Exhibit 10.1

REVOLVING CREDIT AGREEMENT

among

FIRST POTOMAC REALTY INVESTMENT LIMITED PARTNERSHIP

and

OTHER BORROWERS WHICH MAY BECOME PARTIES TO THIS AGREEMENT
and

KEYBANK NATIONAL ASSOCIATION,

WELLS FARGO NATIONAL BANK

and

OTHER BANKS WHICH MAY BECOME PARTIES TO THIS AGREEMENT

and

KEYBANK NATIONAL ASSOCIATION,
AS MANAGING ADMINISTRATIVE AGENT

and

WELLS FARGO NATIONAL BANK,
AS SYNDICATION AGENT

with

KEYBANC CAPITAL MARKETS,
AS LEAD ARRANGER AND BOOK MANAGER

Dated as of November 30, 2004

 

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

 

TABLE OF CONTENTS

         
§1. DEFINITIONS AND RULES OF INTERPRETATION
    1  
§1.1. Definitions
    1  
§1.2. Rules of Interpretation
    17  
§2. THE REVOLVING CREDIT FACILITY
    18  
§2.1. Commitment to Lend
    18  
§2.2. The Revolving Credit Notes
    18  
§2.3. Interest on Revolving Credit Loans; Fees
    19  
§2.4. Requests for Revolving Credit Loans
    21  
§2.5. Conversion Options
    22  
§2.6. Funds for Revolving Credit Loans
    22  
§2.7. Reduction of Commitment
    23  
§2.8. Increase in Total Commitment
    23  
§2.9. Extension of Revolving Credit Maturity Date
    24  
§3. REPAYMENT OF THE LOANS
    24  
§3.1. Maturity
    24  
§3.2. Optional Repayments of Revolving Credit Loans
    24  
§3.3. Mandatory Repayment of Loans
    25  
§4. CERTAIN GENERAL PROVISIONS
    25  

-i-

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

 

         
§4.1. Funds for Payments
    25  
§4.2. Computations
    25  
§4.3. Inability to Determine Libor Rate
    26  
§4.4. Illegality
    26  
§4.5. Additional Costs, Etc.
    26  
§4.6. Capital Adequacy
    27  
§4.7. Certificate; Limitations
    28  
§4.8. Indemnity
    28  
§4.9. Interest on Overdue Amounts; Late Charge
    28  
§5. LETTERS OF CREDIT
    28  
§5.1. Letter of Credit Commitments
    29  
§5.1.1. Commitment to Issue Letters of Credit
    29  
§5.1.2. Letter of Credit Applications
    30  
§5.1.3. Terms of Letters of Credit
    30  
§5.1.4. Obligations of Lenders with respect to Letters of Credit
    30  
§5.2. Reimbursement Obligation of the Borrower
    30  
§5.3. Letter of Credit Payments; Funding of a Loan
    31  
§5.4. Obligations Absolute
    32  
§5.5. Reliance by Issuer
    33  
§6. RECOURSE OBLIGATIONS
    33  
§7. REPRESENTATIONS AND WARRANTIES
    33  
§7.1. Authority, Etc.
    33  

-ii-

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

 

         
§7.2. Governmental Approvals
    35  
§7.3. Title to Properties; Leases
    35  
§7.4. Financial Statements
    36  
§7.5. No Material Changes, Etc.
    36  
§7.6. Franchises, Patents, Copyrights, Etc.
    36  
§7.7. Litigation
    36  
§7.8. No Materially Adverse Contracts, Etc.
    37  
§7.9. Compliance With Other Instruments, Laws, Etc.
    37  
§7.10. Tax Status
    37  
§7.11 No Event of Default
    37  
§7.12. Investment Company Acts
    37  
§7.13. Name; Jurisdiction of Organization; Absence of UCC Financing Statements,
Etc.
    38  
§7.14. Absence of Liens
    38  
§7.15. Certain Transactions
    38  
§7.16. Employee Benefit Plans; Multiemployer Plans; Guaranteed Pension Plans
    38  
§7.17. Regulations U and X
    38  
§7.18. Environmental Compliance
    38  
§7.19. Subsidiaries
    40  
§7.20. Loan Documents
    40  
§7.21. REIT Status
    40  
§8. AFFIRMATIVE COVENANTS OF THE BORROWER AND THE TRUST
    40  
§8.1. Punctual Payment
    40  

-iii-

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

 

         
§8.2. Maintenance of Office; Jurisdiction of Organization, Etc.
    40  
§8.3. Records and Accounts
    40  
§8.4. Financial Statements, Certificates and Information
    41  
§8.5. Notices
    43  
§8.6. Existence of Borrower; Maintenance of Properties
    44  
§8.7. Existence of the Trust; Maintenance of REIT Status of the Trust;
Maintenance of Properties
    45  
§8.8. Insurance
    45  
§8.9. Taxes
    45  
§8.10. Inspection of Properties and Books
    46  
§8.11. Compliance with Laws, Contracts, Licenses, and Permits
    46  
§8.12. Use of Proceeds
    47  
§8.13. Additional Borrower; Solvency of Borrower; Removal of Borrower; Addition
of Real Estate Asset to Unencumbered Pool
    47  
§8.14. Further Assurances
    48  
§8.15. Interest Rate Protection
    48  
§8.16. Environmental Indemnification
    48  
§8.17. Response Actions
    49  
§8.18. Environmental Assessments
    49  
§8.19. Employee Benefit Plans
    49  
§8.20. No Amendments to Certain Documents
    50  
§9. CERTAIN NEGATIVE COVENANTS OF THE BORROWER AND THE TRUST 60
    50  
§9.1. Restrictions on Indebtedness
    50  
§9.2. Restrictions on Liens, Etc.
    51  

-iv-

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

 

         
§9.3. Restrictions on Investments
    53  
§9.4. Merger, Consolidation and Disposition of Assets; Assets of the Trust
    54  
§9.5. Compliance with Environmental Laws
    55  
§9.6. Distributions
    55  
§10. FINANCIAL COVENANTS; COVENANTS REGARDING ELIGIBLE UNENCUMBERED PROPERTIES
    55  
§10.1. Consolidated Total Leverage Ratio
    55  
§10.2. Interest Coverage Ratio
    55  
§10.3. Fixed Charge Coverage Ratio
    56  
§10.4. Net Worth
    56  
§10.5. Unencumbered Pool Leverage
    56  
§10.6. Unencumbered Pool Debt Service Coverage Ratio
    56  
§10.7. Occupancy
    56  
§11. RESERVED
    56  
§12. CONDITIONS TO THE FIRST ADVANCE
    56  
§12.1. Loan Documents
    56  
§12.2. Certified Copies of Organization Documents
    56  
§12.3. By-laws; Resolutions
    57  
§12.4. Incumbency Certificate: Authorized Signers
    57  
§12.5. Title Policies
    57  
§12.6. Certificates of Insurance
    57  
§12.7. Hazardous Substance Assessments
    57  
§12.8. Opinion of Counsel Concerning Organization and Loan Documents
    57  

-v-

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

 

         
§12.9. Structural Condition Assurances
    58  
§12.10. Guaranty
    58  
§12.11. Financial Analysis of Eligible Unencumbered Properties
    58  
§12.12. Inspection of Eligible Unencumbered Properties
    58  
§12.13. Certifications from Government Officials; UCC-11 Reports
    58  
§12.14. Proceedings and Documents
    58  
§12.15. Fees
    58  
§12.16. Closing Certificate
    58  
§13. CONDITIONS TO ALL BORROWINGS
    58  
§13.1. Representations True; No Event of Default; Compliance Certificate
    58  
§13.2. No Legal Impediment
    59  
§13.3. Governmental Regulation
    59  
§13.4. Borrowing Documents
    59  
§13.5. Reserved
    59  
§13.6. New Unencumbered Pool Property
    59  
§13.7. Continued Compliance
    59  
§14. EVENTS OF DEFAULT; ACCELERATION; ETC.
    59  
§14.1. Events of Default and Acceleration
    59  
§14.2. Termination of Commitments
    62  
§14.3. Remedies
    63  
15. SECURITY INTEREST AND SET-OFF
    63  
15.1 Security Interest
    63  

-vi-

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

 

         
15.2 Set-Off and Debit
    63  
15.3 Right to Freeze
    64  
15.4 Additional Rights
    64  
§16. THE AGENT
    64  
§16.1. Authorization
    64  
§16.2. Employees and Agents
    64  
§16.3. No Liability
    65  
§16.4. No Representations
    65  
§16.5. Payments
    65  
§16.6. Holders of Notes
    66  
§16.7. Indemnity
    66  
§16.8. Agent as Lender
    66  
§16.9. Notification of Defaults and Events of Default
    66  
§16.10. Duties in Case of Enforcement
    66  
§16.11. Successor Agent
    67  
§16.12. Notices
    68  
§16.13. Other Agents
    68  
§17. EXPENSES
    68  
§18. INDEMNIFICATION
    68  
§19. SURVIVAL OF COVENANTS, ETC.
    69  
§20. ASSIGNMENT; PARTICIPATIONS; ETC.
    69  
§20.1. Conditions to Assignment by Lenders.
    69  

-vii-

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

 

         
§20.2. Certain Representations and Warranties; Limitations; Covenants
    70  
§20.3. Register
    71  
§20.4. New Notes
    71  
§20.5. Participations
    71  
§20.6. Pledge by Lender
    72  
§20.7. No Assignment by Borrower
    72  
§20.8. Disclosure
    72  
§20.9. Syndication
    72  
§21. NOTICES, ETC.
    72  
§22. FPLP AS AGENT FOR THE BORROWER
    73  
§23. GOVERNING LAW; CONSENT TO JURISDICTION AND SERVICE
    73  
§24. HEADINGS
    74  
§25. COUNTERPARTS
    74  
§26. ENTIRE AGREEMENT, ETC.
    74  
§27. WAIVER OF JURY TRIAL AND CERTAIN DAMAGE CLAIMS
    74  
§28. CONSENTS, AMENDMENTS, WAIVERS, ETC.
    74  
§29. SEVERABILITY
    76  
§30. INTEREST RATE LIMITATION
    76  

-viii-

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

 

(The following exhibits and schedules have been omitted from this filing. Any
exhibit or schedule will be provided to the Commission upon request of the
Company).

Exhibits to Revolving Credit Agreement:

Exhibit A – Form of Revolving Credit Note

Exhibit B – Form of Completed Loan Request

Exhibit C – Forms of Compliance Certificates

Exhibit D – Form of Assignment and Assumption

Exhibit E – Form of Joinder Agreement

-ix-

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

 

Schedules to Revolving Credit Agreement

Schedule 1 Borrowers

Schedule 2 Lender’s Commitments

Schedule 7.1(b) Capitalization

Schedule 7.3(c) Partially-Owned Entities

Schedule 7.7 Litigation

Schedule 7.13 Legal Name; Jurisdiction

Schedule 7.15 Affiliate Transactions

Schedule 7.16 Employee Benefit Plans

Schedule 7.19 Subsidiaries

Schedule 8.19 Employee Benefit Plans

Schedule 9.1 Indebtedness

                 9.1(g) Contingent Liabilities

-x-

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

 

REVOLVING CREDIT AGREEMENT

     This REVOLVING CREDIT AGREEMENT is made as of the 30th day of November,
2004, by and among FIRST POTOMAC REALTY INVESTMENT LIMITED PARTNERSHIP, a
Delaware limited a partnership (“FPLP”) and the Wholly-Owned Subsidiaries
(defined below) which are listed on Schedule 1 hereto (as such Schedule 1 may be
(or may be deemed to be) amended from time to time (FPLP and any such
Wholly-Owned Subsidiary being hereinafter referred to collectively as the
“Borrower” unless referred to in their individual capacities), having their
principal place of business at 7200 Wisconsin Avenue, Suite 310, Bethesda,
Maryland 20814; KEYBANK NATIONAL ASSOCIATION (“KeyBank”), having a principal
place of business at 127 Public Square, Cleveland, Ohio 44114, WELLS FARGO
NATIONAL BANK and the other lending institutions which may become parties hereto
pursuant to §20 (individually, a “Lender” and collectively, the “Lenders”);
KEYBANK, as administrative agent for itself and each other Lender (the “Agent”)
and Wells Fargo National Association, as Syndication Agent; and KEYBANC CAPITAL
MARKETS, as Lead Arranger and Book Manager.

RECITALS

     A. The Borrower is primarily engaged in the business of owning, acquiring,
developing, renovating and operating industrial and so-called flex properties in
the Mid-Atlantic region of the United States.

     B. First Potomac Realty Trust, a Maryland real estate investment trust (the
“Trust”), is the sole general partner of FPLP, holds in excess of 80% of the
partnership interests in FPLP as of the date of this Agreement, and is qualified
to elect REIT status for income tax purposes and has agreed to guaranty the
obligations of the Borrower hereunder and under the other Loan Documents (as
defined below).

     C. The Borrower and the Trust have requested, and the Lenders have agreed
to establish, an unsecured revolving credit facility for use by the Borrower
pursuant to the terms and conditions hereof.

     NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto agree as follows:

     §1. DEFINITIONS AND RULES OF INTERPRETATION.

     §1.1. Definitions. The following terms shall have the meanings set forth in
this §1 or elsewhere in the provisions of this Agreement referred to below:

     AAP Qualification. See §7.6.

     Accountants. In each case, independent certified public accountants
reasonably acceptable to the Majority Lenders. The Lenders hereby acknowledge
that the Accountants may include KPMG LLP and any other so-called “big-four”
accounting firm.

1

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

 

     Accounts Payable. Accounts payable of the Borrower, the Trust and their
respective Subsidiaries, as determined in accordance with GAAP.

     Adjusted EBITDA. As at any date of determination, an amount equal to
(i) Consolidated EBITDA for the applicable period; minus (ii) the Capital
Reserve on such date.

     Adjusted Net Operating Income. As at any date of determination, an amount
equal to (i) the Net Operating Income of the Unencumbered Pool for the
applicable period; minus (ii) the Unencumbered Pool Capital Reserve on such
date.

     Affiliate. With reference to any Person, (i) any director, officer, general
partner, trustee or managing member (or the equivalent thereof) of that Person,
(ii) any other Person controlling, controlled by or under direct or indirect
common control of that Person, (iii) any other Person directly or indirectly
holding 5% or more of any class of the capital stock or other equity interests
(including options, warrants, convertible securities and similar rights) of that
Person, (iv) any other Person 5% or more of any class of whose capital stock or
other equity interests (including options, warrants, convertible securities and
similar rights) is held directly or indirectly by that Person, and (v) any
Person directly or indirectly controlling that Person, whether through a
management agreement, voting agreement, other contract or otherwise.

     Agent. See the preamble to this Agreement. The Agent shall include any
successor agent, as permitted by §16.

     Agent’s Head Office. The Agent’s office located at 127 Public Square,
Cleveland, Ohio 44114, or at such other location as the Agent may designate from
time to time, or the office of any successor agent permitted under §16.

     Agreement. This Revolving Credit Agreement, including the Schedules and
Exhibits hereto, as the same may be from time to time amended, restated,
modified and/or supplemented and in effect.

     Agreement of Limited Partnership of the Borrower. The Amended and Restated
Agreement of Limited Partnership of FPLP, dated September 15, 2003, as amended,
among the Trust and the limited partners named therein, as amended through the
date hereof and as the same may be further amended from time to time as
permitted by §8.20.

     Applicable Base Rate Margin. The Applicable Base Rate Margin is set forth
in §2.3(c).

     Applicable L/C Percentage. With respect to any Letter of Credit, a per
annum percentage equal to the Applicable Libor Margin in effect on the date on
which such Letter of Credit was issued.

     Applicable Libor Margin. The Applicable Libor Margin is set forth in
§2.3(c).

     Arranger. Keybanc Capital Markets.

     Assignment and Assumption. See §20.1.

2

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

 

     Availability. As of the date that any Loan is to be made hereunder, an
amount that would permit the Borrower to remain in compliance with the covenants
set forth in §§10.5 and 10.6 on a pro forma basis, after giving effect to the
requested Loan and all other Loans outstanding for which the amount thereof is
not included in the most recent quarterly covenant calculations for the
covenants set forth in §§10.5 and 10.6 submitted by the Borrower. The amount
available to be drawn at any time shall be the Availability less the Maximum
Drawing Amount and all outstanding Loans at such time.

     Base Rate. The higher of (i) the variable per annum rate of interest
announced from time to time by KeyBank as its “base rate” and (ii) one half of
one percent (1/2%) plus the Federal Funds Rate. The Base Rate is a reference
rate and does not necessarily represent the lowest or best rate being charged to
any customer. Any change in the Base Rate during an Interest Period shall be
effective and result in a corresponding change on the same day in the rate of
interest accruing from and after such day on the unpaid balance of principal of
the Base Rate Loans, if any, effective on the day of such change in the Base
Rate, without notice or demand of any kind.

     Base Rate Loan(s). Those Loans bearing interest calculated by reference to
the Base Rate.

     Borrower. See the preamble hereto.

     Building(s). Individually and collectively, the buildings, structures and
improvements now or hereafter located on the Real Estate Assets.

     Business Day. For all purposes other than as covered by clause (ii) below,
any day other than a Saturday, Sunday or legal holiday on which banks in
Cleveland, Ohio are open for the conduct of a substantial part of their
commercial banking business; and (ii) with respect to all notices and
determinations in connection with, and payments of principal and interest on,
Libor Rate Loans, any day that is a Business Day described in clause (i) and
that is also a Libor Business Day.

     Capital Expenditures. Any expenditure for any item that would be treated or
defined as a capital expenditure under GAAP.

     Capital Reserve. As at any date of determination, a capital reserve equal
to the weighted average square feet of the Real Estate Assets during the
applicable period, multiplied by $0.15 per annum.

     Capitalization Rate. The Capitalization Rate shall be 9.0%.

     Capitalized Leases. Leases under which the Borrower or any of its
Subsidiaries or any Partially-Owned Entity is the lessee or obligor, the
discounted future rental obligations under which are required to be capitalized
on the balance sheet of the lessee or obligor in accordance with GAAP.

     Cash and Cash Equivalents. As of any date of determination, the sum of
(a) the aggregate amount of unrestricted cash then actually held by the Borrower
or any of its Subsidiaries, (b) the aggregate amount of unrestricted cash
equivalents (valued at fair market value) then held by the Borrower or any of
its Subsidiaries and (c) the aggregate amount of cash then actually held by

3

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

 

the Borrower or any of its Subsidiaries in the form of tenant security deposits,
but only to the extent such tenant security deposits are included as a liability
on the Borrower’s Consolidated balance sheet, escrows and reserves. As used in
this definition, (i) “unrestricted” means the specified asset is not subject to
any Liens in favor of any Person, and (ii) “cash equivalents” means that such
asset has a liquid, par value in cash and is convertible to cash on demand.
Notwithstanding anything contained herein to the contrary, the term Cash and
Cash Equivalents shall not include the Commitments of the Lenders to make Loans
or to make any other extension of credit under this Agreement.

     CERCLA. See §7.18.

     Closing Date. November    , 2004.

     Code. The Internal Revenue Code of 1986, as amended and in effect from time
to time.

     Commitment. With respect to each Lender, the amount set forth from time to
time on Schedule 2 hereto as the amount of such Lender’s Commitment to make
Revolving Credit Loans to, and to participate in the issuance, extension and
renewal of Letters of Credit for the account of, the Borrower as such Schedule 2
may be updated by the Agent from time to time.

     Commitment Percentage. With respect to each Lender, the percentage set
forth on Schedule 2 hereto as such Lender’s percentage of the Total Commitment,
as such Schedule 2 may be updated by the Agent from time to time.

     Completed Loan Request. A loan request accompanied by all information
required to be supplied under the applicable provisions of §2.4.

     Consolidated or consolidated. With reference to any term defined herein,
shall mean that term as applied to the accounts of the Borrower, the Trust and
their respective Subsidiaries, consolidated in accordance with GAAP in
accordance with the terms of this Agreement.

     Consolidated EBITDA. In relation to the Borrower, the Trust and their
respective Subsidiaries for any applicable period, an amount equal to, without
double-counting, the net income or loss of the Borrower, the Trust and their
respective Subsidiaries determined in accordance with GAAP (before minority
interests and excluding losses attributable to the sale or other disposition of
assets and the adjustment for so-called “straight-line rent accounting”) for
such period, plus (x) the following to the extent deducted in computing such
Consolidated net income for such period: (i) Consolidated Total Interest Expense
for such period, (ii) real estate depreciation and amortization for such period,
and (iii) other non-cash charges for such period; and minus (y) all gains
attributable to the sale or other disposition of assets or debt restructurings
in such period, in each case adjusted to include the Borrower’s, the Trust’s or
any Subsidiary’s pro rata share of EBITDA (and the items comprising EBITDA) from
any Partially-Owned Entity in such period, based on its percentage ownership
interest in such Partially-Owned Entity (or such other amount to which the
Borrower, the Trust or such Subsidiary is entitled or for which the Borrower,
the Trust or such Subsidiary is obligated based on an arm’s length agreement).

4

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

 

     Consolidated Fixed Charges. For any applicable period, an amount equal to
(i) Consolidated Total Interest Expense for such period plus (ii) the aggregate
amount of scheduled principal payments of Indebtedness (excluding balloon
payments at maturity) required to be made during such period by the Borrower,
the Trust and their respective Subsidiaries on a Consolidated basis plus (iii)
the dividends and distributions, if any, paid or required to be paid during such
period on the Preferred Equity, if any, of the Borrower, the Trust and their
respective Subsidiaries (other than dividends paid in the form of capital
stock).

     Consolidated Gross Asset Value. As of any date of determination, the sum of
(i)(x) the Net Operating Income of all of the Real Estate Assets (except as
provided below) for the most recent fiscal quarter, less the Management fee
Adjustment, with the sum thereof multiplied by (y) 4; with the product thereof
being divided by (y) the Capitalization Rate; plus (ii) an amount equal to the
cost basis value of Real Estate Assets Under Development on such date, plus
(iii) the cost basis value of Land on such date, as evidenced by the Borrower’s
most recent balance sheet delivered to the Agent, plus (iv) the cost basis of
Mortgage Notes on such date, plus (v) the value of Cash and Cash Equivalents on
such date, as determined in accordance with GAAP and approved by the Agent,
provided that (i) Net Operating Income from Real Estate Assets acquired during
the applicable quarter and the immediately preceding fiscal quarter shall be
excluded, and such acquired Real Estate Assets shall be included at their cost
basis value, and (ii) Net Operating Income from Real Estate Assets sold or
otherwise transferred during the applicable quarter shall be excluded.

     Consolidated Tangible Net Worth. As of any date of determination, an amount
equal to the Consolidated Gross Asset Value, of the Borrower and its
Subsidiaries at such date, minus Consolidated Total Indebtedness outstanding on
such date, provided that any amounts attributable to Real Estate Assets that are
required to be reported as “intangibles” under GAAP pursuant to Financial
Accounting Standards Board Statement of Policy No. 141 and 142 shall be
permitted to be added back to “tangible property” for purposes of calculating
such Consolidated Tangible Net Worth.

     Consolidated Total Indebtedness. As of any date of determination,
Consolidated Total Indebtedness means for the Borrower, the Trust and their
respective Subsidiaries, all obligations, contingent or otherwise, which should
be classified on the obligor’s balance sheet as liabilities, or to which
reference should be made by footnotes thereto, all in accordance with GAAP,
including, in any event, the sum of (without double-counting), (i) all Accounts
Payable on such date, and (ii) all Indebtedness outstanding on such date, in
each case whether Recourse, Without Recourse or contingent, provided, however,
that amounts not drawn under the Revolving Credit Loans on such date shall not
be included in calculating Consolidated Total Indebtedness, and provided,
further, that (without double-counting), each of the following shall be included
in Consolidated Total Indebtedness: (a) all amounts of guarantees, indemnities
for borrowed money, stop-loss agreements and the like provided by the Borrower,
the Trust and their respective Subsidiaries, in each case in connection with and
guarantying repayment of amounts outstanding under any other Indebtedness;
(b) all amounts for which a letter of credit (including the Letters of Credit)
has been issued for the account of the Borrower, the Trust or any of their
respective Subsidiaries; (c) all amounts of bonds posted by the Borrower, the
Trust or any of their respective Subsidiaries guaranteeing performance or
payment obligations; (d) all lease obligations (including under Capital Leases,
but excluding obligations under ground leases) and (e) all liabilities of the
Borrower, the Trust or any of their respective Subsidiaries as partners, members
or the like for liabilities (whether such liabilities are Recourse, Without
Recourse or

5

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

 

contingent obligations of the applicable partnership or other Person) of
partnerships or other Persons in which any of them have an equity interest,
which liabilities are for borrowed money or any of the matters listed in clauses
(a), (b), (c) or (d) above. Without limitation of the foregoing (without double
counting), with respect to any Partially-Owned Entity, (x) to the extent that
the Borrower, the Trust or any of their respective Subsidiaries or such
Partially-Owned Entity is providing a completion guaranty in connection with a
construction loan entered into by a Partially-Owned Entity, Consolidated Total
Indebtedness shall include the Borrower’s, the Trust’s or such Subsidiary’s pro
rata liability under the Indebtedness relating to such completion guaranty (or,
if greater, the Borrower’s, the Trust’s or such Subsidiary’s potential liability
under such completion guaranty) and (y) in connection with the liabilities
described in clauses (a) and (d) above (other than completion guarantees, which
are referred to in clause (x)), the Consolidated Total Indebtedness shall
include the portion of the liabilities of such Partially-Owned Entity which are
attributable to the Borrower’s, the Trust’s or such Subsidiary’s percentage
equity interest in such Partially-Owned Entity or such greater amount of such
liabilities for which the Borrower, the Trust or their respective Subsidiaries
are, or have agreed to be, liable by way of guaranty, indemnity for borrowed
money, stop-loss agreement or the like, it being agreed that, in any case,
Indebtedness of a Partially-Owned Entity shall not be excluded from Consolidated
Total Indebtedness by virtue of the liability of such Partially-Owned Entity
being Without Recourse. For purposes hereof, the amount of borrowed money shall
equal the sum of (1) the amount of borrowed money as determined in accordance
with GAAP plus (2) the amount of those contingent liabilities for borrowed money
set forth in subsections (a) through (e) above, but shall exclude any adjustment
for so-called “straight-line interest accounting”.

     Consolidated Total Interest Expense. For any applicable period, the
aggregate amount of interest required in accordance with GAAP to be paid,
accrued, expensed or, to the extent it could be a cash expense in the applicable
period, capitalized, without double-counting, by the Borrower, the Trust and
their respective Subsidiaries during such period on: (i) all Indebtedness of the
Borrower, the Trust and their respective Subsidiaries (including the Loans,
obligations under Capital Leases (to the extent Consolidated EBITDA has not been
reduced by such Capital Lease obligations in the applicable period) and any
Subordinated Indebtedness and including original issue discount and amortization
of prepaid interest, if any, but excluding any Distribution on Preferred
Equity), (ii) all amounts available for borrowing, or for drawing under letters
of credit (including the Letters of Credit), if any, issued for the account of
the Borrower, the Trust or any of their respective Subsidiaries, but only if
such interest was or is required to be reflected as an item of expense, and
(iii) all commitment fees, agency fees, facility fees, balance deficiency fees
and similar fees and expenses in connection with the borrowing of money.

     Conversion Request. A notice given by the Borrower to the Agent of its
election to convert or continue a Loan in accordance with §2.5.

     Default. When used with reference to this Agreement or any other Loan
Document, an event or condition specified in §14.1 that, but for the requirement
that time elapse or notice be given, or both, would constitute an Event of
Default.

     Delinquent Lender. See §16.5(c).

     Disqualifying Environmental Event. Any Release or threatened Release of
Hazardous Substances, any violation of Environmental Laws or any other similar
environmental event with respect to any Eligible Unencumbered Property that
will, in the Agent’s reasonable opinion, cost

6

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

 

in excess of $500,000 to remediate or, which, with respect to all of the
Eligible Unencumbered Properties, will, in the Agent’s reasonable opinion cost
in excess of $1,000,000 in the aggregate to remediate.

     Disqualifying Structural Event. Any structural issue which, with respect to
any Eligible Unencumbered Property, will, in the Agent’s reasonable opinion,
cost in excess of $500,000 to remediate or, which, with respect to all of the
Eligible Unencumbered Properties, will, in the Agent’s reasonable opinion cost
in excess of $1,000,000 in the aggregate to remediate.

     Distribution. With respect to:

     (i) the Borrower, any distribution of cash or other cash equivalent,
directly or indirectly, to the partners of the Borrower; or any other
distribution on or in respect of any partnership interests of the Borrower; and

     (ii) the Trust, the declaration or payment of any dividend on or in respect
of any shares of any class of capital stock or other equity of the Trust, other
than dividends payable solely in shares of common stock by the Trust; the
purchase, redemption, or other retirement of any shares of any class of capital
stock or other equity of the Trust, directly or indirectly through a Subsidiary
of the Trust or otherwise; the return of capital by the Trust to its
shareholders as such; or any other distribution on or in respect of any shares
of any class of capital stock or other equity of the Trust.

     Dollars or $. Lawful currency of the United States of America.

     Drawdown Date. The date on which any Revolving Credit Loan is made or is to
be made, and the date on which any Revolving Credit Loan is converted or
continued in accordance with §2.5.

     Eligible Assignee. Any of (a) a commercial bank (or similar financial
institution) organized under the laws of the United States, or any State thereof
or the District of Columbia, and having total assets in excess of $500,000,000;
(b) a savings and loan association or savings bank organized under the laws of
the United States, or any State thereof or the District of Columbia, and having
a net worth of at least $100,000,000, calculated in accordance with GAAP; and
(c) a commercial bank (or similar financial institution) organized under the
laws of any other country (including the central bank of such country) which is
a member of the Organization for Economic Cooperation and Development (the
“OECD”), or a political subdivision of any such country, and having total assets
in excess of $500,000,000, provided that such bank (or similar financial
institution) is acting through a branch or agency located in the United States
of America. In no event will the Borrower or any Affiliate of the Borrower be an
Eligible Assignee.

