0001286043-07-000051.txt : 20070615 0001286043-07-000051.hdr.sgml : 20070615 20070615165528 ACCESSION NUMBER: 0001286043-07-000051 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 20070615 DATE AS OF CHANGE: 20070615 GROUP MEMBERS: KITE REALTY GROUP TRUST SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: KITE REALTY GROUP TRUST CENTRAL INDEX KEY: 0001286043 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 113715772 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-80335 FILM NUMBER: 07923754 BUSINESS ADDRESS: STREET 1: 30 S MERIDIAN STREET STREET 2: SUITE 1100 CITY: INDIANAPOLIS STATE: IN ZIP: 46204 BUSINESS PHONE: 3175775600 MAIL ADDRESS: STREET 1: 30 S MERIDIAN STREET STREET 2: SUITE 1100 CITY: INDIANAPOLIS STATE: IN ZIP: 46204 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: Kite Alvin E JR CENTRAL INDEX KEY: 0001295833 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: BUSINESS PHONE: (317) 577-5600 MAIL ADDRESS: STREET 1: KITE REALTY GROUP TRUST STREET 2: 30 S MERIDIAN STREET, SUITE 1100 CITY: INDIANAPOLIS STATE: IN ZIP: 46204 SC 13D/A 1 sch13da_akite.htm SCHEDULE 13D/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D/A

Under the Securities Exchange Act of 1934

(Amendment No. 1)

Kite Realty Group Trust

(Name of Issuer)

Common Shares, $0.01 par value per share

(Title of Class of Securities)

49803T102

(CUSIP Number)

John A. Kite

Chief Executive Officer and President

Kite Realty Group Trust

30 S. Meridian Street

Suite 1100

Indianapolis, IN 46204

(317) 577-5600

(Name, Address and Telephone Number of Person

Authorized to Receive Notices and Communications)

June 7, 2007

(Date of Event which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box: [ ]

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 240.13d-7 for other parties to whom copies are to be sent.

* The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

SCHEDULE 13D

CUSIP No. 49803T102				Page 2 of 4 Pages

1	NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Alvin E. Kite, Jr.

2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [ ]

3	SEC USE ONLY

4	SOURCE OF FUNDS (See Instructions) BK

5	CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ]

6	CITIZENSHIP OR PLACE OF ORGANIZATION United States of America

NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	SOLE VOTING POWER 3,592,924


		8	SHARED VOTING POWER 861,845


		9	SOLE DISPOSITIVE POWER 3,592,924


		10	SHARED DISPOSITIVE POWER 861,845

11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 4,454,769

12	CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) [ ]

13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 13.68%

14	TYPE OF REPORTING PERSON (See Instructions) IN

This Amendment No. 1 amends and supplements the Schedule 13D (the “Original Schedule 13D”) filed on June 24, 2005 by Alvin E. Kite, Jr. (the “Reporting Person”) relating to the common shares, par value $0.01 per share (the “Shares”), of Kite Realty Group Trust, a Maryland real estate investment trust (the “Issuer”). Unless otherwise defined, capitalized terms used in this Amendment No. 1 shall have the meaning ascribed to them in the Original Schedule 13D.

Item 3. Source and Amount of Funds or Other Consideration

Item 3 is hereby amended and supplemented as follows:

On June 7, 2007, JA Acquisition, LLC, a newly formed Indiana limited liability company (“JA Acquisition”) owned and controlled by the Reporting Person and his son, John A. Kite (“John Kite”), purchased 800,000 units of limited partnership interest (“Units”) in Kite Realty Group, L.P. (“Kite LP”) from Paul W. Kite, the Reporting Person’s son. Pursuant to the partnership agreement of Kite LP, upon the request of JA Acquisition, the 800,000 Units are redeemable for either cash or an equal number of Shares (at the option of the Issuer). The aggregate purchase price paid for the 800,000 Units was $16,616,000. The funds used to pay the purchase price were derived from bank loans obtained by the Reporting Person and John Kite, which amounts were then contributed to JA Acquisition by the Reporting Person and John Kite. The loan to the Reporting Person is secured by a pledge of 805,891 Units owned by the Reporting Person. John Kite also pledged certain Units on substantially the same terms.

Copies of the documents evidencing the Reporting Person’s loan are attached to this Schedule 13D/A as Exhibits 1 and 2, respectively. Copies of the documents evidencing John Kite’s loan are attached to this Schedule 13D/A as Exhibits 3 and 4, respectively.

Item 5. Interest in Securities of the Issuer

Item 5 is hereby amended and supplemented as follows:

(a) As of the date hereof, and after giving effect to the purchase of the 800,000 Units by JA Acquisition, the Reporting Person may be deemed to beneficially own an aggregate of 4,454,769 Shares, which represents approximately 13.68% of the Issuer’s outstanding Shares (based upon 32,571,307 Shares deemed outstanding after issuance of 3,573,564 Shares upon redemption of 3,573,564 Units beneficially owned by the Reporting Person and 85,000 Shares upon the exercise of stock options held by the Reporting Person). Of the 4,454,769 Shares beneficially owned, the Reporting Person has the right to receive either cash or an equal number of Shares (at the option of the Issuer) upon the redemption (i) by JA Acquisition of the 800,000 Units, (ii) by the Reporting Person of 2,508,218 separate Units owned directly by him, (iii) by the Reporting Person of 192,307 separate Units held by the Alvin E. Kite, Jr. Centre Associates Irrevocable Trust, an irrevocable trust for the benefit of the Reporting Person’s son, and (iv) by the Reporting Person of 73,039 separate Units held by the Alvin E. Kite, Jr. 2004-8 REIT Grantor Retained Annuity Trust. The Reporting Person also has the right to acquire 85,000 Shares pursuant to stock options granted to the Reporting Person in connection with his employment by the Issuer. The Reporting Person also shares beneficial ownership of 61,845 Shares with the Reporting Person’s spouse. The remaining 734,360 Shares are held directly by the Reporting Person.

(b) As of the date hereof, the Reporting Person has the sole power to vote or direct the voting of, and sole power to dispose or direct the disposition of, 3,592,924 Shares beneficially owned by him and has shared power to vote or direct the voting of, and shared power to dispose or direct the disposition of, 861,845 Shares beneficially owned by him.

Item 6.

Contracts, Arrangements, Understandings or Relationships with Respect to

Securities of the Issuer

Item 6 is hereby amended and supplemented as follows:

As discussed in Item 3 above, the Reporting Person entered into a loan agreement and a pledge agreement in connection with the acquisition of the 800,000 Units by JA Acquisition. Copies of these documents are attached to this Schedule 13D/A as Exhibits 1 and 2, respectively, and are incorporated by reference herein.

JA Acquisition was formed by the Reporting Person and John Kite for the purpose of purchasing the Units. The Reporting Person and John Kite are the sole members of JA Acquisition, and they each own fifty percent (50%) of the outstanding units of membership interests in JA Acquisition. Pursuant to the Operating Agreement of JA Acquisition (the “LLC Agreement”), each member of JA Acquisition has one vote per unit of membership interest in JA Acquisition on matters which the members may vote. Pursuant to the LLC Agreement, JA Acquisition may only act by or under the authority of its members, acting unanimously as a group, and each member expressly agrees not to bind JA Acquisition absent authority granted pursuant to the terms of the LLC Agreement. In addition, JA Acquisition, under certain circumstances, has a right of first refusal with respect to the transfer of 845,712 Units owned by Paul Kite.

Item 7. Material to be filed as Exhibits

Exhibit 1	Loan Agreement, dated as of June 7, 2007, between Alvin E. Kite, Jr. and the Bank
Exhibit 2	Collateral Pledge Agreement, dated as of June 7, 2007, between Alvin E. Kite, Jr. and the Bank
Exhibit 3	Loan Agreement, dated as of June 7, 2007, between John A. Kite and the Bank *
Exhibit 4	Collateral Pledge Agreement, dated as of June 7, 2007, between John A. Kite and the Bank *
* Incorporated by reference to the Schedule 13D/A filed by John A. Kite on June 15, 2007

SIGNATURES

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this Amendment No. 1 to Schedule 13D is true, complete and correct.

Dated: June 15, 2007		/s/ Alvin E. Kite, Jr.

		Alvin E. Kite, Jr.

EX-1 2 ex1.htm EXHIBIT 1

Exhibit 1. Loan Agreement, dated as of June 7, 2007, between Alvin E. Kite, Jr. and the Bank

June 7, 2007

Alvin E. Kite, Jr.

300 S. Meridian Street, Suite 1100

Indianapolis, Indiana 46204

Dear Al:

The Bank hereby offers, subject to the following conditions, to make the following loan (the "Loan"):

Borrower: The borrower of the Loan shall be Alvin E. Kite, Jr., a resident of the State of Indiana ("Borrower").

Use of Proceeds: The Loan proceeds are to be used solely to purchase partnership units in Kite Realty Group, L.P., a Delaware limited partnership ("KRGLP"). The use of the Loan proceeds are subject to the limitations set forth in Section 20(c) hereof.

Loan Amount: The original principal amount of the Loan shall not exceed Eight Million Three Hundred Forty-Five Thousand Dollars ($8,345,000) (which is an amount equal to Fifty Percent (50%) of the market value of the Borrowing Base Stock as of the date hereof).

For the purposes of this Loan Agreement, the following terms shall have the following meanings:

Borrowing Base: On any date of determination (including a Determination Date), an amount equal to Sixty-Five Percent (65%) of the then market value (as quoted on the New York Stock Exchange) of the Borrowing Base Stock.

Borrowing Base Stock: The number of shares of beneficial interest (or other comparable equity interest) of Kite Realty Group Trust, a Maryland real estate investment trust ("Kite"), subject to the lien and security interest of the Kite Units Pledge Agreement (as hereinafter defined) as of the date of determination.

Determination Date: The last day of each month during the term of the Loan.

Payment Date: The twentieth (20^th) day of each calendar quarter (i.e., the twentieth (20^th) day of each January, April, July and October) during the term of the Loan.

For the purposes of this Loan Agreement, the following terms shall have the following meanings:

Adjusted LIBOR Rate: For any LIBOR Rate Interest Period, an interest rate per annum equal to the sum of (i) the rate obtained by dividing (A) the LIBOR Rate for such LIBOR Rate Interest Period by (B) a percentage equal to one hundred percent (100%) minus the Reserve Percentage for such LIBOR Rate Interest Period, and (ii) the LIBOR Rate Added Percentage.

