 Revolving Credit Loans.

(a) Subject to the terms and conditions set forth in this Agreement, each of the Lenders severally agrees to lend to the Borrower, and the Borrower may borrow (and repay and reborrow) from time to time between the Closing Date and the Maturity Date upon notice by the Borrower to the Agent given in accordance with §2.7, such sums as are requested by the Borrower for the purposes set forth in §2.9 up to a maximum aggregate principal amount outstanding (after giving effect to all amounts requested) plus the Letters of Credit Outstanding at any one time equal to such Lender’s Revolving Credit Commitment; provided, that, in all events no Default or Event of Default shall have occurred and be continuing; and provided, further, that the outstanding principal amount of the Revolving Credit Loans (after giving effect to all amounts requested) plus the Letters of Credit Outstanding shall not at any time exceed the total Maximum Commitment Amount or cause a violation of the covenant set forth in §9.1. The Revolving Credit Loans shall be made pro rata in accordance with each Lender’s Revolving Credit Commitment Percentage. Each request for a Revolving Credit Loan hereunder shall constitute a representation and warranty by the Borrower that all of the conditions set forth in §10 and §11 have been satisfied on the date of such request. No Lender shall have any obligation to make Revolving Credit Loans to Borrower in the maximum aggregate principal outstanding balance of more than the principal face amount of its Revolving Credit Note.

(b) Upon the request of any Lender, the Revolving Credit Loans of such Lender shall be evidenced by separate promissory notes of the Borrower in substantially the form of Exhibit B hereto (collectively, the “Revolving Credit Notes”), dated of even date with this Agreement (except as otherwise provided in §18.3) and completed with appropriate insertions. One Revolving Credit Note shall be payable to the order of each Lender that requests a Revolving Credit Note, in the principal amount equal to such Lender’s Revolving Credit

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Commitment or, if less, the outstanding amount of all Revolving Credit Loans made by such Lender, plus interest accrued thereon, as set forth below. The Borrower irrevocably authorizes Agent to make or cause to be made, at or about the time of the Drawdown Date of any Revolving Credit Loan or the time of receipt of any payment of principal thereof, an appropriate notation on Agent’s Record reflecting the making of such Revolving Credit Loan or (as the case may be) the receipt of such payment. The outstanding amount of the Revolving Credit Loans set forth on Agent’s Record shall be prima facie evidence of the principal amount thereof owing and unpaid to each Lender, but the failure to record, or any error in so recording, any such amount on Agent’s Record shall not limit or otherwise affect the obligations of the Borrower hereunder or under any Revolving Credit Note to make payments of principal of or interest on any Revolving Credit Note when due. By delivery of any Revolving Credit Notes, there shall not be deemed to have occurred any novation of the indebtedness evidenced by the “Notes” as defined in the A&R Credit Agreement, which indebtedness is instead allocated among the Lenders as of the date hereof and evidenced by the Revolving Credit Notes, if any, in accordance with their respective Revolving Credit Commitment Percentages.

§2.2 The Increased Loan Amount.

(a) Request for Increase. During the term of the Facility, the Borrower shall have the option to increase the Facility Amount by a maximum aggregate amount of up to $85,000,000.00 (the “Increase Option”). Borrower may exercise said Increase Option at any time by providing notice to the Agent (which shall promptly notify the Lenders), provided however, (a) that at the time of the exercise of such option, there is no Default or Event of Default which shall have occurred and be continuing; (b) in no event shall the existence of this Increase Option be deemed a commitment on the part of the Lenders until such time as such Lender in writing increases its commitment or a new Lender issues a written commitment for any such amounts in excess of the existing $215,000,000.00 committed Facility, and then in such event, such increase to the Facility Amount shall only be to the extent of the increased commitment or new commitment amounts; (c) at the time of sending such notice, the Borrowers (in consultation with the Agent) shall specify a reasonable time period within which each Lender is requested to respond as to whether such Lender agrees to increase the amount of its Commitment in accordance with §2.12(b); (d) any such increase shall be in a minimum amount of $10,000,000.00 with minimum increments of $5,000,000.00 above that amount, and a maximum aggregate increase of $85,000,000.00; and (e) any such increase shall be integrated into this Agreement and shall be subject to the same terms and conditions as this Agreement.

(b) Lender Elections to Increase. Each Lender shall notify the Agent within such time period specified in said notice, whether or not it agrees, in its sole discretion, to increase its Commitment and, if so, by what amount (which need not be its pro rata share thereof). Any Lender not responding within such time period shall be deemed to have declined to increase its Commitment.

(c) Notification by Agent; Additional Lenders. The Agent shall notify the Borrowers and each Lender of the Lenders’ responses to each request made hereunder. To achieve the full amount of a requested increase in the Facility Amount and subject to the approval of the Agent and the Issuing Bank (which approvals shall not be unreasonably withheld), the Borrowers may

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also invite additional Eligible Assignees (as defined in §18.1 herein) to become Lenders pursuant to a joinder agreement in form and substance reasonably satisfactory to the Agent and its counsel.

(d) Effective Date and Allocations. If the aggregate Commitments (including due to new Commitments by additional Lenders) are increased in accordance with this §2.2, the Agent and the Borrowers shall determine the effective date (the “Increase Effective Date”) and the final allocation of such increase. The Agent shall promptly notify the Borrowers and the Lenders (including any additional Lenders) of the final allocation of such increase and the Increase Effective Date.

(e) Conditions to Effectiveness of Increase. Any increase in the Facility Amount pursuant to this §2.2 shall be subject to the following conditions:

(i) The Borrowers shall have paid to (A) the Agent, such fees as shall be due to Agent at such time under the Fee Letter, and (B) to each Lender, such fees, if any, as shall have been agreed upon by the Borrower and the Agent.

(ii) As of the Increase Effective Date, no Default or Event of Default then exists and is continuing or would result from such increase in the Facility Amount (including on a pro forma basis relative to financial covenant compliance).

(iii) The Borrowers shall have delivered to the Agent a certificate dated as of the Increase Effective Date (in sufficient copies for each Lender) (A) certifying and attaching the resolutions adopted by the Borrowers approving or consenting to such increase, and (B) certifying that, before and after giving effect to such increase, (1) the representations and warranties of the Borrowers in this Agreement and in each other Loan Document are true and correct on and as of the Increase Effective Date, except to the extent that such representations and warranties specifically refer to an earlier date, in which case, to the knowledge of the Borrowers, they are true and correct as of such earlier date, and except to the extent of changes resulting from transactions contemplated and permitted by this Agreement and changes occurring in the ordinary course of business (in each case to the extent not constituting a Default or Event of Default), (2) no Default or Event of Default exists and is continuing or would result from such increase in the Facility Amount (including on a pro forma basis relative to financial covenant compliance), and (3) the incurrence of Indebtedness in an aggregate principal amount equal to the full Facility Amount after giving effect to all Commitment increases and new Commitments would not result in a breach of, or a default under, any agreement to which any Borrower is a party.

(iv) The Borrowers shall prepay any Committed Loans outstanding on the Increase Effective Date (and pay any additional amounts required pursuant to §4.8) to the extent necessary to keep the outstanding Committed Loans ratable with any revised Commitment allocations arising from any nonratable increase in the Commitments under this §2.2. Notwithstanding any provisions of this Agreement to the contrary, the Borrowers may borrow from the Lenders providing such increase in the Commitments (on a non pro rata basis with Lenders not providing such increase) in order to fund such prepayment.

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(v) The Borrowers will execute and deliver to each applicable Lender that requests one, a new Note in the appropriate stated amount, and will execute and deliver or otherwise provide to the Agent and the Lenders such other documents and instruments consistent with the terms of this Agreement, as the Agent or Lenders reasonably may require.

(f) The provisions of this §2.2 shall not constitute a “commitment” to lend, and the Commitments of the Lenders shall not be increased except in accordance with, and until satisfaction of the provisions of this §2.2 and actual increase of the Commitments as provided herein.

§2.3 Facility Unused Fee.

(a) The Borrower agrees to pay to the Agent for the account of the Lenders in accordance with their respective Revolving Credit Commitment Percentages a facility unused fee calculated at the rate per annum of 40 bps, based upon the average daily amount by which the total Revolving Credit Commitment exceeds the outstanding principal amount of Revolving Credit Loans and the Letters of Credit Outstanding during each calendar quarter or portion thereof calculated on the basis of the actual number of days elapsed in a year of 360 days, commencing on the date hereof and ending on the Maturity Date.

(b) The facility unused fee shall be payable quarterly in arrears on the first day of each calendar quarter for the immediately preceding calendar quarter or portion thereof, on any earlier date on which the applicable Revolving Credit Commitments shall be reduced and on the Maturity Date.

§2.4 Intentionally Deleted.

§2.5 Intentionally Deleted.

§2.6 Interest on Loans.

(a) Each Base Rate Loan shall bear interest for the period commencing with the Drawdown Date thereof and ending on the date on which such Base Rate Loan is repaid or converted to a LIBOR Rate Loan at the rate per annum equal to the sum of the Base Rate plus the Applicable Base Rate Margin.

(b) Each LIBOR Rate Loan shall bear interest for the period commencing with the Drawdown Date thereof and ending on the last day of each Interest Period with respect thereto at the rate per annum equal to the sum of LIBOR determined for such Interest Period plus the Applicable LIBOR Rate Margin.

(c) The Borrower promises to pay interest on each Loan in arrears on each Interest Payment Date with respect thereto.

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(d) Base Rate Loans and LIBOR Rate Loans may be converted to Loans of the other Type as provided in §4.1.

§2.7 Requests for Revolving Credit Loans. Except with respect to the initial Revolving Credit Loan on the Closing Date, the Borrower shall give to the Agent written notice in the form of Exhibit H hereto (or telephonic notice confirmed in writing in the form of Exhibit H hereto; provided that the Agent and the Lenders may rely on such telephonic notice notwithstanding the lack of or discrepant information contained in a written confirmation) of each Revolving Credit Loan requested hereunder (a “Loan Request”) by 10:00 a.m. (Boston time) one Business Day prior to the proposed Drawdown Date with respect to Revolving Credit Base Rate Loans and three (3) Business Days prior to the proposed Drawdown Date with respect to Revolving Credit LIBOR Rate Loans. Each such notice shall specify with respect to the requested Revolving Credit Loan the proposed principal amount of such Revolving Credit Loan, the Type of Revolving Credit Loan, the initial Interest Period (if applicable) for such Revolving Credit Loan and the Drawdown Date. Each such notice shall also contain (i) a general statement as to the purpose for which such Advance shall be used (which purpose shall be in accordance with the terms of §2.9), (ii) a certification by the chief financial officer or other financial officer of the Borrower that the Borrower is and will be in compliance with all covenants under the Loan Documents after giving effect to the making of such Loan, and (iii) a current calculation of the Borrowing Base with such supporting information as the Agent may require adjusted in the best good faith estimate of the Borrower to give effect to the proposed Advance. Promptly upon receipt of any such notice, the Agent shall notify each of the Lenders thereof. Except as provided in this §2.7, each such Loan Request shall be irrevocable and binding on the Borrower and shall obligate the Borrower to accept the Revolving Credit Loan requested from the Lenders on the proposed Drawdown Date; provided that, in addition to the Borrower’s other remedies against any Lender which fails to advance its proportionate share of a requested Revolving Credit Loan, such Loan Request may be revoked by the Borrower by notice received by the Agent no later than the Drawdown Date if any Lender fails to advance its proportionate share of the requested Revolving Credit Loan in accordance with the terms of this Agreement; and provided further that the Borrower shall be liable in accordance with the terms of this Agreement to any Lender which is prepared to advance its proportionate share of the requested Revolving Credit Loan for any costs, expenses or damages actually incurred by such Lender as a result of the Borrower’s election to revoke such Loan Request. Nothing herein shall prevent the Borrower from seeking recourse against any Lender that fails to advance its proportionate share of a requested Revolving Credit Loan as required by this Agreement. Notwithstanding anything to the contrary contained herein, the Borrower may at any time prior to any proposed Drawdown Date, provide written notice to the Agent (the “Full Advance Notice”) instructing Agent not to disburse the requested Advance, or any subsequent Advance, until such time as Agent has received from each Lender, its proportionate share of the requested Revolving Credit Loan in good funds, such that the Agent at the time of the disbursement has received 100% of the proportionate amounts due from each Lender with respect to such Advance. Each Loan Request shall be (a) for a Revolving Credit Base Rate Loan in a minimum aggregate amount of $1,000,000 or an integral multiple of $100,000 in excess thereof; or (b) for a Revolving Credit LIBOR Rate Loan in a minimum aggregate amount of $2,000,000 or an integral multiple of $100,000 in excess thereof; provided, however, that there shall be no more than six (6) LIBOR Rate Loans (including Revolving Credit LIBOR Rate Loans) outstanding at any one time.

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§2.8 Funds for Revolving Credit Loans.

(a) Not later than 1:00 p.m. (Boston time) on the proposed Drawdown Date of any Revolving Credit Loans, each of the Lenders will make available to the Agent, at the Agent’s Head Office, in immediately available funds, the amount of such Lender’s Revolving Credit Commitment Percentage of the amount of the requested Revolving Credit Loans which may be disbursed pursuant to §2.1. Upon receipt from each Lender of such amount, and upon receipt of the documents required by §10 and §11 and the satisfaction of the other conditions set forth herein and therein, to the extent applicable, the Agent will make available to the Borrower the aggregate amount of such Revolving Credit Loans made available to the Agent by the Lenders by crediting such amount to the account of the Borrower maintained at UMB Bank, or to such other account of the Borrower as may be approved by the Agent. The failure or refusal of any Lender to make available to the Agent at the aforesaid time and place on any Drawdown Date the amount of its Revolving Credit Commitment Percentage of the requested Revolving Credit Loans shall not relieve any other Lender from its several obligation hereunder to make available to the Agent the amount of such other Lender’s Revolving Credit Commitment Percentage of any requested Revolving Credit Loans, including any additional Revolving Credit Loans that may be requested subject to the terms and conditions hereof to provide funds to replace those not advanced by the Lender so failing or refusing. In the event of any such failure or refusal, the Lenders not so failing or refusing shall be entitled to a priority position as against the Lender or Lenders so failing or refusing to make available to the Borrower the amount of its or their Revolving Credit Commitment Percentage for such Revolving Credit Loans as provided in §12.5.

(b) Unless the Agent shall have been notified by any Lender prior to the applicable Drawdown Date that such Revolving Credit Lender will not make available to Agent such Revolving Credit Lender’s Revolving Credit Commitment Percentage of a proposed Revolving Credit Loan, the Agent may in its discretion assume that such Lender has made such Revolving Credit Loan available to Agent in accordance with the provisions of this Agreement and the Agent may, if it chooses, in reliance upon such assumption make such Revolving Credit Loan available to the Borrower, and such Lender shall be liable to the Agent for the amount of such advance. If such Lender does not pay such corresponding amount upon the Agent’s demand therefor, the Agent will promptly notify the Borrower, and the Borrower shall promptly pay such corresponding amount to the Agent. The Agent shall also be entitled to recover from the Lender or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Agent to the Borrower to the date such corresponding amount is recovered by the Agent at a per annum rate equal to (i) from the Borrower at the applicable rate for such Revolving Credit Loan or (ii) from a Lender at the Federal Funds Effective Rate. Notwithstanding anything to the contrary contained herein, the Borrower may at any time prior to any proposed Drawdown Date, provide a Full Advance Notice to the Agent instructing Agent not to disburse the requested Advance, or any subsequent Advance, until such time as Agent has received from each Lender, its proportionate share of the requested Revolving Credit Loan, as provided in §2.7 herein.

§2.9 Use of Proceeds. The Borrower will use the proceeds of the Loans solely (a) to refinance indebtedness under the A&R Credit Agreement (b) to provide financing for the

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acquisition, renovation, improvement and development by the Borrower of Real Estate utilized or to be utilized for Megaplex Movie Theatre properties or Entertainment-Related Retail Improvements or other approved properties; (c) for capital improvement projects for Real Estate; (d) for general corporate purposes of Borrower and any Subsidiaries; and (e) for such other purposes as the Required Lenders in their sole discretion from time to time may agree in writing.

§2.10 Letters of Credit.

(a) Subject to the terms and conditions set forth in this Agreement, at any time and from time to time from the Closing Date through the day that is thirty (30) days prior to the Maturity Date, the Issuing Lender shall issue such Letters of Credit as the Borrower may request upon the delivery of a written request in the form of Exhibit I hereto (a “Letter of Credit Request”) to the Issuing Lender, provided that (i) no Default or Event of Default shall have occurred and be continuing, (ii) upon issuance of such Letter of Credit, the Outstanding Letters of Credit (including the amount of drawings made under Letters of Credit but not reimbursed) shall not exceed Seventy Million Dollars ($70,000,000.00), (iii) in no event shall the sum of (A) the Revolving Credit Loans Outstanding and (B) the amount of Letters of Credit Outstanding (after giving effect to all Letters of Credit requested and drawings made under any Letters of Credit but not reimbursed) exceed the total Maximum Commitment Amount, (iv) the conditions and covenants set forth in §§6, 9, 10 and 11 shall have been satisfied, and (v) in no event shall any amount drawn under a Letter of Credit be available for reinstatement or a subsequent drawing under such Letter of Credit. Each Letter of Credit Request shall be for a Letter of Credit in a minimum aggregate amount of $100,000.00. Each Letter of Credit Request shall be executed by an officer of Borrower. The Issuing Lender shall be entitled to conclusively rely on such Person’s authority to request a Letter of Credit on behalf of Borrower. The Issuing Lender shall have no duty to verify the authenticity of any signature appearing on a Letter of Credit Request. The Borrower assumes all risks with respect to the use of the Letters of Credit. Unless the Issuing Lender and the Required Lenders otherwise consent, the term of any Letter of Credit shall not exceed a period of time commencing on the issuance of the Letter of Credit and ending on the date which is fifteen (15) days prior to the Maturity Date (but in any event the term shall not extend beyond the Maturity Date). The amount available to be drawn under any Letter of Credit shall reduce on a dollar-for-dollar basis the amount available to be drawn under the Revolving Credit Commitment as a Revolving Credit Loan.

(b) Each Letter of Credit Request shall be submitted to the Issuing Lender at least ten (10) Business Days (or such shorter period as the Issuing Lender may approve) prior to the date upon which the requested Letter of Credit is to be issued. Each such Letter of Credit Request shall contain (i) a statement as to the purpose for which such Letter of Credit shall be used (which purpose shall be in accordance with the terms of this Agreement), and (ii) a certification by the chief financial or other financial officer of Borrower that the Borrower is and will be in compliance with all covenants under the Loan Documents after giving effect to the issuance of such Letter of Credit. The Borrower shall further deliver to the Issuing Lender such additional applications and documents as the Issuing Lender may require, in conformity with the then standard practices of its letter of credit department, in connection with the issuance of such Letter of Credit; provided that in the event of any conflict, the terms of this Agreement shall control.

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(c) The Issuing Lender shall, if it approves of the content of the Letter of Credit Request (which approval shall not be unreasonably withheld), and subject to the conditions set forth in this Agreement, issue the Letter of Credit on or before ten (10) Business Days following receipt of the documents last due pursuant to §2.10(b). Each Letter of Credit shall be in form and substance reasonably satisfactory to the Issuing Lender in its reasonable discretion. Upon issuance of a Letter of Credit, the Issuing Lender shall provide notice of the issuance of such Letter of Credit to the Lenders and shall provide a copy of such Letter of Credit to any Lender that requests a copy.

(d) Upon the issuance of a Letter of Credit, each Lender shall be deemed to have purchased a participation therein from Issuing Lender in an amount equal to its respective Revolving Credit Commitment Percentage of the amount of such Letter of Credit. No Lender’s obligation to participate in a Letter of Credit shall be affected by any other Lender’s failure to perform as required herein with respect to such Letter of Credit or any other Letter of Credit.

(e) The Borrower shall pay to the Issuing Lender (i) upon issuance of each Letter of Credit, for its own account, a Letter of Credit issuance fee calculated at the rate of one-eighth of one percent (0.125%) per annum of the amount available to be drawn under such Letter of Credit (which fee shall not be less than $1,000.00 in any event), and (ii) for the accounts of the Lenders in accordance with their respective percentage shares of participation in such Letter of Credit, a Letter of Credit fee calculated at the rate per annum equal to the Applicable Margin then applicable to Revolving Credit LIBOR Rate Loans on the amount available to be drawn under such Letter of Credit, which such fees shall be payable in quarterly installments in arrears with respect to each Letter of Credit on the first day of each calendar quarter following the date of issuance and continuing on each quarter or portion thereof thereafter, as applicable, or on any earlier date on which the Revolving Credit Commitments shall terminate and on the expiration or return of any Letter of Credit. In addition, the Borrower shall pay to Issuing Lender for its own account within five (5) days of demand of Issuing Lender the standard issuance, documentation and service charges for Letters of Credit issued from time to time by Issuing Lender.

(f) In the event that any amount is drawn under a Letter of Credit by the beneficiary thereof, the Borrower shall reimburse the Issuing Lender by having such amount drawn treated as an outstanding Revolving Credit Base Rate Loan under this Agreement and the Agent shall promptly notify each Lender by telex, telecopy, telegram, telephone (confirmed in writing) or other similar means of transmission, and each Lender shall promptly and unconditionally pay to the Agent, for the Issuing Lender’s own account, an amount equal to such Lender’s Revolving Credit Commitment Percentage of such Letter of Credit (to the extent of the amount drawn). If and to the extent any Lender shall not make such amount available on the Business Day on which such draw is funded, such Lender agrees to pay such amount to the Agent forthwith on demand, together with interest thereon, for each day from the date on which such draw was funded until the date on which such amount is paid to the Agent, at the Federal Funds Effective Rate until three (3) days after the date on which the Agent gives notice of such draw and at the Federal Funds Effective Rate plus 1% for each day thereafter. Further, such Lender shall be deemed to have assigned any and all payments made of principal and interest on its Loans, amounts due with respect to its participations in Letters of Credit and any other amounts due to it hereunder to the Agent to fund the amount of any drawn Letter of Credit which

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such Lender was required to fund pursuant to this §2.10(f) until such amount has been funded (as a result of such assignment or otherwise). In the event of any such failure or refusal, the Lenders not so failing or refusing shall be entitled to a priority position as against the Lender or Lenders so failing or refusing to make such funds available to the Borrower, for such amounts as provided in §12.5. The failure of any Lender to make funds available to the Agent in such amount shall not relieve any other Lender of its obligation hereunder to make funds available to the Agent pursuant to this §2.10(f).

(g) If after the issuance of a Letter of Credit pursuant to §2.10(c) by the Issuing Lender, but prior to the funding of any portion thereof by a Lender, one of the events described in §12.1(h), (i) or (j) shall have occurred, each Lender will, on the date such Revolving Credit Loan pursuant to §2.10(f) was to have been made, purchase an undivided participation interest in the Letter of Credit in an amount equal to its Revolving Credit Commitment Percentage of the amount of such Letter of Credit. Each Lender will immediately transfer to the Issuing Lender in immediately available funds the amount of its participation and upon receipt thereof the Issuing Lender will deliver to such Lender a Letter of Credit participation certificate dated the date of receipt of such funds and in such amount.

(h) Whenever at any time after the Issuing Lender has received from any Lender any such Lender’s payment of funds under a Letter of Credit and thereafter the Issuing Lender receives any payment on account thereof, then the Issuing Lender will distribute to such Lender its participation interest in such amount (appropriately adjusted in the case of interest payments to reflect the period of time during which such Lender’s participation interest was outstanding and funded); provided, however, that in the event that such payment received by the Issuing Lender is required to be returned, such Lender will return to the Issuing Lender any portion thereof previously distributed by the Issuing Lender to it.

(i) The issuance of any supplement, modification, amendment, renewal or extension to or of any Letter of Credit shall be treated in all respects the same as the issuance of a new Letter of Credit.

(j) Borrower assumes all risks of the acts, omissions, or misuse of any Letter of Credit by the beneficiary thereof. None of Agent, Issuing Lender or any Lender will be responsible for (i) the form, validity, sufficiency, accuracy, genuineness or legal effect of any document submitted by any party in connection with the issuance of any Letter of Credit, even if such document should in fact prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, telegraph, telex or otherwise; (iii) any loss or delay in the transmission or otherwise of any document or draft required by or from a beneficiary in order to make a disbursement under a Letter of Credit or the proceeds thereof; (iv) for the misapplication by the beneficiary of any Letter of Credit of the proceeds of any drawing under such Letter of Credit; and (v) for any consequences arising from causes beyond the control of Agent or any Lender. Provided there exists no negligence or willful misconduct on the part of the Agent, Issuing Lender or any Lender, then none of Agent, Issuing Lender or any Lender will be responsible for (i) failure of any beneficiary of any Letter of Credit to comply fully with the conditions required in order to demand payment under a Letter of Credit; (ii) errors in

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interpretation of technical terms; (iii) the form, validity, sufficiency, accuracy, genuineness or legal effect of any Letter of Credit; and (iv) the form, validity, sufficiency, accuracy, genuineness or legal effect of any instrument transferring or assigning or purporting to transfer or assign any Letter of Credit or the rights or benefits thereunder or proceeds thereof in whole or in part, which may prove to be invalid or ineffective for any reason. Notwithstanding the foregoing, in no event shall the Lender be responsible for any acts of fraud or forgery by Borrower any of its Subsidiaries or any third party in connection with the issuance, transfer, presentment or payment under or in connection with any Letter of Credit. None of the foregoing will affect, impair or prevent the vesting of any of the rights or powers granted to Agent, Issuing Lender or the Lenders hereunder. In furtherance and extension and not in limitation or derogation of any of the foregoing, any act taken or omitted to be taken by Agent, Issuing Lender or the other Lenders in good faith will be binding on Borrower and will not put Agent, Issuing Lender or the other Lenders under any resulting liability to Borrower.

§2.11 Appointment of Borrower Agent. Borrower recognizes that it is advantageous and convenient for them to, and as such, is hereby authorized to, appoint one or more officers of the Borrowers from time to time to act as agent for the Borrower to effect borrowings and other extensions of credit under this Agreement and to designate a Borrower to which proceeds of the borrowings shall be distributed (individually and collectively, the “Borrower Agent”).

(1) Upon appointment of a Borrower Agent, the Borrower shall provide Agent with notice thereof, along with an incumbency certificate and any other required corporate or company authority documents as may be requested by the Agent, including resolutions, as appropriate, properly evidencing the authority of the Borrower Agent. Upon delivery to Agent of all requested authority documents, each Borrower shall be deemed to have irrevocably appointed such Borrower Agent as its agent to effect borrowings, obtain other extensions of credit and to execute instruments and documents and take other actions in the name, or on behalf of, but not as a lender to, such Borrower, as provided or contemplated in this Agreement. Each of the Borrowers represents and covenants that all requests for Loans and Letters of Credit under this Agreement shall be made by either the Borrower or Borrower Agent as agent for the Borrowers, and that the authority of the Borrower Agent so to request Loans and Letters of Credit on behalf of, and to bind, the Borrowers, shall continue unless and until (i) the Agent actually receives written notice of the termination and/or replacement of such authority signed by an executive officer of each of the Borrowers, (ii) this Agreement has been terminated, or (iii) all Obligations of such Borrower have been paid or otherwise satisfied. Notwithstanding any provision to the contrary elsewhere in this Agreement or such other Loan Documents, the Borrower Agent shall not have any duties or responsibilities, except those expressly set forth herein and therein, or any fiduciary relationship with any Borrower and no implied covenants, functions, responsibilities duties, obligations or liabilities shall be read into this Agreement or the other Loan Documents or otherwise exist against the Borrower Agent. Furthermore, in performing his duties under this appointment, the Borrower Agent shall be acting solely as a conduit for money transfers between the Lenders and the Borrowers, and the Borrower Agent shall not make, nor shall he be construed as making, any loans or advances of money under this Agreement to any of the Borrowers.

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(2) Each Borrower further agrees and acknowledges that any Loans which may be made by the Lenders under the Facility provided under this Agreement may be made directly to the designated Borrower notwithstanding any notice or knowledge by the Lenders that such Loan is intended for the use of another Borrower, and the Lenders shall have no responsibility with respect to whether or when the designated Borrower distributes or delivers the proceeds of any Loans to any other Borrower, and payment or delivery by the Agent of the proceeds of such Loans to the designated Borrower shall be deemed to be a payment or delivery to each Borrower. Without limiting the foregoing, each Borrower acknowledges that it shall be directly indebted to the Lenders for each Loan distributed to it by the Borrower Agent as if that Loan had been made directly by the Lenders to the Borrower which received such proceeds, in addition to which the other Borrowers shall be jointly and severally obligated to the Lenders in that amount.

(3) The Agent shall have no responsibility to inquire as to the distribution of Loans and Letters of Credit made by the Agent or Issuing Lender through the Borrower Agent as described herein.

(4) The Borrower Agent and each Borrower agrees, jointly and severally, to indemnify, defend, and to hold the Agent and the Lenders, and any of their Affiliates or any designee harmless from and against any liability, claim, demand, expense, or loss made against the Agent or any Lender, or any of their Affiliates and/or its designees on account of, or arising out of, this Agreement and the transactions contemplated hereby, the Agent’s, Lenders’ and any of their Affiliate’s and/or designee’s reliance upon loan requests submitted by the Borrower Agent and any other action taken by the Agent, any Lender or any of their Affiliates and/or designees hereunder or under any of the Loan Documents or any other agreement with the Borrower Agent and/or the Borrowers and/or any other Person.

(5) The Revolving Credit Facility established in this Agreement constitutes one combined aggregate line of credit for all of the Borrowers.

§3. REPAYMENT OF THE LOANS.

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

§3.2 Mandatory Prepayments. If at any time the sum of the aggregate outstanding principal amount of the Revolving Credit Loans and the Letters of Credit Outstanding exceeds the aggregate Revolving Credit Commitments, or the aggregate outstanding principal balance of

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the Revolving Credit Loans and the Letters of Credit Outstanding exceeds the Borrowing Base, then the Borrower shall immediately pay the amount of such excess to the Agent for the respective accounts of the Lenders, as applicable, for application to the Loans as provided in §3.4, together with any additional amounts payable pursuant to §4.8.

§3.3 Optional Prepayments. The Borrower shall have the right, at its election, to prepay the outstanding amount of the Revolving Credit Loans, as a whole or in part, at any time without penalty or premium; provided, that if any prepayment of all or a portion of the outstanding amount of any LIBOR Rate Loans pursuant to this §3.3 is made on a date that is not the last day of the Interest Period relating thereto, such prepayment shall be accompanied by the payment of any amounts due pursuant to §4.8. The Borrower shall give the Agent, no later than 10:00 a.m., Boston time, at least three (3) days prior written notice of any prepayment pursuant to this §3.3, in each case specifying the proposed date of prepayment of the applicable Revolving Credit Loans and the principal amount to be prepaid.

§3.4 Partial Prepayments. Each partial prepayment of the Loans under §3.3 shall be in a minimum amount of $1,000,000.00 or an integral multiple of $100,000 in excess thereof, and shall be accompanied by the payment of accrued interest on the principal prepaid to the date of payment. Each partial payment under §3.2 and §3.3 shall be in the absence of instruction by the Borrower, first applied to the principal of Revolving Credit Loans, and within each category, first to the principal of Base Rate Loans within such category and then to the principal of LIBOR Rate Loans within such category.

§3.5 Extension Option. The Borrower shall have a one-time option to extend the term of the Facility for a period of one year from the date of the initial Maturity Date (the “Extension Option”) provided that: (i) the Borrower notifies the Agent in writing no less than sixty (60) days, nor more than ninety (90) days, before the initial Maturity Date; (ii) the Borrower is in full compliance with the terms of this Agreement; (iii) no Default, or Event of Default has occurred and is continuing at the time of the notice and as of the commencement of the Extension Option; (iv) an extension fee in the amount of 30 bps multiplied by the Facility Amount is paid to the Agent for the pro rata benefit of the Lenders, and (v) the Borrower delivers a certification by the chief financial or other financial officer of the Borrower that the Borrower is and will be in compliance with all covenants under the Loan Documents after giving effect to the issuance of the Extension Option.

§3.6 Effect of Prepayments. Amounts of the Revolving Credit Loans prepaid under §3.2 and §3.3 prior to the Maturity Date may, provided no Event of Default has occurred and is continuing hereunder, be reborrowed as provided in §2.

§4. CERTAIN GENERAL PROVISIONS.

§4.1 Conversion Options.

(a) The Borrower may elect from time to time to convert any of its outstanding Revolving Credit Loans to a Revolving Credit Loan of another Type and such Revolving Credit Loans shall thereafter bear interest as a Base Rate Loan or a LIBOR Rate Loan, as applicable; provided that (i) with respect to any such conversion of a LIBOR Rate Loan to a Base Rate

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Loan, the Borrower shall give the Agent at least one (1) Business Day’s prior written notice of such election, and such conversion shall only be made on the last day of the Interest Period with respect to such LIBOR Rate Loan; (ii) with respect to any such conversion of a Base Rate Loan to a LIBOR Rate Loan, the Borrower shall give the Agent at least three (3) LIBOR Business Days’ prior written notice of such election and the Interest Period requested for such Loan, the principal amount of the Loan so converted shall be in a minimum aggregate amount of $2,000,000 or an integral multiple of $100,000 in excess thereof and, after giving effect to the making of such Loan, there shall be no more than six (6) LIBOR Rate Loans outstanding at any one time; (iii) no Loan may be converted into a LIBOR Rate Loan when any Event of Default has occurred and is continuing; and (iv) no Loan may be converted into a LIBOR Rate Loan for an Interest Period of greater than one month when any Default has occurred and is continuing. All or any part of the outstanding Revolving Credit Loans of any Type may be converted as provided herein, provided that no partial conversion shall result in a Revolving Credit Base Rate Loan in a principal amount of less than $1,000,000 or a Revolving Credit LIBOR Rate Loan in a principal amount of less than $2,000,000 and that the principal amount of each Loan shall be in an integral multiple of $100,000. On the date on which such conversion is being made, each Lender shall take such action as is necessary to transfer its Commitment Percentage of such Loans to its Domestic Lending Office or its LIBOR Lending Office, as the case may be. Each Conversion/Continuation Request relating to the conversion of a Base Rate Loan to a LIBOR Rate Loan shall be irrevocable by the Borrower.