     Eligible Unencumbered Property(ies). As of any date of determination, an
Unencumbered Property that: (i) is a Permitted Property, (ii) is not the subject
of a Disqualifying Environmental Event or a Disqualifying Structural Event,
(iii) is not a Real Estate Asset Under Development, (iv) is wholly-owned in fee
simple by the Borrower, (v) has been improved with a Building or Buildings which
(a) have been issued a certificate of occupancy (where available) or are
otherwise lawfully occupied for their intended use and (b) are in good and sound
operating

7

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

 

condition, (vi) has a minimum occupancy of 75%, (vii) has a net rentable area of
at least 60,000 square feet but not more than 350,000 square feet, and
(viii) had or has a purchase price (including any assumed Indebtedness) of not
more than $25,000,000 or has an appraised value (based on an appraisal
satisfactory to the Agent) of not more than $25,000,000 (the foregoing clauses
(i) through (viii) being herein referred to collectively as the “Unencumbered
Property Conditions”).

     Employee Benefit Plan. Any employee benefit plan within the meaning of
§3(3) of ERISA maintained or contributed to by the Borrower or any ERISA
Affiliate, other than a Multiemployer Plan.

     Environmental Laws. See §7.18(a).

     Environmental Reports. See §7.18

     ERISA. The Employee Retirement Income Security Act of 1974, as amended and
in effect from time to time.

     ERISA Affiliate. Any Person which is treated as a single employer with the
Borrower under §414 of the Code.

     ERISA Reportable Event. A reportable event with respect to a Guaranteed
Pension Plan within the meaning of §4043 of ERISA and the regulations
promulgated thereunder.

     Event of Default. See §14.1.

     Extension. See §2.9.

     Facility Fee. See §2.3(e).

     Federal Funds Rate. For any day, a fluctuating interest rate per annum
equal to the weighted average of the rates on overnight federal funds
transactions with members of the Federal Reserve System arranged by federal
funds brokers, as published for such day (or, if such day is not a Business Day,
for the next preceding Business Day) by the Federal Reserve Bank of New York,
or, if such rate is not so published for any day that is a Business Day, the
average of the quotations for such day on such transactions received by the
Agent from 3 federal funds brokers of recognized standing selected by the Agent.

     Financial Statement Date. September 30, 2004.

     Fronting Bank. KeyBank.

     “funds from operations”. As defined in accordance with resolutions adopted
by the Board of Governors of the National Association of Real Estate Investment
Trusts, as in effect at the applicable date of determination.

     GAAP. Generally accepted accounting principles, consistently applied.

8

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

 

     Guaranteed Pension Plan. Any employee pension benefit plan within the
meaning of §3(2) of ERISA maintained or contributed to by the Borrower or the
Trust, as the case may be, or any ERISA Affiliate of any of them the benefits of
which are guaranteed on termination in full or in part by the PBGC pursuant to
Title IV of ERISA, other than a Multiemployer Plan.

     Guaranty. The Guaranty, dated as of the date hereof, made by the Trust in
favor of the Agent and the Lenders pursuant to which the Trust guarantees to the
Agent and the Lenders the unconditional payment and performance of the
Obligations.

     Hazardous Substances. See §7.18(b).

     Implied Debt Service. As of any date of determination, an amount equal to
(i) the average amount of Unsecured Consolidated Total Indebtedness outstanding
during the applicable period, multiplied by (ii) the Mortgage Constant.

     Increase. See §2.8.

     Increase Conditions. The satisfaction of each of the following:

  (a)   no Default or Event of Default shall have occurred and be continuing
(both before and after giving effect to the Increase) and all representations
and warranties contained in the Loan Documents shall be true and correct as of
the effective date of the Increase (except to the extent that such
representations and warranties relate expressly to an earlier date);     (b)  
the Increase shall be extended on the same terms and conditions applicable to
the other Loans;     (c)   to the extent any portion of the Increase is
committed to by a third party financial institution or institutions not already
a Lender hereunder, such financial institution shall be an Eligible Assignee and
approved by the Agent (such approval not to be unreasonably withheld or delayed)
and each such financial institution shall have signed a counterpart signature
page becoming a party to this Agreement and a “Lender” hereunder; and     (d)  
one or more of the existing Lenders or such other financial institutions which
may become parties hereto incident to the Increase have committed in writing
pursuant to the terms hereof to lend the full aggregate amount of the Increase.

     Indebtedness. All obligations, contingent and otherwise, that in accordance
with GAAP should be classified upon the obligor’s balance sheet as liabilities,
or to which reference should be made by footnotes thereto, including in any
event and whether or not so classified: (a) all debt and similar monetary
obligations, whether direct or indirect, including, without limitation, all
Obligations and all obligations under any hedge, swap or other interest rate
protection arrangement, any forward purchase contract or any put; (b) all
liabilities secured by any mortgage, pledge, security interest, lien, charge, or
other encumbrance existing on property owned or acquired subject thereto,
whether or not the liability secured thereby shall have been assumed; (c) all
reimbursement obligations under letters of credit (including the Letters of

9

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

 

Credit); and (d) all guarantees for borrowed money, endorsements and other
contingent obligations, whether direct or indirect, in respect of indebtedness
or obligations of others, including any obligation to supply funds (including
partnership obligations and capital requirements) to or in any manner to invest
in, directly or indirectly, the debtor, to purchase indebtedness, or to assure
the owner of indebtedness against loss, through an agreement to purchase goods,
supplies, or services for the purpose of enabling the debtor to make payment of
the indebtedness held by such owner or otherwise.

     Interest Payment Date. As to any Base Rate Loan and any Libor Rate Loan,
the last day of any calendar month in which such Loan is outstanding, and with
respect to any Libor Rate Loan, also on the last day of the applicable Interest
Period.

     Interest Period. With respect to each Revolving Credit Loan, but without
duplication of any other Interest Period, (a) initially, the period commencing
on the Drawdown Date of such Loan and ending on the last day of one of the
following periods (as selected by the Borrower in a Completed Loan Request):
(i) for any Base Rate Loan, the calendar month in which such Base Rate Loan is
made (whether by borrowing or by conversion from a Libor Rate Loan), and
(ii) for any Libor Rate Loan, 30, 60 or 90 days; and (b) thereafter, each period
commencing at the end of the last day of the immediately preceding Interest
Period applicable to such Revolving Credit Loan and ending on the last day of
the applicable period set forth in (a)(i) and (ii) above (as selected by the
Borrower in a Conversion Request); provided that all of the foregoing provisions
relating to Interest Periods are subject to the following:

     (A) if any Interest Period with respect to a LIBOR Rate Loan would
otherwise end on a day that is not a LIBOR Business Day, such Interest Period
shall end on the next succeeding LIBOR Business Day, unless such next succeeding
LIBOR Business Day occurs in the next calendar month, in which case such
Interest Period shall end on the next preceding LIBOR Business Day, as
determined conclusively by the Agent in accordance with the then current bank
practice in London;

     (B) any Interest Period pertaining to a LIBOR Loan that begins on the last
Business Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall end on the last Business Day of a calendar month;

     (C) if the Borrower shall fail to give notice of conversion as provided in
§2.5, the Borrower shall be deemed to have requested a conversion of the
affected Libor Rate Loan to a Base Rate Loan on the last day of the then current
Interest Period with respect thereto;

     (D) any Interest Period relating to any Libor Rate Loan that begins on the
last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period) shall, subject to subparagraph (E) below, end on the last Business Day
of a calendar month; and

     (E) no Interest Period may extend beyond the Maturity Date.

10

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

 

     Investments. All expenditures made and all liabilities incurred
(contingently or otherwise, but without double-counting): (i) for the
acquisition of stock, partnership or other equity interests or for the
acquisition of Indebtedness of, or for loans, advances, capital contributions or
transfers of property to, any Person; (ii) in connection with Real Estate Assets
Under Development; and (iii) for the acquisition of any other obligations of any
Person. In determining the aggregate amount of Investments outstanding at any
particular time: (a) there shall be deducted in respect of each such Investment
any amount received as a return of capital (but only by repurchase, redemption,
retirement, repayment, liquidating dividend or liquidating distribution);
(b) there shall not be deducted in respect of any Investment any amounts
received as earnings on such Investment, whether as dividends, interest or
otherwise; and (c) there shall not be deducted from the aggregate amount of
Investments any decrease in the value thereof.

     Joinder Documents. The one or more Joinder Agreements among the Agent (on
behalf of itself and the Lenders) and any Wholly-owned Subsidiary which is to
become a Borrower at any time after the Closing Date, the form of which is
attached hereto as Exhibit E, together with all other documents, instruments and
certificates required by any such Joinder Agreement to be delivered by such
Wholly-owned Subsidiary to the Agent and the Lenders on the date such
Wholly-owned Subsidiary becomes a Borrower hereunder.

     Land. An undeveloped Real Estate Asset owned in fee by the Borrower.

     Leases. Leases, licenses and agreements whether written or oral, relating
to the use or occupation of space in or on the Buildings or on the Real Estate
Assets by persons other than the Borrower or any other member of the Potomac
Group.

     Lenders. Collectively, KeyBank and each other lending institution which may
become a party to this Agreement, and any other Person who becomes an assignee
of any rights of a Lender pursuant to §20 or a Person who acquires all or
substantially all of the stock or assets of a Lender.

     Letter of Credit Application. See §5.1.1.

     Letter of Credit Fee. See §2.3(f).

     Letter of Credit Participation. See §5.1.4.

     Letters of Credit. See §5.1.1.

     Libor Business Day. Any day on which commercial banks are open for
international business (including dealings in Dollar deposits) in London,
England.

     Libor Breakage Costs. With respect to any Libor Rate Loan to be prepaid
prior to the end of the applicable Interest Period or not borrowed, converted or
continued (“drawn” and, with correlative meaning, “draw”) after elected, a
prepayment “breakage” fee in an amount required to compensate the Lenders for
any and all additional losses, costs or expenses that such Lenders incur as a
result of such prepayment or failure to borrow, convert or continue a Libor Rate
Loan, including, without limitation, any loss (including loss of anticipated
profits), cost or expense incurred by reason of the liquidation or reemployment
of deposits of other funds acquired by any Lender to fund or maintain such Libor
Rate Loan.

11

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

 

     Libor Rate. For any LIBOR Rate Loan for any Interest Period, the average
rate (rounded upwards to the nearest 1/16th) as shown in Dow Jones Markets
(formerly Telerate) (Page 3750) at which deposits in U.S. dollars are offered by
first class banks in the London Interbank Market at approximately 11:00 a.m.
(London time) on the day that is one (1) LIBOR Business Day prior to the first
day of such Interest Period with a maturity approximately equal to such Interest
Period and in an amount approximately equal to the amount to which such Interest
Period relates, adjusted for reserves and taxes if required by future
regulations. If Dow Jones Markets no longer reports such rate or Agent
determines in good faith that the rate so reported no longer accurately reflects
the rate available to Agent in the London Interbank Market, Agent may select a
replacement index. For any period during which a Reserve Percentage shall apply,
the LIBOR Rate with respect to LIBOR Rate Loans shall be equal to the amount
determined above divided by an amount equal to 1 minus the Reserve Percentage.

     Libor Rate Loan(s). Loans bearing interest calculated by reference to the
Libor Rate.

     Lien. See §9.2.

     Loan Documents. Collectively, this Agreement, the Guaranty, the Notes, the
Letters of Credit, the Letter of Credit Applications, the Joinder Documents and
any and all other agreements, instruments, documents or certificates now or
hereafter evidencing or otherwise relating to the Loans and executed and
delivered by or on behalf of the Borrower or its Subsidiaries or the Trust or
its Subsidiaries in connection with or in any way relating to the Loans or the
transactions contemplated by this Agreement, and all schedules, exhibits and
annexes hereto or thereto, as any of the same may from time to time be amended
and in effect.

     Loans. The Revolving Credit Loans.

     Majority Lenders. As of any date, the Lenders whose aggregate Commitments
constitute at least sixty-six and two-thirds percent (66-2/3%) of the Total
Commitment (or, if the Commitments have been terminated, the Lenders whose
aggregate Commitments, immediately prior to such termination, constituted at
least sixty-six and two-thirds percent (66-2/3%) of the Total Commitment).

     Management Fee. For any applicable period, an amount equal to three percent
(3%) of revenue.

     Management Fee Adjustment. For any applicable period, the difference
between the Management Fee and the Overhead Allocation, expressed as a positive
or negative number, as the case may be.

     Maturity Date. December 31, 2006, or such earlier date (or later date
pursuant to §2.9) on which the Revolving Credit Loans shall become due and
payable pursuant to the terms hereof. The Maturity Date may be extended to
December 31, 2007 in accordance with the terms of §2.9.

     Maximum Drawing Amount. The maximum aggregate amount that the beneficiaries
may at any time draw under outstanding Letters of Credit, as such maximum
aggregate amount may be reduced from time to time pursuant to the terms of the
Letter of Credit.

12

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

 

     Mortgage Constant. As at any date of determination, a ratio that represents
the payment of principal and interest on an amortizing mortgage loan based on
(i) an interest rate equal to the greater of (a) the actual weighted average
interest rate on the Unsecured Consolidated Total Indebtedness and (b) the
greater of (x) the then 10-year treasury rate plus 2.0% and (y) 7.5%, and (ii) a
25-year mortgage-style amortization schedule. For example: a 7.5% interest rate
and a 25-year amortization schedule would result in a mortgage constant equal to
8.87%.

     Mortgage Note(s). A mortgage note, in which the Borrower holds a direct
interest as payee, for real estate that is developed, so long as at the relevant
date of determination, such Mortgage Note is not in default.

     Multiemployer Plan. Any multiemployer plan within the meaning of §3(37) of
ERISA maintained or contributed to by the Borrower or the Trust, as the case may
be, or any ERISA Affiliate.

     Net Operating Income. For any period, an amount equal to (i) the aggregate
rental and other income from the operation of the applicable Real Estate Assets
during such period; minus (ii) all expenses and other proper charges incurred in
connection with the operation of such Real Estate Assets (including, without
limitation, real estate taxes, management fees, payments under ground leases and
bad debt expenses) during such period; but, in any case, before payment of or
provision for debt service charges for such period, income taxes for such
period, capital expenses for such period, and depreciation, amortization, and
other non-cash expenses for such period, all as determined in accordance with
GAAP (except that any rent leveling adjustments shall be excluded from rental
income).

     Note Record. A Record with respect to any Note.

     Notes. The Revolving Credit Notes.

     Obligations. All indebtedness, obligations and liabilities of the Borrower
and its Subsidiaries to any of the Lenders or the Agent, individually or
collectively (but without double-counting), under this Agreement and each of the
other Loan Documents and in respect of any of the Loans, the Notes and
Reimbursement Obligations incurred and the Letter of Credit Applications and the
Letters of Credit and other instruments at any time evidencing any thereof,
whether existing on the date of this Agreement or arising or incurred hereafter,
direct or indirect, joint or several, absolute or contingent, matured or
unmatured, liquidated or unliquidated, secured or unsecured, arising by
contract, operation of law or otherwise, and including any indebtedness,
obligations and liabilities of the Borrower and its Subsidiaries under any
Protected Interest Rate Agreement entered into with any Lender.

     Organizational Documents. Collectively, (i) the Agreement of Limited
Partnership of FPLP, (ii) the Certificate of Limited Partnership of FPLP,
(iii) the Amended and Restated Declaration of Trust of the Trust, (iv) the
Amended and Restated By-Laws of the Trust, and (v) all of the partnership
agreements, corporate charters and by-laws, limited liability company operating
agreements, joint venture agreements or similar agreements, charter documents
and certificates or other agreements relating to the formation, organization or
governance of any Borrower (including, without limitation, any Wholly-owned
Subsidiary who becomes a Borrower from time to time hereunder), in each case as
any of the foregoing may be amended in accordance with §8.20.

13

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

 

     Overhead Allocation. For any period, the amount of corporate overhead
included as a property operating expense in lieu of a management fee.

     Partially-Owned Entity(ies). Any of the partnerships, associations,
corporations, limited liability companies, trusts, joint ventures or other
business entities or Persons in which the Borrower or the Trust, directly, or
indirectly through its full or partial ownership of another entity, own an
equity interest, but which is not required in accordance with GAAP to be
consolidated with the Borrower or the Trust for financial reporting purposes.

     PBGC. The Pension Benefit Guaranty Corporation created by §4002 of ERISA
and any successor entity or entities having similar responsibilities.

     Permits. All governmental permits, licenses, and approvals necessary for
the lawful operation and maintenance of the Real Estate Assets.

     Permitted Liens. Liens permitted by §9.2.

     Permitted Property. A property which is an industrial property or a
so-called flex property and is located in the State of Maryland, the State of
Virginia or the District of Columbia.

     Person. Any individual, corporation, general partnership, limited
partnership, trust, limited liability company, limited liability partnership,
unincorporated association, business, or other legal entity, and any government
(or any governmental agency or political subdivision thereof).

     Potomac Group. Collectively, (i) FPLP, (ii) the Trust, (iii) the respective
Subsidiaries of FPLP and the Trust and (iv) the Partially-Owned Entities.

     Preferred Equity. Any preferred stock, preferred partnership interests,
preferred member interests or other preferred equity interests issued by the
Borrower, the Trust or any of their respective Subsidiaries.

     Protected Interest Rate Agreement. An agreement which evidences the
interest protection arrangements required by §8.15, and all extensions,
renewals, modifications, amendments, substitutions and replacements thereof.

     Rate Period. The period beginning on the first day of any fiscal month
following delivery to the Agent of the annual or quarterly financial statements
required to be delivered pursuant to §8.4.1(a) or §8.4(b) and ending on the last
day of the fiscal month in which the next such annual or quarterly financial
statements are delivered to the Agent.

     RCRA. See §7.18.

     Real Estate Assets. The fixed and tangible properties consisting of land
and/or Buildings owned by the Borrower or any of its Subsidiaries at the
relevant time of reference thereto, including, without limitation, the Eligible
Unencumbered Properties at such time of reference.

14

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

 

     Real Estate Assets Under Development. Any Real Estate Assets for which the
Borrower or any of its Subsidiaries is actively pursuing construction of one or
more Buildings or other improvements and for which construction is proceeding to
completion without undue delay from Permit denial, construction delays or
otherwise, all pursuant to such Person’s ordinary course of business, provided
that any such Real Estate Asset (or, if applicable, any Building comprising a
portion of any such Real Estate Asset) will no longer be considered a Real
Estate Asset Under Development when a certificate of occupancy has issued for
such Real Estate Asset (or Building) or such Real Estate Asset (or Building) may
otherwise be lawfully occupied for its intended use.

     Record. The grid attached to any Note, or the continuation of such grid, or
any other similar record, including computer records, maintained by any Lender
with respect to any Loan.

     Recourse. With reference to any obligation or liability, any liability or
obligation that is not Without Recourse to the obligor thereunder, directly or
indirectly. For purposes hereof, a Person shall not be deemed to be “indirectly”
liable for the liabilities or obligations of an obligor solely by reason of the
fact that such Person has an ownership interest in such obligor, provided that
such Person is not otherwise legally liable, directly or indirectly, for such
obligor’s liabilities or obligations (e.g., without limitation, by reason of a
guaranty or contribution obligation, by operation of law or by reason of such
Person being a general partner of such obligor).

     Reimbursement Obligation. The Borrower’s obligation to reimburse the
Lenders and the Agent on account of any drawing under any Letter of Credit as
provided in §5.2. Notwithstanding the foregoing, unless the Borrower shall
notify the Agent of its intent to repay the Reimbursement Obligation on the date
of the related drawing under any Letter of Credit as provided in §5.2 and such
Reimbursement Obligation is in fact paid by the Borrower on such date, such
Reimbursement Obligation shall simultaneously with such drawing be converted to
and become a Base Rate Loan as set forth in §5.3.

     REIT. A “real estate investment trust”, as such term is defined in
Section 856 of the Code.

     Release. See §7.18(c)(iii).

     Reserve Percentage. The maximum aggregate reserve requirement (including
all basic, supplemental, marginal and other reserves) which is imposed on member
banks of the Federal Reserve System against "Euro-currency Liabilities” as
defined in Regulation D.

     Revolving Credit Loan(s). Each and every revolving credit loan made or to
be made by the Lenders to the Borrower pursuant to §2.

     Revolving Credit Notes. Collectively, the separate promissory notes of the
Borrower in favor of each Lender in substantially the form of Exhibit A hereto,
in an aggregate principal amount equal to $75,000,000, dated as of the date
hereof or as of such later date as any Person becomes a Lender under this
Agreement, and completed with appropriate insertions, as each of such notes may
be amended, replaced, substituted and/or restated from time to time (including
in connection with any Increase).

     SARA. See §7.18.

15

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

 

     SEC. The Securities and Exchange Commission, or any successor thereto.

     SEC Filings. Collectively, (i) each Form 10-K, 10-Q and Form 8-K filed by
the Trust with the SEC from time to time and (ii) each of the other public forms
and reports filed by the Trust with the SEC from time to time.

     Subsidiary. Any corporation, association, partnership, limited liability
company, trust, joint venture or other business entity or Person which is
required to be consolidated with the Borrower or the Trust in accordance with
GAAP.

     Total Commitment. As of any date, the sum of the then current Commitments
of the Lenders. As of the Closing Date, the Total Commitment is $75,000,000.
After the Closing Date, the aggregate amount of the Total Commitment may be
increased to an amount not exceeding $150,000,000, provided that such Increase
is in accordance with the provisions of §2.8.

     Trust. See preamble.

     Type. As to any Revolving Credit Loan, its nature as a Base Rate Loan or a
Libor Rate Loan.

     Unanimous Lender Approval. The written consent of each Lender that is a
party to this Agreement at the time of reference.

     Unencumbered Asset. Any Real Estate Asset that on any date of determination
is not subject to any Liens (except for Permitted Liens).

     Unencumbered Pool. As determined from time to time, collectively, the
Eligible Unencumbered Properties that the Borrower has designated in writing to
be included in the Unencumbered Pool, subject to and in accordance with the
terms hereof.

     Unencumbered Pool Capital Reserve. As at any date of determination, a
capital reserve equal to the total number of square feet of the Eligible
Unencumbered Properties on such date, multiplied by $0.15.

     Unencumbered Property Conditions. See definition of “Eligible Unencumbered
Property(ies)”.

     Unsecured Consolidated Total Indebtedness. As of any date of determination,
the aggregate principal amount of Consolidated Total Indebtedness outstanding at
such date (including all Obligations), that is not secured by a lien evidenced
by a mortgage, deed of trust, negative pledge, assignment of partnership
interests or other security interest.

     Value of Unencumbered Properties. At any date of determination, an amount
equal to Net Operating Income of the Eligible Unencumbered Properties less the
Management Fee Adjustment relating to such properties, divided by the
Capitalization Rate, provided that (i) any Eligible Unencumbered Property
acquired during the applicable period and the immediately preceding period will
be included at its cost basis value and the Net Operating Income attributable to
such Eligible Unencumbered Property shall be excluded from the calculation of
the Value of Unencumbered Properties, and (ii) the Net Operating Income
attributable to any

16

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

 

Eligible Unencumbered Property sold or otherwise transferred during the
applicable period shall be excluded from the calculation of the Value of
Unencumbered Properties.

     Wholly-owned Subsidiary. Any single purpose entity which is a Subsidiary of
FPLP and of which FPLP at all times owns directly or indirectly (through a
Subsidiary or Subsidiaries) 100% of the outstanding voting or controlling
interests and of the economic interests.

     “Without Recourse” or “without recourse”. With reference to any obligation
or liability, any obligation or liability for which the obligor thereunder is
not liable or obligated other than as to its interest in a designated Real
Estate Asset or other specifically identified asset only, subject to such
limited exceptions to the non-recourse nature of such obligation or liability,
such as fraud, misappropriation and misapplication indemnities, as are usual and
customary in like transactions involving institutional lenders at the time of
the incurrence of such obligation or liability, and to usual and customary
environmental indemnification obligations in connection with such designated
Real Estate Asset.

     §1.2. Rules of Interpretation.

     (i) A reference to any document or agreement shall include such document or
agreement as amended, modified or supplemented from time to time in accordance
with its terms or the terms of this Agreement.

     (ii) The singular includes the plural and the plural includes the singular.

     (iii) A reference to any law includes any amendment or modification to such
law.

     (iv) A reference to any Person includes its permitted successors and
permitted assigns.

     (v) Accounting terms not otherwise defined herein have the meanings
assigned to them by generally accepted accounting principles applied on a
consistent basis by the accounting entity to which they refer.

     (vi) The words “include”, “includes” and “including” are not limiting.

     (vii) All terms not specifically defined herein or by generally accepted
accounting principles, which terms are defined in the Uniform Commercial Code as
in effect in Massachusetts, have the meanings assigned to them therein.

     (viii) Reference to a particular “§” refers to that section of this
Agreement unless otherwise indicated.

     (ix) The words “herein”, “hereof”, “hereunder” and words of like import
shall refer to this Agreement as a whole and not to any particular section or
subdivision of this Agreement.

17

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

 

     §2. THE REVOLVING CREDIT FACILITY.

     §2.1 Commitment to Lend. Subject to the provisions of §2.4 and the other
terms and conditions set forth in this Agreement, each of the Lenders severally
agrees to lend to the Borrower, and the Borrower may borrow, repay, and reborrow
from each Lender from time to time between the Closing Date and the Maturity
Date upon notice by the Borrower to the Agent (with copies to the Agent for each
Lender) given in accordance with §2.4, such sums as are requested by the
Borrower up to a maximum aggregate principal amount outstanding (after giving
effect to all amounts requested) at any one time equal to such Lender’s
Commitment minus, without double counting, an amount equal to such Lender’s
Commitment Percentage multiplied by the sum of all Reimbursement Obligations to
the extent not yet deemed Revolving Credit Loans and the Maximum Drawing Amount;
provided that the sum of the outstanding amount of the Revolving Credit Loans
(after giving effect to all amounts requested), plus the Maximum Drawing Amount
and, without double counting the portion, if any, of any Letter of Credit which
is drawn and included in the Revolving Credit Loans, all outstanding
Reimbursement Obligations, shall not at any time exceed the lesser of (i) the
Total Commitment and (ii) the Availability at such time, and provided, further,
that at the time the Borrower requests a Revolving Credit Loan and after giving
effect to the making thereof: (i) in the case of any borrowing or other
extension of credit, all of the conditions in §13 (and in the case of the
initial borrowing on the Closing Date, also the conditions in §12) have been met
at the time of such request, and (ii) there has not occurred and is not
continuing (or will not occur by reason thereof) any Default or Event of
Default.

     The Revolving Credit Loans shall be made pro rata in accordance with each
Lender’s Commitment Percentage. Each request for a Revolving Credit Loan made
pursuant to §2.4 shall constitute a representation and warranty by the Borrower
that the conditions set forth in §12 have been satisfied as of the Closing Date
and that the conditions set forth in §13 have been satisfied on the date of such
request and will be satisfied on the proposed Drawdown Date of the requested
Loan or issuance of Letter of Credit, as the case may be, provided that the
making of such representation and warranty by the Borrower shall not limit the
right of any Lender not to lend if such conditions have not been met. No
Revolving Credit Loan or other extension of credit shall be required to be made
by any Lender unless all of the conditions contained in §12 have been satisfied
as of the Closing Date with respect to the initial Revolving Credit Loan or
issuance of Letter of Credit, and unless all of the conditions set forth in §13
have been satisfied at the time of any request for a Revolving Credit Loan or
other extension of credit and on the Drawdown Date therefor.

     §2.2. The Revolving Credit Notes. The Revolving Credit Loans shall be
evidenced by the Revolving Credit Notes. A Revolving Credit Note shall be
payable to the order of each Lender in an aggregate principal amount equal to
such Lender’s Commitment. The Borrower irrevocably authorizes each Lender to
make or cause to be made, at or about the time of the Drawdown Date of any
Revolving Credit Loan or at the time of receipt of any payment of principal on
such Lender’s Revolving Credit Note, an appropriate notation on such Lender’s
applicable Note Record reflecting the making of such Revolving Credit Loan or
(as the case may be) the receipt of such payment. The outstanding amount of the
Revolving Credit Loans set forth on such applicable Note Record shall be prima
facie evidence of the principal amount thereof owing and unpaid to such Lender,
but the failure to record, or any error in so recording, any such amount on such
Note Record shall not limit or otherwise affect the rights and

18

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

 

obligations of the Borrower hereunder or under any Revolving Credit Note to make
payments of principal of or interest on any Revolving Credit Note when due.

     §2.3. Interest on Revolving Credit Loans; Fees.

          (a) Each Base Rate Loan shall bear interest for the period commencing
with the Drawdown Date thereof and ending on the last day of the Interest Period
with respect thereto (unless earlier paid in accordance with §3.2) at a rate
equal to the Base Rate plus the Applicable Base Rate Margin.

          (b) Each Libor Rate Loan shall bear interest for the period commencing
with the Drawdown Date thereof and ending on the last day of the Interest Period
with respect thereto (unless earlier paid in accordance with §3.2) at a rate
equal to the Libor Rate determined for such Interest Period plus the Applicable
Libor Margin.