Applicable Rate: As such term is defined in Section 5(a) hereof.

Breakage Costs: The cost to Bank of re-employing funds bearing interest at an Adjusted LIBOR Rate, incurred (or expected to be incurred) in connection with (i) any payment of any portion of the Loan bearing interest at an Adjusted LIBOR Rate prior to the termination of any applicable LIBOR Rate Interest Period, (ii) the conversion of an Adjusted LIBOR Rate to any other applicable interest rate on a date other than the last day of the relevant interest period, or (iii) the failure of Borrower to draw down, on the first day of the applicable LIBOR Rate Interest Period, any amount as to which Borrower has elected a LIBOR Rate Option.

Business Day: A day of the year on which banks are not required or authorized to close in city, state.

Closing: The execution by Borrower of the Loan Documents and the acceptance thereof by Bank.

Closing Date: The date on which the Loan Documents (as hereinafter defined) are executed by Borrower and accepted by Bank.

Default Rate: A rate per annum equal to Three Percent (3%) (300 basis points) above the Applicable Rate(s) then in effect.

Extended Maturity Date: June 7, 2010.

LIBOR Business Day: A Business Day on which dealings in U.S. dollars are carried on in the London Interbank Market.

LIBOR Rate: For any LIBOR Rate Interest Period, the applicable British Banker's Association LIBOR rate for deposits in Dollars as reported by any generally recognized financial information service as of 11:00 a.m. (London time) two (2) LIBOR Business Days prior to the first day of such LIBOR Rate Interest Period, and having a maturity equal to such LIBOR Rate Interest Period, provided that, if no such British Banker's Association LIBOR Rate is available to the Bank, the applicable LIBOR Rate for the relevant LIBOR Rate Interest Period shall instead be the rate determined by the Bank to be the rate at which Bank offers to place deposits in Dollars with first class banks in the London Interbank Market at approximately 11:00 a.m. (London time) two (2) LIBOR Business Days prior to the first day of such LIBOR Rate Interest Period, in an amount approximately equal to the amount to which such LIBOR Rate Interest Period relates and having a maturity equal to such LIBOR Rate Interest Period.

LIBOR Rate Added Percentage: Ninety-Five One Hundredths of One Percent (95/100 of 1%) (95 basis points) per annum.

LIBOR Rate Interest Period: With respect to each amount of the Loan bearing interest at a LIBOR based rate, a period of one, two, three or six months, to the extent deposits with such maturities are available to Bank, commencing on a LIBOR Business Day, as selected by Borrower provided, however, that (i) any LIBOR Rate Interest Period which would otherwise end on a day which is not a LIBOR Business Day shall continue to and end on the next succeeding LIBOR Business Day, unless the result would be that such LIBOR Rate Interest Period would be extended to the next succeeding calendar month, in which case such LIBOR Rate Interest Period shall end on the next preceding LIBOR Business Day and (ii) any LIBOR Rate Interest Period which begins on a day for which there is no numerically corresponding date in the calendar month in which such LIBOR Rate Interest Period would otherwise end shall instead end on the last LIBOR Business Day of such calendar month. Borrower may not select any LIBOR Rate Interest Period for the Loan or any portion thereof if such LIBOR Rate Interest Period ends after the Scheduled Maturity Date.

LIBOR Rate Option: As defined in Section 5(b) hereof.

Original Maturity Date: June 7, 2009.

Maturity Date: The earlier of: (i) the Scheduled Maturity Date, or (ii) the date the Loan first becomes due, by acceleration or otherwise.

Prime Interest Rate: A rate per annum equal to the Prime Rate.

Prime Rate: That interest rate established from time to time by Bank as Bank's Prime Rate, whether or not such rate is publicly announced; the Prime Rate is not necessarily the lowest interest rate charged by Bank for commercial or other extensions of credit. Any change in the Prime Rate shall be effective immediately from and after such change in the Prime Rate.

Reserve Percentage: For any LIBOR Rate Interest Period, that percentage which is specified three (3) Business Days before the first day of such LIBOR Rate Interest Period by the Board of Governors of the Federal Reserve System (or any successor) or any other governmental or quasi governmental authority with jurisdiction over Borrower for determining the maximum reserve requirement (including, but not limited to, any marginal reserve requirement) for Borrower with respect to liabilities consisting of or including (among other liabilities) Eurocurrency liabilities in an amount equal to that portion of the Loan affected by such LIBOR Rate Interest Period and with a maturity equal to such LIBOR Rate Interest Period.

Scheduled Maturity Date: The Original Maturity Date, unless and until the maturity of the Loan is extended in accordance with the terms of Section 6 hereof, in which case it shall thereafter mean the Extended Maturity Date.

Default Rate:

The Loan will bear interest at the Applicable Rate, unless the Default Rate is applicable. The Prime Interest Rate shall be the "Applicable Rate" for the Loan, except that the Adjusted LIBOR Rate shall be the "Applicable Rate" with respect to portions of the Loan as to which a LIBOR Rate Option is then in effect. While and so long as an Event of Default (as hereinafter defined) is continuing, the Loan will bear interest at the Default Rate.

Provided that no Event of Default exists, Borrower shall have the option (the "LIBOR Rate Option") to elect from time to time in the manner and subject to the conditions hereinafter set forth an Adjusted LIBOR Rate as the Applicable Rate for all or any portion of the Loan which would otherwise bear interest at the Prime Interest Rate.

The only manner in which Borrower may exercise the LIBOR Rate Option is by giving Bank irrevocable notice (which may be verbal notice provided that Borrower delivers to Bank facsimile confirmation within twenty-four (24) hours) of such exercise not later than 11:00 a.m. E.S.T time on the second LIBOR Business Day prior to the proposed commencement of the relevant LIBOR Rate Interest Period, which written notice shall specify: (i) the portion of the Loan with respect to which Borrower is electing the LIBOR Rate Option, (ii) the LIBOR Business Day upon which the applicable LIBOR Rate Interest Period is to commence and (iii) the duration of the applicable LIBOR Rate Interest Period. The Applicable Rate for any portion of the Loan with respect to which Borrower has elected the LIBOR Rate Option shall revert to the Prime Interest Rate as of the last day of the LIBOR Rate Interest Period applicable thereto (unless Borrower again exercises the LIBOR Rate Option for such portion of the Loan). Bank shall be under no duty to notify Borrower that the Applicable Rate on any portion of the Loan is about to revert from an Adjusted LIBOR Rate to the Prime Interest Rate. The LIBOR Rate Option may be exercised by Borrower only with respect to any portion of the Loan equal to or in excess of Fifty Thousand Dollars ($50,000). At no time may there be more than four (4) LIBOR Rate Interest Periods in effect with respect to the Loan.

If Bank determines (which determination shall be conclusive and binding upon Borrower, absent manifest error) (i) that Dollar deposits in an amount approximately equal to the portion of the Loan for which Borrower has exercised the LIBOR Rate Option for the designated LIBOR Rate Interest Period are not generally available at such time in the London Interbank Market for deposits in Dollars, (ii) that the rate at which such deposits are being offered will not adequately and fairly reflect the cost to Bank of maintaining a LIBOR Rate on such portion of the Loan or of funding the same for such LIBOR Rate Interest Period due to circumstances affecting the London Interbank Market generally, (iii) that reasonable means do not exist for ascertaining a LIBOR Rate, or (iv) that an Adjusted LIBOR Rate would be in excess of the maximum interest rate which Borrower may by law pay, then, in any such event, Bank shall so notify Borrower and all portions of the Loan bearing interest at an Adjusted LIBOR Rate that are so affected shall, as of the date of such notification with respect to an event described in clause (ii) or (iv) above,

or as of the expiration of the applicable LIBOR Rate Interest Period with respect to an event described in clause (i) or (iii) above, bear interest at the Prime Interest Rate until such time as the situations described above are no longer in effect or can be avoided by Borrower exercising a LIBOR Rate Option for a different LIBOR Rate Interest Period.

Interest on the Loan at the Applicable Rate (or Default Rate) shall be calculated for the actual number of days elapsed on the basis of a 360-day year, including the first date of the applicable period to, but not including, the date of repayment.

Borrower shall pay all Breakage Costs in respect of the Loan incurred from time to time by Bank upon demand; provided, however, that Borrower shall not be responsible for or obligated to pay for Breakage Costs, if any, resulting from any of the conditions or occurrences described in Section 5(d) of this Loan Agreement.

If the introduction of or any change in any law, regulation or treaty, or in the interpretation thereof by any governmental authority charged with the administration or interpretation thereof, shall make it unlawful for Bank to maintain the Applicable Rate at an Adjusted LIBOR Rate with respect to the Loan or any portion thereof, or to fund the Loan or any portion thereof in Dollars in the London Interbank Market, or to give effect to its obligations regarding the LIBOR Rate Option as contemplated hereby, then (i) Bank shall notify Borrower that Bank is no longer able to maintain the Applicable Rate at an Adjusted LIBOR Rate, (ii) the LIBOR Rate Option shall immediately terminate, (iii) the Applicable Rate for any portion of the Loan for which the Applicable Rate is then an Adjusted LIBOR Rate shall automatically be converted to the Prime Interest Rate, and (iv) Borrower shall pay to Bank the amount of Breakage Costs (if any) incurred in connection with such conversion. Thereafter, Borrower shall not be entitled to exercise the LIBOR Rate Option until such time as the situation described herein is no longer in effect or can be avoided by Borrower exercising a LIBOR Rate Option for a different term.