(b) Any LIBOR Rate Loan may be continued as such Type upon the expiration of an Interest Period with respect thereto by compliance by the Borrower with the terms of this §4.1; provided that Borrower shall give Agent at least three (3) LIBOR Business Days’ prior written notice of such election and the Interest Period requested for such Loan, provided further that no LIBOR Rate Loan may be continued as such for an Interest Period of greater than one month when any Default has occurred and is continuing, and no LIBOR Rate Loan may be continued as such for any period of time when any Event of Default has occurred and is continuing, but shall be automatically converted to a Base Rate Loan on the last day of the Interest Period relating thereto ending during the continuance of any Event of Default. After a Default or Event of Default has been cured, Borrower may convert to or continue any LIBOR Rate Loan as otherwise provided herein.

(c) In the event that the Borrower does not notify the Agent of its election hereunder with respect to any LIBOR Rate Loan, such Loan shall be automatically converted at the end of the applicable Interest Period to a LIBOR Rate Loan with a one month Interest Period.

§4.2 Closing Fee. The Borrower shall pay to KeyBank on the Closing Date such amount as is set forth in a separate agreement regarding any such fees between Borrower and KeyBank (“Separate Agreement Regarding Fees”).

§4.3 Agent’s Fee. The Borrower shall pay to the Agent, for the Agent’s own account, an annual Agent’s fee (the “Agent’s Fee”) as shall be provided in the Separate Agreement Regarding Fees. The Agent’s Fee shall be payable quarterly in arrears on the first day of each calendar quarter for the immediately preceding calendar quarter or portion thereof. The Agent’s Fee shall also be paid upon the Maturity Date or earlier termination of the Commitments. The Agent’s Fee for any partial quarter shall be prorated. The parties hereto hereby acknowledge and agree that no Agent’s Fee shall be due at the initial closing of this Agreement.

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§4.4 Funds for Payments.

(a) All payments of principal, interest, facility fees, Letter of Credit fees, closing fees and any other amounts due hereunder or under any of the other Loan Documents shall be made to the Agent, for the respective accounts of the Lenders and the Agent, as the case may be, at the Agent’s Head Office, not later than 1:00 p.m. (Boston time) on the day when due, in each case in lawful money of the United States in immediately available funds. The Agent is hereby authorized to charge the accounts of the Borrower with KeyBank, on the dates when the amount thereof shall become due and payable, with the amounts of the principal of and interest on the Loans and all fees, charges, expenses and other amounts owing to the Agent and/or the Lenders under the Loan Documents.

(b) All payments by the Borrower hereunder and under any of the other Loan Documents shall be made without setoff or counterclaim and free and clear of and without deduction for any taxes (other than income or franchise taxes imposed on any Lender), levies, imposts, duties, charges, fees, deductions, withholdings, compulsory loans, restrictions or conditions of any nature now or hereafter imposed or levied by any jurisdiction or any political subdivision thereof or taxing or other authority therein unless the Borrower is compelled by law to make such deduction or withholding. If any such obligation is imposed upon the Borrower with respect to any amount payable by it hereunder or under any of the other Loan Documents, the Borrower will pay to the Agent, for the account of the Lenders or (as the case may be) the Agent, on the date on which such amount is due and payable hereunder or under such other Loan Document, such additional amount in Dollars as shall be necessary to enable the Lenders or the Agent to receive the same net amount which the Lenders or the Agent would have received on such due date had no such obligation been imposed upon the Borrower. The Borrower will deliver promptly to the Agent certificates or other valid vouchers for all taxes or other charges required to be deducted from or paid with respect to payments made by the Borrower hereunder or under any other Loan Document.

(c) Each Lender organized under the laws of a jurisdiction outside the United States, if requested in writing by the Borrower (but only so long as such Lender remains lawfully able to do so), shall provide the Borrower with such duly executed form(s) or statement(s) which may, from time to time, be prescribed by law and, which, pursuant to applicable provisions of (i) an income tax treaty between the United States and the country of residence of such Lender, (ii) the Code, or (iii) any applicable rules or regulations in effect under (i) or (ii) above, indicates the withholding status of such Lender; provided that nothing herein (including without limitation the failure or inability to provide such form or statement) shall relieve the Borrower of its obligations under §4.4(b). In the event that the Borrower shall have delivered the certificates or vouchers described above for any payments made by the Borrower and such Lender receives a refund of any taxes paid by the Borrower pursuant to §4.4(b), such Lender will pay to the Borrower the amount of such refund promptly upon receipt thereof, to the extent of any payment made by Borrower; provided that if at any time thereafter such Lender is required to return such refund, the Borrower shall promptly repay to such Lender the amount of such refund.

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(d) The obligations of the Borrower to the Lenders under this Agreement (and of the Lenders to make payments to the Issuing Lender with respect to Letters of Credit) shall be absolute, unconditional and irrevocable, and shall be paid and performed strictly in accordance with the terms of this Agreement, under all circumstances whatsoever, including, without limitation, the following circumstances: (i) any lack of validity or enforceability of this Agreement, any Letter of Credit, any of the other Loan Documents; (ii) any improper use which may be made of any Letter of Credit or any improper acts or omissions of any beneficiary or transferee of any Letter of Credit in connection therewith; (iii) the existence of any claim, set-off, defense or any right which the Borrower or any of its Subsidiaries or Affiliates may have at any time against any beneficiary or any transferee of any Letter of Credit (or persons or entities for whom any such beneficiary or any such transferee may be acting) or any of the Lenders (other than the defense of payment to the Lenders in accordance with the terms of this Agreement) or any other person, whether in connection with any Letter of Credit, this Agreement, any other Loan Document, or any unrelated transaction; (iv) any draft, demand, certificate, statement or any other documents presented under any Letter of Credit proving to be insufficient, forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect whatsoever; (v) any breach of any agreement between Borrower or any of its Subsidiaries or Affiliates and any beneficiary or transferee of any Letter of Credit; (vi) any irregularity in the transaction with respect to which any Letter of Credit is issued, including any fraud by the beneficiary or any transferee of such Letter of Credit; (vii) payment by the Issuing Lender under any Letter of Credit against presentation of a sight draft, demand, certificate or other document which does not comply with the terms of such Letter of Credit, provided that such payment shall not have constituted negligence or willful misconduct on the part of the Issuing Lender; (viii) any non-application or misapplication by the beneficiary of a Letter of Credit of the proceeds of such Letter of Credit; (ix) the legality, validity, form, regularity or enforceability of the Letter of Credit; (x) the failure of any payment by Issuing Lender to conform to the terms of a Letter of Credit (if, in Issuing Lender’s good faith judgment, such payment is determined to be appropriate and Issuing Lender has not been negligent in such determination); (xi) the surrender or impairment of any security for the performance or observance of any of the terms of any of the Loan Documents; (xii) the occurrence of any Default or Event of Default; and (xiii) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, provided that such other circumstances or happenings shall not have been the result of negligence or willful misconduct on the part of the Issuing Lender.

§4.5 Computations. All computations of interest on the Loans and of other fees to the extent applicable shall be based on a 360-day year and paid for the actual number of days elapsed. Except as otherwise provided in the definition of the term “Interest Period” with respect to LIBOR Rate Loans, whenever a payment hereunder or under any of the other Loan Documents becomes due on a day that is not a Business Day, the due date for such payment shall be extended to the next succeeding Business Day, and interest shall accrue during such extension. The Outstanding Loans as reflected on the records of the Agent from time to time shall be considered prima facie evidence of such amount.

§4.6 Inability to Determine LIBOR. In the event that, prior to the commencement of any Interest Period relating to any LIBOR Rate Loan, the Agent shall determine that adequate and reasonable methods do not exist for ascertaining LIBOR for such Interest Period, the Agent

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shall forthwith give notice of such determination (which shall be conclusive and binding on the Borrower and the Lenders absent manifest error) to the Borrower and the Lenders. In such event (a) any Loan Request with respect to a LIBOR Rate Loan shall be automatically withdrawn and shall be deemed a request for a Base Rate Loan and (b) each LIBOR Rate Loan will automatically, on the last day of the then current Interest Period applicable thereto, become a Base Rate Loan, and the obligations of the Lenders to make LIBOR Rate Loans shall be suspended until the Agent determines that the circumstances giving rise to such suspension no longer exist, whereupon the Agent shall so notify the Borrower and the Lenders.

§4.7 Illegality. Notwithstanding any other provisions herein, if any present or future law, regulation, treaty or directive or the interpretation or application thereof shall make it unlawful, or any central bank or other governmental authority having jurisdiction over a Lender or its LIBOR Lending Office shall assert that it is unlawful, for any Lender to make or maintain LIBOR Rate Loans, such Lender shall forthwith give notice of such circumstances to the Agent and the Borrower and thereupon (a) the commitment of the Lenders to make LIBOR Rate Loans shall forthwith be suspended and (b) the LIBOR Rate Loans then outstanding shall be converted automatically to Base Rate Loans on the last day of each Interest Period applicable to such LIBOR Rate Loans or within such earlier period as may be required by law. Notwithstanding the foregoing, before giving such notice, the applicable Lender shall designate a different lending office if such designation will avoid the need for giving such notice and will not, in the judgment of such Lender, be otherwise materially disadvantageous to such Lender. In the event that the applicable Lender shall be replaced pursuant to §4.15, then to the extent the terms of this §4.7 are not otherwise applicable, Borrower again shall be permitted to request LIBOR Rate Loans.

If at any time, it shall be unlawful or impossible for any Lender to make, maintain or fund its LIBOR Rate Loans, the Borrowers shall have the right, upon five (5) Business Day’s notice to the Agent, to either (x) cause a bank, reasonably acceptable to the Agent, to offer to purchase the Commitments of such Lender for an amount equal to such Lender’s outstanding Loans, together with all fees, accrued interest and other amounts payable to such Lender and to become a Lender hereunder, which offer such Lender is hereby required to accept, or (y) to repay in full all Loans then outstanding of such Lender, together with interest and all other amounts due thereon, upon which event, such Lender’s Commitments shall be deemed to be cancelled, and the Facility Amount shall be reduced by the dollar amount of any such reduction of the Commitments pursuant to this §4.7.

§4.8 Additional Interest. If any LIBOR Rate Loan or any portion thereof is repaid or is converted to a Base Rate Loan for any reason on a date which is prior to the last day of the Interest Period applicable to such LIBOR Rate Loan, or if repayment of the Loans has been accelerated as provided in §12.1, the Borrower will pay to the Agent upon demand for the account of the applicable Lenders in accordance with their respective Commitment Percentages in addition to any amounts of interest otherwise payable hereunder, any amounts required to compensate such Lenders for any losses, costs or expenses which may reasonably be incurred as a result of such payment or conversion, including, without limitation, an amount equal to daily interest for the unexpired portion of such Interest Period on the LIBOR Rate Loan or portion thereof so repaid or converted at a per annum rate equal to the excess, if any, of (a) the interest rate calculated on the basis of LIBOR applicable to such LIBOR Rate Loan (including any

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spread over LIBOR) minus (b) the yield obtainable by the Agent upon the purchase of debt securities customarily issued by the Treasury of the United States of America which have a maturity date most closely approximating the last day of such Interest Period (it being understood that the purchase of such securities shall not be required in order for such amounts to be payable) and that a Lender shall not be obligated or required to have actually obtained funds at LIBOR or to have actually reinvested such amounts as described above. Such amount shall be reduced to present value by using the rate on the United States Treasury Securities described in the foregoing sentence and the number of days remaining in the unexpired portion of the Interest Period in question.

§4.9 Additional Costs, Etc. Notwithstanding anything herein to the contrary, if any present or future applicable law, which expression, as used herein, includes statutes, rules and regulations thereunder and interpretations thereof by any competent court or by any governmental or other regulatory body or official charged with the administration or the interpretation thereof and requests, directives, instructions and notices at any time or from time to time hereafter made upon or otherwise issued to any Lender or the Agent by any central bank or other fiscal, monetary or other authority (whether or not having the force of law), shall:

(a) subject any Lender or the Agent to any tax, levy, impost, duty, charge, fee, deduction or withholding of any nature with respect to this Agreement, the other Loan Documents, such Lender’s Commitment, a Letter of Credit or the Loans (other than taxes based upon or measured by the gross receipts, income or profits of such Lender or the Agent or its franchise tax), or

(b) materially change the basis of taxation (except for changes in taxes on gross receipts, income or profits or its franchise tax) of payments to any Lender of the principal of or the interest on any Loans or any other amounts payable to any Lender under this Agreement or the other Loan Documents, or

(c) impose or increase or render applicable any special deposit, reserve, assessment, liquidity, capital adequacy or other similar requirements (whether or not having the force of law and which are not already reflected in any amounts payable by Borrower hereunder) against assets held by, or deposits in or for the account of, or loans by, or commitments of an office of any Lender, or

(d) impose on any Lender or the Agent any other conditions or requirements with respect to this Agreement, the other Loan Documents, the Loans, such Lender’s Commitment, a Letter of Credit or any class of loans or commitments of which any of the Loans or such Lender’s Commitment forms a part;

and the result of any of the foregoing is:

(i) to increase the cost to any Lender of making, funding, issuing, renewing, extending or maintaining any of the Loans, or such Lender’s Commitment, or

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(ii) to reduce the amount of principal, interest or other amount payable to any Lender or the Agent hereunder on account of such Lender’s Commitment or any of the Loans or the Letters of Credit, or

(iii) to require any Lender or the Agent to make any payment or to forego any interest or other sum payable hereunder, the amount of which payment or foregone interest or other sum is calculated by reference to the gross amount of any sum receivable or deemed received by such Lender or the Agent from the Borrower hereunder,

then, and in each such case, the Borrower will, within fifteen (15) days of demand made by such Lender or (as the case may be) the Agent at any time and from time to time and as often as the occasion therefor may arise, pay to such Lender or the Agent such additional amounts as such Lender or the Agent shall determine in good faith to be sufficient to compensate such Lender or the Agent for such additional cost, reduction, payment or foregone interest or other sum. Each Lender and the Agent in determining such amounts may use any reasonable averaging and attribution methods generally applied by such Lender or the Agent.

§4.10 Capital Adequacy. If after the date hereof any Lender determines that (a) the adoption of or change in any law, rule, regulation or guideline regarding capital requirements for banks or bank holding companies or any change in the interpretation or application thereof by any governmental authority charged with the administration thereof, or (b) compliance by such Lender or its parent bank holding company with any guideline, request or directive of any such entity regarding capital adequacy (whether or not having the force of law), has the effect of reducing the return on such Lender’s or such holding company’ s capital as a consequence of such Lender’s commitment to make Loans or participate in Letters of Credit hereunder to a level below that which such Lender or holding company could have achieved but for such adoption, change or compliance (taking into consideration such Lender’s or such holding company’ s then existing policies with respect to capital adequacy and assuming the full utilization of such entity’ s capital) by any amount deemed by such Lender to be material, then such Lender may notify the Borrower thereof. The Borrower agrees to pay to such Lender the amount of such reduction in the return on capital as and when such reduction is determined, upon presentation by such Lender of a statement of the amount setting forth the Lender’s calculation thereof. In determining such amount, such Lender may use any reasonable averaging and attribution methods generally applied by such Lender.

§4.11 Indemnity of Borrower. The Borrower agrees to indemnify each Lender and to hold each Lender harmless from and against any loss, cost or expense that such Lender may sustain or incur as a consequence of (a) default by the Borrower in payment of the principal amount of or any interest on any LIBOR Rate Loans as and when due and payable, including any such loss or expense arising from interest or fees payable by such Lender to lenders of funds obtained by it in order to maintain its LIBOR Rate Loans, or (b) default by the Borrower in making a borrowing or a conversion after the Borrower has given (or is deemed to have given) a Loan Request or a Conversion/Continuation Request.

§4.12 Default Interest; Late Charge. Following the occurrence and during the continuance of any Event of Default, and regardless of whether or not the Agent or the Lenders

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shall have accelerated the maturity of the Loans, all Loans shall bear interest payable on demand at a rate per annum equal to four percent (4%) above the rate that would otherwise be applicable at such time (the “Default Rate”), until such amount shall be paid in full (after as well as before judgment). In addition, the Borrower shall pay a late charge equal to five percent (5.0%) of any amount of interest and/or principal payable on the Loans or any other amounts payable hereunder or under the Loan Documents, which is not paid by the Borrower within ten (10) days of the date when due.

§4.13 Certificate. A certificate setting forth any amounts payable pursuant to §4.8, §4.9, §4.10, §4.11 or §4.12 and a reasonably detailed explanation of such amounts which are due, submitted by any Lender or the Agent to the Borrower, shall be conclusive in the absence of manifest error.

§4.14 Limitation on Interest. Notwithstanding anything in this Agreement or the other Loan Documents to the contrary, all agreements between or among the Borrower, the Lenders and the Agent, whether now existing or hereafter arising and whether written or oral, are hereby limited so that in no contingency, whether by reason of acceleration of the maturity of any of the Obligations or otherwise, shall the interest contracted for, charged or received by the Lenders exceed the maximum amount permissible under applicable law. If, from any circumstance whatsoever, interest would otherwise be payable to the Lenders in excess of the maximum lawful amount, the interest payable to the Lenders shall be reduced to the maximum amount permitted under applicable law; and if from any circumstance the Lenders shall ever receive anything of value deemed interest by applicable law in excess of the maximum lawful amount, an amount equal to any excessive interest shall be applied to the reduction of the principal balance of the Obligations and to the payment of interest or, if such excessive interest exceeds the unpaid balance of principal of the Obligations, such excess shall be refunded to the Borrower. All interest paid or agreed to be paid to the Lenders shall, to the extent permitted by applicable law, be amortized, prorated, allocated and spread throughout the full period until payment in full of the principal of the Obligations (including the period of any renewal or extension thereof) so that the interest thereon for such full period shall not exceed the maximum amount permitted by applicable law. This Section shall control all agreements between or among the Borrower, the Lenders and the Agent.

§4.15 Certain Provisions Relating to Increased Costs. If a Lender gives notice of the existence of the circumstances set forth in §4.7 or any Lender requests compensation for any losses or costs to be reimbursed pursuant to any one or more of the provisions of §4.4, §4.9 or §4.10, then, upon request of Borrower, such Lender, as applicable, shall use reasonable efforts in a manner consistent with such institution’s practice in connection with loans like the Loan of such Lender to eliminate, mitigate or reduce amounts that would otherwise be payable by Borrower under the foregoing provisions, provided that such action would not be otherwise prejudicial to such Lender, including, without limitation, by designating another of such Lender’s offices, branches or affiliates; the Borrower agreeing to pay all reasonably incurred costs and expenses incurred by such Lender in connection with any such action. Notwithstanding anything to the contrary contained herein, if no Default or Event of Default shall have occurred and be continuing, and if any Lender has given notice of the existence of the circumstances set forth in §4.7 or has requested payment or compensation for any losses or costs to be reimbursed pursuant

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to any one or more of the provisions of §4.4, §4.9 or §4.10 (each, an “Affected Lender”), then, within forty-five (45) days after such notice or request for payment or compensation, Borrower shall have the one-time right as to such Affected Lender, to be exercised by delivery of written notice delivered to the Agent and the Affected Lender within forty-five (45) days of receipt of such notice, to elect to cause the Affected Lender to transfer its Commitment. The Agent shall promptly notify the remaining Lenders that each of such Lenders shall have the right, but not the obligation, to acquire a portion of the Commitment at par, based upon their relevant pro rata Commitment Percentages, of the Affected Lender (or if any of such Lenders does not elect to purchase its pro rata share, then to such remaining Lenders in such proportion as approved by the Agent). In the event that the Lenders do not elect to acquire all of the Affected Lender’s Commitment, then the Agent shall endeavor to obtain a new lender which shall be an Eligible Assignee to acquire such remaining Commitment. Upon any such purchase of the Commitment of the Affected Lender, the Affected Lender’s interest in the Obligations and its rights hereunder and under the Loan Documents shall terminate at the date of purchase, and the Affected Lender shall promptly execute all documents reasonably requested to surrender and transfer such interest. The purchase price for the Affected Lender’s Commitment shall equal any and all amounts outstanding and owed by Borrower to the Affected Lender, including principal and all accrued and unpaid interest or fees including any accrued, unbilled LIBOR breakage fees. In the event that no new Lender is located to purchase the Affected Lender’s Commitment, then Borrower shall have the option after receipt of written notice from Agent to Borrower that no new Lender has been obtained, to terminate the Commitment of the Affected Lender and prepay in full all amounts outstanding and owed by Borrower to the Affected Lender, including principal and all accrued and unpaid interest or fees including any accrued, unbilled LIBOR breakage fees.

§5. BORROWING BASE PROPERTY AND BORROWING BASE PROPERTY REPLACEMENT.

§5.1 Intentionally Deleted.

§5.2 Intentionally Deleted.

§5.3 Replacement or Addition of Borrowing Base Properties.

(a) After the Closing Date, the Borrower shall have the right, subject to the consent of the Required Lenders and the satisfaction by the Borrower of the conditions set forth in this §5.3, to add Potential Borrowing Base Property to the Borrowing Base Property or to replace any Borrowing Base Property with Potential Borrowing Base Property. The addition or replacement of Potential Borrowing Base Property to or for the then existing Borrowing Base Property shall be referred to as “Borrowing Base Property Replacement”. In the event the Borrower desires to effect a Borrowing Base Property Replacement as aforesaid, the Borrower shall provide written notice to the Agent of such request (which the Agent shall promptly furnish to the Lenders), together with all other Eligible Real Estate Qualification Documents. Within ten (10) Business Days from the date of the receipt of the Eligible Real Estate Qualification Documents, each Lender shall advise the Agent as to whether such Lender approves the Potential Borrowing Base Property. If a Lender fails to respond to the Agent within such ten (10)

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Business Day period, such Lender shall be deemed to have approved such Potential Borrowing Base Property. Notwithstanding the foregoing, no Potential Borrowing Base Property shall be included as Borrowing Base Property unless and until the following conditions precedent shall have been satisfied:

(i) such Potential Borrowing Base Property shall be Eligible Real Estate;

(ii) the Borrower shall have executed and/or delivered to the Agent all Eligible Real Estate Qualification Documents, all of which instruments, documents or agreements shall be in form and substance reasonably satisfactory to the Agent in its reasonable discretion; and

(iii) after giving effect to the inclusion of such Potential Borrowing Base Property, each of the representations and warranties made by or on behalf of the Borrower contained in this Agreement, the other Loan Documents or in any document or instrument delivered pursuant to or in connection with this Agreement shall be true in all material respects both as of the date as of which it was made and shall also be true as of the time of the replacement or addition of Borrowing Base Properties, with the same effect as if made at and as of that time (it being understood and agreed that any representation or warranty which by its terms is made as of a specified date shall be required to be true and correct only as of such specified date), and no Default or Event of Default shall have occurred and be continuing, and the Agent shall have received a certificate of the Borrower to such effect.

(iv) without limiting any of the foregoing, upon the occurrence of a Borrowing Base Property Replacement, Borrower must provide to Agent a Borrowing Base Certificate reflective of the contemplated transaction evidencing that the sum of the amount Outstanding under the Loans plus the Letters of Credit does not exceed the Borrowing Base.

(v) Borrower shall pay any and all reasonable out-of-pocket expenses and costs, including attorneys fees, incurred by Agent in connection with review and/or closing of the Potential Borrowing Base Property.

The decision of the Required Lenders to grant or withhold their consent to the acceptance of Potential Borrowing Base Property under this §5.3 shall be based on the factors set forth in this §5.3 and the other provisions of this Agreement relating to Eligible Real Estate and Borrowing Base Properties, provided however, that any such decision hereunder shall be in the sole discretion of the Required Lenders.

§5.4 Removal of Borrowing Base Property. Provided no Default or Event of Default shall have occurred hereunder and be continuing (or would exist immediately after giving effect to the transactions contemplated by this §5.4), subject to the consent of the Agent and the Required Lenders in their reasonable discretion, Borrower shall be permitted to remove a Borrowing Base Property from the Borrowing Base upon the request of the Borrower and subject to and upon the following terms and conditions:

(a) the Borrower shall deliver to the Agent written notice of its desire to remove such property not later than ten (10) days prior to the date on which such removal is to be effected;

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(b) the Borrower shall submit to the Agent with such request, a Borrowing Base Certificate reflective of the contemplated transaction evidencing that the sum of the amount Outstanding under the Loans plus the Letters of Credit does not exceed the Borrowing Base;

(c) the Borrower shall pay all reasonable costs and expense of the Agent in connection with such removal, including without limitation, reasonable attorney’s fees;

(d) the Borrower shall pay to the Agent for the account of the Lenders, such amount as is necessary to provide that the amount Outstanding under the Facility plus the Letters of Credit does not exceed the Borrowing Base after giving effect to such removal; said removal price shall be applied to reduce the outstanding principal balance of the Loans as provided in §3.4.

§6. REPRESENTATIONS AND WARRANTIES.

The Borrower represents, warrants and covenants to the Agent and the Lenders as follows:

§6.1 Corporate, Limited Liability Company Authority, Etc.

(a) Borrower-SPE as a Special Purpose Entity. Until the Loan and all other obligations of Borrower to Lender under the Loan Documents have been paid in full and the Lenders have no further obligations to make any Loans or issue any Letters of Credit hereunder, each Borrower hereby represents, warrants and covenants that each Borrower-SPE is and shall continue to be, a Special Purpose Entity. As used herein “Special Purpose Entity” and/or “SPE” means a corporation or limited liability company which:

(i) is organized solely for the purpose of acquiring, financing, owning, holding, developing, selling, leasing, transferring, exchanging, managing and operating the Borrowing Base Properties owned by it (including, without limitation, EPR Senior Property Loans and property encumbered by EPR Senior First Mortgages), entering into this Agreement and the other Loan Documents with the Agent and the Lenders, refinancing the Borrowing Base Properties owned by it in connection with a permitted repayment of the Loan, and transacting lawful business that is incident, necessary and appropriate to accomplish the foregoing;

(ii) is not engaged and will not engage in any business unrelated to the acquisition, financing, ownership, development, management or operation of the Borrowing Base Properties (including, without limitation, EPR Senior Property Loans and property encumbered by EPR Senior First Mortgages) or other activities described in subpart (i) immediately above;

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(iii) does not have and will not have any assets other than those related to the Borrowing Base Properties and equity interests in Subsidiaries or other Affiliates of EPR;

(iv) has not engaged, sought or consented to and will not engage in, seek or consent to any dissolution, winding up, liquidation, consolidation, merger, sale of all or substantially all of its assets or amend its articles of incorporation, certificate of formation with respect to the matters set forth in this definition;

(v) has a certificate of incorporation or articles that provide that such entity will not: (1) dissolve, merge, liquidate, consolidate; (2) sell all or substantially all of its assets; (3) engage in any other business activity, or amend its organizational documents with respect to the matters set forth in this definition without the consent of the Required Lenders; or (4) without the affirmative vote of one Independent Director and all other directors of the corporation file a bankruptcy or insolvency petition or otherwise institute insolvency proceedings with respect to itself or to any other entity in which it has a direct or indirect legal or beneficial ownership interest;

(vi) is and will remain solvent and pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its assets as the same shall become due, and is maintaining and will maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;

(vii) has not failed and will not fail to correct any known misunderstanding regarding the separate identity of such entity;

(viii) has maintained and will maintain its accounts (including without limitation, payroll accounts), books and records separate from any other Person and will file its own tax returns, except to the extent that it is required to file consolidated tax returns by law;

(ix) has maintained and will maintain its own records, books, resolutions and agreements;

(x) has not commingled and will not commingle its funds or assets with those of any other Person and has not participated and will not participate in any cash management system with any other Person;

(xi) has held and will hold its assets in its own name;

(xii) has conducted and will conduct its business in its own name;

(xiii) has maintained and will maintain its financial statements, accounting records and other entity documents separate from any other Person and has not permitted and will not permit its assets to be listed as assets on the

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financial statement of any other entity except as required by GAAP; provided, however, that any such consolidated financial statement shall contain a note indicating that its separate assets and liabilities are neither available to pay the debts of the consolidated entity nor constitute obligations of the consolidated entity;

(xiv) has paid and will pay its own liabilities and expenses, including the salaries of its own employees, out of its own funds and assets, and has maintained and will maintain a sufficient number of employees in light of its contemplated business operations;

(xv) has observed and will observe all corporate formalities;

(xvi) has and will have no Indebtedness other than (i) related to the Loan, (ii) liabilities incurred in the ordinary course of business relating to the ownership and operation of the Borrowing Base Properties and the routine administration of such corporation, in amounts not to exceed $250,000 which liabilities are not more than sixty (60) days past the date incurred, are not evidenced by a note and are paid when due, and which amounts are normal and reasonable under the circumstances, and (iii) such other liabilities that are permitted pursuant to this Agreement;

(xvii) has not and will not assume or guarantee or become obligated for the debts of any other Person or hold out its credit as being available to satisfy the obligations of any other Person except as existing or permitted pursuant to this Agreement;

(xviii) has not and will not acquire obligations of its shareholders or any other Affiliate;

(xix) has allocated and will allocate fairly and reasonably any overhead expenses that are shared with any Affiliate, including paying for shared office space and services performed by any employee of an Affiliate;

(xx) maintains and uses its own separate identity (and promptly corrects any misunderstandings regarding separate identities) on all correspondence and other documentation, including without limitation, checks and invoices utilized by the Special Purpose Entity or utilized to collect its funds or pay its expenses shall bear its own name and shall not bear the name of any other entity unless such entity is clearly designated as being the Special Purpose Entity’s agent;

(xxi) has not pledged and will not pledge its assets for the benefit of any other Person except in favor of Lender under the Loan Documents and as may otherwise be permitted under this Agreement;;

(xxii) has held itself out and identified itself and will hold itself out and identify itself as a separate and distinct entity under its own name;

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(xxiii) has maintained and will maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any other Person;

(xxiv) has not made and will not make loans to any Person or hold evidence of indebtedness issued by any other Person or entity (other than EPR Senior Property Loans and cash and investment-grade securities issued by an entity that is not an Affiliate of or subject to common ownership with such entity);

(xxv) has not identified and will not identify its partners, members or shareholders, or any Affiliate of any of them, as a division or part of it, and has not identified itself and shall not identify itself as a division of any other Person;

(xxvi) has not entered into or been a party to, and will not enter into or be a party to, any transaction with its shareholders or Affiliates except (A) in the ordinary course of its business and on terms which are intrinsically fair, commercially reasonable and are no less favorable to it than would be obtained in a comparable arm’s-length transaction with an unrelated third party, and (B) in connection with this Agreement; provided, however, that, if no Default or Event of Default then exists or would result therefrom, nothing in this Agreement shall prohibit EPR or any of its Subsidiaries from transferring to any Affiliates its ownership interest in any Subsidiaries which, at the time of such transfer, no longer own any Borrowing Base Properties;

(xxvii) has not and will not have any obligation to, and will not, indemnify its officers, directors or shareholders, as the case may be, unless such an obligation is fully subordinated to the Loan and will not constitute a claim against it in the event that cash flow in excess of the amount required to pay the Loan is insufficient to pay such obligation;

(xxviii) shall consider the interests of its creditors in connection with all corporate actions;

(xxix) has complied and will comply with all of the terms and provisions contained in its organizational documents. The statement of facts contained in its organizational documents are true and correct and will remain true and correct;

(xxx) has and shall maintain at least one (1) Independent Director and caused the articles of incorporation for such Person to require at least one (1) Independent Director;

(xxxi) shall not pledge its assets for the benefit of any other Person, other than with respect to this Agreement and the Loan Documents and as otherwise permitted under this Agreement, nor shall it agree with any other party that it shall not pledge its assets for the benefit of any other Person; and

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(xxxii) shall not voluntarily file or consent to the filing of a petition for bankruptcy, insolvency, reorganization, assignment for the benefit of creditors or similar proceeding under any federal or state bankruptcy, insolvency, reorganization or other similar law or otherwise seek any relief under any laws relating to the relief of debts or the protection of debtors generally, or admit in writing its inability to pay its debts generally as they become due, or take action in furtherance of any such action, without the consent of each holder of any interest in such entity, and without the unanimous written consent of each applicable Independent Director.

(b) EPR as a REIT. EPR is a Maryland real estate investment trust duly organized pursuant to an Amended and Restated Declaration of Trust filed with the Maryland Department of Assessments and Taxation, and is in good standing under the laws of Maryland. EPR conducts its business in a manner which enables it to qualify as a real estate investment trust under, and to be entitled to the benefits of, §856 of the Code, and has elected to be treated as and is entitled to the benefits of a real estate investment trust thereunder. EPR (i) has all requisite power to own its property and conduct its business as now conducted and as presently contemplated, and (ii) is in good standing and duly authorized to do business in the jurisdictions where the Borrowing Base Properties directly owned or leased by it are located and in each other jurisdiction where a failure to be so qualified in such other jurisdiction could have a materially adverse effect on the business, assets or financial condition of EPR. EPR has not taken any action that would prevent it from maintaining its qualification as a REIT for its tax year ending December 31, 2009, or as of the date of this Agreement, from maintaining such qualification at all times during the term of the Loan.

(c) Intentionally Deleted.

(d) Intentionally Deleted.