          (c) With reference to Base Rate Loans and Libor Rate Loans, the
“Applicable Base Rate Margin” and the “Applicable Libor Margin” shall be equal
to (A) from the Closing Date through the end of the fiscal month in which the
financial statements required to be delivered pursuant to §8.4(b) for the fiscal
quarter of the Borrower ending December 31, 2004 are delivered to the Agent, a
percentage equal to 0% for the Applicable Base Rate Margin and 1.70% for the
Applicable Libor Margin, and (B) thereafter, the percentage determined for each
Rate Period by reference to the Table below:

Table

Applicable Margin

                              Applicable             Base Rate Total Leverage
Ratio

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

  Applicable Libor Margin

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

  Margin

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

a) less than or equal to 65% but greater than 60%
    2.50 %     0.50 %
c) less than or equal to 60% but greater than 55%
    2.00 %     0.10 %
d) less than or equal to 55% but greater than 50%
    1.85 %     0.00 %
e) less than or equal to 50% but greater than 45%
    1.70 %     0.00 %

19

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

 

For purposes of determining the Applicable Base Rate Margin and the Applicable
Libor Margin, the Consolidated Total Leverage Ratio (§10.1 hereof) will be
tested quarterly, commencing with the fiscal quarter of the Borrower ending
December 31, 2004, based on the annual or quarterly financial statements
required to be delivered pursuant to §8.4(a) or 8.4(b), respectively. For
purposes of determining the interest rate for any Rate Period hereunder, any
interest rate change shall be effective on the first day of the fiscal month
immediately following the date on which the financial statements required to be
delivered pursuant to §8.4(a) or §8.4(b) are delivered to the Agent, together
with a notice to the Agent (which shall be verified by the Agent) specifying any
change in the Applicable Base Rate Margin and/or the Applicable Libor Margin. If
the Borrower has failed to timely deliver the financial statements required to
be delivered by it pursuant to §8.4(a) or §8.4(b), then in addition to the other
rights and remedies of the Lenders hereunder, the Applicable Base Rate Margin
and the Applicable Libor Margin that are then in effect shall automatically be
increased to the next highest level until such financial statements are
delivered.

          (d) The Borrower unconditionally promises to pay interest on each
Revolving Credit Loan in arrears on each Interest Payment Date with respect
thereto, and when the principal of such Revolving Credit Loan is due (whether at
maturity, by reason of acceleration or otherwise).

          (e) The Borrower agrees to pay to the Agent, for the accounts of the
Lenders in accordance with their respective Commitment Percentages, from the
Closing Date through the Maturity Date, a facility fee (the “Facility Fee”)
calculated at the rate of (i) for any day when the outstanding principal balance
of the Loans is less than 50% of the Total Commitment, 0.25% per annum, and
(ii) for any day when the outstanding principal balance of the Loans is greater
than or equal to 50% of the Total Commitment, 0.15% per annum, in each case
calculated on the average daily amount, during each fiscal quarter or portion
thereof, of the unborrowed portion of the Total Commitment. The Facility Fee
shall be payable quarterly in arrears on the fifth Business Day of each calendar
quarter for the immediately preceding calendar quarter commencing on the first
such date following the Closing Date through the Maturity Date, with a final
payment on the Maturity Date.

          (f) The Borrower shall pay to the Agent the following Letter of Credit
fees (in each case, a “Letter of Credit Fee”): (i) a fee in an amount equal to
the Applicable L/C Percentage of the undrawn amount of each outstanding Letter
of Credit, which fee shall be for the accounts of the Lenders (including the
Fronting Bank) pro rata in accordance with their respective Commitment
Percentages, and (ii) a fee in an amount equal to 0.125% per annum for the
account of the Fronting Bank. Each Letter of Credit Fee shall be payable
quarterly in arrears on the fifth Business Day of each calendar quarter for the
immediately preceding calendar quarter, with a final payment on the Maturity
Date or any earlier date on which the Commitments shall terminate (which Letter
of Credit Fee shall be pro-rated for any calendar quarter in which such Letter
of Credit is issued, drawn upon or otherwise reduced or terminated). In
addition, the Borrower shall pay to Issuing Lender for its own account , upon
issuance, the standard issuance, documentation and service charges for Letters
of Credit issued from time to time by Issuing Lender.

20

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

 

     §2.4. Requests for Revolving Credit Loans.

     The following provisions shall apply to each request by the Borrower for a
Revolving Credit Loan:

     (i) The Borrower shall submit a Completed Loan Request to the Agent,
together with a duplicate copy of such Completed Loan Request for each Lender
which is then a party to this Agreement at the time such loan request is made.
Except as otherwise provided herein, each Completed Loan Request shall be in a
minimum amount of $500,000 or an integral multiple of $100,000 in excess
thereof. Each Completed Loan Request shall be irrevocable and binding on the
Borrower and shall obligate the Borrower to accept the Revolving Credit Loans
requested from the Lenders on the proposed Drawdown Date.

     (ii) Each Completed Loan Request shall be delivered by the Borrower to the
Agent by 10:00 a.m. (x) on the Business Day of the proposed Drawdown Date of any
Base Rate Loan, and (y) at least two (2) Business Days prior to the proposed
Drawdown Date of any Libor Rate Loan.

     (iii) Each Completed Loan Request shall include a completed writing in the
form of Exhibit B hereto specifying: (1) the principal amount of the Revolving
Credit Loan requested, (2) the proposed Drawdown Date of such Revolving Credit
Loan, (3) the Interest Period applicable to such Revolving Credit Loan, and (4)
the Type of such Revolving Credit Loan being requested, and certifying that,
both before and after giving effect to such requested Revolving Credit Loan, no
Default or Event of Default exists or will exist under this Agreement or any
other Loan Document and that, after giving effect to the Requested Revolving
Credit Loan (and all other outstanding Revolving Credit Loans and Letters of
Credit), the Borrower is in compliance with Availability.

     (iv) No Lender shall be obligated to fund any Revolving Credit Loan unless:

     (a) a Completed Loan Request has been timely received by the Agent as
provided in subsection (i) above; and

     (b) both before and after giving effect to the Revolving Credit Loan to be
made pursuant to the Completed Loan Request, all of the conditions contained in
§12 shall have been satisfied as of the Closing Date, with respect to the
initial advance only, and all of the conditions set forth in §13 shall have been
met, including, without limitation, the condition under §13.1 that there be no
Default or Event of Default under this Agreement.

     (v) The Agent will promptly notify each Lender of any Completed Loan
Request and will cause a copy thereof to be delivered to each Lender on the same
Business Day received, or, in the case of a Libor Rate Loan, the next Business
Day, in each case absent circumstances outside of its control.

21

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

 

     §2.5. Conversion Options.

          (a) The Borrower may elect from time to time to convert any
outstanding Revolving Credit Loan to a Revolving Credit Loan of another Type,
provided that (i) subject to the further proviso at the end of this §2.5(a) and
subject to §2.5(b) and §2.5(d), with respect to any conversion of a Base Rate
Loan to a Libor Rate Loan (or a continuation of a Libor Rate Loan, as provided
in §2.5(b)), the Borrower shall give the Agent (with copies to the Agent for
each Lender) at least three (3) Business Days’ prior written notice of such
election, which such notice must be received by the Agent by 10:00 a.m. on any
Business Day; and (ii) no Loan may be converted into a Libor Rate Loan when any
Default or Event of Default has occurred and is continuing. All or any part of
outstanding Revolving Credit Loans of any Type may be converted as provided
herein, provided that each Conversion Request relating to the conversion of a
Base Rate Loan to a Libor Rate Loan shall be for an amount equal to $1,000,000
or an integral multiple of $100,000 in excess thereof and shall be irrevocable
by the Borrower.

          (b) Any Revolving Credit Loan of any Type may be continued as such
upon the expiration of the Interest Period with respect thereto (i) in the case
of Base Rate Loans, automatically and (ii) in the case of Libor Rate Loans by
compliance by the Borrower with the notice provisions contained in §2.5(a)(i);
provided that no Libor Rate Loan may be continued as such when any Default or
Event of Default has occurred and is continuing but shall be automatically
converted to a Base Rate Loan on the last day of the first Interest Period
relating thereto ending during the continuance of any Default or Event of
Default. The Borrower shall notify the Agent promptly when any such automatic
conversion contemplated by this §2.5(b) is scheduled to occur.

          (c) In the event that the Borrower does not notify the Agent of its
election hereunder with respect to any Revolving Credit Loan in accordance with
the terms hereof, such Loan shall be automatically converted to a Base Rate Loan
at the end of the applicable Interest Period.

          (d) The Borrower may not request or elect a Libor Rate Loan pursuant
to §2.4, elect to convert a Base Rate Loan to a Libor Rate Loan pursuant to
§2.5(a) or elect to continue a Libor Rate Loan pursuant to §2.5(b) if, after
giving effect thereto, there would be greater than five (5) Libor Rate Loans
then outstanding. Any Loan Request or Conversion Request for a Libor Rate Loan
that would create greater than five (5) Libor Rate Loans outstanding shall be
deemed to be a Loan Request or Conversion Request for a Base Rate Loan. By way
of explanation of the foregoing, in the event that the Borrower wishes to
convert or continue two or more Loans into one Libor Rate Loan on the same day
and for identical Interest Periods (or borrow an additional Revolving Credit
Loan simultaneously with converting or continuing a Revolving Credit Loan for
identical Interest Periods), such Libor Rate Loan shall constitute one single
Libor Rate Loan for purposes of this clause (d).

     §2.6. Funds for Revolving Credit Loans.

          (a) Subject to the other provisions of this §2, not later than
11:00 a.m. (Boston time) on the proposed Drawdown Date of any Revolving Credit
Loan, each of the Lenders will make available to the Agent, at the Agent’s Head
Office, in immediately available funds, the amount of such Lender’s Commitment
Percentage of the amount of the requested Revolving Credit Loan. Upon receipt
from each Lender of such amount, the Agent will make available to

22

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

 

the Borrower the aggregate amount of such Revolving Credit Loan made available
to the Agent by the Lenders. All such funds received by the Agent by 11:00 a.m.
(Boston time) on any Business Day will be made available to the Borrower not
later than 2:00 p.m. on the same Business Day; funds received after such time
will be made available by not later than 11:00 a.m. on the next Business Day.
The failure or refusal of any Lender to make available to the Agent at the
aforesaid time and place on any Drawdown Date the amount of its Commitment
Percentage of the requested Revolving Credit Loan shall not relieve any other
Lender from its several obligation hereunder to make available to the Agent the
amount of its Commitment Percentage of any requested Revolving Credit Loan but
in no event shall the Agent (in its capacity as Agent) have any obligation to
make any funding or shall any Lender be obligated to fund more than its
Commitment Percentage of the requested Revolving Credit Loan or to increase its
Commitment Percentage on account of such failure or otherwise.

          (b) The Agent may, unless notified to the contrary by any Lender prior
to a Drawdown Date, assume that such Lender has made available to the Agent on
such Drawdown Date the amount of such Lender’s Commitment Percentage of the
Revolving Credit Loan to be made on such Drawdown Date, and the Agent may (but
it shall not be required to), in reliance upon such assumption, make available
to the Borrower a corresponding amount. If any Lender makes available to the
Agent such amount on a date after such Drawdown Date, such Lender shall pay to
the Agent on demand an amount equal to the product of (i) the average, computed
for the period referred to in clause (iii) below, of the weighted average
interest rate paid by the Agent for federal funds acquired by the Agent during
each day included in such period, multiplied by (ii) the amount of such Lender’s
Commitment Percentage of such Revolving Credit Loan, multiplied by (iii) a
fraction, the numerator of which is the number of days that elapsed from and
including such Drawdown Date to the date on which the amount of such Lender’s
Commitment Percentage of such Revolving Credit Loan shall become immediately
available to the Agent, and the denominator of which is 365. A statement of the
Agent submitted to such Lender with respect to any amounts owing under this
paragraph shall be prima facie evidence of the amount due and owing to the Agent
by such Lender.

     §2.7. Reduction of Commitment. The Borrower shall have the right at any
time and from time to time upon five (5) Business Days’ prior written notice to
the Agent (with copies to the Agent for each Lender) to reduce by $5,000,000 or
an integral multiple of $1,000,000 in excess thereof (but not below $20,000,000
or, if greater, the Maximum Drawing Amount) or terminate entirely the unborrowed
portion of the then Total Commitment, whereupon the Commitments of the Lenders
shall be reduced pro rata in accordance with their respective Commitment
Percentages by the amount specified in such notice or, as the case may be,
terminated. Upon the effective date of any such reduction or termination, the
Borrower shall pay to the Agent for the respective accounts of the Lenders all
accrued and unpaid interest on the amount of such reduction and the full amount
of the Facility Fee then accrued and unpaid on the amount of the reduction. No
reduction or termination of the Commitments may be reinstated.

     §2.8. Increase in Total Commitment. At any time (but at least 60 days prior
to the Maturity Date), the Borrower shall have the right, upon written notice to
the Agent and satisfaction of the Increase Conditions, to cause the Total
Commitment to increase by an amount not at any time exceeding $75,000,000 (the
“Increase”), in which event Schedule 2 will be deemed to be amended to reflect
the increased Commitment of each Lender, if any, that has agreed in writing to
an increase and to add any third party financial institution that may have
become a party to, and a “Lender” under, this Agreement in connection with the
Increase (and

23

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

 

the Agent is hereby authorized to effect such amendment on behalf of the Lenders
and the Borrower); provided, however, that it shall be a condition precedent to
the effectiveness of the Increase that the Increase Conditions shall have been
satisfied. In the event that the Increase results in any change to the
Commitment Percentage of any Lender, then on the effective date of such Increase
in the Total Commitment (i) any new Lender, and any existing Lender whose
Commitment has increased, shall pay to the Agent such amounts as are necessary
to fund its new or increased Commitment Percentage of all existing Revolving
Credit Loans, (ii) the Agent will use the proceeds thereof to pay to all Lenders
whose Commitment Percentage is decreasing such amounts as are necessary so that
each such Lender’s participation in existing Revolving Credit Loans will be
equal to its adjusted Commitment Percentage, and (iii) if the effective date of
such Increase in the Total Commitment occurs on a date other than the last day
of an Interest Period applicable to any outstanding Libor Rate Loan, the
Borrower will be responsible for Libor Breakage Costs and any other amounts
payable pursuant to §4.8 on account of the payments made pursuant to clause
(ii) above. No Lender shall have any obligation to increase its Commitment in
connection with the Increase.

     §2.9. Extension of Revolving Credit Maturity Date. At least 60 days but in
no event more than 120 days prior to December 31, 2006, the Borrower, by written
notice to the Agent (with copies for each Lender), may request an extension of
the Maturity Date by a period of one year from the Maturity Date then in effect
(the “Extension”). The Extension shall become effective on December 31, 2006 so
long as (i) the Borrower has paid to the Agent on such date, for the ratable
accounts of the Lenders, an extension fee in an amount equal to 25 basis points
on the Total Commitment in effect on such date, and (ii) no Default or Event of
Default has occurred and is continuing on such date and all representations and
warranties contained in the Loan Documents are true and correct as of such date
(except to the extent that such representations and warranties relate expressly
to an earlier date). The notice referred to in the first sentence of this §2.9
shall constitute and shall be deemed to be a certification by the Borrower as to
the truth and accuracy of the statements contained in clause (ii) of the
preceding sentence.

     §3. REPAYMENT OF THE LOANS.

     §3.1. Maturity. The Borrower promises to pay on the Maturity Date, and
there shall become absolutely due and payable on the Maturity Date, all unpaid
principal of the Revolving Credit Loans outstanding on such date, together with
any and all accrued and unpaid interest thereon, the unpaid balance of the
Facility Fee accrued through such date, and any and all other unpaid amounts due
under this Agreement, the Notes or any other of the Loan Documents.

     §3.2. Optional Repayments of Revolving Credit Loans. The Borrower shall
have the right, at its election, to prepay the outstanding amount of the
Revolving Credit Loans, in whole or in part, at any time without penalty or
premium; provided that the outstanding amount of any Libor Rate Loans may not be
prepaid on a date other than the last day of an Interest Period unless the
Borrower pays the Libor Breakage Costs for each Libor Rate Loan so prepaid at
the time of such prepayment. The Borrower shall give the Agent (with copies to
the Agent for each Lender), no later than 10:00 a.m., Boston, Massachusetts
time, at least two (2) Business Days’ prior written notice of any prepayment
pursuant to this §3.2 of any Base Rate Loans, and at least four (4) Business
Days’ notice of any proposed prepayment pursuant to this §3.2 of Libor Rate
Loans, specifying the proposed date of prepayment of Revolving Credit Loans and
the principal amount to be prepaid. Each such partial prepayment of the Loans
shall be in an amount equal to

24

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

 

$1,000,000 or an integral multiple of $1,000,000 in excess thereof or, if less,
the outstanding balance of the Revolving Credit Loans then being repaid, shall
be accompanied by the payment of all charges, if any, outstanding on all
Revolving Credit Loans so prepaid and of all accrued interest on the principal
prepaid to the date of payment, and shall be applied, in the absence of
instruction by the Borrower, first to the principal of Base Rate Loans and then
to the principal of Libor Rate Loans.

     §3.3 Mandatory Repayment of Loans. If at any time the sum of the
outstanding amount of the Loans, plus the Maximum Drawing Amount, plus without
double counting any Revolving Credit Loans, the outstanding Reimbursement
Obligations, if any, exceeds the lesser of (i) the Total Commitment at such
time, or (ii) the Availability at such time, the Borrower shall immediately pay
to the Agent an amount in cash necessary to eliminate such excess, such amount
to be applied, in the absence of instruction by the Borrower, first to the
principal of Base Rate Loans and then to the principal of Libor Rate Loans.

     §4. CERTAIN GENERAL PROVISIONS.

     §4.1. Funds for Payments.

          (a) All payments of principal, interest, fees, and any other amounts
due hereunder or under any of the other Loan Documents shall be made to the
Agent, for the respective accounts of the Lenders or (as the case may be) the
Agent, at the Agent’s Head Office, in each case in Dollars and in immediately
available funds. The Borrower shall make each payment of principal of and
interest on the Loans and Reimbursement Obligations which are not converted to a
Loan hereunder and of fees hereunder not later than 12:00 p.m. (Boston,
Massachusetts time) on the due date thereof.

          (b) All payments by the Borrower hereunder and under any of the other
Loan Documents shall be made without setoff or counterclaim and free and clear
of and without deduction for any taxes, levies, imposts, duties, charges, fees,
deductions, withholdings, compulsory liens, restrictions or conditions of any
nature now or hereafter imposed or levied by any jurisdiction or any political
subdivision thereof or taxing or other authority therein unless the Borrower is
compelled by law to make such deduction or withholding. If the Borrower is
compelled by law to make any such deduction or withholding with respect to any
amount payable by it hereunder or under any of the other Loan Documents (except
with respect to taxes on the income or profits of the Agent or any Lender), the
Borrower shall pay to the Agent, for the account of the Lenders or (as the case
may be) the Agent, on the date on which such amount is due and payable hereunder
or under such other Loan Document, such additional amount in Dollars as shall be
necessary to enable the Lenders to receive the same net amount which the Lenders
would have received on such due date had no such deduction or withholding
obligation been imposed upon the Borrower. The Borrower will deliver promptly to
the Agent (with copies to the Agent for each Lender) certificates or other valid
vouchers for all taxes or other charges deducted from or paid with respect to
payments made by the Borrower hereunder or under such other Loan Document.

     §4.2. Computations. All computations of interest on Libor Rate Loans and of
other fees to the extent applicable shall be based on a 360-day year and all
computations of interest on Base Rate Loans shall be based on a 365/366 day
year, in each case paid for the actual number of days elapsed. Except as
otherwise provided in the definition of the term “Interest Period” with respect

25

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

 

to Libor Rate Loans, whenever a payment hereunder or under any of the other Loan
Documents becomes due on a day that is not a Business Day, the due date for such
payment shall be extended to the next succeeding Business Day, and interest
shall accrue during such extension. The outstanding amount of the Loans as
reflected on the Note Records or record attached to any other Note from time to
time shall constitute prima facie evidence of the principal amount thereof.

     §4.3. Inability to Determine Libor Rate. In the event, prior to the
commencement of any Interest Period relating to any Libor Rate Loan, the Agent
shall determine that adequate and reasonable methods do not exist for
ascertaining the Libor Rate that would otherwise determine the rate of interest
to be applicable to any Libor Rate Loan during any Interest Period, the Agent
shall forthwith give notice of such determination (which shall be conclusive and
binding on the Borrower) to the Borrower and the Lenders. In such event (a) any
Loan Request with respect to Libor Rate Loans shall be automatically withdrawn
and shall be deemed a request for Base Rate Loans, (b) each Libor Rate Loan will
automatically, on the last day of the then current Interest Period applicable
thereto, become a Base Rate Loan, and (c) the obligations of the Lenders to make
Libor Rate Loans shall be suspended, in each case unless and until the Agent
determines that the circumstances giving rise to such suspension no longer
exist, whereupon the Agent shall so notify the Borrower and the Lenders.

     §4.4. Illegality. Notwithstanding any other provisions herein, if any
present or future law, regulation, treaty or directive or in the interpretation
or application thereof shall make it unlawful for any Lender to make or maintain
Libor Rate Loans, such Lender shall forthwith give notice of such circumstances
to the Agent and the Borrower and thereupon (a) the Commitment of such Lender to
make Libor Rate Loans or convert Base Rate Loans to Libor Rate Loans shall
forthwith be suspended and (b) such Lender’s Commitment Percentage of Libor Rate
Loans then outstanding shall be converted automatically to Base Rate Loans on
the last day of each Interest Period applicable to such Libor Rate Loans or
within such earlier period as may be required by law, all until such time as it
is no longer unlawful for such Lender to make or maintain Libor Rate Loans. The
Borrower hereby agrees promptly to pay the Agent for the account of such Lender,
upon demand, any additional amounts necessary to compensate such Lender for
Libor Breakage Costs incurred by such Lender in making any conversion required
by this §4.4 prior to the last day of an Interest Period.

     §4.5. Additional Costs, Etc. If any present or future applicable law, which
expression, as used herein, includes statutes, rules and regulations thereunder
and interpretations thereof by any competent court or by any governmental or
other regulatory body or official charged with the administration or the
interpretation thereof and requests, directives, instructions and notices at any
time or from time to time hereafter made upon or otherwise issued to any Lender
or the Agent by any central bank or other fiscal, monetary or other authority
(whether or not having the force of law, but if not having the force of law,
then generally applied by the Lenders or the Agent with respect to similar
loans), shall:

          (a) subject any Lender or the Agent to any tax, levy, impost, duty,
charge, fee, deduction or withholding of any nature with respect to this
Agreement, the other Loan Documents, any Letters of Credit, such Lender’s
Commitment or the Loans (other than taxes based upon or measured by the income
or profits of such Lender or the Agent), or

26

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

 

          (b) change the basis of taxation (except for changes in taxes on
income or profits) of payments to any Lender of the principal of or the interest
on any Loans or any other amounts payable to the Agent or any Lender under this
Agreement or the other Loan Documents, or

          (c) impose or increase or render applicable (other than to the extent
specifically provided for elsewhere in this Agreement) any special deposit,
reserve, assessment, liquidity, capital adequacy or other similar requirements
(whether or not having the force of law) against assets held by, or deposits in
or for the account of, or loans by, or letters of credit issued by, or
commitments of an office of any Lender, or

          (d) impose on any Lender or the Agent any other conditions or
requirements with respect to this Agreement, the other Loan Documents, the
Loans, such Lender’s Commitment, or any class of loans or commitments of which
any of the Loans or such Lender’s Commitment forms a part;

and the result of any of the foregoing is

     (i) to increase the cost to any Lender of making, funding, issuing,
renewing, extending or maintaining any of the Loans or such Lender’s Commitment
or any Letter of Credit, or

     (ii) to reduce the amount of principal, interest, Reimbursement Obligation
or other amount payable to such Lender or the Agent hereunder on account of such
Lender’s Commitment, any Letter of Credit or any of the Loans, or

     (iii) to require such Lender or the Agent to make any payment or to forego
any interest or Reimbursement Obligation or other sum payable hereunder, the
amount of which payment or foregone interest or Reimbursement Obligation or
other sum is calculated by reference to the gross amount of any sum receivable
or deemed received by such Lender or the Agent from the Borrower hereunder,

then, and in each such case, the Borrower will, upon demand made by the Agent or
such Lender (such demand to be made promptly by the Agent or such Lender upon
the making of any such determination), at any time and from time to time and as
often as the occasion therefor may arise, pay to such Lender or the Agent such
additional amounts as such Lender or the Agent shall determine in good faith to
be sufficient to compensate such Lender or the Agent for such additional cost,
reduction, payment or foregone interest or other sum, provided that such Lender
or the Agent is generally imposing similar charges on its other similarly
situated borrowers. The Agent shall provide the Borrower with a calculation, in
reasonable detail, of such amounts in accordance with its customary practices.

     §4.6. Capital Adequacy. If any future law, governmental rule, regulation,
policy, guideline or directive (whether or not having the force of law, but if
not having the force of law, then generally applied by the Lenders with respect
to similar loans) or the interpretation thereof by a court or governmental
authority with appropriate jurisdiction affects the amount of capital required
or expected to be maintained by banks or bank holding companies and any Lender
or the Agent determines that the amount of capital required to be maintained by
it is increased by or

27

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

 

based upon the existence of Loans made or deemed to be made pursuant hereto,
then such Lender or the Agent may notify the Borrower of such fact, and the
Borrower shall pay to such Lender or the Agent from time to time, upon demand
made by the Agent or such Lender (such demand to be made promptly by the Agent
or such Lender upon the making of any such determination), as an additional fee
payable hereunder, such amount as such Lender or the Agent shall determine
reasonably and in good faith and certify in a notice to the Borrower to be an
amount that will adequately compensate such Lender in light of these
circumstances for its increased costs of maintaining such capital. Each Lender
and the Agent shall allocate such cost increases among its customers in good
faith and on an equitable basis, and will not charge the Borrower unless it is
generally imposing a similar charge on its other similarly situated borrowers.
The Agent shall provide the Borrower with a calculation, in reasonable detail,
of such amounts in accordance with its customary practices.

     §4.7. Certificate; Limitations. A certificate setting forth any additional
amounts payable pursuant to §§4.5 or 4.6 and a brief explanation of such amounts
which are due, submitted by any Lender or the Agent to the Borrower, shall be
prima facie evidence that such amounts are due and owing. Notwithstanding
anything to the contrary contained in this Article 5, to the extent reasonably
possible, each Lender shall designate an alternate lending office in the
continental United States to make the Loans in order to reduce any liability of
Borrower to such Lender under §§4.4, 4.5 or 4.6 or to avoid the unavailability
of a Libor Rate Loan, so long as such designation is not disadvantageous to such
Lender.

     §4.8. Indemnity. In addition to the other provisions of this Agreement
regarding such matters, the Borrower agrees to indemnify the Agent and each
Lender and to hold the Agent and each Lender harmless from and against any loss,
cost or expense (including loss of anticipated profits) that the Agent or such
Lender may sustain or incur as a consequence of (a) a default by the Borrower in
the payment of any principal amount of or any interest on any Libor Rate Loans
as and when due and payable, including any such loss or expense arising from
interest or fees payable by the Agent or such Lender to lenders of funds
obtained by it in order to maintain its Libor Rate Loans, (b) the failure by the
Borrower to make a borrowing or conversion after the Borrower has given a
Completed Loan Request for a Libor Rate Loan or a Conversion Request for a Libor
Rate Loan, and (c) the making of any payment of a Libor Rate Loan or the making
of any conversion of any such Loan to a Base Rate Loan on a day that is not the
last day of the applicable Interest Period with respect thereto, including
interest or fees payable by the Agent or a Lender to lenders of funds obtained
by it in order to maintain any such Libor Rate Loans.

     §4.9. Interest on Overdue Amounts; Late Charge. Notwithstanding anything to
the contrary stated herein, upon the occurrence and during the continuance of an
Event of Default, at the option of the Majority Lenders, to the extent permitted
by applicable law, the unpaid balance of all Obligations shall bear interest at
the rate otherwise applicable thereto plus 2%, compounded daily until such Event
of Default is cured or waived to the satisfaction of the Agent and the required
Lenders. In addition, the Borrower shall pay a late charge equal to five percent
(5%) of any amount of interest charges on the Loans which is not paid within ten
(10) days of the date when due.

     §5. LETTERS OF CREDIT.

28

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

 

     §5.1. Letter of Credit Commitments.

          §5.1.1. Commitment to Issue Letters of Credit. Subject to the terms
and conditions set forth in this Agreement, at any time and from time to time
from the Closing Date through the day that is one-hundred twenty (120) days
prior to the Maturity Date, the Issuing Lender shall issue such Letters of
Credit as the Borrower may request upon the delivery of a written request on the
Fronting Bank’s customary form as part of a Completed Loan Request (a “Letter of
Credit Application”), the Fronting Bank on behalf of the Lenders and in reliance
upon the agreement of the Lenders set forth in §5.1.4 and upon the
representations and warranties of the Borrower contained herein, agrees, in its
individual capacity, to issue, extend and renew for the account of the Borrower
one or more letters of credit (individually, a “Letter of Credit”), in such form
as may be requested from time to time by the Borrower and agreed to by the
Fronting Bank; provided, however, that, after giving effect to such Completed
Loan Request, (a) the Maximum Drawing Amount plus all Reimbursement Obligations
(to the extent, if any, not yet deemed a Revolving Credit Loan pursuant to
§5.3), shall not exceed $10,000,000 at any one time and (b) the sum of (i) the
Maximum Drawing Amount and, without double counting, all Reimbursement
Obligations (to the extent, if any, not yet deemed a Revolving Credit Loan
pursuant to §5.3) and (ii) the amount of all Loans outstanding shall not exceed
the lesser of (x) the Total Commitment in effect at such time and (y) the
Availability at such time.