Borrower recognizes that the cost to Bank of maintaining the Loan or any portion thereof may fluctuate and, Borrower agrees to pay Bank additional amounts to compensate Bank for any increase in its actual costs incurred in maintaining the Loan or any portion thereof outstanding or for the reduction of any amounts received or receivable from Borrower as a result of:

any change after the date hereof in any applicable law, regulation or treaty, or in the interpretation or administration thereof, or by any domestic or foreign court, (A) changing the basis of taxation of payments under this Loan Agreement to Bank (other than taxes imposed on all or any portion of the overall net income or receipts of Bank), or (B) imposing, modifying or applying any reserve, special deposit or similar requirement against assets of, deposits with or for the account of, credit extended by, or any other acquisition of funds for loans by Bank (which includes the Loan or any applicable portion thereof), or (C) imposing on Bank, or the London Interbank Market generally, any other condition affecting the Loan, provided that the result of the foregoing is to increase the cost to Bank of maintaining the Loan or any portion thereof or to reduce the amount of any sum received or receivable from Borrower by Bank under the Loan Documents for the Loan; or

ii.

the maintenance by Bank of reserves in accordance with reserve requirements promulgated by the Board of Governors of the Federal Reserve System of the United States with respect to "Eurocurrency Liabilities" of a similar term to that of the applicable portion of the Loan (without duplication for reserves already accounted for in the calculation of a LIBOR Rate pursuant to the terms hereof).

If the application of any law, rule, regulation or guideline adopted or arising out of the July, 1988 report of the Basle Committee on Banking Regulations and Supervisory Practices entitled "International Convergence of Capital Measurement and Capital Standards", or the adoption after the date hereof of any other law, rule, regulation or guideline regarding capital adequacy, or any change after the date hereof in any of the

foregoing, or in the interpretation or administration thereof by any domestic or foreign governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by Bank, with any request or directive regarding capital adequacy (whether or not having the force of law) of any such authority, central bank or comparable agency, has the effect of reducing the rate of return on Bank's capital to a level below that which Bank would have achieved but for such application, adoption, change or compliance (taking into consideration the policies of Bank with respect to capital adequacy), then, from time to time Borrower shall pay to Bank such additional amounts as will compensate Bank for such reduction with respect to any portion of the Loan outstanding.

Any amount payable by Borrower under subsection (h) or subsection (i) of this Section 5 shall be paid within five (5) days of receipt by Borrower of a certificate signed by an authorized officer of Bank setting forth the amount due and the basis for the determination of such amount, which statement shall be conclusive and binding upon Borrower, absent manifest error. Failure on the part of Bank to demand payment from Borrower for any such amount attributable to any particular period shall not constitute a waiver of Bank's right to demand payment of such amount for any subsequent or prior period. Bank shall use reasonable efforts to deliver to Borrower prompt notice of any event described in subsection (h) or (i) of this Section 5, of the amount of the reserve and capital adequacy payments resulting therefrom and the reasons therefor and of the basis of calculation of such amount; provided, however, that any failure by Bank to so notify Borrower shall not affect Borrower's obligation to pay the reserve and capital adequacy payment resulting therefrom.

Maturity: If not sooner paid, the entire principal balance outstanding, together with all unpaid interest thereon, shall be due and payable in full on the Original Maturity Date. Borrower shall have the option to extend the term of the Loan to the Extended Maturity Date upon the satisfaction of the following conditions: (a) Borrower shall give the Bank written notice of Borrower's election to extend the term of the Loan no earlier than ninety (90) days prior to the Original Maturity Date; (b) no Event of Default is continuing as of the Original Maturity Date; and (c) Borrower pays to the Bank an extension fee in an amount equal to Fifteen One-Hundredths of One Percent (15/100 of 1%) of the original amount of the Loan then outstanding.

Loan Payments:

On each Payment Date during the term of the Loan, the Borrower shall pay interest in arrears at the Applicable Rate(s) on the outstanding principal balance of the Loan in the amount of all interest accrued and unpaid through the last day of the calendar month preceding the calendar month in which such payment is due; and

If on a Determination Date, the amount of the Loan exceeds the Borrowing Base, Borrower shall pay to Bank within fifteen (15) days after such Determination Date a principal payment in an amount sufficient to reduce the principal balance of the Loan as of such Determination Date to an amount equal to the Borrowing Base;

In any and all events, the entire outstanding principal balance of the Loan, together with all accrued and unpaid interest thereon, shall be due and payable on the Scheduled Maturity Date.

Borrower may sell any of the Borrower Kite Units subject to the lien and security interest of the Kite Units Pledge Agreement, provided no Event of Default is the continuing and provided Borrower makes to Bank a principal payment in an amount sufficient to reduce the principal balance of the Loan immediately following such sale to an amount equal to Fifty Percent (50%) of the then market value (as quoted on the New York Stock Exchange) of the number of shares of beneficial interest (or other comparable equity interest of Kite) which would be subject to the lien and security interest of the Kite Units Pledge Agreement immediately following such sale (such a payment being referred to herein as a "Pledge Agreement Release Price"). Upon the receipt of such Pledge Agreement Release Price payment, Bank will execute a release of the

Kite Units Pledge Agreement from the beneficial interests for which such Pledge Agreement Release Price payment is made and will release all of its other security encumbering such interests.

Prepayment: The Loan may be prepaid at any time, without premium or penalty; provided, however, no prepayment of all or part of the Loan shall be permitted unless the same is made together with the payment of all interest accrued on the Loan through the date of prepayment and an amount equal to all Breakage Costs incurred by Bank as a result of the prepayment. Any such prepayments shall be credited, first to the applicable Breakage Costs, then to accrued but unpaid interest, and the balance, if any, to the principal.

Commitment Fee: A commitment fee of Twenty-Five Thousand Thirty-Five Dollars ($25,035) (the "Commitment Fee") shall be payable by Borrower to Bank in respect of the Loan The Commitment Fee shall be paid by Borrower to the Bank at the Closing.

Borrower hereby acknowledges that the Commitment Fee shall be for the applicable services rendered, supported by good, valuable and adequate consideration, and that the Commitment Fee, once paid, shall not be refundable for any reason.

10.

Expenses: The Borrower shall pay all costs and expenses of the Loan including (by way of illustration and not limitation): intangibles and similar taxes, the Bank's outside attorney's costs and fees, and any and all other costs of the Bank in connection with this Letter Loan Agreement and the Loan.

11.

Late Fee: For any installment of the Loan (exclusive of the payment due upon the Scheduled Maturity Date) which is not paid within five (5) Business Days after the due date thereof, then, in addition to and not in lieu of any other rights or remedies available to Bank, Borrower shall pay to the Bank, on demand, a late charge equal to Four Percent (4%) per annum of the amount of such installment to cover the extra expense involved in handling delinquent payments.

12.

Loan Documents and Security for the Loan: The Loan shall be evidenced by a Credit Note (the "Note") in the amount of the Loan, and shall be secured by a Collateral Pledge Agreement (the "Kite Units Pledge Agreement") which shall be a first security interest and a lien upon 805,891 Partnership Units of KRGLP owned by Borrower (the "Borrower Kite Units"), which Borrower Kite Units are presently redeemable for 805,891 shares of beneficial interest of Kite ("Kite Common Stock") (the Borrower Kite Units, any Kite Common Stock for which the Borrower Kite Units may be redeemed and the proceeds thereof, being referred to herein as the "Borrower Kite Units Collateral") or cash, as provided in the Partnership Agreement.

All of the foregoing documents (this Letter Loan Agreement, the Note and the Kite Units Pledge Agreement being referred to herein as the "Loan Documents") shall be in form and substance acceptable to the Bank and shall remain effective for as long a period of time as any part of the Loan is unpaid.

In addition, at Closing, Borrower shall deliver the opinion of Borrower's legal counsel with respect to the Borrower and the Borrower, which Opinion shall be in a form reasonably satisfactory to Bank.

13.

Acknowledgment and Consent/Control Agreement: At the Closing, Borrower, Bank, KRGLP and Kite shall have entered into an Acknowledgment and Consent in respect of the Borrower Kite Units, which Acknowledgment and Consent shall be in a form acceptable to Bank.

14.

Assignment and Termination: This Letter Loan Agreement is personal to Borrower and neither this Letter Loan Agreement nor any rights of Borrower hereunder shall be assignable by operation of law or otherwise and this Letter Loan Agreement may be terminated at the option of Bank and an Event of Default shall be deemed to have occurred hereunder in the event Borrower assigns or transfers this Letter Loan Agreement or any rights hereunder without the prior written consent of Bank.

In the event of a termination of this Letter Loan Agreement based upon any such default, or upon any Event of Default hereunder or under any of the other Loan Documents, all obligations of Bank shall terminate (and Borrower shall remain liable for any and all expenses incurred by

Bank) and the outstanding balance of the Loan, may, at the option of Bank, be declared immediately due and payable.

For the purposes hereof, any of the following events shall be deemed an "Event of Default" hereunder:

Borrower shall fail to make payment of interest, principal or principal and interest on the Loan within five (5) days after the same is due and payable, or Borrower shall fail to observe or perform any other covenant or condition contained in this Letter Loan Agreement and such failure is not cured within fifteen (15) days of notice of such failure from Bank to Borrower; or

Borrower shall file a voluntary petition in bankruptcy or shall be adjudicated as bankrupt or insolvent, or shall file any petition or answer seeking or acquiescing in any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief for himself under any present or future federal, state or other statute, law or regulation relating to bankruptcy, insolvency or other relief for debtors; or shall seek or consent to or acquiesce in the appointment of any trustee, receiver or liquidator of Borrower or of all or any part of the Borrower Kite Units Collateral or any account in which it is held, or of any or all of the royalties, revenues, distribution or profits thereof, or shall make any general assignment for the benefit of creditors, or shall admit in writing his inability to pay his debts generally as they become due; or

A court of competent jurisdiction shall enter an order, judgment or decree approving a petition filed against Borrower seeking any reorganization, dissolution or similar relief under any present or future federal, state or other statute, law or regulation relating to bankruptcy, insolvency, or other relief for debtors, and such order, judgment or decree shall remain unvacated and unstayed for an aggregate of sixty (60) days (whether or not consecutive) from the first date of entry thereof; or any trustee, receiver or liquidator of Borrower or of all or any part of the Borrower Kite Units Collateral or any account in which it is held, or of any or all of the royalties, revenues, rents, issues or profits thereof, shall be appointed without the consent or acquiescence of Borrower and such appointment shall remain unvacated and unstayed for an aggregate of sixty (60) days (whether or not consecutive); or

A writ of execution or attachment or any similar process shall be issued or levied against all or any part of or interest in the Borrower Kite Units Collateral or the account in which it is held, or any judgment involving monetary damages shall be entered against Borrower which shall become a lien on the Borrower Kite Units Collateral or any account in which it is held or any portion thereof or interest therein and such execution, attachment or similar process or judgment is not released, bonded, satisfied, vacated or stayed within sixty (60) days after its entry or levy; or

There has occurred a breach of or default under any term, covenant, agreement, condition, provision, representation or warranty contained in any of the Loan Documents or any part thereof, not specifically referred to in this Section 14 and any applicable cure period has expired; or

Borrower has transferred any part of his ownership (whether legal, equitable or beneficial) in the Borrower Kite Units Collateral or any account in which it is held; or

The Borrower Kite Units Collateral or any account in which it is held or any part thereof is further encumbered by a security agreement, lien, pledge or other security instrument in favor of any party other than Bank; or

The death of Borrower.