(e) Borrower-SPE. Pershing is a Missouri limited liability company duly organized pursuant to articles of organization filed with the Missouri Secretary of State, and is in good standing under the laws of Missouri, Louisiana, Kansas, Michigan, Arizona and Virginia, subject to deletion or addition of a state as a result of any change in the Borrowing Base Properties. DownREIT is a Missouri corporation duly organized pursuant to articles of incorporation filed with the Missouri Secretary of State, and is in good standing under the laws of Missouri and                                         , subject to deletion or addition of a state as a result of any change in the Borrowing Base Properties. Huntsville is a Delaware corporation duly organized pursuant to articles of incorporation filed with the Delaware Secretary of State, and is in good standing under the laws of Delaware,                                         . Pensacola is a Missouri corporation, duly organized pursuant to the articles of incorporation filed with the Missouri Secretary of State, and in good standing under the laws of Missouri,                                         . Megaplex Four is a Missouri corporation, duly organized pursuant to the articles of incorporation filed with the Missouri Secretary of State, and in good standing under the laws of Missouri,                                         . Westcol is a Delaware limited liability company duly organized pursuant to articles of organization filed with the Delaware Secretary of State and is in good standing under the laws of Delaware and Colorado,

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subject to deletion or addition of a state as a result of any change in the Borrowing Base Properties. Melbourne is a Missouri corporation duly organized pursuant to articles of incorporation filed with the Missouri Secretary of State, and is in good standing under the laws of Missouri and Florida, subject to any addition or deletion of a state as a result of any change in the Borrowing Base Properties. Each additional Borrower-SPE, as applicable shall also be duly organized pursuant to its articles or organization, incorporation, or other applicable formation documents filed with the applicable Secretary of State and shall be in good standing under the laws of such states as required for the conduct of its business. Each Borrower-SPE conducts its business in a manner which enables it to qualify as an SPE. Each Borrower-SPE (i) has all requisite power to own its property and conduct its business as now conducted and as presently contemplated, and (ii) is in good standing and is duly authorized to do business in the jurisdictions where the Borrowing Base Properties owned or leased by it are located and in each other jurisdiction where a failure to be so qualified in such other jurisdiction could have a materially adverse effect on the business, assets or financial condition of the Borrower. Each Borrower-SPE has not taken any action that would prevent it from maintaining its qualification as an SPE as of the date of this Agreement, or from maintaining such qualification at all times during the term of the Loan.

(f) Other Subsidiaries. Each other Subsidiary of EPR (i) is a corporation, limited partnership, general partnership, limited liability company or trust duly organized under the laws of its state or jurisdiction of organization (including under Canadian law, as applicable), and is validly existing and in good standing under the laws thereof, (ii) has all requisite power to own its property and conduct its business as now conducted and as presently contemplated and (iii) is in good standing and is duly authorized to do business in each jurisdiction where a failure to be so qualified could have a materially adverse effect on the business, assets or financial condition of the Borrower or any Subsidiary of EPR.

(g) Authorization. The execution, delivery and performance of this Agreement and the other Loan Documents to which each Borrower is a party and the transactions contemplated hereby and thereby (i) are within the authority of such Person, (ii) have been duly authorized by all necessary proceedings on the part of such Person, (iii) do not and will not conflict with or result in any breach or contravention of any provision of law, statute, rule or regulation to which such Person is subject or any judgment, order, writ, injunction, license or permit applicable to such Person, (iv) do not and will not conflict with or constitute a default (whether with the passage of time or the giving of notice, or both) under any provision of the partnership agreement, articles of incorporation or other charter documents or bylaws of, or any agreement or other instrument binding upon, such Person or any of its properties, (v) do not and will not result in or require the imposition of any lien or other encumbrance on any of the properties, assets or rights of such Person, and (vi) do not require the approval or consent of any Person other than those already obtained and delivered to Agent.

(h) Enforceability. The execution and delivery of this Agreement and the other Loan Documents to which each Borrower is a party are valid and legally binding obligations of such Person enforceable in accordance with the respective terms and provisions hereof and thereof, except as enforceability is limited by bankruptcy, insolvency, reorganization, moratorium or other laws relating to or affecting generally the enforcement of creditors’ rights and general principles of equity.

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(i) SEC Filings. EPR has made all filings with and obtained all consents of the Securities and Exchange Commission as required, if any, under the Securities Act and the Securities Exchange Act in connection with the execution, delivery and performance by EPR of each of the Obligations incurred in connection with the Loan Documents.

§6.2 Governmental Approvals. The execution, delivery and performance of this Agreement and the other Loan Documents to which the Borrower is a party and the transactions contemplated hereby and thereby do not require the approval or consent of, or filing with, any governmental agency or authority other than those already obtained and the filing of the Security Documents in the appropriate records office with respect thereto.

§6.3 Title to Properties. Except as indicated on Schedule 6.3 hereto, EPR and its Subsidiaries own or lease all of the assets reflected in the Consolidated balance sheet of EPR and its Subsidiaries (as reflected in EPR’s March 31, 2009 Form 10-Q (“10-Q”), as filed with the SEC under the Exchange Act and as delivered to Agent herewith, as at the Balance Sheet Date and all assets acquired or leased since that date (except property and assets since sold or otherwise disposed of in the ordinary course of business or other adjustments that are not material in amount), subject to no rights of others (other than the rights of lessees under leases pursuant to which EPR or one of Consolidated Subsidiaries is the lessor), including any mortgages, leases pursuant to which Borrower-SPE, EPR or any of such Subsidiaries is the lessee (other than, in the case of Borrowing Base Properties, Qualified Ground Leases, or, in the case of other properties, ground leases), conditional sales agreements, title retention agreements, liens or other encumbrances, in each case except for Permitted Liens. Provided, however, that in no event shall any reference to any prior 10-Qs which may be incorporated by reference within the 10-Q delivered herewith be deemed delivered to Lender nor shall any such information contained in any such prior filings be deemed delivered to Lender.

§6.4 Financial Statements. The Borrower has furnished to Agent and the Lenders: (a) the Consolidated balance sheet of EPR and its Subsidiaries as of the Balance Sheet Date and the related Consolidated statement of income and cash flow for the period then ended, (b) to the extent available to Borrower, an unaudited statement of Borrowing Base Property Net Operating Income for each of the Borrowing Base Properties as of the Closing Date for the fiscal quarter ended March 31, 2009 reasonably satisfactory in form to the Agent and certified by the chief financial or accounting officer of Borrower as fairly presenting the Borrowing Base Property Net Operating Income for such Properties for such periods, and (c) certain other financial information relating to the Borrower and the Real Estate, such as revenue information with respect to Exhibitor EBITDAR. Such balance sheet and statements have been prepared in accordance with GAAP and fairly present the Consolidated financial condition of EPR and its Subsidiaries as of such dates and the Consolidated results of the operations of EPR and its Subsidiaries for such periods. There are no liabilities, contingent or otherwise, of EPR or any of its Subsidiaries involving material amounts required to be disclosed and not disclosed in said financial statements and the related notes thereto. The theatre revenue statements for the Borrowing Base Properties prepared by Borrower and delivered to Agent most recently before the Closing Date are, to Borrower’s knowledge, true, correct, complete and accurate statements thereof.

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§6.5 No Material Changes. Since the Balance Sheet Date, there has occurred no materially adverse change in the condition (financial or otherwise) of the business, assets, operations, or prospects of the Borrower and its Subsidiaries taken as a whole as shown on or reflected in the consolidated balance sheet of the Borrower and its Subsidiaries as of the Balance Sheet Date, or its Consolidated statement of income or cash flows for the period then ended, other than changes in the ordinary course of business that could not reasonably be expected to have a Material Adverse Effect. As of the date hereof, except as set forth on Schedule 6.5 hereto, based on information provided to Borrower from any applicable tenant, there has occurred no materially adverse change in the financial condition or business of any of the Borrowing Base Properties from the condition shown on the statements of income delivered to the Agent pursuant to §6.4 other than changes in the ordinary course of business that have not had any Materially Adverse Effect either individually or in the aggregate on the business or financial condition of such Borrowing Base Property.

§6.6 Franchises, Patents, Copyrights, Etc. The Borrower possesses all franchises, patents, copyrights, trademarks, trade names, service marks, licenses and permits, and rights in respect of the foregoing, adequate for the conduct of their business substantially as now conducted without known conflict with any rights of others. None of the Borrowing Base Properties is owned or operated under or by reference to any registered or protected trademark, trade name, service mark of Borrower.

§6.7 Litigation. Except as stated on Schedule 6.7, there are no actions, suits, proceedings or investigations of any kind pending or to the knowledge of the Borrower threatened against the Borrower or any of its Subsidiaries before any court, tribunal, arbitrator, mediator or administrative agency or board which question the validity of this Agreement or any of the other Loan Documents, any action taken or to be taken pursuant hereto or thereto or any lien, security title or security interest created or intended to be created pursuant hereto or thereto, or which if adversely determined could reasonably be expected to have a Material Adverse Effect. Except as set forth on Schedule 6.7, there are no judgments, final orders or awards outstanding against or affecting the Borrower, any of its Subsidiaries or any Borrowing Base Property.

§6.8 No Materially Adverse Contracts, Etc. None of the Borrower or any of its Subsidiaries is subject to any judgment, decree or order that has or is reasonably expected in the future to have a materially adverse effect on the business, assets or financial condition of such Person.

§6.9 Compliance with Other Instruments, Laws, Etc. None of the Borrower-SPE, EPR or any of its Subsidiaries is in violation of any provision of its charter or other organizational documents, bylaws, or any agreement or instrument to which it is subject or by which it or any of its properties is bound or any decree, order, judgment, statute, license, rule or regulation, in any of the foregoing cases in a manner that could reasonably be expected to materially and adversely affect the financial condition, properties or business of such Person.

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§6.10 Tax Status. Each Borrower-SPE, EPR and its Subsidiaries (a) has made or filed all federal and state income and all other material tax returns, reports and declarations required by any jurisdiction to which it is subject or has obtained an extension for filing, (b) has paid prior to delinquency all taxes and other governmental assessments and charges shown or determined to be due on such returns, reports and declarations, except those being contested in good faith and by appropriate proceedings and (c) has set aside on its books provisions reasonably adequate for the payment of all taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction.

§6.11 No Event of Default. No Default or Event of Default has occurred and is continuing.

§6.12 Holding Company and Investment Company Acts. None of the Borrower-SPE, EPR or any of its Subsidiaries is a “holding company”, or a “subsidiary company” of a “holding company”, or an “affiliate” of a “holding company”, as such terms are defined in the Public Utility Holding Company Act of 1935; nor is any of them an “investment company”, or an “affiliated company” or a “principal underwriter” of an “investment company”, as such terms are defined in the Investment Company Act of 1940.

§6.13 Absence of UCC Financing Statements, Etc. Except with respect to Permitted Liens or as disclosed on the lien search reports delivered to and approved by the Agent, there is no financing statement (but excluding any financing statements that may be filed against Borrower-SPE, EPR or its Subsidiaries without the consent or agreement of such Persons), security agreement, chattel mortgage, real estate mortgage, deed of trust or other document filed or recorded with any applicable filing records, registry, or other public office, that purports to cover, affect or give notice of any present or possible future lien on, or security interest or security title in, any property of the Borrower.

§6.14 Setoff, Etc. The Borrowing Base Property and the rights of the Agent and the Lenders with respect to the Borrowing Base Property are not subject to any setoff, claims, withholdings or other defenses (provided that the foregoing representation shall not be deemed a representation as to any potential claims of tenants under Leases, which are covered by §6.22).

§6.15 Certain Transactions. Except as disclosed on Schedule 6.15 hereto, or in EPR’s reports under the Exchange Act, delivered to the Lenders from the Borrower none of the partners, officers, trustees, managers, members, directors, or employees of the Borrower, or any of its Subsidiaries is a party to any material agreement with the Borrower, or any of its Subsidiaries (other than for services as partners, managers, members, employees, officers and directors), including any such agreement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any partner, officer, trustee, director or such employee or, to the knowledge of the Borrower, any corporation, partnership, trust or other entity in which any partner, officer, trustee, director, or any such employee has a substantial interest or is an officer, director, trustee or partner, which are on terms materially less favorable to the Borrower or any of its Subsidiaries than those that would be obtained in a comparable arms-length transaction.

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§6.16 Employee Benefit Plans. The Borrower and each ERISA Affiliate has fulfilled its obligation, if any, under the minimum funding standards of ERISA and the Code with respect to each Employee Benefit Plan, Multiemployer Plan or Guaranteed Pension Plan and is in compliance in all material respects with the presently applicable provisions of ERISA and the Code with respect to each Employee Benefit Plan, Multiemployer Plan or Guaranteed Pension Plan. Neither the Borrower nor any ERISA Affiliate has (a) sought a waiver of the minimum funding standard under §412 of the Code in respect of any Employee Benefit Plan, Multiemployer Plan or Guaranteed Pension Plan, (b) failed to make any contribution or payment to any Employee Benefit Plan, Multiemployer Plan or Guaranteed Pension Plan, or made any amendment to any Employee Benefit Plan, Multiemployer Plan or Guaranteed Pension Plan, 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 (c) incurred any liability under Title IV of ERISA other than a liability to the PBGC for premiums under §4007 of ERISA. None of the Borrowing Base Properties constitutes a “plan asset” of any Employee Plan, Multiemployer Plan or Guaranteed Pension Plan.

§6.17 Disclosure. All of the representations and warranties made by or on behalf of the Borrower and its Subsidiaries in this Agreement and the other Loan Documents or any document or instrument delivered to the Agent or the Lenders pursuant to or in connection with any of such Loan Documents are true and correct in all material respects, and the Borrower has not failed to disclose such information as is necessary to make such representations and warranties not misleading. There is no material fact or circumstance that has not been disclosed to the Agent and the Lenders or in EPR’s Exchange Act reports delivered by the Borrower to Lender herewith, and the written information, reports and other papers and data with respect to the Borrower, any Subsidiary or the Borrowing Base Properties (other than projections and estimates) furnished to the Agent or the Lenders in connection with this Agreement or the obtaining of the Commitments of the Lenders hereunder was, at the time so furnished, complete and correct in all material respects, or has been subsequently supplemented by other written information, reports or other papers or data, to the extent necessary to give in all material respects a true and accurate knowledge of the subject matter in all material respects; provided that such representation shall not apply to (a) the accuracy of any engineering and environmental reports prepared by third parties or legal conclusions or analysis provided by the Borrower’s counsel (although the Borrower has no reason to believe that the Agent and the Lenders may not rely on the accuracy thereof) (b) budgets, projections and other forward-looking or speculative information prepared in good faith by the Borrower (except to the extent the related assumptions were when made manifestly unreasonable), or (c) any Third Party Information.

§6.18 Trade Name; Place of Business. The Borrower does not use any trade name and conducts business under any name other than its actual name set forth in the Loan Documents. The principal place of business of each Borrower is as set forth in §19 herein, and Borrower will not change its principal place of business without first notifying Agent.

§6.19 Regulations T, U and X. No portion of any Loan is to be used for the purpose of purchasing or carrying any “margin security” or “margin stock” as such terms are used in Regulations T, U and X of the Board of Governors of the Federal Reserve System, 12 C.F.R. Parts 220, 221 and 224. Borrower is not engaged, nor will it engage, principally or as one of its

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important activities, in the business of extending credit for the purpose of purchasing or carrying any “margin security” or “margin stock” as such terms are used in Regulations T, U and X of the Board of Governors of the Federal Reserve System, 12 C.F.R. Parts 220, 221 and 224, nor does Borrower currently own any “margin stock” consisting of more than twenty-five (25%) percent of its total net worth.

§6.20 Environmental Compliance. The Borrower has taken all commercially reasonable steps to investigate the past and present conditions and usage of the Borrowing Base Properties and the operations conducted thereon and, except as specifically set forth on Schedule 6.20, attached hereto, or in the case of Real Estate acquired after the date hereof by Borrower, in express written notice with respect thereto provided to the Agent, makes the following representations and warranties:

(a) None of the Borrower or any of its Subsidiaries, nor to the best knowledge and belief of Borrower and any of its Subsidiaries, any operator of the Real Estate, nor any operations thereon, is in violation, or alleged violation, of any judgment, decree, order, law, license, rule or regulation pertaining to environmental matters, including without limitation, those arising under the Resource Conservation and Recovery Act (“RCRA”), the Comprehensive Environmental Response, Compensation and Liability Act of 1980 as amended (“CERCLA”), the Superfund Amendments and Reauthorization Act of 1986 (“SARA”), the Federal Clean Water Act, the Federal Clean Air Act, the Toxic Substances Control Act, or any state or local statute, regulation, ordinance, order or decree relating to the environment (hereinafter “Environmental Laws”), which violation (i) involves Real Estate (other than the Borrowing Base Properties) and would have a Material Adverse Effect or (ii) involves Borrowing Base Property.

(b) None of the Borrower or any of its Subsidiaries has received notice from any third party including, without limitation, any federal, state or local governmental authority, (i) that it has been identified by the United States Environmental Protection Agency (“EPA”) as a potentially responsible party under CERCLA with respect to a site listed on the National Priorities List, 40 C.F.R. Part 300 Appendix B (1986); (ii) that any hazardous waste, as defined by 42 U.S.C. §9601(5), any hazardous substances as defined by 42 U.S.C. §9601(14), any pollutant or contaminant as defined by 42 U.S.C. §9601(33) or any toxic substances, oil or hazardous materials or other chemicals or substances regulated by any Environmental Laws (“Hazardous Substances”) which it has generated, transported or disposed of have been found at any site at which a federal, state or local agency or other third party has conducted or has ordered that the Borrower or any of its Subsidiaries conduct a remedial investigation, removal or other response action pursuant to any Environmental Law; or (iii) that it is or shall be a named party to any claim, action, cause of action, complaint, or legal or administrative proceeding (in each case, contingent or otherwise) arising out of any third party’s incurrence of costs, expenses, losses or damages of any kind whatsoever in connection with the release of Hazardous Substances.

(c) (i) No portion of the Real Estate has been used for the handling, processing, storage or disposal of Hazardous Substances except in accordance with applicable Environmental Laws, and no underground tank or other underground storage receptacle for Hazardous Substances is located on any portion of the Real Estate except those which are being operated and maintained in compliance with Environmental Laws; (ii) in the course of any

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activities conducted by the Borrower or any of its Subsidiaries, or, to the best knowledge and belief of the Borrower and its Subsidiaries, the operators of their properties, no Hazardous Substances have been generated or are being used on the Real Estate except in the ordinary course of business and in accordance with applicable Environmental Laws; (iii) there has been no past or present releasing, spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, disposing or dumping (other than the storing of materials in reasonable quantities to the extent necessary for the operation of a Megaplex Movie Theatre or Entertainment-Related Retail Improvement in the ordinary course of business, and in any event in compliance with all Environmental Laws) (a “Release”) or threatened Release of Hazardous Substances on, upon, into or from the Borrowing Base Properties, which Release would have a material adverse effect on the value of such Borrowing Base Properties or adjacent properties, or from any other Real Estate, which Release could have a Material Adverse Effect; (iv) except as set forth on Schedule 6.20 hereto, there have been no Releases on, upon, from or into any real property in the vicinity of any of the Real Estate which, through soil or groundwater contamination, may have come to be located on, and which would have a material adverse effect on the value of, the Real Estate; and (v) any Hazardous Substances that have been generated on any of the Real Estate have been transported off-site in accordance with all applicable Environmental Laws. The representation set forth in this §6.20(c) with respect to activities of lessees and other third parties unrelated to Borrower and its Subsidiaries shall be limited to the best knowledge and belief of the Borrower and its Subsidiaries.

(d) To the best knowledge of each Borrower and its Subsidiaries, none of Borrower or any of its Subsidiaries, nor the Real Estate is subject to any applicable Environmental Law requiring the performance of Hazardous Substances site assessments, or the removal or remediation of Hazardous Substances, or the giving of notice to any governmental agency or the recording or delivery to other Persons of an environmental disclosure document or statement in each case by virtue of the transactions set forth herein and contemplated hereby, or to the effectiveness of any other transactions contemplated hereby except for such matters that shall be complied with as of the Closing Date.

(e) To the best knowledge of Borrower and its Subsidiaries, none of the Borrower or any of its Subsidiaries has acquired any actual knowledge of any existing or closed sanitary landfills, solid waste disposal sites, or hazardous waste treatment, storage or disposal facilities on or affecting the Real Estate.

(f) There has been no claim received by Borrower or any of its Subsidiaries, by any party that any use, operation, or condition of the Real Estate has caused any nuisance or any other liability or adverse condition on any other property which could reasonably be expected to have a Material Adverse Effect, nor is there any knowledge of any basis for such a claim.

(g) In the event that any event or circumstance described in §6.20 shall occur with respect to any Real Estate of Borrower or any of its Subsidiaries after the date hereof that Borrower is permitted to address pursuant to §8.6, or that is being remedied by Tenant, such event or circumstance shall not constitute a misrepresentation of Borrower or any of its Subsidiaries at any time the representations and warranties under this §6.20 are repeated or deemed repeated; provided further that the foregoing shall not limit the requirement that such representations with respect to Borrowing Base Properties be correct when such properties are accepted as Borrowing Base Property.

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§6.21 Subsidiaries and Affiliates. Schedule 6.21 sets forth, as of the date hereof, all of the Affiliates (including Subsidiaries) of EPR, the form and jurisdiction of organization of each of the Affiliates, and the owners of the direct and indirect ownership interests therein. No Person set forth on said Schedule 6.21 owns any legal, equitable or beneficial interest in any of the Persons (other than EPR, which is publicly traded) set forth on Schedules 6.21 except as set forth on such Schedule.

§6.22 Leases. To the extent that any of the same have been requested by Agent or any of the Lenders, the Borrower has delivered to the Agent (i) true copies of the Leases relating to each Borrowing Base Property and (ii) an accurate and complete Rent Roll and Lease Summary as of the date of inclusion of each Borrowing Base Property as a Borrowing Base Property with respect to all Leases of any portion of the Borrowing Base Property . The Leases reflected on such Rent Roll constitute as of the date thereof the sole agreements relating to leasing or licensing of space at such Borrowing Base Property and in the Building relating thereto. No tenant is entitled to any free rent, partial rent, rebate of rent payments, credit, offset or deduction in rent, including, without limitation, lease support payments or lease buy-outs, except as reflected in such Rent Roll or the applicable Lease. Except as set forth in Schedule 6.22, the Leases reflected therein are, as of the date of inclusion of the applicable Borrowing Base Property as a Borrowing Base Property, in full force and effect in accordance with their terms, without any payment default or any other material default under any Megaplex Movie Theatre Lease, nor are there any defenses, counterclaims, offsets, concessions or rebates available to any tenant thereunder, except as provided in the applicable Leases or to the extent Borrower has knowledge thereof, the Borrower has not given or made, any notice of any payment or other material default with respect to any Megaplex Movie Theatre Lease, or any claim, which remains uncured or unsatisfied, with respect to any of the Megaplex Movie Theatre Leases, and to the best of the knowledge and belief of the Borrower, there is no basis for any such claim or notice of default by any tenant. No property other than the Borrowing Base Property which is the subject of the applicable Lease is necessary to comply with the requirements (including, without limitation, parking requirements) contained in such Lease.

§6.23 Property.

(i) All of the Borrowing Base Properties are in good condition and working order subject to ordinary wear and tear and casualty and condemnation permitted in the Loan Documents. All of the other Real Estate of the Borrower and its Subsidiaries (including any property encumbered by an EPR Senior First Mortgage) is in good condition and working order subject to ordinary wear and tear and casualty and condemnation permitted in the Loan Documents, except for such portion of such Real Estate which is not occupied by any tenant and where such failure would not have a Material Adverse Effect. Such Real Estate (including any property encumbered by an EPR Senior First Mortgage), and the use and operation thereof, is in material compliance with all applicable zoning, building codes and other applicable governmental regulations. There are no unpaid or outstanding real estate or other taxes or assessments on or against any of the Borrowing Base Properties which are payable by the

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Borrower-SPE or any mortgagor under any EPR Senior First Mortgage (except only real estate or other taxes or assessments, that are not yet delinquent or are being protested as permitted by this Agreement or the applicable Leases). There are no unpaid or outstanding real estate or other taxes or assessments on or against any other property of the Borrower or any of its Subsidiaries or on any property encumbered by an EPR Senior First Mortgage which are payable by any of such Persons in any material amount (except only real estate or other taxes or assessments, that are not yet delinquent or are being protested as permitted by this Agreement). There are no pending eminent domain proceedings against any property of the Borrower or any of its Subsidiaries or any of the property encumbered by an EPR Senior First Mortgage or any part thereof, and, to the knowledge of the Borrower, no such proceedings are presently threatened by any taking authority which may individually or in the aggregate have any Material Adverse Effect. None of the property of the Borrower or any of its Subsidiaries or any of the property encumbered by an EPR Senior First Mortgage is now damaged as a result of any fire, explosion, accident, flood or other casualty in any manner which individually or in the aggregate would have any Material Adverse Effect;

(ii) If the Borrowing Base Property and improvements are located in a special flood hazard area designated as such by the Director of the Federal Emergency Management Agency, such Borrowing Base Property and improvements are and will continue to be covered by special flood insurance under the National Flood Insurance Program;

(iii) Neither Borrower-SPE, EPR nor any Subsidiary is the mortgagor under any mortgage, deed of trust, or similar instrument encumbering the Borrowing Base Property;

(iv) Except with respect to that encumbered by an EPR Senior First Mortgage, the Borrowing Base Property has not been sold, mortgaged (or made the subject of a negative pledge, except as provided to Agent herein) or underwritten to obtain financing (whether or not such financing constitutes Indebtedness) under any financing arrangement other than the financing evidenced by the Facility;

(v) All necessary certificates of occupancy have been obtained and shall be maintained with respect to the Borrower Base Property;

(vi) The Borrowing Base Property is a Real Estate asset for which the Borrower has conducted its customary due diligence and review, including inspection of the Real Estate, and such customary due diligence and review have not revealed facts that would adversely affect the value of the Real Estate;

(vii) Except with respect to that encumbered by an EPR Senior First Mortgage, Borrower-SPE holds good and marketable fee simple title to or a valid and subsisting leasehold interest in each parcel of Borrowing Base Property, and has obtained a Title Policy with respect thereto, subject only to the Permitted Encumbrances, a copy of which such Title Policy, Borrower shall make available to Agent or Lenders upon request therefor.

(viii) Borrower has obtained a Survey with proper Surveyor Certification on each of the Borrower Base Properties and shall make copies of the same available to Agent or Lenders upon request therefore; and

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(ix) The Borrower has complied with all other applicable conditions set forth in this Agreement with respect to inclusion and retention of the Borrowing Base Property as Borrowing Base Property.

§6.24 Brokers. The Borrower has not engaged or otherwise dealt with any broker, finder or similar entity in connection with this Agreement or the Loans contemplated hereunder.

§6.25 Other Debt. None of EPR or any of its Subsidiaries is in default of the payment of any Indebtedness in an amount equal to or greater than $1,000,000.00 in the aggregate, or the material performance of any related agreement, mortgage, deed of trust, security agreement, financing agreement, indenture or lease to which any of them is a party. The Borrower-SPE is not a party to or bound by any agreement, instrument or indenture that may require the subordination in right or time or payment of any of the Obligations to any other indebtedness or obligation of the Borrower. Schedule 6.25 hereto sets forth all agreements, mortgages, deeds of trust, financing agreements or other material agreements binding upon the Borrower and its Subsidiaries or their respective properties and entered into by the Borrower as of the date of this Agreement with respect to any Indebtedness of the Borrower or any of its Subsidiaries in an amount equal to or greater than $1,000,000.00, in the aggregate, and the Borrower will upon request provide the Agent with true, correct and complete copies thereof.

§6.26 Solvency. As of the Closing Date and after giving effect to the transactions contemplated by this Agreement and the other Loan Documents, including all Loans made or to be made hereunder, the Borrower is not insolvent on a balance sheet basis such that the sum of such Person’s assets exceeds the sum of such Person’s liabilities, the Borrower is able to pay its debts as they become due, and the Borrower has sufficient capital to carry on its business.

§6.27 No Bankruptcy Filing. The Borrower is not contemplating either the filing of a petition by it under any state or federal bankruptcy or insolvency laws or the liquidation of its assets or property.

§6.28 No Fraudulent Intent. Neither the execution and delivery of this Agreement or any of the other Loan Documents nor the performance of any actions required hereunder or thereunder is being undertaken by the Borrower or its Subsidiaries with or as a result of any actual intent by any of such Persons to hinder, delay or defraud any entity to which any of such Persons is now or will hereafter become indebted.

§6.29 Transaction in Best Interests of Borrower; Consideration. The transaction evidenced by this Agreement and the other Loan Documents is in the best interests of the Borrower and its Subsidiaries. The direct and indirect benefits to inure to the Borrower and its Subsidiaries pursuant to this Agreement and the other Loan Documents constitute substantially more than “reasonably equivalent value” (as such term is used in §548 of the Bankruptcy Code) and “valuable consideration,” “fair value,” and “fair consideration,” (as such terms are used in any applicable state fraudulent conveyance law), in exchange for the benefits to be provided by the Borrower and its Subsidiaries pursuant to this Agreement and the other Loan Documents.

§6.30 Capitalization. The equity interests of each Borrower-SPE are directly or indirectly owned 100% by EPR.

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§6.31 EPR Senior First Mortgages. The Borrower has delivered to the Agent (i) true copies of the EPR Senior First Mortgages relating to each applicable Borrowing Base Property and (ii) an accurate and complete schedule of payments (the “EPR Senior Loan Payment Schedule”) due under each EPR Senior Property Loan relating to each applicable Borrowing Base Property as of the date of inclusion of each Borrowing Base Property as a Borrowing Base Property. Except as set forth in Schedule 6.31, the EPR Senior First Mortgages reflected therein are, as of the date of inclusion of the applicable Borrowing Base Property as a Borrowing Base Property, (i) in full force and effect in accordance with their terms, (ii) without any payment default or any other material default under any EPR Senior Property Loan, and (iii) without any defenses, counterclaims or offsets available to any mortgagor thereunder. Additionally, as of the date of inclusion of the applicable Borrowing Base Property as a Borrowing Base Property, the Borrower has not given or made, any notice of any payment or other material default with respect to any EPR Senior Property Loan, or any claim, which remains uncured or unsatisfied, with respect to any of the EPR Senior Property Loans, and to the best of the knowledge and belief of the Borrower, there is no basis for any such claim or notice of default by any EPR Mortgagor.

§6.32 Intentionally Deleted.

§6.33 Certificates of Occupancy; Licenses. All certificates of completion and occupancy permits and, to the best knowledge of Borrower, all other certifications, permits, licenses and approvals, including any applicable liquor license required for the legal use, occupancy and operation of each of the Borrowing Base Properties for its approved use and all appurtenant and related uses (collectively, the “Licenses”), have been obtained and are in full force and effect.

§6.34 Insurance. The Borrowing Base Properties and improvements thereon are insured by fire and other insurance policies providing coverage and otherwise in accordance with industry standards. Such insurance (i) names and will continue to name the Borrower-SPE and its successors and assigns as an insured thereunder and (ii) are and will continue to be in full force and effect. Borrower shall, in connection with the closing hereunder and prior to the expiration of any insurance required hereunder, deliver to the Agent and Lenders certificates of any insurance required hereunder evidencing the existence of such insurance, which such certificates shall be in form and substance reasonably satisfactory to Agent and Lenders, it being agreed that such insurance and certificates may be maintained by a Tenant or an EPR Mortgagor at each of the Borrowing Base Properties. Insurance certificates which comply with the terms of the applicable Leases or EPR Senior Property Loan Documents, as the case may be, approved by Agent shall be deemed acceptable to Agent and Lenders.

§7. AFFIRMATIVE COVENANTS.

The Borrower covenants and agrees to the following, so long as any Obligation, Loan, Note or any Letter of Credit is outstanding or any of the Lenders have any obligation to make any Loans or issue Letters of Credit:

§7.1 Punctual Payment. The Borrower will duly and punctually pay or cause to be paid the principal and interest on the Loans and all interest and fees provided for in this Agreement, all in accordance with the terms of this Agreement and the Notes, as well as all other sums owing pursuant to the Loan Documents.

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§7.2 Maintenance of Office. The Borrower will maintain its respective chief executive office at 30 Pershing Road, Suite 201, Kansas City, MO, 64108, or at such other place in the United States of America as the Borrower shall designate prior to any such change in location by written notice to the Agent and the Lenders, where notices, presentations and demands to or upon the Borrower in respect of the Loan Documents may be given or made.

§7.3 Records and Accounts. The Borrower will (a) keep, and cause each of its Subsidiaries to keep, proper records and books of account in which true and correct entries will be made in accordance with GAAP and (b) maintain adequate accounts and reserves for all taxes (including income taxes), depreciation and amortization of its properties and the properties of its Subsidiaries, contingencies and other reserves. Neither the Borrower, nor any of its Subsidiaries shall, without the prior written consent of the Required Lenders, (x) make any material change to the accounting procedures used by such Person in preparing the financial statements and other information described in §6.4 or §7.4, except as required by SEC Rules or interpretations thereof or accounting industry pronouncements or (y) change its fiscal year.

§7.4 Financial Statements, Certificates and Information. Borrower will deliver or cause to be delivered to the Agent with sufficient copies for each of the Lenders which will be delivered by Agent to Lenders:

(a) as soon as practicable, but in any event not later than ninety (90) days after the end of each fiscal year of Borrower, commencing with the fiscal year ending December 31, 2009, the audited Consolidated balance sheet of EPR and its Consolidated Subsidiaries at the end of such year, and the related audited Consolidated statements of income, changes in capital and cash flows for such year, each setting forth in comparative form the figures for the previous fiscal year and all such statements to be in reasonable detail, prepared in accordance with GAAP, and accompanied by an auditor’s report prepared without qualification as to the scope of the audit by a “Big Four” accounting firm or another nationally recognized firm acceptable to the Agent (the foregoing with respect to EPR and its Consolidated Subsidiaries may be satisfied by delivery of the Form 10-K of EPR filed with the SEC, provided, however, that in no event shall any reference to any prior 10-Ks or Proxy Statements which may be incorporated by reference within the filings then being delivered to Agent be deemed delivered to Agent nor shall any such information contained in any such prior filings be deemed delivered to Agent), and any other information the Agent may reasonably request to complete a financial analysis of the Borrower, and EPR’s Subsidiaries;

(b) as soon as practicable, but in any event not later than forty-five (45) days after the end of each fiscal quarter (including the fourth quarter) of Borrower, copies of the unaudited Consolidated balance sheet of the Borrower and its Subsidiaries as at the end of such quarter, and the related unaudited Consolidated statements of income and cash flows for the portion of Borrower’s fiscal year then elapsed, all in reasonable detail and prepared in accordance with GAAP (the foregoing with respect to EPR and its Subsidiaries for the first three quarters of any fiscal year may be satisfied by delivery of the Form 10-Q of EPR filed with the SEC provided,

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however, that in no event shall any reference to any prior 10-Qs or Proxy Statements which may be incorporated by reference within the filings then being delivered to Lender be deemed delivered to Lender nor shall any such information contained in any such prior filings be deemed delivered to Lender), together with a certification by the chief financial officer or accounting officer of Borrower that the information contained in such financial statements fairly presents the financial position of the Borrower and its Subsidiaries on the date thereof (subject to year-end adjustments);

(c) simultaneously with the delivery of the financial statements referred to in subsections (a) and (b) above, a statement (a “Compliance Certificate”) certified by the chief financial officer or other financial officer of Borrower in the form of Exhibit K hereto (or in such other form as the Agent may approve from time to time) setting forth in reasonable detail computations evidencing compliance or non-compliance (as the case may be) with the covenants contained in §9 and the other covenants described in such certificate and (if applicable) setting forth reconciliations to reflect changes in GAAP since the Balance Sheet Date. Borrower shall submit with the Compliance Certificate a Borrowing Base Certificate in the form of Exhibit J attached hereto pursuant to which the Borrower shall calculate the amount of the Borrowing Base as of the end of the immediately preceding fiscal quarter of the Borrower. All income, expense and value associated with Real Estate or other Investments disposed of during any quarter will be eliminated from calculations, where applicable. The Compliance Certificate shall be accompanied by copies of the statements of the Borrowing Base Property Net Operating Income for such fiscal quarter and on a trailing four-quarter basis for each of the Borrowing Base Properties, prepared on a basis consistent with the statements furnished to the Lenders prior to the date hereof and otherwise in form and substance reasonably satisfactory to the Agent, together with a certification by the chief financial officer or other financial officer of Borrower that the information contained in such statement fairly presents the Borrowing Base Property Net Operating Income of the Borrowing Base Properties for such periods;

(d) contemporaneously with the delivery of the financial statements referred to in clause (a) above, the statement of all contingent liabilities involving amounts of $1,000,000.00 or more of the Borrower and its Subsidiaries which are not reflected in such financial statements or referred to in the notes thereto (including, without limitation, all guaranties, endorsements and other contingent obligations in respect of the indebtedness of others, and obligations to reimburse the issuer in respect of any letters of credit);

(e) upon reasonable request by the Agent on behalf of any Lender, as soon as practicable but in any event not later than forty-five (45) days after the end of the most recent fiscal quarter of Borrower (including the fourth fiscal quarter in each year), a Consolidated operating statement for the Borrowing Base Properties and as requested by Agent or any Lender, a Rent Roll for each of the Borrowing Base Properties and a copy of each Lease or amendment entered into with respect to a Borrowing Base Property during such quarter;

(f) contemporaneously with the filing or mailing thereof, copies of all material of a financial nature, reports or proxy statements sent to the shareholders of EPR;

(g) Intentionally deleted;

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(h) promptly upon the filing hereof, copies of all registration statements (other than the exhibits thereto and any registration statements on Form S-8 or its equivalent);

(i) Intentionally Deleted;

(j) evidence reasonably satisfactory to Agent of the timely payment of all real estate taxes for the Borrowing Base Properties;

(k) not later than November 15 of each year, the Consolidated cash flow projections of the Borrower and its Subsidiaries for the next three years;

(l) from time to time such other financial data and information in the possession of the Borrower or its Subsidiaries (including without limitation auditors’ management letters, status of litigation or investigations against the Borrower and any settlement discussions relating thereto, property inspection and environmental reports and information as to zoning and other legal and regulatory changes affecting the Borrower) as the Agent may reasonably request. Information concerning such litigation or settlement discussions shall not include attorney-client privileged communications, but shall otherwise include information which may be confidential or subject to a work-product privilege so that the Agent and the Lenders receive the same level of disclosure from the Borrower with respect to such matters as has been made prior to the Closing Date.

(m) promptly upon their becoming available, copies of all registration statements and regular periodic reports, if any, that Borrower shall have filed with the Commission (or any Governmental Authority substituted therefor) or any national securities exchange, including each Form 8-K, Form 10-K and Form 10-Q filed with the Commission.

(n) as soon as is reasonably practicable, but in any event not later than forty-five (45) days after the end of each fiscal quarter (including the fourth quarter), statements of Exhibitor’s EBITDAR for the prior quarter and for the trailing four quarters.

§7.5 Notices.

(a) Defaults. The Borrower will immediately upon obtaining actual knowledge of same notify the Agent in writing of the occurrence of any Default or Event of Default, which notice shall describe such occurrence with reasonable specificity and shall state that such notice is a “notice of default or event of default”. If any Person shall give any notice or take any other action in respect of a claimed default (whether or not constituting an Event of Default) under this Agreement or under any note, evidence of indebtedness, indenture or other obligation to which or with respect to which the Borrower or any of its Subsidiaries is a party or obligor, whether as principal or surety, and such default would permit the holder of such note or obligation or other evidence of indebtedness to accelerate the maturity thereof, which acceleration would either cause a Default or have a Material Adverse Effect, the Borrower shall promptly give written notice thereof to the Agent and each of the Lenders, describing the notice or action and the nature of the claimed default.

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(b) Environmental Events. The Borrower will give notice to the Agent within five (5) Business Days of obtaining actual knowledge of (i) any potential or known Release, or threat of Release, of any Hazardous Substances in an amount that may be required to be contained, removed or otherwise remediated at or from any Real Estate; (ii) any violation of any Environmental Law that the Borrower or any of its Subsidiaries reports in writing or is reportable by such Person in writing (or for which any written report supplemental to any oral report is made) to any federal, state or local environmental agency or (iii) any inquiry, proceeding, investigation, or other action, including a notice from any agency of potential environmental liability, of any federal, state or local environmental agency or board, that in either case involves (A) any Borrowing Base Property, or (B) any other Real Estate and could reasonably be expected to have a Material Adverse Effect.

(c) Notification of Claims Against Borrowing Base Property. The Borrower will give notice to the Agent in writing within five (5) Business Days of obtaining actual knowledge of any material setoff, claims (including, with respect to the Borrowing Base Property, environmental claims), withholdings or other defenses to which any of the Borrowing Base Property, or the rights of the Agent or the Lenders with respect to the Borrowing Base Property, are subject.

(d) Notice of Litigation and Judgments. The Borrower will give notice to the Agent in writing within five (5) Business Days of obtaining actual knowledge of any litigation or proceedings threatened in writing or any pending litigation and proceedings affecting the Borrower or any of its Subsidiaries or to which the Borrower or any of its Subsidiaries is or is to become a party involving an uninsured claim against any of the Borrower or any of its Subsidiaries that could reasonably be expected to have a Material Adverse Effect and stating the nature and status of such litigation or proceedings. The Borrower will give notice to the Agent, in writing, in form and detail reasonably satisfactory to the Agent and each of the Lenders, within ten days of any judgment not covered by insurance, whether final or otherwise, against any of the Borrower or any of its Subsidiaries in an amount in excess of $1,000,000 in the aggregate, except that notice is not required hereunder for EPR unless such amount exceeds $5,000,000 in the aggregate.

(e) Notice of Proposed Sales, Encumbrances, Refinance or Transfer of Non-Borrowing Base Property. The Borrower will give notice to the Agent of any completed sale, encumbrance, refinance or transfer of any Real Estate in amounts exceeding $50,000,000.00 (other than the Borrowing Base Properties) within any fiscal quarter of Borrower, such notice to be submitted together with the Compliance Certificate provided or required to be provided to the Agent and the Lenders under §7.4 with respect to such fiscal quarter. The Compliance Certificate shall with respect to any completed sale, encumbrance, refinance or transfer be adjusted in the best good faith estimate of Borrower to give effect to such sale, encumbrance, refinance or transfer and demonstrate that no Default or Event of Default with respect to the covenants referred to therein shall exist after giving effect to such sale, encumbrance, refinance or transfer. Notwithstanding the foregoing, in the event of any sale, encumbrance, refinance or transfer of any Real Estate or other Investment of the type described in §8.3(i) involving Real Estate or such other Investment by EPR in an amount in excess of $25,000,000 per quarter, the Borrower shall promptly give notice to the Agent of such transaction, which notice shall be

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accompanied by a Compliance Certificate prepared using the financial statements of Borrower most recently provided or required to be provided to the Agent and the Lenders under §6.4 or §7.4, adjusted as provided in this paragraph.

(f) ERISA. The Borrower will give notice to the Agent within five (5) Business Days after the Borrower or any ERISA Affiliate (i) gives or is required to give notice to the PBGC of any “reportable event” (as defined in §4043 of ERISA) with respect to any Guaranteed Pension Plan, Multiemployer Plan or Employee Benefit Plan, or knows that the plan administrator of any such plan has given or is required to give notice of any such reportable event; (ii) gives a copy of any notice of complete or partial withdrawal liability under Title IV of ERISA; or (iii) receives any notice from the PBGC under Title IV or ERISA of an intent to terminate or appoint a trustee to administer any such plan.

(g) Notification of Lenders. Within five (5) Business Days after receiving any notice under this §7.5, the Agent will forward a copy thereof to each of the Lenders, together with copies of any certificates or other written information that accompanied such notice.

(h) Notice of REIT Status. EPR shall give each Lender notice in the event it does not maintain its status as a REIT or takes any action which could lead to its disqualification as a REIT.

§7.6 Existence; Maintenance of Properties.

(a) Borrower-SPE will preserve and keep in full force and effect its status as a Special Purpose Entity, as set forth in §6.1(a) herein. EPR will preserve and keep in full force and effect its existence as a Maryland real estate investment trust. EPR will cause each of its Subsidiaries to preserve and keep in full force and effect their legal existence in the jurisdiction of its incorporation or formation. EPR will preserve and keep in full force all of its rights and franchises and those of its Subsidiaries, the preservation of which is necessary to the conduct of their business. Borrower-SPE shall at all times comply with all requirements and applicable laws, guidelines and regulations necessary to maintain its Special Purpose Entity status. EPR shall at all times comply with all requirements and applicable laws and regulations necessary to maintain REIT status. The common shares of EPR shall at all times be listed for trading and be traded on the New York Stock Exchange (NYSE), unless otherwise consented to by the Required Lenders.

(b) The Borrower (i) will cause all of its properties and those of EPR’s Subsidiaries used or useful in the conduct of its business or the business of its Subsidiaries to be maintained and kept in good condition, repair and working order (ordinary wear and tear excepted) and supplied with all necessary equipment, and (ii) will cause to be made all necessary repairs, renewals, replacements, betterments and improvements thereof in all cases in which the failure so to do would have a material adverse effect on the condition of any Borrowing Base Property or would cause a Material Adverse Effect. Without limitation of the obligations of the Borrower under this Agreement with respect to the maintenance of the Borrowing Base Properties, the Borrower shall promptly and diligently comply with the recommendations of the Environmental Engineer concerning the maintenance, operation or upkeep of the Borrowing Base Properties contained in the building inspection and environmental reports delivered to the

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Agent or otherwise obtained by Borrower. This §7.6(b) shall be subject, however, to any provisions in the applicable Leases or EPR Senior Property Loan Documents which restrict Borrower or any applicable Subsidiaries from making any such repairs or replacements or the like or which impose such duties instead on the tenant or mortgagor, as applicable.

§7.7 Insurance.

(a) The Borrower will procure and maintain or cause to be procured and maintained (i) insurance covering the Borrower-SPE, EPR and its Subsidiaries, the Borrowing Base Properties and its properties (the cost of such insurance to be borne by the insured thereunder) with financially sound and reputable insurers (or self-insurance provided by Borrower or creditworthy tenants) in such amounts and against such risks and casualties as are customary for properties of similar character and location, due regard being given to the type of improvements thereon, their construction, location, use and occupancy, and (ii) such insurance as is required in the applicable Leases for the Borrowing Base Properties.

(b) The Borrower shall, prior to the expiration of any insurance required hereunder, renew or cause to be renewed such insurance and upon request by Agent or any of the Lenders, deliver to Agent evidence of insurance evidencing the existence of all such insurance, it being understood by the Agent and the Lenders that such insurance certificates may be maintained by the Tenant or EPR Mortgagor under its applicable lease or EPR Senior First Mortgage, as the case may be, for the Borrowing Base Property.

(c) All insurance provided for in §7.7(a) above shall be obtained under valid and enforceable policies (collectively, the “Policies” or in singular, the “Policy”). As to initial Borrowing Base Properties, the Policies are issued pursuant to the terms of the existing Leases or EPR Senior Property Loan Documents, as applicable. With respect to any subsequent Borrowing Base Properties, the Policies shall be issued by financially sound and responsible insurance companies authorized to do business in the applicable state and having a financial strength rating of not less than the better of A- and “A2” or better by the Rating Agencies.

(d) Upon request by the Agent or any Lender, the Borrower will provide to the Agent for the benefit of the Lenders copies of Title Policies for all of the Borrowing Base Properties.

§7.8 Taxes; Liens. The Borrower will, and will cause its Subsidiaries to (which shall include permitting the applicable Tenant to pay directly), duly pay and discharge, or cause to be paid and discharged, before the same shall become delinquent, all taxes, assessments and other governmental charges imposed upon them or upon the Borrowing Base Properties or the other Real Estate, sales and activities, or any part thereof, or upon the income or profits therefrom as well as all claims for labor, materials or supplies that if unpaid might by law become a lien or charge upon any of its property or other Liens affecting any of the Borrowing Base Property or other property of Borrower, or its Subsidiaries, provided that any such tax, assessment, charge or levy or claim need not be paid if the validity or amount thereof shall currently be contested in good faith by Borrower or the applicable Tenant in accordance with the applicable Lease by appropriate proceedings which shall suspend the collection thereof with respect to such property, neither such property nor any portion thereof or interest therein would be in any danger of sale,

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forfeiture or loss by reason of such proceeding and the Borrower shall have set aside on its books adequate reserves in accordance with GAAP; and provided, further, that forthwith upon the commencement of proceedings to foreclose any lien that may have attached as security therefor, the Borrower either (i) will provide a bond issued by a surety reasonably acceptable to the Agent and sufficient to stay all such proceedings or (ii) if no such bond is provided, will pay each such tax, assessment, charge or levy. Notwithstanding anything in this §7.8 to the contrary, insofar as this §7.8 permits the Borrower to shift any duty of the Borrower under this §7.8 to a Tenant, the Borrower may likewise shift such duty to an EPR Mortgagor to the extent the Borrower has the right under the applicable EPR Senior Property Loan Documents to do so; and, likewise, references in this §7.8 permitting a Tenant to contest taxes or the like shall apply with the same force and effect to an EPR Mortgagor.

§7.9 Inspection, Books and Records. The Borrower will 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 will permit representatives of the Agent at the expense of the Agent or the Lender requiring the Agent to conduct such visit and inspection, to visit and inspect any of its properties, to examine and make abstracts from any of its books and records and to discuss its affairs, finances and accounts with its officers and independent public accountants, all at such reasonable times, upon reasonable prior notice and as often as may reasonably be desired, but conducted in such a manner as to not unreasonably interfere with the conduct of Borrower’s business or the business of any tenant or any EPR Mortgagor, and subject in all events to the terms of the applicable Lease or EPR Senior Loan Property Loan Documents, as the case may be.

§7.10 Compliance with Laws, Contracts, Licenses, and Permits. The Borrower will, and will cause each of its Subsidiaries to, comply in all respects with (i) all applicable laws and regulations now or hereafter in effect wherever its business is conducted, including all Environmental Laws, (ii) the provisions of its corporate charter, partnership agreement, limited liability company agreement or declaration of trust, as the case may be, and other charter documents and bylaws, (iii) all agreements and instruments to which it is a party or by which it or any of its properties may be bound, (iv) all applicable decrees, orders, and judgments, and (v) all licenses and permits required by applicable laws and regulations for the conduct of its business or the ownership, use or operation of its properties, except where a failure to so comply with any of clauses (i) through (v) would not have a Material Adverse Effect. If any authorization, consent, approval, permit or license from any officer, agency or instrumentality of any government shall become necessary or required in order that the Borrower may fulfill any of its obligations hereunder, the Borrower will immediately take or cause to be taken all steps necessary to obtain such authorization, consent, approval, permit or license and furnish the Agent and the Lenders with evidence thereof.

§7.11 Further Assurances. The Borrower will and will cause each of its Subsidiaries to, cooperate with the Agent and the Lenders and execute such further instruments and documents as the Lenders or the Agent shall reasonably request to carry out to their satisfaction the transactions contemplated by this Agreement and the other Loan Documents.

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§7.12 Management. The Borrower-SPE shall not enter into nor shall it allow an EPR Mortgagor to enter into any new management agreement with a third-party manager after the date hereof for any Borrowing Base Property without the prior written consent of the Agent (which shall not be unreasonably withheld or delayed). Borrower has provided to Agent full and complete copies of the currently existing management contracts for the initial Borrowing Base Properties (the “Initial Management Contracts”), which such Initial Management Contracts are in full force and effect as of the date of this Agreement. The parties acknowledge that Agent has approved said Initial Management Contracts.

§7.13 Compliance with Environmental Laws. At its sole cost and expense, the Borrower shall at all times cause the Borrowing Base Properties and the use and operation thereof to be in compliance with all applicable laws, rules and regulations, including without limitation, all Environmental Laws then in effect.

In the ordinary course of its business, the Borrower conducts periodic reviews of the effect of Environmental Laws on the business, operations and properties of the Borrower and its Subsidiaries, including without limitation, all Real Property assets in the course of which it identifies and evaluates associated liabilities and costs (including, without limitation, any capital or operating expenditures required for clean-up or closure of properties presently owned, any capital or operating expenditures required to achieve or maintain compliance with environmental protection standards imposed by law or as a condition of any license, permit or contract, any related constraints on operating activities, and any actual or potential liabilities to third parties, including employees, and any related costs and expenses). On the basis of this review, the Borrower has reasonably concluded that such associated liabilities and costs, including the costs of compliance with Environmental Laws, are unlikely to have a Material Adverse Effect on the Borrower and its Subsidiaries.

§7.14 Business Operations. The Borrower shall operate its respective businesses in substantially the same manner and in substantially the same fields and lines of business as such business is now conducted and in compliance with the terms and conditions of this Agreement and the Loan Documents.

§7.15 Registered Servicemark. Without the prior written consent of the Agent, none of the Borrowing Base Properties shall be owned or operated by the Borrower under any registered or protected trademark, tradename, servicemark or logo. Notwithstanding the foregoing, this provision shall not prevent any applicable Tenant or applicable EPR Mortgagor from operating the Borrowing Base Property under its trademarks and tradenames or service marks.

§7.16 Intentionally Deleted.

§7.17 Distributions of Income to EPR. EPR shall cause its Subsidiaries to promptly distribute to EPR (but not less frequently than once each fiscal quarter of EPR, unless otherwise approved by the Agent), whether in the form of dividends, distributions or otherwise, all profits, proceeds or other income relating to or arising from its Subsidiaries’ use, operation, financing, refinancing, sale or other disposition of their respective assets and properties after (a) the payment by each Subsidiary of its debt service and operating expenses for such quarter and (b) the establishment of reasonable reserves for the payment of operating expenses not paid on at

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least a quarterly basis and capital improvements to be made to such Subsidiary’s assets and properties approved by such Subsidiary in the ordinary course of business consistent with its past practices, or reserves required under applicable loan covenants; provided however, that in the event that (i) an Event of Default shall have occurred and be continuing, and the maturity of the Obligations has been accelerated, or (ii) there shall have occurred and be continuing, an Event of Default under any of §§ 12.1(a), 12.1(b), 12.1(h), 12.1(i), or 12.1(j), then the Borrower-SPE shall not make any Distributions, either directly or indirectly to EPR, whatsoever.

§7.18 Borrowing Base Property. Borrower shall: (i) defend the right, title and interest of the Borrower-SPE in and to the Borrowing Base Property against the claims and demands of all Persons; (ii) shall cause the Borrowing Base Property to be managed in accordance with the policies and procedures customary for assets of a type such as said Borrowing Base Properties; (iii) shall review its policies and procedures periodically to confirm that the policies and procedures are being complied with in all material respects and are adequate to meet the Borrower’s business objectives with respect to the Borrowing Base Properties; and (iv) shall not transfer or assign, or grant any Lien or option with respect to, or grant any pledge or negative pledge of the Borrowing Base Property or any interest in the Borrowing Base Property (except with respect to the negative pledges of the Borrowing Base Property provided for the benefit of the Lenders hereunder), and except as may otherwise be permitted under this Agreement.

§7.19 Intentionally Deleted.

§7.20 Plan Assets. The Borrower will do, or cause to be done, all things necessary to ensure that none of the Borrowing Base Properties will be deemed to be Plan Assets at any time.

§7.21 Certificates of Occupancy; Licenses. Borrower shall keep and maintain or cause the applicable tenants or mortgagors to keep and maintain, all licenses necessary for the operation of the Borrowing Base Properties for their approved uses and all appurtenant and related uses. The use being made of each of the Borrowing Base Properties is in conformity with the certificate of occupancy issued for each such Borrowing Base Property.

§7.22 EPR Senior First Mortgages. Borrower covenants, represents and warrants to Agent and each of the Lenders with respect to any EPR Senior First Mortgage on any of the Borrowing Base Properties (a “Qualified EPR Senior Mortgage” or collectively, “Qualified EPR Senior Mortgages”), if any, and any related EPR Senior Property Loan Documents (collectively, with the Qualified EPR Senior Mortgage(s), the “Qualified Senior Property Loan Documents”), as follows:

(a) Except as previously disclosed to Agent, to the best knowledge of the Borrower, no default has occurred and is continuing under the terms of any Qualified Senior Property Loan Documents, and no event has occurred that, with the passage of time or service of notice, or both, would constitute an event of default under any Qualified Senior Property Loan Documents.

(b) Each of the Qualified Senior Property Loan Documents is in full force and effect.

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(c) All principal, interest and all other charges due and payable under each of the Qualified Senior Property Loan Documents, have been fully paid.

(d) Borrower shall, at its sole cost and expense, promptly and timely perform and observe, or cause the applicable mortgagor under a Qualified EPR Senior Mortgage to promptly and timely perform and observe, all the material terms, covenants and conditions required to be performed and observed by Borrower as mortgagor under each Qualified EPR Senior Mortgage and related Qualified Senior Property Loan Documents (including the payment of all principal, interest and other charges required to be paid under such Qualified Senior Property Loan Documents).

(e) Borrower shall notify Agent promptly in writing after any Obligor receives notice of the occurrence of any material default by the mortgagor under any Qualified Senior Property Loan Documents or the occurrence of any event that, with the passage of time or service of notice, or both, would constitute a material default by the mortgagor under any Qualified Senior Property Loan Documents, and the receipt by Borrower of any notice (written or otherwise) from the mortgagor under any Qualified EPR Senior Mortgage noting or claiming the occurrence of any default by any obligor under any Qualified Senior Property Loan Documents or the occurrence of any event that, with the passage of time or service of notice, or both, would constitute a default by any obligor under any Qualified Senior Property Loan Documents. Borrower shall promptly deliver to Agent a copy of any such written notice of default.

(f) Borrower shall promptly, after obtaining knowledge of such filing notify Agent orally of any filing, by or against any mortgagor under a Qualified EPR Senior Mortgage of a petition under the Bankruptcy Code. Borrower shall thereafter promptly give written notice of such filing to Agent, setting forth any information available to Borrower as of the date of such filing, the court in which such petition was filed, and the relief sought in such filing. Borrower shall promptly deliver to Agent any and all notices, summonses, pleadings, applications and other documents received by Borrower in connection with any such petition and any proceedings relating to such petition.

(g) Upon the request of Agent or any Lender, Borrower shall deposit with Agent a copy of each fully executed Qualified EPR Senior Mortgage along with the corresponding Qualified Senior Property Loan Documents certified by Borrower as true and correct.”

§7.23 Ground Leases. Borrower covenants, represents and warrants to Agent and each of the Lenders with respect to any ground lease of any of the Borrowing Base Properties (a “Qualified Ground Lease” or collectively, “Qualified Ground Leases”), if any, as follows:

(a) Except as previously disclosed to Agent, to the best knowledge of the Borrower, no default has occurred and is continuing under the terms of any Qualified Ground Lease, and no event has occurred that, with the passage of time or service of notice, or both, would constitute an event of default under any Qualified Ground Lease.

(b) Each Qualified Ground Lease is in full force and effect.

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(c) All rents, additional rents, percentage rents and all other charges due and payable under each Qualified Ground Lease have been fully paid.

(d) Subject to the Permitted Encumbrances, Borrower is the owner of the entire lessee’s interest in and under each Qualified Ground Lease and has the right and authority under each Qualified Ground Lease to execute this Agreement and other related Loan Documents.

(e) Borrower shall, at its sole cost and expense, promptly and timely perform and observe, or cause the applicable Tenant under a Qualified Ground Lease to promptly and timely perform and observe, all the material terms, covenants and conditions required to be performed and observed by Borrower as lessee under each Qualified Ground Lease (including the payment of all rent, additional rent, percentage rent and other charges required to be paid under such Qualified Ground Lease).

(f) Borrower shall notify Agent promptly in writing after any Obligor receives notice of the occurrence of any material default by the lessor under any Qualified Ground Lease or the occurrence of any event that, with the passage of time or service of notice, or both, would constitute a material default by the lessor under any Qualified Ground Lease, and the receipt by Borrower of any notice (written or otherwise) from the lessor under any Qualified Ground Lease noting or claiming the occurrence of any default by any Obligor under any Qualified Ground Lease or the occurrence of any event that, with the passage of time or service of notice, or both, would constitute a default by any Obligor under any Qualified Ground Lease. Borrower shall promptly deliver to Agent a copy of any such written notice of default.

(g) Borrower shall promptly, after obtaining knowledge of such filing notify Agent orally of any filing, by or against any lessor under a Qualified Ground Lease of a petition under the Bankruptcy Code. Borrower shall thereafter promptly give written notice of such filing to Agent, setting forth any information available to Borrower as of the date of such filing, the court in which such petition was filed, and the relief sought in such filing. Borrower shall promptly deliver to Agent any and all notices, summonses, pleadings, applications and other documents received by Borrower in connection with any such petition and any proceedings relating to such petition.

(h) Upon the request of Agent or any Lender, Borrower shall deposit with Agent a copy of each fully executed Qualified Ground Lease certified by Borrower as true and correct.

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§8. NEGATIVE COVENANTS.

The Borrower covenants and agrees that, so long as any Obligations, Loan, Note or Letter of Credit is outstanding or any of the Lenders has any obligation to make any Loans or issue any Letters of Credit:

§8.1 Restrictions on Indebtedness of Borrower.

A. The Borrower-SPE. The Borrower-SPE will not create, incur, assume, guarantee or be or remain liable, contingently or otherwise, with respect to any Indebtedness (whether secured or unsecured, recourse or non-recourse) other than:

(a) Indebtedness to the Lenders and the Agent arising under any of the Loan Documents;

(b) current liabilities of the Borrower-SPE incurred in the ordinary course of business but not incurred through (i) the borrowing of money, or (ii) the obtaining of credit except for credit on an open account basis customarily extended and in fact extended in connection with normal purchases of goods and services;

(c) Indebtedness in respect of taxes, assessments, governmental charges or levies and claims for labor, materials and supplies to the extent that payment therefor shall not at the time be required to be made in accordance with the provisions of §7.8;

(d) Indebtedness in respect of judgments only to the extent, for the period and for an amount not resulting in a Default; and

(e) endorsements for collection, deposit or negotiation and warranties of products or services, in each case incurred in the ordinary course of business.

B. EPR. EPR shall not, without the prior written consent of the Required Lenders, create, incur, assume, guarantee or be or remain liable, contingently or otherwise with respect to any Indebtedness on a recourse basis, except: (a) the limited secured recourse Indebtedness permitted pursuant to §9.10 herein; (b) unsecured debt (i.e., Indebtedness that is not secured by a Lien) permitted pursuant to §9.1 hereof; (c) Indebtedness under this Agreement (including under any of the other Loan Documents) and Indebtedness under the Term Loan Agreement (including under any of the other Loan Documents referred to therein); (d) Indebtedness of the type described in clauses (b) through (e), inclusive of §8.1A immediately above; and (e) Indebtedness whose recourse is solely for so-called “bad-boy” acts, including without limitation, (i) failure to account for a tenant’s security deposits, if any, for rent or any other payment collected by a borrower from a tenant under the lease, all in accordance with the provisions of any applicable loan documents, (ii) fraud or a material misrepresentation made by a Borrower, or the holders of beneficial or ownership interests in such Borrower, in connection with the financing evidenced by the applicable loan documents; (iii) any attempt by a Borrower to divert or otherwise cause to be diverted any amounts payable to the applicable lender in accordance with the applicable loan documents; (iv) the misappropriation or misapplication of any insurance proceeds or condemnation awards relating to the Borrowing Base Properties; (v) voluntary or involuntary

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bankruptcy by a Borrower; and (vi) any environmental matter(s) affecting any Borrowing Base Properties which is introduced or caused by a Borrower or any holder of a beneficial or ownership interest in a Borrower.

§8.2 Restrictions on Liens, Etc. The Borrower and its Subsidiaries will not (a) create or incur or suffer to be created or incurred or to exist any lien, security title, encumbrance, mortgage, pledge, negative pledge, charge, restriction or other security interest of any kind upon any of its property or assets of any character whether now owned or hereafter acquired, or upon the income or profits therefrom; (b) with respect to Borrower-SPE, only, pledge its assets for the benefit of any other Person other than with respect to this Agreement and the Loan Documents, nor shall it agree with any other party that it shall not pledge its assets for the benefit of any other Person, including without limitation, the pledge of any equity by EPR of the Borrower-SPE or any similar agreement with any other Person other than with respect to this Agreement, (c) pledge any equity interest of the Borrower-SPE; (d) transfer any of its property or assets or the income or profits therefrom for the purpose of subjecting the same to the payment of Indebtedness or performance of any other obligation in priority to payment of its general creditors; (e) acquire, or agree or have an option to acquire, any property or assets upon conditional sale or other title retention or purchase money security agreement, device or arrangement; (f) suffer to exist for a period of more than thirty (30) days after the same shall have been incurred any Indebtedness or claim or demand against it that if unpaid might by law or upon bankruptcy or insolvency, or otherwise, be given any priority whatsoever over any of its general creditors; (g) sell, assign, pledge or otherwise transfer any accounts, contract rights, general intangibles, chattel paper or instruments, with or without recourse (provided that this clause (g) shall not prohibit a true sale of a land option or development agreement or the sale of Real Estate by Borrower); or (h) incur or maintain any obligation to any holder of Indebtedness of Borrower which prohibits the creation or maintenance of any lien securing the Obligations or any other Indebtedness from the Lenders (collectively, “Liens”); provided that the Borrower and its Subsidiaries may create or incur or suffer to be created or incurred or to exist:

(i) Liens on properties to secure taxes, assessments and other governmental charges or claims for labor, material or supplies in respect of obligations not then delinquent or being contested in good faith;

(ii) deposits or pledges made in connection with, or to secure payment of, workers’ compensation, unemployment insurance, old age pensions or other social security obligations;

(iii) Liens on assets other than the Borrowing Base Property or any interest therein (including the rents, issues and profits therefrom) in respect of judgments, awards or Indebtedness which is permitted by §8.1B(a) and §9.10;

(iv) encumbrances on the Real Estate permitted under the applicable Lease or EPR Senior Property Loan Documents, or consisting of easements, rights of way, zoning restrictions, restrictions on the use of real property and defects and irregularities in the title thereto, landlord’s or lessor’s liens under leases to which the Borrower or any such Subsidiary is a party, purchase money security interests and other liens or encumbrances, which do not individually or in the aggregate have a materially adverse effect on the business of the Borrower on a consolidated basis;

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(v) liens and encumbrances on a Borrowing Base Property expressly permitted hereunder;

(vi) Liens in favor of the Agent and the Lenders arising under the Collateral Agreements, the Mortgages or any other Loan Documents; and

(vii) Liens arising under the Term Loan Agreement and the other Loan Documents referred to therein.

§8.3 Restrictions on Investments. The Borrower will not make or permit to exist or to remain outstanding any Investment except Investments in:

(a) marketable direct or guaranteed obligations of the United States of America that mature within one (1) year from the date of purchase by the Borrower or any such Subsidiary;

(b) marketable direct obligations of any of the following: Federal Home Loan Mortgage Corporation, Student Loan Marketing Association, Federal Home Loan Banks, Federal National Mortgage Association, Government National Mortgage Association, Bank for Cooperatives, Federal Intermediate Credit Banks, Federal Financing Banks, Export-Import Bank of the United States, Federal Land Banks, or any other agency or bank of the United States of America;

(c) demand deposits, certificates of deposit, bankers acceptances and time deposits of any of the Lenders or any United States banks having total assets in excess of $100,000,000; provided, however, that the aggregate amount at any time so invested with any single bank having total assets of less than $1,000,000,000 will not exceed $1,000,000;

(d) securities commonly known as “commercial paper” issued by any Lender, or by a corporation organized and existing under the laws of the United States of America or any State which at the time of purchase are rated by Moody’s Investors Service, Inc. or by Standard & Poor’s Corporation at not less than “P 1” if then rated by Moody’s Investors Service, Inc., and not less than “A 1”, if then rated by Standard & Poor’s Corporation;

(e) mortgage-backed securities guaranteed by the Government National Mortgage Association, the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation and other mortgage-backed bonds which at the time of purchase are rated by Moody’s Investors Service, Inc. or by Standard & Poor’s Corporation at not less than “AA” if then rated by Moody’s Investors Service, Inc. and not less than “AA” if then rated by Standard & Poor’s Corporation;

(f) repurchase agreements having a term not greater than 180 days and fully secured by securities described in the foregoing subsections (a), (b) or (e) with the Lenders, banks described in the foregoing subsection (c) or financial institutions or other corporations having total assets in excess of $500,000,000;

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(g) shares of so-called “money market funds” registered with the Securities and Exchange Commission under the Investment Company Act of 1940 which maintain a level per-share value, invest principally in investments described in the foregoing subsections (a) through (f) and have total assets in excess of $50,000,000;

(h) EPR Senior Property Loans (including property encumbered by EPR Senior First Mortgages) and, subject to §9, options, easements, licenses, fee interests, partnership interests, interests in limited liability companies and leasehold interests and similar interests in Real Estate, including earnest money deposits relating thereto and transaction costs;

(i) subject to the terms of this Agreement, Investments in Subsidiaries of Borrower existing as of the date hereof, and Investments in new Subsidiaries of Borrower created after the date of this Agreement;

(j) deposits required by government agencies or public utilities;

§8.4 Merger, Consolidation.

(a) Borrower-SPE will not become a party to any dissolution, liquidation or disposition of all or substantially all of Borrower-SPE’s assets or business, a merger, reorganization, consolidation or other business combination or agree to effect any asset acquisition, stock acquisition or other acquisition individually or in a series of transactions which may have a similar effect as any of the foregoing, in each case without the prior written consent of the Required Lenders, except for (i) the merger or consolidation of Borrower-SPE with another Subsidiary of EPR, and (ii) the merger or consolidation of Borrower-SPE where Borrower-SPE is the sole surviving entity provided however that any such merger or consolidation does not violate Borrower-SPE’s status as a Special Purpose Entity.

(b) EPR will not become a party to any dissolution, liquidation or disposition of all or substantially all of EPR’s assets or business, a merger, reorganization, consolidation or other business combination or agree to effect any asset acquisition, stock acquisition or other acquisition individually or in a series of transactions which may have a similar effect as any of the foregoing, in each case without the prior written consent of Required Lenders, except for (i) the merger or consolidation of EPR with one of its Subsidiaries, provided that such Subsidiary is other than Borrower-SPE; (ii) the merger or consolidation of EPR where EPR is the sole surviving entity provided however that any such merger or consolidation does not violate EPR’s status as a REIT; (iii) any acquisitions or investments; or (iv) any merger where EPR is the surviving entity such that a majority of the seats of the Board of Directors of the newly constituted entity are held by trustees of EPR serving as such prior to the time of such merger, or EPR otherwise maintains a controlling interest therein, provided further that such exceptions do not otherwise create any Default or Event of Default hereunder.

§8.5 Independent Directors. Borrower-SPE shall not fire, remove or change any Independent Director meeting the requirements set forth therefore in §1.1 herein, except that

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Borrower-SPE may only replace an Independent Director who either resigns or no longer qualifies as an Independent Director, and provided that Borrower-SPE shall provide written notice to Agent and Lenders of any such change in any Independent Director within two (2) Business Days thereof, and provided further that Borrower-SPE may fire an Independent Director for cause, only upon the prior consent of the Agent, and provided that Borrower-SPE shall immediately replace such Independent Director with a new Independent Director meeting the requirements set forth therefore in §1.1 herein.

§8.6 Intentionally Deleted.

§8.7 Distributions. EPR will not make any Distributions which would violate any of the following covenants:

(a) EPR will not make any Distributions in violation of §9.8 hereof, except as otherwise provided below. Notwithstanding the foregoing, EPR may, subject to the limitations set forth in this Agreement (including specifically, but without limitation, those contained in §8.7(b)) make Distributions (which shall not be included in the ninety percent (90%) FFO test set forth in §9.8 hereof) in order to enable EPR to repurchase common shares of EPR and the right to redeem any then outstanding preferred shares in accordance with their terms so long as (i) any such repurchase or redemption is made in EPR’s prudent business judgment, (ii) no Event of Default shall have occurred and be continuing on the date of any such repurchase or redemption and (iii) no Event of Default shall occur as a result of any such repurchase or redemption;

(b) In the event that an Event of Default shall have occurred and be continuing, EPR shall not make any Distributions other than the minimum Distributions required under the Code to maintain the REIT Status of EPR, as evidenced by a certification of the chief financial officer of EPR containing calculations in reasonable detail reasonably satisfactory in form and substance to the Agent; provided, however, that EPR shall not be entitled to make any Distribution in connection with the repurchase of common stock of Borrower at any time after an Event of Default shall have occurred and be continuing; and

(c) In the event that an Event of Default shall have occurred and be continuing and the maturity of the Obligations has been accelerated, EPR shall not make any Distributions whatsoever, either directly or indirectly.

§8.8 Asset Sales. The Borrower will not sell, transfer or otherwise dispose of any Borrowing Base Property other than for fair market value, and as otherwise set forth herein.

§8.9 Development Activity. The Borrower-SPE will not engage directly or indirectly in the development of properties (other than Eligible Real Estate) without the prior written consent of the Required Lenders in their sole discretion.

§8.10 Restriction on Prepayment of Indebtedness. The Borrower will not, (a) prepay, redeem, defease, purchase or otherwise retire the principal amount, in whole or in part, of any Indebtedness other than the Obligations and the Hedge Obligations after the occurrence of any Event of Default, or (b) modify any document evidencing any Indebtedness (other than the Obligations) to accelerate the maturity date of such Indebtedness; provided, that this §8.10 shall

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not prohibit (x) the prepayment of Indebtedness which is financed solely from the proceeds of a new loan which would otherwise be permitted by the terms of §8.1; (y) the prepayment of Indebtedness secured by Real Estate which is satisfied solely from the proceeds of a sale of the Real Estate securing such Indebtedness and (z) prepayment or defeasances permitted under other credit facilities.

§8.11 Zoning and Contract Changes and Compliance. The Borrower shall not initiate or consent to any zoning reclassification of any of its Borrowing Base Property or seek any variance under any existing zoning ordinance or use or permit the use of any Borrowing Base Property in any manner that could result in such use becoming a non-conforming use under any zoning ordinance or any other applicable land use law, rule or regulation. The Borrower shall not initiate any change in any laws, requirements of governmental authorities or obligations created by private contracts and Leases which now or hereafter may materially adversely affect the ownership, occupancy, use or operation of any Borrowing Base Property.

§8.12 Derivative Obligations. The Borrower-SPE shall not contract, create, incur, assume or suffer to exist any Derivative Obligations without the prior written consent of the Required Lenders in their sole discretion.

§8.13 Subsidiary Guarantees and Pledges. Any Subsidiaries of EPR which as of the date of this Agreement, do not guaranty any Indebtedness or have not granted any pledge of stock or other equity interests to secure any Indebtedness, are hereby prohibited from doing so, provided however, that any such Subsidiary may provide a guaranty of the Obligations, and provided further that any such Subsidiary may (i) incur Indebtedness with respect to acquisitions and/or refinancings or financings by such Subsidiary of Real Estate directly or indirectly owned by such Subsidiary; (ii) incur Indebtedness with respect to acquisitions, financings and/or refinancings by one or more Subsidiaries in a related transaction, which is funded by a common lender, and is secured by mortgages on the Real Estate directly or indirectly owned by each of such Subsidiaries, and from which Indebtedness, each of such Subsidiaries receives a benefit; and (iii) pledge its stock or other equity interests in a borrower or owner of Real Estate, to secure any Indebtedness that is also secured by a mortgage by such borrower or owner, granted pursuant to this Section 8.13(i) or (ii) hereinabove.

§8.14 Organizational Document Amendments. The Borrower shall not make any amendment to its organizational documents, including without limitation, its operating agreement, by-laws, articles or organization, articles or incorporation, or the like (other than any amendment to increase its authorized shares of any class or series or to authorize a new class or series of shares) without the consent of the Agent and the Required Lenders, but in no event shall Borrower make any amendments to any organizational documents which may have a Material Adverse Effect on the Borrowing Base Property hereunder or Borrower’s ability to perform its Obligations hereunder.

§8.15 Lease Amendments. With respect to any Megaplex Movie Theatre Lease on any Borrowing Base Property: Borrower-SPE shall not, without prior written consent of the Agent in its sole discretion, (i) alter, amend or modify the terms, in any material manner, or (ii) cancel or terminate any such Lease, or accept a surrender thereof, or (iii) otherwise change the terms of

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any such Lease in any material manner, or (iv) take any other action with respect thereto which may have a Material Adverse Effect on any Borrowing Base Property, including without limitation, a diminution in the value thereof.

§9. FINANCIAL COVENANTS.

At all times, the Borrower covenants and agrees that, so long as any Obligations, Loan, Note, or Letter of Credit is outstanding or any Lender has any obligation to make any Loans or issue any Letters of Credit, they shall at all times be in compliance with the following financial covenants. §9.2 through §9.7 and §9.10 through §9.11 shall be tested as of the end of each quarter, based upon the results for that particular quarter then ended. §9.1 and §9.8 shall be tested as of the end of each quarter, based upon the results for the trailing four quarters then ended and §9.1 shall also be tested on and as of the date of each new Loan hereunder. Notwithstanding anything to the contrary contained herein, §9.5 shall be tested as of the end of each quarter, based upon the results for that particular quarter then ended, but shall incorporate adjustments for proceeds from dividend reinvestment programs at the end of each calendar year, only, to the extent that such proceeds do not exceed $1,000,000.00.

§9.1 Borrowing Base. The outstanding principal balance of the Loans including the Letters of Credit Outstanding plus, without duplication, all unsecured debt (i.e. Indebtedness that is not secured) of Borrowers, shall at all times not be greater than and shall at all times be in compliance with the Borrowing Base; additionally, at no time shall the outstanding principal balance of the Loans, including the Letters of Credit Outstanding, exceed the Maximum Commitment Amount.

§9.2 Total Debt to Total Asset Value. Calculated on a Consolidated basis with respect to EPR, the ratio of Total Debt to Total Asset Value shall not exceed 60% for the first twelve (12) months after the date of this Agreement, reducing to 55% thereafter. At Borrower’s election, at the end of the first twelve (12) months after the date of this Agreement, or any time thereafter, as applicable, such ratio may remain at 55% or be increased to 60%, provided that if the Borrower elects to increase such ratio to 60%, the Facility shall, at the time of such election, and at all times during which such increased ratio is in effect, be secured by first mortgages in favor of the Agent, on behalf of the Lenders, on all or such portions of the Borrowing Base Properties as the Agent deems material in its sole discretion, provided further that it shall not be a Default or Event of Default hereunder (nor shall first mortgage collateralization be required) in the event that said ratio increases by up to 5% (i.e. from 55% up to 60%) so long as: (x) such increase shall not occur more than one time during the term of the Facility, and (y) such increase shall not be sustained for more than one quarter.

§9.3 Reserved.

§9.4 Maximum Permitted Investments. Calculated on a Consolidated basis with respect to EPR, at any time, the ratio of: (i) Investments in the aggregate sum of: (A) Investments in notes, mortgages and unimproved real estate (including cost of land under development, but excluding EPR Senior First Mortgages); (B) Investments in construction (total budgeted cost, excluding cost of land); and (C) Investments in unconsolidated subsidiaries, to (ii) Total Asset Value, shall not at any time exceed 25%.

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§9.5 Tangible Net Worth. The Consolidated Tangible Net Worth will not at any time be less than the sum of (a) ($1,083,300,000.00) plus (b) seventy-five percent (75%) of the aggregate Net Equity Proceeds received by EPR and its Subsidiaries on a Consolidated basis subsequent to March 31, 2009.

§9.6 Interest Rate Protection. With regard to EPR, the ratio of Unhedged Variable Rate Debt to Total Asset Value shall not exceed twenty-five percent (25%).

§9.7 Minimum Interest Coverage Ratio. Calculated on a Consolidated basis with respect to EPR, the Adjusted EBITDA to Interest Expense shall not be less than 2.00 to 1.00.

§9.8 Maximum Distributions. The ratio of Distributions of FFO to FFO before preferred dividends shall not exceed ninety percent (90%), measured on a rolling four-quarter basis, provided however, that (i) as long as there is no Default or Event of Default and none of the Loans has been accelerated, EPR shall not be prohibited from making Distributions that are necessary to maintain REIT Status (measured on a rolling four quarter basis), as evidenced by a certificate of the chief financial officer of EPR containing calculations in reasonable detail reasonably satisfactory in form and substance to the Agent, and (ii) EPR may make additional Distributions to the extent permitted under §8.7 hereof. For purposes of this covenant calculation, FFO shall exclude the effect of non-cash impairment charges.

§ 9.9 Minimum Liquidity. From ninety (90) days prior to the maturity date of the Concord Debt, until such maturity date (or, if such maturity date is extended to a date not beyond the Maturity Date of the Facility, for the 90-day period preceding such extended maturity date), Borrower must maintain Excess Availability under the Facility in an amount equal to at least the then outstanding principal balance of the Concord Debt, provided that the foregoing shall not apply once EPR or one or more of its Subsidiaries fully repays the Concord Debt or refinances it to a maturity date beyond that of the Facility. “Excess Availability” means, at any time, the sum of (i) the amount by which the Borrowing Base exceeds the outstanding principal amount of the Loans and the Letters of Credit Outstanding at such time, and (ii) the amount of EPR and its Subsidiaries’ unrestricted cash and cash equivalents at such time.

§ 9.10 Maximum Secured Recourse Debt to Total Asset Value. Calculated on a Consolidated basis with respect to EPR, Indebtedness of Borrowers, other than Indebtedness under the Facility, secured by a Lien (“Secured Indebtedness”) that is recourse to EPR (and insofar as the amount of such Indebtedness exceeds of 50% of the value of the property securing such Indebtedness), to Total Asset Value shall not exceed 15%; additionally, the amount of each such loan made after the date of this Agreement shall not at the time of origination, exceed 65% of the value of the property securing such loan. For purposes of calculating amounts under this covenant, valuation of property shall be: (i) in the case of existing properties which are Megaplex Movie Theatres and Entertainment-Related Retail Improvements (whether subject to a Lease or an EPR Senior First Mortgage), based upon such property’s net operating income (calculated in accordance with GAAP), capped at 10.00%, (ii) in the case of properties that are not Megaplex

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Movie Theatres or Entertainment-Related Retail Improvements (other than those under construction), based upon such property’s net operating income (calculated in accordance with GAAP), capped at 11.00%, provided however, that in the event the capped value is greater than the purchase price of the asset, then such calculation shall incorporate the purchase price, instead, and (iii) in the case of properties under construction, based upon such property’s cost.

§ 9.11 Minimum Fixed Charge Coverage Ratio. Calculated on a Consolidated basis with respect to EPR, at any time, the ratio of Adjusted EBITDA to Fixed Charges shall not be less than 1.50 to 1.00.

§10. CLOSING CONDITIONS.

The obligation of the Lenders to establish the Facility and make the Loans or issue Letters of Credit from time to time hereunder shall be subject to the satisfaction of each of the following conditions precedent:

§10.1 Loan Documents. Each of the Loan Documents shall have been duly executed and delivered by the respective parties thereto and shall be in full force and effect. The Agent shall have received a fully executed counterpart of each such document, except that each Lender that requests a Note, shall have received the fully executed original of its Note.

§10.2 Certified Copies of Organizational Documents. The Agent shall have received from the Borrower a copy, certified as of a recent date by the appropriate officer of each State in which such Person is organized or in which it is required to be qualified as a foreign entity, as applicable, and a duly authorized officer or similar representative of such Person, as applicable, to be true and complete, of the corporate charter or other formation document of the Borrower or its qualification to do business, as applicable, as in effect on such date of certification.

§10.3 Resolutions. All action on the part of the Borrower necessary for the valid execution, delivery and performance by such Person of this Agreement and the other Loan Documents to which such Person is or is to become a party shall have been duly and effectively taken, and evidence thereof reasonably satisfactory to the Agent shall have been provided to the Agent.

§10.4 Incumbency Certificate; Authorized Signers. The Agent shall have received from Borrower an incumbency certificate, dated as of the Closing Date, signed by a duly authorized officer of such Person and giving the name and bearing a specimen signature of each individual who shall be authorized to sign, in the name and on behalf of such Person, each of the Loan Documents to which such Person is or is to become a party.

§10.5 Opinion of Counsel. The Agent shall have received such opinions addressed to the Lenders and the Agent and dated as of the Closing Date from counsel to the Borrower addressing such matters as reasonably requested by Agent in form and substance reasonably satisfactory to the Agent, including an enforceability and due authority opinion with respect to Borrower.

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§10.6 Payment of Fees. The Borrower shall have paid to the Agent the fees payable pursuant to §4.2.

§10.7 Insurance. The Agent shall have received duplicate originals or copies of all certificates of insurance required by this Agreement.

§10.8 Performance; No Default. Borrower shall have performed and complied in all material respects with all terms and conditions herein required to be performed or complied with by it on or prior to the Closing Date, and on the Closing Date there shall exist no Default or Event of Default.

§10.9 Representations and Warranties. With the exception of any Third Party Information, the representations and warranties made by the Borrower in the Loan Documents or otherwise made by or on behalf of the Borrower and its Subsidiaries in connection therewith or after the date thereof shall have been true and correct in all material respects when made and shall also be true and correct in all material respects on the Closing Date.

§10.10 Proceedings and Documents. All proceedings in connection with the transactions contemplated by this Agreement and the other Loan Documents shall be reasonably satisfactory to the Agent and the Agent’s counsel in form and substance, and the Agent shall have received all information and such counterpart originals or certified copies of such documents and such other certificates, opinions, assurances, consents, approvals or documents as the Agent and the Agent’s counsel may reasonably require.

§10.11 Eligible Real Estate Qualification Documents. The Eligible Real Estate Qualification Documents for each Borrowing Base Property included in the Borrowing Base as of the Closing Date shall have been delivered to the Agent at the Borrower’s expense and shall be in form and substance satisfactory to the Agent.

§10.12 Compliance Certificate. The Agent shall have received a Compliance Certificate dated as of the date of the Closing Date demonstrating compliance with each of the covenants calculated therein as of the most recent fiscal quarter for which Borrower has provided financial statements under §6.4 adjusted in the best good faith estimate of Borrower as of the Closing Date.

§10.13 Stockholder and Partner Consents. The Agent shall have received evidence reasonably satisfactory to the Agent that all necessary stockholder, partner, member or other consents required in connection with the consummation of the transactions contemplated by this Agreement and the other Loan Documents have been obtained.

§10.14 Other. The Agent shall have reviewed such other documents, instruments, certificates, opinions, assurances, consents and approvals as the Agent or the Agent’s counsel may reasonably have requested.

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§11. CONDITIONS TO ALL BORROWINGS.

The obligations of the Lenders to make any Loan or issue any Letter of Credit, whether on or after the Closing Date, shall also be subject to the satisfaction of the following conditions precedent:

§11.1Prior Conditions Satisfied. All conditions set forth in §10 shall continue to be satisfied as of the date upon which any Loan is to be made or any Letter of Credit is to be issued.

§11.2 Representations True; No Default. The Agent shall have received as of the date of each Loan Advance, a Certificate from a duly authorized officer of EPR, certifying that, with the exception of Third Party Information, each of the representations and warranties made by or on behalf of the Borrower or any of its Subsidiaries contained in this Agreement, the other Loan Documents or in any document or instrument delivered pursuant to or in connection with this Agreement shall be true in all material respects both as of the date as of which they were made and shall also be true in all material respects as of the time of the making of such Loan with the same effect as if made at and as of that time, except to the extent of changes resulting from transactions permitted by the Loan Documents (it being understood and agreed that any representation or warranty which by its terms is made as of a specified date, other than that made as of the closing date shall be required to be true and correct only as of such specified date), and no Default or Event of Default shall have occurred and be continuing.

§11.3 No Legal Impediment. No change shall have occurred in any law or regulations thereunder or interpretations thereof that in the reasonable opinion of any Lender would make it illegal for such Lender to make such Loan or issue such Letter of Credit.

§11.4 Governmental Regulation. Each Lender shall have received such statements in substance and form reasonably satisfactory to such Lender as such Lender shall require for the purpose of compliance with any applicable regulations of the Comptroller of the Currency or the Board of Governors of the Federal Reserve System in connection with any Loan.

§11.5 Proceedings and Documents. All proceedings in connection with such Loan or Letter of Credit shall be reasonably satisfactory in substance and in form to the Agent, and the Agent’s counsel in form and substance and the Agent shall have received all information and such counterpart originals or certified or other copies of such documents and such other certificates, opinions, assurances, consents, approvals or documents as the Agent and the Agent’s counsel or any Lender may reasonably require.

§11.6 Borrowing Documents. The Agent shall have received as of the date of each Loan Advance, a fully completed Loan Request for such Loan and the other documents and information (including, without limitation, a Borrowing Base Certificate and a Compliance Certificate) as required by §2.7, or a fully completed Letter of Credit Request required by §2.10 in the form of Exhibit I hereto fully completed, as applicable.

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§12. EVENTS OF DEFAULT; ACCELERATION; ETC.

§12.1 Events of Default and Acceleration. If any of the following events (“Events of Default”) shall occur:

(a) the Borrower shall fail to pay any principal of the Loans when the same shall become due and payable, whether at the stated date of maturity or any accelerated date of maturity or at any other date fixed for payment;

(b) the Borrower shall fail to pay any interest on the Loans, any reimbursement obligations with respect to the Letters of Credit or any other sums due hereunder or under any of the other Loan Documents (excluding payments due under §12.1(a) above) within five (5) days after the same shall become due and payable, on any fixed date for payment or otherwise, provided however that such grace period shall not be applicable where any interest payment is due at the stated date of maturity or any accelerated date of maturity;

(c) the Borrower shall fail to comply with the covenants contained in §7.5 (a) or §9.1 and, with respect to §9.1, such failure shall continue to exist after written notice thereof shall have been given to the Borrower by the Agent and the cure period provided in §12.2 shall have ended;

(d) the Borrower shall fail to comply with any covenant contained in §9.3 through §9.11 and such failure shall continue for thirty (30) days after written notice thereof shall have been given to the Borrower by the Agent, except that, notwithstanding anything to the contrary contained herein, any failure to comply with the covenant contained in §9.9 shall be an immediate default with no notice or cure period hereunder.

(e) the Borrower shall fail to perform any other term, covenant or agreement contained herein or in any of the other Loan Documents which they are required to perform (other than those specified in the other subclauses of this §12 or in the other Loan Documents) and shall fail to remedy such failure within thirty (30) days after written notice thereof shall have been given to the Borrower by the Agent;

(f) any representation or warranty made by or on behalf of the Borrower or any of its Subsidiaries in this Agreement or any other Loan Document, or any report, certificate, financial statement, request for a Loan, Letter of Credit Request or in any other document or instrument delivered pursuant to or in connection with this Agreement, any advance of a Loan, the issuance of any Letter of Credit or any of the other Loan Documents, other than constituting or based upon Third Party Information on which Borrower or any of its Subsidiaries relied and had no knowledge or reason to believe was untrue in any material respect, shall prove to have been false in any material respect upon the date when made or deemed to have been made or repeated; notwithstanding anything to the contrary contained in this provision, the Borrower shall have a period of thirty (30) days to cure any unintentional inaccuracy or misrepresentation .

(g) any of the Borrower or any of its Subsidiaries (i) shall fail to pay at maturity, or within any applicable period of grace, any obligation for borrowed money or credit received or other Indebtedness, or (ii) shall fail to observe or perform any term, covenant or agreement

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contained in any agreement by which it is bound, evidencing or securing any obligation for borrowed money or credit received or other Indebtedness 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; provided that the events described in this §12.1(g) shall not constitute an Event of Default unless such failure to perform, together with other failures to perform as described in this §12.1(g), involve singly or in the aggregate obligations for borrowed money or credit received totaling in excess of $5,000,000.00;

(h) any of the Borrower or any of its Subsidiaries, (i) shall make an assignment for the benefit of creditors, or admit in writing its general 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 for it or any substantial part of its assets, (ii) shall commence any case or other proceeding relating to it under any bankruptcy, reorganization, arrangement, insolvency, readjustment of debt, dissolution or liquidation or similar law of any jurisdiction, now or hereafter in effect, or (iii) shall take any action to authorize or in furtherance of any of the foregoing;

(i) a petition or application shall be filed for the appointment of a trustee or other custodian, liquidator or receiver of any of the Borrower or any of its Subsidiaries or any substantial part of the assets of any thereof, or a case or other proceeding shall be commenced against any such Person under any bankruptcy, reorganization, arrangement, insolvency, readjustment of debt, dissolution or liquidation or similar law of any jurisdiction, now or hereafter in effect, and any such Person shall indicate its written approval thereof, written consent thereto or written acquiescence therein or such petition, application, case or proceeding shall not have been dismissed within sixty (60) days following the filing or commencement thereof;

(j) a decree or order is entered appointing a trustee, custodian, liquidator or receiver for any of the Borrower or any of its Subsidiaries or adjudicating any such Person, 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 such Person in an involuntary case under federal bankruptcy laws as now or hereafter constituted;

(k) there shall remain in force, undischarged, unsatisfied and unstayed, for more than sixty (60) days, whether or not consecutive, one or more uninsured or unbonded final judgments against any of the Borrower or any of its Subsidiaries that, either individually or in the aggregate, exceed $1,000,000;

(l) any of the Loan Documents shall be canceled, terminated, revoked or rescinded otherwise than in accordance with the terms thereof or the express prior written agreement, consent or approval of the Lenders, or any action at law, suit in equity or other legal proceeding to cancel, revoke or rescind any of the Loan Documents shall be commenced by or on behalf of any of the Borrower, or any court or any other governmental or regulatory authority or agency of competent jurisdiction shall make a determination, or issue a judgment, order, decree or ruling, to the effect that any one or more of the Loan Documents is illegal, invalid or unenforceable in accordance with the terms thereof;

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(m) any dissolution, termination, liquidation of all or substantially all of the assets, merger or consolidation of any of the Borrower shall occur unless Borrower is the surviving entity, or any sale, transfer or other disposition of all or substantially all of the assets, measured either by value or quantity, of any of the Borrower shall occur, in each case other than as permitted under the terms of this Agreement or the other Loan Documents;

(n) with respect to any Guaranteed Pension Plan, an ERISA Reportable Event shall have occurred and the Required Lenders shall have determined in their reasonable discretion that such event reasonably could be expected to result in liability of any of the Borrower or any of its Subsidiaries to the PBGC or such Guaranteed Pension Plan in an aggregate amount exceeding $2,000,000 and such event in the circumstances occurring reasonably could constitute grounds for the termination of such Guaranteed Pension Plan by the PBGC or for the appointment by the appropriate United States District Court of a trustee to administer such Guaranteed Pension Plan; or a trustee shall have been appointed by the United States District Court to administer such Plan; or the PBGC shall have instituted proceedings to terminate such Guaranteed Pension Plan;

(o) EPR shall cease at any time to qualify as a real estate investment trust under the Code and/or Borrower-SPE shall fail to be a Special Purpose Entity;

(p) the Borrower-SPE, EPR or any of its Subsidiaries or any Person so connected with any of them shall be indicted for a federal crime, a punishment for which could include the forfeiture of (i) any assets of Borrower-SPE, EPR or any of its Subsidiaries which in the good faith judgment of the Required Lenders could have a Material Adverse Effect, or (ii) the Borrowing Base Properties;

(q) any Change in Control shall occur with respect to any Borrower; or

(r) an event of default, however defined, under any of the other Loan Documents shall occur;

then, and in any such event, the Agent may, and upon the request of the Required Lenders shall, by notice in writing to the Borrower terminate the Facility and/or declare all amounts owing with respect to this Agreement, the Notes, the Letters of Credit and the other Loan Documents (including prepayment penalties or yield maintenance fees) to be, and they shall thereupon forthwith become, immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived by the Borrower; provided that in the event of any Event of Default specified in §12.1(h), §12.1(i) or §12.1(j), all such amounts shall become immediately due and payable automatically and without any requirement of presentment, demand, protest or other notice of any kind from any of the Lenders or the Agent. Upon demand by Agent or the Required Lenders in their absolute and sole discretion after the occurrence of an Event of Default, and regardless of whether the conditions precedent in this Agreement for a Revolving Credit Loan have been satisfied, the Lenders will cause a Revolving Credit Loan to be made in the undrawn amount of all Letters of Credit. The proceeds of any such Revolving Credit Loan will be pledged to and held by Agent as security for any amounts that become payable under the Letters of Credit and all other Obligations. In the alternative, if demanded by Agent in its absolute and sole discretion after the occurrence of an Event of

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Default, Borrower will deposit with and pledge to Agent cash in an amount equal to the amount of all undrawn Letters of Credit. Such amounts will be pledged to and held by Agent for the benefit of the Lenders as security for any amounts that become payable under the Letters of Credit and all other Obligations. Upon any draws under Letters of Credit, at Agent’s sole discretion, Agent may apply any such amounts to the repayment of amounts drawn thereunder and upon the expiration of the Letters of Credit any remaining amounts will be applied to the payment of all other Obligations or if there are no outstanding Obligations and Lenders have no further obligation to make Revolving Credit Loans or issue Letters of Credit or if such excess no longer exists, such proceeds deposited by Borrower will be released to Borrower. If at any time the aggregate amount of funds pledged to Agent as collateral for such Letters of Credit shall exceed one hundred percent (100%) of the aggregate face amount of all amounts available to be drawn under such Letters of Credit (including any amounts that may be reinstated thereunder), Agent shall release the amount of such excess deposited by the Borrower to the Borrower.

Notwithstanding anything to the contrary contained herein, the occurrence of any one of the aforementioned terms or conditions in this §12.1, shall be, prior to the giving of any applicable notice or grace period, and until the same is cured as permitted by this Agreement, a “Default.”

§12.2 Limitation of Cure Periods.

(a) In the event that there shall occur any Default under §12.1(c), then within five (5) Business Days after receipt of notice of such Default from the Agent or the Required Lenders, the Borrower may elect to cure such Default by providing additional Borrowing Base Property consisting of Potential Borrowing Base Property, and/or to reduce the outstanding Loans to it, in which event such actions shall be completed within such five (5) Business Day period (or within thirty (30) days following the expiration of the initial five (5) Business Day period in the event that the Borrower intends to provide additional Borrowing Base Property). The Borrower’s notice of its election pursuant to the preceding sentence shall be delivered to the Agent within the period of five (5) Business Days provided above, and if not so delivered Borrower’s cure period shall immediately terminate and such Default shall become an Event of Default. In the event that Borrower elects to add additional Borrowing Base Property and fails within the time provided herein, the cure period shall terminate and such Default immediately shall constitute an Event of Default. In the event that the Borrower shall elect under §12.2(a) to provide additional Borrowing Base Property consisting of Potential Borrowing Base Property, the Real Estate to be added to the Borrowing Base Property shall be Eligible Real Estate and on or prior to the expiration of the thirty (30) day period referred to above each of the Eligible Real Estate Qualification Documents shall have been completed at the Borrower’s expense and provided to the Agent for the benefit of the Lenders and all other conditions to the acceptance of such Real Estate as a Borrowing Base Property shall have been satisfied.

(b) In the event that there shall occur any Default that affects only certain Borrowing Base Property or the owner(s) thereof, or if any Default shall occur in any covenant contained in § 9.3 through § 9.11, then within five (5) Business Days after receipt of notice of such Default from the Agent or the Required Lenders, the Borrower may elect to cure such Default by electing to remove such Borrowing Base Property from the Borrowing Base and reduce the outstanding

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Loans or by substituting for such Borrowing Base Property additional Borrowing Base Property consisting of Potential Borrowing Base Property for the Borrowing Base Property to which such Default relates (provided that the value of such Borrowing Base Property Replacement is such that after acceptance thereof, the Borrower is in compliance with the Borrowing Base requirements), in which event such actions shall be completed within five (5) Business Days following the expiration of the initial five (5) Business Day period (or within thirty (30) days following the expiration of the initial five (5) Business Day period in the event that the Borrower intends to provide additional or substitute Borrowing Base Property). The Borrower’s notice of its election pursuant to the preceding sentence shall be delivered to the Agent within the period of five (5) Business Days provided above, and if not so delivered Borrower’s cure period shall immediately terminate and such Default shall become an Event of Default. In the event that Borrower elects to add additional or substitute Borrowing Base Property and fails within the time provided herein, the cure period shall terminate and such Default immediately shall constitute an Event of Default. In the event that the Borrower shall elect to cure any Default in any covenant contained in §9.3 through §9.11, by providing additional Borrowing Base Property consisting of Potential Borrowing Base Property, the Real Estate to be added to the Borrowing Base Property shall be Eligible Real Estate and on or prior to the expiration of the thirty (30) day period referred to above, each of the Eligible Real Estate Qualification Documents shall have been completed at the Borrower’s expense and provided to the Agent for the benefit of the Lenders and all other conditions in this Agreement to the acceptance of such Real Estate as a Borrowing Base Property shall have been satisfied.

§12.3 Termination of Commitments. If any one or more Events of Default specified in §12.1(h), §12.1(i) or §12.1(j) shall occur, then immediately and without any action on the part of the Agent or any Lender any unused portion of the credit hereunder shall terminate and the Lenders shall be relieved of all obligations to make Loans or issue Letters of Credit to the Borrower. If any other Event of Default shall have occurred, the Agent, upon the election of the Required Lenders, shall by notice to the Borrower terminate the obligation to make Loans to the Borrower or issue any Letters of Credit. No termination under this §12.3 shall relieve the Borrower of its obligations to the Lenders arising under this Agreement or the other Loan Documents.

§12.4 Remedies. In case any one or more Events of Default shall have occurred and be continuing, and whether or not the Lenders shall have accelerated the maturity of the Loans pursuant to §12.1, the Agent on behalf of the Lenders may, with the consent of the Required Lenders but not otherwise, proceed to protect and enforce their rights and remedies under this Agreement, the Notes and/or any of the other Loan Documents by suit in equity, action at law or other appropriate proceeding, including to the full extent permitted by applicable law the specific performance of any covenant or agreement contained in this Agreement and the other Loan Documents, the obtaining of the ex parte appointment of a receiver, and, if any amount shall have become due, by declaration or otherwise, the enforcement of the payment thereof. No remedy herein conferred upon the Agent or the holder of any Note is intended to be exclusive of any other remedy and each and every remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute or any other provision of law. If Borrower fails to perform any agreement or covenant contained in this Agreement or any of the other Loan Documents beyond any applicable period for notice

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and cure, the Agent may itself perform, or cause to be performed, any agreement or covenant of such Person contained in this Agreement or any of the other Loan Documents which such Person shall fail to perform, and the out-of-pocket costs of such performance, together with any reasonable expenses, including reasonable attorneys’ fees actually incurred (including attorneys’ fees incurred in any appeal) by the Agent in connection therewith, shall be payable by Borrower upon demand and shall constitute a part of the Obligations and shall if not paid within five (5) days after demand bear interest at the rate for overdue amounts as set forth in this Agreement. In the event that all or any portion of the Obligations is collected by or through an attorney-at-law, the Borrower shall pay all costs of collection including, but not limited to, reasonable attorney’s fees.

§12.5 Distribution of Proceeds. In the event that, following the occurrence and during the continuance of any Event of Default, any monies are received in connection with the realization of any of the Borrowers’ assets, such monies shall be distributed for application as follows:

(a) First, to the payment of, or (as the case may be) the reimbursement of the Agent for or in respect of, all reasonable costs, expenses, disbursements and losses which shall have been paid, incurred or sustained by the Agent in connection with the collection of such monies by the Agent, for the exercise, protection or enforcement by the Agent of all or any of the rights, remedies, powers and privileges of the Agent or the Lenders under this Agreement or any of the other Loan Documents or in support of any provision of adequate indemnity to the Agent against any taxes or liens which by law shall have, or may have, priority over the rights of the Agent or the Lenders to such monies;

(b) Second, to all other Obligations (including any interest, expenses or other obligations incurred after the commencement of a bankruptcy) in such order or preference as the Required Lenders shall determine; provided, that (i) distributions in respect of such other Obligations shall include, on a pari passu basis, the Agent’s fee payable pursuant to §4.3; (ii) in the event that any Lender shall have wrongfully failed or refused to make an advance under §2.7 or §2.10(f) and such failure or refusal shall be continuing, advances made by other Lenders during the pendency of such failure or refusal shall be entitled to be repaid as to principal and accrued interest in priority to the other Obligations described in this subsection (b), and (iii) except as otherwise provided in clause (ii), Obligations owing to the Lenders with respect to each type of Obligation such as interest, principal, fees and expenses shall be made among the Lenders pro rata; and provided, further that the Required Lenders may in their discretion make proper allowance to take into account any Obligations not then due and payable; and

(c) Third, to termination payments due with respect to any Hedge Obligations; and

(d) Fourth, the excess, if any, shall be returned to the Borrower or to such other Persons as are entitled thereto.

§13. SETOFF.

§13.1 Set-Off. During the continuance of any uncured Event of Default, any deposits (general or specific, time or demand, provisional or final, regardless of currency, maturity, or the

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branch where such deposits are held) or other sums credited by or due from any Lender to the Borrower and any securities or other property of the Borrower in the possession of such Lender may be applied to or set off against the payment of Obligations and any and all other liabilities, direct, or indirect, absolute or contingent, due or to become due, now existing or hereafter arising, of the Borrower to such Lender. Each of the Lenders agrees with each other Lender that if such Lender shall receive from the Borrower, whether by voluntary payment, exercise of the right of setoff, or otherwise, and shall retain and apply to the payment of the Note or Notes held by such Lender on a pro rata basis with all other Lenders consistent with the Commitment Percentage and such Lender shall make such disposition and arrangements with the other Lenders either by way of distribution, pro tanto assignment of claims, subrogation or otherwise as shall result in each Lender receiving in respect of the Loans held by it its proportionate payment as contemplated by this Agreement. ANY AND ALL RIGHTS TO REQUIRE LENDER TO EXERCISE ITS RIGHTS AND REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES OR MAY SECURE THE LOAN, PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF THE BORROWER ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.

§13.2 Additional Rights. The rights of Lenders and each affiliate of Lenders under this Article 13 are in addition to and not in limitation of, other rights and remedies, including other rights of set-off which Lenders may have upon an Event of Default.

§14. THE AGENT.

§14.1 Authorization. The Agent is authorized to take such action on behalf of each of the Lenders and to exercise all such powers as are hereunder and under any of the other Loan Documents and any related documents delegated to the Agent, together with such powers as are reasonably incident thereto, provided that no duties or responsibilities not expressly assumed herein or therein shall be implied to have been assumed by the Agent. The obligations of the Agent hereunder are primarily administrative in nature, and nothing contained in this Agreement or any of the other Loan Documents shall be construed to constitute the Agent as a trustee for any Lender or to create an agency or fiduciary relationship. The Borrower and any other Person shall be entitled to conclusively rely on a statement from the Agent that it has the authority to act for and bind the Lenders pursuant to this Agreement and the other Loan Documents.

§14.2 Employees and Agents. The Agent may exercise its powers and execute its duties by or through employees or agents and shall be entitled to take, and to rely on, advice of counsel concerning all matters pertaining to its rights and duties under this Agreement and the other Loan Documents. The Agent may utilize the services of such Persons as the Agent may reasonably determine, and all reasonable fees and expenses of any such Persons shall be paid by the Borrower.

§14.3 No Liability. Neither the Agent nor any of its shareholders, directors, officers or employees nor any other Person assisting them in their duties nor any agent, or employee thereof, shall be liable to any of the Lenders for any waiver, consent or approval given or any action taken, or omitted to be taken, in good faith by it or them hereunder or under any of the

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other Loan Documents, or in connection herewith or therewith, or be responsible for the consequences of any oversight or error of judgment whatsoever, except that the Agent or such other Person, as the case may be, shall be liable for losses due to its willful misconduct or gross negligence.

§14.4 No Representations. The Agent shall not be responsible for the execution or validity or enforceability of this Agreement, the Notes, any of the other Loan Documents or any instrument at any time constituting, or intended to constitute, collateral security for the Notes, or for the value of any such collateral security or for the validity, enforceability or collectability of any amounts owing with respect to the Notes, or for any recitals or statements, warranties or representations made herein or in any of the other Loan Documents or in any certificate or instrument hereafter furnished to it by or on behalf of the Borrower or any of its Subsidiaries, or be bound to ascertain or inquire as to the performance or observance of any of the terms, conditions, covenants or agreements herein or in any of the other Loan Documents. The Agent shall not be bound to ascertain whether any notice, consent, waiver or request delivered to it by the Borrower or any holder of any of the Notes shall have been duly authorized or is true, accurate and complete. The Agent has not made nor does it now make any representations or warranties, express or implied, nor does it assume any liability to the Lenders, with respect to the creditworthiness or financial condition of the Borrower or any of its Subsidiaries, or the value of the Borrowing Base Property or any other assets of the Borrower. Each Lender acknowledges that it has, independently and without reliance upon the Agent or any other Lender, and based upon such information and documents as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender also acknowledges that it will, independently and without reliance upon the Agent or any other Lender, based upon such information and documents as it deems appropriate at the time, continue to make its own credit analysis and decisions in taking or not taking action under this Agreement and the other Loan Documents.

§14.5 Payments.

(a) A payment by the Borrower to the Agent hereunder or under any of the other Loan Documents for the account of any Lender shall, upon receipt by the Agent, constitute a payment to such Lender. The Agent agrees to distribute to each Lender not later than one Business Day after the Agent’s receipt of good funds, determined in accordance with the Agent’s customary practices, such Lender’s pro rata share of payments received by the Agent for the account of the Lenders except as otherwise expressly provided herein or in any of the other Loan Documents. In the event that the Agent fails to distribute such amounts within one Business Day as provided above, the Agent shall pay interest on such amount at a rate per annum equal to the Federal Funds Effective Rate from time to time in effect.

(b) If in the opinion of the Agent the distribution of any amount received by it in such capacity hereunder, under the Notes or under any of the other Loan Documents might involve it in liability, it may refrain from making distribution until its right to make distribution shall have been adjudicated by a court of competent jurisdiction. If a court of competent jurisdiction shall adjudge that any amount received and distributed by the Agent is to be repaid, each Person to whom any such distribution shall have been made shall either repay to the Agent its

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proportionate share of the amount so adjudged to be repaid or shall pay over the same in such manner and to such Persons as shall be determined by such court. In the event that the Agent shall refrain from making any distribution of any amount received by it as provided in this §14.5(b), the Agent shall endeavor to hold such amounts in an interest bearing account and at such time as such amounts may be distributed to the Lenders, the Agent shall distribute to each Lender, based on their respective Commitment Percentages, its pro rata share of the interest or other earnings from such deposited amount.

(c) Notwithstanding anything to the contrary contained in this Agreement or any of the other Loan Documents, any Lender that fails (i) to make available to the Agent its pro rata share of any Loan or (ii) to comply with the provisions of §13 with respect to making dispositions and arrangements with the other Lenders, where such Lender’s share of any payment received, whether by setoff or otherwise, is in excess of its pro rata share of such payments due and payable to all of the Lenders, in each case as, when and to the full extent required by the provisions of this Agreement, shall be deemed delinquent (a “Delinquent Lender”) and shall be deemed a Delinquent Lender until such time as such delinquency is satisfied. A Delinquent Lender shall be deemed to have assigned any and all payments due to it from the Borrower, whether on account of outstanding Loans, interest, fees or otherwise, to the remaining nondelinquent Lenders for application to, and reduction of, their respective pro rata shares of all outstanding Loans. The Delinquent Lender hereby authorizes the Agent to distribute such payments to the nondelinquent Lenders in proportion to their respective pro rata shares of all outstanding Loans. A Delinquent Lender shall be deemed to have satisfied in full a delinquency when and if, as a result of application of the assigned payments to all outstanding Loans of the nondelinquent Lenders or as a result of other payments by the Delinquent Lenders to the nondelinquent Lenders, the Lenders’ respective pro rata shares of all outstanding Loans have returned to those in effect immediately prior to such delinquency and without giving effect to the nonpayment causing such delinquency.

§14.6 Holders of Notes. Subject to the terms of §18, the Agent may deem and treat the payee of any Note as the absolute owner or purchaser thereof for all purposes hereof until it shall have been furnished in writing with a different name by such payee or by a subsequent holder, assignee or transferee.

§14.7 Indemnity. The Lenders ratably agree hereby to indemnify and hold harmless the Agent from and against any and all claims, actions and suits (whether groundless or otherwise), losses, damages, costs, expenses (including any expenses for which the Agent has not been reimbursed by the Borrower as required by §15), and liabilities of every nature and character arising out of or related to this Agreement, the Notes, or any of the other Loan Documents or the transactions contemplated or evidenced hereby or thereby, or the Agent’s actions taken hereunder or thereunder, except to the extent that any of the same shall be directly caused by the Agent’s willful misconduct or gross negligence.

§14.8 Agent as Lender. In its individual capacity, KeyBank shall have the same obligations and the same rights, powers and privileges in respect to its Commitment and the Loans made by it, and as the holder of any of the Notes as it would have were it not also the Agent.

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§14.9 Resignation; Removal. The Agent may resign at any time by giving 60 days’ prior written notice thereof to the Lenders and the Borrower. The Required Lenders may remove the Agent from its capacity as Agent for failure to perform its material obligations under this Agreement provided that the Required Lenders shall have given prior written notice to the Agent of its failure to perform any of its material obligations under this Agreement and such failure shall not have been cured within thirty (30) calendar days after receipt of notice of such failure (or such failure cannot reasonably be cured within such thirty (30) day period, then within such longer period of time as may be necessary to complete such cure so long as Agent commences such cure within such thirty (30) day period and thereafter diligently pursues such cure to completion). Upon any such resignation or removal, the Required Lenders shall have the right to appoint as a successor Agent any Lender or any financial institution whose senior debt obligations are rated not less than “A2” or its equivalent by Moody’s or not less than “A2” or its equivalent by S&P and which has a net worth of not less than $500,000,000. Unless a Default or Event of Default shall have occurred and be continuing, such successor Agent shall be reasonably acceptable to the Borrower. If no successor Agent shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Agent’s giving of notice of resignation or its removal, then the retiring or removed Agent may, on behalf of the Lenders, appoint a successor Agent, which shall be any Lender or any financial institution whose senior debt obligations are rated not less than “A2” or its equivalent by Moody’s or not less than “A” or its equivalent by S&P and which has a net worth of not less than $500,000,000. Upon the acceptance of any appointment as Agent hereunder by a successor Agent, such successor Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring or removed Agent, and the retiring or removed Agent shall be discharged from its duties and obligations hereunder as Agent thereafter arising. After any retiring or removed Agent’s resignation or removal, the provisions of this Agreement and the other Loan Documents shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as Agent. Notwithstanding anything herein to the contrary, in the event that the Lender that is also the Agent shall at any time hold a Commitment less than $10,000,000.00, then such Agent shall promptly provide written notice thereof to the Lenders and the Required Lenders shall have the right, to be exercised within fifteen (15) days of delivery of such notice by such Agent, to elect to remove such Agent as Agent and replace such Agent as Agent under the Loan Documents, subject to the terms of this §14.9.

§14.10 Duties in the Case of Enforcement. In case one or more Events of Default have occurred and shall be continuing, and whether or not acceleration of the Obligations shall have occurred, the Agent shall, if (a) so requested by the Required Lenders and (b) the Lenders have provided to the Agent such additional indemnities and assurances against expenses and liabilities as the Agent may reasonably request, proceed to enforce and exercise all or any such other legal and equitable and other rights or remedies as it may have in respect of the Borrowers’ assets. The Required Lenders may direct, subject to the terms of any intercreditor agreement among the Agent and the Lenders, the Agent in writing as to the method and the extent of any such sale or other disposition of said assets, the Lenders hereby agreeing to indemnify and hold the Agent harmless from all liabilities incurred in respect of all actions taken or omitted in accordance with such directions, provided that the Agent need not comply with any such direction to the extent that the Agent reasonably believes that the Agent’s compliance with such direction to be unlawful or commercially unreasonable in any applicable jurisdiction.

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§14.11 Request for Agent Action. Agent and the Lenders acknowledge that in the ordinary course of business of the Borrower, (a) a Borrowing Base Property may be subject to a Taking, (b) Borrower may desire to enter into easements or other agreements affecting the Borrowing Base Properties, or take other actions or enter into other agreements in the ordinary course of business which similarly require the consent, approval or agreement of the Agent. In connection with the foregoing, the Lenders hereby expressly authorize the Agent to (x) execute releases of any liens in connection with any Taking, (y) execute any required consents or subordinations in form and substance satisfactory to Agent, consistent with the provisions of the applicable Leases in connection with any easements or agreements affecting the Borrowing Base Property, or (z) execute any other required consents, approvals, or other agreements in form and substance satisfactory to the Agent in connection with such other actions or agreements as may be necessary in the ordinary course of Borrower’s business.

§14.12 Intentionally Deleted.

§14.13 Replacement of Holdout Lender. If any action to be taken by the Lenders hereunder requires the unanimous consent, authorization, or agreement, of all Lenders, and a Lender (“Holdout Lender”) fails to give its consent, authorization or agreement, then Agent, upon at least 5 Business Days prior irrevocable notice to the Holdout Lender, may, or upon Borrower’s request, and otherwise in compliance with the terms of this §14.13, permanently replace the Holdout Lender with one or more substitute lenders (each, a “Replacement Lender”), and the Holdout Lender shall have no right to refuse to be replaced hereunder. Any notice hereunder to replace the Holdout Lender shall specify an effective date for such replacement, which date shall not be later than 15 Business Days after the date such notice is given.

Prior to the effective date of such replacement, the Holdout Lender and each Replacement Lender shall execute and deliver an Assignment and Acceptance Agreement, subject only to the Holdout Lender being repaid its share of the outstanding obligations (including an assumption of its pro rata share of the risk participation liability) without any premium or penalty of any kind whatsoever. If the Holdout Lender shall refuse or fail to execute and deliver any such Assignment and Acceptance Agreement prior to the effective date of such replacement, the Holdout Lender shall be deemed to have executed and delivered such Assignment and Acceptance Agreement. Until such time as the Replacement Lender(s) shall have acquired all of the Obligations, the Commitments, and the other rights and obligations of the Holdout Lender hereunder and under the other Loan Documents, the Holdout Lender shall remain obligated to make the Holdout Lender’s Pro Rata Share of Advances.

In the event that no new Lender is located to purchase the Holdout Lender’s Commitment, then Borrower shall have the option after receipt of written notice from Agent to Borrower that no new Lender has been obtained, to terminate the Commitment of the Holdout Lender. Borrower agrees to pay all reasonably incurred costs or expenses incurred by any Lender in connection with this §14.13 including without limitation, all principal and accrued and unpaid interest or fees, including any accrued and unbilled LIBOR breakage fees.

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§15. EXPENSES.

The Borrower agrees to pay (a) the reasonable costs of producing and reproducing this Agreement, the other Loan Documents and the other agreements and instruments mentioned herein, (b) any taxes (including any interest and penalties in respect thereto) payable by the Agent or any of the Lenders (other than taxes based upon the Agent’s or any Lender’s gross or net income in the ordinary course), (c) all title insurance premiums, engineer’s fees, environmental reviews and the reasonable fees, expenses and disbursements of the counsel to the Agent and any local counsel to the Agent incurred in connection with the preparation, administration, syndication or interpretation of the Loan Documents and other instruments mentioned herein (excluding, however, the preparation of agreements evidencing participations granted under §18.4), and amendments, modifications, approvals, consents or waivers hereto or hereunder, (d) all other reasonable out of pocket fees, expenses and disbursements of the Agent actually incurred by the Agent in connection with the preparation or interpretation of the Loan Documents and other instruments mentioned herein, the addition or substitution of additional Borrowing Base Properties, the review of leases, the making of each advance hereunder, the syndication of the Commitments pursuant to §18 (without duplication of those items addressed in subparagraph (c), above), (e) all reasonable out-of-pocket expenses (including reasonable attorneys’ fees and costs, and the fees and costs of appraisers, engineers, investment bankers or other experts retained by any Lender or the Agent) actually incurred by any Lender or the Agent in connection with (i) the enforcement of or preservation of rights under any of the Loan Documents against the Borrower or the administration thereof after the occurrence of a Default or Event of Default and (ii) any litigation, proceeding or dispute whether arising hereunder or otherwise, in any way related to the Agent’s or any of the Lenders’ relationship with the Borrower , unless such suit is brought by Borrower, and the Borrower ultimately prevails in such suit; otherwise all such costs and expenses shall be borne by the Borrower, (f) all reasonable fees, expenses and disbursements of the Agent incurred in connection with UCC searches, title rundowns or title searches and (g) all reasonable fees, expenses and disbursements (including reasonable attorneys’ fees and costs) which may be incurred by KeyBank in connection with the execution and delivery of this Agreement and the other Loan Documents (without duplication of any of the items listed above). The covenants of this §15 shall survive the repayment of the Loans and the termination of the obligations of the Lenders hereunder.

§16 INDEMNIFICATION.

§16.1 Lender Indemnification. The Borrower agrees to indemnify and hold harmless the Agent and the Lenders and their respective directors, officers, employees, agents and each Person who controls the Agent or any Lender from and against any and all claims, actions and suits, whether groundless or otherwise, and from and against any and all liabilities, losses, damages and expenses of every nature and character arising out of or relating to this Agreement or any of the other Loan Documents or the transactions contemplated hereby and thereby including, without limitation, (a) any and all claims for brokerage, leasing, finders or similar fees which may be made relating to the Borrowing Base Properties or the Loans, (b) any condition of the Borrowing Base Properties, (c) any actual or proposed use by the Borrower of the proceeds of any of the Loans (d) any actual or alleged infringement of any patent, copyright, trademark, service mark or similar right of the Borrower, or any of its Subsidiaries comprised in the

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Borrowing Base Property, (e) the Borrower entering into or performing this Agreement or any of the other Loan Documents, (f) any actual or alleged violation of any law, ordinance, code, order, rule, regulation, approval, consent, permit or license relating to the Borrowing Base Property, or (g) with respect to the Borrower and its Subsidiaries and their respective properties and assets, the violation of any Environmental Law, the Release or threatened Release of any Hazardous Substances or any action, suit, proceeding or investigation brought or threatened with respect to any Hazardous Substances (including, but not limited to, claims with respect to wrongful death, personal injury, nuisance or damage to property), in each case including, without limitation, the reasonable fees and disbursements of counsel incurred in connection with any such investigation, litigation or other proceeding; provided, however, that the Borrower shall not be obligated under this §16 to indemnify any Person for liabilities to the extent arising from such Person’s own gross negligence or willful misconduct (as such shall be determined by a final non-appealable judgment of a court of competent jurisdiction). In litigation, or the preparation therefor, the Lenders and the Agent shall be entitled to select a single law firm as their own counsel and, in addition to the foregoing indemnity, the Borrower agrees to pay promptly the reasonable fees and expenses of such counsel. If, and to the extent that the obligations of the Borrower under this §16 are unenforceable for any reason, the Borrower hereby agrees to make the maximum contribution to the payment in satisfaction of such obligations which is permissible under applicable law. The provisions of this §16 shall survive the repayment of the Loans and the termination of the obligations of the Lenders hereunder.

§16.2 Borrower Must Notify. Agent and each Lender shall not be in default under this Agreement or under any other Loan Document, unless a written notice specifically setting forth the claim of Borrower shall have been given to Agent and each Lender within thirty (30) days after the Borrower first had actual knowledge or actual notice of the occurrence of the event which Borrower alleges gave rise to such claim (an “Agent/Lender Default Notice”) and Agent and/or the applicable Lender does not remedy or cure the default, if any there be, with reasonable promptness thereafter.

§16.3 Remedies. If it is determined by the final order of a court of competent jurisdiction, which is not subject to further appeal, that Agent and/or Lender has breached any of its obligations under the Loan Documents and has not remedied or cured the same with reasonable promptness following notice thereof, Agent and/or Lender’s responsibilities shall be limited to: (i) where the breach consists of the failure to grant consent or give approval in violation of the terms and requirements of a Loan Document, the obligation to grant such consent or give such approval and to pay Borrower’s reasonable costs and expenses including, without limitation, reasonable attorneys fees and disbursements in connection with such court proceedings; and (ii) the case of any such failure to grant such consent or give such approval, or in the case of any other such default by Agent and/or Lender, where it is also so determined that Agent and/or Lender acted in bad faith, or that Agent and/or Lender’s default constituted gross negligence or willful misconduct, the payment of any actual, direct, compensatory damages sustained by Borrower as a result thereof plus Borrower’s reasonable costs and expenses, including without limitation, reasonable attorney’s fees and disbursements in connection with such court proceedings.

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§16.4 Limitations. In no event, however, shall Agent and/or any Lender be liable to Borrower or anyone else for other damages such as, but not limited to, indirect, speculative, special, consequential or punitive damages whatever nature of the breach by Agent and/or any such Lender of its obligations under this Agreement or under any of the other Loan Documents. In no event shall any Lender be liable to Borrower or anyone else unless a written notice specifically setting forth the claim of Borrower shall have been given to such Lender within the time period specified in §16.2, above.

§16.5 Obligations Absolute. Except to the extent prohibited by applicable law which cannot be waived, the obligations of Borrower under the Loan Documents shall be absolute, unconditional and irrevocable and shall be paid strictly in accordance with the terms of the Loan Documents under all circumstances whatsoever, including without limitation, the existence of any claim, set off, defense or other right which Borrower may have at any time against Agent and/or Lender whether in connection with the Facility or any unrelated transaction.

§17. SURVIVAL OF COVENANTS, ETC.

All covenants, agreements, representations and warranties made herein, in the Notes, in any of the other Loan Documents or in any documents or other papers delivered by or on behalf of the Borrower or any of its Subsidiaries pursuant hereto or thereto shall be deemed to have been relied upon by the Lenders and the Agent, notwithstanding any investigation heretofore or hereafter made by any of them, and shall survive the making by the Lenders of any of the Loans, as herein contemplated, and shall continue in full force and effect so long as any amount due under this Agreement or the Notes or any of the other Loan Documents remains outstanding. The indemnification obligations of the Borrower provided herein and in the other Loan Documents shall survive the full repayment of amounts due and the termination of the obligations of the Lenders hereunder and thereunder to the extent provided herein and therein. All statements contained in any certificate delivered to any Lender or the Agent at any time by or on behalf of the Borrower or any of its Subsidiaries pursuant hereto or in connection with the transactions contemplated hereby shall constitute representations and warranties by such Person hereunder.

§18. ASSIGNMENT AND PARTICIPATION.

§18.1 Conditions to Assignment by Lenders. Except as provided herein, each Lender may assign to one or more banks or other entities all or a portion of its interests, rights and obligations under this Agreement (including all or a portion of its Commitment Percentage and Commitment and the same portion of the Loans at the time owing to it and any Notes held by it); provided that: (a) the Agent and, so long as no Event of Default exists hereunder, the Borrower shall have each given its prior written consent to such assignment, which consent shall not be unreasonably withheld or delayed (provided that (i) such consent shall not be required for any assignment to another Lender to a lender which is under common control with the assigning Lender or to a wholly-owned Subsidiary of such Lender, and (ii) the consent of Agent shall not be required if an Event of Default exists and is continuing so long as the assignee is an institutional lender), (b) each such assignment shall be of a constant, and not a varying, percentage of all the assigning Lender’s rights and obligations under this Agreement, (c) the

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parties to such assignment shall execute and deliver to the Agent, for recording in the Register (as hereinafter defined) an Assignment and Acceptance Agreement in the form of Exhibit L annexed hereto, together with any Notes subject to such assignment, (d) in no event shall any voting, consent or approval rights of a Lender be assigned to any Person controlling, controlled by or under common control with, or which is not otherwise free from influence or control by, the Borrower which rights shall instead be allocated pro rata among the other remaining Lenders, (e) if such assignee is to become a Lender, such assignee shall have a net worth as of the date of such assignment of not less than $200,000,000, unless waived by the Agent and the Borrower, (f) such assignee shall acquire an interest in the Loans of not less than $3,000,000 (or if less, the remaining Loans of the assignor), unless waived by the Agent, and so long as no Event of Default exists hereunder, the Borrower, and (g) such assignee shall be subject to the terms of any intercreditor agreement among the Lenders and the Agent. Any assignee satisfying the terms and conditions of this §18.1 shall be referred to as an “Eligible Assignee”. Upon execution, delivery, acceptance and recording of such Assignment and Acceptance Agreement, (i) the assignee thereunder shall be a party hereto and all other Loan Documents executed by the Lenders and have the rights and obligations of a Lender hereunder, (ii) the assigning Lender shall, upon payment to the Agent of the registration fee referred to in §18.2 (except if such assigning Lender is a Holdout Lender assigning its interest as required under §14.13, above), be released from its obligations under this Agreement arising after the effective date of such assignment with respect to the assigned portion of its interests, rights and obligations under this Agreement, and (iii) the Agent may unilaterally amend Schedule 1 to reflect such assignment. In connection with each assignment, the assignee shall represent and warrant to the Agent, the assignor and each other Lender that such assignee is not controlling, controlled by, under common control with or is not otherwise under the influence or control by, the Borrower or any of its Subsidiaries. In the event that any consent is required by Borrower under this §18.1, such consent shall be deemed given by the Borrower in the event the Borrower does not otherwise respond to the request for consent with five (5) Business Days from the date of such request.

§18.2 Register. The Agent shall maintain on behalf of the Borrower a copy of each assignment delivered to it and a register or similar list (the “Register”) for the recordation of the names and addresses of the Lenders and the Commitment Percentages of and principal amount of the Loans owing to the Lenders from time to time. The entries in the Register shall be conclusive as to the interest of each Lender, in the absence of manifest error, and the Borrower, the Agent and the Lenders may treat each Person whose name is recorded in the Register as a Lender hereunder for all purposes of this Agreement. The Register shall be available for inspection by the Borrower and the Lenders at any reasonable time and from time to time upon reasonable prior notice. Upon each such recordation, the assigning Lender (except if such assigning Lender is a Holdout Lender assigning its interest as required under §14.13, above) agrees to pay to the Agent a registration fee in the sum of $3,500 (provided that with respect to any assignment by a Lender to a Subsidiary as provided herein, the assigning Lender shall pay to Agent only reasonable expenses, which shall not exceed the amount of such registration fee incurred in connection with such assignment in lieu of such registration fee).

§18.3 New Notes. Upon its receipt of an Assignment and Acceptance Agreement executed by the parties to such assignment, together with each Note subject to such assignment, the Agent shall record the information contained therein in the Register. Within five (5)

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Business Days after receipt of notice of such assignment from Agent, the Borrower, at Agent’s expense, shall execute and deliver to the Agent, in exchange for each surrendered Note, a new Note to the order of such assignee in an amount equal to the amount assigned to such assignee pursuant to such Assignment and Acceptance Agreement and, if the assigning Lender has retained some portion of its obligations hereunder, a new Note to the order of the assigning Lender in an amount equal to the amount retained by it hereunder. Such new Notes shall provide that they are replacements for the surrendered Notes, shall be in an aggregate principal amount equal to the aggregate principal amount of the surrendered Notes, shall be dated the effective date of such Assignment and Acceptance Agreement and shall otherwise be in substantially the form of the assigned Notes. The surrendered Notes shall be canceled and returned to the Borrower.

§18.4 Participations. Each Lender may sell participations to one or more Lenders or other entities in all or a portion of such Lender’s rights and obligations under this Agreement and the other Loan Documents without consent or approval of the Agent or other Lenders; provided that (a) any such sale or participation shall not affect the rights and duties of the selling Lender hereunder, (b) such participation shall not entitle such participant to any rights or privileges under this Agreement or any Loan Documents, including without limitation, rights granted to the Lenders under §4.8, §4.9 and §4.10, (c) such participation shall not entitle the participant to the right to approve waivers, amendments or modifications, (d) such participant shall have no direct rights against the Borrower, (e) such sale is effected in accordance with all applicable laws, and (f) such participant shall not be a Person controlling, controlled by or under common control with, or which is not otherwise free from influence or control by any of the Borrower.

§18.5 Pledge by Lender. Any Lender may at any time pledge all or any portion of its interest and rights under this Agreement (including all or any portion of its Note) to any of the twelve Federal Reserve Banks organized under §4 of the Federal Reserve Act, 12 U.S.C. §341 or to any other Person to secure obligations of such Lenders. No such pledge or the enforcement thereof shall release the pledgor Lender from its obligations hereunder or under any of the other Loan Documents.

§18.6 No Assignment by Borrower. No Borrower shall assign or transfer any of its rights or obligations under this Agreement without the prior written consent of each of the Lenders and any purported assignment without such consent shall be null and void.

§18.7 Disclosure. Borrower agrees to promptly cooperate with any Lender in connection with any proposed assignment or participation of all or any portion of its Commitment. Each of the Lenders and the Agent acknowledges and agrees for itself that it shall hold all nonpublic information regarding Borrower and its Subsidiaries and their businesses identified as such by Borrower and obtained by Agent or such Lender, and agrees to keep any such information delivered or made available by the Borrower to it confidential from anyone other than its directors, employees, officers, agents, attorneys and other advisors who are or are expected to become engaged in evaluating, administering or syndicating the Loan or rendering advice in connection therewith, provided that nothing herein shall prevent any of the foregoing Persons from disclosing such information (a) to any potential assignees or participants who have agreed to maintain the confidentiality of such information on such terms at least as restrictive as

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those provided in this §18.7, (b) upon the order of any court or administrative agency or upon the request of any administrative agency or authority having jurisdiction over any of the foregoing Persons or such potential assignees or participants, (c) upon the request or demand of any regulatory agency or authority, (d) to the extent that such information has been publicly disclosed other than as a result of a disclosure in breach hereof by the disclosing Person, (e) otherwise as required by law or (f) to the extent necessary to enforce the Loan Documents. In addition, the Lenders may make disclosure of such information to any contractual counterparty in swap agreements or such contractual counterparty’s professional advisors (so long as such contractual counterparty or professional advisors to such contractual counterparty agree to be bound by the provisions of this §18.7). In addition, the Agent and each Lender may disclose the existence of this Agreement and the information about this Agreement to market data collectors, similar service providers to the lending industry, and service providers to the Agent and the Lenders in connection with the administration and management of this Agreement and the other Loan Documents.

§18.8 Amendments to Loan Documents. Upon any such assignment or participation, the Borrower shall, upon the request of the Agent, enter into such documents as may be reasonably required by the Agent to modify the Loan Documents to reflect such assignment or participation.

§19. NOTICES.

Each notice, demand, election or request provided for or permitted to be given pursuant to this Agreement (hereinafter in this §19 referred to as “Notice”), but specifically excluding to the maximum extent permitted by law any notices of the institution or commencement of foreclosure proceedings, must be in writing and shall be deemed to have been properly given or served by personal delivery or by sending same by overnight courier or by depositing same in the United States Mail, postpaid and registered or certified, return receipt requested, or as expressly permitted herein, by telegraph, telecopy, telefax, telex, or electronic PDF copies and addressed as follows:

If to the Agent or KeyBank:

KeyBank National Association

224 Franklin Street, 18^th Floor

Boston, Massachusetts 02110

Attn: KeyBank Institutional Real Estate

Telecopy No.: (617) 385-6292

Email: Jeffrey_M_Morrison@KeyBank.com

With a copy to:

Burns & Levinson LLP

125 Summer Street

Boston, MA 02110

Attn: Frank A. Segall, Esq.

Telecopy No. (617) 345-3299

Email: Fsegall@burnslev.com

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If to any Borrower:

Entertainment Properties Trust

30 Pershing Road, Suite 201

Kansas City, MO 64108

Attn: Gregory K. Silvers, Esq.

Vice President and General Counsel

Telecopy No.: (816) 472-5794

E-mail: gregs@eprkc.com

With a copy to:

Entertainment Properties Trust

30 Pershing Road, Suite 201

Kansas City, MO 64108

Attn: Mark A. Peterson, Vice President and CFO

Telecopy No.: (816) 472-5794

Email: markp@eprkc.com

to any other Lender which is a party hereto, at the address for such Lender set forth on Schedule 1 attached hereto, and to any Lender which may hereafter become a party to this Agreement, at such address as may be designated by such Lender. Each Notice shall be effective upon being personally delivered or upon being sent by overnight courier or upon being deposited in the United States Mail as aforesaid, or if transmitted by telegraph, telecopy, telefax or telex is permitted, upon being sent and confirmation of receipt. The time period in which a response to such Notice must be given or any action taken with respect thereto (if any), however, shall commence to run from the date of receipt if personally delivered or sent by overnight courier, or if so deposited in the United States Mail, the earlier of three (3) Business Days following such deposit or the date of receipt as disclosed on the return receipt. Rejection or other refusal to accept or the inability to deliver because of changed address for which no notice was given shall be deemed to be receipt of the Notice sent. By giving Notice thereof, the Borrower, a Lender or Agent shall have the right from time to time and at any time during the term of this Agreement to change their respective addresses and each shall have the right to specify as its address any other address within the United States of America.

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§20. RELATIONSHIP.

The Agent, each Lender and their Affiliates (collectively, solely for purposes of this paragraph, the “Lenders”), may have economic interests that conflict with those of Borrower, its stockholders and/or its affiliates. Borrower agrees that nothing in the Loan Documents or otherwise will be deemed to create an advisory, fiduciary or agency relationship or fiduciary or other implied duty between any Lender, on the one hand, and Borrower, its stockholders or its affiliates, on the other. The Borrower acknowledges and agrees that (i) the transactions contemplated by the Loan Documents (including the exercise of rights and remedies hereunder and thereunder) are arm’s-length commercial transactions between the Lenders, on the one hand, and Borrower, on the other, and (ii) in connection therewith and with the process leading thereto, (x) no Lender has assumed an advisory or fiduciary responsibility in favor of Borrower, its stockholders or its affiliates with respect to the transactions contemplated hereby (or the exercise of rights or remedies with respect thereto) or the process leading thereto (irrespective of whether any Lender has advised, is currently advising or will advise Borrower, its stockholders or its Affiliates on other matters) or any other obligation to Borrower except the obligations expressly set forth in the Loan Documents and (y) each Lender is acting solely as principal and not as the agent or fiduciary of Borrower, its management, stockholders, creditors or any other Person. Borrower acknowledges and agrees that Borrower has consulted its own legal and financial advisors to the extent it deemed appropriate and that it is responsible for making its own independent judgment with respect to such transactions and the process leading thereto. Borrower agrees that it will not claim that any Lender has rendered advisory services of any nature or respect, or owes a fiduciary or similar duty to Borrower, in connection with such transaction or the process leading thereto.

§21. USURY.

Notwithstanding anything to the contrary contained herein, if at any time the interest rate applicable to any Loan, together with all fees, charges and other amounts which are treated as interest on such Loan under applicable law (collectively, the “Charges”), shall exceed the maximum lawful rate (the “Maximum Rate”) which may be contracted for, charged, taken, received or reserved by the Lender holding such Loan in accordance with applicable law, the rate of interest payable in respect of such Loan hereunder, together with all Charges payable in respect thereof, shall be limited to the Maximum Rate and, to the extent lawful, the interest and Charges that would have been payable in respect of such Loan but were not payable as a result of the operation of this Section 21, shall be cumulated and the interest and Charges payable to such Lender in respect of other Loans or periods shall be increased (but not able the Maximum Rate therefor) until such cumulated amount, together with interest thereon at the Federal Funds Rate to the date of repayment, shall have been received by such Lender.

§22. GOVERNING LAW; CONSENT TO JURISDICTION AND SERVICE.

THIS AGREEMENT AND EACH OF THE OTHER LOAN DOCUMENTS, EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED HEREIN OR THEREIN, ARE CONTRACTS UNDER THE LAWS OF THE STATE OF NEW YORK AND SHALL FOR ALL PURPOSES BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED

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BY THE LAWS OF SUCH STATE (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW OTHER THAN NEW YORK GENERAL OBLIGATIONS LAW, SECTION 5-1401). THE BORROWER AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR ANY FEDERAL COURT SITTING IN THE CITY AND COUNTY OF NEW YORK AND CONSENTS TO THE EXCLUSIVE JURISDICTION OF SUCH COURT AND THE SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE UPON THE BORROWER BY MAIL AT THE ADDRESS SPECIFIED IN §19. THE BORROWER HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT COURT.

§23. POWER OF ATTORNEY. For purposes of exercising the rights and remedies granted to Agent and the Lenders under this Agreement, Borrower hereby irrevocably constitutes and appoints Agent its true and lawful attorney-in-fact, upon and following any Event of Default, to execute, acknowledge and deliver any instruments and to do and perform any acts permitted hereunder or by law in the name and on behalf of the Borrower.

§24. HEADINGS.

The captions in this Agreement are for convenience of reference only and shall not define or limit the provisions hereof.

§25. COUNTERPARTS.

This Agreement and any amendment hereof may be executed in several counterparts and by each party on a separate counterpart, each of which when so executed and delivered shall be an original, and all of which together shall constitute one instrument. In proving this Agreement it shall not be necessary to produce or account for more than one such counterpart signed by the party against whom enforcement is sought, which such signature shall be sufficient if in form of telecopy, telefax of electronic PDF copy.

§26. ENTIRE AGREEMENT, ETC.

The Loan Documents express the entire understanding of the parties with respect to the transactions contemplated hereby. Neither this Agreement nor any term hereof may be changed, waived, discharged or terminated, except as provided in §27 and §29.

§27. WAIVER OF JURY TRIAL AND CERTAIN DAMAGE CLAIMS.

EACH OF THE BORROWER, THE AGENT AND THE LENDERS HEREBY WAIVES ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT, ANY NOTE OR ANY OF THE OTHER LOAN DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER OR THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS. EXCEPT TO THE

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EXTENT EXPRESSLY PROHIBITED BY LAW, THE BORROWER HEREBY WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES. THE BORROWER (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY LENDER OR THE AGENT HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH LENDER OR THE AGENT WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS AND (B) ACKNOWLEDGE THAT THE AGENT AND THE LENDERS HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS TO WHICH THEY ARE PARTIES BY, AMONG OTHER THINGS, THE WAIVERS AND CERTIFICATIONS CONTAINED IN THIS §27. THE BORROWER ACKNOWLEDGES THAT IT HAS HAD AN OPPORTUNITY TO REVIEW THIS §27 WITH LEGAL COUNSEL AND THAT THE BORROWER AGREES TO THE FOREGOING AS ITS FREE, KNOWING AND VOLUNTARY ACT.

§28. DEALINGS WITH THE BORROWER.

The Lenders and their Affiliates may accept deposits from, extend credit to and generally engage in any kind of banking, trust or other business with the Borrower and its Subsidiaries or any of their Affiliates regardless of the capacity of the Lender hereunder.

§29. CONSENTS, AMENDMENTS, WAIVERS, ETC.

Except as otherwise expressly provided in this Agreement, any consent or approval required or permitted by this Agreement may be given, and any term of this Agreement or of any other instrument related hereto or mentioned herein may be amended, and the performance or observance by the Borrower of any terms of this Agreement or such other instrument or the continuance of any Default or Event of Default may be waived (either generally or in a particular instance and either retroactively or prospectively) with, but only with, the written consent of the Agent and the Required Lenders. Notwithstanding the foregoing, none of the following may occur without the written consent of each Lender affected by any of the following: a reduction in the rate of interest on the Loans; an increase in the amount of the Commitments of the Lenders (except as provided in §18.1 and §2.2); a forgiveness, reduction or waiver of the principal of any unpaid Loan or any interest thereon or fee payable under the Loan Documents; a change in the amount of any fee payable to a Lender hereunder; the postponement of any date fixed for any payment of and fees or any principal of or interest on any Loan; an extension of the Maturity Date; the imposition of any additional restrictions on assignments and participations; a change in the manner of distribution of any payments to the Lenders or the Agent; any modification to require a Lender to fund a pro rata share of a request for an Advance of the Loan made by the Borrower other than based on its Commitment Percentage; a waiver of any indemnity of a Lender. The provisions of §2.10 and §14 may not be amended without the written consent of the Issuing Lender or the Agent, respectively. Further notwithstanding the foregoing, none of the following may occur without the written consent of 100% of the Lenders: the release of EPR or, except as permitted in connection with the removal of a Borrower-SPE and its properties from the Borrowing Base, a Borrower-SPE; an amendment of the definition of Required Lenders or of

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any requirement for consent by all of the Lenders; an amendment of §13.1; an amendment to this §29; or an amendment of any provision of this Agreement or the Loan Documents which requires the approval of all of the Lenders or the Required Lenders to require a lesser number of Lenders to approve such action

No waiver shall extend to or affect any obligation not expressly waived or impair any right consequent thereon. No course of dealing or delay or omission on the part of the Agent or any Lender in exercising any right shall operate as a waiver thereof or otherwise be prejudicial thereto. No notice to or demand upon any of the Borrower shall entitle the Borrower to other or further notice or demand in similar or other circumstances.

§30. SEVERABILITY.

The provisions of this Agreement are severable, and if any one clause or provision hereof shall be held invalid or unenforceable in whole or in part in any jurisdiction, then such invalidity or unenforceability shall affect only such clause or provision, or part thereof, in such jurisdiction, and shall not in any manner affect such clause or provision in any other jurisdiction, or any other clause or provision of this Agreement in any jurisdiction.

§31. TIME OF THE ESSENCE.

Time is of the essence with respect to each and every covenant, agreement and obligation of the Borrower under this Agreement and the other Loan Documents.

§32. NO UNWRITTEN AGREEMENTS.

THE LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. ANY ADDITIONAL TERMS OF THE AGREEMENT BETWEEN THE PARTIES ARE SET FORTH BELOW.

§33. REPLACEMENT NOTES.

Upon receipt of evidence reasonably satisfactory to Borrower of the loss, theft, destruction or mutilation of any Note, and in the case of any such loss, theft or destruction, upon delivery of an indemnity agreement reasonably satisfactory to Borrower or, in the case of any such mutilation, upon surrender and cancellation of the applicable Note, Borrower will execute and deliver, in lieu thereof, a replacement Note, identical in form and substance to the applicable Note and dated as of the date of the applicable Note and upon such execution and delivery all references in the Loan Documents to such Note shall be deemed to refer to such replacement Note.

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§34. NO THIRD PARTIES BENEFITED.

This Agreement and the other Loan Documents are made and entered into for the sole protection and legal benefit of the Borrower, the Lenders, the Agent and their permitted successors and assigns, and no other Person shall be a direct or indirect legal beneficiary of, or have any direct or indirect cause of action or claim in connection with, this Agreement or any of the other Loan Documents.

§35. HONORARY TITLES.

Royal Bank of Canada, acting under the global brand name for its corporate and investment banking businesses, “RBC Capital Markets” is appointed as Joint Lead Arranger, Book Manager and Syndication Agent hereunder; further, Keybanc Capital Markets and JP Morgan Securities, Inc. are each appointed as Joint Lead Arrangers and Book Managers, and further JPMorgan Chase Bank, N.A. is appointed as Syndication Agent hereunder, and in such capacities, each such Person assumes no responsibility or obligation hereunder, including, without limitation, for servicing, enforcement or collection of any of the Loans, nor any duties as an agent hereunder for the Lenders. The titles of “Joint Lead Arranger” “Book Manager” and “Syndication Agent” are solely honorific and imply no fiduciary responsibility to the Agent, the Borrower or any Lender and the use of such titles does not impose on such Person any duties or obligations greater than those of any other Lender or entitle such Person to any rights other than those to which any other Lender is entitled.

§36. USA PATRIOT ACT NOTICE. Each Lender that is subject to the Act (as hereinafter defined) and the Agent (for itself and not on behalf of any Lender) hereby notifies the Borrower that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), it is required to obtain, verify and record information that identifies each Borrower, which information includes the name and address of such Borrower and other information that will allow such Lender or the Agent, as applicable, to identify such Borrower in accordance with the Act. Each Borrower agrees to provide any such information upon request.

[SIGNATURES BEGIN ON FOLLOWING PAGE]

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IN WITNESS WHEREOF, each of the undersigned have caused this Agreement to be executed by its duly authorized representatives as of the date first set forth above.

BORROWER:
30 WEST PERSHING, LLC, a Missouri limited liability company
By:	/s/ Mark A. Peterson
Name:	Mark A. Peterson
Title:	Vice President and CFO
EPT DOWNREIT II, INC., a Missouri corporation
By:	/s/ Mark A. Peterson
Name:	Mark A. Peterson
Title:	Vice President and CFO
EPT HUNTSVILLE, INC., a Delaware corporation
By:	/s/ Mark A. Peterson
Name:	Mark A. Peterson
Title:	Vice President and CFO
EPT PENSACOLA, INC., a Missouri corporation
By:	/s/ Mark A. Peterson
Name:	Mark A. Peterson
Title:	Vice President and CFO
MEGAPEX FOUR, INC., a Missouri corporation
By:	/s/ Mark A. Peterson
Name:	Mark A. Peterson
Title:	Vice President and CFO

108

WESTCOL CENTER, LLC, a Delaware limited liability company
By:	/s/ Mark A. Peterson
Name:	Mark A. Peterson
Title:	Vice President and CFO
EPT MELBOURNE, INC., a Missouri corporation
By:	/s/ Mark A. Peterson
Name:	Mark A. Peterson
Title:	Vice President and CFO
ENTERTAINMENT PROPERTIES TRUST, a Maryland real estate investment trust
By:	/s/ Mark A. Peterson
Name:	Mark A. Peterson
Title:	Vice President and CFO

109

LENDERS:
KEYBANK NATIONAL ASSOCIATION, individually		Loan Amount:
as a Lender and as Agent		$40,000,000.00
		Percentage: 18.60465%
By:	/s/ Jeffry M. Morrison
Name:	Jeffry M. Morrison
Title:	Senior Banker
JP MORGAN CHASE BANK, N.A.,		Loan Amount:
as a Lender		$40,000,000.00
		Percentage: 18.60465%
By:	/s/ Mohammad Hasan
Name:	Mohammad Hasan
Title:	Associate
ROYAL BANK OF CANADA,		Loan Amount:
as a Lender		$40,000,000.00
		Percentage: 18.60465%
By:	/s/ Dan LePage
Name:	Dan LePage
Title:	Authorized Signatory
CITICORP NORTH AMERICA, INC.,		Loan Amount:
as a Lender		$25,000,000.00
		Percentage: 11.62790%
By:	/s/ Ricardo James
Name:	Ricardo James
Title:	Director
UMB BANK, N.A.,		Loan Amount:
as a Lender		$20,000,000.00
		Percentage: 9.30233%
By:	/s/ Robert P. Elbert
Name:	Robert P. Elbert
Title:	Senior Vice President

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BARCLAYS BANK PLC,		Loan Amount:
as a Lender		$20,000,000.00
		Percentage: 9.30233%
By:	/s/ David Barton
Name:	David Barton
Title:	Director
GOLDMAN SACHS LENDING PARTNERS LLC,		Loan Amount:
as a Lender		20,000,000.00
		Percentage: 9.30233%
By:	/s/ Mark Walton
Name:	Mark Walton
Title:	Authorized Signatory
BANK MIDWEST, N.A.,		Loan Amount
as a Lender		$10,000,000.00
		Percentage: 4.65116%
By:	/s/ David L. Rambo
Name:	David L. Rambo
Title:	Sr. VP Commercial Lending

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EXHIBIT B

REVOLVING CREDIT NOTE

$                .00 June     , 2009

FOR VALUE RECEIVED, the undersigned, 30 WEST PERSHING, LLC, a Missouri limited liability company, ENTERTAINMENT PROPERTIES TRUST, a real estate investment trust, duly organized under the laws of the state of Maryland, EPT DOWNREIT II, INC., a Missouri corporation, EPT HUNTSVILLE, INC., a Delaware corporation, EPT PENSACOLA, INC., a Missouri corporation, MEGAPLEX FOUR, INC., a Missouri corporation, WESTCOL CENTER, LLC, a Delaware limited liability company, and EPT MELBOURNE, INC., a Missouri corporation (severally, a “Borrower” and collectively, the “Borrowers”), each with an address at c/o Entertainment Properties Trust, 30 Pershing Road, Suite 201, Kansas City, MO 64108, jointly and severally hereby promises to pay to the order of                          (“Payee”) at the office of KEYBANK NATIONAL ASSOCIATION, a national banking association, as Agent for the Lenders (“Agent”), in accordance with the terms of that certain Amended and Restated Master Credit Agreement, dated as of June 30, 2009, as from time to time in effect, among Borrowers, KeyBank National Association, for itself and as Agent, and such other Lenders as may be from time to time named therein, (the “Credit Agreement”), to the extent not sooner paid, on or before the Maturity Date, the principal sum of                          and 00/100 Dollars ($            .00), or such amount as may be advanced by the Payee under the Credit Agreement as a Revolving Credit Loan with daily interest from the date thereof, computed as provided in the Credit Agreement, on the principal amount hereof from time to time unpaid, at a rate per annum on each portion of the principal amount which shall at all times be equal to the rate of interest applicable to such portion in accordance with the Credit Agreement, and with interest on overdue principal and, to the extent permitted by applicable law, on overdue installments of interest and late charges at the rates provided in the Credit Agreement. Interest shall be payable on the dates specified in the Credit Agreement, except that all accrued interest shall be paid at the stated or accelerated maturity hereof or upon the prepayment in full hereof. Capitalized terms used herein and not otherwise defined herein shall have the meanings set forth in the Credit Agreement.

Payments hereunder shall be made to the Agent for the Payee at 225 Franklin Street, 18^th Floor, Boston, Massachusetts 02110.

This Note is one of one or more Revolving Credit Notes evidencing borrowings under and is entitled to the benefits and subject to the provisions of the Credit Agreement. The principal of this Note may be due and payable in whole or in part prior to the Maturity Date and is subject to mandatory prepayment in the amounts and under the circumstances set forth in the Credit Agreement, and may be prepaid in whole or from time to time in part, all as set forth in the Credit Agreement.

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Notwithstanding anything in this Note to the contrary, all agreements between the undersigned Borrowers and the Lenders and the Agent, whether now existing or hereafter arising and whether written or oral, are hereby limited so that in no contingency, whether by reason of acceleration of the maturity of any of the Obligations or otherwise, shall the interest contracted for, charged or received by the Lenders exceed the maximum amount permissible under applicable law. If, from any circumstance whatsoever, interest would otherwise be payable to the Lenders in excess of the maximum lawful amount, the interest payable to the Lenders shall be reduced to the maximum amount permitted under applicable law; and if from any circumstance the Lenders shall ever receive anything of value deemed interest by applicable law in excess of the maximum lawful amount, an amount equal to any excessive interest shall be applied to the reduction of the principal balance of the Obligations of the undersigned Borrowers or, if such excessive interest exceeds the unpaid balance of principal of the Obligations of the undersigned Borrowers, such excess shall be refunded to the undersigned Borrowers. All interest paid or agreed to be paid to the Lenders shall, to the extent permitted by applicable law, be amortized, prorated, allocated and spread throughout the full period until payment in full of the principal of the Obligations of the undersigned Borrowers (including the period of any renewal or extension thereof) so that the interest thereon for such full period shall not exceed the maximum amount permitted by applicable law.

In case an Event of Default shall occur, the entire principal amount of this Note may become or be declared due and payable in the manner and with the effect provided in said Credit Agreement.

This Note shall be governed by and construed in accordance with the laws of the State of New York (without giving effect to the conflict of laws rules of any jurisdiction other than New York General Obligations Law, Section 5-1401).

The undersigned Borrowers and all guarantors and endorsers hereby waive presentment, demand, notice, protest, notice of intention to accelerate the indebtedness evidenced hereby, notice of acceleration of the indebtedness evidenced hereby and all other demands and notices in connection with the delivery, acceptance, performance and enforcement of this Note, except as specifically otherwise provided in the Credit Agreement, and assent to extensions of time of payment or forbearance or other indulgence without notice.

[SIGNATURES APPEAR ON FOLLOWING PAGE]

2

IN WITNESS WHEREOF, the undersigned has duly executed this Note on the day and year first above written.

	30 WEST PERSHING, LLC a Missouri limited liability company
	By:
Witness:	Name:	Mark A. Peterson
	Title:	Vice President and CFO
	EPT DOWNREIT II, INC., a Missouri
	corporation
	By:
Witness:	Name:	Mark A. Peterson
	Title:	Vice President and CFO
	EPT HUNTSVILLE, INC., a Delaware corporation
	By:
Witness:	Name:	Mark A. Peterson
	Title:	Vice President and CFO
	EPT PENSACOLA, INC., a Missouri corporation
	By:
Witness:	Name:	Mark A. Peterson
	Title:	Vice President and CFO
	MEGAPLEX FOUR, INC., a Missouri corporation
	By:
Witness:	Name:	Mark A. Peterson
	Title:	Vice President and CFO

3

	WESTCOL CENTER, LLC, a Delaware limited liability company
	By:
Witness:	Name:	Mark A. Peterson
	Title:	Vice President and CFO
	EPT MELBOURNE, INC., a Missouri corporation
	By:
Witness:	Name:	Mark A. Peterson
	Title:	Vice President and CFO
	ENTERTAINMENT PROPERTIES TRUST
	a Maryland real estate investment trust
	By:
Witness:	Name:	Mark A. Peterson
	Title:	Vice President and CFO

4

EXHIBIT H

FORM OF REQUEST FOR REVOLVING CREDIT LOAN

KeyBank National Association

225 Franklin Street, 18^th Floor

Boston, Massachusetts 02110

Attn:                                     

Ladies and Gentlemen:

Pursuant to the provisions of §2.7 of the Amended and Restated Master Credit Agreement dated as of June 30, 2009 (as the same may hereafter be amended, the “Credit Agreement”), among 30 WEST PERSHING, LLC, EPT DOWNREIT II, INC., EPT HUNTSVILLE, INC., EPT PENSACOLA, INC., MEGAPLEX FOUR, INC., WESTCOL CENTER, LLC, EPT MELBOURNE, INC. AND ENTERTAINMENT PROPERTIES TRUST (collectively, the “Borrower”), KeyBank National Association for itself and as Agent, and the other Lenders from time to time party thereto, the undersigned Borrower hereby requests and certifies as follows:

1. Revolving Credit Loan. The undersigned Borrower hereby requests a [Revolving Credit Loan under §2.1] of the Credit Agreement:

Principal Amount: $

Type (LIBOR Rate, Base Rate):

Drawdown Date:

Interest Period for LIBOR Rate Loans:

by credit to the general account of the Borrower with the Agent at the Agent’s Head Office.

2. Use of Proceeds. Such Loan shall be used for the following purposes permitted by §2.9 of the Credit Agreement:

[Describe]

3. No Default. The undersigned chief financial officer or other financial officer of Borrower certifies that the Borrower are and will be in compliance with all covenants under the Loan Documents after giving effect to the making of the Loan requested hereby. No condemnation proceedings are pending or, to the undersigned knowledge, threatened against any Borrowing Base Property.

4. Representations True. Each of the representations and warranties made by or on behalf of the Borrower-SPE, EPR or its Subsidiaries, contained in the Credit Agreement, in the other Loan Documents or in any document or instrument delivered pursuant to or in connection with the Credit Agreement was true in all material respects as of the date on which it was made and at and as of the Drawdown Date for the Loan requested hereby, with the same effect as if made at and as of such Drawdown Date, except to the extent of changes resulting from

1

transactions permitted by the Loan Documents (it being understood and agreed that any representation or warranty which by its terms is made as of a specified date shall be required to be true and correct only as of such specified date), and no Default or Event of Default has occurred and is continuing.

5. Borrowing Base. Attached hereto is an updated Borrowing Base Certificate in the form provided for under the Credit Agreement.

6. Other Conditions. All other conditions to the making of the Loan requested hereby set forth in the Credit Agreement have been satisfied.

7. Definitions. Terms defined in the Credit Agreement are used herein with the meanings so defined.

IN WITNESS WHEREOF, the undersigned has duly executed this request this      day of             , 200    .

30 WEST PERSHING, LLC,
a Missouri limited liability company
By:
	Name: Mark A. Peterson
	Title: Vice President and CFO
EPT DOWNREIT II, INC., a Missouri corporation
By:
	Name: Mark A. Peterson
	Title: Vice President and CFO
EPT HUNTSVILLE, INC., a Delaware corporation
By:
	Name: Mark A. Peterson
	Title: Vice President and CFO
EPT PENSACOLA, INC., a Missouri corporation
By:
	Name: Mark A. Peterson
	Title: Vice President and CFO

2

MEGAPLEX FOUR, INC., a Missouri corporation
By:
	Name: Mark A. Peterson
	Title: Vice President and CFO
WESTCOL CENTER, LLC, a Delaware limited liability company
By:
	Name: Mark A. Peterson
	Title: Vice President and CFO
EPT MELBOURNE, INC., a Missouri corporation
By:
Name:	Mark A. Peterson
Title:	Vice President and CFO
ENTERTAINMENT PROPERTIES TRUST, a Maryland real estate investment trust
By:
Name:	Mark A. Peterson
Title:	Vice President and CFO

3

EXHIBIT I

LETTER OF CREDIT REQUEST

[Parties did not create this exhibit and, as a result, there is no document to attach to this placeholder]

4

EXHIBIT J

FORM OF BORROWING BASE CERTIFICATE

Date:             , 20    

KeyBank National Association

225 Franklin Street, 18th Floor

Boston, Massachusetts 02110 Attn:                                 

Ladies and Gentlemen:

This Certificate is furnished pursuant to §7.4(c) of the Amended and Restated Master Credit Agreement dated as of June 30, 2009 (as the same may hereafter be amended from time to time, the “Credit Agreement”) by and among 30 WEST PERSHING, LLC, a limited liability company duly organized and validly existing under the laws of the State of Missouri (“Pershing”), EPT DOWNREIT II, INC., a Missouri corporation (“EPT DownREIT”), EPT HUNTSVILLE, INC., a Delaware corporation (“Huntsville”), EPT PENSACOLA, INC., a Missouri corporation (“Pensacola”), MEGAPLEX FOUR, INC., a Missouri corporation (“Megaplex Four”), WESTCOL CENTER, LLC, a Delaware limited liability company (“Westcol”) and EPT MELBOURNE, INC., a Missouri corporation (“Melbourne”, and collectively, jointly and severally, with Pershing, EPT DownREIT, Huntsville, Pensacola, Megaplex Four, Westcol and Melbourne are the “Borrower-SPE”), and ENTERTAINMENT PROPERTIES TRUST, a real estate investment trust duly organized and validly existing under the laws of the State of Maryland (“EPR”) (individually and collectively, jointly and severally, Borrower-SPE, and EPR are referred to as the “Borrower”), having its principal place of business at c/o Entertainment Properties Trust, 30 Pershing Road, Suite 201, Kansas City, MO 64108, KEYBANK NATIONAL ASSOCIATION (“KeyBank”) the other lending institutions which are or may become parties to this Agreement as “Lenders” (each, individually, a “Lender”), pursuant to §18 (together with KeyBank, the “Lenders”), and KEYBANK NATIONAL ASSOCIATION, as Agent for the Lenders (the “Agent”).

Unless otherwise defined herein, the terms used in this Certificate have the meanings given to them in the Credit Agreement. I am duly authorized to deliver this Certificate and the attached Schedule on behalf of the Borrower and hereby certify that the calculations made on said Schedule are correct and accurate as of              20    , and that as of the date hereof, and after giving effect to the pending Loan or the issuance of any pending Letter of Credit, there exists and shall not exist any violation of the Borrowing Base covenants as set forth in the Credit Agreement and that Borrower is in compliance therewith.

Borrower is providing the attached information to demonstrate compliance as of the date hereof with the covenants described in the attachment hereto.

1

IN WITNESS WHEREOF, the undersigned have duly executed this Borrowing Base Certificate this              day of             , 200    .

30 WEST PERSHING, LLC,
a Missouri limited liability company
By:
	Name: Mark A. Peterson
	Title: Vice President and CFO
EPT DOWNREIT II, INC., a Missouri corporation
By:
	Name: Mark A. Peterson
	Title: Vice President and CFO
EPT HUNTSVILLE, INC., a Delaware corporation
By:
	Name: Mark A. Peterson
	Title: Vice President and CFO
EPT PENSACOLA, INC., a Missouri corporation
By:
	Name: Mark A. Peterson
	Title: Vice President and CFO
MEGAPLEX FOUR, INC., a Missouri corporation
By:
	Name: Mark A. Peterson
	Title: Vice President and CFO

2

WESTCOL CENTER, LLC, a Delaware limited liability company
By:
	Name: Mark A. Peterson
	Title: Vice President and CFO
EPT MELBOURNE, INC., a Missouri corporation
By:
	Name: Mark A. Peterson
	Title: Vice President and CFO
ENTERTAINMENT PROPERTIES TRUST, a Maryland real estate investment trust
By:
	Name: Mark A. Peterson
	Title: Vice President and CFO

3

EXHIBIT K

FORM OF COMPLIANCE CERTIFICATE

KeyBank National Association

225 Franklin Street, 18th Floor

Boston, Massachusetts 02110

Attn:                                     

Ladies and Gentlemen:

Reference is made to the Amended and Restated Master Revolving Credit Agreement dated as of June 30, 2009 (as the same may hereafter be amended, the “Credit Agreement”) by and among 30 WEST PERSHING, LLC, EPT DOWNREIT II, INC., EPT HUNTSVILLE, INC., EPT PENSACOLA, INC. MEGAPLEX FOUR, INC., WESTCOL CENTER, LLC, EPT MELBOURNE, INC. and ENTERTAINMENT PROPERTIES TRUST (collectively, the “Borrower”), KeyBank National Association for itself and as Agent, and the other Lenders from time to time party thereto. Terms defined in the Credit Agreement and not otherwise defined herein are used herein as defined in the Credit Agreement.

Pursuant to the Credit Agreement, Borrower is furnishing to you herewith (or have most recently furnished to you) the consolidated financial statement of Borrower and its Consolidated Subsidiaries for the fiscal period ended                          (the “Balance Sheet Date”). Such financial statement has been prepared in accordance with GAAP and presents fairly the consolidated financial position of Borrower and its Consolidated Subsidiaries covered thereby at the date thereof and the results of its operations for the periods covered thereby, subject in the case of interim statements only to normal year-end audit adjustments.

This certificate (including the attached schedule) is submitted in compliance with requirements of §5.4(b), §7. 4(c), §7. 5(e), Article 9 or §10.12 of the Credit Agreement. If this certificate is provided under a provision other than §7.4(c), the calculations provided below are made using the consolidated financial statement of Borrower as of the Balance Sheet Date adjusted in the best good faith estimate of Borrower to give effect to the making of a Loan, acquisition or disposition of property or other event that occasions the preparation of this certificate; and the nature of such event and the estimate of Borrower of its effects are set forth in reasonable detail in an attachment hereto. The undersigned officer is the chief financial officer or other financial officer of Borrower.

The undersigned representatives have caused the provisions of the Loan Documents to be reviewed and have no knowledge of any Default or Event of Default. (Note: If the signer does have knowledge of any Default or Event of Default, the form of certificate should be revised to specify the Default or Event of Default, the nature thereof and the actions taken, being taken or proposed to be taken by the Borrower with respect thereto.)

Borrower is providing the attached information to demonstrate compliance as of the date hereof with the covenants described in the attachment hereto.

1

IN WITNESS WHEREOF, the undersigned have duly executed this Compliance Certificate this      day of             , 200    .

30 WEST PERSHING, LLC,
a Missouri limited liability company
By:
	Name: Mark A. Peterson
	Title: Vice President and CFO
EPT DOWNREIT II, INC., a Missouri corporation
By:
	Name: Mark A. Peterson
	Title: Vice President and CFO
EPT HUNTSVILLE, INC., a Delaware corporation
By:
	Name: Mark A. Peterson
	Title: Vice President and CFO
EPT PENSACOLA, INC., a Missouri corporation
By:
	Name: Mark A. Peterson
	Title: Vice President and CFO
MEGAPLEX FOUR, INC., a Missouri corporation
By:
	Name: Mark A. Peterson
	Title: Vice President and CFO

2

WESTCOL CENTER, LLC, a Delaware limited liability company
By:
	Name: Mark A. Peterson
	Title: Vice President and CFO
EPT MELBOURNE, INC., a Missouri corporation
By:
	Name: Mark A. Peterson
	Title: Vice President and CFO
ENTERTAINMENT PROPERTIES TRUST a Maryland real estate investment trust
By:
	Name: Mark A. Peterson
	Title: Vice President and CFO

3

EXHIBIT L

FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT

Reference is made to that certain Amended and Restated Master Credit Agreement dated as of June 30, 2009, (as the same may be amended or modified from time to time, the “Credit Agreement”), among 30 West Pershing, LLC, EPT DownREIT II, Inc., EPT Huntsville, Inc., EPT Pensacola, Inc., Megaplex Four, Inc., Westcol Center, LLC, EPT Melbourne, Inc. and Entertainment Properties Trust, (each, jointly and severally, a “Borrower”; collectively, the “Borrowers”), the financial institutions party thereto, as lenders and KeyBank National Association, for itself and as agent for the Lenders (in such capacity, the “Agent”). Terms defined in the Credit Agreement are used herein with the same meanings.

1. The undersigned assignor (the “Assignor”) hereby sells and assigns, without recourse, to the undersigned assignee (the “Assignee”), and the Assignee hereby purchases and assumes, without recourse, from the Assignor, effective as of the effective date set forth below, the interests set forth below (the “Assigned Interest”) in the Assignor’s rights and obligations under the Credit Agreement, including, without limitation, the interests set forth below in the Commitments of the Assignor on the effective date and the Loans including any Letters of Credit owing to the Assignor which are outstanding on the effective date, together with unpaid interest accrued on the assigned Loans or Letters of Credit to the effective date and the amount, if any, set forth below of the fees accrued to the effective date for the account of the Assignor. Each of the Assignor and the Assignee hereby makes and agrees to be bound by all the representations, warranties and agreements set forth in the Credit Agreement, a copy of which has been received by each such party. From and after the effective date (i) the Assignee shall be a party to and be bound by the provisions of the Credit Agreement and, to the extent of the interest assigned by this Assignment and Acceptance, have the rights and obligations of a Lender thereunder and under the Loan Documents and (ii) the Assignor shall, to the extent of the interests assigned by this Assignment and Acceptance, relinquish its rights and be released from its obligations under the Credit Agreement.

2. This Assignment and Acceptance is being delivered to the Agent together with (i) any Notes evidencing the Loans included in the Assigned Interest, (ii) if the Assignee is organized under the laws of a jurisdiction outside the United States, such forms as may be required by the Agent, duly completed and executed by such Assignee and (iii) if the Assignee is not already a Lender under the Credit Agreement, an Administrative Questionnaire in the form of Exhibit L-1 to the Credit Agreement.

3. THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK

Date of Assignment:

Legal Name of Assignor:

1

Legal Name of Assignee:

Assignee’s Address for Notices:

Effective date of Assignment (may not be fewer than 5 Business Days after the Date of Assignment):

Percentage Assigned of Commitments (set forth,

as a percentage of the Aggregate

Allocations:             %

Principal Amount

Assigned: $

Fees Assigned (if any):

The terms set forth above are hereby agreed to:

	as Assignor
By:
Name:
Title:
	as Assignee
By:
Name:
Title:

2

EXHIBIT L-1

FORM OF ADMINISTRATIVE QUESTIONNAIRE

Please accurately complete the following information and return via FAX to the attention of                         , Director, Institutional Real Estate, KeyBank National Association, as soon as possible.

Fax Number: (617) 385-6292

LEGAL NAME TO APPEAR IN DOCUMENTATION:

GENERAL INFORMATION - DOMESTIC LENDING OFFICE:

Institution Name:

Street Address:

City, State, Zip Code:

CONTACTS/NOTIFICATION METHODS:

CREDIT CONTACTS:

Primary Contact:

Street Address:

City, State, Zip Code:

Phone Number:

FAX Number:

Backup Contact:

Street Address:

City, State, Zip Code:

Phone Number:

FAX Number:

TAX WITHHOLDING:

Non Resident Alien            Y*

* Form 4224 Enclosed

Tax ID Number

3

CONTACTS/NOTIFICATION METHODS:

ADMINISTRATIVE CONTACTS - BORROWINGS, PAYDOWNS, INTEREST, FEES, ETC.

Contact:

Street Address:

City, State, Zip Code:

Phone Number:

FAX Number:

PAYMENT INSTRUCTIONS:

Name of Bank where funds are to be transferred:

Routing Transit/ABA number of Bank where funds are to be transferred:

Name of Account, if applicable:

Account Number:

Additional Information:

MAILINGS:

Please specify who should receive financial information:

Name:

Street Address:

City, State, Zip Code:

It is very important that all of the above information is accurately filled in and returned promptly. If there is someone other than yourself who should receive this questionnaire, please notify me of their name and FAX number and we will FAX them a copy of the questionnaire. If you have any questions, please call me at (617) 385-6292.

PARTICIPANT INFORMATION

Participant Name:

Address:

Primary Contact:

Title:

Department:

Phone Number:

Facsimile 9:

Alternate Contact:

Phone Number:

Facsimile #:

Account Officer:

4

Phone Number:

Tax ID #:

Commitment Percentage:

Maximum Commitment:

Interest Rate and Fees:

WIRE INSTRUCTIONS TO YOUR BANK:

Bank Name:

Department Name:

ABA 9:

A/C #:

Attention:

Client Name/Ref

AGENT’S WIRE INSTRUCTIONS:

Name:

ABA 9:

A/C #: (to be assigned)

Tax ID #:

Attention:

Client Name/Ref

5

SCHEDULE 1

LENDERS AND COMMITMENTS

(notice for final documents)

Lender	Commitment		Commitment Percentage
KeyBank National Association	$	40,000,000.00	18.60465	%
225 Franklin Street, 18th Floor
Boston, Massachusetts 02110
Attn: Jeffrey M. Morrison
Institutional Real Estate
Tel: (617) 385-6216
Fax: (617) 385-6293
Email: Jeffrey_M_Morrison@KeyBank.com
JP Morgan Chase Bank, N.A.	$	40,000,000.00	18.60465	%
270 Park Avenue
New York, NY 10017
Attn: Donald Shokrian
Managing Director
Tel: (212) 622-2166
Fax: (646) 534-0574
Email: mohammad.s.hasan@jpmorgan.com
Royal Bank of Canada	$	40,000,000.00	18.60465	%
One Liberty Plaza, 3rd Floor
165 Broadway
New York, NY 10006-1404
Attn: Dan LePage
Tel: (212) 428-6605
Fax: (212) 428-6459
E-mail: Dan.LePage@rbccm.com
Citicorp North America, Inc.	$	25,000,000.00	11.62791	%
388 Greenwich Street – 19th Floor
New York, New York 10010
Attn; Rita Lai
Phone: 212-723-5931
Fax: 646-291-1630
Email: rita.c.lai@citigroup.com

UMB Bank, n.a.,	$	20,000,000.00	9.30233	%
1010 Grand Blvd.
Kansas City, MO 64106
Attn: Robert P. Elbert
Senior Vice President
Tel: (816) 860-7116
Fax: (816) 860-7143
Email: Robert.elbert@umb.com
Barclays Bank Plc	$	20,000,000.00	9.30233	%
c/o Barclay Capital
745 7th Avenue
New York, New York 10014
Attn: Allison D’Eugenio
Tel: (212) 526-1374
Fax: (212) 526-5115
Email: Allison.deugenio2@barcap.com
Goldman Sachs Lending Partners LLC	$	20,000,000.00	9.30233	%
85 Broad Street
New York, New York 10004
Attn: Allison O’Connor
Tel: (212) 902-8497
Fax: (212) 346-2608
Group Email: ficc-ny-closers@gs.com
Band Midwest, N.A.	$	10,000,000.00	4.65116	%
1111 Main, Suite 1600
Kansas City, MO 64105
Attn: Matt Mayer
Tel:: 816-471-9800:
Fax: 816-472-5668
Email: mmayer@dfckc.com

SCHEDULE 3

ELIGIBLE REAL ESTATE QUALIFICATION DOCUMENTS

1. Lease Summaries. Detailed Lease Summaries of all Tenant Leases relating to such Real Estate, in form and substance reasonably satisfactory to the Required Lenders.

2. Rent Roll. Current Rent Roll for such Real Estate certified by the Borrower as accurate and complete as of a recent date, in form and substance reasonably satisfactory to the Required Lenders, including without limitation, Tenant identification, term of lease, current rent, square footage, etc.

3. Certificate Regarding Condition. A certification from the chief executive or chief financial officer of the Borrower that such Real estate complies with the terms of Section 6.23.

4. Budget. An operating and capital expenditure budget for such Real Estate in form and substance reasonably satisfactory to the Required Lenders. The capital expenditure budget for the Real Estate must show adequate reserves or cash flow to cover capital expenditure needs of the Real Estate.

5. Operating Statements. Operating statements for such Real Estate in the form of such statements delivered to the Lenders under Section 7.4(c) covering each of the four fiscal quarters ending immediately prior to the addition of such Real Estate to the Borrowing Base Property, to the extent available. Such operating statements shall be subject to the approval of the Required Lenders.

6. EPR Senior Property Loan Summaries. Detailed summaries of all EPR Senior Property Loans and related EPR Senior First Mortgages, in form and substance reasonably satisfactory to the Required Lenders.

7. Additional Documents. Such other agreements, documents, certificates, reports or assurances as the Agent may reasonably require.

SCHEDULE 6.3

LIST OF ALL ENCUMBRANCES ON BORROWER ASSETS

None.

SCHEDULE 6.5

MATERIAL CHANGES TO BORROWING BASE PROPERTIES

None.

SCHEDULE 6.7

PENDING LITIGATION OF BORROWER

None.

SCHEDULE 6.15

LIST OF TRANSACTIONS WITH AFFILIATES AND SUBSIDIARIES

None.

SCHEDULE 6.20

ENVIRONMENTAL RELEASES

None.

SCHEDULE 6.21

EPR AND ITS AFFILIATES EPR²

Entity	Jurisdiction of Organization
Entertainment Properties Trust	MD
3 Theatres, Inc.	MO
30 West Pershing, LLC	MO
Atlantic - EPR I3	DE
Atlantic - EPR II4	DE
Burbank Village, Inc.	DE
Burbank Village, L.P.	DE
Cantera 30 Theatre, L.P.5	DE
Cantera 30, Inc.	DE
CCC VinREIT, LLC	DE
Crotched Mountain Properties, LLC	NH
Domus Communities, LLC6	DE
DPRB VinREIT, LLC	DE
EPR Canada, Inc.	MO
EPR Hialeah, Inc.	MO
EPR Metropolis Trust	DE
EPR North Trust	DE

² All Affiliates are wholly owned, directly or indirectly, by EPR except as otherwise noted below.

³ 80% owned by Atlantic US-Fund I, L.P.

⁴ 80% owned by Atlantic US-Fund II, L.P.

⁵ Cantera 30, Inc. owns all general partner interests. Atlantic – EPR I owns all limited partnership interests.

⁶ 50% owned by Petrus Capital, LLC.

EPR TRS Holdings, Inc.	MO
EPR TRS I, Inc.	MO
EPR TRS II, Inc.	MO
EPR TRS III, Inc.	MO
EPT 301, LLC	MO
EPT Aliso Viejo, Inc.	DE
EPT Arroyo, Inc.	DE
EPT Auburn, Inc.	DE
EPT Biloxi, Inc.	DE
EPT Boise, Inc.	DE
EPT Charlotte, Inc.	DE
EPT Chattanooga, Inc.	DE
EPT Columbiana, Inc.	DE
EPT Concord, LLC	DE
EPT Crotched Mountain, Inc.	MO
EPT Davie, Inc.	DE
EPT Deer Valley, Inc.	DE
EPT DownREIT, Inc.	MO
EPT DownREIT II, Inc.	MO
EPT East, Inc.	DE
EPT East, Inc.	MO
EPT Firewheel, Inc.	DE
EPT First Colony, Inc.	DE

EPT Fresno, Inc.	DE
EPT GCC, LLC	DE
EPT Glendora, Inc.	DE
EPT Gulf Pointe, Inc.	DE
EPT Hamilton, Inc.	DE
EPT Hattiesburg, Inc.	DE
EPT Hoffman Estates, Inc.	DE
EPT Huntsville, Inc.	DE
EPT Hurst, Inc.	DE
EPT Indianapolis, Inc.	DE
EPT Kalamazoo, Inc.	MO
EPT Lafayette, Inc.	DE
EPT Lawrence, Inc.	DE
EPT Leawood, Inc.	DE
EPT Little Rock, Inc.	DE
EPT Macon, Inc.	DE
EPT Mad River, Inc.	MO
EPT Manchester, Inc.	DE
EPT Melbourne, Inc.	MO
EPT Mesa, Inc.	DE
EPT Mesquite, Inc.	DE
EPT Modesto, Inc.	DE
EPT Mount Attitash, Inc.	DE

EPT Mount Snow, Inc.	DE
EPT New Roc GP, Inc.	DE
EPT New Roc, LLC	DE
EPT Oakview, Inc.	DE
EPT Pensacola, Inc.	MO
EPT Pompano, Inc.	DE
EPT Raleigh Theatres, Inc.	DE
EPT Schoolhouse, Inc.	DE
EPT Ski Properties, Inc.	DE
EPT Slidell, Inc.	DE
EPT South Barrington, Inc.	DE
EPT Waterparks, Inc.	DE
EPT White Plains, LLC	DE
EPT Wilmington, Inc.	DE
Exit 108 Entertainment, LLC7	AL
Flik Depositor, Inc.	DE
Flik, Inc.	DE
GFS VinREIT, LLC	DE
Havens VinREIT, LLC	MO
HGP VinREIT, LLC	DE
JERIT CS Fund I, LLC	DE
Kanata Entertainment Holdings, Inc.	Canada
LCPV VinREIT, Inc.	DE

LC White Plains Recreation, LLC8	NY
LC White Plains Retail, LLC9	NY
Megaplex Four, Inc.	MO
Megaplex Nine, Inc.	MO
Metropolis Entertainment Holdings, Inc.	Canada
Mississauga Entertainment Holdings, Inc.	Canada
New Roc Associates, L.P10 .	NY
Oakville Entertainment Holdings, Inc.	Canada
Paso Robles VinREIT, LLC	MO
PGCC, LLC11	DE
SBV VinREIT, LLC	DE
Suffolk Retail, LLC12	DE
Sunny VinREIT, LLC	DE

⁷ 50% owned by Exit 108 Theatre, LLC.

⁸ 66  ²/3 % of voting control and distribution and profits interest (paid after designated preferred returns) held by EPT White Plains, LLC in Class A membership interests. 10% preference on distributions. 33  ¹/3% of voting control and distribution and profits interest (paid after designated preferred returns) held by City Center Group, LLC in Class C membership interests. 10% preference on distributions.  ¹/3% of this interest allocated to Louis R. Cappelli. 10% preference on distributions. Class B membership interests, which are non-voting, are held by Cappelli Group, LLC and are entitled to preferences on distributions of 9%. Class C membership interests, which are non-voting, are held by City Center Group, LLC and are entitled to preferences on distributions of 10%. All distribution preferences paid in alphabetical order of priority.

⁹ 66  ²/3 % of voting control and distribution and profits interest (paid after designated preferred returns) held by EPT White Plains, LLC in Class A membership interests. 10% preference on distributions. 33  ¹/3% of voting control and distribution and profits interest (paid after designated preferred returns) held by City Center Group, LLC in Class C membership interests. 10% preference on distributions.  ¹/3% of this interest allocated to Louis R. Cappelli. 10% preference on distributions. Class B membership interests, which are non-voting, are held by Cappelli Group, LLC and are entitled to preferences on distributions of 9%. Class C membership interests, which are non-voting, are held by City Center Group, LLC and are entitled to preferences on distributions of 10%. All distribution preferences paid in alphabetical order of priority.

¹⁰ EPT New Roc GP, Inc. owns all general partnership interests. EPT New Roc, LLC owns all Class A limited partnership interests. LC New ROC LP, LLC owns all Class B limited partnership interests.

¹¹ 50% owned by SGCC, Inc.

¹² 50% owned by Hemisphere Property Group, Inc.

Tampa Veterans 24, Inc.	DE
Tampa Veterans 24, L.P.13	DE
Theatre Sub, Inc.	MO
VinREIT, LLC14	DE
WestCol Center, LLC	DE
WestCol Corp.	DE
WestCol Holdings, LLC	DE
WestCol Theatre, LLC	DE
Westminster Promenade Owner’s Association, LLC	CO
Whitby Entertainment Holdings, Inc.	Canada

¹³ Tampa Veterans 24, Inc. owns all general partnership interests. Atlantic - EPR II owns all limited partnership interests.

¹⁴ 4% owned by Global Wine Partners (U.S.) LLC.

144

SCHEDULE 6.22

MONETARY DEFAULTS UNDER LEASES

None.

SCHEDULE 6.25

MATERIAL LOAN AGREEMENTS

Company	Original Lender	Start Date	End Date
Burbank Village, LP	Archon Financial	5/19/2005	6/5/2015
EPR North Trust	GMAC	3/1/2004	3/1/2014
EPT Aliso Viejo, Inc.	Goldman Sachs	3/6/2006	3/6/2016
EPT Arroyo, Inc.	Goldman Sachs	9/29/2006	10/6/2016
EPT Auburn, Inc.	Bear Stearns	9/12/2006	10/1/2016
EPT Biloxi, Inc.	Bear Stearns	2/21/2007	3/1/2017
EPT Boise, Inc.	Archon Financial	10/28/2005	11/6/2015
EPT Chattanooga, Inc.	Bear Stearns	7/30/2007	8/1/2017
EPT Columbiana, Inc.	Bear Stearns	9/12/2006	10/1/2016
EPT Davie, Inc.	Goldman Sachs	3/6/2006	3/6/2016
EPT Deer Valley, Inc.	Archon Financial	10/28/2005	11/6/2015
EPT DownREIT II, Inc.	Archon Financial	6/29/1998	7/11/2008
EPT First Colony, Inc.	Bear Stearns	4/19/2007	5/1/2017
EPT Fresno, Inc.	Goldman Sachs	3/23/2007	4/6/2017
EPT Gulf Pointe, Inc.	Bear Stearns	9/19/2007	10/1/2012
EPT Hamilton, Inc.	Archon Financial	10/28/2005	11/6/2015
EPT Hattiesburg, Inc.	Key Bank	4/18/2007	5/1/2017
EPT Hurst, Inc.	Bear Stearns	6/1/2006	6/30/2016
EPT Indianapolis, Inc.	Key Bank	4/18/2007	5/1/2017
EPT Lafayette, Inc.	Goldman Sachs	9/29/2006	10/6/2016
EPT Lawrence, Inc.	Key Bank	4/18/2007	5/1/2017
EPT Leawood, Inc.	Bear Stearns	7/30/2007	8/1/2017
EPT Little Rock, Inc.	Archon Financial	10/28/2005	11/6/2015
EPT Macon, Inc.	Goldman Sachs	9/29/2006	10/6/2016
EPT Mesa, Inc.	Bear Stearns	6/1/2006	6/30/2016
EPT Mesquite, Inc.	Bear Stearns	9/24/2007	10/1/2012
EPT Modesto, Inc.	Bear Stearns	9/12/2006	10/1/2016
EPT Oakview, Inc.	Bear Stearns	4/19/2007	5/1/2017
EPT Pompano, Inc.	Archon Financial	10/28/2005	11/6/2015
EPT Raleigh Theatres, Inc.	Archon Financial	10/28/2005	11/6/2015

EPT South Barrington, Inc.	Bear Stearns	10/3/2007	11/1/2012
EPT Wilmington, Inc.	Bear Stearns	9/12/2006	10/1/2016
Flik, Inc.	Secore Financial	2/27/2003	2/10/2013
New Roc Associates, LP	Archon Financial	4/1/2004	4/1/2014
New Roc Associates, LP	Empire State Development Corporation	1/30/1998	Undetermined
Westcol Theatre, LLC	Wells Fargo Bank	8/1/1998	7/15/2018
LC White Plains Retail, LLC & LC White Plains recreation, LLC	Union Labor Life	10/7/2004	10/7/2010
LC White Plains Retail, LLC	Empire State Development Corporation		Undetermined
DPRB VinREIT, LLC	Bank of the West	2/25/2009	12/1/2017
EPT Concord, Inc.	CIBC	8/20/2008	9/10/2010
HGP VinREIT, LLC	Bank of the West	9/26/2008	6/5/2018
GFS VinREIT, LLC	Bank of the West	9/26/2008	6/5/2018
Sunny VinREIT, LLC	Bank of the West	9/26/2008	6/5/2018
SBV VinREIT, LLC	Bank of the West	9/26/2008	6/5/2018
DPRB VinREIT, LLC	Bank of the West	8/20/2008	12/1/2017
DPRB VinREIT, LLC	Bank of the West	3/14/2008	12/1/2017
DPRB VinREIT, LLC	Bank of the West	3/24/2008	12/1/2017
Havens VinREIT, LLC	Bank of the West	3/14/2008	3/5/2018
EPT Firewheel, Inc.	Bear Sterns	3/1/2008	2/1/2018
EPT 301, Inc.	Key Bank	10/26/2007	10/26/2011
EPT Slidell, Inc.	GoZone Bond	10/1/2007	10/1/2037

The Term Loan Agreement

TABLE OF CONTENTS

		Page
	EXHIBITS AND SCHEDULES
Exhibit A	Intentionally Deleted.
Exhibit B	FORM OF REVOLVING CREDIT NOTE	1
Exhibit E	Intentionally Deleted.
Exhibit H	FORM OF REQUEST FOR REVOLVING CREDIT LOAN	1
Exhibit I	LETTER OF CREDIT REQUEST	4
Exhibit J	FORM OF BORROWING BASE CERTIFICATE	1
Exhibit K	FORM OF COMPLIANCE CERTIFICATE	1
Exhibit L	FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT	1
Exhibit L-1	FORM OF ADMINISTRATIVE QUESTIONNAIRE	3
Schedule 1	COMMITMENTS
Schedule 3	ELIGIBLE REAL ESTATE QUALIFICATION DOCUMENTS
Schedule 6.3	LIST OF ALL ENCUMBRANCES ON BORROWER ASSETS
Schedule 6.5	MATERIAL CHANGES TO BORROWING BASE PROPERTIES
Schedule 6.7	PENDING LITIGATION OF BORROWER
Schedule 6.15	LIST OF TRANSACTIONS WITH AFFILIATES AND SUBSIDIARIES
Schedule 6.20	ENVIRONMENTAL RELEASES
Schedule 6.21	SUBSIDIARIES AND AFFILIATES OF EPR
Schedule 6.22	MONETARY DEFAULTS UNDER LEASES
Schedule 6.25	MATERIAL LOAN AGREEMENTS

EX-12.1

EXHIBIT 12.1

ENTERTAINMENT PROPERTIES TRUST

COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES

(dollars in thousands)

	Year Ended December 31,
	2009			2008			2007			2006			2005
Earnings:
Income (loss) before gain on sale of land, equity in income from joint ventures, noncontrolling interests and discontinued operations (1)	$	(12,801	)	$	125,568		$	97,503		$	80,535		$	68,188
Fixed charges		73,390			72,658			61,376			49,092			44,203
Distributions from equity investments		986			2,262			1,239			874			855
Capitalized interest		(600	)		(797	)		(494	)		(100	)		(160	)
Adjusted Earnings	$	60,975		$	199,691		$	159,624		$	130,401		$	113,086
Fixed Charges:
Interest expense, net (including amortization of deferred financing fees)	$	72,715		$	70,951		$	60,505		$	48,866		$	43,749
Interest income		75			910			377			126			294
Capitalized interest		600			797			494			100			160
Total Fixed Charges	$	73,390		$	72,658		$	61,376		$	49,092		$	44,203
Ratio of Earnings to Fixed Charges		0.8x			2.7x			2.6x			2.7x			2.6x

(1) Earnings before gain on sale of land, equity in income from joint ventures, noncontrolling interests and discontinued operations for the year ended December 31, 2009 includes $42.2 million in impairment charges for properties held and used and $71.0 million in provision for loan losses.

EX-12.2

EXHIBIT 12.2

ENTERTAINMENT PROPERTIES TRUST

COMPUTATION OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED DISTRIBUTIONS

(dollars in thousands)

	Year Ended December 31,
	2009			2008			2007			2006			2005
Earnings:
Income (loss) before gain on sale of land, equity in income from joint ventures, noncontrolling interests and discontinued operations (1)	$	(12,801	)	$	125,568		$	97,503		$	80,535		$	68,188
Fixed charges before preferred distributions		73,390			72,658			61,376			49,092			44,203
Distributions from equity investments		986			2,262			1,239			874			855
Capitalized interest		(600	)		(797	)		(494	)		(100	)		(160	)
Adjusted Earnings	$	60,975		$	199,691		$	159,624		$	130,401		$	113,086
Fixed Charges:
Interest expense, net (including amortization of deferred financing fees)	$	72,715		$	70,951		$	60,505		$	48,866		$	43,749
Interest income		75			910			377			126			294
Capitalized interest		600			797			494			100			160
Preferred distributions		30,206			28,266			21,312			11,857			11,353
Combined Fixed Charges and Preferred Distributions	$	103,596		$	100,924		$	82,688		$	60,949		$	55,556
Ratio of Earnings to Combined Fixed Charges and Preferred Distributions		0.6x			2.0x			1.9x			2.1x			2.0x

(1) Earnings before gain on sale of land, equity in income from joint ventures, noncontrolling interests and discontinued operations for the year ended December 31, 2009 includes $42.2 million in impairment charges for properties held and used and $71.0 million in provision for loan losses.

EX-21

EXHIBIT 21

Subsidiaries of the Company

Subsidiary Jurisdiction of Incorporation or Formation

3 Theatres, Inc.	Missouri
30 West Pershing, LLC	Missouri
Atlantic - EPR I	Delaware
Atlantic - EPR II	Delaware
Burbank Village, Inc.	Delaware
Burbank Village, LP	Delaware
Cantera 30, Inc.	Delaware
Cantera 30 Theatre, LP	Delaware
CCC VinREIT, LLC	Delaware
Crotched Mountain Properties, LLC	New Hampshire
Domus Communities, LLC	Delaware
DPRB VinREIT, LLC	Delaware
EPR Canada, Inc.	Missouri
EPR Hialeah, Inc.	Missouri
EPR Metropolis Trust	Delaware
EPR North Trust	Delaware
EPR TRS Holdings, Inc.	Missouri
EPR TRS I, Inc.	Missouri
EPR TRS II, Inc.	Missouri
EPR TRS III, Inc.	Missouri
EPT 301, LLC	Missouri
EPT Aliso Viejo, Inc.	Delaware
EPT Arroyo, Inc.	Delaware
EPT Auburn, Inc.	Delaware
EPT Biloxi, Inc.	Delaware
EPT Boise, Inc.	Delaware
EPT Chattanooga, Inc.	Delaware
EPT Columbiana, Inc.	Delaware
EPT Concord, LLC	Delaware
EPT Crotched Mountain, Inc.	Missouri
EPT Davie, Inc.	Delaware
EPT Deer Valley, Inc.	Delaware
EPT DownREIT II, Inc.	Missouri
EPT DownREIT, Inc.	Missouri
EPT East, Inc.	Delaware
EPT Firewheel, Inc.	Delaware
EPT First Colony, Inc.	Delaware
EPT Fresno, Inc.	Delaware
EPT GCC, LLC	Delaware
EPT Glendora, Inc.	Delaware
EPT Gulf Pointe, Inc.	Delaware
EPT Hamilton, Inc.	Delaware
EPT Hattiesburg, Inc.	Delaware

EPT Hoffman Estates, Inc.	Delaware
EPT Huntsville, Inc.	Delaware
EPT Hurst, Inc.	Delaware
EPT Indianapolis, Inc.	Delaware
EPT Kalamazoo, Inc.	Missouri
EPT Lafayette, Inc.	Delaware
EPT Lawrence, Inc.	Delaware
EPT Leawood, Inc.	Delaware
EPT Little Rock, Inc.	Delaware
EPT Macon, Inc.	Delaware
EPT Mad River, Inc.	Missouri
EPT Manchester, Inc.	Delaware
EPT Melbourne, Inc.	Missouri
EPT Mesa, Inc.	Delaware
EPT Mesquite, Inc.	Delaware
EPT Modesto, Inc.	Delaware
EPT Mount Attitash, Inc.	Delaware
EPT Mount Snow, Inc.	Delaware
EPT New Roc GP, Inc.	Delaware
EPT New Roc, LLC	Delaware
EPT Nineteen, Inc.	Delaware
EPT Oakview, Inc.	Delaware
EPT Pensacola, Inc.	Missouri
EPT Pompano, Inc.	Delaware
EPT Raleigh Theatres, Inc.	Delaware
EPT Schoolhouse, LLC	Delaware
EPT Ski Properties, Inc.	Delaware
EPT Slidell, Inc.	Delaware
EPT South Barrington, Inc.	Delaware
EPT Waterparks, Inc.	Delaware
EPT White Plains, LLC	Delaware
EPT Wilmington, Inc.	Delaware
Exit 108 Entertainment, LLC	Alabama
Flik Depositor, Inc.	Delaware
Flik, Inc.	Delaware
GFS VinREIT, LLC	Delaware
Havens VinREIT, LLC	Missouri
HGP VinREIT, LLC	Delaware
Education Capital Solutions, LLC	Delaware
Kanata Entertainment Holdings, Inc.	New Brunswick
LC White Plains Recreation, LLC	New York
LC White Plains Retail, LLC	New York
LCPV VinREIT, LLC	Delaware
Megaplex Four, Inc.	Missouri
Megaplex Nine, Inc.	Missouri
Metropolis Entertainment Holdings, Inc.	New Brunswick
Mississauga Entertainment Holdings, Inc.	New Brunswick
New Roc Associates, LP	New York
Oakville Entertainment Holdings, Inc.	New Brunswick
Paso Robles VinREIT, LLC	Missouri

PGCC, LLC	Delaware
SBV VinREIT, LLC	Delaware
Suffolk Retail, LLC	Delaware
Sunny VinREIT, LLC	Delaware
Tampa Veterans 24, Inc.	Delaware
Tampa Veterans 24, LP	Delaware
Theatre Sub, Inc.	Missouri
VinREIT, LLC	Delaware
WestCol Center, LLC	Delaware
WestCol Corp.	Delaware
WestCol Holdings, LLC	Delaware
WestCol Theatre, LLC	Delaware
Westminster Promenade Owner’s Association, LLC	Colorado
Whitby Entertainment Holdings, Inc.	New Brunswick
YongeDundas Signage Trust	Delaware

EX-23

EXHIBIT 23

Consent of Independent Registered Public Accounting Firm

The Board of Trustees

Entertainment Properties Trust:

We consent to the incorporation by reference in the Registration Statements (Form S-3 No. 333-72021 and Form S-3 No. 333-151978 each pertaining to the Dividend Reinvestment and Direct Shares Purchase Plan, Form S-8 No. 333-76625 pertaining to the 1997 Share Incentive Plan, Form S-8 No. 333-142831 and Form S-8 No. 333-159465 pertaining to the 2007 Equity Incentive Plan, Form S-4 No. 333-78803, as amended, pertaining to the shelf registration of 5,000,000 common shares and Form S-3 No. 333-140978 for an undetermined amount of securities) of Entertainment Properties Trust of our reports dated February 26, 2010, with respect to the consolidated balance sheets of Entertainment Properties Trust as of December 31, 2009 and 2008, and the related consolidated statements of income, changes in equity, comprehensive income, and cash flows, for each of the years in the three-year period ended December 31, 2009, and all related financial statement schedules and the effectiveness of internal control over financial reporting as of December 31, 2009, which reports appear in the December 31, 2009 Annual Report on Form 10-K of Entertainment Properties Trust.

/s/ KPMG LLP

KPMG LLP

Kansas City, Missouri

February 26, 2010

EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, David M. Brain, certify that:

1. I have reviewed this report on Form 10-K of Entertainment Properties Trust;

2. Based on my knowledge, this 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 report;

3. Based on my knowledge, the financial statements, and other financial information included in this 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 report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, 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 report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 26, 2010	/s/ David M. Brain
	David M. Brain
	President, Chief Executive Officer (Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, Mark A. Peterson, certify that:

1. I have reviewed this report on Form 10-K of Entertainment Properties Trust;

2. Based on my knowledge, this 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 report;

3. Based on my knowledge, the financial statements, and other financial information included in this 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 report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, 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 report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 26, 2010	/s/ Mark A. Peterson
	Mark A. Peterson
	Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer and Principal Accounting Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350 AS

ADOPTED PURSUANT TO SECTION 906 OF THE

SARBANES-OXLEY ACT

I, David M. Brain, President and Chief Executive Officer of Entertainment Properties Trust (the “Issuer”), have executed this certification for furnishing to the Securities and Exchange Commission in connection with the filing with the Commission of the registrant’s Annual Report on Form 10-K for the year ended December 31, 2009 (the “Report”). I hereby certify 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 Issuer.

/s/ David M. Brain

David M. Brain

President, Chief Executive Officer

(Principal Executive Officer)

Date: February 26, 2010

EX-32.2

EXHIBIT 32.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350 AS

ADOPTED PURSUANT TO SECTION 906 OF THE

SARBANES-OXLEY ACT

I, Mark A. Peterson, Vice President and Chief Financial Officer of Entertainment Properties Trust (the “Issuer”), have executed this certification for furnishing to the Securities and Exchange Commission in connection with the filing with the Commission of the registrant’s Annual Report on Form 10-K for the year ended December 31, 2009 (the “Report”). I hereby certify 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 Issuer.

/s/ Mark A. Peterson

Mark A. Peterson

Vice President, Chief Financial Officer

and Treasurer (Principal Financial

Officer and Principal Accounting Officer)

Date: February 26, 2010