     Each Letter of Credit Application shall be executed by an officer of
Borrower. The Issuing Lender shall be entitled to conclusively rely on such
Person’s authority to request a Letter of Credit on behalf of Borrower. The
Issuing Lender shall have no duty to verify the authenticity of any signature
appearing on a Letter of Credit Request. The Borrower assumes all risks with
respect to the use of the Letters of Credit. Unless the Issuing Lender and the
Required Lenders otherwise consent, the term of any Letter of Credit shall not
exceed a period of time commencing on the issuance of the Letter of Credit and
ending on the date which is sixty (60) days prior to the Maturity Date (but in
any event the term shall not extend beyond the Maturity Date). The amount
available to be drawn under any Letter of Credit shall reduce on a
dollar-for-dollar basis the amount available to be drawn under the Total
Commitment as a Loan. Each Letter of Credit Application shall be submitted to
the Issuing Lender at least ten (10) Business Days (or such shorter period as
the Issuing Lender may approve) prior to the date upon which the requested
Letter of Credit is to be issued. Each such Letter of Credit Application shall
contain (i) a statement as to the purpose for which such Letter of Credit shall
be used (which purpose shall be in accordance with the terms of this Agreement),
and (ii) a certification by the chief financial or chief accounting officer of
Borrower that the Borrower is and will be in compliance with all covenants under
the Loan Documents after giving effect to the issuance of such Letter of Credit.
The Borrower shall further deliver to the Issuing Lender such additional
applications and documents as the Issuing Lender may require, in conformity with
the then standard practices of its letter of credit department, in connection
with the issuance of such Letter of Credit; provided that in the event of any
conflict, the terms of this Agreement shall control. The Issuing Lender shall,
if it approves of the content of the Letter of Credit request (which approval
shall not be unreasonably withheld), and subject to the conditions set forth in
this Agreement, issue the Letter of Credit on or before ten (10) Business Days
following receipt of the documents last due pursuant to §2.10(b). Each Letter of
Credit shall be in form and substance reasonably satisfactory to the Issuing
Lender in its reasonable discretion. Upon issuance of a Letter of Credit, the
Issuing Lender shall provide notice of the issuance of such Letter of Credit to
the Lenders and shall provide a copy of such Letter of Credit to any Lender that
requests a copy. Upon the issuance of a Letter of Credit, each Revolving Credit
Lender shall be deemed to have

29

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

 

purchased a participation therein from Issuing Lender in an amount equal to its
respective Commitment Percentage of the amount of such Letter of Credit. No
Lender’s obligation to participate in a Letter of Credit shall be affected by
any other Lender’s failure to perform as required herein with respect to such
Letter of Credit or any other Letter of Credit. The issuance of any supplement,
modification, amendment, renewal or extension to or of any Letter of Credit
shall be treated in all respects the same as the issuance of a new Letter of
Credit.

          §5.1.2. Letter of Credit Applications. Each Letter of Credit
Application shall be completed to the satisfaction of the Agent and the Fronting
Bank.

          §5.1.3. Terms of Letters of Credit. Each Letter of Credit issued,
extended or renewed hereunder shall, among other things, (i) provide for the
payment of sight drafts for honor thereunder when presented in accordance with
the terms thereof and when accompanied by the documents described therein, and
(ii) shall have an expiry date no later than one year after its issuance. Each
Letter of Credit so issued, extended or renewed shall be subject to the Uniform
Customs.

          §5.1.4. Obligations of Lenders with respect to Letters of Credit. Each
Lender severally agrees that it shall be absolutely liable, without regard to
the occurrence of any Default or Event of Default or any other condition
precedent whatsoever, to the extent of such Lender’s Commitment Percentage, to
reimburse the Fronting Bank on demand for the amount of each draft paid by the
Fronting Bank under each Letter of Credit (such agreement for a Lender being
called herein the “Letter of Credit Participation” of such Lender). Each such
payment made by a Lender shall be treated as a purchase by such Lender of a
participation in the Fronting Bank’s interest in such Letter of Credit and each
Lender shall share, in accordance with its respective Commitment Percentage, in
any interest (but not any fee payable solely for the account of the Fronting
Bank) which accrues and is payable by the Borrower pursuant to §5.2 or otherwise
in connection with such Letter of Credit.

          §5.2. Reimbursement Obligation of the Borrower. In order to induce the
Fronting Bank to issue, extend and renew each Letter of Credit and the Lenders
to participate therein, the Borrower hereby agrees to reimburse or pay to the
Fronting Bank, for the account of the Fronting Bank or (as the case may be) the
Lenders, with respect to each Letter of Credit issued, extended or renewed by
the Fronting Bank hereunder,

          (a) promptly upon notification by the Fronting Bank or the Agent that
any draft presented under such Letter of Credit is honored by the Fronting Bank,
or the Fronting Bank otherwise makes a payment with respect thereto, (i) the
amount paid by the Fronting Bank under or with respect to such Letter of Credit,
and (ii) any amounts payable pursuant to §5.5 under, or with respect to, such
Letter of Credit, and

          (b) upon the termination of the Total Commitment, or the acceleration
of the Reimbursement Obligations with respect to all Letters of Credit in
accordance with §14, an amount equal to the then Maximum Drawing Amount on all
Letters of Credit, which amount shall be held by the Agent in an
interest-bearing account (with interest to be added to such account) as cash
collateral for the benefit of the Lenders and the Agent for all Reimbursement
Obligations. Upon the expiration, termination or surrender without draw of any
Letter of Credit, the Agent shall release to the Borrower the cash collateral
amount applicable to such Letter of Credit.

30

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

 

     Each such payment shall be made to the Agent for the benefit of the
Fronting Bank or the Lenders, as applicable, at the Agent’s Head Office in
immediately available funds. Interest on any and all amounts not converted to a
Revolving Credit Loan pursuant to §5.3 and remaining unpaid by the Borrower
under this §5.2 at any time from the date such amounts become due and payable
(whether as stated in this §5.2, by acceleration or otherwise) until payment in
full (whether before or after judgment) shall be payable to the Agent for the
benefit of the Lenders on demand at the rate specified in §4.9 for overdue
principal on the Loans.

     §5.3. Letter of Credit Payments; Funding of a Loan. If any draft shall be
presented or other demand for payment shall be made under any Letter of Credit,
the Fronting Bank will use its reasonable efforts to notify the Borrower and the
Lenders, on or before the date the Fronting Bank intends to honor such drawing,
of the date and amount of the draft presented or demand for payment and of the
date and time when it expects to pay such draft or honor such demand for payment
and, except to the extent the amount of such draft becomes a Revolving Credit
Loan as set forth in this §5.3, Borrower shall reimburse Agent, as set forth in
§5.2. Notwithstanding anything contained in §5.2 or this §5.3 to the contrary,
however, unless Borrower shall have notified the Agent and Fronting Bank prior
to 11:00 a.m. (New York time) on the Business Day immediately prior to the date
of such drawing that Borrower intends to reimburse Fronting Bank for the amount
of such drawing with funds other than the proceeds of Revolving Credit Loans,
Borrower shall be deemed to have timely given a Completed Loan Request pursuant
to §2.4 to Agent, requesting a Base Rate Loan on the date on which such drawing
is honored and in an amount equal to the amount of such drawing. The Borrower
may thereafter convert any such Base Rate Loan to a Revolving Credit Loan of
another Type in accordance with §2.5. Each Lender shall, in accordance with
§2.6, make available such Lender’s Commitment Percentage of such Revolving
Credit Loan to Agent, the proceeds of which shall be applied directly by Agent
to reimburse Fronting Bank for the amount of such draw. In the event that any
Lender fails to make available to Agent the amount of such Lender’s Commitment
Percentage of such Revolving Credit Loan on the date of any drawing, Agent shall
be entitled to recover such amount on demand from such Lender plus any
additional amounts payable under §2.6(b) in the event of a late funding by a
Lender. Further, such Lender shall be deemed to have assigned any and all
payments made of principal and interest on its Loans, amounts due with respect
to its participations in Letters of Credit and any other amounts due to it
hereunder to the Agent to fund the amount of any drawn Letter of Credit which
such Lender was required to fund pursuant to this section until such amount has
been funded (as a result of such assignment or otherwise). If after the issuance
of a Letter of Credit pursuant to §2.10(c) by the Issuing Lender, but prior to
the funding of any portion thereof by a Lender, one of the events described in
§14.1(g) or (h) shall have occurred, each Lender will, on the date such
Revolving Credit Loan was to have been made, purchase an undivided participation
interest in the Letter of Credit in an amount equal to its Commitment Percentage
of the amount of such Letter of Credit. Each Lender will immediately transfer to
the Issuing Lender in immediately available funds the amount of its
participation and upon receipt thereof the Issuing Lender will deliver to such
Lender a Letter of Credit participation certificate dated the date of receipt of
such funds and in such amount. The Fronting Bank is irrevocably authorized by
the Borrower and each of the Lenders to honor draws on each Letter of Credit by
the beneficiary thereof in accordance with the terms of such Letter of Credit.
The responsibility of the Fronting Bank to the Borrower and the Lenders shall be
only to determine that the documents (including each draft) delivered under each
Letter of Credit in connection with such presentment shall be in conformity in
all material respects with such Letter of Credit in accordance with the Fronting
Bank’s customary practices.

31

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

 

     §5.4. Obligations Absolute. The obligations of the Borrower to the Lenders
under this Agreement with respect to Letters of Credit shall be absolute,
unconditional and irrevocable, and shall be paid and performed strictly in
accordance with the terms of this Agreement, under all circumstances whatsoever,
including, without limitation, the following circumstances: (i) any improper use
which may be made of any Letter of Credit or any improper acts or omissions of
any beneficiary or transferee of any Letter of Credit in connection therewith;
(ii) the existence of any claim, set-off, defense or any right which the
Borrower may have at any time against any beneficiary or any transferee of any
Letter of Credit (or persons or entities for whom any such beneficiary or any
such transferee may be acting) or the Lenders (other than the defense of payment
to the Lenders in accordance with the terms of this Agreement) or any other
person, whether in connection with any Letter of Credit, this Agreement, any
other Loan Document, or any unrelated transaction; (iii) any statement or any
other documents presented under any Letter of Credit proving to be insufficient,
forged, fraudulent or invalid in any respect or any statement therein being
untrue or inaccurate in any respect whatsoever; (iv) any breach of any agreement
between Borrower and any beneficiary or transferee of any Letter of Credit;
(v) any irregularity in the transaction with respect to which any Letter of
Credit is issued, including any fraud by the beneficiary or any transferee of
such Letter of Credit; (vi) payment by the Issuing Lender under any Letter of
Credit against presentation of a sight draft or a certificate which does not
comply with the terms of such Letter of Credit, provided that such payment shall
not have constituted gross negligence or willful misconduct on the part of the
Issuing Lender as determined by a court of competent jurisdiction after the
exhaustion of all applicable appeal periods, and (vii) any other circumstance or
happening whatsoever, whether or not similar to any of the foregoing, provided
that such other circumstances or happenings shall not have been the result of
gross negligence or willful misconduct on the part of the Issuing Lender as
determined by a court of competent jurisdiction after the exhaustion of all
applicable appeal periods. Borrower assumes all risks of the acts, omissions, or
misuse of any Letter of Credit by the beneficiary thereof. Neither Agent,
Issuing Lender nor any Lender will be responsible for (i) the form, validity,
sufficiency, accuracy, genuineness or legal effect of any Letter of Credit or
any document submitted by any party in connection with the issuance of any
Letter of Credit, even if such document should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) the form,
validity, sufficiency, accuracy, genuineness or legal effect of any instrument
transferring or assigning or purporting to transfer or assign any Letter of
Credit or the rights or benefits thereunder or proceeds thereof in whole or in
part, which may prove to be invalid or ineffective for any reason; (iii) failure
of any beneficiary of any Letter of Credit to comply fully with the conditions
required in order to demand payment under a Letter of Credit; (iv) errors,
omissions, interruptions or delays in transmission or delivery of any messages,
by mail, cable, telegraph, telex or otherwise; (v) errors in interpretation of
technical terms; (vi) any loss or delay in the transmission or otherwise of any
document or draft required by or from a beneficiary in order to make a
disbursement under a Letter of Credit or the proceeds thereof; (vii) for the
misapplication by the beneficiary of any Letter of Credit of the proceeds of any
drawing under such Letter of Credit; and (viii) for any consequences arising
from causes beyond the control of Agent or any Lender. None of the foregoing
will affect, impair or prevent the vesting of any of the rights or powers
granted to Agent, Issuing Lender or the Lenders hereunder. In furtherance and
extension and not in limitation or derogation of any of the foregoing, any act
taken or omitted to be taken by Agent, Issuing Lender or the other Lenders in
good faith will be binding on Borrower and will not put Agent, Issuing Lender or
the other Lenders under any resulting liability to Borrower.

32

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

 

     §5.5. Reliance by Issuer. The Fronting Bank and the Agent shall be entitled
to rely, and shall be fully protected in relying upon, any Letter of Credit,
draft, writing, resolution, notice, consent, certificate, affidavit, letter,
cablegram, telegram, telecopy, telex or teletype message, statement, order or
other document believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons and upon advice and statements of
legal counsel, independent accountants and other experts selected by the
Fronting Bank or the Agent. The Agent and the Fronting Bank shall be fully
justified in failing or refusing to take any action under this §5 (other than
the issuance of a Letter of Credit pursuant to a Letter of Credit Application
and otherwise in accordance with the terms of this Agreement) unless it shall
first have received such advice or concurrence of the Majority Lenders (or such
other number or percentage of the Lenders as may be required by this Agreement)
as it reasonably deems appropriate or it shall first be indemnified to its
reasonable satisfaction by the Lenders against any and all liability and expense
which may be incurred by it by reason of taking or continuing to take any such
action. The Agent and any Fronting Bank shall in all cases be fully protected by
the Lenders in acting, or in refraining from acting, under this §5 in accordance
with a request of the Majority Lenders (or such other number or percentage of
the Lenders as may be required by this Agreement), and such request and any
action taken or failure to act pursuant thereto shall be binding upon the
Lenders and all future holders of the Notes or of a Letter of Credit
Participation.

     §6. RECOURSE OBLIGATIONS. The Obligations are full recourse obligations of
the Borrower, and all of the respective assets and properties of the Borrower
shall be available for the payment in full in cash and performance of the
Obligations. The obligations of the Trust under the Guaranty are full recourse
obligations of the Trust, and all of the respective assets and properties of the
Trust shall be available for the payment in full in cash and performance
thereof.

     §7. REPRESENTATIONS AND WARRANTIES. The Borrower and the Trust, on their
own behalf and on behalf of their respective Subsidiaries, jointly and severally
represent and warrant to the Agent and the Lenders all of the statements
contained in this §7.

     §7.1. Authority, Etc.

     (a) Organization: Good Standing.

     (i) FPLP is a limited partnership duly organized, validly existing and in
good standing under the laws of its state of organization; FPLP has all
requisite limited partnership power to own its properties and conduct its
business as now conducted and as presently contemplated; and FPLP is in good
standing as a foreign entity and is duly authorized to do business in the
jurisdictions where the Eligible Unencumbered Properties owned by it are located
and in each other jurisdiction where such qualification is necessary except
where a failure to be so qualified would not have a materially adverse effect on
its business, operations, assets, condition (financial or otherwise) or
properties. Each Borrower (other than FPLP) is a limited partnership, general
partnership, nominee trust or limited liability company, as the case may be,
duly organized, validly existing and in good standing under the laws of its
state of organization; each such Borrower has all requisite limited partnership,
general partnership, trust, limited liability company or corporate, as the case
may

33

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

 

be, power to own its respective properties and conduct its respective business
as now conducted and as presently contemplated; and each such Borrower is in
good standing as a foreign entity and is duly authorized to do business in the
jurisdictions where the Eligible Unencumbered Properties owned by it are located
and in each other jurisdiction where such qualification is necessary except
where a failure to be so qualified in such other jurisdiction would not have a
materially adverse effect on the business, operations, assets, condition
(financial or otherwise) or properties of such Borrower.

     (ii) the Trust is a corporation duly organized, validly existing and in
good standing under the laws of the State of Maryland; each Subsidiary of the
Trust is duly organized, validly existing and in good standing as a corporation,
nominee trust, limited liability company, limited partnership or general
partnership, as the case may be, under the laws of the state of its
organization; the Trust and each of its Subsidiaries has all requisite
corporate, trust, limited liability company, limited partnership or general
partnership, as the case may be, power to own its respective properties and
conduct its respective business as now conducted and as presently contemplated;
and the Trust is in good standing as a foreign entity and is duly authorized to
do business in the jurisdictions where such qualification is necessary, except
where a failure to be so qualified in such other would not have a materially
adverse effect on the business, operations, assets, condition (financial or
otherwise) or properties of the Trust or any such Subsidiary.

          (b) Capitalization. The outstanding equity of FPLP is comprised of a
general partner interest and limited partner interests, all of which have been
duly issued and are outstanding and fully paid and non-assessable. All of the
issued and outstanding general partner interests of FPLP are owned and held of
record by the Trust. There are no outstanding securities or agreements
exchangeable for or convertible into or carrying any rights to acquire a general
partner interest in FPLP. There are no outstanding commitments, options,
warrants, calls or other agreements (whether written or oral) binding on FPLP or
the Trust which require or could require FPLP or the Trust to sell, grant,
transfer, assign, mortgage, pledge or otherwise dispose of any general partner
interest in FPLP. Except as set forth in the Agreement of Limited Partnership of
FPLP, no general partner interests of FPLP are subject to any restrictions on
transfer or any partner agreements, voting agreements, trust deeds, irrevocable
proxies; or any other similar agreements or interests (whether written or oral).
For so long as any Borrower which is a Wholly-owned Subsidiary of FPLP is a
Borrower, FPLP owns, directly or indirectly, 100% (by number of votes or
controlling interests) of the outstanding voting interests and of the economic
interests in each such Borrower. All of the issued and outstanding equity
interests of each Borrower other than FPLP are owned and held of record by the
Persons set forth on Schedule 7.1(b) attached hereto, and all of such equity
interests have been duly issued and are outstanding and fully paid and
non-assessable. There are no outstanding securities or agreements exchangeable
for or convertible into or carrying any rights to acquire any equity interests
in any Borrower (other than FPLP). There are no outstanding commitments,
options, warrants, calls or other agreements (whether written or oral) binding
on any Borrower (other than FPLP) which require or could require any Borrower
(other than FPLP) to sell, grant, transfer, assign, mortgage, pledge or
otherwise dispose of any equity interest in such Borrower. Except as

34

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

 

disclosed on Schedule 7.1(b) attached hereto, no equity interests of any
Borrower (other than FPLP) are subject to any restrictions on transfer or any
partner agreements, voting agreements, trust deeds, irrevocable proxies; or any
other similar agreements or interests (whether written or oral). All of the
Preferred Equity which exists as of the date of this Agreement, and each of the
agreements or other documents entered into and/or setting forth the terms,
rights and restrictions applicable to any such Preferred Equity, are listed and
described on Schedule 7.1(b) attached hereto. All of the agreements and other
documents relating to the Preferred Equity in effect on the Closing Date have
been furnished to the Agent.

          (c) Due Authorization. The execution, delivery and performance of this
Agreement and the other Loan Documents to which the Borrower or the Trust is or
is to become a party and the transactions contemplated hereby and thereby
(i) are within the authority of the Borrower and the Trust, (ii) have been duly
authorized by all necessary proceedings on the part of the Borrower or the Trust
and any general partner thereof, (iii) do not conflict with or result in any
breach or contravention of any provision of law, statute, rule or regulation to
which the Borrower or the Trust is subject or any judgment, order, writ,
injunction, license or permit applicable to the Borrower or the Trust, (iv) do
not conflict with any provision of the Organizational Documents of the Borrower
or the Trust or any general partner thereof, and (v) do not contravene any
provisions of, or constitute Default or Event of Default hereunder or a failure
to comply with any term, condition or provision of, any other agreement,
instrument, judgment, order, decree, permit, license or undertaking binding upon
or applicable to the Borrower or the Trust or any of the Borrower’s or the
Trust’s properties (except for any such failure to comply under any such other
agreement, instrument, judgment, order, decree, permit, license, or undertaking
as would not materially and adversely affect the business, operations, assets,
condition (financial or otherwise) or properties of the Trust, FPLP or any other
member of the Potomac Group) or result in the creation of any mortgage, pledge,
security interest, lien, encumbrance or charge upon any of the properties or
assets of the Borrower or the Trust.

          (d) Enforceability. Each of the Loan Documents to which the Borrower
or the Trust is a party has been duly executed and delivered and constitutes the
legal, valid and binding obligations of the Borrower and the Trust, as the case
may be, subject only to applicable bankruptcy, insolvency, reorganization,
moratorium or other laws relating to or affecting generally the enforcement of
creditors’ rights.

     §7.2. Governmental Approvals. The execution, delivery and performance by
the Borrower and the Trust of this Agreement and the other Loan Documents to
which the Borrower or the Trust is or is to become a party and the transactions
contemplated hereby and thereby do not require (i) the approval or consent of
any governmental agency or authority other than those already obtained and
delivered to the Agent, or (ii) filing with any governmental agency or
authority, other than filings which will be made with the SEC when and as
required by law or deemed appropriate by the Trust.

     §7.3. Title to Properties; Leases.

     The Borrower and the Trust each has good fee to all of its respective
properties, assets and rights of every name and nature purported to be owned by
it, including, without limitation, that:

35

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

 

          (a) The Borrower holds good and clear record and marketable fee simple
title to the Eligible Unencumbered Properties and all assets or properties
relating thereto, subject to no Liens other than Permitted Liens.

          (b) The Borrower and the Trust will, as of the Closing Date, own all
of the assets as reflected in the financial statements of the Borrower and the
Trust described in §7.4, or acquired since the date of such financial statements
(except property and assets sold or otherwise disposed of in the ordinary course
of business since that date).

          (c) Each of the direct or indirect interests of the Borrower in any
Partially-Owned Entity is set forth on Schedule 7.3(c) attached hereto,
including the type of entity in which the interest is held, the percentage
interest owned by the Borrower in such entity, the capacity in which the
Borrower holds the interest, and the Borrower’s ownership interest therein.

     §7.4. Financial Statements. The Borrower has furnished to each of the
Lenders the audited Consolidated balance sheet of the Trust and its Subsidiaries
as of December 31, 2003 (together with the unaudited Consolidated balance sheet
of the Trust and its Subsidiaries as of September 30, 2004 and the related
Consolidated Statements of Income, changes in shareholders’ equity and cash
flows for the fiscal year or other period then ended, as applicable
(collectively, the “Initial Financials”). Such Initial Financials have been
prepared in accordance with GAAP and, in the case of the December 31, 2003
financial statements, accompanied by an auditors’ report prepared without
qualification by the Accountants. The Initial Financials fairly present the
financial condition of the Trust and its Subsidiaries as at the close of
business on the date thereof and the results of operations for the fiscal year
then ended. There are no contingent liabilities of the Trust or any of its
Subsidiaries as of such date known to the officers of the Trust or any of its
Subsidiaries not disclosed in the Initial Financials.

     §7.5 No Material Changes, Etc. Since the Financial Statement Date, there
has occurred no materially adverse change in the business, operations, assets,
condition (financial or otherwise) or properties of the Trust, FPLP or any other
member of the Potomac Group. Since the Financial Statement Date and the Closing
Date (or such later date upon which a Real Estate Asset became part of the
Unencumbered Pool), there has been no material adverse change to the Net
Operating Income of any Real Estate Asset that is part of the Unencumbered Pool.

     §7.6. Franchises, Patents, Copyrights, Etc. The Borrower, the Trust and
each of their respective Subsidiaries possess all franchises, patents,
copyrights, trademarks, trade names, licenses and permits, and rights in respect
of the foregoing, adequate for the conduct of their respective businesses
substantially as now conducted without known conflict with any rights of others,
except where the failure to so possess could not reasonably be expected to have
a material adverse effect on the business, operations, assets, condition
(financial or otherwise) or properties of the Trust, FPLP or any other member of
the Potomac Group. The Borrower, the Trust and each of their respective
Subsidiaries possess all material Permits relating to each of the Unencumbered
Assets comprising part of the Unencumbered Pool. FPLP is pre-approved as a
landlord for the United States government by the General Services Administration
as part of the General Services Administration’s Advanced Acquisition Program
(the “AAP Qualification”).

     §7.7 Litigation. Except as disclosed on Schedule 7.7, there are no actions,
suits, proceedings or investigations of any kind pending or, to the Borrower’s
or the Trust’s knowledge, threatened against the Borrower, the Trust or any of
their respective Subsidiaries

36

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

 

before any court, tribunal or administrative agency or board that, if adversely
determined, could reasonably be expected to, either individually or in the
aggregate, materially adversely affect the business, operations, assets,
condition (financial or otherwise) or properties of the Trust, FPLP or any other
member of the Potomac Group, or materially impair the right of the Trust, FPLP
or any other member of the Potomac Group, to carry on its businesses
substantially as now conducted by it, or result in any substantial liability not
fully covered by insurance, or for which adequate reserves are not maintained,
as reflected in the applicable consolidated financial statements or SEC Filings
of the Borrower and the Trust, or which question the validity of this Agreement
or any of the other Loan Documents, or any action taken or to be taken pursuant
hereto or thereto.

     §7.8. No Materially Adverse Contracts, Etc. Neither the Borrower, the Trust
nor any of their respective Subsidiaries is subject to any charter, corporate,
partnership or other legal restriction, or any judgment, decree, order, rule or
regulation that has or could reasonably expected in the future to have a
materially adverse effect on the business, operations, assets, condition
(financial or otherwise) or properties of the Trust, FPLP or any other member of
the Potomac Group. None of the Borrower, the Trust or any of their respective
Subsidiaries is a party to any contract or agreement that has had, or could
reasonably be expected to have, any materially adverse effect on the business,
operations, assets, condition (financial or otherwise) or properties of the
Trust, FPLP or any other member of the Potomac Group.

     §7.9. Compliance With Other Instruments, Laws, Etc. Neither the Borrower,
the Trust nor any of their respective Subsidiaries is in violation of any
provision of its partnership agreement, charter or other Organizational
Document, as the case may be, or any agreement or instrument to which it may be
subject or by which it or any of its properties may be bound or any decree,
order, judgment, statute, license, rule or regulation, in any of the foregoing
cases in a manner that could reasonably be expected to result, individually or
in the aggregate, in the imposition of substantial penalties or materially and
adversely affect the business, operations, assets, condition (financial or
otherwise) or properties of the Trust, FPLP or any other member of the Potomac
Group.

     §7.10. Tax Status. (i) Each of the Borrower, the Trust and their respective
Subsidiaries (a) has made or filed all federal, state and local income and all
other tax returns, reports and declarations required by any jurisdiction to
which it is subject, (b) has paid all taxes and other governmental assessments
and charges shown or determined to be due on such returns, reports and
declarations, except those being contested in good faith and by appropriate
proceedings, and (c) has set aside on its books provisions reasonably adequate
for the payment of all taxes for periods subsequent to the periods to which such
returns, reports or declarations apply, and (ii) there are no unpaid taxes
claimed to be due by the taxing authority of any jurisdiction, and the
respective officers of the Borrower and the Trust and their respective
Subsidiaries know of no basis for any such claim.

     §7.11 No Event of Default. No Default or Event of Default has occurred and
is continuing.

     §7.12. Investment Company Acts. None of the Borrower, the Trust or any of
their respective Subsidiaries is an “investment company”, or an “affiliated
company” or a “principal underwriter” of an “investment company”, as such terms
are defined in the Investment Company Act of 1940.

37

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

 

     §7.13. Name; Jurisdiction of Organization; Absence of UCC Financing
Statements, Etc. The exact legal name of the Borrower and the Trust, and their
respective jurisdictions of organization, are set forth on Schedule 7.13
attached hereto. Except for Permitted Liens, there is no financing statement,
security agreement, chattel mortgage, real estate mortgage, equipment lease,
financing lease, option, encumbrance or other document filed or recorded with
any filing records, registry, or other public office, that purports to cover,
affect or give notice of any present or possible future lien or encumbrance on,
or security interest in, any Eligible Unencumbered Property. Neither the
Borrower nor the Trust has pledged or granted any lien on or security interest
in or otherwise encumbered or transferred any of their respective interests in
any Subsidiary (including in the case of the Trust, its interests in FPLP).

     §7.14. Absence of Liens. The Borrower is the owner of the Eligible
Unencumbered Properties free from any Lien, except for Permitted Liens.

     §7.15. Certain Transactions. Except as set forth on Schedule 7.15, none of
the officers, partners, directors, or employees of the Trust, the Borrower or
any of their Subsidiaries is presently a party to any transaction with the
Borrower, the Trust or any of their respective Subsidiaries (other than for
services as employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, partner, director or such employee
or, to the knowledge of the Borrower or the Trust, any corporation, partnership,
trust or other entity in which any officer, partner, director, or any such
employee or natural Person related to such officer, partner, director or
employee or other Person in which such officer, partner, director or employee
has a direct or indirect beneficial interest has a substantial interest or is an
officer, director, trustee or partner.

     §7.16. Employee Benefit Plans; Multiemployer Plans; Guaranteed Pension
Plans. Except as disclosed in the SEC Filings or on Schedule 7.16, none of the
Borrower, the Trust nor any ERISA Affiliate maintains or contributes to any
Employee Benefit Plan, Multiemployer Plan or Guaranteed Pension Plan.

     §7.17. Regulations U and X. No portion of any Loan is to be used, and no
portion of any Letter of Credit is to be obtained, for the purpose of purchasing
or carrying any “margin security” or “margin stock” as such terms are used in
Regulations U and X of the Board of Governors of the Federal Reserve System, 12
C.F.R. Parts 221 and 224.