15.

Bank Participation/ Syndication: Borrower acknowledges that the Bank reserves the right to syndicate and/or participate its interest in the Loan and Borrower agrees to, at Bank's request, execute such additional promissory notes and other instruments as may be appropriate to

evidence his obligation under the Loan to such syndicate banks as may commit, in the future, to fund a portion of the Loan according to the terms hereof.

16.

Indemnification: The Borrower agrees to indemnify and to defend and hold the Bank harmless against any brokerage commissions or finder's fees claimed by any broker or other party claiming by or through Borrower in connection with the transactions contemplated hereby.

17.

Warranties and Representations: Borrower represents, covenants and warrants to Bank as follows:

Borrower is a resident of the State of Indiana.

Borrower possesses the requisite power to enter into the Loan Documents, to borrow thereunder, to execute and deliver the Loan Documents and to perform his obligations thereunder.

None of the provisions of the Loan Documents violate, breach, contravene, conflict with, or cause a default under any provision of any existing note, bond, mortgage, debenture, indenture, trust, license, lease, instrument, decree, order, judgment, or agreement to which Borrower is a party or by which he or his assets may be bound or affected.

To Borrower's knowledge, each of the Loan Documents, when issued for value, will constitute a legal, valid and binding obligation of Borrower enforceable against Borrower in accordance with its terms, except as the same may be limited by reorganization, bankruptcy, insolvency, moratorium or other laws affecting generally the enforcement of creditors' rights.

Borrower has not received notice of, and he is not otherwise aware of any litigation or proceeding by any governmental authority or other person presently pending or threatened, nor has any claim been asserted against Borrower which, if adversely determined, would materially affect the business, operations, financial condition, properties or prospects of Borrower.

Borrower is not engaged in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulation U of the Board of Governors of the Federal Reserve System).

Borrower is not "insolvent" within the meaning of that term as defined in §101(29) of the Federal Bankruptcy Code and is able to pay his debts as they mature.

18.

Disbursements: All disbursements shall be made within approximately five (5) days after receipt of all information required by the Bank to approve the requested disbursements; provided, however, the initial disbursement of the Loan shall be made within one (1) Business Day after receipt of all information required by the Bank to approve the requested disbursements.

Funds will be disbursed directly into a demand deposit account maintained by Borrower at the Bank. Borrower shall submit to Bank for each requested advance of principal of the Loan, an Application for Advance in form satisfactory to Bank (an "Application for Advance"), setting forth the total amount of the Advance which Borrower is requesting.

19.

Upon the occurrence of an Event of Default hereunder, Bank may terminate Bank's undertaking to make any further advances of the Loan and the outstanding balance of the Loan, at the option of Bank, may be declared immediately due and payable. In addition, upon the occurrence of an Event of Default, Bank shall be entitled to exercise the rights and remedies set forth in the Loan Documents and shall be entitled to redeem the Borrower Kite Units for Kite Common Stock, and to request the registration by Kite of such Kite Common Stock if it is not already registered. Upon the occurrence of an Event of Default hereunder, Borrower will pay such expenses of Bank (including without limitation the reasonable fees and expenses of Bank's counsel and the reasonable fees and expenses of any participant's counsel) as shall be billed for expenses actually incurred in connection herewith.

20.

Additional Loan Conditions:

Borrower, during the term of the Loan, will deliver or cause to be delivered to the Bank:

as soon as practicable, but in any event within ninety (90) days after the end of each calendar year, commencing with calendar year 2006, financial statements of Borrower for such year, as of the end of such year, which financial statements shall be prepared by Borrower and shall be certified as to accuracy by Borrower and shall otherwise be in reasonable detail and satisfactory in scope to the Bank; and

ii.

within sixty (60) days after the filing with the appropriate governmental authorities, but in no event later than October 31 of each year, all tax returns or extensions filed by Borrower for the preceding year.

The Commitment Fee has been fully earned by the Bank. In no event shall the Commitment Fee be refunded to Borrower. Any unpaid Loan costs and expenses shall be paid by Borrower immediately upon the expiration or termination of this Letter Loan Agreement for any reason.

Borrower shall furnish to Bank, upon its request, a statement in conformity with the requirements of Federal Reserve Board Form U-1 referred to in Regulation U. No part of the proceeds of the Loan may be used for any purpose that violates, or which is inconsistent with, the provisions of Regulations G, T, U or X of the Board of Governors of the Federal Reserve System.

21.

Items to be Delivered Pre-Closing: Borrower shall furnish the following documentation to the Bank at least one (1) Business Day prior to Closing, all in form, substance and execution satisfactory to the Bank:

The Borrower's Social Security Number.

A copy of the Partnership Agreement, together with any and all amendments and modifications thereto.

A copy of the Articles of Incorporation for Kite.

An acknowledgment by the Partnership that Borrower owns the Borrower Kite Units (i.e., 805,891 partnership units of KRGLP).

22.

Text Intentionally Omitted.

23.

Letter Loan Agreement Expiration: This Letter Loan Agreement is open for acceptance by the Borrower until 5:00 P.M. Indianapolis Time on June 15, 2007 (the "Letter Loan Agreement Expiration"). If it is not accepted and returned to the Bank by said date, the Letter Loan Agreement shall immediately become null and void without further notice.

24.

Indemnification: Borrower agrees to indemnify Bank, and its successors and assigns, and their directors, officers and employees, against all losses, claims, costs, damages, liabilities and expenses, including, without limitation, all reasonable, out-of-pocket expenses of litigation or preparation therefor (a "Loss") which they may pay or incur in respect of claims brought or made against Bank by third parties in connection with or arising out of Bank making the Loan to Borrower, but excluding claims involving the violation by the Bank of applicable laws pertaining to financial institutions and/or lending practices. The indemnity set forth herein shall be in addition to any other obligations of Borrower to Bank hereunder or at common law or otherwise, and shall survive any termination of this Letter Loan Agreement and the repayment of the Loan.

25.

Time of Essence: Time is of the essence under the Loan Documents.

26.

Amendments: No amendment or waiver of any provision of this Letter Loan Agreement, or any other Loan Document, nor consent to any departure therefrom by Borrower shall be effective unless the same shall be in writing and signed by Borrower and Bank, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

27.

Set-Off: If an Event of Default shall occur the Bank shall have the right, in addition to all other rights and remedies available to it, to set-off against and to appropriate and apply to the unpaid balance of the Loan and all other obligations of the Borrower thereunder or under any other Loan Documents, any debt owing to, and any other funds held in any manner for the account of, the Borrower by the Bank, including, without limitation, all funds in all deposit accounts (general or special) now or hereafter maintained by the Borrower with the Bank. Such right shall exist whether or not the Bank shall have made demand under this Agreement or the Loan and whether or not the Loan or such other obligations are matured or unmatured. The Borrower hereby confirms the foregoing arrangements and the Bank's right of banker's lien and set-off and nothing in this Agreement shall be deemed a waiver of the Bank's right of the banker's lien or set-off. The Borrower hereby grants to Bank, as security for the Loan, a continuing lien upon all monies, securities and other property of Borrower now or hereafter held or received by, or in transit to Bank from or for Borrower.

28.

No Joint Venture: Notwithstanding anything to the contrary herein contained or implied, Bank, by this Letter Loan Agreement, or by any action pursuant hereto, shall not be deemed to be a partner of, or a joint venturer with, Borrower, and Borrower hereby indemnifies and agrees to defend and hold Bank harmless, including the payment of reasonable attorneys' fees, from any Loss resulting from any judicial construction of the parties' relationship as such.

29.

Severability: In the event any provision of this Letter Loan Agreement or any of the Loan Documents shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not affect the validity, enforceability or legality of the remaining provisions hereof or thereof, all of which shall continue unaffected and unimpaired thereby.

30.

Waiver of Jury Trial: Borrower, after consulting or having had the opportunity to consult with counsel, knowingly, voluntarily and intentionally waives any right he may have to a trial by jury in any litigation based upon or arising out of the Loan or any other Loan Documents or any of the transactions contemplated by the Loan Documents or any course of conduct, dealing, statements, whether oral or written, or actions of Borrower or Bank. Borrower shall not seek to consolidate, by counterclaim or otherwise, any action in which a jury trial has been waived with any other action in which a jury trial cannot be or has not been waived. These provisions shall not be deemed to have been modified in any respect or relinquished by Bank except by written instrument executed by both Borrower and Bank

31.

Governing Law: The laws of the State of Indiana shall govern all matters relating to the Loan Documents and all of the indebtedness or obligations arising thereunder.

32.

Survival of Provisions: The terms and conditions herein set forth and the covenants and agreements of Borrower hereunder shall survive the Closing.

33.

Tax Effect of Redemption of Borrower Kite Units and/or Sale of Collateral: Any taxes resulting to Borrower upon or resulting from the redemption of the Borrower Kite Units in accordance with the Kite Units Pledge Agreement or the sale of any collateral subject to the Kite Units Pledge Agreement shall be the sole liability and obligation of Borrower, and Bank shall have no liability or obligation resulting therefrom. Borrower agrees to indemnify and hold harmless Bank, and its successors and assigns, and their directors, officers and employees (the "Bank Indemnified Group"), against all losses, claims, costs, damages, liabilities and expenses (including, without limitation, all reasonable expenses of litigation or preparation therefor and all attorneys' fees, costs and expenses) incurred by the Bank Indemnified Group, arising out of or in connection with any taxes payable or paid as a result of the redemption of the Borrower Kite Units in accordance with the Kite Units Pledge Agreement. The indemnity set forth herein shall be in addition to any other obligations of Borrower to Bank hereunder or under the other Loan Documents and shall survive any redemption of the Borrower Kite Units in accordance with the Kite Units Pledge Agreement and the termination of the Kite Units Pledge Agreement.

34.

Bank's Right to Vote Shares: In the event Bank or an affiliate thereof becomes the owner of the Borrower Kite Units for any reason, then during the period of their ownership by Bank or an affiliate, such Borrower Kite Units shall not be voted. If, however, Bank or an affiliate thereof becomes the owner of the Borrower Kite Units for any reason and thereafter Bank elects to

exchange or to redeem the Borrower Kite Units pursuant to Section 11.3(F) of that certain Amended and Restated Agreement of Limited Partnership of Kite Realty Group, L.P., dated as of August 16, 2004, (the "Partnership Agreement") and KRGLP and/or Kite elect to exchange or redeem the Borrower Kite Units by the payment of Shares (as defined in the Partnership Agreement), such Shares may be voted by Bank or the affiliate owning such Shares.

The Bank's obligation under this Letter Loan Agreement shall be subject to satisfaction of all of the conditions contained herein. The issuance of this Letter Loan Agreement shall not prejudice the Bank's rights of review and approval, including without limitation, of all documents and materials heretofore delivered to the Bank by or on behalf of the Borrower. Please direct all correspondence to Cheryl F. Van Klompenberg, Vice President, the Bank, 1675 Broadway, Suite 400, Denver, CO 80202.

This Letter Loan Agreement shall not be binding upon the Bank unless it is accepted in writing by the Borrower as provided herein, and delivered to Cheryl F. Van Klompenberg, Vice President before the Letter Loan Agreement Expiration. The terms of this Letter Loan Agreement, both prior to and after acceptance by Borrower, may be waived or modified only by a written instrument signed by the Bank. This Letter Loan Agreement shall be governed by the laws of the State of Indiana, without regard to principles of conflict of laws. TIME IS OF THE ESSENCE IN THIS LETTER LOAN AGREEMENT.

Very truly yours,
The Bank


By:		/s/ Cheryl F. Van Klompenberg

Printed Name:		Cheryl F. Van Klompenberg

Title:		Vice President

ACCEPTANCE OF LETTER LOAN AGREEMENT

The undersigned hereby acknowledges receipt of the foregoing Letter Loan Agreement this 7th day of June, 2007, and does hereby accept all of the terms, conditions and time limitations set forth in the Letter Loan Agreement by the execution of same and acknowledges the Commitment Fee is non-refundable.

BORROWER:

/s/ Alvin E. Kite, Jr.

Alvin E. Kite, Jr.

STATE OF INDIANA		)
		) SS:
COUNTY OF Marion		)

Before me, a Notary Public in and for said County and State, personally appeared Alvin E. Kite, Jr., personally known to me, and acknowledged the execution of the foregoing as his own voluntary act and deed.

Witness my hand and Notarial Seal, this 5^th day of June, 2007.

/s/ Stacey D. Teeters, Notary Public, State of Indiana No. 532283

Notary Public - Signature

Stacey D. Teeters

Notary Public - Printed

My Commission Expires:		My County of Residence:

April 14, 2012		Madison

EX-2 3 ex2.htm EXHIBIT 2

Exhibit 2. Collateral Pledge Agreement, dated as of June 7, 2007, between Alvin E. Kite, Jr. and the Bank

PLEDGE AGREEMENT

(PARTNERSHIP UNITS)

The undersigned, ALVIN E. KITE, JR., a resident of the State of Indiana (the “Pledgor”), hereby transfers, assigns, delivers, sets over, hypothecates and pledges to the Bank, and grants to the Bank a security interest in:

a. Eight Hundred Five Thousand Eight Hundred Ninety-One (805,891) partnership units owned by the Pledgor of Kite Realty Group, L.P., a Delaware limited partnership (“KRGLP”), each such unit representing a limited partnership interest in KRGLP pursuant to and as provided in that certain Amended and Restated Agreement of Limited Partnership of Kite Realty Group, L.P., dated as of August 16, 2004, as amended (the “Partnership Agreement”) (collectively, the “Units”);

b. All certificates representing the Units and all cash, securities, dividends, distributions, interest and other property at any time and from time to time received, receivable or otherwise distributed in respect of or in exchange for or redeemed for any or all of the Units;

c. All ownership interests hereafter delivered to the Pledgor in substitution for all certificates and instruments representing or evidencing such ownership interests, together with the interest coupons (if any) attached thereto, and all cash, securities, interests, dividends, distributions and other property at any time and from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all thereof;

d. All shares of beneficial interests (or other comparable equity interest) of Kite Realty Group Trust, a Maryland real estate investment trust (“Kite Realty”), for which the Units are redeemed (the “Stock”);

e. All certificates representing the Stock and all cash, securities, dividends, distributions, interest and other property at any time and from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of the Stock;

f. All additional shares of common stock, beneficial interest (or other comparable equity interest), debt obligations or securities of Kite Realty at any time and from time to time received, receivable or otherwise distributed in respect of or in exchange for all or any of the Stock or such additional shares, beneficial interests (or other comparable equity interests), debt obligations or securities and the certificates representing such additional shares, beneficial interests (or other comparable equity interests), debt obligations or securities and all cash, securities, dividends or other property at any time and from time to time received, receivable or otherwise distributed in respect of or in exchange for all or any of the Stock or such additional shares, beneficial interests (or other comparable equity interests), debt obligations or securities;

g. All securities hereafter delivered to the Pledgor in substitution for any of the collateral described in subparagraphs (d) - (f), all certificates and instruments representing or evidencing such securities, together with the interest coupons (if any) attached thereto, and all cash, securities, interests, dividends, distributions and other property at any time and from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all thereof; and

h. All “Proceeds” (as defined in the Indiana Uniform Commercial Code (I.C. § 26-1-9.1-102(a)(64))) of or from the foregoing, including, but not limited to, (i) any and all Proceeds

of any insurance, indemnity, warranty or guaranty payable to the Pledgor from time to time with respect to any of the foregoing; (ii) any and all payments of any form whatsoever made or due and payable to the Pledgor from time to time in connection with any requisition, confiscation, condemnation, seizure or forfeiture of all or any part of the foregoing by any governmental authority, or any person acting under color of a governmental authority; and (iii) any and all other amounts from time to time paid or payable under or in connection with any of the foregoing;

(collectively, the “Collateral”) to secure the undertakings of the Pledgor herein and the prompt and complete performance of the Obligations (as hereinafter defined). For the purposes hereof, the following terms shall have the following meanings:

“Default Rate” shall have the meaning assigned to that term in the Loan Agreement.

“Event of Default” shall have the meaning assigned to that term in the Loan Agreement.

“Loan” means that certain Eight Million Three Hundred Forty-Five Thousand Dollar ($8,345,000) loan from Bank to Pledgor made pursuant to the Loan Agreement.

“Loan Agreement” means that certain Letter Loan Agreement from Bank to Pledgor, dated of even date herewith, and accepted by Pledgor of even date herewith, as amended or modified from time to time.

“Loan Documents” shall have the meaning assigned to that term in the Loan Agreement.

“Note” shall have the meaning assigned to that term in the Loan Agreement.

“Obligations” means all obligations of Pledgor to Bank of every type and description under the Loan and the Loan Documents, whether direct or indirect, absolute or contingent, now existing or hereafter arising.

1. Covenants, Representations and Warranties. Upon the issuance of any Stock, the Pledgor shall deliver or cause to be delivered the original stock certificates and all other instruments or documents evidencing such Stock (the “Stock Certificates”), together with appropriate stock powers, endorsements and other appropriate instruments of assignment endorsed in blank. The Pledgor warrants to the Bank that: (a) Pledgor is the legal and beneficial owner of the Units and owns the Units free of all claims and liens other than the security interest granted hereunder; (b) Pledgor suffers under no legal incapacity; (c) Pledgor has the full right, power and authority to deliver, pledge, assign and transfer the Units to the Bank as provided herein; (d ) this pledge will not violate the proscriptions or require the consent, license, filing, report, permit, exemption, regulation or approval, of any governmental authority or other person or entity or violate any provision of law or any agreement, judgment, decree, order, instrument or indenture to which the Pledgor is a party or by which he or his assets are bound or result in the imposition of any lien on any of his assets; (e) all shares of the Units are fully paid and non-assessable and to Pledgor’s knowledge have been duly and validly issued; (f) to Pledgor’s knowledge, the Collateral has not been materially altered and all signatures thereon are genuine; (g) to Pledgor’s knowledge, there presently exists no state of facts which give rise (or which with notice or lapse of time or both would give rise) to any defenses, set offs, or counterclaims to the Pledgor’s obligations hereunder; (h) to Pledgor’s knowledge there exists no default by the KRGLP or Kite Realty under the Collateral; (i) to Pledgor’s knowledge, no insolvency proceedings have been instituted with respect to KRGLP or Kite Realty; (j) to Pledgor’s knowledge there has not occurred any event which with notice or lapse of time or both would constitute a default on the part of KRGLP or Kite Realty under the Collateral; (k) the Pledgor has executed no release, discharge, satisfaction or cancellation of any of the obligations evidenced by the Collateral; (l) the Pledgor has executed no release of any portion of the security described in the Collateral; (m) the Pledgor has executed no instrument of any kind assigning the Collateral or the liability of KRGLP or Kite Realty thereon, or with respect thereto, which remains in effect; (n) the Pledgor has done no act which impairs the validity of or the security of this Pledge Agreement; (o) Pledgor has delivered to Bank a true and complete copy of the Partnership Agreement, which Partnership Agreement, to Pledgor’s knowledge, is currently in full force and effect and has not been amended or modified, except as disclosed to Bank in writing; (p) Pledgor’s

execution of this Pledge Agreement and the assignment effected hereby, to Pledgor’s knowledge, does not and will not violate the proscriptions or require the consent, license, filing, report, permit, exemption, regulation or approval of any governmental authority or violate any provision of law or violate or cause a breach of or default under the Partnership Agreement or any agreement, judgment, decree, order, mortgage, deed of trust, instrument or indenture to which Pledgor is a party, or by which he or his assets is/are bound, or, except as provided for herein, result in the imposition of any lien on the Collateral; and (q) there is no action, suit or proceeding pending or, to Pledgor’s knowledge, threatened against the Pledgor which might result in a material adverse change in the financial condition of the Pledgor.