     §7.18. Environmental Compliance. The Borrower has caused Phase I and other
environmental assessments or similar assessments (collectively, the
“Environmental Reports”) to be conducted to investigate the past and present
environmental condition and usage of the Real Estate Assets, true and complete
copies of which have been delivered to the Agent. To the Borrower’s knowledge,
except as otherwise expressly specified in the Environmental Reports, the
Borrower makes the following representations and warranties:

          (a) None of the Borrower, its Subsidiaries, the Trust or any operator
of the Real Estate Assets or any portion thereof, or any operations thereon is
in violation, or alleged violation, of any judgment, decree, order, law,
license, rule or regulation pertaining to environmental matters, including
without limitation, those arising under the Resource Conservation and Recovery
Act (“RCRA”), the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 as amended (“CERCLA”), the Superfund Amendments

38

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

 

and Reauthorization Act of 1986 (“SARA”), the Federal Clean Water Act, the
Federal Clean Air Act, the Toxic Substances Control Act, or any state or local
statute, regulation, ordinance, order or decree relating to health, safety or
the environment (hereinafter “Environmental Laws”), which violation or alleged
violation has, or its remediation would have, by itself or when aggregated with
all such other violations or alleged violations, a material adverse effect on
the business, operations, assets, condition (financial or otherwise), properties
or prospects of the Trust, FPLP or any other member of the Potomac Group, or
constitutes a Disqualifying Environmental Event with respect to any of the
Eligible Unencumbered Properties.

          (b) None of the Borrower, the Trust or any of their respective
Subsidiaries has received written notice from any third party, including,
without limitation, any federal, state or local governmental authority, (i) that
it has been identified by the United States Environmental Protection Agency
(“EPA) as a potentially responsible party under CERCLA with respect to a site
listed on the National Priorities List, 40 C.F.R. Part 300 Appendix B (1986),
(ii) that any hazardous waste, as defined by 42 U.S.C. § 9601(5), any hazardous
substances as defined by 42 U.S.C. § 9601(14), any pollutant or contaminant as
defined by 42 U.S.C. §9601(33) or any toxic substances, oil or hazardous
materials or other chemicals or substances regulated by any Environmental Laws
(“Hazardous Substances”) which it has generated, transported or disposed of have
been found at any site at which a federal, state or local agency or other third
party has conducted or has ordered that the Borrower, the Trust or any of their
respective Subsidiaries conduct a remedial investigation, removal or other
response action pursuant to any Environmental Law, or (iii) that it is or shall
be a named party to any claim, action, cause of action, complaint, or legal or
administrative proceeding (in each case, contingent or otherwise) arising out of
any third party’s incurrence of costs, expenses, losses or damages of any kind
whatsoever in connection with the release of Hazardous Substances, which event
described in any such notice would have a material adverse effect on the
business, operations, assets, condition (financial or otherwise), properties or
prospects of the Trust, FPLP or any other member of the Potomac Group, or
constitutes a Disqualifying Environmental Event with respect to any of the
Eligible Unencumbered Properties.

          (c) (i) No portion of the Real Estate Assets has been used for the
handling, processing, storage or disposal of Hazardous Substances except in
accordance with applicable Environmental Laws; and no underground tank or other
underground storage receptacle for Hazardous Substances is located on any
portion of any Real Estate Assets except in accordance with applicable
Environmental Laws, (ii) in the course of any activities conducted by the
Borrower, the Trust, their respective Subsidiaries or the operators of their
respective properties or any ground or space tenants on any Real Estate Asset,
no Hazardous Substances have been generated or are being used on such Real
Estate Asset except in accordance with applicable Environmental Laws, (iii)
there has been no present or past releasing, spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping, disposing or
dumping (a “Release”) or threatened Release of Hazardous Substances on, upon,
into or from the Real Estate Assets in violation of applicable Environmental
Laws, (iv) there have been no Releases in violation of applicable Environmental
Laws upon, from or into any real property in the vicinity of any of the Real
Estate Assets which, through soil or groundwater contamination, may have come to
be located on such Real Estate Asset, and (v) to the best of Borrower’s
Knowledge, any Hazardous Substances that have been generated on any of the Real
Estate Assets during ownership thereof by the Borrower, the Trust, their
respective Subsidiaries or the operations of their respective properties have
been transported off-site only in compliance with all applicable Environmental
Laws; any of which events described in clauses (i) through (v) above would have

39

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

 

a material adverse effect on the business, operations, assets, condition
(financial or otherwise), properties or prospects of the Trust, FPLP or any
other member of the Potomac Group, or constitutes a Disqualifying Environmental
Event with respect to any of the Eligible Unencumbered Properties.

          (d) None of the Borrower, the Trust or any of the Real Estate Assets
is subject to any applicable Environmental Law requiring the performance of
Hazardous Substances site assessments, or the removal or remediation of
Hazardous Substances, or the giving of notice to any governmental agency or the
recording or delivery to other Persons of an environmental disclosure document
or statement, by virtue of the transactions set forth herein and contemplated
hereby, or as a condition to the effectiveness of any other transactions
contemplated hereby.

     §7.19. Subsidiaries. Schedule 7.19 sets forth, as of the Closing Date, all
of the respective Subsidiaries of FPLP, each other Borrower and the Trust.

     §7.20. Loan Documents. All of the representations and warranties by or on
behalf of the Borrower and the Trust and their respective Subsidiaries made in
this Agreement and in the other Loan Documents or any document or instrument
delivered to the Agent or the Lenders pursuant to or in connection with any of
such Loan Documents are true and correct in all material respects and do not
include any untrue statement of a material fact or omit to state a material fact
required to be stated or necessary to make such representations and warranties
not materially misleading.

     §7.21. REIT Status. The Trust has not taken any action that would prevent
it from maintaining its qualification as a REIT for its tax years ending
December 31, 2003 or December 31, 2004, or from maintaining such qualification
at all times during the term of this Agreement.

     §8. AFFIRMATIVE COVENANTS OF THE BORROWER AND THE TRUST. The Borrower and
the Trust, on their own behalf and on behalf of their respective Subsidiaries,
jointly and severally covenant and agree that:

     §8.1. Punctual Payment. The Borrower will duly and punctually pay or cause
to be paid the principal and interest on the Loans and all interest, fees,
charges and other amounts and Obligations provided for in this Agreement and the
other Loan Documents, all in accordance with the terms of this Agreement, the
Notes and the other Loan Documents.

     §8.2. Maintenance of Office; Jurisdiction of Organization, Etc.. Each of
the Borrower and the Trust will maintain its chief executive office in Bethesda,
Maryland, or at such other place in the United States of America as each of them
shall designate by written notice to the Agent to be delivered at least thirty
(30) days prior to any change of chief executive office, where, subject to §21,
notices, presentations and demands to or upon the Borrower and the Trust in
respect of the Loan Documents may be given or made. Neither the Trust nor the
Borrower will change its jurisdiction of organization, name or corporate
structure without giving the Agent at least thirty (30) days prior written
notice of such change, and, in the case of a change in corporate structure,
without the prior written consent of the Agent, which consent may not be
unreasonably withheld.

     §8.3. Records and Accounts. Each of the Borrower and the Trust will
(a) keep, and cause each of its Subsidiaries to keep, true and accurate records
and books of account in which

40

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

 

full, true and correct entries will be made in accordance with GAAP and
(b) maintain adequate accounts and reserves for all taxes (including income
taxes), contingencies, depreciation and amortization of its properties and the
properties of its Subsidiaries.

     §8.4. Financial Statements, Certificates and Information. The Borrower and
the Trust will deliver to the Agent (with copies to the Agent for each Lender):

          (a) as soon as practicable, but in any event not later than ninety
(90) days after the end of each fiscal year of the Trust, the audited
consolidated balance sheet of the Trust and its Subsidiaries at the end of such
year, and the related audited consolidated statements of income, changes in
shareholder’s equity and cash flows for the year then ended, in each case,
setting forth in comparative form the figures as of the end of and for the
previous fiscal year and all such statements to be in reasonable detail,
prepared in accordance with GAAP, and, in each case, accompanied by an auditor’s
report prepared without qualification by the Accountants (and the Borrower also
shall deliver the foregoing for FPLP on a consolidated basis); together with a
written statement from such Accountants to the effect that they have read a copy
of this Agreement, and that, in making the examination necessary to said
certification, they have obtained no knowledge of any Default or Event of
Default under §10 or otherwise under the provisions of this Agreement relating
to the financial condition of the Trust or any of its Subsidiaries, or of any
facts or circumstances that would cause the Trust not to continue to qualify as
a REIT for federal income tax purposes, or, if such Accountants shall have
obtained knowledge of any then existing Default, Event of Default or such facts
or circumstances, they shall make disclosure thereof in such statement;

          (b) as soon as practicable, but in any event not later than forty-five
(45) days after the end of each of its March 31, June 30 and September 30 fiscal
quarters, copies of the unaudited consolidated balance sheet of the Trust and
its Subsidiaries, as at the end of such quarter, and the related unaudited
consolidated statements of income, changes in shareholders’ equity and cash
flows for the portion of the Trust’s fiscal year then elapsed, all in reasonable
detail and prepared in accordance with GAAP (which may be provided by inclusion
in the Form 10-Q of the Trust filed with the SEC for such period provided
pursuant to clause (i) below), together with a certification by the principal
financial or accounting officer of the Borrower and the Trust that the
information contained in such financial statements fairly presents the financial
position of the Trust and its Subsidiaries on the date thereof (subject to
year-end adjustments none of which shall be materially adverse and the absence
of footnotes) (and the Borrower also shall deliver the foregoing for FPLP on a
consolidated basis);

          (c) as soon as practicable, but in any event not later than ninety
(90) days after the end of each of its fiscal years, statements of Net Operating
Income and outstanding Indebtedness as at the end of such fiscal year and for
the fiscal year then ended in respect of each Real Estate Asset (including each
Eligible Unencumbered Property), each prepared in accordance with GAAP
consistent with the definitions of Net Operating Income and outstanding
Indebtedness used in this Agreement and a rent roll and operating statement in
respect of each Eligible Unencumbered Property, in each case certified by the
chief financial or accounting officer of the Borrower as true and correct;

          (d) as soon as practicable, but in any event not later than forty-five
(45) days after the end of each of the fiscal quarters of the Borrower, (i)
copies of the unaudited statements of Net Operating Income and outstanding
Indebtedness as at the end of such quarter and for the

41

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

 

portion of the fiscal year then elapsed in respect of each Real Estate Asset
(including each Eligible Unencumbered Property), each prepared in accordance
with GAAP consistent with the definitions of Net Operating Income and
outstanding Indebtedness used in this Agreement and a rent roll and operating
statement in respect of each Eligible Unencumbered Property, in each case
certified by the chief financial or accounting officer of the Borrower to
present fairly the Net Operating Income and outstanding Indebtedness and rent
roll in respect of each such Real Estate Asset, and (ii) an occupancy analysis
in respect of each Real Estate Asset (including each Eligible Unencumbered
Property) certified by the chief financial officer of the Borrower to be true
and complete;

          (e) simultaneously with the delivery of the financial statements
referred to in subsections (a) and (b) above, a statement in the form of Exhibit
C-2 hereto signed by the chief financial or accounting officer of the Borrower,
and setting forth in reasonable detail computations evidencing compliance with
the covenants contained in §10;

          (f) promptly as they become available, a copy of each report submitted
to the Borrower, the Trust or any of their respective subsidiaries by the
Accountants in connection with each annual audit of the books of the Borrower,
the Trust or such Subsidiary by such Accountants or in connection with any
interim audit thereof pertaining to any phase of the business of the Borrower,
the Trust or any such Subsidiary;

          (g) contemporaneously with (or promptly after) the filing or mailing
thereof, copies of all material of a financial nature sent to the holders of any
Indebtedness of the Borrower (other than the Loans) for borrowed money, to the
extent that the information or disclosure contained in such material refers to
or could reasonably be expected to have a material adverse effect on the
business, operations, assets, condition (financial or otherwise) or properties
of the Trust, FPLP or any other member of the Potomac Group;

          (h) contemporaneously with the filing or mailing thereof, copies of
all material of a financial nature filed with the SEC or sent to the
stockholders of the Trust;

          (i) as soon as practicable, but in any event not later than ninety
(90) days after the end of each fiscal year of the Trust, copies of the Form
10-K statement filed by the Trust with the SEC for such fiscal year, and as soon
as practicable, but in any event not later than fifty (50) days after the end of
each fiscal quarter of the Trust copies of the Form 10-Q statement filed by the
Trust with the SEC for such fiscal quarter, provided that, in either case, if
the SEC has granted an extension for the filing of such statements, the Trust
shall deliver such statements to the Agent within ten (10) days after the filing
thereof with the SEC;

          (j) in the case of the Borrower and the Trust, as soon as practicable,
but in any event not later than thirty (30) days prior to the end of each of
their respective fiscal years, a business plan for the next fiscal year
(including pro forma projections for such period);

          (k) together with the financial statements delivered pursuant to
§8.4(a), a certification by the chief financial or accounting officer of the
Borrower of the state and federal taxable income of the Trust and its
Subsidiaries as of the end of the applicable fiscal year;

          (l) in the event that the definition of “funds from operations” is
revised by the Board of Governors of the National Association of Real Estate
Investment Trusts, a report, certified by the chief financial or accounting
officer of the Borrower, of the “funds from operations” of the Borrower based on
the definition as in effect on

42

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

 

the date of this Agreement and based on the definition as so revised from time
to time, which such report shall be delivered to the Agent (with copies to the
Agent for each Lender) with the financial statements required to be delivered
pursuant to §8.4(b) above; and

          (m) from time to time such other financial data and other information
about the Borrower, the Trust, their respective Subsidiaries, the Real Estate
Assets and the Partially-Owned Entities as the Agent or any Lender (through the
Agent) may reasonably request.

     §8.5. Notices.

          (a) Defaults. The Borrower and the Trust will, promptly after
obtaining knowledge of the same, notify the Agent in writing (with copies to the
Agent for each Lender) of the occurrence of any Default or Event of Default. If
any Person shall give any notice or take any other action in respect of (x) a
claimed Default (whether or not constituting an Event of Default) under this
Agreement or (y) a claimed failure by the Borrower, the Trust or any of their
respective Subsidiaries, as applicable, to comply with any term, condition or
provision of or under any note, evidence of Indebtedness, indenture or other
obligation in excess of $20,000,000, individually or in the aggregate, in
respect of Indebtedness that is Without Recourse and in excess of $2,000,000,
individually or in the aggregate, in respect of Indebtedness that is Recourse,
to which or with respect to which any of them is a party or obligor, whether as
principal or surety, and such failure to comply would permit the holder of such
note or obligation or other evidence of Indebtedness to accelerate the maturity
thereof, the Borrower shall forthwith give written notice thereof to the Agent
and each of the Lenders, describing the notice or action and the nature of the
claimed failure to comply.

          (b) Environmental Events. The Borrower and the Trust will promptly
give notice in writing to the Agent (with copies to the Agent for each Lender)
(i) upon Borrower’s or the Trust’s obtaining knowledge of any material violation
(as determined by the Borrower or the Trust in the exercise of its reasonable
discretion) of any Environmental Law regarding any Real Estate Asset or
Borrower’s or the Trust’s operations, (ii) upon Borrower’s or the Trust’s
obtaining knowledge of any known Release of any Hazardous Substance at, from, or
into any Real Estate Asset which it reports in writing or is reportable by it in
writing to any governmental authority and which is material in amount or nature
or which could materially affect the value of such Real Estate Asset, (iii) upon
Borrower’s or the Trust’s receipt of any notice of material violation of any
Environmental Laws or of any material Release of Hazardous Substances in
violation of any Environmental Laws or any matter that may be a Disqualifying
Environmental Event with respect to any of the Eligible Unencumbered Properties,
including a notice or claim of liability or potential responsibility from any
third party (including without limitation any federal, state or local
governmental officials) and including notice of any formal inquiry, proceeding,
demand, investigation or other action with regard to (A) Borrower’s or the
Trust’s or any other Person’s operation of any Real Estate Asset,
(B) contamination on, from or into any Real Estate Asset, or (C) investigation
or remediation of off-site locations at which Borrower or the Trust or any of
its predecessors are alleged to have directly or indirectly disposed of
Hazardous Substances, or (iv) upon Borrower’s or the Trust’s obtaining knowledge
that any expense or loss has been incurred by such governmental authority in
connection with the assessment, containment, removal or remediation of any
Hazardous Substances with respect to which Borrower or the Trust or any
Partially-Owned Entity may be liable or for which a lien may be imposed on any
Real Estate Asset.

43

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

 

          (c) Notification of Claims against Eligible Unencumbered Properties.
The Borrower will, and will cause each Subsidiary to, promptly upon becoming
aware thereof, notify the Agent in writing (with copies to the Agent for each
Lender) of any setoff, claims, withholdings or other defenses to which any of
the Eligible Unencumbered Properties are subject, which (i) could reasonably be
expected to have a material adverse effect on (x) the business, operations,
assets, condition (financial or otherwise), properties or prospects of the
Trust, FPLP or any other member of the Potomac Group, or (y) the value of any
such Eligible Unencumbered Property, or (ii) with respect to such Eligible
Unencumbered Property, constitute a Disqualifying Environmental Event, a
Disqualifying Structural Event or a Lien subject to the bonding or insurance
requirement of §9.2(vii).

          (d) Notice of Litigation and Judgments. The Borrower and the Trust
will give notice to the Agent in writing (with copies to the Agent for each
Lender) within three (3) days of becoming aware of any litigation or proceedings
threatened in writing or any pending litigation and proceedings an adverse
determination in which could materially adversely affect FPLP, the Trust or any
member of the Potomac Group, or any Eligible Unencumbered Property or to which
the Borrower, the Trust or any of their respective Subsidiaries is or is to
become a party involving a claim against the Borrower, the Trust or any of their
respective Subsidiaries that could reasonably be expected to have a materially
adverse effect on the respective business, operations, assets, condition
(financial or otherwise) or properties of the Trust, FPLP or any other member of
the Potomac Group or on the value or operation of the Eligible Unencumbered
Properties and stating the nature and status of such litigation or proceedings.
The Borrower and the Trust will give notice to the Agent and each of the
Lenders, in writing, in form and detail reasonably satisfactory to the Agent,
within three (3) days of any judgment not covered by insurance, final or
otherwise, against the Borrower, the Trust or any of such Subsidiaries in an
amount in excess of $1,000,000.

          (e) Acquisition of Real Estate Assets. The Borrower shall notify the
Agent (with copies to the Agent for each Lender) in its financial reports
delivered pursuant to §§8.4(a) and (b) of the acquisition of Real Estate Assets
during the applicable quarter by the Borrower or any other member of the Potomac
Group (other than the Trust) (whether or not such acquisition was made with
proceeds of the Loans), which notice shall include, with respect to each such
Real Estate Asset, its address, a brief description and recent photograph, a
rent roll summary, a pro forma and historic (if available) income statement and
a summary of the key business terms of such acquisition.

     §8.6. Existence of Borrower; Maintenance of Properties. The Borrower and
the Trust will do or cause to be done all things necessary to, and shall,
preserve and keep in full force and effect its respective existence in its
jurisdiction of organization and will do or cause to be done all things
necessary to preserve and keep in full force all of its respective rights and
franchises and those of its respective Subsidiaries which may be necessary to
properly and advantageously conduct the businesses conducted by it. The Borrower
(a) will cause all necessary repairs, renewals, replacements, betterments and
improvements to be made to all Real Estate Assets owned or controlled by it, all
as in the judgment of the Borrower may be necessary so that the business carried
on in connection therewith may be properly and advantageously conducted at all
times, subject to the terms of the applicable Leases and partnership agreements
or other entity charter documents, and in any event, will keep all of the Real
Estate Assets (for so long as such Real Estate Assets are owned by the Borrower
or any of its Subsidiaries) in a condition consistent with the Real Estate
Assets currently owned or controlled by the Borrower or its

44

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

 

Subsidiaries, (b) will cause all of its other properties and those of its
Subsidiaries (to the extent controlled by the Borrower) used or useful in the
conduct of its business or the business of its Subsidiaries to be maintained and
kept in good condition, repair and working order and supplied with all necessary
equipment, (c) will not permit the Trust to directly own or lease any Real
Estate Asset, and (d) will, and will cause each of its Subsidiaries to continue
to engage primarily in the businesses now conducted by it and in related
businesses, all of the foregoing to the extent necessary to comply with the
other terms and conditions set forth in this Agreement, and in the case of
clauses (a) and (b) above.

     §8.7. Existence of the Trust; Maintenance of REIT Status of the Trust;
Maintenance of Properties. The Trust will do or cause to be done all things
necessary to preserve and keep in full force and effect the Trust’s existence as
a Maryland corporation. The Trust will at all times (i) maintain its status as a
REIT and not take any action which could lead to its disqualification as a REIT
and (ii) continue to operate as a self-directed and self-administered REIT and
be listed on a nationally-recognized stock exchange. The Trust will not engage
in any business other than the business of acting as a REIT and serving as the
general partner and limited partner of the Borrower and matters directly
relating thereto, and shall (x) conduct all or substantially all of its business
operations through the Borrower or through subsidiary partnerships or other
entities in which the Borrower owns 100% of the economic interests and (y) own
no real property or material personal property other than through its ownership
interests in the Borrower. The Trust will (a) cause all of its properties and
those of its Subsidiaries used or useful in the conduct of its business or the
business of its Subsidiaries to be maintained and kept in good condition, repair
and working order, and supplied with all necessary equipment, (b) cause to be
made all necessary repairs, renewals, replacements, betterments and improvements
thereof, all as in the judgment of the Trust may be necessary so that the
business carried on in connection therewith may be properly and advantageously
conducted at all times and (c) cause each of its Subsidiaries to continue to
engage primarily in the businesses now conducted by it and in related
businesses, in each case under clauses (a), (b) and (c) above to the extent, in
the good faith judgment of the Trust, necessary to properly and advantageously
conduct the businesses being conducted by it.

     §8.8. Insurance. The Borrower and the Trust will maintain with respect to
their other properties, and will cause each of its Subsidiaries to maintain,
with financially sound and reputable insurers, insurance with respect to such
properties and its business against such casualties and contingencies as shall
be in accordance with the general practices of businesses engaged in similar
activities in similar geographic areas and in amounts, containing such terms, in
such forms and for such periods as may be reasonable and prudent.

     §8.9. Taxes. The Borrower will, and will cause the Trust and each of their
respective Subsidiaries to, pay or cause to be paid real estate taxes, other
taxes, assessments and other governmental charges against the Real Estate Assets
before the same become delinquent and will duly pay and discharge, or cause to
be paid and discharged, before the same shall become overdue, all taxes,
assessments and other governmental charges imposed upon its sales and
activities, or any part thereof, or upon the income or profits therefrom, as
well as all claims for labor, materials, or supplies that if unpaid might by law
become a lien or charge upon any of the Real Estate Assets; provided that any
such tax, assessment, charge, levy or claim need not be paid if the validity or
amount thereof shall currently be contested in good faith by appropriate
proceedings and if the Borrower or the Trust shall have set aside on its books
adequate reserves with respect thereto; and provided further that the Borrower
or the Trust will pay all such taxes, assessments, charges, levies or claims
forthwith prior to the consummation of proceedings to

45

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

 

foreclose any lien that may have attached as security therefor. Promptly upon
request by the Agent if required for bank regulatory compliance purposes or
similar bank purposes, the Borrower will provide evidence of the payment of real
estate taxes, other taxes, assessments and other governmental charges against
the Real Estate Assets in the form of receipted tax bills or other form
reasonably acceptable to the Agent, or evidence of the existence of applicable
contests as contemplated herein.

     §8.10. Inspection of Properties and Books. (a) Subject to the rights of
tenants to limit or prohibit such access, as denoted in the applicable Leases,
the Borrower and the Trust will permit the Agent or any of its designated
representatives upon reasonable notice (which notice may be given orally or in
writing and provided that no notice shall be required if a Default or Event of
Default has occurred and is continuing), to visit and inspect any of the
properties of the Borrower, the Trust or any of their respective Subsidiaries to
examine the books of account of the Borrower, the Trust and their respective
Subsidiaries (and to make copies thereof and extracts therefrom) and to discuss
the affairs, finances and accounts of the Borrower, the Trust and their
respective Subsidiaries with, and to be advised as to the same by, its officers,
all at such reasonable times and intervals as the Agent may reasonably request.

          (b) The Borrower hereby agrees that each of the Lenders and the Agent
(and each of their respective, and their respective affiliates’, employees,
officers, directors, agents and advisors (collectively, “Representatives”) is,
and has been from the commencement of discussions with respect to the facility
established by the Agreement (the “Facility”), permitted to disclose to any and
all Persons, without limitation of any kind, the structure and tax aspects (as
such terms are used in Code sections 6011 and 6111) of the Facility, and all
materials of any kind (including opinions or other tax analyses) that are or
have been provided to such Lender or the Agent related to such structure and tax
aspects. In this regard, the Lenders and the Agent intend that this transaction
will not be a “confidential transaction” under Code sections 6011, 6111 or 6112,
and the regulations promulgated thereunder. Neither Borrower, any Guarantor, nor
any Subsidiary of any of the foregoing intends to treat the Loan or the
transactions contemplated by this Agreement and the other Loan Documents as
being a “reportable transaction” (within the meaning of Treasury
Regulation Section 1.6011-4). If the Borrower or the Guarantor determines to
take any action inconsistent with such intention, the Borrower will promptly
notify the Agent thereof. If the Borrower so notifies the Agent, the Borrower
acknowledges that the Agent may treat the Loan as part of a transaction that is
subject to Treasury Regulation Section 301.6112-1, and the Agent will maintain
the lists and other records, including the identity of the applicable party to
the Loan as required by such Treasury Regulation.

     §8.11. Compliance with Laws, Contracts, Licenses, and Permits. The Borrower
and the Trust will comply with, and will cause each of their respective
Subsidiaries to comply with (a) all applicable laws and regulations now or
hereafter in effect wherever its business is conducted that are material in any
respect to the operation of their respective businesses in the ordinary course
and consistent with past practices, including, without limitation, all such
Environmental Laws and all such applicable federal and state securities laws,
(b) the provisions of its partnership agreement or corporate charter and other
Organizational Documents, as applicable, (c) all material agreements and
instruments to which it is a party or by which it or any of its properties may
be bound (including the Real Estate Assets and the Leases) and (d) all
applicable decrees, orders, and judgments. If at any time while any Loan or Note
or other Obligations is outstanding or the Lenders have any obligation to make
Loans or issue Letters of Credit

46

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

 

hereunder, any Permit shall become necessary or required in order that the
Borrower may fulfill any of its obligations hereunder, the Borrower and the
Trust and their respective Subsidiaries will immediately take or cause to be
taken all reasonable steps within the power of the Borrower or the Trust, as
applicable, to obtain such Permit and furnish the Agent with evidence thereof.

     §8.12. Use of Proceeds. Subject at all times to the other provisions of
this Agreement, including without limitation §7.17, the Borrower will use the
proceeds of the Loans solely to repay in full its obligations under its existing
revolving credit facility agented by Fleet National Bank, to finance
acquisitions and rehabilitation of Permitted Properties and for its working
capital and general corporate purposes.

     §8.13. Additional Borrower; Solvency of Borrower; Removal of Borrower;
Addition of Real Estate Asset to Unencumbered Pool.

          (a) If, after the Closing Date, FPLP wishes to designate as an
Eligible Unencumbered Property a Real Estate Asset that otherwise qualifies as
an Eligible Unencumbered Property but is owned by a Person other than the
Borrower, FPLP shall cause such Person (which Person must be a Wholly-owned
Subsidiary of FPLP) to become a party to this Agreement and the other applicable
Loan Documents prior to such Real Estate Asset becoming an Eligible Unencumbered
Property hereunder. The liability of each Person which is from time to time a
Borrower hereunder shall be joint and several with each other Borrower for all
Obligations for so long as such Borrower is a Borrower hereunder (provided that
FPLP shall at all times be a Borrower hereunder). In accordance with §11.3, at
any time and from time to time but only for so long as no Default or Event of
Default shall then exist, FPLP may notify Agent, in writing (each, a “Release
Notice”), that the Borrower would like one (1) or more Eligible Unencumbered
Properties to be removed from the Unencumbered Pool. Such Release Notice shall
be accompanied by a Certificate of Compliance in the form of Exhibit C-3,
evidencing compliance with §2.1 and §10 after giving effect to the requested
release. Upon the Agent’s receipt of such Release Notice and its satisfaction
with the Certificate of Compliance, such Eligible Unencumbered Properties (each,
a “Released Property”) shall be removed from the Unencumbered Pool and any
Wholly-owned Subsidiary which is the owner of a Released Property (and is not
the owner of any other an Eligible Unencumbered Property) and which is then a
Borrower (other than FPLP) hereunder shall be released from its obligations
hereunder (including the Obligations). FPLP will not permit any Borrower (other
than FPLP) that owns any Eligible Unencumbered Property to have any Subsidiaries
unless such Subsidiary’s business, obligations and undertakings are exclusively
related to the business of such Borrower.

          (b) The Borrower and the Trust shall remain solvent at all times.

          (c) Prior to the addition of any Real Estate Asset to the Unencumbered
Pool, the Borrower shall deliver to the Agent (i) a written request to add such
Real Estate Asset to the Unencumbered Pool, (ii) the Joinder Documents, if
applicable, (iii) a current rent roll and operating statement for such Real
Estate Asset, (iv) a Certificate of Compliance in the form of Exhibit C-3
evidencing compliance with §2.1 and §10 after giving effect to the requested
addition, (v) a certification that such Real Estate Asset is not the subject of
a Disqualifying Environmental Event or a Disqualifying Structural Event, and
(vi) any other documents, certificates, instruments or agreements reasonably
requested by the Agent.

47

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

 

          (d) Notwithstanding the foregoing clauses (a) — (c) or any other
provision of this Agreement, until such time as the Unencumbered Pool has at
least 4 Eligible Unencumbered Properties and an aggregate value of at least
$60,000,000, (i) the addition of any new Eligible Unencumbered Property to the
Unencumbered Pool, (ii) the addition of any Borrower, (iii) the removal of any
Real Estate Asset from the Unencumbered Pool or (iv) the release of any Borrower
shall require the prior written consent of the Majority Lenders. In addition, in
the event the Borrower wishes to add a Real Estate Asset to the Unencumbered
Pool which does not meet one or more of the Unencumbered Property Conditions or
the provisions of §8.13(c), such Real Estate Asset may be included in the
Unencumbered Pool with Unanimous Lender Approval. From and after the first date
on which the Unencumbered Pool has at least 4 Eligible Unencumbered Properties
having an aggregate value of at least $60,000,000, the Borrower shall at all
times maintain at least 4 Eligible Unencumbered Properties having an aggregate
value of at least $60,000,000 in the Unencumbered Pool.

     §8.14. Further Assurances. The Borrower and the Trust will cooperate with
the Agent and the Lenders and execute such further instruments and documents as
the Lenders or the Agent shall reasonably request to carry out to their
satisfaction the transactions contemplated by this Agreement and the other Loan
Documents.

     §8.15. Interest Rate Protection. In the event that the Borrower’s floating
rate Indebtedness that is not otherwise subject to interest rate protection
arrangements at any time exceeds twenty-five percent (25%) of Consolidated Total
Indebtedness for borrowed money, the Borrower shall obtain and maintain in
effect interest rate protection arrangements (by means of hedging techniques or
vehicles such as interest rate swaps, interest rate caps, interest rate
corridors or interest rate collars, in each case to be capped at a rate
reasonably satisfactory to the Agent and otherwise in form and substance
reasonably satisfactory to the Agent) for a term and in an amount reasonably
satisfactory to the Agent. Once obtained, the Borrower shall maintain such
arrangements in full force and effect as provided therein, and shall not,
without the approval of the Agent, modify, terminate, or transfer such
arrangements during the period in which the Borrower’s floating rate
Indebtedness exceeds twenty-five percent (25%) of Consolidated Total
Indebtedness for borrowed money.

     §8.16. Environmental Indemnification. The Borrower and the Trust each
covenants and agrees that it will indemnify and hold the Agent and each Lender,
and each of their respective Affiliates, harmless from and against any and all
claims, expense, damage, loss or liability incurred by the Agent or any Lender
(including all reasonable costs of legal representation incurred by the Agent or
any Lender, but excluding, as applicable, for the Agent or a Lender any claim,
expense, damage, loss or liability as a result of the gross negligence or
willful misconduct of the Agent or such Lender or any of their respective
Affiliates) relating to (a) any Release or threatened Release of Hazardous
Substances on any Real Estate Asset; (b) any violation of any Environmental Laws
with respect to conditions at any Real Estate Asset or the operations conducted
thereon; (c) the investigation or remediation of off-site locations at which the
Borrower, the Trust or any of their respective Subsidiaries or their
predecessors are alleged to have directly or indirectly disposed of Hazardous
Substances; or (d) any action, suit, proceeding or investigation brought or
threatened with respect to any Hazardous Substances relating to Real Estate
Assets (including, but not limited to, claims with respect to wrongful death,
personal injury or damage to property). It is expressly acknowledged by the
Borrower that, notwithstanding the introductory paragraph of this §8, this
covenant of indemnification shall survive the repayment of the amounts owing
under the Notes and this Agreement and the

48

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

 

termination of this Agreement and the obligations of the Lenders hereunder and
shall inure to the benefit of the Agent and the Lenders and their respective
Affiliates, their respective successors, and their respective assigns under the
Loan Documents permitted under this Agreement.

     §8.17. Response Actions. The Borrower covenants and agrees that if any
Release or disposal of Hazardous Substances shall occur or shall have occurred
on any Real Estate Asset owned directly or indirectly by the Borrower or the
Trust, in violation of applicable Environmental Laws, the Borrower will cause
the prompt containment and removal of such Hazardous Substances and remediation
of such wholly-owned Real Estate Asset as necessary to comply with all
Environmental Laws or to preserve the value of any applicable Eligible
Unencumbered Property.

     §8.18. Environmental Assessments. If the Agent reasonably believes, after
discussion with the Borrower and review of any environmental reports provided by
the Borrower, that a Disqualifying Environmental Event has occurred with respect
to any one or more of the Eligible Unencumbered Properties, whether or not a
Default or an Event of Default shall have occurred, the Agent may, from time to
time, for the purpose of assessing and determining whether a Disqualifying
Environmental Event has in fact occurred, cause the Borrower to obtain one or
more environmental assessments or audits of such Eligible Unencumbered Property
prepared by a hydrogeologist, an independent engineer or other qualified
consultant or expert approved by the Agent to evaluate or confirm (i) whether
any Hazardous Substances are present in the soil or water at such Eligible
Unencumbered Property and (ii) whether the use and operation of such Eligible
Unencumbered Property complies with all Environmental Laws. Environmental
assessments may include without limitation detailed visual inspections of such
Eligible Unencumbered Property including, without limitation, any and all
storage areas, storage tanks, drains, dry wells and leaching areas, and, if and
to the extent reasonable, appropriate and required pursuant to applicable
Environmental Laws, the taking of soil samples, surface water samples and ground
water samples, as well as such other investigations or analyses as the Agent
deems appropriate. All such environmental assessments shall be at the sole cost
and expense of the Borrower.

     §8.19. Employee Benefit Plans.

          (a) Notice. The Borrower and the Trust will notify the Agent (with
copies to the Agent for each Lender) at least thirty (30) days prior to the
establishment of any Employee Benefit Plan, Multiemployer Plan or Guaranteed
Pension Plan by any of them or any of their respective ERISA Affiliates other
than those disclosed on Schedule 8.19 attached hereto or disclosed in the SEC
Filings, and neither the Borrower nor the Trust will establish any Employee
Benefit Plan, Multiemployer Plan or Guaranteed Pension Plan which could
reasonably be expected to have a material adverse effect on FPLP, the Trust or
any member of the Potomac Group.

          (b) In General. Each Employee Benefit Plan maintained by the Borrower,
the Trust or any of their respective ERISA Affiliates will be operated in
compliance with the provisions of ERISA and, to the extent applicable, the Code,
including but not limited to the provisions thereunder respecting prohibited
transactions.

          (c) Terminability of Welfare Plans. With respect to each Employee
Benefit Plan maintained by the Borrower, the Trust or any of their respective
ERISA Affiliates which is

49

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

 

an employee welfare benefit plan within the meaning of §3(l) or §3(2)(B) of
ERISA, the Borrower, the Trust, or any of their respective ERISA Affiliates, as
the case may be, shall have the right to terminate each such plan at any time
(or at any time subsequent to the expiration of any applicable bargaining
agreement) without liability other than liability to pay claims incurred prior
to the date of termination.

          (d) Unfunded or Underfunded Liabilities. The Borrower and the Trust
will not at any time have accruing or accrued unfunded or underfunded
liabilities with respect to any Employee Benefit Plan, Guaranteed Pension Plan
or Multiemployer Plan, or permit any condition to exist under any Multiemployer
Plan that would create a withdrawal liability.

     §8.20. No Amendments to Certain Documents. The Borrower and the Trust will
not at any time cause or permit its certificate of limited partnership,
agreement of limited partnership (including without limitation the Agreement of
Limited Partnership of the Borrower), articles of incorporation, by-laws,
operating agreement or other Organizational Documents, as the case may be, to be
modified, amended or supplemented in any respect whatever, without (in each
case) the express prior written consent or approval of the Agent, if such
changes could reasonably be expected to affect the Trust’s REIT status or
otherwise adversely affect the rights of the Agent and the Lenders hereunder or
under any other Loan Document.

     §9. CERTAIN NEGATIVE COVENANTS OF THE BORROWER AND THE TRUST. The Borrower
and the Trust, on their own behalf and on behalf of their respective
Subsidiaries, jointly and severally covenant and agree that neither the Borrower
nor the Trust will:

     §9.1. Restrictions on Indebtedness. Create, incur, assume, guarantee or be
or remain liable, contingently or otherwise, with respect to any Indebtedness
other than:

          (a) Indebtedness to the Agent and the Lenders (and their respective
Affiliates) arising under any of the Loan Documents;

          (b) current liabilities of the Borrower incurred in the ordinary
course of business other than through (i) the borrowing of money, or (ii) the
obtaining of credit except for credit on an open account basis customarily
extended and in fact extended in connection with normal purchases of goods and
services;

          (c) Indebtedness (other than relating to the Eligible Unencumbered
Properties) in an aggregate amount not in excess of $250,000 in respect of
taxes, assessments, governmental charges or levies and claims for labor,
materials and supplies to the extent that payment therefor shall not at the time
be required to be made in accordance with the provisions of §8.9;

          (d) Indebtedness (other than relating to the Eligible Unencumbered
Properties) in an aggregate amount not in excess of $1,000,000 in respect of
judgments or awards that have been in force for less than the applicable period
for taking an appeal so long as execution is not levied thereunder or in respect
of which, at the time, a good faith appeal or proceeding for review is being
prosecuted, and in respect of which a stay of execution shall have been obtained
pending such appeal or review;

50

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

 

          (e) endorsements for collection, deposit or negotiation incurred in
the ordinary course of business;

          (f) Secured Indebtedness of the Borrower incurred after the Closing
Date, provided that: (i) such Indebtedness is Without Recourse to the Borrower
or the Trust and is Without Recourse to any of the respective assets of any of
the Borrower or the Trust other than to the specific Real Estate Asset or Assets
acquired, refinanced or rehabilitated with the proceeds of such Indebtedness,
(ii) at the time any such Indebtedness is incurred and after giving effect
thereto, there exists no Default or Event of Default hereunder and (iii) such
Indebtedness, in the aggregate, does not exceed sixty percent (60%) of
Consolidated Gross Asset Value;

          (g) contingent liabilities of the Borrower disclosed in the financial
statements referred to in §7.4 or on Schedule 9.1(g) hereto, and such other
contingent liabilities of the Borrower having a combined aggregate potential
liability of not more than $1,000,000 at any time;

          (h) Indebtedness of the Borrower for the purchase price of capital
assets (other than Real Estate Assets but including Indebtedness in respect of
Capitalized Leases) incurred in the ordinary course of business, provided that
the aggregate principal amount of Indebtedness permitted by this clause
(i) shall not exceed $500,000 at any time outstanding; and

               (i) Recourse Indebtedness of the Borrower incurred after the
Closing Date (other than relating to the Eligible Unencumbered Properties) in
connection with the purchase of or the construction of or renovation of
improvements on any Real Estate Asset, provided that (i) the aggregate principal
amount of Indebtedness permitted by this clause (j) shall not exceed $10,000,000
at any time outstanding, and (ii) at the time any such Indebtedness is incurred
and after giving effect thereto, there exists no Default or Event of Default
hereunder.

     Notwithstanding the foregoing, in no event shall the Borrower, the Trust or
any of their respective Subsidiaries incur or have outstanding (i) unhedged
variable rate Indebtedness in excess of twenty-five percent (25%) of
Consolidated Gross Asset Value, or (ii) any unsecured Indebtedness for borrowed
money.

   It is understood and agreed that the provisions of this §9.1 shall not apply
to Indebtedness of any Partially-Owned Entity which is Without Recourse to the
Borrower or the Trust, or any of their respective assets.

     The terms and provisions of this §9.1 are in addition to, and not in
limitation of, the covenants set forth in §10.

     §9.2. Restrictions on Liens, Etc. (a) Create or incur or suffer to be
created or incurred or to exist any lien, mortgage, pledge, attachment, security
interest or other rights of third parties of any kind upon any of the Eligible
Unencumbered Properties, whether now owned or hereafter acquired, or upon the
income or profits therefrom; (b) acquire, or agree or have an option to acquire,
any property or assets upon conditional sale or other title retention or
purchase money security agreement, device or arrangement in connection with the
operation of the Eligible Unencumbered Properties; (c) suffer to exist with
respect to the Eligible Unencumbered Properties, any taxes, assessments,
governmental charges and claims for labor, materials and supplies for which
payment thereof is not being contested or for which payment notwithstanding

51

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

 

a contest is required to be made in accordance with the provisions of §8.9 and
has not been timely made; or (d) sell, assign, pledge or otherwise transfer for
security any accounts, contract rights, general intangibles, chattel paper or
instruments, with or without recourse, relating to the Eligible Unencumbered
Properties (the foregoing types of liens and encumbrances described in clauses
(a) through (d) being sometimes referred to herein collectively as “Liens”),
provided that the Borrower may create or incur or suffer to be created or
incurred or to exist:

               (i) Liens securing taxes, assessments, governmental charges or
levies which are not yet due and payable or which are not yet required to be
paid under §8.9;

               (ii) Liens arising out of deposits or pledges made in connection
with, or to secure payment of, worker’s compensation, unemployment insurance,
old age pensions or other social security obligations; and deposits with utility
companies and other similar deposits made in the ordinary course of business;

               (iii) Liens (other than affecting the Eligible Unencumbered
Properties) in respect of judgments or awards, the Indebtedness with respect to
which is not prohibited by §9.1(d);

               (iv) Encumbrances on properties consisting of easements, rights
of way, covenants, zoning and other land-use restrictions, building
restrictions, restrictions on the use of real property and defects and
irregularities in the title thereto; landlord’s or lessor’s Liens under Leases
to which the Borrower is a party or bound; purchase options granted at a price
not less than the market value of such property; and other minor Liens or
encumbrances on properties, none of which interferes materially and adversely
with the use of the property affected in the ordinary conduct of the business of
the Borrower, and which matters (x) do not individually or in the aggregate have
a material adverse effect on the business of FPLP, the Trust or any member of
the Potomac Group and (y) do not make title to such property unmarketable by the
conveyancing standards in effect where such property is located;

               (v) any Leases entered into in the ordinary course of business;

               (vi) as to Real Estate Assets which are acquired after the date
of this Agreement, Liens and other encumbrances or rights of others which exist
on the date of acquisition and which do not otherwise constitute a breach of
this Agreement; provided that nothing in this clause (vi) shall be deemed or
construed to permit an Eligible Unencumbered Property to be subject to a Lien to
secure Indebtedness;

               (vii) Liens affecting the Eligible Unencumbered Properties in
respect of judgments or awards that are under appeal or have been in force for
less than the applicable period for taking an appeal, so long as execution is
not levied thereunder or in respect of which, at the time, a good faith appeal
or proceeding for review is being diligently prosecuted, and in respect of which
a stay of execution shall have been obtained pending such appeal or review;
provided that the Borrower shall have obtained a bond or insurance or made other
arrangements with respect thereto, in each case reasonably satisfactory to the
Agent;

               (viii) Liens securing Indebtedness for the purchase price of
capital assets (other than Real Estate Assets but including Indebtedness in
respect of Capitalized Leases for equipment and other equipment leases) to the
extent not otherwise prohibited by §9.1; and

52

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

 

               (x) other Liens (other than affecting the Eligible Unencumbered
Properties) in connection with any Indebtedness permitted under §9.1.

               Nothing contained in this §9.2 shall restrict or limit the
Borrower or any of their respective Wholly-owned Subsidiaries from creating a
Lien in connection with any Real Estate Asset which is not an Eligible
Unencumbered Property and otherwise in compliance with the other terms of this
Agreement.

               The Trust shall not create or incur or suffer to be created or
incurred any Lien on any of its directly-owned properties or assets, including,
in any event, its general partner interests and limited partner interests in the
Borrower.

     §9.3. Restrictions on Investments. Make or permit to exist or to remain
outstanding any Investment except, with respect to the Borrower and its
Subsidiaries only, Investments in:

          (a) marketable direct or guaranteed obligations of the United States
of America that mature within one (1) year from the date of purchase (including
investments in securities guaranteed by the United States of America such as
securities in so-called “overseas private investment corporations”);

          (b) demand deposits, certificates of deposit, bankers acceptances and
time deposits of United States banks having total assets in excess of
$1,000,000,000;

          (c) securities commonly known as “commercial paper” issued by a
corporation organized and existing under the laws of the United States of
America or any state thereof that at the time of purchase have been rated and
the ratings for which are not less than “P 1” if rated by Moody’s, and not less
than “A 1” if rated by S&P;

          (d) Investments existing on the Closing Date and listed in the
financial statements referred to in §7.4;

          (e) other Investments hereafter in connection with the acquisition and
development of Permitted Properties by the Borrower or any Wholly-owned
Subsidiary of the Borrower, provided that (i) the aggregate amounts actually
invested by Borrower (or if not invested directly by Borrower, actually invested
by an Affiliate of the Borrower for which the Borrower has any funding
obligation) and such Wholly-owned Subsidiary at any time in Real Estate Assets
under Development (including all development costs) will not exceed ten percent
(10%) of the Consolidated Gross Asset Value at the time of any such Investment,
and (ii) no Investment may be made in any Real Estate Asset Under Development
until such Real Estate Asset is at least 70% leased or will provide a positive
operating cash flow (determined in accordance with GAAP) based upon the Leases
that have duly executed and delivered in connection with such Real Estate Asset;
and Investments in raw land intended to be developed by the Borrower or any
Wholly-owned Subsidiary of the Borrower for use as a Permitted Property,
provided that the aggregate amounts actually invested by Borrower (or if not
invested directly by Borrower, actually invested by an Affiliate of the Borrower
for which the Borrower has any funding obligation) and such Wholly-owned
Subsidiary at any time in raw land will not exceed five percent (5%) of the
Consolidated Gross Asset Value at the time of any such Investment;

53

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

 

          (f) any Investments now or hereafter made in any Wholly-owned
Subsidiary; and Investments now or hereafter made in any Partially-Owned Entity
(or other Person for which the Borrower has any funding obligation) so long as
such Investment is made in connection with Permitted Properties and provided
that the aggregate amounts actually invested by Borrower (or if not invested
directly by Borrower, actually invested by an Affiliate of the Borrower for
which the Borrower has any funding obligation) and such Wholly-owned Subsidiary
at any time in any Partially-Owned Entity (or other such Person) will not exceed
ten percent (10%) of the Consolidated Gross Asset Value at the time of any such
Investment; and

          (g) Investments in respect of (1) equipment, inventory and other
tangible personal property acquired in the ordinary course of business,
(2) current trade and customer accounts receivable for services rendered in the
ordinary course of business and payable in accordance with customary trade
terms, (3) advances in the ordinary course of business to employees for travel
expenses, drawing accounts and similar expenditures, (4) prepaid expenses made
in the ordinary course of business.

          (h) Investments by the Borrower in Mortgage Notes, provided that the
aggregate investment in such Mortgage Notes will not exceed five percent (5%) of
the Consolidated Gross Asset Value at the time of any such Investment.

     In no event shall the aggregate of Investments made pursuant to subclauses
(e), (f), (g) and (h) above exceed twenty-five percent (25%) of Consolidated
Gross Asset Value at any time.

     Notwithstanding the foregoing, the Trust shall be permitted to make and
maintain Investments in the Borrower and the Trust shall contribute to the
Borrower, promptly upon, and in any event within 3 Business Days of, the Trust’s
receipt thereof, 100% of the aggregate proceeds received by the Trust in
connection with any offering of stock or debt in the Trust (net of fees and
expenses customarily incurred in such offerings).

     §9.4. Merger, Consolidation and Disposition of Assets; Assets of the Trust.

          (a) Become a party to any merger, consolidation, spin-off or other
material business change without the prior written approval of the Majority
Lenders (other than (x) the merger or consolidation of one or more Wholly-owned
Subsidiaries with and into the Borrower or (y) the merger or consolidation of
two or more Wholly owned Subsidiaries of the Borrower so long as no Default or
Event of Default has occurred and is continuing, or would occur and be
continuing after giving effect to such merger or consolidation); or

          (b) sell, transfer or otherwise dispose of any Real Estate Assets or
other property, including any equity interest in any Person in any one or more
transactions in any 12-month period having a sales price (net of any
Indebtedness secured by a Lien on such Real Estate Assets, if any), in an amount
in excess of twenty percent (20%) of Consolidated Gross Asset Value
(collectively and individually, “Sell” or a “Sale”) or grant a Lien to secure
Indebtedness (an “Indebtedness Lien”) in any one or more transactions in a
12-month period in an amount in excess of twenty percent (20%) of Consolidated
Gross Asset Value unless, in each such event, the Majority Lenders have given
their prior written consent thereto. In addition, prior to any Sale or grant of
an Indebtedness Lien, the Borrower shall have provided to the Agent (with copies
to the Agent for each Lender) a compliance certificate in the form of
Exhibit C-3, hereto signed by

54

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

 

the chief financial officer or chief accounting officer of the Borrower, setting
forth in reasonable detail computations evidencing compliance with the covenants
contained in §10 hereof and certifying that no Default or Event of Default would
exist or occur and be continuing after giving effect to all such proposed Sales
or Indebtedness Liens (and the use of proceeds of such Sales or Indebtedness
Liens to pay Indebtedness outstanding hereunder).

     §9.5. Compliance with Environmental Laws. (a) Use any of the Real Estate
Assets or any portion thereof as a facility for the handling, processing,
storage or disposal of Hazardous Substances except for quantities of Hazardous
Substances used in the ordinary course of business and in compliance with all
applicable Environmental Laws, (b) cause or permit to be located on any of the
Real Estate Assets any underground tank or other underground storage receptacle
for Hazardous Substances except in compliance with Environmental Laws,
(c) generate any Hazardous Substances on any of the Real Estate Assets except in
compliance with Environmental Laws, or (d) conduct any activity at any Real
Estate Asset or use any Real Estate Asset in any manner so as to cause a Release
in violation of applicable Environmental Laws.

     §9.6. Distributions.

          (a) The Borrower will not make (i) annual Distributions in excess of
95% of “funds from operations”; or (ii) any Distributions during any period
after any monetary Event of Default has occurred; provided, however, (a) that
the Borrower may at all times (including while an Event of Default is
continuing) make Distributions to the extent (after taking into account all
available funds of the Trust from all other sources) required in order to enable
the Trust to continue to qualify as a REIT and (b) in the event that the
Borrower cures any such Event of Default in clause (ii) above and the Agent has
accepted such cure prior to accelerating the Loan, the limitation of clause
(ii) above shall cease to apply with respect to such Event of Default.

          (b) The Trust will not, during any period when any monetary Event of
Default has occurred and is continuing, make any Distributions in excess of the
minimum Distributions required to be made by the Trust in order to maintain its
status as a REIT.

     §10. FINANCIAL COVENANTS; COVENANTS REGARDING ELIGIBLE UNENCUMBERED
PROPERTIES. The Borrower and the Trust, on their own behalf and on behalf of
their respective Subsidiaries, jointly and severally covenant and agree that:

     §10.1. Consolidated Total Leverage Ratio. At any time, (i) Consolidated
Total Indebtedness as at the last day of the applicable quarter shall not exceed
60% of (ii) Consolidated Gross Asset Value, provided that for a single period of
not more than two consecutive fiscal quarters, such percentage shall be
permitted to exceed 60% (but in no event may it exceed 65%) so long as such
fiscal quarters do not include either of the two fiscal quarters immediately
preceding the Maturity Date. Such single two consecutive fiscal quarter period
shall commence with the first fiscal quarter for which the financial statements
pertaining to such quarter evidence Consolidated Total Indebtedness in excess of
60% of Consolidated Gross Asset Value for such quarter, and shall not be
available to the Borrower again, whether or not the Borrower utilized both
consecutive fiscal quarters. This covenant shall be tested quarterly as of the
last day of the applicable quarter.

     §10.2. Interest Coverage Ratio. As at the end of any fiscal quarter, the
ratio of (i) Adjusted EBITDA for the four consecutive fiscal quarters ending on
the last day of such fiscal

55

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

 

quarter to (ii) Consolidated Total Interest Expense for the four consecutive
fiscal quarters ending on the last day of such fiscal quarter must exceed 1.75
to 1.0.

     §10.3. Fixed Charge Coverage Ratio. As at the end of any fiscal quarter,
the ratio of (i) Adjusted EBITDA for the four consecutive fiscal quarters ending
on the last day of such fiscal quarter to (ii) Consolidated Fixed Charges for
the four consecutive fiscal quarters ending on the last day of such fiscal
quarter must exceed 1.50 to 1.0.

     §10.4. Net Worth. As at the end of any fiscal quarter or any other date of
measurement, the Consolidated Tangible Net Worth of the Borrower and its
Subsidiaries shall not be less than the sum of (i) $100,000,000 plus (ii) 80% of
the aggregate proceeds received by the Trust (net of fees and expenses
customarily incurred in transactions of such type) in connection with any
offering of stock in the Trust, plus (iii) 80% of the aggregate value of
operating units issued by the Borrower in connection with asset or stock
acquisitions (valued at the time of issuance by reference to the terms of the
agreement pursuant to which such units are issued), in each case after the
Closing Date and on or prior to the date such determination of Consolidated Net
Worth is made.

     §10.5. Unencumbered Pool Leverage. As at the end of any fiscal quarter or
any other date of measurement, the Borrower shall not permit Unsecured
Consolidated Total Indebtedness to equal or exceed 65% the aggregate Value of
Unencumbered Properties.

     §10.6. Unencumbered Pool Debt Service Coverage Ratio. As of the end of any
fiscal quarter, the ratio of (i) Adjusted Net Operating Income for the
applicable quarter, annualized; divided by (ii) the Implied Debt Service shall
not be less than 1.50 to 1.00.

     §10.7. Occupancy. Eligible Unencumbered Properties shall at all times
maintain a stabilized occupancy of 80% in the aggregate.

     §11. [Reserved.]

     §12. CONDITIONS TO THE FIRST ADVANCE. The obligations of any Lender to make
the initial Revolving Credit Loans and of the Fronting Bank to issue any initial
Letters of Credit (and to maintain the existing outstanding Loans and Letters of
Credit) shall be subject to the satisfaction of the following conditions
precedent on or prior to the Closing Date with, in each instance, the Agent,
acting on behalf of the Lenders, having approved in its sole discretion each
matter submitted to it in compliance with such conditions:

     §12.1. Loan Documents. Each of the Loan Documents shall have been duly
executed and delivered by the respective parties thereto and shall be in full
force and effect.

     §12.2. Certified Copies of Organization Documents. The Agent shall have
received (i) from the Borrower a copy, certified as of a recent date by a duly
authorized officer of the Trust, in its capacity as general partner of the
Borrower, to be true and complete, of the Agreement of Limited Partnership of
FPLP and any other Organizational Document or other agreement governing the
rights of the partners or other equity owners of the Borrower, and (ii) from the
Trust a copy, certified as of a recent date by the appropriate officer of the
State of Maryland to be true and correct, of the corporate charter of the Trust,
in each case along with any other

56

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

 

organization documents of the Borrower or the Trust and their respective general
partners, as the case may be, and each as in effect on the date of such
certification.

     §12.3. By-laws; Resolutions. All action on the part of the Borrower and the
Trust necessary for the valid execution, delivery and performance by the
Borrower and the Trust of this Agreement and the other Loan Documents to which
any of them is or is to become a party shall have been duly and effectively
taken, and evidence thereof satisfactory to the Agent shall have been provided
to the Agent. The Agent shall have received from the Trust true copies of its
by-laws and the resolutions adopted by its board of directors or trustees
authorizing the transactions described herein and evidencing the due
authorization, execution and delivery of the Loan Documents to which the Trust
and/or the Borrower is a party, each certified by the secretary as of a recent
date to be true and complete.

     §12.4. Incumbency Certificate: Authorized Signers. The Agent shall have
received from the Trust an incumbency certificate, dated as of the Closing Date,
signed by a duly authorized officer of the Trust and giving the name of each
individual who shall be authorized: (a) to sign, in the name and on behalf of
the Borrower and the Trust, as the case may be, each of the Loan Documents to
which the Borrower or the Trust is or is to become a party; (b) to make Loan and
Conversion Requests on behalf of the Borrower and (c) to give notices and to
take other action on behalf of the Borrower or the Trust, as applicable, under
the Loan Documents.

     §12.5. Title Policies. The Agent (on behalf of the Lenders) shall have
received copies of the owner’s title policies, if any, for each of the Eligible
Unencumbered Properties, for which the Agent has requested copies.

     §12.6. Certificates of Insurance. The Agent shall have received
(a) certificates of insurance as to all of the insurance maintained by Borrower
on the Eligible Unencumbered Properties (including flood insurance if necessary)
from the insurer or an independent insurance broker identifying insurers, types
of insurance, insurance limits, and policy terms; and (b) such further
information and certificates from Borrower, its insurers and insurance brokers
as the Agent may reasonably request.

     §12.7. Hazardous Substance Assessments. To the extent requested by the
Agent, the Agent shall have received hazardous waste site assessment reports
running in favor of the Agent and the Lenders concerning Hazardous Substances
(or the threat thereof) and asbestos with respect to the Eligible Unencumbered
Properties dated no earlier than 30 days prior to the Closing Date (or such
longer period of time as may be approved by the Agent), from environmental
engineers acceptable to the Agent, such reports to be in form and substance
satisfactory to the Agent and each of the Lenders. The Agent shall have the
right to obtain third-party review of the reports at the Borrower’s expense.

     §12.8. Opinion of Counsel Concerning Organization and Loan Documents. Each
of the Lenders and the Agent shall have received favorable opinions addressed to
the Lenders and the Agent in form and substance reasonably satisfactory to the
Lenders and the Agent from Armstrong Teasdale LLP and, if any, state specific
local counsel who are reasonably satisfactory to Agent, each as counsel to the
Borrower, the Trust and their respective Subsidiaries, with respect to
applicable law.

57

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

 

     §12.9. Structural Condition Assurances. To the extent requested by the
Agent, the Agent and each of the Lenders shall have received evidence
satisfactory to the Agent and each of the Lenders as to the good physical
condition of the Buildings and that utilities and public water and sewer service
is available at the lot lines of the Eligible Unencumbered Properties and
connected directly to the Buildings with all necessary permits.

     §12.10 Guaranty. The Guaranty shall have been duly executed and delivered
by the Trust.

     §12.11 Financial Analysis of Eligible Unencumbered Properties. Each of the
Lenders shall have completed to its satisfaction, a financial analysis of each
Eligible Unencumbered Property.

     §12.12 Inspection of Eligible Unencumbered Properties. The Agent shall have
completed to its satisfaction an inspection of the Eligible Unencumbered
Properties at the Borrower’s expense. The Agent shall distribute to the Lenders
any written reports resulting from any such inspections.

     §12.13. Certifications from Government Officials; UCC-11 Reports.

   The Agent shall have received (i) long-form certifications from government
officials evidencing the legal existence, good standing and foreign
qualification of the Borrower and the Trust, along with a certified copy of the
certificate of limited partnership of the Borrower, all as of the most recent
practicable date; and (ii) UCC-11 search results from the appropriate
jurisdictions for the Borrower and the Trust.

     §12.14. Proceedings and Documents. All proceedings in connection with the
transactions contemplated by this Agreement, the other Loan Documents and all
other documents incident thereto shall be satisfactory in form and substance to
each of the Lenders and to the Agent’s counsel, and the Agent, each of the
Lenders and such counsel shall have received all information and such
counterpart originals or certified or other copies of such documents as the
Agent may reasonably request.

     §12.15. Fees. The Borrower shall have paid to the Agent, for the accounts
of the Lenders or for its own account, as applicable, all of the fees and
expenses that are due and payable as of the Closing Date in accordance with this
Agreement or any separate fee letter entered into by the Borrower and the Trust
and the Agent.

     §12.16. Closing Certificate. The Borrower and the Guarantor shall have
delivered a bringdown Closing Certificate to the Agent, in form and substance
satisfactory to the Agent.

     §13. CONDITIONS TO ALL BORROWINGS. The obligations of any Lender to make
any Loan, and of the Fronting Bank to issue any Letter of Credit, whether on or
after the Closing Date, shall also be subject to the satisfaction of the
following conditions precedent:

     §13.1. Representations True; No Event of Default; Compliance Certificate.
Each of the representations and warranties made by or on behalf of the Borrower,
the Trust or any of their respective Subsidiaries contained in this Agreement,
the other Loan Documents or in any document or instrument delivered pursuant to
or in connection with this Agreement shall be true as of the date as of which
they were made and shall also be true at and as of the time of the making of
each Loan, and the issuance, extension or renewal of any Letter of Credit, with
the

58

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

 

same effect as if made at and as of that time (except to the extent that such
representations and warranties relate expressly to an earlier date); and no
Default or Event of Default under this Agreement shall have occurred and be
continuing on the date of any Completed Loan Request or on the Drawdown Date of
any Loan or Letter of Credit.

     §13.2. No Legal Impediment. No change shall have occurred any law or
regulations thereunder or interpretations thereof that in the reasonable opinion
of the Agent or any Lender or the Fronting Bank would make it illegal for any
Lender to make such Loan or to participate in the issuance, extension or renewal
of such Letter of Credit or, in the reasonable opinion of the Agent, would make
it illegal to issue, extend or renew such Loan or Letter of Credit.

     §13.3. Governmental Regulation. Each Lender shall be satisfied that the
making of such Loan or participation in the issuance, extension or renewal of
such Letter of Credit is in compliance with any applicable regulations of the
Comptroller of the Currency or the Board of Governors of the Federal Reserve
System.

     §13.4. Borrowing Documents. In the case of any request for a Revolving
Credit Loan or a Letter of Credit, the Agent shall have received the Completed
Loan Request and required certificates.

     §13.5. [Reserved.]

     §13.6. New Unencumbered Pool Property. To the extent the Completed Loan
Request is for a funding based upon any new Real Estate Asset being part of the
Unencumbered Pool, the Agent shall have determined that the Unencumbered
Property Conditions and the terms of Section 8.13(c) have been satisfied with
respect to such Real Estate Asset.

     §13.7. Continued Compliance. To the extent deemed applicable by the Agent,
the conditions of Section 12 shall remain or be satisfied.

     §14. EVENTS OF DEFAULT; ACCELERATION; ETC..

     §14.1. Events of Default and Acceleration. If any of the following events
(“Events of Default”) shall occur:

          (a) the Borrower shall fail to pay any principal of any Loans when the
same shall become due and payable, whether at the stated date of maturity or any
accelerated date of maturity or at any other date fixed for payment);

          (b) the Borrower shall fail to pay any interest on the Loans or any
other sums due hereunder or under any of the other Loan Documents or any fee
letter (including, without limitation, amounts due under §8.16) when the same
shall become due and payable, and such failure continues for three (3) days;

          (c) the Borrower, the Trust or any of their respective Subsidiaries
shall fail to comply, or to cause the Trust to comply, as the case may be, with
any of the respective covenants contained in the following: §8.1 (except with
respect to principal, interest and other sums covered by clauses (a) or (b)
above); §8.2; §§8.4 through §810, inclusive; §8.12; §8.13; §8.15; §8.19; §8.20;
§9; §10 and §11;

59

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

 

          (d) the Borrower, the Trust or any of their respective Subsidiaries
shall fail to perform any other term, covenant or agreement contained herein or
in any of the other Loan Documents (other than those specified elsewhere in this
§14) and such failure continues for thirty (30) days;

          (e) any representation or warranty made by or on behalf of the
Borrower, the Trust or any of their respective Subsidiaries in this Agreement or
any of the other Loan Documents shall prove to have been false in any material
respect upon the date when made or deemed to have been made or repeated;

          (f) the Borrower, the Trust or any of its Subsidiaries or, to the
extent of Recourse to the Borrower, the Trust or such Subsidiaries thereunder,
any Partially-Owned Entity or other of their respective Affiliates, shall fail
to pay at maturity, or within any applicable period of grace, any Indebtedness
for borrowed money or credit received or in respect of any Capitalized Leases,
which is in excess of (i) $20,000,000, either individually or in the aggregate,
if such Indebtedness is without Recourse and (ii) $2,000,000, either
individually or in the aggregate, if such Indebtedness is Recourse, or fail to
observe or perform any material term, covenant, condition or agreement contained
in any agreement, document or instrument by which it is bound evidencing,
securing or otherwise relating to such Indebtedness or Recourse obligations,
evidencing or securing borrowed money or credit received or in respect of any
Capitalized Leases for such period of time (after the giving of appropriate
notice if required) as would permit the holder or holders thereof or of any
obligations issued thereunder in excess of (i) $20,000,000, either individually
or in the aggregate, if such Indebtedness is without Recourse and (ii)
$2,000,000, either individually or in the aggregate, if such Indebtedness is
Recourse, to accelerate the maturity thereof;

          (g) any of FPLP, the Trust or any of their respective Subsidiaries
shall make an assignment for the benefit of creditors, or admit in writing its
inability to pay or generally fail to pay its debts as they mature or become
due, or shall petition or apply for the appointment of a trustee or other
custodian, liquidator or receiver of any of FPLP, the Trust or any of their
respective Subsidiaries or of any substantial part of the properties or assets
of any of such parties or shall commence any case or other proceeding relating
to any of the FPLP, the Trust or any of their respective Subsidiaries under any
bankruptcy, reorganization, arrangement, insolvency, readjustment of debt,
dissolution or liquidation or similar law of any jurisdiction, now or hereafter
in effect, or shall take any action to authorize or in furtherance of any of the
foregoing, or if any such petition or application shall be filed or any such
case or other proceeding shall be commenced against any of FPLP, the Trust or
any of their respective Subsidiaries and (i) any of FPLP, the Trust or any of
their respective Subsidiaries shall indicate its approval thereof, consent
thereto or acquiescence therein or (ii) any such petition, application, case or
other proceeding shall continue undismissed, or unstayed and in effect, for a
period of forty-five (45) days;

          (h) a decree or order is entered appointing any trustee, custodian,
liquidator or receiver or adjudicating any of FPLP, the Trust or any of their
respective Subsidiaries bankrupt or insolvent, or approving a petition in any
such case or other proceeding, or a decree or order for relief is entered in
respect of any of FPLP, the Trust or any of their respective Subsidiaries in an
involuntary case under federal bankruptcy laws as now or hereafter constituted;

60

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

 

          (i) there shall remain in force, undischarged, unsatisfied and
unstayed, for more than thirty (30) days, whether or not consecutive, any
uninsured final judgment against any of FPLP, the Trust or any of their
respective Subsidiaries that, with other outstanding uninsured final judgments,
undischarged, unsatisfied and unstayed, against any of such parties exceeds in
the aggregate $1,000,000;

          (j) any of the Loan Documents or any material provision of any Loan
Document shall be canceled, terminated, revoked or rescinded otherwise than in
accordance with the terms thereof or with the express prior written agreement,
consent or approval of the Agent, or any action at law, suit or in equity or
other legal proceeding to make unenforceable, cancel, revoke or rescind any of
the Loan Documents shall be commenced by or on behalf of the Borrower or any of
its Subsidiaries or the Trust or any of its Subsidiaries, or any court or any
other governmental or regulatory authority or agency of competent jurisdiction
shall make a determination that, or issue a judgment, order, decree or ruling to
the effect that, any one or more of the Loan Documents is illegal, invalid or
unenforceable as to any material terms thereof;

          (k) any “Event of Default” or default (after notice and expiration of
any period of grace, to the extent provided, as defined or provided in any of
the other Loan Documents, shall occur and be continuing;

          (l) with respect to any Guaranteed Pension Plan, an ERISA Reportable
Event shall have occurred and the Majority Lenders shall have determined in
their reasonable discretion that such event reasonably could be expected to
result in liability of the Borrower or any of its Subsidiaries or the Trust or
any of its Subsidiaries to the PBGC or such Guaranteed Pension Plan in an
aggregate amount exceeding $1,000,000 and such event in the circumstances
occurring reasonably could constitute grounds for the termination of such
Guaranteed Pension Plan by the PBGC or for the appointment by the appropriate
United States District Court of a trustee to administer such Guaranteed Pension
Plan; or a trustee shall have been appointed by the United States District Court
to administer such Plan; or the PBGC shall have instituted proceedings to
terminate such Guaranteed Pension Plan;

          (m) subject to the Borrower’s ability to remove Real Estate Assets
from the Unencumbered Pool in accordance with the provisions set forth below in
this §14, the failure of any of the Real Estate Assets being included from time
to time as part of the Unencumbered Pool to comply with any of the conditions
set forth in the definition of Eligible Unencumbered Properties;

          (n) the failure of any two of (i) Douglas Donatelli, for any reason,
to cease to retain the titles of President, Chief Executive Officer and Trustee
of the Trust, or (ii) Nicholas R. Smith, for any reason, to cease to retain the
titles of Executive Vice President and Chief Investment Officer, or (iii) Barry
H. Bass, for any reason, to cease to retain the titles of Senior Vice President
and Chief Financial Officer, and in each case, to perform the functions
typically performed under such respective offices and to be actively involved in
strategic planning and decision-making for the Trust, unless within six (6)
months after such failure, the Board of Directors or Board of Trustees has duly
elected or appointed a qualified substitute to replace such individual who is
acceptable to the Majority Lenders in their sole discretion (as notified to the
Borrower by the Agent in writing); or the occurrence of any transaction in which
any “person” or “group” (within the meaning of Section 13(d) and 14(d)(2) of the
Securities Exchange Act of 1934) becomes the “beneficial owner” (as defined in
Rule 13d-3 under the

61

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

 

Securities Exchange Act of 1934), directly or indirectly, of a sufficient number
of shares of all classes of stock then outstanding of the Trust ordinarily
entitled to vote in the election of directors, empowering such “person” or
“group” to elect a majority of the Board of Directors or Board of Trustees of
the Trust, who did not have such power before such transaction; or during any
twelve-month period on or after the Closing Date, individuals who at the
beginning of such period constituted the Board of Trustees of the Trust
(together with any new directors whose election by the Board of Trustees or
whose nomination for election by the shareholders of the Trust was approved by a
vote of at least a majority of the members of the Board of Trustees then in
office who either were members of the Board of Trustees at the beginning of such
period or whose election or nomination for election was previously so approved)
ceased for any reason to constitute a majority of the members of the Board of
Trustees of the Trust then in office; or

          (o) without limitation of the other provisions of this §14.1, the
Trust shall at any time fail to be the sole general partner of FPLP or shall at
any time be in contravention of any of the requirements contained in the last
paragraph of §9.2 hereof, or §9.3 (including, without limitation, the last
paragraph of §9.3);

          then, and in any such event, so long as the same may be continuing,
the Agent may, and upon the request of the Majority Lenders shall, declare all
amounts owing with respect to this Agreement, the Notes and the other Loan
Documents to be, and they shall thereupon forthwith become, immediately due and
payable without presentment, demand, protest or other notice of any kind, all of
which are hereby expressly waived by the Borrower, the Trust and each of their
respective Subsidiaries; provided that in the event of any Event of Default
specified in §14.1(g) or 14.1(h), all such amounts shall become immediately due
and payable automatically and without any requirement of notice from any of the
Lenders or the Agent or action by the Lenders or the Agent.

     Notwithstanding the foregoing provisions of this §14.1, in the event of a
Default or Event of Default arising as a result of the inclusion of any Real
Estate Asset in the Unencumbered Pool at any particular time of reference, if
such Default or Event of Default is capable of being cured by the exclusion of
such Real Estate Asset from the Unencumbered Pool in accordance with, and
subject to, §8.13 and from all other covenant calculations under §10 or
otherwise, the Borrower shall be permitted a period not to exceed five (5) days
to submit to the Agent (with copies to the Agent for each Bank) a compliance
certificate in the form of Exhibit C hereto evidencing compliance with §2.1 and
with all of the covenants set forth in §10 (with calculations evidencing such
compliance after excluding from Adjusted Net Operating Income all of the
Adjusted Net Operating Income generated by the Real Estate Asset to be excluded
from the Unencumbered Pool) and with the Unencumbered Property Conditions, and
otherwise certifying that, after giving effect to the exclusion of such Real
Estate Asset from the Unencumbered Pool, no Default or Event of Default will be
continuing.

     §14.2. Termination of Commitments. If any one or more Events of Default
specified in §14.1(g) or §14.1(h) shall occur, any unused portion of the
Commitments or other commitments to extend credit hereunder shall forthwith
terminate and the Lenders shall be relieved of all obligations to make Loans to
the Borrower and the Agent and the Fronting Bank shall be relieved of all
further obligations to issue, extend or renew Letters of Credit. If any other
Event of Default shall have occurred and be continuing, the Agent may, and upon
the request of the Majority Lenders shall, terminate the unused portion of the
Commitments or other commitment to extend credit hereunder. No such termination
of the Commitments or other commitment to

62

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

 

extend credit hereunder shall relieve the Borrower of any of the Obligations or
any of its existing obligations to the Agent or the Lenders arising under other
agreements or instruments.

     §14.3. Remedies. In the event that one or more Events of Default shall have
occurred and be continuing, whether or not the Lenders shall have accelerated
the maturity of the Loans pursuant to §14.1, the Majority Lenders may direct the
Agent to proceed to protect and enforce the rights and remedies of the Agent and
the Lenders under this Agreement, the Notes, any or all of the other Loan
Documents or under applicable law by suit in equity, action at law or other
appropriate proceeding (including for the specific performance of any covenant
or agreement contained in this Agreement or the other Loan Documents or any
instrument pursuant to which the Obligations are evidenced and, to the full
extent permitted by applicable law, the obtaining of the ex parte appointment of
a receiver), and, if any amount shall have become due, by declaration or
otherwise, proceed to enforce the payment thereof or any other legal or
equitable right or remedy of the Agent and the Lenders under the Loan Documents
or applicable law. No remedy herein conferred upon the Lenders or the Agent or
the holder of any Note or purchaser of any Letter of Credit Participation is
intended to be exclusive of any other remedy and each and every remedy shall be
cumulative and shall be in addition to every other remedy given hereunder or
under any of the other Loan Documents or now or hereafter existing at law or in
equity or by statute or any other provision of law.

     §15. SECURITY INTEREST AND SET-OFF.

     §15.1 Security Interest. Borrower hereby grants to the Agent, on behalf of
and for the benefit of the Lenders, and to each Lender, a lien, security
interest and right of setoff as security for all liabilities and obligations to
the Lenders, whether now existing or hereafter arising, upon and against all
deposits, credits, collateral and property, now or hereafter in the possession,
custody, safekeeping or control of the Agent or any Lender or any entity under
the control of KeyCorp. and its successors and assigns, or in transit to any of
them.

     §15.2 Set-Off and Debit. (i) If any Event of Default or other event which
would entitle the Agent to accelerate the Loans occurs, or (ii) at any time,
whether or not any Default or Event of Default exists, in the event any
attachment, trustee process, garnishment, or other levy or lien is, or is sought
to be, imposed on any property of the Borrower; then, in any such event, any
such deposits, balances or other sums credited by or due from the Agent or any
Lender, or from any such affiliate of the Agent or any Lender, to the Borrower
may to the fullest extent not prohibited by applicable law at any time or from
time to time, without regard to the existence, sufficiency or adequacy of any
other collateral, and without notice or compliance with any other condition
precedent now or hereafter imposed by statute, rule of law or otherwise, all of
which are hereby waived, be set off, debited and appropriated, and applied by
the Agent or any Lender, as the case may be, against any or all of the
Obligations irrespective of whether demand shall have been made and although
such Obligations may be unmatured, in such manner as the Agent or the applicable
Lender in its sole and absolute discretion may determine. Within five
(5) Business Days of making any such set off, debit or appropriation and
application, the Agent agrees to notify the Borrower thereof, provided that the
failure to give such notice shall not affect the validity of such set off, debit
or appropriation and application. ANY AND ALL RIGHTS TO REQUIRE THE AGENT OR ANY
LENDER TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL
WHICH SECURES THE LOANS, PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO
SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF THE BORROWER, ARE HEREBY KNOWINGLY,

63

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

 

VOLUNTARILY AND IRREVOCABLY WAIVED. Each of the Lenders agrees with each other
Lender that (a) if an amount to be set off is to be applied to indebtedness of
the Borrower to such Lender, other than the obligations evidenced by the Note
held by such Lender, such amount shall be applied ratably to such other
indebtedness and to the obligations evidenced by the Note held by such Lender,
and (b) if such Lender shall receive from the Borrower, whether by voluntary
payment, exercise of the right of setoff, counterclaim, cross action,
enforcement of the claim evidenced by the Note held by such Lender by
proceedings against the Borrower at law or in equity or by proof thereof in
bankruptcy, reorganization liquidation, receivership or similar proceedings, or
otherwise, and shall retain and apply to the payment of the Note held by such
Lender any amount in excess of its ratable portion of the payments received by
all of the Lenders with respect to the Note held by all of the Lenders, such
Lender will make such disposition and arrangements with the other Lenders with
respect to such excess, either by way of distribution, pro tanto assignment of
claims, subrogation or otherwise as shall result in each Lender receiving in
respect of the Note held by it its proportionate payment as contemplated by this
Agreement; provided that if all or any part of such excess payment is thereafter
recovered from such Lender, such disposition and arrangements shall be rescinded
and the amount restored to the extent of such recovery, but without interest.

     §15.3 Right to Freeze. The Agent and each of the Lenders shall also have
the right, at its option, upon the occurrence of any event which would entitle
the Agent or any Lender to set off or debit as set forth in §15.2, to freeze,
block or segregate any such deposits, balances and other sums so that the
Borrower may not access, control or draw upon the same.

     §15.4 Additional Rights. The rights of the Agent, the Lenders and each
affiliate of Administrative Agent and each of the Lenders under this Section 15
are in addition to, and not in limitation of, other rights and remedies,
including other rights of set off, which the Agent or any Lender may have.

     §16. THE AGENT.

     §16.1. Authorization. (a) The Agent is authorized to take such action on
behalf of each of the Lenders and to exercise all such powers as are hereunder
and under any of the other Loan Documents and any related documents delegated to
the Agent, together with such powers as are reasonably incident thereto,
provided that no duties or responsibilities not expressly assumed herein or
therein shall be implied to have been assumed by the Agent. The relationship
between the Agent and the Lenders is and shall be that of agent and principal
only, and nothing contained in this Agreement or any of the other Loan Documents
shall be construed to constitute the Agent as a trustee or fiduciary for any
Lender.

          (b) The Borrower, without further inquiry or investigation, shall, and
is hereby authorized by the Lenders to, assume that all actions taken by the
Agent hereunder and in connection with or under the Loan Documents are duly
authorized by the Lenders. The Lenders shall notify Borrower of any successor to
Agent by a writing signed by Majority Lenders, which successor shall be
reasonably acceptable to the Borrower so long as no Default or Event of Default
has occurred and is continuing. The Borrower acknowledges that any Lender which
acquires Fleet is acceptable as a successor to the Agent.

     §16.2. Employees and Agents. The Agent may exercise its powers and execute
its duties by or through employees or agents and shall be entitled to take, and
to rely on, advice of counsel

64

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

 

concerning all matters pertaining to its rights and duties under this Agreement
and the other Loan Documents. The Agent may utilize the services of such Persons
as the Agent in its sole discretion may reasonably determine, and all reasonable
fees and expenses of any such Persons shall be paid by the Borrower.

     §16.3. No Liability. Neither the Agent, nor any of its shareholders,
directors, officers or employees nor any other Person assisting them in their
duties nor any agent or employee thereof, shall be liable for any waiver,
consent or approval given or any action taken, or omitted to be taken, in good
faith by it or them hereunder or under any of the other Loan Documents, or in
connection herewith or therewith, or be responsible for the consequences of any
oversight or error of judgment whatsoever, except that the Agent may be liable
for losses due to its willful misconduct or gross negligence, as finally
determined by a court of competent jurisdiction.

     §16.4. No Representations. The Agent shall not be responsible for the
execution or validity or enforceability of this Agreement, the Notes or any of
the other Loan Documents or for the validity, enforceability or collectibility
of any such amounts owing with respect to the Notes, or for any recitals or
statements, warranties or representations made herein or in any of the other
Loan Documents or in any certificate or instrument hereafter furnished to it by
or on behalf of the Trust or the Borrower or any of their respective
Subsidiaries, or be bound to ascertain or inquire as to the performance or
observance of any of the terms, conditions, covenants or agreements in this
Agreement or the other Loan Documents. The Agent shall not be bound to ascertain
whether any notice, consent, waiver or request delivered to it by the Borrower
or the Trust or any holder of any of the Notes shall have been duly authorized
or is true, accurate and complete. The Agent has not made nor does it now make
any representations or warranties, express or implied, nor does it assume any
liability to the Lenders, with respect to the credit worthiness or financial
condition of the Borrower or any of its Subsidiaries or the Trust or any of the
Subsidiaries or any tenant under a Lease or any other entity. Each Lender
acknowledges that it has, independently and without reliance upon the Agent or
any other Lender, and based upon such information and documents as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement.

     §16.5. Payments.

          (a) A payment by the Borrower to the Agent hereunder or any of the
other Loan Documents for the account of any Lender shall constitute a payment to
such Lender. The Agent agrees to distribute to each Lender such Lender’s pro
rata share of payments received by the Agent for the accounts of all the
Lenders, as provided herein or in any of the other Loan Documents. All such
payments shall be made on the date received, if before 1:00 p.m., and if after
1:00 p.m., on the next Business Day. If payment is not made on the day received,
the funds shall be invested by the Agent in overnight obligations, and interest
thereon paid pro rata to the Lenders.

          (b) If in the reasonable opinion of the Agent the distribution of any
amount received by it in such capacity hereunder, under the Notes or under any
of the other Loan Documents might involve it in material liability, it may
refrain from making distribution until its right to make distribution shall have
been adjudicated by a court of competent jurisdiction, provided that the Agent
shall invest any such undistributed amounts in overnight obligations on behalf
of the Lenders and interest thereon shall be paid pro rata to the Lenders. If a
court of competent jurisdiction shall adjudge that any amount received and
distributed by the Agent is to

65

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

 

be repaid, each Person to whom any such distribution shall have been made shall
either repay to the Agent its proportionate share of the amount so adjudged to
be repaid or shall pay over the same in such manner and to such Persons as shall
be determined by such court.

          (c) Notwithstanding anything to the contrary contained in this
Agreement or any of the other Loan Documents, any Lender that fails (i) to make
available to the Agent its pro rata share of any Loan or to purchase any Letter
of Credit Participation or (ii) to adjust promptly such Lender’s outstanding
principal and its pro rata Commitment Percentage as provided in §2.1, shall be
deemed delinquent (a “Delinquent Lender”) and shall be deemed a Delinquent
Lender until such time as such delinquency is satisfied. A Delinquent Lender
shall be deemed to have assigned any and all payments due to it from the
Borrower, whether on account of outstanding Loans, interest, fees or otherwise,
to the remaining nondelinquent Lenders for application to, and reduction of,
their respective pro rata            shares of all outstanding Loans. The
Delinquent Lender hereby authorizes the Agent to distribute such payments to the
nondelinquent Lenders in proportion to their respective pro
rata            shares of all outstanding Loans. If not previously satisfied
directly by the Delinquent Lender, a Delinquent Lender shall be deemed to have
satisfied in full a delinquency when and if, as a result of application of the
assigned payments to all outstanding Loans of the nondelinquent Lenders, the
Lenders’ respective pro rata            shares of all outstanding Loans have
returned to those in effect immediately prior to such delinquency and without
giving effect to the nonpayment causing such delinquency.

     §16.6. Holders of Notes. The Agent may deem and treat the payee of any
Notes or the Purchaser of any Letter of Credit Participation as the absolute
owner or purchaser thereof for all purposes hereof until it shall have been
furnished in writing with a different name by such payee or by a subsequent
holder, assignee or transferee.

     §16.7. Indemnity. The Lenders ratably and severally agree hereby to
indemnify and hold harmless the Agent and its Affiliates from and against any
and all claims, actions and suits (whether groundless or otherwise), losses,
damages, costs, expenses (including any expenses for which the Agent has not
been reimbursed by the Borrower as required by §17), and liabilities of every
nature and character arising out of or related to this Agreement, the Notes, or
any of the other Loan Documents or the transactions contemplated or evidenced
hereby or thereby, or the Agent’s actions taken hereunder or thereunder, except
to the extent that any of the same shall be directly caused by the Agent’s
willful misconduct or gross negligence, as finally determined by a court of
competent jurisdiction.

     §16.8. Agent as Lender. In its individual capacity as a Lender, KeyBank
shall have the same obligations and the same rights, powers and privileges in
respect to its Commitment and the Loans made by it, and as the holder of any of
the Notes and as the purchaser of any Letter of Credit Participation, as it
would have were it not also the Agent.

     §16.9. Notification of Defaults and Events of Default. Each Lender hereby
agrees that, upon learning of the existence of a Default or an Event of Default,
it shall (to the extent notice has not previously been provided) promptly notify
the Agent thereof. The Agent hereby agrees that upon receipt of any notice under
this §16.9 it shall promptly notify the other Lenders of the existence of such
Default or Event of Default.

     §16.10. Duties in Case of Enforcement. In the case one or more Events of
Default have occurred and shall be continuing, and whether or not acceleration
of the Obligations shall have

66

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

 

occurred, the Agent shall, at the request, or may, upon the consent, of the
Majority Lenders, and provided that the Lenders have given to the Agent such
additional indemnities and assurances against expenses and liabilities as the
Agent may reasonably request, proceed to enforce the provisions of this Loan
Agreement and the other Loan Documents and the exercise of any other legal or
equitable rights or remedies as it may have hereunder or under any other Loan
Document or otherwise by virtue of applicable law, or to refrain from so acting
if similarly requested by the Majority Lenders. The Agent shall be fully
protected in so acting or refraining from acting upon the instruction of the
Majority Lenders, and such instruction shall be binding upon all the Lenders.
The Majority Lenders may direct the Agent in writing as to the method and the
extent of any such foreclosure, sale or other disposition or the exercise of any
other right or remedy, the Lenders hereby agreeing to severally indemnify and
hold the Agent harmless from all costs and liabilities incurred in respect of
all actions taken or omitted in accordance with such direction, provided that
the Agent need not comply with any such direction to the extent that the Agent
reasonably believes the Agent’s compliance with such direction to be unlawful or
commercially unreasonable in any applicable jurisdiction. The Agent may, in its
discretion but without obligation, in the absence of direction from the Majority
Lenders, take such interim actions as it believes reasonably necessary to
preserve the rights of the Lenders hereunder, including but not limited to
petitioning a court for injunctive relief or appointment of a receiver. Each of
the Lenders acknowledges and agrees that no individual Lender may separately
enforce or exercise any of the provisions of any of the Loan Documents,
including without limitation the Notes, other than through the Agent. The Agent
shall advise the Lenders of all such action taken by the Agent.

     §16.11. Successor Agent. KeyBank, or any successor Agent, may resign as
Agent at any time by giving at least 30 days prior written notice thereof to the
Lenders and to the Borrower. Any such resignation shall be effective upon
appointment and acceptance of a successor Agent, as hereinafter provided, and,
at the request of the Majority Lenders, the Agent will resign if its Commitment
is no longer at least equal to that of the largest Commitment of any Lender,
unless such circumstance is a result of the merger or consolidation of any of
the other Lenders or a result of events other than the sale by the Agent of any
portion of its Commitment. Upon any such resignation, the Majority Lenders shall
have the right to appoint a successor Agent, which is a Lender under this
Agreement, provided that so long as no Default or Event of Default has occurred
and is continuing the Borrower shall have the right to approve any successor
Agent, which approval shall not be unreasonably withheld. If, in the case of a
resignation by the Agent, no successor Agent shall have been so appointed by the
Majority Lenders and approved by the Borrower, and shall have accepted such
appointment, within thirty (30) days after the retiring Agent’s giving of notice
of resignation, then the retiring Agent may, on behalf of the Lenders, appoint
any one of the other Lenders as a successor Agent. The Borrower acknowledges
that any Lender which acquires KeyBank is acceptable as a successor Agent. Upon
the acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from all further duties and obligations as Agent under
this Agreement. After any Agent’s resignation hereunder as Agent, the provisions
of this §16 shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Agent under this Agreement. The Agent agrees that it
shall not assign any of its rights or duties as Agent to any other Person. The
Agent may be removed at the direction of the Majority Lenders in the event of a
final judicial determination (in which the Agent had an opportunity to be heard)
that the Agent had acted in a grossly negligent manner or in willful misconduct.

67

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

 

     §16.12. Notices. Any notices or other information required hereunder to be
provided to the Agent (with copies to the Agent for each Lender) shall be
forwarded by the Agent to each of the Lenders on the same day (if practicable)
and, in any case, on the next Business Day following the Agent’s receipt
thereof.

     §16.13. Other Agents. The Syndication Agent shall not have any liabilities
or obligations hereunder in its capacity as such.

     §17. EXPENSES. The Borrower agrees to pay (a) the reasonable costs of
producing and reproducing this Agreement, the other Loan Documents and the other
agreements and instruments mentioned herein, (b) the reasonable fees, expenses
and disbursements of the Agent’s outside counsel or any local counsel to the
Agent incurred in connection with the preparation, administration or
interpretation of the Loan Documents and other instruments mentioned herein,
each closing hereunder, and amendments, modifications, approvals, consents or
waivers hereto or hereunder, (c) the fees, expenses and disbursements of the
Agent incurred by the Agent in connection with the preparation, administration
or interpretation of the Loan Documents and other instruments mentioned herein,
including, without limitation, the costs incurred by the Agent in connection
with its inspection of the Eligible Unencumbered Properties, and, without
double-counting amounts under clause (b) above, the fees and disbursements of
the Agent’s counsel in preparing the documentation, (d) all, if any, title
insurance premiums, appraisal fees, engineer’s, inspector’s and surveyor’s fees,
(e) the fees, costs, expenses and disbursements of the Agent and its Affiliates
incurred in connection with the syndication and/or participations of the Loans
(whether occurring before or after the closing hereunder), including, without
limitation, reasonable legal fees, travel costs, costs of preparing syndication
materials and photocopying costs, (f) all reasonable expenses (including
reasonable attorneys’ fees and costs, which attorneys may be employees of any
Lender or the Agent, and the fees and costs of engineers, appraisers, surveyors,
investment bankers, or other experts retained by any Lender or the Agent in
connection with any such enforcement proceedings) incurred by any Lender or the
Agent in connection with (i) the enforcement of or preservation of rights under
any of the Loan Documents against the Borrower or any of its Subsidiaries or the
Trust or the administration thereof after the occurrence and during the
continuance of a Default or Event of Default (including, without limitation,
expenses incurred in any restructuring and/or “workout” of the Loans), and (ii)
any litigation, proceeding or dispute whether arising hereunder or otherwise, in
any way related to any Lender’s or the Agent’s relationship with the Borrower or
any of its Subsidiaries or the Trust, (g) all reasonable fees, expenses and
disbursements of the Agent incurred in connection with UCC searches and filings,
UCC terminations or mortgage discharges, and the like, and (h) all costs
incurred by the Agent in the future in connection with its inspection of the
Eligible Unencumbered Properties (or any proposed Eligible Unencumbered
Property) or with the addition of any Eligible Unencumbered Property. The
covenants of this §17 shall survive the repayment of the amounts owing under the
Notes and this Agreement and the termination of this Agreement and the
obligations of the Lenders hereunder.

     §18. INDEMNIFICATION. The Borrower agrees to indemnify and hold harmless
the Agent and each of the Lenders and the shareholders, directors, agents,
officers, subsidiaries and affiliates of the Agent and each of the Lenders from
and against any and all claims, actions and suits, whether groundless or
otherwise, and from and against any and all liabilities, losses (including
amounts, if any, owing to any Lender pursuant to §§4.4, 4.5, 4.6 and 4.8),
settlement payments, obligations, damages and expenses of every nature and
character in connection therewith, arising out of this Agreement or any of the
other Loan Documents or the transactions

68

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

 

contemplated hereby or thereby or which otherwise arise in connection with the
financing, including, without limitation, (a) any actual or proposed use by the
Borrower or any of its Subsidiaries of the proceeds of any of the Loans, (b) the
Borrower or any of its Subsidiaries entering into or performing this Agreement
or any of the other Loan Documents, or (c) pursuant to §8.16, in each case
including, without limitation, the reasonable fees and disbursements of counsel
and allocated costs of internal counsel incurred in connection with any such
investigation, litigation or other proceeding, provided, however, that the
Borrower shall not be obligated under this §18 to indemnify any Person for
liabilities arising from such Person’s own gross negligence, willful misconduct
or breach of this Agreement, as finally determined by a court of competent
jurisdiction. In litigation, or the preparation therefor, the Borrower shall be
entitled to select counsel reasonably acceptable to the Majority Lenders, and
the Agent (as approved by the Majority Lenders) shall be entitled to select
their own supervisory counsel, and, in addition to the foregoing indemnity, the
Borrower agrees to pay promptly the reasonable fees and expenses of each such
counsel. Prior to any settlement of any such litigation by the Lenders, the
Lenders shall provide the Borrower and the Trust with notice and an opportunity
to address any of their concerns with the Lenders, and the Lenders shall not
settle any litigation without first obtaining Borrower’s consent thereto, which
consent shall not be unreasonably withheld or delayed, provided that such
consent shall not be required at any time that an Event of Default has occurred
and is continuing. If and to the extent that the obligations of the Borrower
under this §18 are unenforceable for any reason, the Borrower hereby agrees to
make the maximum contribution to the payment in satisfaction of such obligations
which is permissible under applicable law. The provisions of this §18 shall
survive the repayment of the amounts owing under the Notes and this Agreement
and the termination of this Agreement and the obligations of the Lenders
hereunder and shall continue in full force and effect as long as the possibility
of any such claim, action, cause of action or suit exists.

     §19. SURVIVAL OF COVENANTS, ETC. All covenants, agreements, representations
and warranties made herein, in the Notes, in any of the other Loan Documents or
in any documents or other papers delivered by or on behalf of the Borrower or
any of its Subsidiaries or the Trust pursuant hereto shall be deemed to have
been relied upon by the Lenders and the Agent, notwithstanding any investigation
heretofore or hereafter made by any of them, and shall survive the making by the
Lenders of any of the Loans and the issuance, extension or renewal of any Letter
of Credit, as herein contemplated, and shall continue in full force and effect
so long as any Letter of Credit or any amount due under this Agreement or the
Notes or any of the other Loan Documents remains outstanding or any Lender has
any obligation to make any Loans or purchase Letter of Credit Participations or
the Fronting Bank has any obligation to issue, extend or renew Letters of
Credit. The indemnification obligations of the Borrower provided herein and in
the other Loan Documents shall survive the full repayment of amounts due and the
termination of the obligations of the Lenders hereunder and thereunder to the
extent provided herein and therein. All statements contained in any certificate
or other paper delivered to any Lender or the Agent at any time by or on behalf
of the Borrower or any of its Subsidiaries or the Trust pursuant hereto or in
connection with the transactions contemplated hereby shall constitute
representations and warranties by the Borrower or such Subsidiary or the Trust
hereunder.

     §20. ASSIGNMENT; PARTICIPATIONS; ETC.

     §20.1. Conditions to Assignment by Lenders. Except as provided herein, each
Lender may assign to one or more Eligible Assignees all or a portion (in a
minimum amount of

69

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

 

$5,000,000) of its interests, rights and obligations under this Agreement
(including all or a portion of its Commitment Percentage and Commitment and the
same portion of the Loans at the time owing to it, the Notes held by it and its
participating interest in the risk relating to any Letters of Credit); provided
that (a) the Agent and, other than during an Event of Default, the Borrower each
shall have the right to approve any Eligible Assignee, which approval shall not
be unreasonably withheld or delayed, (b) subject to the provisions of §2.7, each
Lender shall have at all times an amount of its Commitment of not less than
$5,000,000 unless otherwise consented to by the Agent and (c) the parties to
such assignment shall execute and deliver to the Agent, for recording in the
Register (as hereinafter defined), an assignment and assumption, substantially
in the form of Exhibit D hereto (an “Assignment and Assumption”), together with
any Notes subject to such assignment. Upon such execution, delivery, acceptance
and recording, from and after the effective date specified in each Assignment
and Assumption, which effective date shall be at least two (2) Business Days
after the execution thereof unless otherwise agreed or accepted by the Agent
(provided any assignee has assumed the obligation to fund any outstanding Libor
Rate Loans), (i) the assignee thereunder shall be a party hereto and, to the
extent provided in such Assignment and Assumption, have the rights and
obligations of a Lender hereunder and thereunder, and (ii) the assigning Lender
shall, to the extent provided in such assignment and upon payment to the Agent
of the registration fee referred to in §20.3, be released from its obligations
under this Agreement. Any such Assignment and Assumption shall run to the
benefit of the Borrower and a copy of any such Assignment and Assumption shall
be delivered by the Assignor to the Borrower.

     Notwithstanding the provisions of subclause (a) of the preceding paragraph,
any Lender may, without the consent of the Borrower, make an assignment
otherwise permitted hereunder to (x) another Lender, and (y) an Affiliate of
such Lender, provided that such Affiliate is an Eligible Assignee.

     §20.2. Certain Representations and Warranties; Limitations; Covenants. By
executing and delivering an Assignment and Assumption, the parties to the
assignment thereunder confirm to and agree with each other and the other parties
hereto as follows: (a) other than the representation and warranty that it is the
legal and beneficial owner of the interest being assigned thereby free and clear
of any adverse claim, the assigning Lender makes no representation or warranty
and assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with this Agreement or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of this
Agreement, the other Loan Documents or any other instrument or document
furnished pursuant hereto; (b) the assigning Lender makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of the Borrower and its Subsidiaries or the Trust or any other Person primarily
or secondarily liable in respect of any of the Obligations, or the performance
or observance by the Borrower and its Subsidiaries or the Trust or any other
Person primarily or secondarily liable in respect of any of the Obligations of
any of their obligations under this Agreement or any of the other Loan Documents
or any other instrument or document furnished pursuant hereto or thereto;
(c) such assignee confirms that it has received a copy of this Agreement,
together with copies of the most recent financial statements referred to in §7.4
and §8.4 and such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into such Assignment and
Assumption; (d) such assignee will, independently and without reliance upon the
assigning Lender, the Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement; (e) such
assignee represents and

70

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

 

warrants that it is an Eligible Assignee; (f) such assignee appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers under this Agreement and the other Loan Documents as are delegated
to the Agent by the terms hereof or thereof, together with such powers as are
reasonably incidental thereto; (g) such assignee agrees that it will perform in
accordance with their terms all of the obligations that by the terms of this
Agreement are required to be performed by it as a Lender; (h) such assignee
represents and warrants that it is legally authorized to enter into such
Assignment and Assumption; and (i) such assignee acknowledges that it has made
arrangements with the assigning Lender satisfactory to such assignee with
respect to its pro rata share of Letter of Credit Fees in respect of outstanding
Letters of Credit.

     §20.3. Register. The Agent shall maintain a copy of each Assignment and
Assumption delivered to it and a register or similar list (the “Register”) for
the recordation of the names and addresses of the Lenders and the Commitment
Percentages of, and principal amount of the Loans owing to, the Lenders from
time to time. The entries in the Register shall be conclusive, in the absence of
manifest error, and the Borrower, the Agent and the Lenders may treat each
Person whose name is recorded in the Register as a Lender hereunder for all
purposes of this Agreement. The Register shall be available for inspection by
the Borrower and the Lenders at any reasonable time and from time to time upon
reasonable prior notice. Upon each such recordation, the assigning Lender agrees
to pay to the Agent a registration fee in the sum of $2,500 and all legal fees
and expenses incurred by the Agent in connection with such assignment.

     §20.4. New Notes. Upon its receipt of an Assignment and Assumption executed
by the parties to such assignment, together with each Note subject to such
assignment, the Agent shall (a) record the information contained therein in the
Register, and (b) give prompt notice thereof to the Borrower and the Lenders
(other than the assigning Lender). Unless done simultaneously with the
Assignment and Assumption, within two (2) Business Days after receipt of such
notice, the Borrower, at its own expense, shall execute and deliver to the
Agent, in exchange for each surrendered Revolving Credit Note, a new Revolving
Credit Note to the order of such Eligible Assignee in an amount equal to the
amount assumed by such Eligible Assignee pursuant to such Assignment and
Assumption and, if the assigning Lender has retained some portion of its
obligations hereunder, a new Revolving Credit Note and other Note, if
applicable, to the order of the assigning Lender in an amount equal to the
amount retained by it hereunder. Such new Notes shall provide that they are
replacements for the surrendered Notes, shall be in an aggregate principal
amount equal to the aggregate principal amount of the surrendered Notes, shall
be dated the effective date of such Assignment and Assumption and shall
otherwise be in substantially the form of the assigned Notes. The surrendered
Notes shall be canceled and returned to the Borrower.

     §20.5. Participations. Each Lender may sell participations to one or more
lending institutions or other entities in all or a portion of such Lender’s
rights and obligations under this Agreement and the other Loan Documents;
provided that (a) each such participation shall be in an amount of not less than
$5,000,000, (b) any such sale or participation shall not affect the rights and
duties of the selling Lender hereunder to the Borrower and the Agent and the
Lender shall continue to exercise all approvals, disapprovals and other
functions of a Lender, (c) the only rights granted to the participant pursuant
to such participation arrangements with respect to waivers, amendments or
modifications of, or approvals under, the Loan Documents shall be the rights to
approve waivers, amendments or modifications that would reduce the principal of
or the

71

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

 

interest rate on any Loans, extend the term or increase the amount of the
Commitment of such Lender as it relates to such participant, reduce the amount
of any fees to which such participant is entitled or extend any regularly
scheduled payment date for principal or interest, and (d) no participant shall
have the right to grant further participations or assign its rights, obligations
or interests under such participation to other Persons without the prior written
consent of the Agent, which consent shall not be unreasonably withheld.

     §20.6. Pledge by Lender. Notwithstanding any other provision of this
Agreement, any Lender at no cost to the Borrower may at any time pledge all or
any portion of its interest and rights under this Agreement (including all or
any portion of its Notes) to any of the twelve Federal Reserve Banks organized
under §4 of the Federal Reserve Act, 12 U.S.C. §341. No such pledge or the
enforcement thereof shall release the pledgor Lender from its obligations
hereunder or under any of the other Loan Documents.

     §20.7. No Assignment by Borrower. The Borrower shall not assign or transfer
any of its rights or obligations under any of the Loan Documents without prior
Unanimous Lender Approval.

     §20.8. Disclosure. The Borrower agrees that, in addition to disclosures
made in accordance with standard banking practices, any Lender may disclose
information obtained by such Lender pursuant to this Agreement to assignees or
participants and potential assignees or participants hereunder.

     §20.9. Syndication. The Borrower acknowledges that each of the Agent and
the Arranger intends, and shall have the right, by itself or through its
Affiliates, to syndicate or enter into co-lending arrangements with respect to
the Loans and the Total Commitment pursuant to this §20. The Arranger, in
cooperation with the Borrower, will manage all aspects of the syndication,
including the selection of co-lenders, the determination of when Arranger will
approach potential co-lenders and the final allocations among co-lenders. Each
of the Borrower and the Trust agrees to assist Arranger actively in achieving a
timely syndication that is reasonably satisfactory to the Arranger, such
assistance to include, among other things, (a) direct contact during the
syndication between the Borrower’s and the Trust’s senior officers,
representatives and advisors, on the one hand, and prospective co-lenders, on
the other hand at such times and places as Arranger may reasonably request, (b)
providing to Arranger all financial and other information with respect to the
Borrower and the Trust and the transactions contemplated hereby that Arranger
may reasonably request, including but not limited to financial projections
relating to the foregoing, and (c) assistance in the preparation of a
confidential information memorandum and other marketing materials to be used in
connection with the syndication, and the Borrower and the Trust agree to
cooperate with the Agent’s and the Arranger’s and their Affiliate’s syndication
and/or co-lending efforts, such cooperation to include, without limitation, the
provision of information reasonably requested by potential syndicate members. In
addition, the Borrower and the Trust agree that, prior to and during the
syndication of the Total Commitment (which for purposes hereof shall be deemed
to be completed 90 days after the Closing Date), the Borrower nor the Trust will
permit any offering, placement or arrangement of any competing issues of debt
securities or commercial bank facilities of the Borrower, the Trust and any of
their Subsidiaries, unless approved by the Agent.

     §21. NOTICES, ETC. Except as otherwise expressly provided in this
Agreement, all notices and other communications made or required to be given
pursuant to this Agreement

72

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

 

or the Notes shall be in writing and shall be delivered in hand, mailed by
United States registered or certified first class mail, postage prepaid, sent by
overnight courier, or sent by facsimile and confirmed by delivery via courier or
postal service, addressed as follows:

          (a) if to the Borrower or the Trust, at 7200 Wisconsin Avenue,
Suite 301, Bethesda, Maryland 20814, attention Barry Bass, Chief Financial
Officer (facsimile: (301) 986-5554), with a copy to David W. Braswell, Esq.,
Armstrong Teasdale LLP, One Metropolitan Square, Suite 2600, St. Louis, Missouri
63102, or to such other address for notice as the Borrower or the Trust shall
have last furnished in writing to the Agent;

          (b) if to the Agent, to KeyBank National Association, 127 Public
Square, Cleveland, Cleveland, OH 44114, attention John C. Scott (facsimile:
(216) 689-4997), with a copy to Michelle Jawyn, KeyBank National Association,
127 Public Square, Cleveland, OH 44114, or such other address for notice as the
Agent shall have last furnished in writing to the Borrower, with a copy to
Pamela M. MacKenzie, Esq., Goulston & Storrs, 400 Atlantic Avenue, Boston,
Massachusetts 02110-3333 (facsimile: (617)-574-7615), or at such other address
for notice as the Agent shall last have furnished in writing to the Person
giving the notice; and

          (c) if to any Lender, at such Lender’s address set forth on Schedule 2
hereto, or such other address for notice as such Lender shall have last
furnished in writing to the Person giving the notice.

Any such notice or demand shall be deemed to have been duly given or made and to
have become effective (i) if delivered by hand, overnight courier, or facsimile
to the party to which it is directed, at the time of the receipt thereof by such
party or the sending of such facsimile and (ii) if sent by registered or
certified first-class mail, postage prepaid, on the third Business Day following
the mailing thereof.

     §22. FPLP AS AGENT FOR THE BORROWER. The Borrower (other than FPLP) hereby
appoints FPLP as its agent with respect to the receiving and giving of any
notices, requests, instructions, reports, certificates (including, without
limitation, compliance certificates), schedules, revisions, financial statements
or any other written or oral communications hereunder. The Agent and each Lender
is hereby entitled to rely on any communications given or transmitted by FPLP as
if such communication were given or transmitted by each and every Borrower;
provided however, that any communication given or transmitted by any Borrower
other than FPLP shall be binding with respect to such Borrower. Any
communication given or transmitted by the Agent or any Lender to FPLP shall be
deemed given and transmitted to each and every Borrower.

     §23. GOVERNING LAW; CONSENT TO JURISDICTION AND SERVICE. THIS AGREEMENT AND
EACH OF THE OTHER LOAN DOCUMENTS, EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED
THEREIN, ARE CONTRACTS UNDER THE LAWS OF THE STATE OF NEW YORK AND SHALL FOR ALL
PURPOSES BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF SUCH STATE
(EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW). EACH OF THE
BORROWER AND ITS SUBSIDIARIES AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE
COMMONWEALTH OF MASSACHUSETTS SITTING IN SUFFOLK COUNTY OR ANY FEDERAL COURT

73

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

 

SITTING IN THE EASTERN DISTRICT OF MASSACHUSETTS OR IN ANY COURT IN THE STATE OF
NEW YORK AND OF ANY FEDERAL COURT LOCATED IN NEW YORK AND CONSENTS TO THE
NON-EXCLUSIVE JURISDICTION OF SUCH COURTS AND THE SERVICE OF PROCESS IN ANY SUCH
SUIT BEING MADE UPON THE BORROWER OR ITS SUBSIDIARIES BY MAIL AT THE ADDRESS
SPECIFIED IN §21. THE BORROWER AND ITS SUBSIDIARIES HEREBY WAIVE ANY OBJECTION
THAT ANY OF THEM MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY
SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT COURT.

     §24. HEADINGS. The captions in this Agreement are for convenience of
reference only and shall not define or limit the provisions hereof.

     §25. COUNTERPARTS. This Agreement and any amendment hereof may be executed
in several counterparts and by each party on a separate counterpart, each of
which when so executed and delivered shall be an original, and all of which
together shall constitute one instrument. In proving this Agreement it shall not
be necessary to produce or account for more than one such counterpart signed by
the party against whom enforcement is sought.

     §26. ENTIRE AGREEMENT, ETC. The Loan Documents and any other documents
executed in connection herewith or therewith express the entire understanding of
the parties with respect to the transactions contemplated hereby. Neither this
Agreement nor any term hereof may be changed, waived, discharged or terminated,
except as provided in §28.

     §27. WAIVER OF JURY TRIAL AND CERTAIN DAMAGE CLAIMS. EXCEPT TO THE EXTENT
EXPRESSLY PROHIBITED BY LAW, THE BORROWER AND ITS SUBSIDIARIES HEREBY WAIVE
THEIR RESPECTIVE RIGHTS TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM
ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT, THE NOTES OR ANY
OF THE OTHER LOAN DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER
OR THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS. EXCEPT TO THE EXTENT
EXPRESSLY PROHIBITED BY LAW, THE BORROWER AND ITS SUBSIDIARIES HEREBY WAIVE ANY
RIGHT ANY OF THEM MAY HAVE TO CLAIM OR RECOVER IN ANY LITIGATION REFERRED TO IN
THE PRECEDING SENTENCE ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES
OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES, INCLUDING ANY
DAMAGES PURSUANT TO M.G.L. C. 93A ET SEQ. EACH OF THE BORROWER AND ITS
SUBSIDIARIES (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
LENDER OR THE AGENT HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH LENDER OR
THE AGENT WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVERS AND (B) ACKNOWLEDGES THAT THE AGENT AND THE LENDERS HAVE BEEN INDUCED TO
ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS TO WHICH THEY ARE PARTIES
BY, AMONG OTHER THINGS, THE WAIVERS AND CERTIFICATIONS CONTAINED HEREIN.

     §28. CONSENTS, AMENDMENTS, WAIVERS, ETC. Except as otherwise expressly
provided in this Agreement, any consent or approval required or permitted by
this Agreement may be given, and any term of this Agreement or of any of the
other Loan Documents may be

74

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

 

amended, and the performance or observance by the Borrower or the Trust or any
of their respective Subsidiaries of any terms of this Agreement or the other
Loan Documents or the continuance of any Default or Event of Default may be
waived (either generally or in a particular instance and either retroactively or
prospectively) with, but only with, the written consent of the Majority Lenders.

     Notwithstanding the foregoing, Unanimous Lender Approval shall be required
for any amendment, modification or waiver of this Agreement that:

     (i) reduces or forgives any principal of any unpaid Loan or any interest
thereon (including any general waiver of interest “breakage” costs) or any fees
due any Lender hereunder, or permits any prepayment not otherwise permitted
hereunder; or

     (ii) changes the unpaid principal amount of any Loan, reduces the rate of
interest applicable to any Loan, or reduces any fee payable to the Lenders
hereunder; or

     (iii) changes the date fixed for any payment of principal of or interest on
any Loan (including, without limitation, any extension of the Maturity Date not
contemplated herein) or any fees payable hereunder (including, without
limitation, the waiver of any monetary Event of Default); or

     (iv) changes the amount of any Lender’s Commitment (other than pursuant to
an assignment permitted under §20.1) or increases the amount of the Total
Commitment except as permitted hereunder; or

     (v) modifies any provision herein or in any other Loan Document which by
the terms thereof expressly requires Unanimous Lender Approval; or

     (vi) changes the definitions of Majority Lenders or Unanimous Lender
Approval.

     No waiver shall extend to or affect any obligation not expressly waived or
impair any right consequent thereon. No course of dealing or delay or omission
on the part of the Agent or the Lenders or any Lender in exercising any right
shall operate as a waiver thereof or otherwise be prejudicial to such right or
any other rights of the Agent or the Lenders. No notice to or demand upon the
Borrower shall entitle the Borrower to other or further notice or demand in
similar or other circumstances.

     Notwithstanding the foregoing, in the event that the Borrower requests any
consent, waiver or approval under this Agreement or any other Loan Document, or
an amendment or modification hereof or thereof, and one or more Lenders
determine not to consent or agree to such consent, waiver, approval, amendment
or modification, then the Lender then acting as Agent hereunder shall have the
right to purchase the Commitment of such non-consenting Lender(s)

75

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

 

at a purchase price equal to the then outstanding amount of principal, interest
and fees then owing to such Lender(s) by the Borrower hereunder, and such
non-consenting Lender(s) shall immediately upon request, sell and assign its
Commitment and all of its other right, title and interest in the Loans and other
Obligations to the Lender then acting as Agent pursuant to an Assignment and
Assumption (provided that the selling Lender(s) shall not be responsible to pay
any assignment fee in connection therewith).

     §29. SEVERABILITY. The provisions of this Agreement are severable, and if
any one clause or provision hereof shall be held invalid or unenforceable in
whole or in part in any jurisdiction, then such invalidity or unenforceability
shall affect only such clause or provision, or part thereof, in such
jurisdiction, and shall not in any manner affect such clause or provision in any
other jurisdiction, or any other clause or provision of this Agreement in any
jurisdiction.

     §30. INTEREST RATE LIMITATION. Notwithstanding anything herein to the
contrary, if at any time the interest rate applicable to any Loan, together with
all fees, charges and other amounts which are treated as interest on such Loan
under applicable law (collectively, the “Charges”), shall exceed the maximum
lawful rate (the “Maximum Rate”) which may be contracted for, charged, taken,
received or reserved by the Lender holding such Loan in accordance with
applicable law, the rate of interest payable in respect of such Loan hereunder,
together with all Charges payable in respect thereof, shall be limited to the
Maximum Rate and, to the extent lawful, the interest and Charges that would have
been payable in respect of such Loan but were not payable as a result of the
operation of this §30 shall be cumulated and the interest and Charges payable to
such Lender in respect of other Loans or periods shall be increased (but not
above the Maximum Rate therefor) until such cumulated amount, together with
interest thereon at the Federal Funds Rate to the date of repayment, shall have
been received by such Lender.

(Remainder of page intentionally left blank)

76

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

 

[Signature pages to Revolving Credit Agreement]

     IN WITNESS WHEREOF, the undersigned have duly executed this Agreement as a
sealed instrument as of the date first set forth above.

              KEYBANK NATIONAL ASSOCIATION,     Individually and as
Administrative Agent     By:      /s/  John Scott

     

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

      Name: John Scott

      Title:   Vice President

            WELLS FARGO NATIONAL ASSOCIATION,     Individually and as
Syndication Agent     By:      /s/   Jennifer A. Dakin

     

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

      Name: Jennifer A. Dakin

      Title:  Assistant Vice President

       

                      FIRST POTOMAC REALTY INVESTMENT LIMITED PARTNERSHIP      
  By: First Potomac Realty Trust,             its sole general partner
 
               

          By:   /s/ Barry Bass

             

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

              Barry Bass, Senior Vice President and

              Chief Financial Officer

(Signatures continued on next page)

77

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

 

                          BREN MAR, LLC
 
                        By: Bren Mar Holdings, LLC,         its sole member
 
                            By: First Potomac Realty Investment Limited
Partnership,             its sole member
 
                                By: First Potomac Realty Trust,                
its sole general partner
 
                   

              By:   /s/ Barry Bass

                 

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

                  Barry Bass, Senior Vice President and

                  Chief Financial Officer
 
                   
 
                        AIRPARK PLACE, LLC
 
                        By: Airpark Place Holdings, LLC,         its sole member
 
                            By: First Potomac Realty Investment Limited
Partnership,             its sole member
 
                                By: First Potomac Realty Trust,                
its sole general partner
 
                   

              By:   /s/ Barry Bass

                 

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

                  Barry Bass, Senior Vice President and

                  Chief Financial Officer

(Signatures continued on next page)

78

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

 

                      CROSSWAYS II LLC
 
                    By: First Potomac Realty Investment Limited Partnership,    
    its sole member
 
                        By: First Potomac Realty Trust,             its sole
general partner
 
               

          By:   /s/ Barry Bass

             

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

              Barry Bass, Senior Vice President and

              Chief Financial Officer
 
               
 
                    AQUIA TWO, LLC
 
                    By: First Potomac Realty Investment Limited Partnership,    
    its sole member

79