2. Voting; Dividends; Distributions. So long as there has occurred no Event of Default, the Bank shall not cause the record transfer of ownership of the Collateral to the Bank, and the Pledgor shall be entitled (a) to vote the Units, in person or by proxy, at any annual or special meetings of the partners of KRGLP; (b) to vote the Stock, in person or by proxy, at any annual or special meetings of the shareholders of Kite Realty; (c) to give consents, waivers and ratifications relative to the Collateral; and (d) to receive all payments and distributions under, or cash dividends distributed in respect of, the Collateral provided, however, that, after the occurrence and during the continuance of any Event of Default, all payments in respect of the Collateral shall be applied to the Obligations in such order or manner as the Bank shall determine. Further, all sums paid upon or in respect of the Collateral upon the liquidation or dissolution of KRGLP or Kite Realty shall be paid over to the Bank and applied to the Obligations and, in case any distribution of capital shall be made on or in respect of the Collateral or any property shall be distributed upon or with respect to the Collateral, the property so distributed shall be paid over to the Bank and applied to the Obligations in each instance, or in such manner as the Bank shall determine. In the event that during the term of this Pledge Agreement, any stock dividend, reclassification, readjustment, combination, subdivision, or other change is made in the capital structure of KRGLP or Kite Realty or the Collateral, or any subscription, warrant or other option is exercisable with respect to the Collateral, as an addition to or in substitution or exchange for any Collateral, all new, substituted or additional securities issued to the Pledgor shall be tendered to and held by the Bank under the terms of this Pledge Agreement in the exact form received, with execution by the Pledgor, when necessary or appropriate, in blank of endorsements or undated stock powers. Notwithstanding anything to the contrary herein contained, no vote shall be cast or consent, waiver or ratification be given or action taken which would impair any rights of the holder of the Collateral under the Partnership Agreement or be inconsistent with or violate any provision of the Loan Documents.

3. Rights of Bank. Bank may, from time to time, (a) without notice to the Pledgor, retain or obtain the primary or secondary liability of any party or parties, in addition to the Pledgor, with respect to any of the Obligations; (b) without notice to the Pledgor, extend or renew for any period (whether or not longer than the original period) or exchange any of the Obligations or release or compromise any liability of any party or parties primarily or secondarily liable thereon; (c) without notice to the Pledgor, release Bank's security interest in the Collateral or any other collateral securing the Obligations and permit any substitution or exchange for any such Collateral or any other collateral securing the Obligations, or, with the prior written consent of the Pledgor, pledge or assign Bank's security interest in the Collateral or any other collateral securing the Obligations; and (d) after an Event of Default, resort to the Collateral for the payment of any of the Obligations, whether or not Bank shall have resorted to any other property or shall have proceeded against any party primarily or secondarily liable on any of the Obligations. Upon the failure of the Pledgor to pay prior to delinquency any tax, lien or assessment against any of the Collateral, Bank, at its option, may pay any of the items and shall be the sole judge of the legality or validity thereof and the amount necessary to discharge the same. All amounts so paid by Bank shall be repaid or reimbursed immediately to the Bank by the Pledgor without demand, with interest thereon at the Default Rate, and, if not so paid, shall become a part of the Obligations. Notwithstanding the provisions immediately foregoing, the Pledgor shall have the right to contest the amount or validity of any such tax, lien or assessment, so long as it does so diligently and in good faith by appropriate proceedings which prevent foreclosure or execution.

4. Covenants. The Pledgor covenants and agrees that from and after the date hereof and until the Obligations are fully, finally and irrevocably paid and performed:

a. without the prior written consent of the Bank, the Pledgor will not, except as expressly provided in the last grammatical paragraph of Section 7 of the Loan Agreement, sell, assign, transfer, exchange or otherwise dispose of, or grant any option with respect to, the Collateral, nor will he create, incur or permit to exist any lien, security interest or encumbrance

with respect to any of the Collateral, or any interest therein, except for the lien provided under this Pledge Agreement, and subject to the right of contest set forth in Paragraph 3, the Pledgor will take any action necessary to remove any such lien and will defend the right, title and interest of the Bank in and to the Collateral against the claims and demands of all persons;

b. Pledgor will warrant and defend his ownership of the Collateral and the security interest created by this Pledge Agreement against all claims of all other persons (other than Bank and persons claiming through Bank) and will maintain and preserve the Collateral and such security interest;

c. without the prior written consent of the Bank (which shall not be unreasonably withheld, conditioned or delayed), the Pledgor will not vote to enable KRGLP or Kite Realty to issue any stock or other securities of any nature in exchange or substitution for the Collateral;

d. from time to time the Pledgor will, at the Pledgor’s expense, duly and promptly execute any and all further instruments and documents and take such further action as the Bank may reasonably deem desirable to obtain the full benefits of this Pledge Agreement, including, without limitation, the filing of any financing or continuation statements under any Uniform Commercial Code, and the Pledgor also hereby authorizes Bank to file any such financing statement or continuation statement on his behalf to the extent permitted by applicable law;

e. whether before or after any Event of Default, the Pledgor shall hold all payments received upon liquidation or dissolution of KRGLP or Kite Realty or upon any distribution of any capital or property by KRGLP or Kite Realty in respect of the Collateral in trust for the Bank segregated from other funds of the Pledgor, and shall forthwith upon receipt by the Pledgor deliver the same to the Bank in the same form as received by the Pledgor, duly endorsed by the Pledgor to Bank, if required (any such payments received by the Bank shall be held by the Bank subject to the terms of this Pledge Agreement and shall not be applied to the Obligations except as permitted by Paragraph 6 hereof);

f. after the occurrence of an Event of Default, the Pledgor shall hold all payments of every kind received under or in connection with any of the Collateral in trust for the Bank, segregated from other funds of the Pledgor, and shall forthwith upon receipt by the Pledgor deliver the same to the Bank in the same form as received by the Pledgor, duly endorsed by the Pledgor to the Bank, if required;

g. subject to the right of contest provided in Paragraph 3, the Pledgor will pay prior to delinquency all taxes and assessments against any of the Collateral;

h. the Pledgor will not consent to, or vote for, any modification or amendment to, or the termination, suspension or cancellation of the Partnership Agreement that impairs the Bank’s interest in the Collateral without the prior written approval of Bank; and

i. The Pledgor shall cause KRGLP and Kite Realty to enter into an Acknowledgment and Consent in the form attached hereto as Exhibit A. The Pledgor shall cooperate with Bank in such actions undertaken or initiated by Bank as may be reasonably necessary under applicable law so that Bank has a first priority perfected security interest in the Collateral.

5. Power of Attorney. The Pledgor hereby constitutes and appoints the Bank or any agent thereof, with full power of substitution, as his true and lawful attorney-in-fact with full power and authority in the place and stead of the Pledgor and in the name of the Pledgor or in the Bank’s name, from time to time in the Bank’s discretion, for the purpose of carrying out the terms of this Pledge Agreement, subject to the terms hereof, to take any and all appropriate action and to execute any and all documents and instruments which may be necessary or desirable to accomplish the purposes of this Pledge Agreement. The Pledgor hereby ratifies all that any such

attorney shall lawfully do or cause to be done by virtue hereof. This power of attorney is a power coupled with an interest and shall be irrevocable. Without limiting the generality of the foregoing, the Pledgor hereby grants to the Bank the power and right, on behalf of the Pledgor, without notice to or consent by the Pledgor, upon the occurrence and continuance of an Event of Default, (a) to ask, demand, collect, receive and give acquittances and receipts for any and all Proceeds and, in the name of the Pledgor or in its own name or otherwise; (b) to take possession of and endorse and collect any check, drafts, notes, acceptances or other instruments for the payment of Proceeds and to file any claim or to take any other action or proceeding in any court of law or equity or otherwise deemed appropriate by the Bank for the purpose of collecting any and all such Proceeds whenever payable or for the purpose of protecting any right relative to the Collateral; (c) to pay or discharge taxes, assessments and liens levied or placed on or threatened against the Collateral; (d) to defend any suit, action or proceeding brought against the Pledgor with respect to any Collateral; (e) to settle, compromise, renew, extend or adjust the Obligations or any rights constituting a part of the Collateral or any suit, action or proceeding described above and, in connection therewith, to give such discharges and releases as the Bank may deem appropriate; (f) to sell, transfer, pledge, make any agreement with respect to or otherwise deal with any of the Collateral as fully and completely as though the Bank were the absolute owner thereof for all purposes, including, without limitation, the execution, in connection with the sale of any of the Collateral, of any endorsements, assignments or other instruments of conveyance or transfer as may be necessary or appropriate; (g) to request the redemption of the Units for the Stock as permitted by the Partnership Agreement; (h) to the extent not already registered, to request the registration of the Stock by Kite Realty under the Federal Securities Act of 1933, which registration, if agreed to and undertaken by Kite Realty, shall be at Pledgor’s expense; (i) to request that Kite Realty or KRGLP file a supplement to any S-3 Registration Statement (or the prospectus forming a part thereof) which has now been filed or may hereafter be filed with the Securities Exchange Commission in respect of the Stock so that Bank or its nominee may be a selling shareholder, which filing, if agreed to and/or undertaken by Kite Realty and/or KRGLP, shall be at Pledgor's expense; and (j) generally, to do, at Bank’s option and at the Pledgor’s expense, at any time, from time to time, all acts and things which Bank deems necessary to protect, preserve or realize upon the Collateral and the Bank’s security interest therein, in order to effect the intents and purposes of this Pledge Agreement, all as fully and effectively as the Pledgor might do. The powers conferred upon the Bank hereunder are solely to protect its interest in the Collateral and shall not impose any duty upon it to exercise any such powers.

6. Event of Default; Remedies. Upon the occurrence of an Event of Default, the Bank may, itself or through one or more nominees, at its option (a) declare the Obligations to be immediately due and payable, whereupon the Obligations shall become immediately due and payable without presentment, demand, protest or notice of any kind; (b) take any action described in Paragraph 5 hereof; (c) appropriate and apply toward the payment of the Obligations, and in such order of application as the Bank may from time to time elect, the Collateral or any Proceeds thereof; (d) cause the Collateral to be registered in the name of the Bank or its nominee or cause new certificates evidencing the Collateral to be issued; (e) if the Units have not been redeemed for the Stock, become a limited partner of KRGLP and/or exercise all voting and ownership rights in respect of the Units at any meeting of KRGLP; (f) if the Units have been redeemed for the Stock, exercise all voting and corporate rights in respect of the Stock at any meeting of Kite Realty; (g) exercise any and all rights of conversion, exchange, subscription or any other rights, privileges or options pertaining to any Collateral as if it were the absolute owner thereof, including, without limitation, the right to exchange at its discretion, any and all of the Collateral upon the merger, consolidation, reorganization, recapitalization or other readjustment of KRGLP or Kite Realty, as the case may be, or upon the exercise by KRGLP or Kite Realty, as the case may be, or the Bank of any right, privilege or option pertaining to any of the Collateral and, in connection therewith, to deposit and deliver any and all of the Collateral with any committee, depositary, transfer agent, registrar or other designated agency upon such terms and conditions as it may determine, all without liability except to account for property actually received by the Bank; (h) sell, lease, assign, give options to purchase or sell or otherwise dispose of and deliver the Collateral (or contract to do so), or any part thereof, in one or more parcels or lots at public or private sale or sales, at any exchange, broker’s board or at any of the Bank’s offices or elsewhere upon such terms and conditions as the Bank may deem advisable and at such price as it may deem best, for cash or on credit or for future delivery without assumption of any credit risk, with the right of the Bank upon any such sale or sales, public or private, to purchase the whole or any part of the Collateral so sold, free of any right or equity of redemption in the Pledgor, which right or equity is hereby expressly waived and released; and (i) exercise such other rights and remedies available to the Bank under the Indiana Uniform Commercial Code. In addition, in the event KRGLP or Kite Realty ceases to do business or becomes subject (voluntarily or involuntarily) to any type of insolvency, bankruptcy or rehabilitation proceeding or makes an assignment for the benefit of creditors, the Bank may, itself or through one or more nominees, at its

option, takes the actions described in Sections 6(b)-(j) inclusive hereof. The Bank shall apply the net proceeds of any such collection, recovery, receipt, appropriation, realization or sale, after deducting all reasonable costs and expenses of every kind incurred therein or incidental to the care, safekeeping or otherwise of any or all of the Collateral or in any way relating to the rights of the Bank hereunder, including, without limitation, reasonable attorneys’ fees and legal expenses, to the payment in whole or in part of the Obligations, in such order as the Bank may elect, and the Pledgor shall remain liable for any deficiency remaining unpaid after such application, including, without limitation, all reasonable attorneys’ fees and costs of collecting such deficiency, and only after so paying over such Proceeds and after the payment by the Bank of any amount required by any provision of law, the Bank shall account for the surplus, if any, to the Pledgor. If the Pledgor is entitled to notice under applicable law, that requirement shall be met if the Bank sends notice at least seven (7) days prior to the date of sale, disposition or other event requiring notice, and such notice shall be deemed reasonably and properly given if mailed at least seven (7) days prior to such disposition, postage prepaid, addressed to the Pledgor at the address of the Pledgor set forth below. No notification need be given to the Pledgor if he has signed after an Event of Default a statement renouncing or modifying any right to notification of sale or any intended disposition.

7. Limitations on Bank’s Duty. Bank shall be deemed to have exercised reasonable care in the custody and preservation of the Collateral if it takes such action for that purpose as the Pledgor shall request in writing, but failure of the Bank to comply with any such request shall not of itself be deemed a failure to exercise reasonable care, and no failure on the part of the Bank to preserve or protect any rights with respect to the Collateral against prior parties or to do any act with respect to preservation of the Collateral not so requested by the Pledgor shall be deemed a failure to exercise reasonable care in the custody or preservation of the Collateral. The Bank shall be accountable only for amounts that it actually receives as a result of the exercise of powers herein conferred, and neither it nor any of its officers, directors, employees or agents shall be responsible to the Pledgor for any act or failure to act or any delay in acting, except for its own gross negligence or willful misconduct.

8. Registration. If Bank exercises the right to sell any or all of the Collateral pursuant to this Pledge Agreement, the Pledgor agrees to use his best efforts, at the sole expense of Pledgor and without expense to the Bank, to obtain all necessary approvals or exemptions from relevant governmental authorities for the sale of the Collateral or any part thereof, including, without limitation, assistance in the preparation, submission and approval of any necessary registration statements under the state or federal securities laws. The Pledgor recognizes that Bank may be unable to effect a public sale of any or all of the Collateral by reason of certain prohibitions contained in applicable laws, but may be compelled to resort to one or more private sales thereof to a restricted group of purchasers who will be obliged to agree, among other things, to acquire such securities for their own account for investment and not with a view to the distribution or resale thereof. The Pledgor acknowledges and agrees that any such private sale may result in prices and other terms less favorable to the seller than if such sale were a public sale and, notwithstanding such circumstances, agrees that the occurrence of any such private sale, in and of itself, shall not be deemed to have caused such sale to have been made in a commercially unreasonable manner. Bank shall be under no obligation to delay a sale of any of the Collateral for the period of time necessary to permit KRGLP or Kite Realty, as the case may be, to register such securities for public sale under applicable laws, even if KRGLP or Kite Realty, as the case may be, is required to do so or would agree to do so.

9. Waiver; Amendment. All rights and remedies of the Bank expressed hereunder are in addition to all other rights and remedies possessed by it. No delay on the part of the Bank in the exercise of any right or remedy shall operate as a waiver thereof, and no single or partial exercise by the Bank of any right or remedy shall preclude other or further exercise thereof or the exercise of any other right or remedy. No action of the Bank permitted hereunder shall impair or affect the rights of the Bank in and to the Collateral. Notice of acceptance of this Pledge Agreement is hereby waived. None of the terms or provisions of this Pledge Agreement may be waived, altered, modified or amended except by an instrument in writing, duly executed by the Pledgor and the Bank.

10. Successors and Assigns. This Pledge Agreement shall be binding upon the Pledgor and his heirs, personal representatives, successors and assigns. This Pledge Agreement shall inure to the benefit of the Bank and its successors and assigns.

11. General. This Pledge Agreement has been made and delivered at Indianapolis, Indiana, and shall be governed by the laws of the State of Indiana. Wherever possible each provision of this Pledge Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Pledge

Agreement shall be prohibited by or invalid under any such law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Pledge Agreement. The masculine pronoun when used herein shall include the neuter and the feminine and also the plural. Section headings are for ease of reference only and shall not govern interpretation of any provisions hereof. Any taxes resulting to Pledgor upon the redemption of the Units for the Stock or from the sale of the Collateral pursuant to this Pledge Agreement shall be the sole liability of Pledgor and Bank shall have no obligation resulting therefrom or in respect thereof.

12. Waiver of Jury Trial. To the full extent permitted by applicable law, Pledgor hereby waives any right to have a jury participate in resolving any dispute, whether sounding in contract, tort or otherwise, between Bank and Pledgor arising out of, in connection with, related to, or incidental to this Pledge Agreement.

Executed at Indianapolis, Indiana, on this 7th day of June, 2007.

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SIGNATURE PAGE OF PLEDGOR

TO PLEDGE AGREEMENT (PARTNERSHIP UNITS)

PLEDGOR:

/s/ Alvin E. Kite, Jr.

Alvin E. Kite, Jr.

STATE OF INDIANA		)
		) SS:
COUNTY OF Marion		)

Witness my hand and Notarial Seal, this 5th day of June, 2007.

/s/ Stacey D. Teeters, Notary Public, State of Indiana No. 532283

Notary Public - Signature

Stacey D. Teeters

Notary Public - Printed

My Commission Expires:		My County of Residence:

April 14, 2012		Madison

ACCEPTANCE OF PLEDGE AGREEMENT (PARTNERSHIP UNITS)

Accepted this 7th day of June, 2007.

The Bank

By:		/s/ Kevin P. Murray

Printed Name:		Kevin P. Murray

Title:		Vice President

STATE OF OHIO		)
		) SS:
COUNTY OF n/a		)

Before me, a Notary Public in and for said County and State, personally appeared Kevin P. Murray, known to be a Vice President of the Bank and acknowledged the execution of the foregoing for and on behalf of said national banking association.

Witness my hand and Notarial Seal, this 5th day of June, 2007.

/s/ Sandra Ann Patrick

Notary Public - Signature

Sandra Ann Patrick

Notary Public - Printed

My Commission Expires:		My County of Residence:

October 5, 2010		n/a

ACKNOWLEDGMENT AND CONSENT

THIS ACKNOWLEDGMENT AND CONSENT (the “Agreement”) is made and dated as of this 7th day of June, 2007, by and among KITE REALTY GROUP, L.P., a Delaware limited partnership (the “Partnership”), KITE REALTY GROUP TRUST, a Maryland real estate investment trust and the general partner of the Partnership (the “General Partner”), ALVIN E. KITE, JR., a resident of the State of Indiana (the “Pledgor”), and the Bank (the “Lender”).

RECITALS:

13.

The Pledgor is a limited partner in the Partnership.

14. The Amended and Restated Agreement of Limited Partnership of Kite Realty Group, L.P. dated as of August 16, 2004, as amended and modified (the “Partnership Agreement”), authorizes the Pledgor to grant a bona fide security interest in his interests in the Partnership.

15. The Pledgor represents that it is the borrower of a loan being made under that certain loan agreement, dated as of the date hereof, by and between Pledgor and the Lender (the “Loan Agreement”). Capitalized terms used but not otherwise defined herein shall have the respective meanings ascribed to them in the Partnership Agreement.

16. The Pledgor desires to pledge and encumber all or a portion of his interests in the Partnership to and in favor of the Lender as security for the loan made to Pledgor by the Lender pursuant to the Loan Agreement, and to effect such pledge and encumbrance Pledgor has executed in favor of Lender a Pledge Agreement (Partnership Units), dated as of the date hereof (the “Pledge Agreement”).

17. The Pledgor and the Lender desire to confirm with the Partnership and the General Partner the rights of the Lender to register ownership of the Pledgor’s interests in the Partnership in the name of the Lender or its nominee and certain other rights of the Lender

18. The Partnership and the General Partner desire to provide their authorization and consent to the Pledgor to pledge and encumber all or a portion or the Pledgor’s interests in the Partnership in favor of the Lender.

AGREEMENT:

NOW, THEREFORE, in consideration of the foregoing recitals and the mutual promises and agreements contained herein, and in order to induce the Lender to extend credit to the Pledgor in reliance upon this Agreement:

1. The General Partner hereby certifies that a true and correct copy of the Partnership Agreement as in effect as of the date hereof is attached as Exhibit A hereto. The General Partner hereby certifies the Conversion Factor is, as of the date hereof, 1.0.

2. The Partnership and the General Partner jointly and severally certify that the Pledgor is the registered owner of 805,891 Partnership Units (the “Pledgor Units”), which Pledgor Units are designated the Bank Pledged Units on the records of the Partnership, and that such Partnership Units are now redeemable in accordance with the terms of Section 8.6 of the Partnership Agreement.

3. The Partnership and the General Partner hereby jointly and severally agree, acknowledge and consent to the grant of a security interest by the Pledgor to the Lender in the Pledgor Units pursuant to the Loan Agreement and the Pledge Agreement. The Partnership and the General Partner hereby jointly and severally agree that they will comply with instructions from the Lender with respect to the Pledgor Units and any Shares issued in respect thereof without further consent, instruction or direction by the Pledgor. The Partnership and the General Partner jointly and severally agree that, as requested by Pledgor, while this Agreement is in effect, they will not comply with any instructions of Pledgor with respect to the Pledgor Units and the Shares issued in respect thereof.

4. The Partnership and the General Partner jointly and severally hereby acknowledge and agree that: (a) once this Agreement, together with all exhibits hereto, has been fully executed and delivered by the parties hereto and delivered to the Partnership, the pledge of, and the grant of a security interest in, the Pledgor Units will be recorded on the books of the Partnership; (b) the General Partner hereby approves and consents to the Pledgor’s pledge of, and grant of a security interest to the Lender in, the Pledgor Units; and (c) they will not require an opinion of counsel pursuant to Section 11.3(D) of the Partnership Agreement with respect to such pledge or grant of a security interest.

5. The Partnership and the General Partner hereby jointly and severally acknowledge and agree that they have no reason to believe that the security interest granted by the Pledgor to the Lender in the Pledgor Units pursuant to the Pledge Agreement does not constitute a grant of a security interest in a “bona fide security transaction” for purposes of Section 11.3 of the Partnership Agreement.

6. The Partnership and the General Partner hereby jointly and severally acknowledge and confirm that no written security interest in the Pledgor Units (other than the security interest of the Lender and security interests which have been previously released) has been received by or registered on the records of the Partnership.

7. The Partnership and the General Partner hereby jointly and severally agree, and the Lender hereby agrees, that by virtue of holding a security interest in the Pledgor Units (a) the Lender does not and shall not become a Substituted Limited Partner under the Partnership Agreement and (b) the Lender does not and shall not undertake any obligations or liabilities of any nature whatsoever arising from the Partnership Agreement or pertaining to the organization, formation, creation, operation or conduct of the Partnership or of any of its Partners.

8. The Partnership and the General Partner jointly and severally hereby acknowledge and agree that upon the execution and delivery to the Lender by the Pledgor of this Agreement, all exhibits and schedules hereto and thereto to which the Pledgor is a party, and a certification by the Lender that the Lender or its nominee is the lawful owner of the Pledged Units, the Pledgor will not, except as contemplated by Section 8.6(A) of the Partnership Agreement and Section 11 of this Agreement, be required to execute any other document or take any other action with respect to the redemption of the Pledgor Units in connection with the exercise of the Lender’s rights under this Agreement, and that the Lender will not be required to become a Substituted Limited Partner prior to exercising that Redemption Right.

9. The Partnership and the General Partner hereby jointly and severally agree, upon written notice from the Lender, to make any and all distributions of Partnership property allocable to the Pledgor Units directly to the Lender. The Pledgor authorizes the General Partner and the Partnership to make distributions directly to the Lender pursuant to this Section 11 upon receipt of such notice, in lieu of making distributions to the Pledgor. The Lender acknowledges that such distributions will be subject to withholding, pursuant to any applicable terms of the Partnership Agreement. The Lender agrees that, until the foregoing notice is provided, the Partnership may make distributions directly to the Pledgor.

10. The Partnership and the General Partner hereby jointly and severally agree that, except as contemplated by this Agreement, they will not register on the books of the Partnership any assignment, transfer or other disposition of the Pledgor Units, or any additional Partnership Units hereafter issued in respect of the Pledgor

Units, without the consent of the Lender. The Partnership and the General Partner hereby jointly and severally agree that if the Partnership issues any certificates for the Pledgor Units, it will deliver such certificates directly to the Lender.

11. The Partnership and the General Partner hereby jointly and severally agree that upon delivery to the Partnership by the Lender of a certification by the Lender that the Lender or its nominee is the lawful owner of the Pledged Units or any additional Partnership Units hereafter issued in respect of the Pledgor Units, if requested by the Lender, the Partnership will register ownership of such Partnership Units in the name of the Lender or its nominee and the Lender or its nominee shall thereafter, among other rights, have the immediate right to redeem such Partnership Units in accordance with Section 8.6(A) of the Partnership Agreement, provided that any request for such redemption shall be made on the form of Notice of Redemption attached to the Partnership Agreement as Exhibit D (the “Notice of Redemption”), which shall be signed, at the discretion of the Lender, by the Lender or its nominee, and further provided that (a) if upon any such redemption, the General Partner elects to purchase the Pledgor Units for its own account pursuant to Section 8.6(B) of the Partnership Agreement, the purchase price payable by the General Partner on such redemption shall be paid directly to the Lender or its nominee, (b) if the General Partner does not so elect, the Partnership shall, with respect to the Shares Amount then payable pursuant to Section 8.6(B) of the Partnership Agreement, as directed in writing by the Lender or its nominee, issue such Shares in the name set forth in the Notice of Redemption and, deliver the shares as a physical certificate or electronically via Deposit/Withdrawal at Custodian (“DWAC”) to the address or account set forth in the Notice of Redemption and (c) if cash is paid in lieu of payment of the Shares Amount, make such cash payment directly to the Lender or its nominee. The Partnership, the General Partner, Pledgor and Lender agree that, notwithstanding the terms, conditions and provisions of the Partnership Agreement, if Lender or its nominee tenders a Notice of Redemption in accordance with Section 8.6(A) of the Partnership Agreement, for the purpose of the Partnership Agreement the “Specified Redemption Date” applicable to the redemption pursuant to such Redemption Notice shall mean the fifteenth Business Day after receipt by the General Partner of such Notice of Redemption or such shorter period as the General Partner, in its sole and absolute discretion may determine; provided that, if the Shares are not then Publicly Traded, the Specified Redemption Date means the thirtieth Business Day after receipt by the General Partner of such Notice of Redemption. The Partnership and the General Partner hereby jointly and severally acknowledge and agree that any Shares issued in accordance with this Section 11 to the Lender or its nominee will have been fully registered under the Exchange Act and the Securities Act, as provided in Section 8.6(B) of the Partnership Agreement, and that such Shares will not be subject to any contractual restriction imposed by the Partnership or the General Partner on the resale thereof.

12. This Agreement and the terms and provisions hereof shall remain in full force and effect until the Lender sends a written notice to the Partnership or the General Partner that this Agreement has been released.

13. The Lender hereby agrees that the Lender shall exchange or redeem for the Redemption Amount any Partnership Units in which a security interest is held by it simultaneously with the time at which the Lender would be deemed to be a partner in the Partnership for purposes of allocating liabilities to the Lender under Section 753 of the Code.

14. In order to induce the Partnership and the General Partner to execute and deliver this Agreement and in consideration thereof, the Pledgor hereby agrees to indemnify and hold the Partnership and the General Partner, and their respective officers, directors, partners, employees and agents (collectively, the “Indemnified Persons”), harmless from and against any and all claims, losses, damages, liabilities and expenses (including reasonable legal fees and disbursements) which an Indemnified Person may incur which result from, are based upon or arise out of the pledge described herein, the action or inaction of the Partnership or the General Partner, the action or inaction of the Pledgor, and/or the action or inaction of the Lender, other than such liabilities and expenses which result from, are based upon or arise out of the willful misconduct or gross negligence of the Partnership or the General Partner. In no event shall the Partnership or the General Partner be held liable to the Pledgor for any payment made to the Lender or its designee in accordance with the provisions of this Agreement.

15. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Indiana. This Agreement may be executed in any number of separate counterparts, each of which, when so executed, shall be deemed an original and all of which, taken together, shall be deemed to constitute one and the same instrument. Other than as outlined in Section 11 of this Agreement, this Agreement may not be amended,

modified, cancelled or terminated without the prior written consent of the Partnership, the General Partner and the Lender.

This Agreement is entered into as of the date first set forth above.

[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]

SIGNATURE PAGE OF PARTNERSHIP TO

ACKNOWLEDGMENT AND CONSENT

PARTNERSHIP:

Notice Address:

30 South Meridian Street,

Suite 1100

Indianapolis, IN 46204

KITE REALTY GROUP, L.P., a Delaware limited partnership

By:

Kite Realty Group Trust, a Maryland real estate investment trust, its General Partner

By:

Printed Name:

Title:

SIGNATURE PAGE OF GENERAL PARTNER TO

ACKNOWLEDGMENT AND CONSENT

Notice Address:

30 South Meridian Street,

Suite 1100

Indianapolis, IN 46204

GENERAL PARTNER

Kite Realty Group Trust, a Maryland real estate investment trust,

By:

Printed Name:

Title:

SIGNATURE PAGE OF PLEDGOR TO

ACKNOWLEDGMENT AND CONSENT

Notice Address: 30 South Meridian Street, Suite 1100 Indianapolis, IN 46204		PLEDGOR:


		Alvin E. Kite, Jr.

SIGNATURE PAGE OF LENDER TO

ACKNOWLEDGMENT AND CONSENT

Notice Address:

127 Public Square

city, state 44114

LENDER

THE BANK

By:

Printed Name:

Title: