Exhibit 10.1

 

Loan No. 1005595    LOGO [g357773logo.jpg]

EXECUTION COPY

 

 

 

CREDIT AGREEMENT

Dated as of May 21, 2012

by and among

SAUL HOLDINGS LIMITED PARTNERSHIP,

as Borrower,

THE FINANCIAL INSTITUTIONS PARTY HERETO

AND THEIR ASSIGNEES UNDER SECTION 13.6.,

as Lenders,

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Administrative Agent,

and

JPMORGAN CHASE BANK, N.A.,

as Syndication Agent

 

 

WELLS FARGO SECURITIES, LLC,

as Sole Lead Arranger and Sole Bookrunner

 

 

 

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TABLE OF CONTENTS

 

ARTICLE I. DEFINITIONS

     1   

Section 1.1.

  

Definitions.

     1   

Section 1.2.

  

General; References to Central Time.

     25   

Section 1.3.

  

Financial Attributes of Non-Wholly Owned Subsidiaries.

     26   

Section 1.4.

  

Pro Forma Calculations.

     26   

ARTICLE II. CREDIT FACILITY

     26   

Section 2.1.

  

Revolving Loans.

     26   

Section 2.2.

  

Letters of Credit.

     27   

Section 2.3.

  

Swingline Loans.

     31   

Section 2.4.

  

Rates and Payment of Interest on Loans.

     33   

Section 2.5.

  

Number of Interest Periods.

     34   

Section 2.6.

  

Repayment of Loans.

     34   

Section 2.7.

  

Prepayments.

     34   

Section 2.8.

  

Continuation.

     35   

Section 2.9.

  

Conversion.

     35   

Section 2.10.

  

Notes.

     36   

Section 2.11.

  

Voluntary Reductions of the Revolving Commitment.

     36   

Section 2.12.

  

Extension of Revolving Termination Date.

     37   

Section 2.13.

  

Expiration Date of Letters of Credit Past Revolving Commitment Termination.

     37   

Section 2.14.

  

Amount Limitations.

     37   

Section 2.15.

  

Funds Transfer Disbursements.

     38   

ARTICLE III. PAYMENTS, FEES AND OTHER GENERAL PROVISIONS

     38   

Section 3.1.

  

Payments.

     38   

Section 3.2.

  

Pro Rata Treatment.

     39   

Section 3.3.

  

Sharing of Payments, Etc.

     40   

Section 3.4.

  

Several Obligations.

     40   

Section 3.5.

  

Fees.

     41   

Section 3.6.

  

Computations.

     42   

Section 3.7.

  

Usury.

     42   

Section 3.8.

  

Statements of Account.

     42   

Section 3.9.

  

Defaulting Lenders.

     42   

Section 3.10.

  

Taxes; Foreign Lenders.

     45   

ARTICLE IV. [RESERVED].

     47   

ARTICLE V. YIELD PROTECTION, ETC.

     47   

Section 5.1.

  

Additional Costs; Capital Adequacy.

     47   

Section 5.2.

  

Suspension of LIBOR Loans.

     49   

Section 5.3.

  

Illegality.

     50   

Section 5.4.

  

Compensation.

     50   

Section 5.5.

  

Treatment of Affected Loans.

     50   

Section 5.6.

  

Affected Lenders.

     51   

Section 5.7.

  

Change of Lending Office.

     51   

Section 5.8.

  

Assumptions Concerning Funding of LIBOR Loans.

     52   

 

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ARTICLE VI. CONDITIONS PRECEDENT

     52   

Section 6.1.

  

Initial Conditions Precedent.

     52   

Section 6.2.

  

Conditions Precedent to All Loans and Letters of Credit.

     54   

ARTICLE VII. REPRESENTATIONS AND WARRANTIES

     54   

Section 7.1.

  

Representations and Warranties.

     54   

Section 7.2.

  

Survival of Representations and Warranties, Etc.

     61   

ARTICLE VIII. AFFIRMATIVE COVENANTS

     61   

Section 8.1.

  

Preservation of Existence and Similar Matters.

     61   

Section 8.2.

  

Compliance with Applicable Law.

     61   

Section 8.3.

  

Maintenance of Property.

     61   

Section 8.4.

  

Conduct of Business.

     62   

Section 8.5.

  

Insurance.

     62   

Section 8.6.

  

Payment of Taxes and Claims.

     62   

Section 8.7.

  

Books and Records; Inspections.

     63   

Section 8.8.

  

Use of Proceeds.

     63   

Section 8.9.

  

Environmental Matters.

     63   

Section 8.10.

  

Further Assurances.

     64   

Section 8.11.

  

Material Contracts.

     64   

Section 8.12.

  

Guarantors.

     64   

ARTICLE IX. INFORMATION

     65   

Section 9.1.

  

Quarterly Financial Statements.

     65   

Section 9.2.

  

Year-End Statements.

     65   

Section 9.3.

  

Compliance Certificate.

     65   

Section 9.4.

  

Other Information.

     66   

Section 9.5.

  

Electronic Delivery of Certain Information.

     68   

Section 9.6.

  

Public/Private Information.

     68   

Section 9.7.

  

USA Patriot Act Notice; Compliance.

     68   

ARTICLE X. NEGATIVE COVENANTS

     69   

Section 10.1.

  

Financial Covenants.

     69   

Section 10.2.

  

Liens; Negative Pledge.

     70   

Section 10.3.

  

Restrictions on Intercompany Transfers.

     71   

Section 10.4.

  

Merger, Consolidation, Sales of Assets and Other Arrangements.

     71   

Section 10.5.

  

Plans.

     72   

Section 10.6.

  

Fiscal Year.

     72   

Section 10.7.

  

Modifications of Organizational Documents and Material Contracts.

     72   

Section 10.8.

  

Subordinated Debt Prepayments; Amendments.

     73   

Section 10.9.

  

Transactions with Affiliates.

     73   

Section 10.10.

  

Environmental Matters.

     73   

Section 10.11.

  

Derivatives Contracts.

     74   

ARTICLE XI. DEFAULT

     74   

Section 11.1.

  

Events of Default.

     74   

Section 11.2.

  

Remedies Upon Event of Default.

     79   

Section 11.3.

  

Remedies Upon Default.

     80   

Section 11.4.

  

Marshaling; Payments Set Aside.

     80   

 

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Section 11.5.

  

Allocation of Proceeds.

     80   

Section 11.6.

  

Letter of Credit Collateral Account.

     81   

Section 11.7.

  

Rescission of Acceleration by Requisite Lenders.

     82   

Section 11.8.

  

Rights Cumulative.

     82   

ARTICLE XII. THE ADMINISTRATIVE AGENT

     83   

Section 12.1.

  

Appointment and Authorization.

     83   

Section 12.2.

  

Wells Fargo as Lender.

     83   

Section 12.3.

  

Approvals of Lenders.

     84   

Section 12.4.

  

Notice of Events of Default.

     84   

Section 12.5.

  

Administrative Agent’s Reliance.

     84   

Section 12.6.

  

Indemnification of Administrative Agent.

     85   

Section 12.7.

  

Lender Credit Decision, Etc.

     86   

Section 12.8.

  

Successor Administrative Agent.

     86   

Section 12.9.

  

Titled Agents.

     87   

ARTICLE XIII. MISCELLANEOUS

     87   

Section 13.1.

  

Notices.

     87   

Section 13.2.

  

Expenses.

     89   

Section 13.3.

  

Stamp, Intangible and Recording Taxes.

     90   

Section 13.4.

  

Setoff.

     90   

Section 13.5.

  

Litigation; Jurisdiction; Other Matters; Waivers.

     91   

Section 13.6.

  

Successors and Assigns.

     92   

Section 13.7.

  

Amendments and Waivers.

     95   

Section 13.8.

  

Nonliability of Administrative Agent and Lenders.

     97   

Section 13.9.

  

Confidentiality.

     97   

Section 13.10.

  

Indemnification.

     98   

Section 13.11.

  

Termination; Survival.

     100   

Section 13.12.

  

Severability of Provisions.

     100   

Section 13.13.

  

GOVERNING LAW.

     101   

Section 13.14.

  

Counterparts.

     101   

Section 13.15.

  

Obligations with Respect to Loan Parties.

     101   

Section 13.16.

  

Independence of Covenants.

     101   

Section 13.17.

  

Limitation of Liability.

     101   

Section 13.18.

  

Entire Agreement.

     102   

Section 13.19.

  

Construction.

     102   

Section 13.20.

  

Headings.

     102   

 

SCHEDULE I

    

Commitments

SCHEDULE 1.1.

    

List of Loan Parties

SCHEDULE 7.1.(b)

    

Ownership Structure

SCHEDULE 7.1.(f)

    

Properties

SCHEDULE 7.1.(g)

    

Indebtedness and Guaranties

SCHEDULE 7.1.(h)

    

Material Contracts

SCHEDULE 7.1.(i)

    

Litigation

SCHEDULE 7.1.(r)

    

Affiliate Transactions

SCHEDULE 10.2.

    

Certain Permitted Liens

 

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EXHIBIT A

  

Form of Assignment and Assumption Agreement

EXHIBIT B

  

Form of Guaranty

EXHIBIT C

  

Form of Notice of Borrowing

EXHIBIT D

  

Form of Notice of Continuation

EXHIBIT E

  

Form of Notice of Conversion

EXHIBIT F

  

Form of Notice of Swingline Borrowing

EXHIBIT G

  

Form of Revolving Note

EXHIBIT H

  

Form of Swingline Note

EXHIBIT I

  

Form of Transfer Authorizer Designation Form

EXHIBIT J

  

Form of Opinion of Counsel

EXHIBIT K

  

Form of Compliance Certificate

 

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THIS CREDIT AGREEMENT (this “Agreement”) dated as of May 21, 2012 by and among
SAUL HOLDINGS LIMITED PARTNERSHIP, a limited partnership formed under the laws
of the State of Maryland (together with its successors and assigns, the
“Borrower”), each of the financial institutions initially a signatory hereto
together with their successors and assigns under Section 13.6. (the “Lenders”),
the Lenders from time to time party hereto as Issuing Banks, WELLS FARGO BANK,
NATIONAL ASSOCIATION, as Administrative Agent (the “Administrative Agent”), and
JPMORGAN CHASE BANK, N.A., as Syndication Agent (the “Syndication Agent”).

WHEREAS, the Administrative Agent, the Issuing Banks and the Lenders desire to
make available to the Borrower a revolving credit facility in the amount of
$175,000,000, with a $30,000,000 swingline subfacility and a $15,000,000 letter
of credit subfacility, on the terms and conditions contained herein.

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

ARTICLE I. DEFINITIONS

 

Section 1.1. Definitions.

In addition to terms defined elsewhere herein, the following terms shall have
the following meanings for the purposes of this Agreement:

“601 Pennsylvania Property” means the real property and improvements at 601
Pennsylvania Avenue, N.W., Washington, D.C, comprised of approximately 225,000
square feet of office space and ancillary ground floor retail space.

“Accession Agreement” means an Accession Agreement substantially in the form of
Annex I to the Guaranty.

“Additional Costs” has the meaning given that term in Section 5.1.(b).

“Adjusted EBITDA” means, for any Person for any given period, (a) the EBITDA of
such Person and its Subsidiaries determined on a consolidated basis for such
period, minus (b) Capital Reserves.

“Adjusted Total Asset Value” means Total Asset Value determined exclusive of
assets that are owned by Excluded Subsidiaries or Unconsolidated Affiliates.

“Administrative Agent” means Wells Fargo Bank, National Association as
contractual representative of the Lenders under this Agreement, or any successor
Administrative Agent appointed pursuant to Section 12.8.

“Administrative Questionnaire” means the Administrative Questionnaire completed
by each Lender and delivered to the Administrative Agent in a form supplied by
the Administrative Agent to the Lenders from time to time.

“Affected Lender” has the meaning given that term in Section 5.6.

“Affiliate” means, with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified. In no event
shall the Administrative Agent or any Lender be deemed to be an Affiliate of the
Borrower or the Parent.

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“Agreement Date” means the date as of which this Agreement is dated.

“Applicable Law” means all applicable provisions of federal, state and local
statutes, treaties, rules, guidelines, regulations, ordinances, codes, executive
orders, and binding administrative or judicial precedents or authorities,
including the interpretation or administration thereof by any Governmental
Authority charged with the enforcement, interpretation or administration
thereof, and all applicable administrative orders, directed duties, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case having the force of law.

“Applicable Margin” means the percentage rate set forth below corresponding to
the ratio of Total Indebtedness of the Borrower and its Subsidiaries to Total
Asset Value of the Borrower and its Subsidiaries:

 

Level

  

Ratio of Total Indebtedness to Total Asset Value

   Applicable
Margin   1   

Less than 0.45 to 1.00

     1.60 %  2   

Greater than or equal to 0.45 to 1.00 but less than 0.50 to 1.00

     1.90 %  3   

Greater than or equal to 0.50 to 1.00 but less than 0.55 to 1.00

     2.20 %  4   

Greater than or equal to 0.55 to 1.00

     2.50 % 

The Applicable Margin for Loans shall be determined by the Administrative Agent
from time to time, based on the ratio of Total Indebtedness to Total Asset Value
as set forth in the Compliance Certificate most recently delivered by the
Borrower pursuant to Section 9.3. Any adjustment to the Applicable Margin shall
be effective as of the first day of the calendar month immediately following the
month during which the Borrower delivers to the Administrative Agent the
applicable Compliance Certificate pursuant to Section 9.3. If the Borrower fails
to deliver a Compliance Certificate pursuant to Section 9.3., the Applicable
Margin shall equal the percentages corresponding to Level 4 until the first day
of the calendar month immediately following the month that the required
Compliance Certificate is delivered. Notwithstanding the foregoing, for the
period from the Effective Date through but excluding the date on which the
Administrative Agent first determines the Applicable Margin for Loans as set
forth above, the Applicable Margin shall be determined based on Level 2.
Thereafter, such Applicable Margin shall be adjusted from time to time as set
forth in this definition. The provisions of this definition shall be subject to
Section 2.4.(c).

“Approved Fund” means any Fund that is administered or managed by (a) a Lender,
(b) an Affiliate of a Lender, or (c) an entity or an Affiliate of any entity
that administers or manages a Lender.

“Arranger” means Wells Fargo Securities, LLC, in its capacity as sole lead
arranger and sole bookrunner, and its successors.

“Assignment and Assumption” means an Assignment and Assumption Agreement among a
Lender, an Eligible Assignee and the Administrative Agent, substantially in the
form of Exhibit A.

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

 

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“Base Rate” means the LIBOR Market Index Rate; provided, that if for any reason
the LIBOR Market Index Rate is unavailable, Base Rate shall mean the per annum
rate of interest equal to the Federal Funds Rate plus one and one-half of one
percent (1.50%).

“Base Rate Loan” means a Revolving Loan (or any portion thereof) bearing
interest at a rate based on the Base Rate.

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

“Borrower” has the meaning set forth in the introductory paragraph hereof.

“Borrower Information” has the meaning given that term in Section 2.4.(c).

“Business Day” means (a) a day of the week (but not a Saturday, Sunday or
holiday) on which the offices of the Administrative Agent in Minneapolis,
Minnesota are open to the public for carrying on substantially all of the
Administrative Agent’s business functions, and (b) if such day relates to a
LIBOR Loan, any such day that is also a day on which dealings in Dollars are
carried on in the London interbank market. Unless specifically referenced in
this Agreement as a Business Day, all references to “days” shall be to calendar
days.

“Capital Reserves” means, for any period and with respect to any Property, an
amount equal to (a) the aggregate square footage of all completed space of such
Property times (b) $0.15 times (c) the number of days in such period divided by
(d) 365. If the term Capital Reserves is used without reference to any specific
Property, then it shall be determined on an aggregate basis with respect to all
Properties and the applicable Ownership Shares of all Properties of all
Unconsolidated Affiliates.

“Capitalization Rate” means 7.5% for all Properties except with respect to
Multifamily Properties or Washington DC CBD Office Properties. For Properties
qualified as Multifamily Properties or Washington DC CBD Office Properties,
Capitalization Rate will mean 7.0%. As of the Agreement Date, the following two
(2) Properties will be considered Washington DC CBD Office Properties and
Multifamily Properties: 601 Pennsylvania Property and the Clarendon Center
Project. For the avoidance of doubt, the Capitalization Rate of 7.0% shall apply
with respect to all income from the Clarendon Center Project, including from the
multifamily portion and the other portions of the Property.

“Capitalized Lease Obligation” means obligations under a lease (or other
arrangement conveying the right to use) to pay rent or other amounts, in each
case that are required to be capitalized for financial reporting purposes in
accordance with GAAP. The amount of a Capitalized Lease Obligation is the
capitalized amount of such obligation as would be required to be reflected on a
balance sheet of the applicable Person prepared in accordance with GAAP as of
the applicable date.

“Cash Collateralize” means, to pledge and deposit with or deliver to the
Administrative Agent, for the benefit of the Issuing Banks or the Lenders, as
collateral for Letter of Credit Liabilities or obligations of Lenders to fund
participations in respect of Letter of Credit Liabilities, cash or deposit
account balances or, if the Administrative Agent and the applicable Issuing Bank
shall agree in their sole discretion, other credit support, in each case
pursuant to documentation in form and substance satisfactory to the
Administrative Agent and such Issuing Bank. “Cash Collateral” shall have a
meaning correlative to the foregoing and shall include the proceeds of such cash
collateral and other credit support.

 

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“Cash Equivalents” means: (a) securities issued, guaranteed or insured by the
United States of America or any of its agencies with maturities of not more than
one year from the date acquired; (b) certificates of deposit with maturities of
not more than one year from the date acquired issued by a United States federal
or state chartered commercial bank of recognized standing, or a commercial bank
organized under the laws of any other country which is a member of the
Organisation for Economic Cooperation and Development, or a political
subdivision of any such country, acting through a branch or agency, which bank
has capital and unimpaired surplus in excess of $500,000,000 and which bank or
its holding company has a short-term commercial paper rating of at least A-2 or
the equivalent by S&P or at least P-2 or the equivalent by Moody’s; (c) reverse
repurchase agreements with terms of not more than seven days from the date
acquired, for securities of the type described in clause (a) above and entered
into only with commercial banks having the qualifications described in
clause (b) above; (d) commercial paper issued by any Person incorporated under
the laws of the United States of America or any State thereof and rated at least
A-2 or the equivalent thereof by S&P or at least P-2 or the equivalent thereof
by Moody’s, in each case with maturities of not more than one year from the date
acquired; and (e) investments in money market funds registered under the
Investment Company Act of 1940, as amended, which have net assets of at least
$500,000,000 and at least 85% of whose assets consist of securities and other
obligations of the type described in clauses (a) through (d) above.

“Clarendon Center Project” means a mixed use development comprised of
approximately 244 rental apartment units, +/-170,000 square feet of office space
and +/- 42,000 square feet of retail space located on two parcels at the
intersections of Clarendon Boulevard with North Highland and North Garfield
Streets in Clarendon, Arlington County, Virginia.

“Commitment” means, as to a Lender, such Lender’s Revolving Commitment.

“Compliance Certificate” has the meaning given that term in Section 9.3.

“Continue,” “Continuation” and “Continued” each refers to the continuation of a
LIBOR Loan from one Interest Period to another Interest Period pursuant to
Section 2.8.

“Control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
“Controlling” and “Controlled” have meanings correlative thereto.

“Convert,” “Conversion” and “Converted” each refers to the conversion of a Loan
of one Type into a Loan of another Type pursuant to Section 2.9.

“Credit Event” means any of the following: (a) the making (or deemed making) of
any Loan, (b) the Conversion of a Base Rate Loan into a LIBOR Loan, (c) the
Continuation of a LIBOR Loan and (d) the issuance of a Letter of Credit.

“Credit Rating” means the rating assigned by a Rating Agency to the senior
unsecured long term Indebtedness of a Person.

“Debtor Relief Laws” means the Bankruptcy Code, and all other liquidation,
conservatorship, bankruptcy, assignment for the benefit of creditors,
moratorium, rearrangement, receivership, insolvency, reorganization, or similar
Applicable Laws relating to the relief of debtors in the United States of
America or other applicable jurisdictions from time to time in effect.

“Default” means any of the events specified in Section 11.1., whether or not
there has been satisfied any requirement for the giving of notice, the lapse of
time, or both.

 

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“Defaulting Lender” means, subject to Section 3.9.(f), any Revolving Lender that
(a) has failed to (i) fund all or any portion of its Loans within two
(2) Business Days of the date such Loans were required to be funded hereunder
unless such Revolving Lender notifies the Administrative Agent and the Borrower
in writing that such failure is the result of such Revolving Lender’s reasonable
determination that one or more conditions precedent to funding (each of which
conditions precedent, together with any applicable default, shall be
specifically identified in such writing) has not been satisfied, or (ii) pay to
the Administrative Agent, any Issuing Bank, the Swingline Lender or any other
Lender any other amount required to be paid by it hereunder (including in
respect of its participation in Letters of Credit or Swingline Loans) within two
(2) Business Days of the date when due, (b) has notified the Borrower, the
Administrative Agent, any Issuing Bank or the Swingline Lender in writing that
it does not intend to comply with its funding obligations hereunder, or has made
a public statement to that effect (unless such writing or public statement
relates to such Revolving Lender’s obligation to fund a Loan hereunder and
states that such position is based on such Revolving Lender’s reasonable
determination that a condition precedent to funding (which condition precedent,
together with any applicable default, shall be specifically identified in such
writing or public statement) cannot be satisfied), (c) has failed, within three
(3) Business Days after written request by the Administrative Agent or the
Borrower, to confirm in writing to the Administrative Agent and the Borrower
that it will comply with its prospective funding obligations hereunder (provided
that such Revolving Lender shall cease to be a Defaulting Lender pursuant to
this clause (c) upon receipt of such written confirmation by the Administrative
Agent and the Borrower), or (d) has, or has a direct or indirect parent company
that has, (i) become the subject of a proceeding under any Debtor Relief Law, or
(ii) had appointed for it a receiver, custodian, conservator, trustee,
administrator, assignee for the benefit of creditors or similar Person charged
with reorganization or liquidation of its business or assets, including the
Federal Deposit Insurance Corporation or any other state or federal regulatory
authority acting in such a capacity; provided that a Revolving Lender shall not
be a Defaulting Lender solely by virtue of the ownership or acquisition of any
equity interest in that Revolving Lender or any direct or indirect parent
company thereof by a Governmental Authority so long as such ownership interest
does not result in or provide such Revolving Lender with immunity from the
jurisdiction of courts within the United States of America or from the
enforcement of judgments or writs of attachment on its assets or permit such
Revolving Lender (or such Governmental Authority) to reject, repudiate, disavow
or disaffirm any contracts or agreements made with such Revolving Lender. Any
determination by the Administrative Agent that a Revolving Lender is a
Defaulting Lender under clauses (a) through (d) above shall be conclusive and
binding absent manifest error, and such Revolving Lender shall be deemed to be a
Defaulting Lender (subject to Section 3.9.(f)) upon delivery of written notice
of such determination to the Borrower, each Issuing Bank, the Swingline Lender
and each Revolving Lender.

“Derivatives Contract” means (a) any transaction (including any master
agreement, confirmation or other agreement with respect to any such transaction)
now existing or hereafter entered into by the Parent and the Borrower or any of
their respective Subsidiaries (i) which is a rate swap transaction, swap option,
basis swap, forward rate transaction, commodity swap, commodity option, equity
or equity index swap, equity or equity index option, bond option, interest rate
option, foreign exchange transaction, cap transaction, floor transaction, collar
transaction, currency swap transaction, cross-currency rate swap transaction,
currency option, credit protection transaction, credit swap, credit default
swap, credit default option, total return swap, credit spread transaction,
repurchase transaction, reverse repurchase transaction, buy/sell-back
transaction, securities lending transaction, weather index transaction or
forward purchase or sale of a security, commodity or other financial instrument
or interest (including any option with respect to any of these transactions) or
(ii) which is a type of transaction that is similar to any transaction referred
to in clause (i) above that is currently, or in the future becomes, recurrently
entered into in the financial markets (including terms and conditions
incorporated by reference in such agreement) and which is a forward, swap,
future, option or other derivative on one or more rates, currencies,
commodities, equity securities or other equity instruments, debt securities or
other debt instruments, economic indices or measures of economic risk or value,
or other benchmarks against which payments or deliveries are to be made, and
(b) any combination of these transactions.

 

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“Derivatives Support Document” means (i) any Credit Support Annex comprising
part of (and as defined in) any Specified Derivatives Contract, and (ii) any
document or agreement pursuant to which cash, deposit accounts, securities
accounts or similar financial asset collateral are pledged to or made available
for set-off by, a Specified Derivatives Provider, including any banker’s lien or
similar right, securing or supporting Specified Derivatives Obligation.

“Derivatives Termination Value” means, in respect of any one or more Derivatives
Contracts, after taking into account the effect of any legally enforceable
netting agreement or provision relating thereto, (a) for any date on or after
the date such Derivatives Contracts have been terminated or closed out, the
termination amount or value determined in accordance therewith, and (b) for any
date prior to the date such Derivatives Contracts have been terminated or closed
out, the then-current mark-to-market value for such Derivatives Contracts,
determined based upon one or more mid-market quotations or estimates provided by
any recognized dealer in Derivatives Contracts (which may include the
Administrative Agent, any Lender or any Affiliate of any thereof).

“Development Property” means a Property currently under development that has not
achieved an Occupancy Rate of 80.0% or more or, subject to the last two
sentences of this definition, on which the improvements (other than tenant
improvements on unoccupied space) related to the development have not been
completed. The term “Development Property” shall include real property of the
type described in the immediately preceding sentence that satisfies both of the
following conditions: (i) it is to be (but has not yet been) acquired by the
Borrower, any Subsidiary or any Unconsolidated Affiliate upon completion of
construction pursuant to a contract in which the seller of such real property is
required to develop or renovate prior to, and as a condition precedent to, such
acquisition and (ii) a third party is developing such property using the
proceeds of a loan that is Guaranteed by, or is otherwise recourse to the
Borrower, any Subsidiary or any Unconsolidated Affiliate. A Development Property
on which all improvements (other than tenant improvements on unoccupied space)
related to the development of such Property have been completed for at least
twelve (12) months shall cease to constitute a Development Property
notwithstanding the fact that such Property has not achieved an Occupancy Rate
of at least 80.0%. Notwithstanding the above, Clarendon Center Project will be
considered a Development Property until December 31, 2012.

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

“EBITDA” means, with respect to a Person for any period and without duplication,
the sum of (a) net income (loss) of such Person for such period determined on a
consolidated basis excluding the following (but only to the extent included in
determining net income (loss) for such period): (i) depreciation and
amortization; (ii) interest expense; (iii) income tax expense;
(iv) extraordinary or nonrecurring items, including without limitation, gains
and losses from the sale of operating Properties (but not from the sale of
Properties developed for the purpose of sale); and (v) equity in net income
(loss) of its Unconsolidated Affiliates plus (b) such Person’s Ownership Share
of EBITDA of its Unconsolidated Affiliates. EBITDA shall be adjusted to remove
any impact from amortization of intangibles pursuant to FASB ASC 805. For
purposes of this definition, nonrecurring items shall be deemed to include
(x) gains and losses on early extinguishment of Indebtedness, and gains or
losses on hedging transactions relating to protection against variable interest
rates on Indebtedness, (y) severance and other restructuring charges and
(z) transaction costs of acquisitions not permitted to be capitalized pursuant
to GAAP.

 

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“Effective Date” means the later of (a) the Agreement Date and (b) the date on
which all of the conditions precedent set forth in Section 6.1. shall have been
fulfilled or waived by all of the Lenders.

“Eligible Assignee” means (a) a Lender, (b) an Affiliate of a Lender, (c) an
Approved Fund and (d) any other Person (other than a natural person) approved by
the Administrative Agent (such approval not to be unreasonably withheld or
delayed); provided that notwithstanding the foregoing, “Eligible Assignee” shall
not include the Parent, the Borrower or any of the Parent’s or the Borrower’s
respective Affiliates or Subsidiaries or any Defaulting Lender or its
Affiliates.

“Eligible Property” means a Property which satisfies all of the following
requirements: (a) such Property is fully developed as a retail, office,
industrial or mixed use Property; (b) such Property is either (x) owned in fee
simple by the Borrower, a Guarantor (other than the Parent) or a Wholly Owned
Subsidiary of the Borrower (other than an Excluded Subsidiary), (y) one of the
following Properties with respect to which the Borrower, a Guarantor (other than
the Parent) or a Wholly Owned Subsidiary (other than an Excluded Subsidiary) of
the Borrower owns a leasehold interest under a Ground Lease: Beacon Center at
6700-6800 Richmond Highway, Alexandria, Virginia, Olney Center at 3410-3494
Olney Laytonsville Road, Olney, Maryland and Southdale Center at 4R Mountain
Road, Glen Burnie, Maryland 21061 or (z) any other Property with respect to
which the Borrower, a Guarantor (other than the Parent) or a Wholly Owned
Subsidiary of the Borrower (other than an Excluded Subsidiary) owns a leasehold
interest under a Ground Lease which has been approved as an “Eligible Property”
by the Administrative Agent, such approval not to be unreasonably withheld or
delayed; provided, that to the extent the amount of Unencumbered Asset Value
attributable to Eligible Properties leased under Ground Leases, which are
Eligible Properties under this clause (z), would exceed 10.0% of the aggregate
Unencumbered Asset Value at any time, such excess shall be excluded; (c) such
Property is located in a State of the United States of America or in the
District of Columbia; (d) neither such Property, nor any interest of the
Borrower, any Guarantor or any Wholly Owned Subsidiary of the Borrower therein,
is subject to (i) any Lien (other than Permitted Liens) or (ii) any Negative
Pledge; (e) if such Property is owned by a Guarantor or a Wholly Owned
Subsidiary of the Borrower, neither the Parent’s nor the Borrower’s direct or
indirect ownership interest in such Guarantor or such Wholly Owned Subsidiary of
the Borrower, as applicable, is subject to (i) any Lien or (ii) any Negative
Pledge; (f) regardless of whether such Property is owned by the Borrower, a
Guarantor or a Wholly Owned Subsidiary, the Borrower or a Guarantor has the
right directly, or indirectly through a Subsidiary, to take the following
actions without the need to obtain the consent of any Person: (i) to create
Liens on such Property as security for Indebtedness of the Borrower, such
Guarantor or such Wholly Owned Subsidiary, as applicable, and (ii) to sell,
transfer or otherwise dispose of such Property; and (g) such Property is free of
all structural defects or major architectural deficiencies, title defects (other
than Permitted Liens), environmental conditions or other adverse matters except
for defects, deficiencies, conditions or other matters individually or
collectively which are not material to the profitable operation of such
Property. The initial list of Eligible Properties shall be provided by the
Borrower to the Administrative Agent and the Lenders on the Agreement Date in
the Officer’s Certificate. For the avoidance of doubt, no Property owned or
leased by an Excluded Subsidiary shall be an “Eligible Property” hereunder.

“Environmental Laws” means any Applicable Law relating to environmental
protection or the manufacture, storage, remediation, disposal or clean-up of
Hazardous Materials including, without limitation, the following: Clean Air Act,
42 U.S.C. § 7401 et seq.; Federal Water Pollution Control Act, 33 U.S.C. § 1251
et seq.; Solid Waste Disposal Act, as amended by the Resource Conservation and
Recovery Act, 42 U.S.C. § 6901 et seq.; Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. § 9601 et seq.; National Environmental
Policy Act, 42 U.S.C. § 4321 et seq.; regulations of the Environmental
Protection Agency, any applicable rule of common law and any judicial
interpretation thereof relating primarily to the environment or Hazardous
Materials, and any analogous or comparable state or local laws, regulations or
ordinances that concern Hazardous Materials or protection of the environment, in
each case to the extent constituting Applicable Law.

 

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

“Equity Issuance” means any issuance or sale by a Person of any Equity Interest
in such Person and shall in any event include the issuance of any Equity
Interest upon the conversion or exchange of any security constituting
Indebtedness that is convertible or exchangeable, or is being converted or
exchanged, for Equity Interests.

“ERISA” means the Employee Retirement Income Security Act of 1974, as in effect
from time to time.

“ERISA Event” means, with respect to the ERISA Group, (a) any “reportable event”
as defined in Section 4043 of ERISA with respect to a Plan (other than an event
for which the 30-day notice period is waived); (b) the withdrawal of a member of
the ERISA Group from a Plan subject to Section 4063 of ERISA during a plan year
in which it was a “substantial employer” as defined in Section 4001(a)(2) of
ERISA or a cessation of operations that is treated as such a withdrawal under
Section 4062(e) of ERISA; (c) the incurrence by a member of the ERISA Group of
any liability with respect to the withdrawal or partial withdrawal from any
Multiemployer Plan; (d) the incurrence by any member of the ERISA Group of any
liability under Title IV of ERISA with respect to the termination of any Plan or
Multiemployer Plan; (e) the institution of proceedings to terminate a Plan or
Multiemployer Plan by the PBGC; (f) the failure by any member of the ERISA Group
to make when due required contributions to a Multiemployer Plan or Plan unless
such failure is cured within 30 days or the filing pursuant to Section 412(c) of
the Internal Revenue Code or Section 302(c) of ERISA of an application for a
waiver of the minimum funding standard; (g) any other event or condition that
might reasonably be expected to constitute grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any Plan
or Multiemployer Plan or the imposition of liability under Section 4069 or
4212(c) of ERISA; (h) the receipt by any member of the ERISA Group of any notice
or the receipt by any Multiemployer Plan from any member of the ERISA Group of
any notice, concerning the imposition of Withdrawal Liability or a determination
that a Multiemployer Plan is, or is expected to be, insolvent (within the
meaning of Section 4245 of ERISA), in reorganization (within the meaning of
Section 4241 of ERISA), or in “critical” status (within the meaning of
Section 432 of the Internal Revenue Code or Section 305 of ERISA); (i) the
imposition of any liability under Title IV of ERISA, other than for PBGC
premiums due but not delinquent under Section 4007 of ERISA, upon any member of
the ERISA Group or the imposition of any Lien in favor of the PBGC under Title
IV of ERISA; or (j) a determination that a Plan is, or is reasonably expected to
be, in “at risk” status (within the meaning of Section 430 of the Internal
Revenue Code or Section 303 of ERISA).

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

 

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“Event of Default” means any of the events specified in Section 11.1., provided
that any requirement for notice or lapse of time or any other condition has been
satisfied.

“Excluded Subsidiary” means (1) Saul Subsidiary II Limited Partnership, a
Delaware limited partnership, so long as it owns only the Properties at 601
Pennsylvania Avenue, Van Ness Square and 4469 Connecticut Avenue; (2) any
Subsidiary of the Borrower (a) holding title to assets that are or are to become
collateral for any Secured Indebtedness of such Subsidiary and (b) that is
prohibited from Guaranteeing the Indebtedness of any other Person pursuant to
(i) any document, instrument or agreement evidencing such Secured Indebtedness
or (ii) a provision of such Subsidiary’s organizational documents which
provision was included in such Subsidiary’s organizational documents as a
condition to the extension of such Secured Indebtedness; (3) any Subsidiary of
the Borrower which is otherwise identified by the Borrower in writing to the
Administrative Agent and approved in writing by the Administrative Agent (such
approval not to be unreasonably withheld or delayed) as an “Excluded
Subsidiary,” and whose Property is, effective as of the date of such designation
(which designation shall not have retroactive effect) not included in, or
removed from, the calculation of Unencumbered Asset Value, provided that for
purposes of this clause (3), (i) immediately before and after such designation,
no Default or Event of Default shall have occurred and be continuing and
(ii) immediately after giving effect to such designation, the Borrower shall be
in compliance with the covenants set forth in Section 10.1. on a pro forma basis
in accordance with Section 1.4. (and upon the reasonable request of the
Administrative Agent the Borrower shall deliver to the Administrative Agent a
certificate setting forth in reasonable detail the calculations demonstrating
such compliance); and (4) any IDOT Finance Subsidiary. The initial list of
Excluded Subsidiaries shall be provided by the Borrower to the Administrative
Agent and the Lenders on the Agreement Date in the Officer’s Certificate.

“Existing Credit Agreement” means that certain Revolving Credit Agreement dated
as of December 19, 2007, by and among Saul Holdings Limited Partnership, as
borrower, U.S. Bank National Association, as administrative agent and sole lead
arranger, Wells Fargo Bank, National Association, as syndication agent, and the
lenders party thereto.

“Fair Market Value” means, (a) with respect to a security listed on a national
securities exchange or the NASDAQ National Market, the price of such security as
reported on such exchange or market by any widely recognized reporting method
customarily relied upon by financial institutions and (b) with respect to any
other property, the price which could be negotiated in an arm’s-length free
market transaction, for cash, between a willing seller and a willing buyer,
neither of which is under pressure or compulsion to complete the transaction.
Except as otherwise provided herein, Fair Market Value shall be determined by
the Responsible Officers of the Parent acting together in good faith and
determining value in accordance with GAAP, as conclusively evidenced by a
certification thereof delivered to the Administrative Agent or, with respect to
any asset valued at no more than $1,000,000, such determination may be made by
the chief financial officer of the Parent evidenced by an officer’s certificate
delivered to the Administrative Agent.

“FASB ASC” means the Accounting Standards Codification of the Financial
Accounting Standards Board.

“Federal Funds Rate” means, for any period, a fluctuating interest rate per
annum equal for each day during such period to the weighted average of the rates
on overnight Federal funds transactions with 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 which
is a Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three Federal Funds
brokers of recognized standing selected by the Administrative Agent.

 

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“Fees” means the fees and commissions provided for or referred to in
Section 3.5. and any other fees payable by the Borrower hereunder or under any
other Loan Document.

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

“Fixed Charges” means, with respect to any Person and for a given period, the
sum of (a) the Interest Expense of such Person for such period, plus (b) the
aggregate of all regularly scheduled principal payments on Indebtedness payable
by such Person during such period (excluding balloon, bullet or similar payments
of principal due upon the stated maturity of Indebtedness), plus (c) the
aggregate amount of all Preferred Dividends paid by such Person during such
period. Such Person’s Ownership Share of the Fixed Charges of its Unconsolidated
Affiliates will be included when determining the Fixed Charges of such Person.

“Floating Rate Indebtedness” means all Indebtedness of a Person which bears
interest at a variable rate during the scheduled life of such Indebtedness to
the extent that such Person has not entered into an interest rate swap
agreement, interest rate “cap” or “collar” agreement or other similar
Derivatives Contract with a Person not an Affiliate of such Person and which, as
of the date of determination, effectively limits such interest rate exposure in
respect of such Indebtedness to a fixed rate less than or equal to 7.00% per
annum.

“Foreign Lender” means any Lender that is organized under the laws of a
jurisdiction other than that in which the Borrower is resident for tax purposes.
For purposes of this definition, the United States of America, each State
thereof and the District of Columbia shall be deemed to constitute a single
jurisdiction.

“Fronting Exposure” means, at any time there is a Defaulting Lender, (a) with
respect to an Issuing Bank, such Defaulting Lender’s Revolving Commitment
Percentage of the outstanding Letter of Credit Liabilities with respect to
Letters of Credit issued by such Issuing Bank other than Letter of Credit
Liabilities as to which such Defaulting Lender’s participation obligation has
been reallocated to other Revolving Lenders or Cash Collateralized in accordance
with the terms hereof, and (b) with respect to the Swingline Lender, such
Defaulting Lender’s Revolving Commitment Percentage of outstanding Swingline
Loans other than Swingline Loans as to which such Defaulting Lender’s
participation obligation has been reallocated to other Revolving Lenders.

“Fund” means any Person (other than a natural person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.

“Funds From Operations” means, with respect to a Person and for a given period,
Funds from Operations as defined from time to time by National Association of
Real Estate Investment Trusts, Inc.

“GAAP” means generally accepted accounting principles in the United States of
America set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board
(including Statement of Financial Accounting Standards No. 168, “The FASB
Accounting Standards Codification”) or in such other statements by such other
entity as may be approved by a significant segment of the accounting profession
in the United States of America, which are applicable to the circumstances as of
the date of determination.

 

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

“Governmental Authority” means any national, state or local government (whether
domestic or foreign), any political subdivision thereof or any other
governmental, quasi-governmental, judicial, administrative, public or statutory
instrumentality, authority, body, agency, bureau, commission, board, department
or other entity (including, without limitation, the Federal Deposit Insurance
Corporation, the Comptroller of the Currency or the Federal Reserve Board, any
central bank or any comparable authority) or any arbitrator with authority to
bind a party at law.

“Ground Lease” means a ground lease containing the following terms and
conditions: (a) a remaining term (exclusive of any unexercised extension
options) of forty (40) years or more from the Agreement Date; (b) the right of
the lessee to mortgage and encumber its interest in the leased property without
the consent of the lessor; (c) the obligation of the lessor to give the holder
of any mortgage Lien on such leased property written notice of any defaults on
the part of the lessee and agreement of such lessor that such lease will not be
terminated until such holder has had a reasonable opportunity to cure or
complete foreclosures, and fails to do so; (d) reasonable transferability of the
lessee’s interest under such lease, including ability to sublease; and (e) such
other rights customarily required by mortgagees making a loan secured by the
interest of the holder of the leasehold estate demised pursuant to a ground
lease.

“Guarantor” means any Person that is party to the Guaranty as a “Guarantor” and
shall in any event include the Parent, Saul Subsidiary I Limited Partnership and
each Material Subsidiary (unless an Excluded Subsidiary).

“Guaranty,” “Guaranteed” or to “Guarantee” as applied to any obligation means
and includes: (a) a guaranty (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), directly or
indirectly, in any manner, of any part or all of such obligation, or (b) an
agreement, direct or indirect, contingent or otherwise, and whether or not
constituting a guaranty, the practical effect of which is to assure the payment
or performance (or payment of damages in the event of nonperformance) of any
part or all of such obligation whether by: (i) the purchase of securities or
obligations, (ii) the purchase, sale or lease (as lessee or lessor) of property
or the purchase or sale of services primarily for the purpose of enabling the
obligor with respect to such obligation to make any payment or performance (or
payment of damages in the event of nonperformance) of or on account of any part
or all of such obligation, or to assure the owner of such obligation against
loss, (iii) the supplying of funds to or in any other manner investing in the
obligor with respect to such obligation, (iv) repayment of amounts drawn down by
beneficiaries of letters of credit (including Letters of Credit), or (v) the
supplying of funds to or investing in a Person on account of all or any part of
such Person’s obligation under a Guaranty of any obligation or indemnifying or
holding harmless, in any way, such Person against any part or all of such
obligation. Notwithstanding the foregoing, a guaranty of customary nonrecourse
carveouts shall not be deemed a “Guaranty” for purposes of this Agreement. As
the context requires, “Guaranty” shall also mean the guaranty executed and
delivered pursuant to Section 6.1. or 8.14. and substantially in the form of
Exhibit B.

“Hazardous Materials” means all or any of the following: (a) substances that are
defined or listed in, or otherwise classified pursuant to, any applicable
Environmental Laws as “hazardous substances,” “hazardous materials,” “hazardous
wastes,” “toxic substances” or any other formulation intended to define, list or
classify substances by reason of deleterious properties such as ignitability,
corrosivity, reactivity, carcinogenicity, reproductive toxicity, “TCLP”
toxicity, or “EP toxicity”; (b) oil, petroleum or petroleum derived substances,
natural gas, natural gas liquids or synthetic gas and drilling fluids, produced
waters and other wastes associated with the exploration, development or
production of crude oil, natural gas or geothermal resources; (c) any flammable
substances or explosives or any

 

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radioactive materials; (d) asbestos in any form; (e) toxic mold; and
(f) electrical equipment which contains any oil or dielectric fluid containing
levels of polychlorinated biphenyls in excess of fifty parts per million.

“IDOT Finance Subsidiary” means any Subsidiary of the Borrower that (i) has been
formed solely for the purpose of entering into financing transactions in the
ordinary course of the Borrower’s and its Subsidiaries’ business and consistent
with past practice, and (ii) is not a Material Subsidiary.

“Indebtedness” means, with respect to a Person, at the time of computation
thereof, all of the following (without duplication): (a) all obligations of such
Person in respect of money borrowed or for the deferred purchase price of
property or services, however excluding trade debt incurred in the ordinary
course of business), and excluding all accrued expenses; (b) all obligations of
such Person, whether or not for money borrowed (i) represented by notes payable,
or drafts accepted, in each case representing extensions of credit,
(ii) evidenced by bonds, debentures, notes or similar instruments, or
(iii) constituting purchase money indebtedness, conditional sales contracts,
title retention debt instruments or other similar instruments, upon which
interest charges are customarily paid or that are issued or assumed as full or
partial payment for property or for services rendered; (c) Capitalized Lease
Obligations of such Person; (d) all reimbursement obligations (contingent or
otherwise) of such Person under or in respect of any letters of credit or
acceptances (whether or not the same have been presented for payment); (e) all
Off-Balance Sheet Obligations of such Person; (f) all obligations of such Person
to purchase, redeem, retire, defease or otherwise make any payment in respect of
any Mandatorily Redeemable Stock issued by such Person or any other Person,
valued at the greater of its voluntary or involuntary liquidation preference
plus accrued and unpaid dividends; (g) all obligations of such Person in respect
of any purchase obligation, repurchase obligation, takeout commitment or forward
equity commitment, in each case evidenced by a binding agreement (excluding any
such obligation to the extent the obligation can be satisfied by the issuance of
Equity Interests (other than Mandatorily Redeemable Stock)); (h) net obligations
under any Derivatives Contract not entered into as a hedge against variable
interest rates on Indebtedness, in an amount equal to the Derivatives
Termination Value thereof at such time but in no event shall be less than zero;
(i) all Indebtedness of other Persons which such Person has Guaranteed or is
otherwise recourse to such Person (except for guaranties of customary exceptions
for fraud, misapplication of funds, environmental indemnities, voluntary
bankruptcy, collusive involuntary bankruptcy and other similar customary
exceptions to non-recourse liability); (j) all Indebtedness of another Person
secured by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien on property or assets owned
by such Person, even though such Person has not assumed or become liable for the
payment of such Indebtedness or other payment obligation; and (k) such Person’s
Ownership Share of the Indebtedness of any Unconsolidated Affiliate of such
Person. Indebtedness of any Person shall include Indebtedness of any partnership
or joint venture in which such Person is a general partner or joint venturer to
the extent of such Person’s Ownership Share of such partnership or joint venture
(except if such Indebtedness, or portion thereof, is recourse to such Person, in
which case the greater of such Person’s Ownership Share of such Indebtedness or
the amount of the recourse portion of the Indebtedness, shall be included as
Indebtedness of such Person). All Loans and Letter of Credit Liabilities shall
constitute “Indebtedness” of the Borrower.

“Intellectual Property” has the meaning given that term in Section 7.1.(s).

“Interest Expense” means, with respect to a Person for any period, without
duplication, (a) total interest expense of such Person, including capitalized
interest not funded under a construction loan interest reserve account, and in
any event shall include all interest expense with respect to any Indebtedness of
Borrower and its Subsidiaries in respect of which such Person is wholly or
partially liable whether pursuant to any repayment, interest carry, performance
guarantee or otherwise, determined on a consolidated basis in accordance with
GAAP for such period, plus (b) such Person’s Ownership Share of Interest Expense
of Unconsolidated Affiliates for such period.

 

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“Interest Period” means with respect to each LIBOR Loan, each period commencing
on the date such LIBOR Loan is made, or in the case of the Continuation of a
LIBOR Loan the last day of the preceding Interest Period for such LIBOR Loan,
and ending on the numerically corresponding day in the first calendar month
thereafter, as the Borrower may select in a Notice of Borrowing, Notice of
Continuation or Notice of Conversion, as the case may be, except that each
Interest Period that commences on the last Business Day of a calendar month (or
on any day for which there is no numerically corresponding day in the
appropriate subsequent calendar month) shall end on the last Business Day of the
appropriate subsequent calendar month. Notwithstanding the foregoing: (a) if any
Interest Period would otherwise end after the Termination Date, such Interest
Period shall end on the Termination Date and (b) each Interest Period that would
otherwise end on a day which is not a Business Day shall end on the immediately
following Business Day (or, if such immediately following Business Day falls in
the next calendar month, on the immediately preceding Business Day).

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

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

“Issuing Bank” means Wells Fargo or any other Lender, each in its capacity as an
issuer of Letters of Credit pursuant to Section 2.2.

“L/C Commitment Amount” has the meaning given to that term in Section 2.2.(a).

“L/C Disbursement” has the meaning given to that term in Section 3.9.(b).

“Lender” means each financial institution from time to time party hereto as a
“Lender,” together with its respective successors and permitted assigns, and, as
the context requires, includes the Swingline Lender; provided, however, that
except as otherwise expressly provided herein, the term “Lender” shall exclude
any Lender (or its Affiliates) in its capacity as a Specified Derivatives
Provider.

“Lending Office” means, for each Lender and for each Type of Loan, the office of
such Lender specified in such Lender’s Administrative Questionnaire or in the
applicable Assignment and Assumption, or such other office of such Lender as
such Lender may notify the Administrative Agent in writing from time to time.

“Letter of Credit” has the meaning given that term in Section 2.2.(a).

 

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“Letter of Credit Collateral Account” means a special deposit account maintained
by the Administrative Agent, for the benefit of the Administrative Agent, the
Issuing Banks and the Lenders, and under its sole dominion and control.

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

“Letter of Credit Liabilities” means, without duplication, at any time and in
respect of any Letter of Credit, the sum of (a) the Stated Amount of such Letter
of Credit plus (b) the aggregate unpaid principal amount of all Reimbursement
Obligations of the Borrower at such time due and payable in respect of all
drawings made under such Letter of Credit. For purposes of this Agreement, a
Lender (other than the Lender then acting as the applicable Issuing Bank) shall
be deemed to hold a Letter of Credit Liability in an amount equal to its
participation interest under Section 2.2. in the related Letter of Credit, and
the Lender then acting as the applicable Issuing Bank shall be deemed to hold a
Letter of Credit Liability in an amount equal to its retained interest in the
related Letter of Credit after giving effect to the acquisition by the Lenders
(other than the Lender then acting as the applicable Issuing Bank) of their
participation interests under such Section.

“Level” has the meaning given that term in the definition of the term
“Applicable Margin.”

“LIBOR” means, for the Interest Period for any LIBOR Loan, the rate of interest,
rounded up to the nearest whole multiple of one-hundredth of one percent
(0.01%), obtained by dividing (i) the rate of interest, rounded upward to the
nearest whole multiple of one-hundredth of one percent (0.01%), referred to as
the BBA (British Bankers’ Association) LIBOR rate as set forth by any service
selected by the Administrative Agent that has been nominated by the British
Bankers’ Association as an authorized information vendor for the purpose of
displaying such rate for deposits in U.S. Dollars at approximately 11:00 a.m.
Central time, two (2) Business Days prior to the date of commencement of such
Interest Period for purposes of calculating effective rates of interest for
loans or obligations making reference thereto, for an amount approximately equal
to the applicable LIBOR Loan and for a period of time approximately equal to
such Interest Period by (ii) a percentage equal to one (1) minus the stated
maximum rate (stated as a decimal) of all reserves, if any, required to be
maintained with respect to Eurocurrency funding (currently referred to as
“Eurocurrency liabilities”) as specified in Regulation D of the Board of
Governors of the Federal Reserve System (or against any other category of
liabilities which includes deposits by reference to which the interest rate on
LIBOR Loans is determined or any applicable category of extensions of credit or
other assets which includes loans by an office of any Lender outside of the
United States of America). Any change in such maximum rate shall result in a
change in LIBOR on the date on which such change in such maximum rate becomes
effective.

“LIBOR Loan” means a Revolving Loan (or any portion thereof) (other than a Base
Rate Loan) bearing interest at a rate based on LIBOR.

“LIBOR Market Index Rate” means, for any day, LIBOR as of that day that would be
applicable for a LIBOR Loan having a one-month Interest Period determined at
approximately 11:00 a.m. Central time for such day (or if such day is not a
Business Day, the immediately preceding Business Day). The LIBOR Market Index
Rate shall be determined on a daily basis.

“Lien” as applied to the property of any Person means: (a) any security
interest, encumbrance, mortgage, deed to secure debt, deed of trust, assignment
of leases and rents, pledge, lien, hypothecation,

 

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assignment, charge or lease constituting a Capitalized Lease Obligation,
conditional sale or other title retention agreement, or other security title or
encumbrance of any kind in respect of any property of such Person, or upon the
income, rents or profits therefrom; (b) any arrangement, express or implied,
under which any property of such Person is transferred, sequestered or otherwise
identified for the purpose of subjecting the same to the payment of Indebtedness
or performance of any other obligation in priority to the payment of the
general, unsecured creditors of such Person; and (c) the filing of any financing
statement under the UCC or its equivalent in any jurisdiction, other than any
precautionary filing not otherwise constituting or giving rise to a Lien,
including a financing statement filed (i) in respect of a lease not constituting
a Capitalized Lease Obligation pursuant to Section 9-505 (or a successor
provision) of the Uniform Commercial Code or its equivalent as in effect in an
applicable jurisdiction or (ii) in connection with a sale or other disposition
of accounts or other assets not prohibited by this Agreement in a transaction
not otherwise constituting or giving rise to a Lien.

“Loan” means a Revolving Loan or a Swingline Loan.

“Loan Document” means this Agreement, each Note, the Guaranty, each Letter of
Credit Document and each other document or instrument now or hereafter executed
and delivered by a Loan Party in connection with, pursuant to or relating to
this Agreement (other than any Specified Derivatives Contract).

“Loan Party” means each of the Borrower, the Parent and each other Person who
guarantees all or a portion of the Obligations. Schedule 1.1. sets forth the
Loan Parties in addition to the Borrower and the Parent as of the Agreement
Date.

“Mandatorily Redeemable Stock” means, with respect to any Person, any Equity
Interest of such Person which by the terms of such Equity Interest (or by the
terms of any security into which it is convertible or for which it is
exchangeable or exercisable), upon the happening of any event or otherwise,
(a) matures or is mandatorily redeemable, pursuant to a sinking fund obligation
or otherwise (other than an Equity Interest to the extent redeemable in exchange
for common stock or other equivalent common Equity Interests at the option of
the issuer of such Equity Interest), (b) is convertible into or exchangeable or
exercisable for Indebtedness or Mandatorily Redeemable Stock, or (c) is
redeemable at the option of the holder thereof, in whole or in part (other than
an Equity Interest which is redeemable solely in exchange for common stock or
other equivalent common Equity Interests); in each case, on or prior to the date
on which all Loans are scheduled to be due and payable in full.

“Material Adverse Effect” means a materially adverse effect on (a) the business,
assets, liabilities, financial condition or results of operations of the Parent
and its Subsidiaries taken as a whole, (b) the ability of the Parent, the
Borrower and the other Loan Parties, taken as a whole, to perform their
obligations under the Loan Documents, (c) the validity or enforceability of the
Loan Documents taken as a whole, or (d) the rights and remedies of the Lenders,
the Issuing Banks and the Administrative Agent under the Loan Documents taken as
a whole.

“Material Contract” means (a) any Tenant Lease the termination of which, prior
to the end of its term, could reasonably be expected to cause a Material Adverse
Effect and (b) any contract or other arrangement (other than Loan Documents and
Specified Derivatives Contracts), whether written or oral, to which the Parent,
the Borrower, any Subsidiary of the Borrower or any other Loan Party is a party
as to which the breach, nonperformance, cancellation or failure to renew (if
renewable by its terms) by any party thereto could reasonably be expected to
have a Material Adverse Effect.

“Material Subsidiary” means any Subsidiary of the Parent having assets with a
Fair Market Value equal to or greater than $2,500,000.

 

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“Moody’s” means Moody’s Investors Service, Inc. and its successors.

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

“Mortgage Receivable” means a promissory note secured by a Mortgage of which the
Parent, the Borrower or a Subsidiary of the Parent is the holder and retains the
rights of collection of all payments thereunder.

“Multiemployer Plan” means at any time a multiemployer plan within the meaning
of Section 4001(a)(3) of ERISA to which any member of the ERISA Group is then
making or accruing an obligation to make contributions or has within the
preceding six plan years made contributions, including for these purposes any
Person which ceased to be a member of the ERISA Group during such six-year
period.

“Multifamily Property” means (a) the Clarendon Center Project and (b) each other
Property which is designated as such by the Administrative Agent and the
Borrower from time to time.

“Negative Pledge” means, with respect to a given asset, any provision of a
document, instrument or agreement (other than any Loan Document) which prohibits
or purports to prohibit the creation or assumption of any Lien on such asset as
security for Indebtedness of the Person owning such asset or any other Person;
provided, however, that an agreement that conditions a Person’s ability to
encumber its assets upon the maintenance of one or more specified ratios that
limit such Person’s ability to encumber its assets but that do not generally
prohibit the encumbrance of its assets, or the encumbrance of specific assets,
shall not constitute a Negative Pledge.

“Net Operating Income” or “NOI” means, for any Property and for a given period,
the sum of the following (without duplication and determined on a consistent
basis with prior periods): (a) rents and other revenues received in the ordinary
course from such Property (including proceeds of rent loss or business
interruption insurance but excluding pre-paid rents and revenues and security
deposits except to the extent applied in satisfaction of tenants’ obligations
for rent) minus (b) all expenses paid (excluding interest but including an
appropriate accrual for property taxes and insurance) related to the ownership,
operation or maintenance of such Property, including but not limited to property
taxes, assessments and the like, insurance, utilities, payroll costs,
maintenance, repair and landscaping expenses, marketing expenses, and general
and administrative expenses (including an appropriate allocation for legal,
accounting, advertising, marketing and other expenses incurred in connection
with such Property, but specifically excluding general overhead expenses of the
Parent or the Borrower and the Subsidiaries of the Parent and any property
management fees) minus (c) the Capital Reserves for such Property as of the end
of such period minus (d) the greater of (i) the actual property management fee
paid during such period with respect to such property, and (ii) an imputed
management fee in the amount of 3% of the gross revenues for such Property for
such period.

“Net Proceeds” means with respect to an Equity Issuance by a Person, the
aggregate amount of all cash and the Fair Market Value of all other property
(other than securities of such Person being converted or exchanged in connection
with such Equity Issuance) received by such Person in respect of such Equity
Issuance net of investment banking fees, legal fees, accountants’ fees,
underwriting discounts and commissions and other customary fees and expenses
actually incurred by such Person in connection with such Equity Issuance.

 

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“Non-Defaulting Lender” means, at any time, each Lender that is not a Defaulting
Lender at such time.

“Nonrecourse Indebtedness” means, with respect to a Person, Indebtedness for
borrowed money in respect of which recourse for payment (except for customary
exceptions for fraud, misapplication of funds, environmental indemnities,
voluntary bankruptcy, collusive involuntary bankruptcy and other similar
customary exceptions to non-recourse liability) is contractually limited to
specific assets of such Person encumbered by a Lien securing such Indebtedness.

“Note” means a Revolving Note or a Swingline Note.

“Notice of Borrowing” means a notice substantially in the form of Exhibit C (or
such other form reasonably acceptable to the Administrative Agent and containing
the information required in such Exhibit) to be delivered to the Administrative
Agent pursuant to Section 2.1.(b) evidencing the Borrower’s request for a
borrowing of Revolving Loans.

“Notice of Continuation” means a notice substantially in the form of Exhibit D
(or such other form reasonably acceptable to the Administrative Agent and
containing the information required in such Exhibit) to be delivered to the
Administrative Agent pursuant to Section 2.8. evidencing the Borrower’s request
for the Continuation of a LIBOR Loan.

“Notice of Conversion” means a notice substantially in the form of Exhibit E (or
such other form reasonably acceptable to the Administrative Agent and containing
the information required in such Exhibit) to be delivered to the Administrative
Agent pursuant to Section 2.9. evidencing the Borrower’s request for the
Conversion of a Loan from one Type to another Type.

“Notice of Swingline Borrowing” means a notice substantially in the form of
Exhibit F (or such other form reasonably acceptable to the Administrative Agent
and containing the information required in such Exhibit) to be delivered to the
Swingline Lender pursuant to Section 2.3.(b) evidencing the Borrower’s request
for a Swingline Loan.

“Obligations” means, individually and collectively: (a) the aggregate principal
balance of, and all accrued and unpaid interest on, all Loans; (b) all
Reimbursement Obligations and all other Letter of Credit Liabilities; and
(c) all other indebtedness, liabilities, obligations, covenants and duties of
the Borrower and the other Loan Parties owing to the Administrative Agent, any
Issuing Bank or any Lender of every kind, nature and description, under or in
respect of this Agreement or any of the other Loan Documents, including, without
limitation, the Fees and indemnification obligations, whether direct or
indirect, absolute or contingent, due or not due, contractual or tortious,
liquidated or unliquidated, and whether or not evidenced by any promissory note.
For the avoidance of doubt, “Obligations” shall not include Specified
Derivatives Obligations.

“Occupancy Rate” means, with respect to a Property at any time, the ratio,
expressed as a percentage, of (a) the net rentable square footage of such
Property actually occupied by tenants that are not affiliated with the Borrower
and paying rent at rates not materially less than rates generally prevailing at
the time the applicable lease was entered into, pursuant to binding leases as to
which no material monetary default has occurred and has continued to the date of
determination unremedied for 60 or more days to (b) the aggregate net rentable
square footage of such Property. For the purposes of the definition of
“Occupancy Rate,” a tenant shall be deemed to actually occupy a Property
notwithstanding a temporary cessation of operations for renovation, repairs or
other temporary reason, or for the purpose of completing tenant build out or
that is otherwise scheduled to be open for business within 180 days of such
date.

 

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“OFAC” has the meaning given that term in Section 7.1.(x).

“Officer’s Certificate” means a certificate from the chief executive officer or
chief financial officer of the Parent certifying the “Eligible Properties” and
“Excluded Subsidiaries” as of the Agreement Date and a description of the
“Permitted Ground Lease Encumbrance”.

“Off-Balance Sheet Obligations” means liabilities and obligations of the Parent,
the Borrower, any Subsidiary or any other Person in respect of “off-balance
sheet arrangements” (as defined in Item 303(a)(4)(ii) of Regulation S-K
promulgated under the Securities Act) which the Parent would be required to
disclose in the “Management’s Discussion and Analysis of Financial Condition and
Results of Operations” section of the Parent’s report on Form 10-Q or Form 10-K
(or their equivalents) which the Parent is required to file with the Securities
and Exchange Commission (or any Governmental Authority substituted therefor).

“Ownership Share” means, with respect to any Subsidiary of a Person (other than
a Wholly Owned Subsidiary) or any Unconsolidated Affiliate of a Person, the
greater of (a) such Person’s relative nominal direct and indirect ownership
interest (expressed as a percentage) in such Subsidiary or Unconsolidated
Affiliate or (b) subject to compliance with Section 9.4.(n), such Person’s
relative direct and indirect economic interest (calculated as a percentage) in
such Subsidiary or Unconsolidated Affiliate determined in accordance with the
applicable provisions of the declaration of trust, articles or certificate of
incorporation, articles of organization, partnership agreement, joint venture
agreement or other applicable organizational document of such Subsidiary or
Unconsolidated Affiliate.

“Parent” means Saul Centers, Inc., a Maryland corporation, its successors and
assigns.

“Participant” has the meaning given that term in Section 13.6.(d).

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

“Permitted Ground Lease Encumbrance” means the encumbrance in respect of one of
the Properties owned by the Borrower and its Subsidiaries existing as of the
Agreement Date and described in the Officer’s Certificate.

“Permitted Liens” means, with respect to any asset or property of a Person,
(a) Liens securing taxes, assessments and other charges or levies imposed by any
Governmental Authority (excluding any Lien imposed pursuant to any of the
provisions of ERISA or pursuant to any Environmental Laws), in all cases which
are not yet due or which are being contested in good faith and with respect to
which adequate reserves or other appropriate provisions are being maintained in
accordance with GAAP; (b) the claims of materialmen, mechanics, carriers,
warehousemen or landlords for labor, materials, supplies or rentals incurred in
the ordinary course of business, which, in each case, are not at the time
required to be paid or discharged under Section 8.6.; (c) Liens consisting of
deposits or pledges made, in the ordinary course of business, in connection
with, or to secure payment of, obligations under workers’ compensation,
unemployment insurance or similar Applicable Laws; (d) Liens consisting of
encumbrances in the nature of zoning restrictions, easements, customary
declarations, and rights or restrictions of record or otherwise imposed by an
applicable Governmental Authority on the use of real property, which do not
materially detract from the value of such property or impair the intended use
thereof in the business of such Person; (e) the rights of tenants under leases
or subleases (including customary “no build” restrictions) not interfering with
the ordinary conduct of business of such Person; and (f) Liens in favor of
(x) any Loan Party, existing as of the Agreement Date and set forth on Schedule
10.2. or (y) the Administrative Agent for its benefit and the benefit of the
Lenders and the Issuing Banks.

 

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“Person” means any natural person, corporation, limited partnership, general
partnership, joint stock company, limited liability company, limited liability
partnership, joint venture, association, company, trust, bank, trust company,
land trust, business trust or other organization, whether or not a legal entity,
or any other nongovernmental entity, or any Governmental Authority.

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

“Post-Default Rate” means, in respect of any principal of any Loan or any
Reimbursement Obligation that is not paid when due, the rate otherwise
applicable plus an additional five percent (5.0%) per annum and with respect to
any other Obligation that is not paid when due (whether at stated maturity, by
acceleration, by optional or mandatory prepayment or otherwise), a rate per
annum equal to the Base Rate as in effect from time to time plus the Applicable
Margin plus five percent (5.0%).

“Preferred Dividends” means, for any period and without duplication, all
Restricted Payments paid during such period on Preferred Equity Interests issued
by the Parent, the Borrower or any Subsidiary. Preferred Dividends shall not
include dividends or distributions (a) paid or payable solely in Equity
Interests (other than Mandatorily Redeemable Stock) payable to holders of such
class of Equity Interests, (b) paid or payable to the Parent, the Borrower or a
Subsidiary, or (c) constituting or resulting in the redemption of Preferred
Equity Interests, other than scheduled redemptions not constituting balloon,
bullet or similar redemptions in full.

“Preferred Equity Interest” means, with respect to any Person, Equity Interests
in such Person which are entitled to preference or priority over any other
Equity Interest in such Person in respect of the payment of dividends or
distribution of assets upon liquidation or both.

“Principal Office” means the office of the Administrative Agent located at 608
Second Avenue S., 11th Floor, Minneapolis, Minnesota 55402-1916, or any other
subsequent office that the Administrative Agent shall have specified as the
Principal Office by written notice to the Borrower and the Lenders.

“Property” means a parcel (or group of related parcels) of real property
developed (or to be developed) by the Borrower, or any Subsidiary of the
Borrower or any Unconsolidated Affiliate.

“Property Management Agreements” means, collectively, all agreements entered
into by the Borrower or any other Loan Party pursuant to which the Borrower or
such other Loan Party engages a Person to advise it with respect to the
management of a given Property and/or to manage a given Property.

“Pro Rata Share” means, as to each Lender, the ratio, expressed as a percentage
of (a) the amount of such Lender’s Revolving Commitment to (b) the aggregate
amount of the Revolving Commitments of all Lenders; provided, however, that if
at the time of determination the Revolving Commitments have terminated or been
reduced to zero, the “Pro Rata Share” of each Lender shall be the ratio,
expressed as a percentage of (A) the sum of the unpaid principal amount of all
outstanding Revolving Loans, Swingline Loans and Letter of Credit Liabilities
owing to such Lender as of such date to (B) the sum of the aggregate unpaid
principal amount of all outstanding Revolving Loans, Swingline Loans and Letter
of Credit Liabilities of all Lenders as of such date.

 

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“Qualified Plan” means a Benefit Arrangement that is intended to be
tax-qualified under Section 401(a) of the Internal Revenue Code.

“Rating Agency” means S&P, Moody’s or any other nationally recognized securities
rating agency selected by the Borrower and approved of by the Administrative
Agent in writing.

“Register” has the meaning given that term in Section 13.6.(c).

“Regulatory Change” means, with respect to any Lender, any change effective
after the Agreement Date in Applicable Law (including without limitation,
Regulation D of the Board of Governors of the Federal Reserve System) or the
adoption or making after such date of any interpretation, directive or request
applying to a class of banks, including such Lender, of or under any Applicable
Law (whether or not having the force of law and whether or not failure to comply
therewith would be unlawful) by any Governmental Authority or monetary authority
charged with the interpretation or administration thereof or compliance by any
Lender with any request or directive regarding capital adequacy or liquidity
requirements. Notwithstanding anything herein to the contrary, (a) the
Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests,
rules, guidelines or directives thereunder or issued in connection therewith and
(b) all requests, rules, guidelines or directives promulgated by the Bank for
International Settlements, the Basel Committee on Banking Supervision (or any
successor or similar authority) or the United States or foreign regulatory
authorities, in each case pursuant to Basel III, shall in each case be deemed to
be a “Regulatory Change,” regardless of the date enacted, adopted or issued.

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

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

“Related Parties” means, with respect to any Person, such Person’s Affiliates
and the partners, directors, officers, employees, agents and advisors of such
Person and of such Person’s Affiliates.

“Requisite Lenders” means, as of any date, (a) Lenders having at least 66-2/3%
of the aggregate amount of the Revolving Commitments, or (b) if the Revolving
Commitments have been terminated or reduced to zero, Lenders holding at least
66-2/3% of the principal amount of the aggregate outstanding Loans and Letter of
Credit Liabilities; provided that (i) in determining such percentage at any
given time, all then existing Defaulting Lenders will be disregarded and
excluded, and (ii) at all times when two or more Lenders (excluding Defaulting
Lenders) are party to this Agreement, the term “Requisite Lenders” shall in no
event mean less than two Lenders. For purposes of this definition, a Lender
shall be deemed to hold a Swingline Loan or a Letter of Credit Liability to the
extent such Lender has acquired a participation therein under the terms of this
Agreement and has not failed to perform its obligations in respect of such
participation.

“Responsible Officer” means with respect to the Parent, the Borrower or any
other Subsidiary of the Parent, the chief financial officer and President of the
Parent, the Borrower or such Subsidiary, as applicable. For purposes of this
Agreement, references to the Borrower’s or a Subsidiary’s Responsible Officers
shall be deemed to refer to the Parent’s Responsible Officers.

“Restricted Payment” means: (a) any dividend or other distribution, direct or
indirect, on account of any Equity Interest of the Parent, the Borrower or any
of the Subsidiaries of the Parent now or

 

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hereafter outstanding, except a dividend payable solely in shares of that class
of Equity Interest to the holders of that class; (b) any redemption, conversion,
exchange, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any Equity Interest of the Parent,
the Borrower or any of the Subsidiaries of the Parent now or hereafter
outstanding; (c) any payment or prepayment of principal of, premium, if any, or
interest on, redemption, conversion, exchange, purchase, retirement, defeasance,
sinking fund or similar payment with respect to, any Subordinated Debt; and
(d) any payment made to retire, or to obtain the surrender of, any outstanding
warrants, options or other rights to acquire any Equity Interests of the Parent,
the Borrower or any of the Subsidiaries of the Parent now or hereafter
outstanding.

“Revolving Commitment” means, as to each Lender (other than the Swingline
Lender), such Lender’s obligation to make Revolving Loans pursuant to
Section 2.1., to issue (in the case of the Issuing Banks) and to participate (in
the case of the other Lenders) in Letters of Credit pursuant to Section 2.2.(i),
and to participate in Swingline Loans pursuant to Section 2.3.(e), in an amount
up to, but not exceeding the amount set forth for such Lender on Schedule I as
such Lender’s “Revolving Commitment Amount” or as set forth in any applicable
Assignment and Assumption, as the same may be reduced from time to time pursuant
to Section 2.11. or increased or reduced as appropriate to reflect any
assignments to or by such Lender effected in accordance with Section 13.6.

“Revolving Commitment Percentage” means, as to each Lender with a Revolving
Commitment, the ratio, expressed as a percentage, of (a) the amount of such
Lender’s Revolving Commitment to (b) the aggregate amount of the Revolving
Commitments of all Revolving Lenders; provided, however, that if at the time of
determination the Revolving Commitments have been terminated or been reduced to
zero, the “Revolving Commitment Percentage” of each Lender with a Revolving
Commitment shall be the “Revolving Commitment Percentage” of such Lender in
effect immediately prior to such termination or reduction.

“Revolving Credit Exposure” means, as to any Revolving Lender at any time, the
aggregate principal amount at such time of its outstanding Revolving Loans and
such Revolving Lender’s participation in Letter of Credit Liabilities and
Swingline Loans at such time.

“Revolving Lender” means a Lender having a Revolving Commitment.

“Revolving Loan” means a loan made by a Lender to the Borrower pursuant to
Section 2.1.(a).

“Revolving Note” means a promissory note of the Borrower substantially in the
form of Exhibit G, payable to the order of a Lender in a principal amount equal
to the amount of such Lender’s Revolving Commitment.

“Revolving Termination Date” means May 20, 2016, or such later date to which the
Revolving Termination Date may be extended pursuant to Section 2.12.

“S&P” means Standard & Poor’s Ratings Services, a Standard & Poor’s Financial
Services LLC business, and its successors.

“Saul Family” means B. Francis Saul II and his spouse, siblings, and lineal
descendants and the spouses of such siblings and lineal descendants and the
heirs, beneficiaries, devisees or legatees that are or were members of the same
family by blood, marriage or adoption as any of the same or any of the foregoing
(and for purposes of this definition, any shares of Equity Interests which a
Person no longer owns as a result of death shall be deemed still to be owned by
such Person unless not held by such Person’s estate, trusts established under
such Person’s will, or the heirs, beneficiaries, devisees or legatees

 

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of such Person that are or were members of the same family by blood, marriage or
adoption as such Person). Entities owned or controlled by members of the Saul
Family shall be deemed owned by such members for purposes of this Agreement.

“Secured Indebtedness” means, with respect to a Person as of an given date, the
aggregate principal amount of all Indebtedness of such Person outstanding on
such date that is secured in any manner by any Lien on any property, and in the
case of the Borrower, shall include (without duplication), the Borrower’s
Ownership Share of the Secured Indebtedness of its Unconsolidated Affiliates, as
applicable.

“Securities Act” means the Securities Act of 1933, as amended from time to time,
together with all rules and regulations issued thereunder.

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

“Specified Derivatives Contract” means any Derivatives Contract, together with
any Derivatives Support Document relating thereto, that is made or entered into
at any time, or in effect at any time now or hereafter, whether as a result of
an assignment or transfer or otherwise, between the Borrower, the Parent or any
other Loan Party and any Specified Derivatives Provider.

“Specified Derivatives Obligations” means all indebtedness, liabilities,
obligations, covenants and duties of the Parent, the Borrower or other Loan
Party under or in respect of any Specified Derivatives Contract, whether direct
or indirect, absolute or contingent, due or not due, liquidated or unliquidated,
and whether or not evidenced by any written confirmation.

“Specified Derivatives Provider” means any Lender, or any Affiliate of a Lender
that is a party to a Derivatives Contract at the time the Derivatives Contract
is entered into.

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

“Subordinated Debt” means Indebtedness for money borrowed of the Borrower or any
of its Subsidiaries that is subordinated in right of payment and otherwise to
the Loans, the other Obligations and the Specified Derivatives Obligations, if
any, in a manner satisfactory to the Administrative Agent in its sole and
absolute discretion.

“Subsidiary” means, for any Person, any corporation, partnership, limited
liability company or other entity of which at least a majority of the Equity
Interests having by the terms thereof ordinary voting power to elect a majority
of the board of directors or other individuals performing similar functions of
such corporation, partnership, limited liability company or other entity
(without regard to the occurrence of any contingency) is at the time directly or
indirectly owned or controlled by such Person or one or more Subsidiaries of
such Person or by such Person and one or more Subsidiaries of such Person, and
shall include all Persons the accounts of which are consolidated with those of
such Person pursuant to GAAP.

 

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“Substantial Amount” means, at the time of determination thereof, an amount in
excess of 20.0% of total consolidated assets (exclusive of depreciation) at such
time of the Borrower and its Subsidiaries determined on a consolidated basis.

“Swingline Commitment” means the Swingline Lender’s obligation to make Swingline
Loans pursuant to Section 2.3. in an amount up to, but not exceeding the amount
set forth in the first sentence of Section 2.3.(a), as such amount may be
reduced from time to time in accordance with the terms hereof.

“Swingline Lender” means Wells Fargo Bank, National Association, together with
its respective successors and assigns.

“Swingline Loan” means a loan made by the Swingline Lender to the Borrower
pursuant to Section 2.3.

“Swingline Maturity Date” means the date which is seven (7) Business Days prior
to the Revolving Termination Date.

“Swingline Note” means the promissory note of the Borrower substantially in the
form of Exhibit H, payable to the order of the Swingline Lender in a principal
amount equal to the amount of the Swingline Commitment as originally in effect
and otherwise duly completed.

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

“Taxes” has the meaning given that term in Section 3.10.

“Tenant Lease” means any lease entered into by the Borrower, any Loan Party or
any Subsidiary with respect to any portion of a Property.

“Total Asset Value” means, with respect to any Person at a given time, the sum
(without duplication) of all of the following of such Person determined on a
consolidated basis in accordance with GAAP applied on a consistent basis:
(a) cash and cash equivalents (other than tenant deposits and other cash and
cash equivalents that are subject to a Lien or a Negative Pledge or the
disposition of which is restricted in any way); plus (b) the quotient of
(i) EBITDA of such Person for the immediately preceding period of twelve
consecutive calendar months divided by (ii) the Capitalization Rate; plus
(c) the GAAP book value, as of the date of acquisition, of Properties acquired
during the twelve consecutive calendar months most recently ended; plus (d) the
GAAP book value of all Development Properties; plus (e) the GAAP book value of
Unimproved Land. Notwithstanding the foregoing, for the first twelve consecutive
calendar months after a Property has ceased to be a Development Property, EBITDA
attributable to that Property shall be determined on the basis of its income for
the immediately preceding three calendar month period, annualized. Such Person’s
Ownership Share of assets held by Unconsolidated Affiliates (excluding assets of
the type described in the immediately preceding clause (a)) will be included in
the calculation of Total Asset Value consistent with the above described
treatment for wholly-owned assets. EBITDA attributable to (x) Properties
acquired or disposed of during the three calendar month period

 

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ending immediately prior to any date of determination of Total Asset Value or
(y) Properties that were Development Properties at the end of such three
calendar month period, shall not be included in the calculation of Total Asset
Value. Notwithstanding the foregoing, for purposes of determining Total Asset
Value, to the extent the amount of Total Asset Value attributable to Properties
leased under Ground Leases, which are Eligible Properties under clause (z) of
the definition of “Eligible Property,” would exceed 10.0% of the aggregate Total
Asset Value at any time, such excess shall be excluded.

“Total Indebtedness” means, with respect to any Person, all Indebtedness of such
Person and such Person’s Ownership Share of all Indebtedness of all Subsidiaries
of such Person.

“Treasury Rate” means, as of any date of determination, the yield on the
Treasury Constant Maturity Series with a ten-year maturity, as reported on the
Business Day immediately preceding such date in Federal Reserve Statistical
Release H.15, Selected Interest Rates (“Release H.15”) of the Board of Governors
of the Federal Reserve System, or any successor publication. If for any reason
Release H.15 is no longer published, the Administrative Agent shall select a
comparable publication to determine the Treasury Rate.

“Transfer Authorizer Designation Form” means a form substantially in the form of
Exhibit I to be delivered to the Administrative Agent pursuant to
Section 6.1.(a), as the same may be amended, restated or modified from time to
time with the prior written approval of the Administrative Agent.

“Type” with respect to any Revolving Loan, refers to whether such Loan or
portion thereof is a LIBOR Loan or a Base Rate Loan.

“UCC” means the Uniform Commercial Code as in effect in any applicable
jurisdiction.

“Unconsolidated Affiliate” means, with respect to any Person, any other Person
in whom such Person holds, either directly or indirectly through one or more
Subsidiaries an Investment, which Investment is accounted for in the financial
statements of such Person on an equity basis of accounting and whose financial
results would not be consolidated under GAAP with the financial results of such
Person on the consolidated financial statements of such Person.

“Unencumbered Asset Value” means (a) the Unencumbered NOI (excluding NOI
attributable to Development Properties) for the immediately preceding period of
twelve consecutive calendar months divided by the Capitalization Rate, plus
(b) the GAAP book value of all Properties acquired during the twelve calendar
month period most recently ended which Properties are not subject to any Lien
(other than Permitted Liens) or any Negative Pledge. Notwithstanding the
foregoing, for the first twelve consecutive calendar months after a Property has
ceased to be a Development Property, Unencumbered NOI attributable to that
Property shall be determined on the basis of its income for the immediately
preceding three calendar month period, annualized. Unencumbered NOI attributable
to Properties disposed of during the three calendar month period ending
immediately prior to any date of determination of Unencumbered Asset Value shall
not be included in the calculation of Unencumbered Asset Value.

“Unencumbered NOI” means, for any period, NOI from all Eligible Properties.

“Unencumbered Pool Debt Service” means, with respect to any Person for any
period, the aggregate amount of principal and interest payments in respect of
all Unsecured Indebtedness of such Person that would be due and payable in
respect thereof during such period, computed assuming a thirty (30) year
amortization schedule and a per annum interest rate equal to the greater of:
(a) the Treasury Rate plus 2.50% and (b) 7.00%.

 

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“Unimproved Land” means land on which no development (other than improvements
that are not material and are temporary in nature) has occurred and for which no
development is scheduled in the following twelve (12) months.

“Unsecured Indebtedness” means, with respect to a Person, Indebtedness of such
Person that is not Secured Indebtedness; provided, however, that any
Indebtedness that is secured only by a pledge of Equity Interests shall be
deemed to be Unsecured Indebtedness.

“Unused Fee Rate” means a per annum rate equal to 0.25%.

“Washington DC CBD Office Property” means (a) 601 Pennsylvania and (b) each
other Property which is designated as such by the Administrative Agent and the
Borrower from time to time.

“Wells Fargo” means Wells Fargo Bank, National Association, and its successors
and assigns.

“Wholly Owned Subsidiary” means any Subsidiary of a Person in respect of which
all of the Equity Interests (other than, in the case of a corporation,
directors’ qualifying shares) are at the time directly or indirectly owned or
controlled by such Person or one or more other Subsidiaries of such Person or by
such Person and one or more other Subsidiaries of such Person.

“Withdrawal Liability” means any liability as a result of a complete or partial
withdrawal from a Multiemployer Plan as such terms are defined in Part I of
Subtitle E of Title IV of ERISA.

 

Section 1.2. General; References to Central Time.

Unless otherwise indicated, all accounting terms, ratios and measurements shall
be interpreted or determined in accordance with GAAP as in effect as of the
Agreement Date. Notwithstanding the preceding sentence, the calculation of
liabilities shall not include any fair value adjustments to the carrying value
of liabilities to record such liabilities at fair value pursuant to electing the
fair value option election under FASB ASC 825-10-25 (formerly known as FAS 159,
The Fair Value Option for Financial Assets and Financial Liabilities) or other
FASB standards allowing entities to elect fair value option for financial
liabilities. Accordingly, the amount of liabilities shall be the historical cost
basis, which generally is the contractual amount owed adjusted for amortization
or accretion of any premium or discount. References in this Agreement to
“Sections,” “Articles,” “Exhibits” and “Schedules” are to sections, articles,
exhibits and schedules herein and hereto unless otherwise indicated. References
in this Agreement to any document, instrument or agreement (a) shall include all
exhibits, schedules and other attachments thereto, (b) shall include all
documents, instruments or agreements issued or executed in replacement thereof,
to the extent permitted hereby and (c) shall mean such document, instrument or
agreement, or replacement or predecessor thereto, as amended, supplemented,
restated or otherwise modified from time to time to the extent not otherwise
stated herein or prohibited hereby and in effect at any given time. Wherever
from the context it appears appropriate, each term stated in either the singular
or plural shall include the singular and plural, and pronouns stated in the
masculine, feminine or neuter gender shall include the masculine, the feminine
and the neuter. Whenever reference is made to Borrower’s knowledge, or a similar
qualification, knowledge means the actual current knowledge of Parent’s
Responsible Officers. Unless explicitly set forth to the contrary, a reference
to “Subsidiary” means a Subsidiary of the Borrower or a Subsidiary of such
Subsidiary and a reference to an “Affiliate” means a reference to an Affiliate
of the Borrower, and a reference to an “Unconsolidated Affiliate” means a
reference to an Unconsolidated Affiliate of the Borrower. Titles and captions of
Articles, Sections, subsections and clauses in this Agreement are for
convenience only, and neither limit nor amplify the provisions of this
Agreement. Unless otherwise indicated, all references to time are references to
Central time.

 

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Section 1.3. Financial Attributes of Non-Wholly Owned Subsidiaries.

When determining the Applicable Margin and compliance by the Parent or the
Borrower with any financial covenant contained in any of the Loan Documents
(a) only the Ownership Share of the Parent or the Borrower, as applicable, of
the financial attributes of a Subsidiary that is not a Wholly Owned Subsidiary
shall be included and (b) the Parent’s Ownership Share of the Borrower shall be
deemed to be 100.0%.

 

Section 1.4. Pro Forma Calculations.

All pro forma computations required to be made hereunder giving effect to any
transaction (including any designation of a Subsidiary as an Excluded
Subsidiary) shall be calculated giving pro forma effect thereto (and to any
other such transaction consummated since the first day of the period for which
such pro forma computation is being made and on or prior to the date of such
computation) as if such transaction had occurred on the first day of the period
of twelve consecutive calendar months ending with the most recent calendar month
for which financial statements shall have been delivered pursuant to Section 9.1
or 9.2 (or, prior to the delivery of any such financial statements, ending on
March 31, 2012), and, to the extent applicable, the historical earnings and cash
flows associated with the assets subject to such transaction and any related
incurrence or reduction of Indebtedness. If any Indebtedness bears a floating
rate of interest and is being given pro forma effect, the interest on such
Indebtedness shall be calculated as if the rate in effect on the date of
determination had been the applicable rate for the entire period (taking into
account any Derivatives Contract applicable to such Indebtedness).

ARTICLE II. CREDIT FACILITY

 

Section 2.1. Revolving Loans.

(a) Making of Revolving Loans. Subject to the terms and conditions set forth in
this Agreement, including without limitation, Section 2.14., each Lender
severally and not jointly agrees to make Revolving Loans to the Borrower during
the period from and including the Effective Date to but excluding the Revolving
Termination Date, in an aggregate principal amount at any one time outstanding
up to, but not exceeding, such Lender’s Revolving Commitment. Each borrowing of
Base Rate Loans shall be in an aggregate minimum amount of $1,000,000 and
integral multiples of $100,000 in excess thereof. Each borrowing and
Continuation under Section 2.8. of, and each Conversion under Section 2.9. of
Base Rate Loans into, LIBOR Loans shall be in an aggregate minimum of $1,000,000
and integral multiples of $100,000 in excess of that amount. Notwithstanding the
immediately preceding two sentences but subject to Section 2.14., a borrowing of
Revolving Loans may be in the aggregate amount of the unused Revolving
Commitments. Within the foregoing limits and subject to the terms and conditions
of this Agreement, the Borrower may borrow, repay and reborrow Revolving Loans.

(b) Requests for Revolving Loans. Not later than 11:00 a.m. Central time at
least one (1) Business Day prior to a borrowing of Revolving Loans that are to
be Base Rate Loans and not later than 11:00 a.m. Central time at least three
(3) Business Days prior to a borrowing of Revolving Loans that are to be LIBOR
Loans, the Borrower shall deliver to the Administrative Agent a Notice of
Borrowing or telephone notice thereof. Each Notice of Borrowing shall specify
the aggregate principal amount of the Revolving Loans to be borrowed, the date
such Revolving Loans are to be borrowed (which must be a Business Day), the use
of the proceeds of such Revolving Loans, the Type of the requested Revolving
Loans, and if such Revolving Loans are to be LIBOR Loans, the initial Interest
Period for such Revolving Loans. Any telephone notice shall include all
information to be specified in a written notice of Borrowing and shall be
promptly confirmed in writing by the Borrower pursuant to a Notice of Borrowing
sent to the Agent by email on the same day as the giving of such telephonic
notice. Each Notice of Borrowing shall

 

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be irrevocable once given and binding on the Borrower. Prior to delivering a
Notice of Borrowing, the Borrower may (without specifying whether a Revolving
Loan will be a Base Rate Loan or a LIBOR Loan) request that the Administrative
Agent provide the Borrower with the most recent LIBOR available to the
Administrative Agent. The Administrative Agent shall provide such quoted rate to
the Borrower on the date of such request or as soon as possible thereafter.

(c) Funding of Revolving Loans. Promptly after receipt of a Notice of Borrowing
under the immediately preceding subsection (b), the Administrative Agent shall
notify each Lender of the proposed borrowing. Each Lender shall deposit an
amount equal to the Revolving Loan to be made by such Lender to the Borrower
with the Administrative Agent at the Principal Office, in immediately available
funds not later than 11:00 a.m. Central time on the date of such proposed
Revolving Loans. Subject to fulfillment of all applicable conditions set forth
herein, the Administrative Agent shall make available to the Borrower in the
account specified in the Transfer Authorizer Designation Form, not later than
2:00 p.m. Central time on the date of the requested borrowing of Revolving
Loans, the proceeds of such amounts received by the Administrative Agent.

(d) Assumptions Regarding Funding by Lenders. With respect to Revolving Loans to
be made after the Effective Date, unless the Administrative Agent shall have
been notified by any Lender that such Lender will not make available to the
Administrative Agent a Revolving Loan to be made by such Lender in connection
with any borrowing, the Administrative Agent may assume that such Lender will
make the proceeds of such Revolving Loan available to the Administrative Agent
in accordance with this Section, and the Administrative Agent may (but shall not
be obligated to), in reliance upon such assumption, make available to the
Borrower the amount of such Revolving Loan to be provided by such Lender. In
such event, if such Lender does not make available to the Administrative Agent
the proceeds of such Revolving Loan, then such Lender and the Borrower severally
agree to pay to the Administrative Agent on demand the amount of such Revolving
Loan with interest thereon, for each day from and including the date such
Revolving Loan is made available to the Borrower but excluding the date of
payment to the Administrative Agent, at (i) in the case of a payment to be made
by such Lender, the greater of the Federal Funds Rate and a rate determined by
the Administrative Agent in accordance with banking industry rules on interbank
compensation and (ii) in the case of a payment to be made by the Borrower, the
interest rate applicable to Base Rate Loans. If the Borrower and such Lender
shall pay the amount of such interest to the Administrative Agent for the same
or overlapping period, the Administrative Agent shall promptly remit to the
Borrower the amount of such interest paid by the Borrower for such period. If
such Lender pays to the Administrative Agent the amount of such Revolving Loan,
the amount so paid shall constitute such Lender’s Revolving Loan included in the
borrowing. Any payment by the Borrower shall be without prejudice to any claim
the Borrower may have against a Lender that shall have failed to make available
the proceeds of a Revolving Loan to be made by such Lender.

 

Section 2.2. Letters of Credit.

(a) Letters of Credit. Subject to the terms and conditions of this Agreement,
including without limitation, Section 2.14., each Issuing Bank, on behalf of the
Lenders, agrees to issue for the account of the Borrower during the period from
and including the Effective Date to, but excluding, the date thirty (30) days
prior to the Revolving Termination Date, one or more standby letters of credit
(each a “Letter of Credit”) up to a maximum aggregate Stated Amount at any one
time outstanding not to exceed $15,000,000 as such amount may be reduced from
time to time in accordance with the terms hereof (the “L/C Commitment Amount”).

(b) Terms of Letters of Credit. At the time of issuance, the amount, form, terms
and conditions of each Letter of Credit, and of any drafts or acceptances
thereunder, shall be subject to

 

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approval by the applicable Issuing Bank and the Borrower, which approval, in the
case of each of such Issuing Bank and the Borrower shall not unreasonably be
withheld, conditioned or delayed. Notwithstanding the foregoing, in no event may
(i) the expiration date of any Letter of Credit extend beyond the date that is
thirty (30) days prior to the Revolving Termination Date, or (ii) any Letter of
Credit have an initial duration in excess of one year; provided, however, a
Letter of Credit may contain a provision providing for the automatic extension
of the expiration date in the absence of a notice of non-renewal from the
applicable Issuing Bank but in no event shall any such provision permit the
extension of the expiration date of such Letter of Credit beyond the date that
is thirty (30) days prior to the Revolving Termination Date. The initial Stated
Amount of each Letter of Credit shall be at least $1,000,000 (or such lesser
amount as may be acceptable to the applicable Issuing Bank, the Administrative
Agent and the Borrower).

(c) Requests for Issuance of Letters of Credit. The Borrower shall give the
applicable Issuing Bank and the Administrative Agent written notice (or
telephonic notice promptly confirmed in writing) at least five (5) Business Days
prior to the requested date of issuance of a Letter of Credit, such notice to
describe in reasonable detail the proposed terms of such Letter of Credit and
the nature of the transactions or obligations proposed to be supported by such
Letter of Credit, and in any event shall set forth with respect to such Letter
of Credit the proposed (i) initial Stated Amount, (ii) beneficiary, and
(iii) expiration date. The Borrower shall also execute and deliver such
customary applications and agreements for standby letters of credit, and other
forms as requested from time to time by the applicable Issuing Bank. Provided
the Borrower has given the notice prescribed by the first sentence of this
subsection and delivered such applications and agreements referred to in the
preceding sentence, subject to the other terms and conditions of this Agreement,
including the satisfaction of any applicable conditions precedent set forth in
Article 6.2., the applicable Issuing Bank shall issue the requested Letter of
Credit on the requested date of issuance for the benefit of the stipulated
beneficiary but in no event prior to the date five (5) Business Days following
the date after which such Issuing Bank has received all of the items required to
be delivered to it under this subsection. No Issuing Bank shall at any time be
obligated to issue any Letter of Credit if such issuance would conflict with, or
cause such Issuing Bank or any Lender to exceed any limits imposed by, any
Applicable Law. References herein to “issue” and derivations thereof with
respect to Letters of Credit shall also include extensions or modifications of
any outstanding Letters of Credit, which modifications increase the obligations
of the applicable Issuing Bank in respect of such Letters of Credit, unless the
context otherwise requires. Upon the written request of the Borrower, the
applicable Issuing Bank shall deliver to the Borrower a copy of each issued
Letter of Credit within a reasonable time after the date of issuance thereof. To
the extent any term of a Letter of Credit Document is inconsistent with a term
of any Loan Document, the term of such Loan Document shall control.

(d) Reimbursement Obligations. Upon receipt by the applicable Issuing Bank from
the beneficiary of a Letter of Credit of any demand for payment under such
Letter of Credit, such Issuing Bank shall promptly notify the Borrower and the
Administrative Agent of the amount to be paid by such Issuing Bank as a result
of such demand and the date on which payment is to be made by such Issuing Bank
to such beneficiary in respect of such demand; provided, however, that an
Issuing Bank’s failure to give, or delay in giving, such notice shall not
discharge the Borrower in any respect from the applicable Reimbursement
Obligation. The Borrower agrees to reimburse the applicable Issuing Bank on or
prior to each date on which such Issuing Bank notifies the Borrower that a draw
has been paid under a Letter of Credit in an amount equal to the amount of such
draw paid. The Borrower’s Reimbursement Obligations shall be absolute,
unconditional and irrevocable and irrespective of any setoff, counterclaim or
defense to payment the Borrower may have at any time against any Issuing Bank,
the Administrative Agent or any Lender, any beneficiary of a Letter of Credit or
any other Person. Upon receipt by the applicable Issuing Bank of any payment in
respect of any Reimbursement Obligation, such Issuing Bank shall promptly pay to
each Lender that has acquired a participation therein under the second sentence
of the immediately following subsection (i) such Lender’s Revolving Commitment
Percentage of such payment.

 

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(e) Manner of Reimbursement. Upon its receipt of a notice referred to in the
immediately preceding subsection (d), the Borrower shall advise the
Administrative Agent and the applicable Issuing Bank whether or not the Borrower
intends to borrow hereunder to finance its obligation to reimburse such Issuing
Bank for the amount of the related demand for payment and, if it does, the
Borrower shall submit a timely request for such borrowing as provided in the
applicable provisions of this Agreement. If the Borrower fails to so advise the
Administrative Agent and the applicable Issuing Bank, or if the Borrower fails
to reimburse such Issuing Bank for a demand for payment under a Letter of Credit
by the date of such payment, the failure of which such Issuing Bank shall
promptly notify the Administrative Agent, then (i) if the applicable conditions
contained in Article VI. would permit the making of Revolving Loans, the
Borrower shall be deemed to have requested a borrowing of Revolving Loans (which
shall be Base Rate Loans) in an amount equal to the unpaid Reimbursement
Obligation and the Administrative Agent shall give each Revolving Lender prompt
notice of the amount of the Revolving Loan to be made available to the
Administrative Agent not later than 12:00 noon Central time and (ii) if such
conditions would not permit the making of Revolving Loans, the provisions of
subsection (j) of this Section shall apply. The limitations set forth in the
second sentence of Section 2.1.(a) shall not apply to any borrowing of Base Rate
Loans under this subsection.

(f) Effect of Letters of Credit on Revolving Commitments. Upon the issuance by
the applicable Issuing Bank of any Letter of Credit and until such Letter of
Credit shall have expired or been cancelled, the Revolving Commitment of each
Lender shall be deemed to be utilized for all purposes of this Agreement in an
amount equal to the product of (i) such Lender’s Revolving Commitment Percentage
and (ii) the sum of (A) the Stated Amount of such Letter of Credit plus (B) any
related Reimbursement Obligations then outstanding.

(g) Issuing Bank’s Duties Regarding Letters of Credit; Unconditional Nature of
Reimbursement Obligations. In examining documents presented in connection with
drawings under Letters of Credit and making payments under such Letters of
Credit against such documents, the applicable Issuing Bank shall only be
required to use the same standard of care as it uses in connection with
examining documents presented in connection with drawings under letters of
credit in which it has not sold participations and making payments under such
letters of credit. The Borrower assumes all risks of the acts and omissions of,
or misuse of the Letters of Credit by, the respective beneficiaries of such
Letters of Credit. In furtherance and not in limitation of the foregoing, none
of the Administrative Agent, any of the Issuing Banks or any of the Lenders
shall be responsible for, and the Borrower’s obligations in respect of Letters
of Credit shall not be affected in any manner by, (i) the form, validity,
sufficiency, accuracy, genuineness or legal effects of any document submitted by
any party in connection with the application for and issuance of or any drawing
honored under any Letter of Credit even if such document should in fact prove to
be in any or all respects invalid, insufficient, inaccurate, fraudulent or
forged; (ii) the validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign any Letter of Credit, or the
rights or benefits thereunder or proceeds thereof, in whole or in part, which
may prove to be invalid or ineffective for any reason; (iii) failure of the
beneficiary of any Letter of Credit to comply fully with conditions required in
order to draw upon such Letter of Credit; (iv) errors, omissions, interruptions
or delays in transmission or delivery of any messages, by mail, cable,
facsimile, electronic mail, telecopy or otherwise, whether or not they be in
cipher; (v) errors in interpretation of technical terms; (vi) any loss or delay
in the transmission or otherwise of any document required in order to make a
drawing under any Letter of Credit, or of the proceeds thereof; (vii) the
misapplication by the beneficiary of any Letter of Credit, or of the proceeds of
any drawing under any Letter of Credit; or (viii) any consequences arising from
causes beyond the control of the Administrative Agent, the Issuing Banks or the
Lenders. None of the above shall affect, impair or prevent the vesting of any of
the Issuing

 

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Banks’ or Administrative Agent’s rights or powers hereunder. Any action taken or
omitted to be taken by an Issuing Bank under or in connection with any Letter of
Credit, if taken or omitted in the absence of gross negligence or willful
misconduct (as determined by a court of competent jurisdiction in a final,
non-appealable judgment), shall not create against such Issuing Bank any
liability to the Borrower, the Administrative Agent, any other Issuing Bank or
any Lender. The obligation of the Borrower to reimburse the applicable Issuing
Bank for any drawing made under any Letter of Credit, and to repay any Revolving
Loan made pursuant to the second sentence of the immediately preceding
subsection (e), shall be absolute, unconditional and irrevocable and shall be
paid strictly in accordance with the terms of this Agreement and any other
applicable Letter of Credit Document under all circumstances whatsoever,
including without limitation, the following circumstances: (A) any lack of
validity or enforceability of any Letter of Credit Document or any term or
provisions therein; (B) any amendment or waiver of or any consent to departure
from all or any of the Letter of Credit Documents; (C) the existence of any
claim, setoff, defense or other right which the Borrower may have at any time
against any Issuing Bank, the Administrative Agent or any Lender, any
beneficiary of a Letter of Credit or any other Person, whether in connection
with this Agreement, the transactions contemplated hereby or in the Letter of
Credit Documents or any unrelated transaction; (D) any breach of contract or
dispute between the Borrower, any Issuing Bank, the Administrative Agent, any
Lender or any other Person; (E) any demand, statement or any other document
presented under a Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein or made in connection
therewith being untrue or inaccurate in any respect whatsoever; (F) any
non-application or misapplication by the beneficiary of a Letter of Credit or of
the proceeds of any drawing under such Letter of Credit; (G) payment by the
applicable Issuing Bank under any Letter of Credit against presentation of a
draft or certificate which does not strictly comply with the terms of such
Letter of Credit; and (H) any other act, omission to act, delay or circumstance
whatsoever that might, but for the provisions of this Section, constitute a
legal or equitable defense to or discharge of the Borrower’s Reimbursement
Obligations. Notwithstanding anything to the contrary contained in this Section
or Section 13.10., but not in limitation of the Borrower’s unconditional
obligation to reimburse the applicable Issuing Bank for any drawing made under a
Letter of Credit as provided in this Section and to repay any Revolving Loan
made pursuant to the second sentence of the immediately preceding
subsection (e), the Borrower shall have no obligation to indemnify the
Administrative Agent, any Issuing Bank or any Lender in respect of any liability
incurred by the Administrative Agent, any Issuing Bank or such Lender arising
solely out of the gross negligence or willful misconduct of the Administrative
Agent, such Issuing Bank or such Lender in respect of a Letter of Credit as
determined by a court of competent jurisdiction in a final, non-appealable
judgment. Except as otherwise provided in this Section, nothing in this Section
shall affect any rights the Borrower may have with respect to the gross
negligence or willful misconduct of the Administrative Agent, any Issuing Bank
or any Lender with respect to any Letter of Credit.

(h) Amendments, Etc. The issuance by the applicable Issuing Bank of any
amendment, supplement or other modification to any Letter of Credit shall be
subject to the same conditions applicable under this Agreement to the issuance
of new Letters of Credit (including, without limitation, that the request
therefor be made through such Issuing Bank), and no such amendment, supplement
or other modification shall be issued unless either (i) the respective Letter of
Credit affected thereby would have complied with such conditions had it
originally been issued hereunder in such amended, supplemented or modified form
or (ii) the Administrative Agent and Requisite Lenders (or all of the Lenders if
required by Section 13.7.) shall have consented thereto. In connection with any
such amendment, supplement or other modification, the Borrower shall pay the
fees, if any, payable under the last sentence of Section 3.5.(c).

(i) Lenders’ Participation in Letters of Credit. Immediately upon the issuance
by the applicable Issuing Bank of any Letter of Credit each Lender shall be
deemed to have absolutely, irrevocably and unconditionally purchased and
received from such Issuing Bank, without recourse or

 

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warranty, an undivided interest and participation to the extent of such Lender’s
Revolving Commitment Percentage of the liability of such Issuing Bank with
respect to such Letter of Credit and each Lender thereby shall absolutely,
unconditionally and irrevocably assume, as primary obligor and not as surety,
and shall be unconditionally obligated to such Issuing Bank to pay and discharge
when due, such Lender’s Revolving Commitment Percentage of such Issuing Bank’s
liability under such Letter of Credit. In addition, upon the making of each
payment by a Lender to the Administrative Agent for the account of the
applicable Issuing Bank in respect of any Letter of Credit pursuant to the
immediately following subsection (j), such Lender shall, automatically and
without any further action on the part of such Issuing Bank, Administrative
Agent or such Lender, acquire (i) a participation in an amount equal to such
payment in the Reimbursement Obligation owing to such Issuing Bank by the
Borrower in respect of such Letter of Credit and (ii) a participation in a
percentage equal to such Lender’s Revolving Commitment Percentage in any
interest or other amounts payable by the Borrower in respect of such
Reimbursement Obligation (other than the Fees payable to such Issuing Bank
pursuant to the second and the last sentences of Section 3.5.(c)).

(j) Payment Obligation of Lenders. Each Lender severally agrees to pay to the
Administrative Agent, for the account of such Issuing Bank, on demand in
immediately available funds in Dollars the amount of such Lender’s Revolving
Commitment Percentage of each drawing paid by the applicable Issuing Bank under
each Letter of Credit to the extent such amount is not reimbursed by the
Borrower pursuant to the immediately preceding subsection (d); provided,
however, that in respect of any drawing under any Letter of Credit, the maximum
amount that any Lender shall be required to fund, whether as a Revolving Loan or
as a participation, shall not exceed such Lender’s Revolving Commitment
Percentage of such drawing. If the notice referenced in the second sentence of
Section 2.2.(e) is received by a Lender not later than 11:00 a.m. Central time,
then such Lender shall make such payment available to the Administrative Agent
not later than 2:00 p.m. Central time on the date of demand therefor; otherwise,
such payment shall be made available to the Administrative Agent not later than
1:00 p.m. Central time on the next succeeding Business Day. Each Lender’s
obligation to make such payments to the Administrative Agent under this
subsection, and the Administrative Agent’s right to receive the same for the
account of any Issuing Bank, shall be absolute, irrevocable and unconditional
and shall not be affected in any way by any circumstance whatsoever, including
without limitation, (i) the failure of any other Lender to make its payment
under this subsection, (ii) the financial condition of the Borrower or any other
Loan Party, (iii) the existence of any Default or Event of Default, including
any Event of Default described in Section 11.1.(e) or (f) or (iv) the
termination of the Revolving Commitments. Each such payment to the
Administrative Agent for the account of any Issuing Bank shall be made without
any offset, abatement, withholding or deduction whatsoever.

(k) Information to Lenders. Promptly following any change in Letters of Credit
outstanding, the applicable Issuing Bank shall deliver to the Administrative
Agent, who shall promptly deliver the same to each Lender and the Borrower, a
notice describing the aggregate amount of all Letters of Credit outstanding at
such time. Upon the request of any Lender from time to time, the applicable
Issuing Bank shall deliver any other information reasonably requested by such
Lender with respect to each Letter of Credit issued by such Issuing Bank then
outstanding. Other than as set forth in this subsection, no Issuing Bank shall
have any duty to notify the Lenders regarding the issuance or other matters
regarding Letters of Credit issued hereunder. The failure of any Issuing Bank to
perform its requirements under this subsection shall not relieve any Lender from
its obligations under the immediately preceding subsection (j).

 

Section 2.3. Swingline Loans.

(a) Swingline Loans. Subject to the terms and conditions hereof, including
without limitation Section 2.14., the Swingline Lender agrees to make Swingline
Loans to the Borrower, during

 

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the period from the Effective Date to but excluding the Swingline Maturity Date,
in an aggregate principal amount at any one time outstanding up to, but not
exceeding, $30,000,000, as such amount may be reduced from time to time in
accordance with the terms hereof. If at any time the aggregate principal amount
of the Swingline Loans outstanding at such time exceeds the Swingline Commitment
in effect at such time, the Borrower shall immediately pay the Administrative
Agent for the account of the Swingline Lender the amount of such excess. Subject
to the terms and conditions of this Agreement, the Borrower may borrow, repay
and reborrow Swingline Loans hereunder. The borrowing of a Swingline Loan shall
not constitute usage of any Lender’s Revolving Commitment for purposes of
calculation of the fee payable under Section 3.5.(b).

(b) Procedure for Borrowing Swingline Loans. The Borrower shall give the
Administrative Agent and the Swingline Lender notice pursuant to a Notice of
Swingline Borrowing or telephonic notice of each borrowing of a Swingline Loan.
Each Notice of Swingline Borrowing shall be delivered to the Swingline Lender no
later than 11:00 a.m. Central time on the proposed date of such borrowing. Any
telephonic notice shall include all information to be specified in a written
Notice of Swingline Borrowing and shall be promptly confirmed in writing by the
Borrower pursuant to a Notice of Swingline Borrowing sent to the Swingline
Lender by telecopy on the same day of the giving of such telephonic notice. Not
later than 1:00 p.m. Central time on the date of the requested Swingline Loan
and subject to satisfaction of the applicable conditions set forth in
Article 6.2. for such borrowing, the Swingline Lender will make the proceeds of
such Swingline Loan available to the Borrower in Dollars, in immediately
available funds, at the account specified by the Borrower in the Notice of
Swingline Borrowing.

(c) Interest. Swingline Loans shall bear interest at a per annum rate equal to
the Base Rate as in effect from time to time plus the Applicable Margin or at
such other rate or rates as the Borrower and the Swingline Lender may agree from
time to time in writing. Interest on Swingline Loans is solely for the account
of the Swingline Lender (except to the extent a Revolving Lender acquires a
participating interest in a Swingline Loan pursuant to the immediately following
subsection (e)). All accrued and unpaid interest on Swingline Loans shall be
payable on the dates and in the manner provided in Section 2.2. with respect to
interest on Base Rate Loans (except as the Swingline Lender and the Borrower may
otherwise agree in writing in connection with any particular Swingline Loan).

(d) Swingline Loan Amounts, Etc. Each Swingline Loan shall be in the minimum
amount of $1,000,000 and integral multiples of $100,000 in excess thereof, or
such other minimum amounts agreed to by the Swingline Lender and the Borrower.
Any voluntary prepayment of a Swingline Loan must be in integral multiples of
$100,000 or the aggregate principal amount of all outstanding Swingline Loans
(or such other minimum amounts upon which the Swingline Lender and the Borrower
may agree) and in connection with any such prepayment, the Borrower must give
the Swingline Lender and the Administrative Agent prior written notice thereof
no later than 12:00 noon Central time on the day prior to the date of such
prepayment. The Swingline Loans shall, in addition to this Agreement, be
evidenced by the Swingline Note.

(e) Repayment and Participations of Swingline Loans. The Borrower agrees to
repay each Swingline Loan within one Business Day of demand therefor by the
Swingline Lender and, in any event, within five (5) Business Days after the date
such Swingline Loan was made; provided, that the proceeds of a Swingline Loan
may not be used to pay a Swingline Loan. Notwithstanding the foregoing, the
Borrower shall repay the entire outstanding principal amount of, and all accrued
but unpaid interest on, the Swingline Loans on the Swingline Maturity Date (or
such earlier date as the Swingline Lender and the Borrower may agree in
writing). In lieu of demanding repayment of any outstanding Swingline Loan from
the Borrower, the Swingline Lender may, on behalf of the Borrower (which hereby
irrevocably directs the Swingline Lender to act on its behalf), request a
borrowing of Revolving Loans that are Base Rate Loans from the Lenders in an
amount equal to the principal balance of such Swingline Loan. The

 

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amount limitations contained in the second sentence of Section 2.1.(a) shall not
apply to any borrowing of such Revolving Loans made pursuant to this subsection.
The Swingline Lender shall give notice to the Administrative Agent of any such
borrowing of Revolving Loans not later than 11:00 a.m. Central time at least one
Business Day prior to the proposed date of such borrowing. Promptly after
receipt of such notice of borrowing of Revolving Loans from the Swingline Lender
under the immediately preceding sentence, the Administrative Agent shall notify
each Lender of the proposed borrowing. Not later than 11:00 a.m. Central time on
the proposed date of such borrowing, each Lender will make available to the
Administrative Agent at the Principal Office for the account of the Swingline
Lender, in immediately available funds, the proceeds of the Revolving Loan to be
made by such Lender. The Administrative Agent shall pay the proceeds of such
Revolving Loans to the Swingline Lender, which shall apply such proceeds to
repay such Swingline Loan. If the Revolving Lenders are prohibited from making
Revolving Loans required to be made under this subsection for any reason
whatsoever, including without limitation, the occurrence of any of the Defaults
or Events of Default described in Sections 11.1.(e) or (f)), each Revolving
Lender shall purchase from the Swingline Lender, without recourse or warranty,
an undivided interest and participation to the extent of such Lender’s Revolving
Commitment Percentage of such Swingline Loan, by directly purchasing a
participation in such Swingline Loan in such amount and paying the proceeds
thereof to the Administrative Agent for the account of the Swingline Lender in
Dollars and in immediately available funds. A Lender’s obligation to purchase
such a participation in a Swingline Loan shall be absolute and unconditional and
shall not be affected by any circumstance whatsoever, including without
limitation, (i) any claim of setoff, counterclaim, recoupment, defense or other
right which such Lender or any other Person may have or claim against the
Administrative Agent, the Swingline Lender or any other Person whatsoever,
(ii) the occurrence or continuation of a Default or Event of Default (including
without limitation, any of the Defaults or Events of Default described in
Sections 11.1. (e) or (f)), or the termination of any Lender’s Revolving
Commitment, (iii) the existence (or alleged existence) of an event or condition
which has had or could have a Material Adverse Effect, (iv) any breach of any
Loan Document by the Administrative Agent, any Lender, the Borrower or any other
Loan Party, or (v) any other circumstance, happening or event whatsoever,
whether or not similar to any of the foregoing. If such amount is not in fact
made available to the Swingline Lender by any Lender, the Swingline Lender shall
be entitled to recover such amount on demand from such Lender, together with
accrued interest thereon for each day from the date of demand thereof, at the
Federal Funds Rate. If such Lender does not pay such amount forthwith upon the
Swingline Lender’s demand therefor, and until such time as such Lender makes the
required payment, the Swingline Lender shall be deemed to continue to have
outstanding Swingline Loans in the amount of such unpaid participation
obligation for all purposes of the Loan Documents (other than those provisions
requiring the other Lenders to purchase a participation therein). Further, such
Lender shall be deemed to have assigned any and all payments made of principal
and interest on its Revolving Loans, and any other amounts due it hereunder, to
the Swingline Lender to fund Swingline Loans in the amount of the participation
in Swingline Loans that such Lender failed to purchase pursuant to this Section
until such amount has been purchased (as a result of such assignment or
otherwise).

 

Section 2.4. Rates and Payment of Interest on Loans.

(a) Rates. The Borrower promises to pay to the Administrative Agent for the
account of each Lender interest on the unpaid principal amount of each Loan made
by such Lender for the period from and including the date of the making of such
Loan to but excluding the date such Loan shall be paid in full, at the following
per annum rates:

(i) during such periods as such Loan is a Base Rate Loan, at the Base Rate (as
in effect from time to time), plus the Applicable Margin; and

 

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(ii) during such periods as such Loan is a LIBOR Loan, at LIBOR for such Loan
for the Interest Period therefor, plus the Applicable Margin.

Notwithstanding the foregoing, while an Event of Default exists, the Borrower
shall pay to the Administrative Agent for the account of each Lender and each
Issuing Bank, as the case may be, interest at the Post-Default Rate on the
outstanding principal amount of any Loan made by such Lender, on all
Reimbursement Obligations and on any other amount payable by the Borrower
hereunder or under the Notes held by such Lender to or for the account of such
Lender (including without limitation, accrued but unpaid interest to the extent
permitted under Applicable Law).

(b) Payment of Interest. All accrued and unpaid interest on the outstanding
principal amount of each Loan shall be payable (i) monthly in arrears on the
first day of each month, commencing with the first full calendar month occurring
after the Effective Date and (ii) on any date on which the principal balance of
such Loan is due and payable in full (whether at maturity, due to acceleration
or otherwise). Interest payable at the Post-Default Rate shall be payable from
time to time on demand. All determinations by the Administrative Agent of an
interest rate hereunder shall be conclusive and binding on the Lenders and the
Borrower for all purposes, absent manifest error.

(c) Borrower Information Used to Determine Applicable Interest Rates. The
parties understand that the applicable interest rate for the Obligations and
certain fees set forth herein may be determined and/or adjusted from time to
time based upon certain financial ratios and/or other information to be provided
or certified to the Lenders by the Borrower or the Parent on behalf of the
Borrower (the “Borrower Information”). If it is subsequently determined that any
such Borrower Information was incorrect (for whatever reason, including without
limitation because of a subsequent restatement of earnings by the Borrower) at
the time it was delivered to the Administrative Agent, and if the applicable
interest rate or fees calculated for any period were lower than they should have
been had the correct information been timely provided, then, such interest rate
and such fees for such period shall be automatically recalculated using correct
Borrower Information. The Administrative Agent shall promptly notify the
Borrower in writing of any additional interest and fees due because of such
recalculation, and the Borrower shall pay such additional interest or fees due
to the Administrative Agent, for the account of each Lender, within five
(5) Business Days of receipt of such written notice. Any recalculation of
interest or fees required by this provision shall survive the termination of
this Agreement, and this provision shall not in any way limit any of the
Administrative Agent’s, any Issuing Bank’s, or any Lender’s other rights under
this Agreement.

 

Section 2.5. Number of Interest Periods.

There may be no more than five (5) different Interest Periods for LIBOR Loans
outstanding at the same time.

 

Section 2.6. Repayment of Loans.

The Borrower shall repay the entire outstanding principal amount of, and all
accrued but unpaid interest on, the Revolving Loans on the Revolving Termination
Date.

 

Section 2.7. Prepayments.

(a) Optional. Subject to Section 5.4., the Borrower may prepay any Loan at any
time without premium or penalty. The Borrower shall give the Administrative
Agent at least two (2) Business Day prior written notice of the prepayment of
any Loan. Each voluntary prepayment of Loans shall be in an aggregate minimum
amount of $1,000,000 and integral multiples of $100,000 in excess thereof or, if
less, the aggregate principal amount of Revolving Loans outstanding.

 

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(b) Mandatory.

(i) Revolving Commitment Overadvance. If at any time the aggregate principal
amount of all outstanding Revolving Loans and Swingline Loans, together with the
aggregate amount of all Letter of Credit Liabilities, exceeds the aggregate
amount of the Revolving Commitments, the Borrower shall immediately upon demand
pay to the Administrative Agent for the account of the Lenders then holding
Revolving Commitments (or if the Revolving Commitments have been terminated,
then holding outstanding Revolving Loans, Swingline Loans and/or Letter of
Credit Liabilities), the amount of such excess.

(ii) Application of Mandatory Prepayments. Amounts paid under the preceding
subsection (b)(i) shall be applied to pay all amounts of principal outstanding
on the Loans and any Reimbursement Obligations pro rata in accordance with
Section 3.2. and if any Letters of Credit are outstanding at such time, the
remainder, if any, shall be deposited into the Letter of Credit Collateral
Account for application to any Reimbursement Obligations. If the Borrower is
required to pay any outstanding LIBOR Loans by reason of this Section prior to
the end of the applicable Interest Period therefor, the Borrower shall pay all
amounts due under Section 5.4.

 

Section 2.8. Continuation.

So long as no Default or Event of Default exists, the Borrower may on any
Business Day, with respect to any LIBOR Loan, elect to maintain such LIBOR Loan
or any portion thereof as a LIBOR Loan by selecting a new Interest Period for
such LIBOR Loan. Each Continuation of a LIBOR Loan shall be in an aggregate
minimum amount of $1,000,000 and integral multiples of $100,000 in excess of
that amount, and each new Interest Period selected under this Section shall
commence on the last day of the immediately preceding Interest Period. Each
selection of a new Interest Period shall be made by the Borrower giving to the
Administrative Agent a Notice of Continuation not later than 11:00 a.m. Central
time on the third Business Day prior to the date of any such Continuation. Such
notice by the Borrower of a Continuation shall be by telephone, promptly
confirmed in writing, or by telecopy, electronic mail or other similar form of
communication in the form of a Notice of Continuation, specifying (a) the
proposed date of such Continuation, (b) the LIBOR Loans and portions thereof
subject to such Continuation and (c) the duration of the selected Interest
Period, all of which shall be specified in such manner as is necessary to comply
with all limitations on Loans outstanding hereunder. Each Notice of Continuation
shall be irrevocable by and binding on the Borrower once given. Promptly after
receipt of a Notice of Continuation, the Administrative Agent shall notify each
Lender of the proposed Continuation. If the Borrower shall fail to select in a
timely manner a new Interest Period for any LIBOR Loan in accordance with this
Section, such Loan will automatically, on the last day of the current Interest
Period therefor, continue as a LIBOR Loan with an Interest Period of one month;
provided, however that if a Default or Event of Default exists, such Loan will
automatically, on the last day of the current Interest Period therefor, Convert
into a Base Rate Loan notwithstanding the first sentence of Section 2.9. or the
Borrower’s failure to comply with any of the terms of such Section.

 

Section 2.9. Conversion.

The Borrower may on any Business Day, upon the Borrower’s giving of a Notice of
Conversion to the Administrative Agent by telecopy, electronic mail or other
similar form of communication, Convert all or a portion of a Loan of one Type
into a Loan of another Type; provided, however, a Base Rate Loan

 

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may not be Converted into a LIBOR Loan if a Default or Event of Default exists.
Each Conversion of Base Rate Loans into LIBOR Loans shall be in an aggregate
minimum amount of $1,000,000 and integral multiples of $100,000 in excess of
that amount. Each such Notice of Conversion shall be given not later than
11:00 a.m. Central time three (3) Business Days prior to the date of any
proposed Conversion. Promptly after receipt of a Notice of Conversion, the
Administrative Agent shall notify each Lender of the proposed Conversion.
Subject to the restrictions specified above, each Notice of Conversion shall be
by telephone promptly confirmed in writing, or by telecopy, electronic mail or
other similar form of communication in the form of a Notice of Conversion
specifying (a) the requested date of such Conversion, (b) the Type of Loan to be
Converted, (c) the portion of such Type of Loan to be Converted, (d) the Type of
Loan such Loan is to be Converted into and (e) if such Conversion is into a
LIBOR Loan, the requested duration of the Interest Period of such Loan. Each
Notice of Conversion shall be irrevocable by and binding on the Borrower once
given.

 

Section 2.10. Notes.

(a) Notes. The Revolving Loans made by each Revolving Lender shall, in addition
to this Agreement, also be evidenced by a Revolving Note, payable to the order
of such Revolving Lender in a principal amount equal to the amount of its
Revolving Commitment as originally in effect and otherwise duly completed. The
Swingline Loans made by the Swingline Lender to the Borrower shall, in addition
to this Agreement, also be evidenced by a Swingline Note payable to the order of
the Swingline Lender.

(b) Records. The date, amount, interest rate, Type and duration of Interest
Periods (if applicable) of each Loan made by each Lender to the Borrower, and
each payment made on account of the principal thereof, shall be recorded by such
Lender on its books and such entries shall be binding on the Borrower absent
manifest error; provided, however, that (i) the failure of a Lender to make any
such record shall not affect the obligations of the Borrower under any of the
Loan Documents and (ii) if there is a discrepancy between such records of a
Lender and the statements of accounts maintained by the Administrative Agent
pursuant to Section 3.8., in the absence of manifest error, the statements of
account maintained by the Administrative Agent pursuant to Section 3.8. shall be
controlling.

(c) Lost, Stolen, Destroyed or Mutilated Notes. Upon receipt by the Borrower of
(i) written notice from a Lender that a Note of such Lender has been lost,
stolen, destroyed or mutilated, and (ii)(A) in the case of loss, theft or
destruction, an unsecured agreement of indemnity from such Lender in form
reasonably satisfactory to the Borrower, or (B) in the case of mutilation, upon
surrender and cancellation of such Note, the Borrower shall at its own expense
execute and deliver to such Lender a new Note dated the date of such lost,
stolen, destroyed or mutilated Note.

 

Section 2.11. Voluntary Reductions of the Revolving Commitment.

The Borrower shall have the right to terminate or reduce the aggregate unused
amount of the Revolving Commitments (for which purpose use of the Revolving
Commitments shall be deemed to include the aggregate amount of all Letter of
Credit Liabilities and the aggregate principal amount of all outstanding
Swingline Loans) at any time and from time to time without penalty or premium
upon not less than five (5) Business Days prior written notice to the
Administrative Agent of each such termination or reduction, which notice shall
specify the effective date thereof and the amount of any such reduction (which
in the case of any partial reduction of the Revolving Commitments shall not be
less than $10,000,000 and integral multiples of $5,000,000 in excess of that
amount in the aggregate) and shall be irrevocable once given and effective only
upon receipt by the Administrative Agent (“Commitment Reduction Notice”);
provided, however, the Borrower may not reduce the aggregate amount of the
Revolving Commitments below $50,000,000 unless the Borrower is terminating the
Revolving Commitments in full. Promptly after receipt of a Commitment Reduction
Notice the Administrative

 

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Agent shall notify each Lender of the proposed termination or Revolving
Commitment reduction. The Revolving Commitments, once reduced or terminated
pursuant to this Section, may not be increased or reinstated. Upon the effective
date of such reduction or termination, the Borrower shall pay all interest and
fees on the Revolving Loans accrued to the date of such reduction or termination
of the Revolving Commitments to the Administrative Agent for the account of the
Revolving Lenders, including but not limited to any applicable compensation due
to each Revolving Lender in accordance with Section 5.4.

 

Section 2.12. Extension of Revolving Termination Date.

The Borrower shall have the right, exercisable one time, to extend the Revolving
Termination Date by one year. The Borrower may exercise such right only by
executing and delivering to the Administrative Agent at least thirty (30) days
but not more than one hundred twenty (120) days prior to the current Revolving
Termination Date, a written request for such extension (an “Extension Request”).
The Administrative Agent shall notify the Revolving Lenders if it receives an
Extension Request promptly upon receipt thereof. Subject to satisfaction of the
following conditions, the Revolving Termination Date shall be extended for one
year effective upon receipt by the Administrative Agent of the Extension Request
and payment of the fee referred to in the following clause (y): (x) immediately
prior to such extension and immediately after giving effect thereto, (A) no
Default or Event of Default shall exist and (B) the representations and
warranties made or deemed made by the Borrower and each other Loan Party in the
Loan Documents to which any of them is a party, shall be true and correct in all
material respects on and as of the date of such extension with the same force
and effect as if made on and as of such date except to the extent that such
representations and warranties expressly relate solely to an earlier date (in
which case such representations and warranties shall have been true and correct
in all material respects on and as of such earlier date) and except for changes
in factual circumstances not expressly prohibited under the Loan Documents and
(y) the Borrower shall have paid the Fees payable under Section 3.5.(d). At any
time prior to the effectiveness of any such extension, upon the Administrative
Agent’s request, the Borrower shall deliver to the Administrative Agent a
certificate from the chief executive officer or chief financial officer
certifying the matters referred to in the immediately preceding clauses (x)(A)
and (x)(B).

 

Section 2.13. Expiration Date of Letters of Credit Past Revolving Commitment
Termination.

If on the date the Revolving Commitments are terminated or reduced to zero
(whether voluntarily, by reason of the occurrence of an Event of Default or
otherwise), there are any Letters of Credit outstanding hereunder, the Borrower
shall, on such date, pay to the Administrative Agent, for its benefit and the
benefit of the Lenders and the Issuing Banks, an amount of money sufficient to
cause the balance of available funds on deposit in the Letter of Credit
Collateral Account to equal the aggregate Stated Amount of such Letters of
Credit for deposit into the Letter of Credit Collateral Account.

 

Section 2.14. Amount Limitations.

Notwithstanding any other term of this Agreement or any other Loan Document, no
Lender shall be required to make a Loan, no Issuing Bank shall not be required
to issue a Letter of Credit and no reduction of the Revolving Commitments
pursuant to Section 2.11. shall take effect, if (a) immediately after the making
of such Loan, the issuance of such Letter of Credit or such reduction in the
Revolving Commitments, or (b) the aggregate principal amount of all outstanding
Revolving Loans and Swingline Loans, together with the aggregate amount of all
Letter of Credit Liabilities, would exceed the aggregate amount of the Revolving
Commitments at such time.

 

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Section 2.15. Funds Transfer Disbursements.

(a) Generally. The Borrower hereby authorizes the Administrative Agent to
disburse the proceeds of any Loan made by the Lenders or any of their Affiliates
pursuant to the Loan Documents as requested by an authorized representative of
the Borrower to any of the accounts designated in the Transfer Authorizer
Designation Form. The Borrower agrees to be bound by any transfer request:
(i) authorized or transmitted by the Borrower; or (ii) made in the Borrower’s
name and accepted by the Administrative Agent in good faith and in compliance
with these transfer instructions, even if not properly authorized by the
Borrower. The Borrower further agrees and acknowledges that the Administrative
Agent may rely solely on any bank routing number or identifying bank account
number or name provided by the Borrower to effect a wire or funds transfer even
if the information provided by the Borrower identifies a different bank or
account holder than named by the Borrower. The Administrative Agent is not
obligated or required in any way to take any actions to detect errors in
information provided by the Borrower. If the Administrative Agent takes any
actions in an attempt to detect errors in the transmission or content of
transfer requests or takes any actions in an attempt to detect unauthorized
funds transfer requests, the Borrower agrees that no matter how many times the
Administrative Agent takes these actions the Administrative Agent will not in
any situation be liable for failing to take or correctly perform these actions
in the future and such actions shall not become any part of the transfer
disbursement procedures authorized under this provision, the Loan Documents, or
any agreement between the Administrative Agent and the Borrower. The Borrower
agrees to notify the Administrative Agent of any errors in the transfer of any
funds or of any unauthorized or improperly authorized transfer requests within
fourteen (14) days after the Administrative Agent’s confirmation to the Borrower
of such transfer.

(b) Funds Transfer. The Administrative Agent will, in its sole discretion,
determine the funds transfer system and the means by which each transfer will be
made. The Administrative Agent may delay or refuse to accept a funds transfer
request if the transfer would: (i) violate the terms of this authorization,
(ii) require use of a bank unacceptable to the Administrative Agent or any
Lender or prohibited by any Governmental Authority, (iii) cause the
Administrative Agent or any Lender to violate any Federal Reserve or other
regulatory risk control program or guideline or (iv) otherwise cause the
Administrative Agent or any Lender to violate any Applicable Law or regulation.

(c) Limitation of Liability. None of the Administrative Agent, any Issuing Bank
or any Lender shall be liable to the Borrower or any other parties for
(i) errors, acts or failures to act of others, including other entities, banks,
communications carriers or clearinghouses, through which the Borrower’s
transfers may be made or information received or transmitted, and no such entity
shall be deemed an agent of the Administrative Agent, any Issuing Bank or any
Lender, (ii) any loss, liability or delay caused by fires, earthquakes, wars,
civil disturbances, power surges or failures, acts of government, labor
disputes, failures in communications networks, legal constraints or other events
beyond the Administrative Agent’s, any Issuing Bank’s or any Lender’s control,
or (iii) any special, consequential, indirect or punitive damages, whether or
not (x) any claim for these damages is based on tort or contract or (y) the
Administrative Agent, any Issuing Bank, any Lender or the Borrower knew or
should have known the likelihood of these damages in any situation. Neither the
Administrative Agent, any Issuing Bank nor any Lender makes any representations
or warranties other than those expressly made in this Agreement.

ARTICLE III. PAYMENTS, FEES AND OTHER GENERAL PROVISIONS

 

Section 3.1. Payments.

(a) Payments by Borrower. Except to the extent otherwise provided herein, all
payments of principal, interest, Fees and other amounts to be made by the
Borrower under this Agreement, the Notes

 

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or any other Loan Document shall be made in Dollars, in immediately available
funds, without setoff, deduction or counterclaim, to the Administrative Agent at
the Principal Office, not later than 1:00 p.m. Central time on the date on which
such payment shall become due (each such payment made after such time on such
due date to be deemed to have been made on the next succeeding Business Day).
Subject to Section 11.5., the Borrower shall, at the time of making each payment
under this Agreement or any other Loan Document, specify to the Administrative
Agent the amounts payable by the Borrower hereunder to which such payment is to
be applied. Each payment received by the Administrative Agent for the account of
a Lender under this Agreement or any Note shall be paid to such Lender by wire
transfer of immediately available funds in accordance with the wiring
instructions provided by such Lender to the Administrative Agent from time to
time, for the account of such Lender at the applicable Lending Office of such
Lender. Each payment received by the Administrative Agent for the account of any
Issuing Bank under this Agreement shall be paid to such Issuing Bank by wire
transfer of immediately available funds in accordance with the wiring
instructions provided by such Issuing Bank to the Administrative Agent from time
to time, for the account of such Issuing Bank. In the event the Administrative
Agent fails to pay such amounts to such Lender or such Issuing Bank, as the case
may be, within one Business Day of receipt of such amounts, the Administrative
Agent shall pay interest on such amount until paid at a rate per annum equal to
the Federal Funds Rate from time to time in effect. If the due date of any
payment under this Agreement or any other Loan Document would otherwise fall on
a day which is not a Business Day such date shall be extended to the next
succeeding Business Day and interest shall continue to accrue at the rate, if
any, applicable to such payment for the period of such extension.

(b) Presumptions Regarding Payments by Borrower. Unless the Administrative Agent
shall have received notice from the Borrower prior to the date on which any
payment is due to the Administrative Agent for the account of the Lenders or any
Issuing Bank hereunder that the Borrower will not make such payment, the
Administrative Agent may assume that the Borrower has made such payment on such
date in accordance herewith and may (but shall not be obligated to), in reliance
upon such assumption, distribute to the Lenders or any such Issuing Bank, as the
case may be, the amount due. In such event, if the Borrower has not in fact made
such payment, then each of the Lenders or each such Issuing Bank, as the case
may be, severally agrees to repay to the Administrative Agent on demand that
amount so distributed to such Lender or such Issuing Bank, with interest
thereon, for each day from and including the date such amount is distributed to
it to but excluding the date of payment to the Administrative Agent, at the
greater of the Federal Funds Rate and a rate determined by the Administrative
Agent in accordance with banking industry rules on interbank compensation.

 

Section 3.2. Pro Rata Treatment.

Except to the extent otherwise provided herein: (a) each borrowing from the
Revolving Lenders under Sections 2.1.(a), 2.2.(e) and 2.3.(e) shall be made from
the Revolving Lenders, each payment of the fees under Sections 3.5.(a), 3.5.(b),
the first sentence of 3.5.(c), and 3.5.(d) shall be made for the account of the
Revolving Lenders, and each termination or reduction of the amount of the
Revolving Commitments under Section 2.11. shall be applied to the respective
Revolving Commitments of the Revolving Lenders, pro rata according to the
amounts of their respective Revolving Commitments; (b) each payment or
prepayment of principal of Revolving Loans shall be made for the account of the
Revolving Lenders pro rata in accordance with the respective unpaid principal
amounts of the Revolving Loans held by them, provided that, subject to
Section 3.9., if immediately prior to giving effect to any such payment in
respect of any Revolving Loans the outstanding principal amount of the Revolving
Loans shall not be held by the Revolving Lenders pro rata in accordance with
their respective Revolving Commitments in effect at the time such Revolving
Loans were made, then such payment shall be applied to the Revolving Loans in
such manner as shall result, as nearly as is practicable, in the outstanding
principal amount of the Revolving Loans being held by the Revolving Lenders pro
rata in accordance with their respective Revolving Commitments; (c) each payment
of interest on Revolving Loans shall be

 

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made for the account of the Revolving Lenders pro rata in accordance with the
amounts of interest on such Revolving Loans then due and payable to the
respective Lenders; (d) the making, Conversion and Continuation of Revolving
Loans of a particular Type (other than Conversions provided for by
Sections 5.1.(c) and 5.5.) shall be made pro rata among the Revolving Lenders
according to the amounts of their respective Revolving Loans and the then
current Interest Period for each Lender’s portion of each such Loan of such Type
shall be coterminous; (e) the Revolving Lenders’ participation in, and payment
obligations in respect of, Swingline Loans under Section 2.3., shall be in
accordance with their respective Revolving Commitment Percentages; and (f) the
Revolving Lenders’ participation in, and payment obligations in respect of,
Letters of Credit under Section 2.2., shall be in accordance with their
respective Revolving Commitment Percentages. All payments of principal,
interest, fees and other amounts in respect of the Swingline Loans shall be for
the account of the Swingline Lender only (except to the extent any Lender shall
have acquired a participating interest in any such Swingline Loan pursuant to
Section 2.3.(e), in which case such payments shall be pro rata in accordance
with such participating interests).

 

Section 3.3. Sharing of Payments, Etc.

If a Lender shall obtain payment of any principal of, or interest on, any Loan
made by it to the Borrower under this Agreement or shall obtain payment on any
other Obligation owing by the Borrower or any other Loan Party through the
exercise of any right of set-off, banker’s lien, counterclaim or similar right
or otherwise or through voluntary prepayments directly to a Lender or other
payments made by or on behalf the Borrower or any other Loan Party to a Lender
(other than any payment in respect of Specified Derivatives Obligations) not in
accordance with the terms of this Agreement and such payment should be
distributed to the Lenders in accordance with Section 3.2. or Section 11.5., as
applicable, such Lender shall promptly purchase from the other Lenders
participations in (or, if and to the extent specified by such Lender, direct
interests in) the Loans made by the other Lenders or other Obligations owed to
such other Lenders in such amounts, and make such other adjustments from time to
time as shall be equitable, to the end that all the Lenders shall share the
benefit of such payment (net of any reasonable expenses which may actually be
incurred by such Lender in obtaining or preserving such benefit) in accordance
with the requirements of Section 3.2. or Section 11.5., as applicable. To such
end, all the Lenders shall make appropriate adjustments among themselves (by the
resale of participations sold or otherwise) if such payment is rescinded or must
otherwise be restored. The Borrower agrees that any Lender so purchasing a
participation (or direct interest) in the Loans or other Obligations owed to
such other Lenders may exercise all rights of set-off, banker’s lien,
counterclaim or similar rights with respect to such participation as fully as if
such Lender were a direct holder of Loans in the amount of such participation.
Nothing contained herein shall require any Lender to exercise any such right or
shall affect the right of any Lender to exercise and retain the benefits of
exercising, any such right with respect to any other indebtedness or obligation
of the Borrower.

 

Section 3.4. Several Obligations.

No Lender shall be responsible for the failure of any other Lender to make a
Loan or to perform any other obligation to be made or performed by such other
Lender hereunder, and the failure of any Lender to make a Loan or to perform any
other obligation to be made or performed by it hereunder shall not relieve the
obligation of any other Lender to make any Loan or to perform any other
obligation to be made or performed by such other Lender.

 

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Section 3.5. Fees.

(a) Closing Fee. On the Effective Date, the Borrower agrees to pay to the
Administrative Agent and each Lender all loan fees as have been agreed to in
writing by the Borrower and the Administrative Agent.

(b) Unused Fees. During the period from the Effective Date to but excluding the
Revolving Termination Date, the Borrower agrees to pay to the Administrative
Agent for the account of the Revolving Lenders an unused facility fee equal to
the sum of the daily amount by which the aggregate amount of the Revolving
Commitments exceeds the aggregate outstanding principal balance of Revolving
Loans and Letter of Credit Liabilities multiplied by the Unused Fee Rate. Such
fee shall be computed on a daily basis and payable quarterly in arrears on the
first day of each January, April, July and October during the term of this
Agreement and on the Revolving Termination Date or any earlier date of
termination of the Revolving Commitments or reduction of the Revolving
Commitments to zero. For the avoidance of doubt, for purposes of calculating an
unused facility fee, the outstanding principal balance of Swingline Loans shall
not be factored into the computation.

(c) Letter of Credit Fees. The Borrower agrees to pay to the Administrative
Agent for the account of each Revolving Lender a letter of credit fee at a rate
per annum equal to the Applicable Margin for LIBOR Loans times the daily average
Stated Amount of each Letter of Credit for the period from and including the
date of issuance of such Letter of Credit (x) to and including the date such
Letter of Credit expires or is cancelled or (y) to but excluding the date such
Letter of Credit is drawn in full. In addition to such fees, the Borrower shall
pay to the applicable Issuing Bank solely for its own account, a fronting fee in
respect of each Letter of Credit equal to one-eighth of one percent (0.125%) of
the initial Stated Amount of such Letter of Credit; provided, however, in no
event shall the aggregate amount of such fee in respect of any Letter of Credit
be less than $1,000. The fees provided for in this subsection shall be
nonrefundable and payable, in the case of the fee provided for in the first
sentence, in arrears (i) quarterly on the first day of January, April, July and
October, (ii) on the Revolving Termination Date, (iii) on the date the Revolving
Commitments are terminated or reduced to zero and (iv) thereafter from time to
time on demand of the Administrative Agent and in the case of the fee provided
for in the second sentence, at the time of issuance of such Letter of Credit.
The Borrower shall pay directly to the applicable Issuing Bank from time to time
on demand all commissions, charges, costs and expenses in the amounts
customarily charged or incurred by such Issuing Bank from time to time in like
circumstances with respect to the issuance, amendment, renewal or extension of
any Letter of Credit or any other transaction relating thereto.

(d) Revolving Credit Extension Fee. If the Borrower exercises its right to
extend the Revolving Termination Date in accordance with Section 2.12., the
Borrower agrees to pay to the Administrative Agent for the account of each
Revolving Lender a fee equal to two-tenths of one percent (0.20%) of the amount
of such Revolving Lender’s Revolving Commitment (whether or not utilized). Such
fee shall be due and payable in full on the date the Administrative Agent
receives the Extension Request pursuant to such Section.

(e) Administrative and Other Fees. The Borrower agrees to pay the administrative
and other fees of the Administrative Agent as may be agreed to in writing from
time to time by the Borrower and the Administrative Agent.

 

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Section 3.6. Computations.

Unless otherwise expressly set forth herein, any accrued interest on any Loan,
any Fees or any other Obligations due hereunder shall be computed on the basis
of a year of 360 days and the actual number of days elapsed.

 

Section 3.7. Usury.

In no event shall the amount of interest due or payable on the Loans or other
Obligations exceed the maximum rate of interest allowed by Applicable Law and,
if any such payment is paid by the Borrower or any other Loan Party or received
by any Lender, then such excess sum shall be credited as a payment of principal,
unless the Borrower shall notify the respective Lender in writing that the
Borrower elects to have such excess sum returned to it forthwith. It is the
express intent of the parties hereto that the Borrower not pay and the Lenders
not receive, directly or indirectly, in any manner whatsoever, interest in
excess of that which may be lawfully paid by the Borrower under Applicable Law.
The parties hereto hereby agree and stipulate that the only charge imposed upon
the Borrower for the use of money in connection with this Agreement is and shall
be the interest specifically described in Section 2.4.(a)(i) through (iv) and,
with respect to Swingline Loans, in Section 2.3.(c). Notwithstanding the
foregoing, the parties hereto further agree and stipulate that all agency fees,
syndication fees, facility fees, closing fees, letter of credit fees,
underwriting fees, default charges, late charges, funding or “breakage” charges,
increased cost charges, attorneys’ fees and reimbursement for costs and expenses
paid by the Administrative Agent or any Lender to third parties or for damages
incurred by the Administrative Agent or any Lender, in each case, in connection
with the transactions contemplated by this Agreement and the other Loan
Documents, are charges made to compensate the Administrative Agent or any such
Lender for underwriting or administrative services and costs or losses performed
or incurred, and to be performed or incurred, by the Administrative Agent and
the Lenders in connection with this Agreement and shall under no circumstances
be deemed to be charges for the use of money. All charges other than charges for
the use of money shall be fully earned and nonrefundable when due.

 

Section 3.8. Statements of Account.

The Administrative Agent will account to the Borrower monthly with a statement
of Loans, accrued interest and Fees, charges and payments made pursuant to this
Agreement and the other Loan Documents, and such account rendered by the
Administrative Agent shall be deemed conclusive upon the Borrower absent
manifest error. The failure of the Administrative Agent to deliver such a
statement of accounts shall not relieve or discharge the Borrower from any of
its obligations hereunder.

 

Section 3.9. Defaulting Lenders.

Notwithstanding anything to the contrary contained in this Agreement, if any
Revolving Lender becomes a Defaulting Lender, then, until such time as such
Revolving Lender is no longer a Defaulting Lender, to the extent permitted by
Applicable Law:

(a) Waivers and Amendments. Such Defaulting Lender’s right to approve or
disapprove any amendment, waiver or consent with respect to this Agreement shall
be restricted as set forth in the definition of Requisite Lenders. The rights
and remedies of the Borrower against a Defaulting Lender under this Section are
in addition to any other rights and remedies Borrower may have against such
Defaulting Lender under this Agreement, any of the Loan Documents, Applicable
Law or otherwise.

(b) Defaulting Lender Waterfall. Any payment of principal, interest, Fees or
other amounts received by the Administrative Agent for the account of such
Defaulting Lender (whether voluntary or

 

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mandatory, at maturity, pursuant to Article XI. or otherwise) or received by the
Administrative Agent from a Defaulting Lender pursuant to Section 3.3. shall be
applied at such time or times as may be determined by the Administrative Agent
as follows: first, to the payment of any amounts owing by such Defaulting Lender
to the Administrative Agent hereunder; second, to the payment on a pro rata
basis of any amounts owing by such Defaulting Lender to the Issuing Banks or the
Swingline Lender hereunder; third, to Cash Collateralize each Issuing Bank’s
Fronting Exposure with respect to such Defaulting Lender in accordance with
subsection (e) below; fourth, as the Borrower may request (so long as no Default
or Event of Default exists), to the funding of any Loan in respect of which such
Defaulting Lender has failed to fund its portion thereof as required by this
Agreement, as determined by the Administrative Agent; fifth, if so determined by
the Administrative Agent and the Borrower, to be held in a deposit account and
released pro rata in order to (x) satisfy such Defaulting Lender’s potential
future funding obligations with respect to Loans under this Agreement and
(y) Cash Collateralize each Issuing Bank’s future Fronting Exposure with respect
to such Defaulting Lender with respect to future Letters of Credit issued under
this Agreement, in accordance with subsection (e) below; sixth, to the payment
of any amounts owing to the Lenders, the Issuing Banks or the Swingline Lender
as a result of any judgment of a court of competent jurisdiction obtained by any
Lender, any Issuing Bank or the Swingline Lender against such Defaulting Lender
as a result of such Defaulting Lender’s breach of its obligations under this
Agreement; seventh, so long as no Default or Event of Default exists, to the
payment of any amounts owing to the Borrower as a result of any judgment of a
court of competent jurisdiction obtained by the Borrower against such Defaulting
Lender as a result of such Defaulting Lender’s breach of its obligations under
this Agreement; and eighth, to such Defaulting Lender or as otherwise directed
by a court of competent jurisdiction; provided that if (x) such payment is a
payment of the principal amount of any Loans or amounts owing by such Defaulting
Lender under Section 2.2.(j) in respect of Letters of Credit (such amounts
“L/C Disbursements”), in respect of which such Defaulting Lender has not fully
funded its appropriate share, and (y) such Loans were made or the related
Letters of Credit were issued at a time when the conditions set forth in
Article VI. were satisfied or waived, such payment shall be applied solely to
pay the Loans of, and L/C Disbursements owed to, all Non-Defaulting Lenders on a
pro rata basis prior to being applied to the payment of any Loans of, or L/C
Disbursements owed to, such Defaulting Lender until such time as all Loans and
funded and unfunded participations in Letter of Credit Liabilities and Swingline
Loans are held by the Revolving Lenders pro rata in accordance with their
respective Revolving Commitment Percentages (determined without giving effect to
the immediately following subsection (d)). Any payments, prepayments or other
amounts paid or payable to a Defaulting Lender that are applied (or held) to pay
amounts owed by a Defaulting Lender or to post Cash Collateral pursuant to this
subsection shall be deemed paid to and redirected by such Defaulting Lender, and
each Lender irrevocably consents hereto.

(c) Certain Fees.

(i) No Defaulting Lender shall be entitled to receive any Fee payable under
Section 3.5.(b) for any period during which that Lender is a Defaulting Lender
(and the Borrower shall not be required to pay any such fee that otherwise would
have been required to have been paid to that Defaulting Lender).

(ii) Each Defaulting Lender shall be entitled to receive letter of credit fees
payable under Section 3.5.(c) for any period during which that Lender is a
Defaulting Lender only to the extent allocable to its Revolving Commitment
Percentage of the stated amount of Letters of Credit for which it has provided
Cash Collateral pursuant to the immediately following subsection (e).

(iii) With respect to any Fee that would have been required to be paid to any
Defaulting Lender but for the immediately preceding clauses (i) or (ii), the
Borrower shall

 

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(x) pay to each Non-Defaulting Lender that portion of any such Fee otherwise
payable to such Defaulting Lender with respect to such Defaulting Lender’s
participation in Letter of Credit Liabilities or Swingline Loans that has been
reallocated to such Non-Defaulting Lender pursuant to the immediately following
subsection (d), (y) pay to each Issuing Bank and Swingline Lender, as
applicable, the amount of any such Fee otherwise payable to such Defaulting
Lender to the extent allocable to such Issuing Bank’s or Swingline Lender’s
Fronting Exposure to such Defaulting Lender, and (z) not be required to pay the
remaining amount of any such Fee.

(d) Reallocation of Participations to Reduce Fronting Exposure. All or any part
of such Defaulting Lender’s participation in Letter of Credit Liabilities and
Swingline Loans shall be reallocated among the Non-Defaulting Lenders in
accordance with their respective Revolving Commitment Percentages (determined
without regard to such Defaulting Lender’s Revolving Commitment) but only to the
extent that (x) the conditions set forth in Article VI. are satisfied at the
time of such reallocation (and, unless the Borrower shall have otherwise
notified the Administrative Agent at such time, the Borrower shall be deemed to
have represented and warranted that such conditions are satisfied at such time),
and (y) such reallocation does not cause the aggregate Revolving Credit Exposure
of any Non-Defaulting Lender to exceed such Non-Defaulting Lender’s Revolving
Commitment. No reallocation hereunder shall constitute a waiver or release of
any claim of any party hereunder against a Defaulting Lender arising from that
Revolving Lender having become a Defaulting Lender, including any claim of a
Non-Defaulting Lender as a result of such Non-Defaulting Lender’s increased
exposure following such reallocation.

(e) Cash Collateral, Repayment of Swingline Loans.

(i) If the reallocation described in the immediately preceding subsection (d)
above cannot, or can only partially, be effected, the Borrower shall, without
prejudice to any right or remedy available to it hereunder or under law,
(x) first, prepay Swingline Loans in an amount equal to the Swingline Lender’s
Fronting Exposure and (y) second, Cash Collateralize each Issuing Bank’s
Fronting Exposure in accordance with the procedures set forth in this
subsection.

(ii) At any time that there shall exist a Defaulting Lender, within one
(1) Business Day following the written request of the Administrative Agent or
the applicable Issuing Bank (with a copy to the Administrative Agent), the
Borrower shall Cash Collateralize such Issuing Bank’s Fronting Exposure with
respect to such Defaulting Lender (determined after giving effect to the
immediately preceding subsection (d) and any Cash Collateral provided by such
Defaulting Lender) in an amount not less than the aggregate Fronting Exposure of
such Issuing Bank with respect to Letters of Credit issued and outstanding at
such time. Such cash collateralization may be provided by a borrowing of
Revolving Loans if the conditions precedent thereto are met.

(iii) The Borrower, and to the extent provided by any Defaulting Lender, such
Defaulting Lender, hereby grant to the Administrative Agent, for the benefit of
all Issuing Banks, and agree to maintain, a first priority security interest in
all such Cash Collateral as security for the Defaulting Lenders’ obligation to
fund participations in respect of Letter of Credit Liabilities, to be applied
pursuant to the immediately following clause (iv). If at any time the
Administrative Agent determines that Cash Collateral is subject to any right or
claim of any Person other than the Administrative Agent and the Issuing Banks as
herein provided, or that the total amount of such Cash Collateral is less than
the aggregate Fronting Exposure of the Issuing Banks with respect to Letters of
Credit issued and outstanding at such time, the

 

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Borrower will, promptly upon demand by the Administrative Agent, pay or provide
to the Administrative Agent additional Cash Collateral in an amount sufficient
to eliminate such deficiency (after giving effect to any Cash Collateral
provided by the Defaulting Lender).

(iv) Notwithstanding anything to the contrary contained in this Agreement, Cash
Collateral provided under this Section in respect of Letters of Credit shall be
applied to the satisfaction of the Defaulting Lender’s obligation to fund
participations in respect of Letter of Credit Liabilities (including, as to Cash
Collateral provided by a Defaulting Lender, any interest accrued on such
obligation) for which the Cash Collateral was so provided, prior to any other
application of such property as may otherwise be provided for herein.

(v) Cash Collateral (or the appropriate portion thereof) provided to reduce any
Issuing Bank’s Fronting Exposure shall no longer be required to be held as Cash
Collateral pursuant to this subsection following (x) the elimination of the
applicable Fronting Exposure (including by the termination of Defaulting Lender
status of the applicable Revolving Lender), or (y) the determination by the
Administrative Agent and such Issuing Bank that there exists excess Cash
Collateral; provided that, subject to the immediately preceding subsection (b),
the Person providing Cash Collateral and such Issuing Bank may agree that Cash
Collateral shall be held to support future anticipated Fronting Exposure or
other obligation.

(f) Defaulting Lender Cure. If the Borrower, the Administrative Agent, the
Swingline Lender and the Issuing Banks agree in writing that a Revolving Lender
is no longer a Defaulting Lender, the Administrative Agent will so notify the
parties hereto, whereupon as of the effective date specified in such notice and
subject to any conditions set forth therein (which may include arrangements with
respect to any Cash Collateral), that Revolving Lender will, to the extent
applicable, purchase at par that portion of outstanding Loans of the other
Lenders or take such other actions as the Administrative Agent may determine to
be necessary to cause the Loans and funded and unfunded participations in
Letters of Credit and Swingline Loans to be held pro rata by the Revolving
Lenders in accordance with their respective Revolving Commitment Percentages
(determined without giving effect to the immediately preceding subsection (d)),
whereupon such Revolving Lender will cease to be a Defaulting Lender; provided
that no adjustments will be made retroactively with respect to Fees accrued or
payments made by or on behalf of the Borrower while that Revolving Lender was a
Defaulting Lender; and provided, further, that except to the extent otherwise
expressly agreed by the affected parties, no change hereunder from Defaulting
Lender to Revolving Lender will constitute a waiver or release of any claim of
any party hereunder arising from that Revolving Lender’s having been a
Defaulting Lender.

(g) New Swingline Loans/Letters of Credit. So long as any Revolving Lender is a
Defaulting Lender, (i) the Swingline Lender shall not be required to fund any
Swingline Loans unless it is satisfied that it will have no Fronting Exposure
after giving effect to such Swingline Loan and (ii) no Issuing Bank shall be
required to issue, extend, renew or increase any Letter of Credit unless it is
satisfied that it will have no Fronting Exposure after giving effect thereto.

 

Section 3.10. Taxes; Foreign Lenders.

(a) Taxes Generally. All payments by the Borrower of principal of, and interest
on, the Loans and all other Obligations shall be made free and clear of and
without deduction for any present or future excise, stamp or other taxes, fees,
duties, levies, imposts, charges, deductions, withholdings or other charges of
any nature whatsoever imposed by any taxing authority, but excluding
(i) franchise taxes, (ii) any taxes (other than withholding taxes) that would
not be imposed but for a connection between the Administrative Agent, an Issuing
Bank or a Lender and the jurisdiction imposing such taxes (other than a
connection arising solely by virtue of the activities of the Administrative
Agent, such Issuing Bank or

 

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such Lender pursuant to or in respect of this Agreement or any other Loan
Document), (iii) any taxes imposed on or measured by any Issuing Bank’s or any
Lender’s net income or branch profits, (iv) any taxes arising after the
Agreement Date solely as a result of or attributable to a Lender changing its
designated Lending Office after the date such Lender becomes a party hereto, and
(v) any taxes imposed by Sections 1471 through Section 1474 of the Internal
Revenue Code (including any official interpretations thereof, collectively
“FATCA”) on any “withholdable payment” payable to such recipient as a result of
the failure of such recipient to satisfy the applicable requirements as set
forth in FATCA after December 31, 2012 (such non-excluded items being
collectively called “Taxes”). If any withholding or deduction from any payment
to be made by the Borrower hereunder is required in respect of any Taxes
pursuant to any Applicable Law, then the Borrower will:

(i) pay directly to the relevant Governmental Authority the full amount required
to be so withheld or deducted;

(ii) promptly forward to the Administrative Agent an official receipt or other
documentation satisfactory to the Administrative Agent evidencing such payment
to such Governmental Authority; and

(iii) pay to the Administrative Agent for its account or the account of the
applicable Lender or the applicable Issuing Bank, as the case may be, such
additional amount or amounts as is necessary to ensure that the net amount
actually received by the Administrative Agent, such Issuing Bank or such Lender
will equal the full amount that the Administrative Agent, such Issuing Bank or
such Lender would have received had no such withholding or deduction been
required.

(b) Tax Indemnification. If the Borrower fails to pay any Taxes when due to the
appropriate Governmental Authority or fails to remit to the Administrative
Agent, for its account or the account of respective Issuing Bank or respective
Lender, as the case may be, the required receipts or other required documentary
evidence, the Borrower shall indemnify the Administrative Agent, the Issuing
Banks and the Lenders for any incremental Taxes, interest or penalties that may
become payable by the Administrative Agent, any Issuing Bank or any Lender as a
result of any such failure. For purposes of this Section, a distribution
hereunder by the Administrative Agent or any Lender to or for the account of any
Lender shall be deemed a payment by the Borrower.

(c) Tax Forms. Prior to the date that any Lender or Participant organized under
the laws of a jurisdiction other than that in which the Borrower is a resident
for tax purposes becomes a party hereto, such Person shall deliver to the
Borrower and the Administrative Agent such certificates, documents or other
evidence, as required by the Internal Revenue Code or Treasury Regulations
issued pursuant thereto (including Internal Revenue Service Forms W-8ECI and
W-8BEN, as applicable, or appropriate successor forms), properly completed,
currently effective and duly executed by such Lender or Participant establishing
that payments to it hereunder and under the Notes are (i) not subject to United
States Federal backup withholding tax and (ii) not subject to United States
Federal withholding tax under the Internal Revenue Code. Each such Lender or
Participant shall, to the extent it may lawfully do so, (x) deliver further
copies of such forms or other appropriate certifications on or before the date
that any such forms expire or become obsolete and after the occurrence of any
event requiring a change in the most recent form delivered to the Borrower or
the Administrative Agent and (y) obtain such extensions of the time for filing,
and renew such forms and certifications thereof, as may be reasonably requested
by the Borrower or the Administrative Agent. The Borrower shall not be required
to pay any amount pursuant to the last sentence of subsection (a) above to any
Lender or Participant that is organized under the laws of a jurisdiction other
than that in which the Borrower is a resident for tax purposes or the
Administrative Agent, if it is organized under the laws of a jurisdiction other
than that in which the Borrower is a resident

 

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for tax purposes, if such Lender, such Participant or the Administrative Agent,
as applicable, fails to comply with the requirements of this subsection. If any
such Lender or Participant, to the extent it may lawfully do so, fails to
deliver the above forms or other documentation, then the Administrative Agent
may withhold from such payment to such Lender such amounts as are required by
the Internal Revenue Code. If any Governmental Authority asserts that the
Administrative Agent did not properly withhold or backup withhold, as the case
may be, any tax or other amount from payments made to or for the account of any
Lender, such Lender shall indemnify the Administrative Agent therefor (but only
to the extent that the Borrower or any Loan Party has not already indemnified
the Administrative Agent for such taxes and without limiting the obligation of
the Borrower or the Loan Parties to do so), including all penalties and
interest, any taxes imposed by any jurisdiction on the amounts payable to the
Administrative Agent under this Section, and reasonable costs and expenses
(including all reasonable fees and disbursements of any law firm or other
external counsel and the allocated cost of internal legal services and all
disbursements of internal counsel) of the Administrative Agent. The obligation
of the Lenders under this Section shall survive the termination of the
Commitments, repayment of all Obligations and the resignation or replacement of
the Administrative Agent.

(d) USA Patriot Act Notice; Compliance. In order for the Administrative Agent to
comply with the USA Patriot Act of 2001 (Public Law 107-56), prior to any Lender
or Participant that is organized under the laws of a jurisdiction outside of the
United States of America becoming a party hereto, the Administrative Agent may
request, and such Lender or Participant shall provide to the Administrative
Agent, its name, address, tax identification number and/or such other
identification information as shall be necessary for the Administrative Agent to
comply with federal law.

(e) Treatment of Certain Refunds. If any party determines, in its sole
discretion exercised in good faith, that it has received a refund of any Taxes
as to which it has been indemnified pursuant to this Section 3.10. (including by
the payment of additional amounts pursuant to this Section 3.10.), it shall pay
to the indemnifying party an amount equal to such refund (but only to the extent
of indemnity payments made under this Section 3.10. with respect to the Taxes
giving rise to such refund), net of all out-of-pocket expenses (including Taxes)
of such indemnified party and without interest (other than any interest paid by
the relevant Governmental Authority with respect to such refund). Such
indemnifying party, upon the request of such indemnified party, shall repay to
such indemnified party the amount paid over pursuant to this paragraph (e) (plus
any penalties, interest or other charges imposed by the relevant Governmental
Authority) in the event that such indemnified party is required to repay such
refund to such Governmental Authority. Notwithstanding anything to the contrary
in this paragraph (e) in no event will the indemnified party be required to pay
any amount to an indemnifying party pursuant to this paragraph (e) the payment
of which would place the indemnified party in a less favorable net after-Tax
position than the indemnified party would have been in if the indemnification
payments or additional amounts giving rise to such refund had never been paid.
This paragraph shall not be construed to require any indemnified party to make
available its Tax returns (or any other information relating to its Taxes that
it deems confidential) to the indemnifying party or any other Person.

ARTICLE IV. [RESERVED].

ARTICLE V. YIELD PROTECTION, ETC.

 

Section 5.1. Additional Costs; Capital Adequacy.

(a) Capital Adequacy. If any Lender or any Participant determines that
compliance with any law or regulation or with any guideline or request from any
central bank or other Governmental Authority (whether or not having the force of
law) affects or would affect the amount of capital required or expected

 

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to be maintained by such Lender or such Participant, or any corporation
controlling such Lender or such Participant, as a consequence of, or with
reference to, such Lender’s Commitments or its making or maintaining Loans or
participating in Letters of Credit below the rate which such Lender or such
Participant or such corporation controlling such Lender or such Participant
could have achieved but for such compliance (taking into account the policies of
such Lender or such Participant or such corporation with regard to capital),
then the Borrower shall, from time to time, within thirty (30) days after
written demand by such Lender or such Participant, pay to such Lender or such
Participant additional amounts sufficient to compensate such Lender or such
Participant or such corporation controlling such Lender or such Participant to
the extent that such Lender or such Participant determines such increase in
capital is allocable to such Lender’s or such Participant’s obligations
hereunder.

(b) Additional Costs. In addition to, and not in limitation of the immediately
preceding subsection, the Borrower shall promptly pay to the Administrative
Agent for the account of a Lender from time to time such amounts as such Lender
may determine to be necessary to compensate such Lender for any costs incurred
by such Lender that it determines are attributable to its making or maintaining
of any LIBOR Loans or its obligation to make any LIBOR Loans hereunder, any
reduction in any amount receivable by such Lender under this Agreement or any of
the other Loan Documents in respect of any of such LIBOR Loans or such
obligation or the maintenance by such Lender of capital or liquidity in respect
of its LIBOR Loans or its Commitments (such increases in costs and reductions in
amounts receivable being herein called “Additional Costs”), resulting from any
Regulatory Change that: (i) changes the basis of taxation of any amounts payable
to such Lender under this Agreement or any of the other Loan Documents in
respect of any of such LIBOR Loans or its Commitments (other than taxes imposed
on or measured by the overall net income of such Lender or of its Lending Office
for any of such LIBOR Loans by the jurisdiction in which such Lender has its
principal office or such Lending Office), or (ii) imposes or modifies any
reserve, special deposit or similar requirements (other than Regulation D of the
Board of Governors of the Federal Reserve System or other similar reserve
requirement applicable to any other category of liabilities or category of
extensions of credit or other assets by reference to which the interest rate on
LIBOR Loans is determined to the extent utilized when determining LIBOR for such
Loans) relating to any extensions of credit or other assets of, or any deposits
with or other liabilities of, or other credit extended by, or any other
acquisition of funds by such Lender (or its parent corporation), or any
commitment of such Lender (including, without limitation, the Commitments of
such Lender hereunder) or (iii) has or would have the effect of reducing the
rate of return on capital of such Lender to a level below that which such Lender
could have achieved but for such Regulatory Change (taking into consideration
such Lender’s policies with respect to capital adequacy and liquidity).

(c) Lender’s Suspension of LIBOR Loans. Without limiting the effect of the
provisions of the immediately preceding subsections (a) and (b), if by reason of
any Regulatory Change, any Lender either (i) incurs Additional Costs based on or
measured by the excess above a specified level of the amount of a category of
deposits or other liabilities of such Lender that includes deposits by reference
to which the interest rate on LIBOR Loans is determined as provided in this
Agreement or a category of extensions of credit or other assets of such Lender
that includes LIBOR Loans or (ii) becomes subject to restrictions on the amount
of such a category of liabilities or assets that it may hold, then, if such
Lender so elects by notice to the Borrower (with a copy to the Administrative
Agent), the obligation of such Lender to make or Continue, or to Convert Base
Rate Loans into, LIBOR Loans shall be suspended until such Regulatory Change
ceases to be in effect (in which case the provisions of Section 5.5. shall
apply).

(d) Additional Costs in Respect of Letters of Credit. Without limiting the
obligations of the Borrower under the preceding subsections of this Section (but
without duplication), if as a result of any Regulatory Change or any risk-based
capital guideline or other requirement hereafter issued by any Governmental
Authority there shall be imposed, modified or deemed applicable after the
Agreement Date, any tax, reserve, special deposit, capital adequacy or similar
requirement against or with respect to

 

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or measured by reference to Letters of Credit and the result shall be to
increase the cost to the applicable Issuing Bank of issuing (or any Lender of
purchasing participations in) or maintaining its obligation hereunder to issue
(or purchase participations in) any Letter of Credit or reduce any amount
receivable by any Issuing Bank or any Lender hereunder in respect of any Letter
of Credit, then, upon demand by such Issuing Bank or such Lender, the Borrower
shall pay promptly to such Issuing Bank or, in the case of such Lender, to the
Administrative Agent for the account of such Lender, from time to time as
specified by such Issuing Bank or such Lender, such additional amounts as shall
be sufficient to compensate such Issuing Bank or such Lender for such increased
costs or reductions in amount.

(e) Notification and Determination of Additional Costs. Each of the
Administrative Agent, each Issuing Bank, each Lender, and each Participant, as
the case may be, agrees to notify the Borrower of any event occurring after the
Agreement Date entitling the Administrative Agent, such Issuing Bank, such
Lender or such Participant to compensation under any of the preceding
subsections of this Section as promptly as practicable; provided, however, that
the failure of the Administrative Agent, any Issuing Bank, any Lender or any
Participant to give such notice shall not release the Borrower from any of its
obligations hereunder (and in the case of a Lender, to the Administrative
Agent). The Administrative Agent, each Issuing Bank, each Lender and each
Participant, as the case may be, agrees to furnish to the Borrower (and in the
case of an Issuing Bank, a Lender or a Participant to the Administrative Agent
as well) a certificate setting forth the basis and amount of each request for
compensation under this Section. Determinations by the Administrative Agent,
such Issuing Bank, such Lender, or such Participant, as the case may be, of the
effect of any Regulatory Change shall be conclusive and binding for all
purposes, absent manifest error and provided that such determinations are made
on a reasonable basis and in good faith. Notwithstanding anything to the
contrary contained in the preceding subsections of this Section 5.1., the
Borrower shall not be required to compensate any Lender or any Participant for
any such increased costs or reduced return incurred by such Lender or
Participant more than one hundred eighty (180) days prior to such Lender’s or
Participant’s written request to the Borrower for such compensation (except that
if the event giving rise to the increased costs or reduced return is
retroactive, then the one hundred eighty (180) day period referred to above
shall be extended to include the period of retroactive effect thereof).

 

Section 5.2. Suspension of LIBOR Loans.

Anything herein to the contrary notwithstanding, if, on or prior to the
determination of LIBOR for any Interest Period:

(a) the Administrative Agent reasonably determines (which determination shall be
conclusive) that quotations of interest rates for the relevant deposits referred
to in the definition of LIBOR are not being provided in the relevant amounts or
for the relevant maturities for purposes of determining rates of interest for
LIBOR Loans as provided herein or is otherwise unable to determine LIBOR; or

(b) the Administrative Agent reasonably determines (which determination shall be
conclusive) that the relevant rates of interest referred to in the definition of
LIBOR upon the basis of which the rate of interest for LIBOR Loans for such
Interest Period is to be determined are not likely to adequately cover the cost
to any Lender of making or maintaining LIBOR Loans for such Interest Period;

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

 

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Section 5.3. Illegality.

Notwithstanding any other provision of this Agreement, if any Lender shall
determine (which determination shall be conclusive and binding) that it is
unlawful for such Lender to honor its obligation to make or maintain LIBOR Loans
hereunder, then such Lender shall promptly notify the Borrower thereof (with a
copy of such notice to the Administrative Agent) and such Lender’s obligation to
make or Continue, or to Convert Loans of any other Type into, LIBOR Loans shall
be suspended until such time as such Lender may again make and maintain LIBOR
Loans (in which case the provisions of Section 5.5. shall be applicable).

 

Section 5.4. Compensation.

The Borrower shall pay to the Administrative Agent for the account of each
Lender, upon the request of the Administrative Agent, such amount or amounts as
the Administrative Agent shall determine in its sole discretion shall be
sufficient to compensate such Lender for any loss, cost or expense attributable
to:

(a) any payment or prepayment (whether mandatory or optional) of a LIBOR Loan,
or Conversion of a LIBOR Loan, made by such Lender for any reason (including,
without limitation, acceleration) on a date other than the last day of the
Interest Period for such Loan; or

(b) any failure by the Borrower for any reason (including, without limitation,
the failure of any of the applicable conditions precedent specified in Article
6.2. to be satisfied) to borrow a LIBOR Loan from such Lender on the date for
such borrowing, or to Convert a Base Rate Loan into a LIBOR Loan or Continue a
LIBOR Loan on the requested date of such Conversion or Continuation.

Upon the Borrower’s request, the Administrative Agent shall provide the Borrower
with a statement setting forth the basis for requesting such compensation and
the method for determining the amount thereof. Any such statement shall be
conclusive absent manifest error.

 

Section 5.5. Treatment of Affected Loans.

If the obligation of any Lender to make LIBOR Loans or to Continue, or to
Convert Base Rate Loans into, LIBOR Loans shall be suspended pursuant to
Section 5.1.(c), Section 5.2. or Section 5.3. then such Lender’s LIBOR Loans
shall be automatically Converted into Base Rate Loans on the last day(s) of the
then current Interest Period(s) for LIBOR Loans (or, in the case of a Conversion
required by Section 5.1.(c), Section 5.2., or Section 5.3. on such earlier date
as such Lender may specify to the Borrower with a copy to the Administrative
Agent) and, unless and until such Lender gives notice as provided below that the
circumstances specified in Section 5.1., Section 5.2. or Section 5.3. that gave
rise to such Conversion no longer exist:

(a) to the extent that such Lender’s LIBOR Loans have been so Converted, all
payments and prepayments of principal that would otherwise be applied to such
Lender’s LIBOR Loans shall be applied instead to its Base Rate Loans; and

 

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(b) all Loans that would otherwise be made or Continued by such Lender as LIBOR
Loans shall be made or Continued instead as Base Rate Loans, and all Base Rate
Loans of such Lender that would otherwise be Converted into LIBOR Loans shall
remain as Base Rate Loans.

If such Lender gives notice to the Borrower (with a copy to the Administrative
Agent) that the circumstances specified in Section 5.1.(c) or 5.3. that gave
rise to the Conversion of such Lender’s LIBOR Loans pursuant to this Section no
longer exist (which such Lender agrees to do promptly upon such circumstances
ceasing to exist) at a time when LIBOR Loans made by other Lenders are
outstanding, then such Lender’s Base Rate Loans shall be automatically
Converted, on the first day(s) of the next succeeding Interest Period(s) for
such outstanding LIBOR Loans, to the extent necessary so that, after giving
effect thereto, all Loans held by the Lenders holding LIBOR Loans and by such
Lender are held pro rata (as to principal amounts, Types and Interest Periods)
in accordance with their respective Commitments.

 

Section 5.6. Affected Lenders.

If (a) a Lender requests compensation pursuant to Section 3.10. or 5.1., and the
Requisite Lenders are not also doing the same, or (b) the obligation of any
Lender to make LIBOR Loans or to Continue, or to Convert Base Rate Loans into,
LIBOR Loans shall be suspended pursuant to Section 5.1.(b) or 5.3. but the
obligation of the Requisite Lenders shall not have been suspended under such
Sections, or (c) a Lender does not vote in favor of any amendment, modification
or waiver to this Agreement or any other Loan Document, which, pursuant to
Section 13.7, requires the vote of such Lender, and the Requisite Lenders shall
have voted in favor of such amendment, modification or waiver, then, so long as
there does not then exist any Default or Event of Default, the Borrower may
demand that such Lender (the “Affected Lender”), and upon such demand the
Affected Lender shall promptly, assign its Commitment to an Eligible Assignee
subject to and in accordance with the provisions of Section 13.6.(b) for a
purchase price equal to (x) the aggregate principal balance of all Loans then
owing to the Affected Lender, plus (y) the aggregate amount of payments
previously made by the Affected Lender under Section 2.2.(j) that have not been
repaid, plus (z) any accrued but unpaid interest thereon and accrued but unpaid
fees owing to the Affected Lender, or any other amount as may be mutually agreed
upon by such Affected Lender and Eligible Assignee. Each of the Administrative
Agent and the Affected Lender shall reasonably cooperate in effectuating the
replacement of such Affected Lender under this Section, but at no time shall the
Administrative Agent, such Affected Lender nor any other Lender nor any Titled
Agent be obligated in any way whatsoever to initiate any such replacement or to
assist in finding an Eligible Assignee. The exercise by the Borrower of its
rights under this Section shall be at the Borrower’s sole cost and expense and
at no cost or expense to the Administrative Agent, the Affected Lender or any of
the other Lenders. The terms of this Section shall not in any way limit the
Borrower’s obligation to pay to any Affected Lender compensation owing to such
Affected Lender pursuant to this Agreement (including, without limitation,
pursuant to Sections 3.10., 5.1. or 5.4.) with respect to any period up to the
date of replacement.

 

Section 5.7. Change of Lending Office.

Each Lender agrees that it will use reasonable efforts (consistent with its
internal policy and legal and regulatory restrictions) to designate an alternate
Lending Office with respect to any of its Loans affected by the matters or
circumstances described in Sections 3.10., 5.1. or 5.3. to reduce the liability
of the Borrower or avoid the results provided thereunder, so long as such
designation is not disadvantageous to such Lender as determined by such Lender
in its sole discretion, except that such Lender shall have no obligation to
designate a Lending Office located in the United States of America.

 

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Section 5.8. Assumptions Concerning Funding of LIBOR Loans.

Calculation of all amounts payable to a Lender under this Article shall be made
as though such Lender had actually funded LIBOR Loans through the purchase of
deposits in the relevant market bearing interest at the rate applicable to such
LIBOR Loans in an amount equal to the amount of the LIBOR Loans and having a
maturity comparable to the relevant Interest Period; provided, however, that
each Lender may fund each of its LIBOR Loans in any manner it sees fit and the
foregoing assumption shall be used only for calculation of amounts payable under
this Article.

ARTICLE VI. CONDITIONS PRECEDENT

 

Section 6.1. Initial Conditions Precedent.

The obligation of the Lenders to effect or permit the occurrence of the first
Credit Event hereunder, whether as the making of a Loan or the issuance of a
Letter of Credit, is subject to the satisfaction or waiver of the following
conditions precedent:

(a) The Administrative Agent shall have received each of the following, in form
and substance satisfactory to the Administrative Agent:

(i) counterparts of this Agreement executed by each of the parties hereto;

(ii) Revolving Notes executed by the Borrower, payable to each applicable Lender
and complying with the terms of Section 2.10.(a) and the Swingline Note executed
by the Borrower;

(iii) the Guaranty executed by each of the Guarantors initially to be a party
thereto;

(iv) an opinion of Pillsbury Winthrop Shaw Pittman LLP, counsel to the Parent,
the Borrower and the other Loan Parties, addressed to the Administrative Agent
and the Lenders and in a form acceptable to the Administrative Agent;

(v) the certificate or articles of incorporation or formation, articles of
organization, certificate of limited partnership, declaration of trust or other
comparable organizational instrument (if any) of each Loan Party certified as of
a recent date by the Secretary of State of the state of formation of such Loan
Party;

(vi) a certificate of good standing (or certificate of similar meaning) with
respect to each Loan Party issued as of a recent date by the Secretary of State
of the state of formation of each such Loan Party and certificates of
qualification to transact business or other comparable certificates issued as of
a recent date by each Secretary of State (and any state department of taxation,
as applicable) of each state in which such Loan Party is required to be so
qualified and where failure to be so qualified could reasonably be expected to
have a Material Adverse Effect;

(vii) a certificate of incumbency signed by the Secretary or Assistant Secretary
(or other individual performing similar functions) of each Loan Party with
respect to each of the officers of such Loan Party authorized to execute and
deliver the Loan Documents to which such Loan Party is a party, and in the case
of the Borrower, authorized to execute and deliver on behalf of the Borrower
Notices of Borrowing, Notices of Swingline Borrowing, requests for Letters of
Credit, Notices of Conversion and Notices of Continuation;

 

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(viii) copies certified by the Secretary or Assistant Secretary (or other
individual performing similar functions) of each Loan Party of (A) the by-laws
of such Loan Party, if a corporation, the operating agreement, if a limited
liability company, the partnership agreement, if a limited or general
partnership, or other comparable document in the case of any other form of legal
entity and (B) all corporate, partnership, member or other necessary action
taken by such Loan Party to authorize the execution, delivery and performance of
the Loan Documents to which it is a party;

(ix) a Compliance Certificate calculated on a pro forma basis for the Borrower’s
fiscal year ending December 31, 2011;

(x) a Transfer Authorizer Designation Form effective as of the Agreement Date;

(xi) evidence that all indebtedness, liabilities or obligations owing by the
Loan Parties under the Existing Credit Agreement shall have been paid in full
and all Liens securing such indebtedness, liabilities or other obligations have
been released;

(xii) evidence that the Fees, if any, then due and payable under Section 3.5.,
together with all other fees, expenses and reimbursement amounts due and payable
to the Administrative Agent and any of the Lenders, including without
limitation, the fees and expenses of counsel to the Administrative Agent, have
been paid;

(xiii) insurance certificates, or other evidence, providing that the insurance
coverage required under Section 8.5. (including, without limitation, both
property and liability insurance) is in full force and effect;

(xiv) the duly executed Officer’s Certificate; and

(xv) such other documents, agreements and instruments as the Administrative
Agent, or any Lender through the Administrative Agent, may reasonably request.

(b) In the good faith judgment of the Administrative Agent:

(i) there shall not have occurred or become known to the Administrative Agent or
any of the Lenders any event, condition, situation or status since the date of
the information contained in the financial and business projections, budgets,
pro forma data and forecasts concerning the Borrower and its Subsidiaries
delivered to the Administrative Agent and the Lenders prior to the Agreement
Date that has had or could reasonably be expected to result in a Material
Adverse Effect;

(ii) no litigation, action, suit, investigation or other arbitral,
administrative or judicial proceeding shall be pending or threatened which could
reasonably be expected to (A) result in a Material Adverse Effect or
(B) restrain or enjoin, impose materially burdensome conditions on, or otherwise
materially and adversely affect, the ability of the Borrower or any other Loan
Party to fulfill its obligations under the Loan Documents to which it is a
party;

(iii) the Borrower and its Subsidiaries shall have received all approvals,
consents and waivers, and shall have made or given all necessary filings and
notices as shall be required to consummate the transactions contemplated hereby
without the occurrence of any default under, conflict with or violation of
(A) any Applicable Law or (B) any agreement, document or instrument to which any
Loan Party is a party or by which any of them or their respective

 

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properties is bound, except for such approvals, consents, waivers, filings and
notices the receipt, making or giving of which could not reasonably be likely to
(A) have a Material Adverse Effect, or (B) restrain or impose materially
burdensome conditions on, or otherwise materially and adversely effect the
ability of the Borrower or any Loan Party to fulfill its obligations under the
Loan Documents to which it is a Party;

(iv) the Borrower and each other Loan Party shall have provided all information
requested by the Administrative Agent and each Lender in order to comply with
the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)); and

(v) there shall not have occurred or exist any other material disruption of
financial or capital markets that could reasonably be expected to materially and
adversely affect the transactions contemplated by the Loan Documents.

 

Section 6.2. Conditions Precedent to All Loans and Letters of Credit.

The obligations of (i) the Lenders to make any Loans and (ii) the Issuing Banks
to issue Letters of Credit are each subject to the further conditions precedent
that: (a) no Default or Event of Default shall exist as of the date of the
making of such Loan or date of issuance of such Letter of Credit or would exist
immediately after giving effect thereto, and no violation of the limits
described in Section 2.14. would occur after giving effect thereto; (b) the
representations and warranties made or deemed made by the Borrower and each
other Loan Party in the Loan Documents to which any of them is a party, shall be
true and correct in all material respects (except in the case of a
representation or warranty qualified by materiality, in which case such
representation or warranty shall be true and correct in all respects) on and as
of the date of the making of such Loan or date of issuance of such Letter of
Credit with the same force and effect as if made on and as of such date except
to the extent that such representations and warranties expressly relate solely
to an earlier date (in which case such representations and warranties shall have
been true and correct in all material respects (except in the case of a
representation or warranty qualified by materiality, in which case such
representation or warranty shall be true and correct in all respects) on and as
of such earlier date) and except for changes in factual circumstances not
expressly prohibited hereunder and (c) in the case of the borrowing of Revolving
Loans, the Administrative Agent shall have received a timely Notice of
Borrowing, or in the case of a Swingline Loan, the Swingline Lender shall have
received a timely Notice of Swingline Borrowing. Each Credit Event shall
constitute a certification by the Borrower to the effect set forth in the
preceding sentence (both as of the date of the giving of notice relating to such
Credit Event and, unless the Borrower otherwise notifies the Administrative
Agent prior to the date of such Credit Event, as of the date of the occurrence
of such Credit Event). In addition, the Borrower shall be deemed to have
represented to the Administrative Agent and the Lenders at the time any Loan is
made or any Letter of Credit is issued that all conditions to the making of such
Loan or issuing of such Letter of Credit contained in this Article VI. have been
satisfied. Unless set forth in writing to the contrary, the making of its
initial Loan by a Lender shall constitute a certification by such Lender to the
Administrative Agent and the other Lenders that the conditions precedent for
initial Loans set forth in Sections 6.1. and 6.2. that have not previously been
waived by the Lenders in accordance with the terms of this Agreement have been
satisfied.

ARTICLE VII. REPRESENTATIONS AND WARRANTIES

 

Section 7.1. Representations and Warranties.

In order to induce the Administrative Agent and each Lender to enter into this
Agreement and to make Loans and, in the case of each Issuing Bank, to issue
Letters of Credit, the Borrower represents and warrants to the Administrative
Agent, each Issuing Bank and each Lender as follows:

(a) Organization; Power; Qualification. Each of the Parent and the Borrower, the
other Loan Parties and the other Subsidiaries of the Borrower is a corporation,
partnership or other legal entity, duly organized or formed, validly existing
and in good standing under the jurisdiction of its incorporation or formation,
has the power and authority to own or lease its respective properties and to
carry on its respective business as now being and hereafter proposed to be
conducted and is duly qualified and is in good standing as a foreign
corporation, partnership or other legal entity, and authorized to do business,
in each jurisdiction in which the character of its properties or the nature of
its business requires such qualification or authorization and where the failure
to be so qualified or authorized could reasonably be expected to have, in each
instance, a Material Adverse Effect.

 

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(b) Ownership Structure. Part I of Schedule 7.1.(b) is, as of the Agreement
Date, a complete and correct list of all Subsidiaries of the Parent setting
forth for each such Subsidiary, (i) the jurisdiction of organization of such
Subsidiary, (ii) each Person holding any Equity Interest in such Subsidiary,
(iii) the nature of the Equity Interests held by each such Person and (iv) the
percentage of ownership of such Subsidiary represented by such Equity Interests.
As of the Agreement Date, except as disclosed in such Schedule (A), each of the
Parent, the Borrower and the Subsidiaries of the Borrower owns, free and clear
of all Liens (except Permitted Liens under clauses (c) through (f) of the
definition thereof), and has the unencumbered right to vote, all outstanding
Equity Interests in each Person shown to be held by it on such Schedule, (B) all
of the issued and outstanding capital stock of each such Person organized as a
corporation is validly issued, fully paid and nonassessable and (C) there are no
outstanding subscriptions, options, warrants, commitments, preemptive rights or
agreements of any kind (including, without limitation, any stockholders’ or
voting trust agreements) for the issuance, sale, registration or voting of, or
outstanding securities convertible into, any additional shares of capital stock
of any class, or partnership or other ownership interests of any type in, any
such Person. As of the Agreement Date, Part II of Schedule 7.1.(b) correctly
sets forth all Unconsolidated Affiliates of the Parent, including the correct
legal name of such Person, the type of legal entity which each such Person is,
and all Equity Interests in such Person held directly or indirectly by the
Parent.

(c) Authorization of Loan Documents and Borrowings. The Borrower has the right
and power, and has taken all necessary action to authorize it, to borrow and
obtain other extensions of credit hereunder. Each of the Parent and the Borrower
and each other Loan Party has the right and power, and has taken all necessary
action to authorize it, to execute, deliver and perform each of the Loan
Documents to which it is a party in accordance with their respective terms and
to consummate the transactions contemplated hereby and thereby. The Loan
Documents to which the Parent, the Borrower or any other Loan Party is a party
have been duly executed and delivered by the duly authorized officers of such
Person and each is a legal, valid and binding obligation of such Person
enforceable against such Person in accordance with its respective terms, except
as the same may be limited by bankruptcy, insolvency, and other similar laws
affecting the rights of creditors generally and the availability of equitable
remedies for the enforcement of certain obligations (other than the payment of
principal) contained herein or therein and as may be limited by equitable
principles generally.

(d) Compliance of Loan Documents with Laws. The execution, delivery and
performance of this Agreement, the other Loan Documents to which any Loan Party
is a party in accordance with their respective terms and the borrowings and
other extensions of credit hereunder do not and will not, by the passage of
time, the giving of notice, or both: (i) require any Governmental Approval or
violate any Applicable Law (including all Environmental Laws) relating to the
Parent, the Borrower or any other Loan Party; (ii) conflict with, result in a
breach of or constitute a default under the organizational documents of any Loan
Party, or any indenture, agreement or other instrument to which the Parent, the
Borrower or any other Loan Party is a party or by which it or any of its
respective properties may be bound; or (iii) result in or require the creation
or imposition of any Lien upon or with respect to any property now owned or to
be hereafter acquired by any Loan Party other than the set off rights described
herein in favor of the Administrative Agent for its benefit and the benefit of
the Lenders and the Issuing Banks.

 

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(e) Compliance with Law; Governmental Approvals. Each of the Parent, the
Borrower, the other Loan Parties and the other Subsidiaries of the Borrower is
in compliance with each Governmental Approval and all other Applicable Laws
relating to it except for noncompliances which, and Governmental Approvals the
failure to possess which, could not, individually or in the aggregate,
reasonably be expected to cause a Default or Event of Default or have a Material
Adverse Effect.

(f) Title to Properties; Liens. Schedule 7.1.(f) is, as of the Agreement Date, a
complete and correct listing of all real estate assets of the Borrower, each
other Loan Party and each other Subsidiary of the Borrower, setting forth, for
each such Property, the current occupancy status of such Property and whether
such Property is a Development Property and, if such Property is a Development
Property, the status of completion of such Property. Each of the Borrower and
each Subsidiary of the Borrower has good, marketable and legal title to, or a
valid leasehold interest in, its respective assets.

(g) Existing Indebtedness; Total Indebtedness. Part I of Schedule 7.1.(g) is, as
of the Agreement Date, a complete and correct listing of all Indebtedness
(including all Guarantees other than guarantees of customary nonrecourse
carveouts) of each of the Borrower, and the Subsidiaries of the Borrower, and if
such Indebtedness is secured by any Lien, a description of all of the property
subject to such Lien. As of the Agreement Date, each of the Borrower, the other
Loan Parties and the other Subsidiaries of the Borrower have performed and are
in compliance with all of the terms of such Indebtedness and all instruments and
agreements relating thereto in all material respects, and no material default or
event of default, or event or condition which with the giving of notice, the
lapse of time, or both, would constitute a material default or event of default,
exists with respect to any such Indebtedness. Part II of Schedule 7.1.(g) is, as
of the Agreement Date, a complete and correct listing of all Total Indebtedness
of the Borrower, the other Loan Parties and the other Subsidiaries of the Parent
(excluding any Indebtedness set forth on Part I of such Schedule).

(h) Material Contracts. Schedule 7.1.(h) is, as of the Agreement Date, a true,
correct and complete listing of all Material Contracts (other than Tenant
Leases). Each of the Borrower, the other Loan Parties and the other Subsidiaries
of the Borrower that is party to any Material Contract has performed and is in
compliance in all material respects with all of the terms of such Material
Contract, and no default or event of default, or event or condition which with
the giving of notice, the lapse of time, or both, would constitute such a
default or event of default, exists with respect to any such Material Contract
to the extent any such default or event of default could reasonably be expected
to have a Material Adverse Effect.

(i) Litigation. Except as set forth on Schedule 7.1.(i), there are no actions,
suits or proceedings pending (nor, to the knowledge of any Loan Party, are there
any actions, suits or proceedings threatened, nor is there any basis therefor)
against or in any other way relating adversely to or affecting the Parent, the
Borrower, any other Loan Party, any other Subsidiary of the Parent or any of
their respective property in any court or before any arbitrator of any kind or
before or by any other Governmental Authority which, (i) could reasonably be
expected to have a Material Adverse Effect or (ii) in any manner draws into
question the validity or enforceability of any Loan Document. As of the
Agreement Date, there are no strikes, slow downs, work stoppages or walkouts or
other labor disputes in progress or threatened relating to, the Parent, the
Borrower, any Loan Party or any other Subsidiary of the Parent.

(j) Taxes. All federal, state and other tax returns of each of the Parent, the
Borrower, each other Loan Party and each other Subsidiary of the Borrower
required by Applicable Law to be filed have

 

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been duly filed, and all federal, state and other taxes, assessments and other
governmental charges or levies upon, each of the Parent, the Borrower, each Loan
Party, each other Subsidiary of the Parent and their respective properties,
income, profits and assets which are due and payable have been paid, except any
such nonpayment or non-filing which is at the time permitted under Section 8.6.
As of the Agreement Date, none of the United States income tax returns of the
Parent, the Borrower, any other Loan Party or any other Subsidiary of the Parent
is under audit. All charges, accruals and reserves on the books of the Parent,
the Borrower, the other Loan Parties and the other Subsidiaries of the Parent in
respect of any taxes or other governmental charges are in accordance with GAAP.

(k) Financial Statements. The Borrower has furnished to the Administrative Agent
copies of (i) (x) the audited consolidated balance sheet of the Parent and its
consolidated Subsidiaries for the fiscal years ended December 31, 2010 and
December 31, 2011 and (y) the unaudited consolidated balance sheet of the Parent
and its consolidated Subsidiaries for the fiscal quarter and the portion of the
fiscal year ended March 31, 2012, and (ii) the related audited or unaudited, as
applicable, consolidated statements of operations, shareholders’ equity and cash
flow for the fiscal years and fiscal quarter ended on such dates, with, in the
case of such annual financial statements, the opinion thereon of Ernst & Young
LLP. Such financial statements (including in each case related schedules and
notes) are complete and correct in all material respects and present fairly, in
accordance with GAAP consistently applied throughout the periods involved, the
consolidated financial position of the Parent and its consolidated Subsidiaries
as at their respective dates and the results of operations and the cash flow for
such periods (subject, as to interim statements, to changes resulting from
normal year-end audit adjustments and the absence of footnotes in the case of
the statements referred to in clause (i)(y) above). None of the Parent, the
Borrower or any of their respective Subsidiaries has on the Agreement Date any
material contingent liabilities, liabilities for taxes, unusual or long-term
commitments or unrealized or forward anticipated losses from any unfavorable
commitments that would be required to be set forth in its financial statements
or notes thereto pursuant to GAAP, except as referred to or reflected or
provided for in said financial statements.

(l) No Material Adverse Change. Since December 31, 2011, there has been no
event, change, circumstance or occurrence that could reasonably be expected to
have a Material Adverse Effect. Each of the Parent, the Borrower, the other Loan
Parties and the other Subsidiaries of the Borrower is Solvent.

(m) ERISA.

(i) Except as could not reasonably be expected, individually or in the aggregate
to have a Material Adverse Effect, each Benefit Arrangement is in compliance
with the applicable provisions of ERISA, the Internal Revenue Code and other
Applicable Laws. Except with respect to Multiemployer Plans, each Qualified Plan
(A) has received a favorable determination from the Internal Revenue Service
applicable to such Qualified Plan’s current remedial amendment cycle (as defined
in Revenue Procedure 2007-44 or “2007-44” for short), (B) has timely filed for a
favorable determination letter from the Internal Revenue Service during its
staggered remedial amendment cycle (as defined in 2007-44) and such application
is currently being processed by the Internal Revenue Service, (C) had filed for
a determination letter prior to its “GUST remedial amendment period” (as defined
in 2007-44) and received such determination letter and the staggered remedial
amendment cycle first following the GUST remedial amendment period for such
Qualified Plan has not yet expired, or (D) is maintained under a preapproved
plan and may rely upon a favorable opinion letter issued by the Internal Revenue
Service with respect to such preapproved plan. To the best knowledge of the
Borrower, as of the Agreement Date, nothing has occurred which would cause the
loss of its reliance on each Qualified Plan’s favorable determination letter or
opinion letter.

 

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(ii) With respect to any Benefit Arrangement that is a retiree welfare benefit
arrangement, all amounts have been accrued on the applicable ERISA Group’s
financial statements in accordance with FASB ASC 715. The “benefit obligation”
of all Plans does not exceed the “fair market value of plan assets” for such
Plans by more than $10,000,000 all as determined by and with such terms defined
in accordance with FASB ASC 715.

(iii) Except as could not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect: (i) no ERISA Event has occurred or
is expected to occur; (ii) there are no pending, or to the best knowledge of the
Borrower, threatened, claims, actions or lawsuits or other action by any
Governmental Authority, plan participant or beneficiary with respect to a
Benefit Arrangement; (iii) there are no violations of the fiduciary
responsibility rules with respect to any Benefit Arrangement; and (iv) no member
of the ERISA Group has engaged in a non-exempt “prohibited transaction,” as
defined in Section 406 of ERISA and Section 4975 of the Internal Revenue Code,
in connection with any Plan, that would subject any member of the ERISA Group to
a tax on prohibited transactions imposed by Section 502(i) of ERISA or
Section 4975 of the Internal Revenue Code.

(n) Absence of Default. None of the Loan Parties or any of the other
Subsidiaries of Borrower is in default under its certificate or articles of
incorporation or formation, bylaws, partnership agreement or other similar
organizational documents, and no event has occurred, which has not been
remedied, cured or waived: (i) which constitutes a Default or an Event of
Default; or (ii) which constitutes, or which with the passage of time, the
giving of notice, or both, would constitute, a default or event of default by,
any Loan Party or any other Subsidiary under any agreement (other than this
Agreement) or judgment, decree or order to which any such Person is a party or
by which any such Person or any of its respective properties may be bound where
such default or event of default could, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.

(o) Environmental Laws. Each of the Borrower, each other Loan Party and each
other Subsidiary of the Borrower: (i) is in compliance with all Environmental
Laws applicable to its business, operations and the Properties owned or operated
by it, (ii) has obtained all Governmental Approvals which are required under
Environmental Laws, and each such Governmental Approval is in full force and
effect, and (iii) is in compliance with all terms and conditions of such
Governmental Approvals, where with respect to each of the immediately preceding
clauses (i) through (iii) the failure to obtain or to comply with the same could
(either individually or in the aggregate) reasonably be expected to have a
Material Adverse Effect. Except for any of the following matters that could not
(either individually or in the aggregate) reasonably be expected to have a
Material Adverse Effect, the Borrower does not have knowledge of, and has not
received notice of, any past, present, or pending releases, events, conditions,
circumstances, activities, practices, incidents, facts, occurrences, actions, or
plans that, with respect to the Borrower, any Loan Party or any other Subsidiary
of the Borrower, their respective businesses, operations or with respect to the
Properties, may: (x) cause or contribute to an actual or alleged violation of or
noncompliance with Environmental Laws, (y) cause or contribute to any other
potential common-law or legal claim or other liability, or (z) cause any of the
Properties to become subject to any restrictions on ownership, occupancy, use or
transferability under any Environmental Law adversely affecting use or value or
require the filing or recording of any notice, approval or disclosure document
under any Environmental Law and, with respect to the immediately preceding
clauses (x) through (z) is based on or related to the on-site or off-site
manufacture, generation, processing, distribution, use, treatment, storage,
disposal, transport, removal, clean up or handling, or the emission, discharge,
release or threatened release of any wastes or Hazardous Material, or any other
requirement under Environmental Law. As of the Agreement Date, there is no
civil, criminal, or administrative action, suit, demand, claim, hearing, notice,
or demand letter, mandate, order, lien, request, investigation, or proceeding
pending or, to the Borrower’s knowledge, threatened, against the Borrower, any
other Loan Party or any other Subsidiary of the

 

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Borrower with respect to any alleged violation of or liability under
Environmental Laws which reasonably could be expected to have a Material Adverse
Effect. None of the Properties is listed on or proposed for listing on the
National Priority List promulgated pursuant to the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 and its implementing
regulations, or any state or local priority list promulgated pursuant to any
analogous state or local law, to the extent any such listing could reasonably be
expected to have a Material Adverse Effect.

(p) Investment Company. None of the Borrower, any other Loan Party or any other
Subsidiary of the Borrower is (i) an “investment company” or a company
“controlled” by an “investment company” within the meaning of the Investment
Company Act of 1940, as amended, or (ii) subject to any other Applicable Law
which purports to regulate or restrict its ability to borrow money or obtain
other extensions of credit or to consummate the transactions contemplated by
this Agreement or to perform its obligations under any Loan Document to which it
is a party.

(q) Margin Stock. None of the Borrower or any Subsidiary of the Borrower is
engaged principally, or as one of its important activities, in the business of
extending credit for the purpose, whether immediate, incidental or ultimate, of
buying or carrying “margin stock” within the meaning of Regulation U of the
Board of Governors of the Federal Reserve System.

(r) Affiliate Transactions. Except as permitted by Section 10.9. or as otherwise
set forth on Schedule 7.1.(r), none of the Borrower or any Subsidiary of the
Borrower is a party to or bound by any agreement or arrangement with any
Affiliate.

(s) Intellectual Property. Each of the Borrower and each Subsidiary of the
Borrower owns or has the right to use, under valid license agreements or
otherwise, all patents, licenses, franchises, trademarks, trademark rights,
service marks, service mark rights, trade names, trade name rights, trade
secrets and copyrights (collectively, “Intellectual Property”) necessary to the
conduct of its businesses, without conflict known to Borrower with any patent,
license, franchise, trademark, trademark right, service mark, service mark
right, trade secret, trade name, copyright, or other proprietary right of any
other Person which conflict could reasonably be expected to have a Material
Adverse Effect. To Borrower’s knowledge, all such Intellectual Property is fully
protected and/or duly and properly registered, filed or issued in the
appropriate office and jurisdictions for such registrations, filing or
issuances. As of the Agreement date, no material claim has been asserted by any
Person against Borrower or any other Loan Party or any other Subsidiary of
Borrower with respect to the use of any such Intellectual Property by the
Borrower, any other Loan Party or any other Subsidiary of the Borrower, or
challenging or questioning the validity or effectiveness of any such
Intellectual Property. To Borrower’s knowledge, the use of such Intellectual
Property by the Borrower, the other Loan Parties and the other Subsidiaries of
the Borrower does not infringe on the rights of any Person, subject to such
claims and infringements as do not, in the aggregate, give rise to any
liabilities on the part of the Borrower, any other Loan Party or any other
Subsidiary of the Borrower that could reasonably be expected to have a Material
Adverse Effect.

(t) Business. As of the Agreement Date, the Borrower, the other Loan Parties and
the other Subsidiaries of the Borrower are engaged in the business of directly
or indirectly owning, leasing, managing, and operating real property, together
with other business activities incidental thereto.

(u) Broker’s Fees. To Borrower’s knowledge, no broker’s or finder’s fee,
commission or similar compensation will be payable with respect to the
transactions contemplated hereby. No other similar fees or commissions will be
payable by the Borrower, any other Loan Party or any other Subsidiary of the
Borrower for any other services rendered to the Borrower, any other Loan Party
or any other Subsidiary of the Parent ancillary to the transactions contemplated
hereby.

 

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(v) Accuracy and Completeness of Information. All written information, reports
and other papers and data (other than financial projections and other forward
looking statements), taken as a whole as of the date of delivery thereof,
furnished to the Administrative Agent or any Lender by, on behalf of, or at the
direction of the Borrower, any other Loan Party or any other Subsidiary of the
Borrower were, at the time the same were so furnished, complete and correct in
all material respects, and, in the case of financial statements, present fairly,
in accordance with GAAP consistently applied throughout the periods involved,
the financial position of the Persons involved as at the date thereof and the
results of operations for such periods (subject, as to interim statements, to
changes resulting from normal year end audit adjustments and absence of full
footnote disclosure). All financial projections and other forward looking
statements prepared by or on behalf of the Borrower or any Subsidiary of the
Borrower that have been or may hereafter be made available to the Administrative
Agent or any Lender were or will be prepared in good faith based on reasonable
assumptions. No fact is known to the Borrower or any Subsidiary of the Borrower
which has had, or may in the future have (so far as any Loan Party can
reasonably foresee), a Material Adverse Effect which has not been set forth in
the financial statements referred to in Section 7.1.(k) or in such information,
reports or other papers or data or otherwise disclosed in writing to the
Administrative Agent and the Lenders. No document furnished or written statement
made to the Administrative Agent or any Lender in connection with the
negotiation, preparation or execution of, or pursuant to, this Agreement or any
of the other Loan Documents, taken as a whole as of the date of delivery
thereof, contained or will contain any untrue statement of a material fact, or
omits or will omit to state a material fact necessary in order to make the
statements contained therein, in light of the circumstances in which they were
made, not misleading.

(w) Not Plan Assets; No Prohibited Transactions. None of the assets of the
Parent, the Borrower, any other Loan Party or any other Subsidiary of the Parent
constitutes “plan assets” within the meaning of ERISA, the Internal Revenue Code
and the respective regulations promulgated thereunder. Assuming that no Lender
funds any amount payable by it hereunder with “plan assets,” as that term is
defined in 29 C.F.R. 2510.3-101, the execution, delivery and performance of this
Agreement and the other Loan Documents, and the extensions of credit and
repayment of amounts hereunder, do not and will not constitute “prohibited
transactions” under ERISA or the Internal Revenue Code.

(x) OFAC. None of the Parent, the Borrower, any of the other Loan Parties, any
of the other Subsidiaries, or, to the Parent’s or the Borrower’s knowledge, any
other Affiliate of the Parent: (i) is a person named on the list of Specially
Designated Nationals or Blocked Persons maintained by the U.S. Department of the
Treasury’s Office of Foreign Assets Control (“OFAC”) available at
http://www.treas.gov/offices/enforcement/ofac/index.shtml or as otherwise
published from time to time; (ii) is (A) an agency of the government of a
country, (B) an organization controlled by a country, or (C) a person resident
in a country that is subject to a sanctions program identified on the list
maintained by OFAC and available at
http://www.treas.gov/offices/enforcement/ofac/index.shtml, or as otherwise
published from time to time, as such program may be applicable to such agency,
organization or person; or (iii) derives any of its assets or operating income
from investments in or transactions with any such country, agency, organization
or person; and none of the proceeds from any Loan, and to the Borrower’s
knowledge, no Letter of Credit, will be used to finance any operations,
investments or activities in, or make any payments to, any such country, agency,
organization, or person.

(y) REIT Status. The Parent qualifies as, and has elected to be treated as, a
REIT and is in compliance with all requirements and conditions imposed under the
Internal Revenue Code to allow the Parent to maintain its status as a REIT.

(z) Unencumbered Properties. Each Property included in calculations of the
Unencumbered Asset Value satisfies all of the requirements (including those in
the definition of “Eligible Property”) contained in this Agreement for the same
to be included therein.

 

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Section 7.2. Survival of Representations and Warranties, Etc.

All statements contained in any certificate, financial statement or other
instrument delivered by or on behalf of the Borrower, any other Loan Party or
any other Subsidiary of the Borrower to the Administrative Agent or any Lender
pursuant to or in connection with this Agreement or any of the other Loan
Documents (including, but not limited to, any such statement made in or in
connection with any amendment thereto or any statement contained in any
certificate, financial statement or other instrument delivered by or on behalf
of any Loan Party prior to the Agreement Date and delivered to the
Administrative Agent or any Lender in connection with the underwriting or
closing the transactions contemplated hereby) shall constitute representations
and warranties made by the Borrower under this Agreement. All representations
and warranties made under this Agreement and the other Loan Documents shall be
deemed to be made at and as of the Agreement Date, the Effective Date, the date
on which any extension of the Revolving Termination Date is effectuated pursuant
to Section 2.12. and at and as of the date of the occurrence of each Credit
Event, except to the extent that such representations and warranties expressly
relate solely to an earlier date (in which case such representations and
warranties shall have been true and correct in all material respects (except in
the case of a representation or warranty qualified by materiality, in which case
such representation or warranty shall be true and correct in all respects) on
and as of such earlier date) and except for changes in factual circumstances not
expressly prohibited hereunder. All such representations and warranties shall
survive the effectiveness of this Agreement, the execution and delivery of the
Loan Documents and the making of the Loans and the issuance of the Letters of
Credit.

ARTICLE VIII. AFFIRMATIVE COVENANTS

For so long as this Agreement is in effect, unless the Requisite Lenders (or, if
required pursuant to Section 13.7., all of the Lenders) shall otherwise consent
in the manner provided for in Section 13.7., the Parent and the Borrower shall
comply with the following covenants:

 

Section 8.1. Preservation of Existence and Similar Matters.

Except as otherwise permitted under Section 10.4., each of the Parent and the
Borrower shall, and shall cause each other Loan Party and each other Subsidiary
to, preserve and maintain its respective existence, rights, franchises, licenses
and privileges in the jurisdiction of its incorporation or formation and qualify
and remain qualified and authorized to do business in each jurisdiction in which
the character of its properties or the nature of its business requires such
qualification and authorization and where the failure to be so authorized and
qualified could reasonably be expected to have a Material Adverse Effect.

 

Section 8.2. Compliance with Applicable Law.

The Borrower shall, and shall cause each other Loan Party and each other
Subsidiary of the Borrower to, comply with all Applicable Law, including the
obtaining of all Governmental Approvals, the failure to comply with which could,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

 

Section 8.3. Maintenance of Property.

In addition to the requirements of any of the other Loan Documents, the Borrower
shall, and shall cause each other Loan Party and each other Subsidiary of the
Borrower to, (a) protect and preserve all of its respective material properties,
including, but not limited to, all Intellectual Property necessary to the
conduct of its respective business, and maintain in good repair, working order
and condition all tangible properties, ordinary wear and tear excepted, and
(b) from time to time make or cause to be made all

 

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material needed and appropriate repairs, renewals, replacements and additions to
such properties, so that the business carried on in connection therewith may be
properly conducted at all times; provided that, to the extent not otherwise
prohibited under this Agreement and so long as (i) immediately before and after
such transfer or conveyance, no Default or Event of Default shall have occurred
and be continuing and (ii) immediately after giving effect to such transfer or
conveyance, the Borrower shall be in compliance with the covenants set forth in
Section 10.1. on a pro forma basis in accordance with Section 1.4. (and upon the
reasonable request of the Administrative Agent the Borrower shall deliver to the
Administrative Agent a certificate setting forth in reasonable detail the
calculations demonstrating such compliance), the Borrower and each of its
Subsidiaries may transfer and convey their respective Properties in their sole
discretion, which Properties shall, if not conveyed to the Borrower or any other
Subsidiary of the Borrower (other than an Excluded Subsidiary), be removed, as
of the date of such transfer or conveyance, from the calculation of Unencumbered
Asset Value.

 

Section 8.4. Conduct of Business.

The Borrower shall, and shall cause each other Loan Party and each other
Subsidiary of the Borrower to, carry on its respective businesses as described
in Section 7.1.(t) and in substantially the same fashion as currently in effect
(including acquiring Properties of the same quality as Properties currently
owned by the Borrower and its Subsidiaries and operating and maintaining
Properties in substantially the same manner and with the same standard of care
and quality as is currently employed by the Borrower and the other Loan Parties
and the Subsidiaries of the Borrower and not enter into any line of business
that would adversely affect the REIT status of Parent; provided that, to the
extent not otherwise prohibited under this Agreement and so long as
(i) immediately before and after such transfer or conveyance, no Default or
Event of Default shall have occurred and be continuing and (ii) immediately
after giving effect to such transfer or conveyance, the Borrower shall be in
compliance with the covenants set forth in Section 10.1. on a pro forma basis in
accordance with Section 1.4. (and upon the reasonable request of the
Administrative Agent the Borrower shall deliver to the Administrative Agent a
certificate setting forth in reasonable detail the calculations demonstrating
such compliance), the Borrower and each of its Subsidiaries may transfer and
convey their respective Properties in their sole discretion, which Properties
shall, if not conveyed to the Borrower or any other Subsidiary of the Borrower
(other than an Excluded Subsidiary), be removed, as of the date of such transfer
or conveyance, from the calculation of Unencumbered Asset Value.

 

Section 8.5. Insurance.

In addition to the requirements of any of the other Loan Documents, the Borrower
shall, and shall cause each other Loan Party and each other Subsidiary of the
Borrower to, maintain insurance (on a replacement cost basis) with financially
sound and reputable insurance companies against such risks and in such amounts
as is customarily maintained by Persons engaged in similar businesses or as may
be required by Applicable Law. The Borrower shall from time to time deliver to
the Administrative Agent upon request a detailed list, together with copies of
all policies of the insurance then in effect, stating the names of the insurance
companies, the amounts and rates of the insurance, the dates of the expiration
thereof and the properties and risks covered thereby.

 

Section 8.6. Payment of Taxes and Claims.

The Borrower shall, and shall cause each other Loan Party and each other
Subsidiary of the Borrower to, pay and discharge when due (a) all taxes,
assessments and governmental charges or levies imposed upon it or upon its
income or profits or upon any properties belonging to it, and (b) all lawful
claims of materialmen, mechanics, carriers, warehousemen and landlords for
labor, materials, supplies and rentals which, if unpaid, might become a Lien on
any properties of such Person that are included in

 

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the calculation of the Unencumbered Asset Value; provided, however, that this
Section shall not require the payment or discharge of any such tax, assessment,
charge, levy or claim which is being contested in good faith by appropriate
proceedings which operate to suspend the collection thereof and for which
adequate reserves have been established on the books of such Person in
accordance with GAAP.

 

Section 8.7. Books and Records; Inspections.

The Borrower shall, and shall cause each other Loan Party and each other
Subsidiary of the Borrower to, keep proper books of record and account in which
full, true and correct entries shall be made of all dealings and transactions in
relation to its business and activities. The Borrower shall, and shall cause
each other Loan Party and each other Subsidiary of the Borrower to, permit
representatives of the Administrative Agent or any Lender to visit and inspect
any of their respective properties, to examine and make abstracts from any of
their respective books and records and to discuss their respective affairs,
finances and accounts with their respective officers, employees and independent
public accountants (in the presence of an officer of the Parent if an Event of
Default does not then exist), all at such reasonable times during business hours
and as often as may reasonably be requested and so long as no Event of Default
exists, with reasonable prior notice ; provided that (a) no Loan Party shall be
required to pay the expense of any such visit, except to the extent such visit
is made by the Administrative Agent or is made during the continuance of an
Event of Default and (b) unless an Event of Default exists, only one (1) such
visit shall be permitted at the Loan Parties’ expense during any fiscal year.
The Borrower shall be obligated to reimburse the Administrative Agent and the
Lenders for their costs and expenses incurred in connection with the exercise of
their rights under this Section only if such exercise occurs while a Default or
Event of Default exists. If requested by the Administrative Agent, the Borrower
shall cause the Parent to execute an authorization letter addressed to its
accountants authorizing the Administrative Agent or any Lender to discuss the
financial affairs of the Parent, the Borrower, any other Loan Party or any other
Subsidiary of the Borrower with the Parent’s accountants.

 

Section 8.8. Use of Proceeds.

The Borrower will use the proceeds of Loans only (a) for the payment of
pre-development and development costs incurred in connection with Properties
owned by the Borrower or any Subsidiary; (b) to finance acquisitions otherwise
permitted under this Agreement; (c) to finance capital expenditures and the
repayment of Indebtedness of the Borrower and its Subsidiaries; (d) to finance
acquisitions of Equity Interests permitted under this Agreement; and (e) to
provide for the general working capital needs of the Parent, the Borrower and
the Subsidiaries of the Parent and for other general corporate purposes of the
Parent, the Borrower and the Subsidiaries of the Parent. The Borrower shall only
use Letters of Credit for the same purposes for which it may use the proceeds of
Loans. The Borrower shall not, and shall not permit any other Loan Party or any
other Subsidiary to, use any part of such proceeds to purchase or carry, or to
reduce or retire or refinance any credit incurred to purchase or carry, any
margin stock (within the meaning of Regulation U or Regulation X of the Board of
Governors of the Federal Reserve System) or to extend credit to others for the
purpose of purchasing or carrying any such margin stock.

 

Section 8.9. Environmental Matters.

The Borrower shall, and shall cause each Subsidiary of the Borrower to, comply
with all Environmental Laws the failure to comply with which could, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect.
The Borrower shall comply, and shall cause each Subsidiary of the Borrower to
comply, and the Borrower shall use, and shall cause each other Loan Party and
each other Subsidiary of the Borrower to use, commercially reasonable efforts to
cause all other Persons occupying the Properties to comply, with all
Environmental Laws to the extent the failure to so comply could reasonably be
expected to cause a Material Adverse Effect. The Borrower shall, and shall

 

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cause each Subsidiary of the Borrower to, promptly take all actions and pay or
arrange for the payment of all costs necessary for it and for its Properties to
comply in all material respects with all Environmental Laws and all Governmental
Approvals, including actions to remove and dispose of all Hazardous Materials
and to clean up the Properties as and to the extent required under Environmental
Laws, to the extent the failure to do so could reasonably be expected to have a
Material Adverse Effect. The Borrower shall, and shall cause each Subsidiary of
the Borrower to, promptly take all actions necessary to prevent the imposition
of any Liens on any of their respective properties arising out of or related to
any Environmental Laws to the extent any such lien could, individually or in the
aggregate, reasonably be expected to cause a Material Adverse Effect. Nothing in
this Section shall impose any obligation or liability whatsoever on the
Administrative Agent or any Lender.

 

Section 8.10. Further Assurances.

At the Borrower’s cost and expense and upon request of the Administrative Agent,
the Borrower shall, and shall cause each other Loan Party and each other
Subsidiary of the Borrower to, duly execute and deliver or cause to be duly
executed and delivered, to the Administrative Agent such further instruments,
documents and certificates, and do and cause to be done such further acts that
may be reasonably necessary or advisable in the reasonable opinion of the
Administrative Agent to carry out more effectively the provisions and purposes
of this Agreement and the other Loan Documents.

 

Section 8.11. Material Contracts.

The Borrower shall, and shall cause each other Loan Party and each other
Subsidiary of the Borrower to, duly and punctually perform and comply in all
material respects with any and all representations, warranties, covenants and
agreements expressed as binding upon any such Person under any Material
Contract. The Borrower shall not, and shall not permit any other Loan Party or
any other Subsidiary of the Borrower to, do or knowingly permit to be done
anything to impair materially the value of any of the Material Contracts.

 

Section 8.12. Guarantors.

(a) Within twenty (20) Business Days of any Person becoming a Material
Subsidiary (other than an Excluded Subsidiary) after the Agreement Date, the
Parent and the Borrower shall deliver to the Administrative Agent each of the
following in form and substance reasonably satisfactory to the Administrative
Agent: (i) an Accession Agreement executed by such Subsidiary and (ii) the items
that would have been delivered under subsections (iv) through (viii), and
(xiv) of Section 6.1.(a) if such Subsidiary had been a Material Subsidiary on
the Agreement Date; provided, however, promptly (and in any event within twenty
(20) Business Days) upon any Excluded Subsidiary ceasing to be an Excluded
Subsidiary, such Subsidiary shall comply with the provisions of this Section.

(b) The Borrower may request in writing that the Administrative Agent release,
and upon receipt of such request the Administrative Agent shall release, a
Guarantor (other than the Parent) from the Guaranty so long as: (i) such
Guarantor is not otherwise required to be a party to the Guaranty under the
immediately preceding subsection (a); (ii) no Default or Event of Default shall
then be in existence or would occur as a result of such release, including
without limitation, a Default or Event of Default resulting from a violation of
any of the covenants contained in Section 10.1.; (iii) the representations and
warranties made or deemed made by the Borrower and each other Loan Party in the
Loan Documents to which any of them is a party, shall be true and correct on and
as of the date of such release with the same force and effect as if made on and
as of such date except to the extent that such representations and warranties
expressly relate solely to an earlier date (in which case such representations
and warranties shall have been true and correct on and as of such earlier date)
and except for changes in factual

 

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circumstances not expressly prohibited under the Loan Documents; and (iv) the
Administrative Agent shall have received such written request at least ten
(10) Business Days (or such shorter period as may be acceptable to the
Administrative Agent) prior to the requested date of release. Delivery by the
Borrower to the Administrative Agent of any such request shall constitute a
representation by the Borrower that the matters set forth in the preceding
sentence (both as of the date of the giving of such request and as of the date
of the effectiveness of such request) are true and correct with respect to such
request.

ARTICLE IX. INFORMATION

For so long as this Agreement is in effect, unless the Requisite Lenders (or, if
required pursuant to Section 13.7., all of the Lenders) shall otherwise consent
in the manner set forth in Section 13.7., the Parent and the Borrower shall
furnish to the Administrative Agent for distribution to each of the Lenders:

 

Section 9.1. Quarterly Financial Statements.

As soon as available and in any event within five (5) Business Days after the
same is required to be filed with the Securities and Exchange Commission (but in
no event later than forty-five (45) days after the end of each of the first,
second and third fiscal quarters of the Parent), the unaudited consolidated
balance sheet of the Parent and its Subsidiaries as at the end of such period
and the related unaudited consolidated income statement and statement of cash
flows of the Parent and its Subsidiaries for such period, setting forth in each
case in comparative form the figures as of the end of and for the corresponding
periods of the previous fiscal year, all of which shall be certified by the
chief executive officer or chief financial officer of the Parent, in his or her
opinion, to present fairly, in accordance with GAAP and in all material
respects, the consolidated financial position of the Parent and its Subsidiaries
as at the date thereof and the results of operations for such period (subject to
normal year-end audit adjustments).

 

Section 9.2. Year-End Statements.

As soon as available and in any event within five (5) Business Days after the
same is required to be filed with the Securities and Exchange Commission (but in
no event later than ninety (90) days after the end of each fiscal year of the
Parent), the audited consolidated balance sheet of the Parent and its
Subsidiaries as at the end of such fiscal year and the related audited
consolidated income statement and statement of cash flows and statement of
stockholders’ equity of the Parent and its Subsidiaries for such fiscal year,
setting forth in comparative form the figures as at the end of and for the
previous fiscal year, all of which shall be (a) certified by the chief executive
officer or chief financial officer of the Parent, in his or her opinion, to
present fairly, in accordance with GAAP and in all material respects, the
financial position of the Parent and its Subsidiaries as at the date thereof and
the result of operations for such period and (b) accompanied by the report
thereon of independent certified public accountants of recognized national
standing reasonably acceptable to the Administrative Agent, whose report shall
be unqualified and in scope and substance satisfactory to the Requisite Lenders
and who shall have authorized the Parent to deliver such financial statements
and report thereon to the Administrative Agent and the Lenders pursuant to this
Agreement.

 

Section 9.3. Compliance Certificate.

At the time the financial statements are furnished pursuant to Sections 9.1. and
9.2., a certificate substantially in the form of Exhibit K (a “Compliance
Certificate”) executed on behalf of the Borrower by the chief financial officer
of the Parent (a) setting forth in reasonable detail as of the end of such
quarterly accounting period or fiscal year, as the case may be, the calculations
required to establish whether the Borrower was in compliance with the covenants
contained in Section 10.1.; (b) stating that no

 

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Default or Event of Default exists, or, if such is not the case, specifying such
Default or Event of Default and its nature, when it occurred and the steps being
taken by the Loan Parties with respect to such event, condition or failure;
(c) a statement of Funds From Operations for such quarterly accounting period or
fiscal year, as the case may be; and (d) a report of newly acquired Properties
of the Borrower and the Subsidiaries of the Borrower, including, with respect to
each Property, the Net Operating Income, purchase price and Mortgage debt, if
any.

 

Section 9.4. Other Information.

(a) Promptly upon receipt thereof, copies of all reports, if any, submitted to
the Parent’s Board of Directors by its independent public accountants including,
without limitation, any management report;

(b) Within five (5) Business Days of the filing thereof, copies of all
registration statements (excluding the exhibits thereto (unless requested by the
Administrative Agent) and any registration statements on Form S-8 or its
equivalent), reports on Forms 10-K, 10-Q and 8-K (or their equivalents) and all
other periodic reports which any Loan Party or any other Subsidiary of the
Borrower shall file with the Securities and Exchange Commission (or any
Governmental Authority substituted therefor) or any national securities
exchange;

(c) Promptly upon the mailing thereof to the shareholders of the Parent
generally, copies of all financial statements, reports and proxy statements so
mailed and promptly upon the issuance thereof copies of all press releases
issued by the Parent, the Borrower, any Subsidiary of the Borrower or any other
Loan Party;

(d) No later than thirty (30) days before the end of each fiscal year of the
Parent ending prior to the Revolving Termination Date, projected balance sheets,
operating statements, profit and loss projections and cash flow budgets of the
Borrower and its Subsidiaries on a consolidated basis for each quarter of the
next succeeding fiscal year, all itemized in reasonable detail;

(e) If any ERISA Event shall occur that individually, or together with any other
ERISA Event that has occurred, could reasonably be expected to have a Material
Adverse Effect, a certificate of the chief executive officer or chief financial
officer of the Parent setting forth details as to such occurrence and the
action, if any, which the Parent or applicable member of the ERISA Group is
required or proposes to take;

(f) To the extent the Borrower has knowledge of the same, prompt notice of the
commencement of any proceeding or investigation by or before any Governmental
Authority and any action or proceeding in any court or other tribunal or before
any arbitrator against or in any other way relating to, or affecting, the
Borrower, any other Loan Party or any Subsidiary of the Borrower or any of their
respective properties, assets or businesses which could reasonably be expected
to have a Material Adverse Effect, and prompt notice of the receipt of notice
that any United States income tax returns of the Parent, the Borrower, any other
Loan Party or any other Subsidiary of the Borrower are being audited;

(g) A copy of any amendment to the certificate or articles of incorporation or
formation, bylaws, partnership agreement or other similar organizational
documents of the Parent, the Borrower, any other Loan Party within twenty
(20) Business Days after the approval thereof by the General Partner or Manager
thereof, or if later, the effectiveness thereof;

(h) Prompt notice of (i) any change in the executive senior management of the
Parent (ii) any material change in the overall business, assets, liabilities,
financial condition, results of operations or

 

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business prospects of the Parent, the Borrower, any other Loan Party or any
other Subsidiary of the Parent or (iii) the occurrence of any other event which,
in the case of any of the immediately preceding clauses (i) through (iii), has
had, or could reasonably be expected to have, a Material Adverse Effect;

(i) Promptly after a Responsible Officer of Borrower has knowledge thereof,
notice of the occurrence of any Default or Event of Default or any event which
constitutes or which with the passage of time, the giving of notice, or
otherwise, would constitute a material default or event of default by the
Parent, the Borrower, any other Loan Party or any other Subsidiary of the Parent
under any Material Contract to which any such Person is a party or by which any
such Person or any of its respective properties may be bound;

(j) [RESERVED];

(k) Prompt notice of any order, judgment or decree in excess of $10,000,000
having been entered against the Parent, the Borrower, any other Loan Party or
any other Subsidiary of the Borrower or any of their respective properties or
assets;

(l) Within thirty (30) days after a Responsible Officer has knowledge thereof,
any written notification of a material violation of any Applicable Law shall
have been received by the Borrower or any other Loan Party from any Governmental
Authority which violation, if proven, could reasonably be expected to cause a
Material Adverse Effect;

(m) Prompt notice of the acquisition, incorporation or other creation of any
Material Subsidiary of the Borrower, the purpose for such Subsidiary, the nature
of the assets and liabilities thereof and whether such Subsidiary is a Wholly
Owned Subsidiary of the Borrower;

(n) Promptly upon the request of the Administrative Agent, evidence of the
Borrower’s calculation of the Ownership Share with respect to a Subsidiary or an
Unconsolidated Affiliate, such evidence to be in form and detail reasonably
satisfactory to the Administrative Agent;

(o) Promptly, upon any change in the Borrower’s Credit Rating, a certificate
stating that the Borrower’s Credit Rating has changed and the new Credit Rating
that is in effect;

(p) Promptly, upon each request, such information identifying the Parent, the
Borrower, any other Loan Party or any other Subsidiary of the Parent as a Lender
may reasonably request in order to comply with the USA Patriot Act (Title III of
Pub. L. 107-56 (signed into law October 26, 2001));

(q) Promptly, and in any event within ten (10) Business Days after a Responsible
Officer of the Borrower obtains knowledge thereof, written notice of the
occurrence of any of the following: (i) the Borrower or any other Loan Party
shall receive written notice that any violation of or noncompliance with any
Environmental Law has or may have been committed or is threatened; (ii) the
Borrower or any other Loan Party shall receive written notice that any
administrative or judicial complaint, order or petition has been filed or other
proceeding has been initiated, or is about to be filed or initiated against any
such Person alleging any violation of, noncompliance with or liability under any
Environmental Law or requiring any such Person to take any action in connection
with the release or threatened release of Hazardous Materials; (iii) the Parent,
the Borrower, any other Loan Party or any other Subsidiary of the Parent shall
receive any notice from a Governmental Authority alleging that any such Person
may be liable or responsible for any costs associated with a response to, or
remediation or cleanup of, a release or threatened release of Hazardous
Materials or any damages caused thereby; and the matters covered by notices
referred to in any of the immediately preceding clauses (i) through (iii),
whether individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect; and

 

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(r) From time to time and promptly upon each request, such data, certificates,
reports, statements, documents or further information regarding any Property or
the business, assets, liabilities, financial condition, results of operations or
business prospects of the Borrower, any other Loan Party or any other Subsidiary
of the Borrower as the Administrative Agent or any Lender may reasonably
request.

 

Section 9.5. Electronic Delivery of Certain Information.

(a) Documents required to be delivered pursuant to the Loan Documents shall be
delivered by electronic communication and delivery, including, the Internet,
e-mail or intranet websites to which the Administrative Agent and each Lender
have access (including a commercial, third-party website such as www.sec.gov
<http://www.sec.gov> or a website sponsored or hosted by the Administrative
Agent, the Parent or the Borrower) provided that the foregoing shall not apply
to (i) notices to any Lender (or any Issuing Bank) pursuant to Article II. and
(ii) any Lender that has notified the Administrative Agent, the Parent and the
Borrower that it cannot or does not want to receive electronic communications,
(iii) notices of Default or Event of Default. The Administrative Agent, the
Parent or the Borrower may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic delivery pursuant to procedures
approved by it for all or particular notices or communications. Documents or
notices delivered electronically shall be deemed to have been delivered
twenty-four (24) hours after the date and time on which the Administrative
Agent, the Parent or the Borrower posts such documents or the documents become
available on a commercial website and the Administrative Agent, the Parent or
Borrower notifies each Lender of said posting and provides a link thereto
provided if such notice or other communication is not sent or posted during the
normal business hours of the recipient, said posting date and time shall be
deemed to have commenced as of 11:00 a.m. Central time on the opening of
business on the next business day for the recipient. Notwithstanding anything
contained herein, in every instance the Parent or the Borrower shall be required
to provide paper copies of the certificate required by Section 9.3. to the
Administrative Agent and shall deliver paper copies of any documents to the
Administrative Agent until a written request to cease delivering paper copies is
given by the Administrative Agent. Except for the certificates required by
Section 9.3., the Administrative Agent shall have no obligation to request the
delivery of or to maintain paper copies of the documents delivered
electronically, and in any event shall have no responsibility to monitor
compliance by the Borrower with any such request for delivery. Each Lender shall
be solely responsible for requesting delivery to it of paper copies and
maintaining its paper or electronic documents.

(b) Documents required to be delivered pursuant to Article II. may be delivered
electronically to a website provided for such purpose by the Administrative
Agent pursuant to the procedures provided to the Parent and the Borrower by the
Administrative Agent.

 

Section 9.6. Public/Private Information.

The Borrower shall cooperate with the Administrative Agent in connection with
the publication of certain materials and/or information provided by or on behalf
of the Borrower. Any information or materials delivered pursuant to the Loan
Documents will be considered Public Information if they are filed by the Parent
with the SEC and are publicly available or are posted on the Parent’s website.
All other such information and materials will be considered Private Information
unless otherwise indicated in writing by Borrower.

 

Section 9.7. USA Patriot Act Notice; Compliance.

The USA Patriot Act of 2001 (Public Law 107-56) and federal regulations issued
with respect thereto require all financial institutions to obtain, verify and
record certain information that identifies individuals or business entities
which open an “account” with such financial institution. Consequently, a

 

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Lender (for itself and/or as Administrative Agent for all Lenders hereunder) may
from time to time request, and the Borrower shall, and shall cause the other
Loan Parties to, provide to such Lender, such Loan Party’s name, address, tax
identification number and/or such other identification information as shall be
necessary for such Lender to comply with federal law. An “account” for this
purpose may include, without limitation, a deposit account, cash management
service, a transaction or asset account, a credit account, a loan or other
extension of credit, and/or other financial services product.

ARTICLE X. NEGATIVE COVENANTS

For so long as this Agreement is in effect, unless the Requisite Lenders (or, if
required pursuant to Section 13.7., all of the Lenders) shall otherwise consent
in the manner set forth in Section 13.7., the Parent and the Borrower shall
comply with the following covenants:

 

Section 10.1. Financial Covenants.

(a) Maximum Leverage Ratio. The Borrower shall not permit the ratio of (i) Total
Indebtedness of the Borrower and its Subsidiaries to (ii) Total Asset Value of
the Borrower and its Subsidiaries to exceed 0.60 to 1.00 at any time.

(b) Minimum Interest Coverage Ratio. The Borrower shall not permit the ratio of
(i) Adjusted EBITDA of the Borrower and its Subsidiaries for the period of four
consecutive fiscal quarters most recently ending to (ii) Interest Expense of the
Borrower and its Subsidiaries for such period, to be less than 2.00 to 1.00 as
of the last day of such period.

(c) Ratio of Adjusted EBITDA to Fixed Charges. The Borrower shall not permit the
ratio of (i) Adjusted EBITDA of the Borrower and its Subsidiaries for any period
of four consecutive fiscal quarters most recently ending to (ii) Fixed Charges
of the Borrower and its Subsidiaries for such period, to be less than 1.30 to
1.00 as of the last day of such period.

(d) Ratio of Unsecured Indebtedness to Unencumbered Asset Value. The Borrower
shall not permit the ratio of (i) Unsecured Indebtedness of the Borrower and its
Subsidiaries to (ii) the Unencumbered Asset Value to exceed 0.60 to 1.00 at any
time.

(e) Unencumbered Pool Debt Service Coverage. The Borrower shall not permit the
ratio of (i) Unencumbered NOI of the Borrower and its Subsidiaries for any
period of four consecutive fiscal quarters most recently ended to
(ii) Unencumbered Pool Debt Service of the Borrower and Subsidiaries for such
period to be less than 1.50 as of the last day of such period.

(f) Minimum Tangible Net Worth. The Borrower shall not permit Tangible Net Worth
of the Parent and its Subsidiaries at any time to be less than (i) $503,291,000
plus (ii) 80% of the Net Proceeds of all Equity Issuances effected at any time
after March 31, 2012 by the Parent or any of its Subsidiaries to any Person
other than the Parent, the Borrower, or any of the Parent’s Wholly Owned
Subsidiaries.

(g) Unencumbered Asset Value. The Borrower shall not permit:

(i) the weighted average aggregate Occupancy Rate (weighted on the basis of
aggregate square footage) of all Properties included in the Unencumbered Asset
Value to be less than 80% at any time; provided that, the Borrower may, at any
time, designate (by written notice to the Administrative Agent) any Property to
be excluded from the group of Properties included in the calculation of the
Unencumbered Asset Value (i) so long as (x) immediately

 

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before and after giving effect to such designation, the Borrower shall be in
compliance with subclauses (ii), (iii) and (iv) of this clause (g) immediately
after giving effect thereto and no Default or Event of Default (other than a
Default or Event of Default related solely to this clause (i)) shall have
occurred and be continuing and (ii) immediately after giving effect to such
designation, the Borrower shall be in compliance with the covenants set forth in
Section 10.1. on a pro forma basis in accordance with Section 1.4. (and upon the
reasonable request of the Administrative Agent the Borrower shall deliver to the
Administrative Agent a certificate setting forth in reasonable detail the
calculations demonstrating such compliance);

(ii) the Unencumbered Asset Value attributable to any single Property to exceed
35% of the aggregate Unencumbered Asset Value at any time; provided, however,
that any such excess shall be excluded from the calculation of Unencumbered
Asset Value but existence of such excess shall not otherwise constitute a breach
under this Section 10.1.(g)(ii);

(iii) there to be less than twelve (12) Properties included in the Unencumbered
Asset Value at any time; or

(iv) the Unencumbered Asset Value to be less than $200,000,000 at any time.

Subject to the requirements set forth in the preceding provisions of this
subsection (g), the Borrower may, at any time, designate (by written notice to
the Administrative Agent) any Eligible Property to be included in or excluded
from the group of Eligible Properties included in the calculation of
Unencumbered Asset Value so long as (i) immediately before and after giving
effect to such designation, no Default or Event of Default shall have occurred
and be continuing and (ii) immediately after giving effect to such designation,
the Borrower shall be in compliance with the covenants set forth in
Section 10.1. on a pro forma basis in accordance with Section 1.4. (and upon the
reasonable request of the Administrative Agent the Borrower shall deliver to the
Administrative Agent a certificate setting forth in reasonable detail the
calculations demonstrating such compliance).

(h) Fixed Rate Indebtedness. The Borrower shall not, and shall not permit any
Subsidiary of the Borrower to, incur, assume or suffer to exist Indebtedness
which is not both (x) Indebtedness other than Floating Rate Indebtedness and
(y) Indebtedness with an original term to maturity in excess of five (5) years,
in an aggregate outstanding principal amount in excess of 40% of Total
Indebtedness at any time.

(i) Adjusted Total Asset Value. The Borrower shall not permit the aggregate
Adjusted Total Asset Value attributable to assets directly or indirectly owned
by the Borrower and the Guarantors to be less than 90% of the Adjusted Total
Asset Value at any time.

(j) Restricted Payments after Certain Defaults, Acceleration. If a Default or
Event of Default specified in Section 11.1.(a), Section 11.1.(f) or
Section 11.1.(g) shall exist, or if as a result of the occurrence of any other
Event of Default any of the Obligations have been accelerated pursuant to
Section 11.2.(a), the Borrower shall not make any Restricted Payments and shall
not permit any Subsidiary of the Borrower to make any Restricted Payments to any
Person other than to the Borrower.

 

Section 10.2. Liens; Negative Pledge.

(a) The Borrower shall not, and shall not permit any Subsidiary of the Borrower
(other than an Excluded Subsidiary) to, create, assume, or incur any Lien (other
than Permitted Liens, the Permitted Ground Lease Encumbrance and Liens securing
Indebtedness not prohibited under the Loan Documents) upon any of its material
properties, assets, income or profits of any character whether now owned or

 

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hereafter acquired if immediately prior to the creation, assumption or incurring
of such Lien, or immediately thereafter, a Default or Event of Default is or
would be in existence, including without limitation, a Default or Event of
Default resulting from a violation of any of the covenants contained in
Section 10.1.

(b) The Borrower shall not, and shall not permit any Subsidiary of the Borrower
(other than an Excluded Subsidiary) to, enter into, assume or otherwise be bound
by any Negative Pledge except for a Negative Pledge contained in (i) an
agreement (x) evidencing Indebtedness which the Borrower or any Subsidiary of
the Borrower is not prohibited from creating, incurring, assuming, or permitting
or suffering to exist under this Agreement, (y) which Indebtedness is secured by
a Lien not prohibited under the Loan Documents, and (z) which prohibits the
creation of any other Lien on only the property securing such Indebtedness as of
the date such agreement was entered into; or (ii) an agreement relating to the
sale of a Subsidiary or assets pending such sale, provided that in any such case
the Negative Pledge applies only to the Subsidiary or the assets that are the
subject of such sale.

 

Section 10.3. Restrictions on Intercompany Transfers.

The Borrower shall not, and shall not permit any Subsidiary of the Borrower
(other than an Excluded Subsidiary) to, create or otherwise cause or suffer to
exist or become effective any consensual encumbrance or restriction of any kind
on the ability of any Subsidiary to: (a) pay dividends or make any other
distribution on any of such Subsidiary’s capital stock or other equity interests
owned by the Parent, the Borrower or any Subsidiary of the Borrower; (b) pay any
Indebtedness owed to the Parent, the Borrower or any Subsidiary of the Borrower;
(c) make loans or advances to the Parent, the Borrower or any Subsidiary of the
Parent; or (d) transfer any of its property or assets to the Parent, the
Borrower or any Subsidiary of the Parent; other than (i) with respect to clauses
(a) through (d) those encumbrances or restrictions contained in any Loan
Document or, (ii) with respect to clause (d), customary provisions restricting
assignment of any agreement entered into by the Borrower or any Subsidiary of
the Borrower in the ordinary course of business.

 

Section 10.4. Merger, Consolidation, Sales of Assets and Other Arrangements.

The Borrower shall not, and shall not permit any Subsidiary of the Borrower
(other than an Excluded Subsidiary) to, (a) enter into any transaction of merger
or consolidation; (b) liquidate, windup or dissolve itself (or suffer any
liquidation or dissolution); (c) convey, sell, lease, sublease, transfer or
otherwise dispose of, in one transaction or a series of transactions, all or any
substantial part of its business or assets, or the capital stock of or other
Equity Interests in any of its Subsidiaries, whether now owned or hereafter
acquired; or (d) acquire a Substantial Amount of the assets of, or make an
Investment of a Substantial Amount in, any other Person; provided, however,
that:

(i) any Subsidiary of the Parent may merge with a Loan Party so long as such
Loan Party is the survivor;

(ii) any Subsidiary of the Parent may sell, transfer or dispose of its assets to
a Loan Party;

(iii) any Subsidiary of the Parent (other than the Borrower) may convey, sell,
transfer or otherwise dispose of, in one transaction or a series of
transactions, all or any substantial part of its business or assets, or the
capital stock of or other Equity Interests in any of its Subsidiaries, and may
thereafter liquidate, provided that immediately prior to any such conveyance,
sale, transfer, disposition or liquidation and immediately thereafter and after
giving effect thereto, no Default or Event of Default is or would be in
existence;

 

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(iv) any Loan Party and any other Subsidiary may, directly or indirectly,
(A) acquire (whether by purchase, acquisition of Equity Interests of a Person,
or as a result of a merger or consolidation) a Substantial Amount of the assets
of, or make an Investment of a Substantial Amount in, any other Person and
(B) sell, lease or otherwise transfer, whether by one or a series of
transactions, a Substantial Amount of assets (including capital stock or other
securities of Subsidiaries) to any other Person, so long as, in each case,
(1) the Borrower shall have given the Administrative Agent and the Lenders at
least thirty (30) days prior written notice of such consolidation, merger,
acquisition, Investment, sale, lease or other transfer; (2) immediately prior
thereto, and immediately thereafter and after giving effect thereto, no Default
or Event of Default is or would be in existence, including, without limitation,
a Default or Event of Default resulting from a breach of Section 10.1.; (3) in
the case of a consolidation or merger involving the Parent or the Borrower, the
Parent or the Borrower, as applicable, shall be the survivor thereof and (4) at
the time the Borrower gives notice pursuant to clause (1) of this subsection,
the Borrower shall have delivered to the Administrative Agent for distribution
to each of the Lenders a Compliance Certificate, calculated on a pro forma
basis, evidencing the continued compliance by the Borrower or the Parent, as
applicable, with the financial covenants contained in Section 10.1., after
giving effect to such consolidation, merger, acquisition, Investment, sale,
lease or other transfer; and

(v) the Borrower, the other Loan Parties and the other Subsidiaries of the
Borrower may lease and sublease their respective assets, as lessor or sublessor
(as the case may be), in the ordinary course of their business.

 

Section 10.5. Plans.

The Borrower shall not, and shall not permit any Loan Party or any other
Subsidiary of the Borrower to, permit any of its respective assets to become or
be deemed to be “plan assets” within the meaning of ERISA, the Internal Revenue
Code and the respective regulations promulgated thereunder.

 

Section 10.6. Fiscal Year.

The Parent and the Borrower shall not, and shall not permit any other Loan Party
or other Subsidiary of the Borrower to, change its fiscal year from that in
effect as of the Agreement Date.

 

Section 10.7. Modifications of Organizational Documents and Material Contracts.

The Borrower shall not, and shall not permit any other Loan Party or any other
Subsidiary of the Borrower to, amend, supplement, restate or otherwise modify
its certificate or articles of incorporation or formation, by-laws, operating
agreement, declaration of trust, partnership agreement or other applicable
organizational document if such amendment, supplement, restatement or other
modification (a) is materially adverse to the interest of the Administrative
Agent, the Issuing Banks or the Lenders, in each case in their role as such, or
(b) could reasonably be expected to have a Material Adverse Effect. The Borrower
shall not enter into, and shall not permit any other Loan Party or any other
Subsidiary of the Borrower to enter into, any amendment or modification to any
Material Contract which could reasonably be expected to have a Material Adverse
Effect or default in the performance of any obligations of the Borrower, any
other Loan Party or any other Subsidiary of the Borrower in any Material
Contract or permit any Material Contract to be canceled or terminated prior to
its stated maturity if such default or cancellation could reasonably be expected
to cause a Material Adverse Effect.

 

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Section 10.8. Subordinated Debt Prepayments; Amendments.

Except as provided in Sections 10.1.(j) and 11.1.(q), the Borrower shall not,
and shall not permit any Subsidiary of the Borrower to, prepay any principal of,
or accrued interest on, any Subordinated Debt or otherwise make any voluntary or
optional payment with respect to any principal of, or accrued interest on, any
Subordinated Debt prior to the originally scheduled due date thereof or
otherwise redeem or acquire for value any Subordinated Debt. Further, the Parent
and the Borrower shall not, and shall not permit any other Loan Party or other
Subsidiary of the Parent to, amend or modify, or permit the amendment or
modification of, any agreement or instrument evidencing any Subordinated Debt
where such amendment or modification provides for the following or which has any
of the following effects:

(a) increases the rate of interest accruing on such Subordinated Debt;

(b) increases the amount of any scheduled installment of principal or interest,
or shortens the date on which any such installment or principal or interest
becomes due;

(c) shortens the final maturity date of such Subordinated Debt;

(d) increases the principal amount of such Subordinated Debt;

(e) amends any financial or other covenant contained in any document or
instrument evidencing any Subordinated Debt in a manner which is more onerous to
the Borrower or such Subsidiary or which requires the Borrower or such
Subsidiary to improve its financial performance;

(f) provides for the payment of additional material fees or the increase in
existing fees; and/or

(g) otherwise could reasonably be expected to be materially adverse to the
interests of the Administrative Agent or the Lenders.

 

Section 10.9. Transactions with Affiliates.

The Borrower shall not permit to exist or enter into, and shall not permit any
Subsidiary of the Borrower to permit to exist or enter into, any transaction
(including the purchase, sale, lease or exchange of any property or the
rendering of any service) with any Affiliate, other than the Borrower or a
Wholly Owned Subsidiary of the Borrower, except (a) as set forth on
Schedule 7.1.(r), (b) compensation, bonus and benefit arrangements with
employees and officers, directors and trustees as permitted by Applicable Law,
and (c) transactions in the ordinary course of and pursuant to the reasonable
requirements of the business of the Borrower, or such Subsidiary of the Borrower
and upon fair and reasonable terms which are no less favorable to the Borrower,
or such Subsidiary of the Borrower than would be obtained in a comparable arm’s
length transaction with a Person that is not an Affiliate. Notwithstanding the
foregoing, no payments may be made with respect to any items set forth on such
Schedule 7.1.(r) if a Default or Event of Default exists or would result
therefrom.

 

Section 10.10. Environmental Matters.

The Borrower shall not, and shall not permit any Subsidiary of the Borrower to,
use, generate, discharge, emit, manufacture, handle, process, store, release,
transport, remove, dispose of or clean up any Hazardous Materials on, under or
from the Properties in material violation of any Environmental Law or in a
manner that could reasonably be expected to lead to a Material Adverse Effect.
Nothing in this Section shall impose any obligation or liability whatsoever on
the Administrative Agent or any Lender.

 

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Section 10.11. Derivatives Contracts.

The Borrower shall not, and shall not permit any Subsidiary of the Borrower to,
enter into or become obligated in respect of Derivatives Contracts other than
Derivatives Contracts entered into by the Borrower or any such Subsidiary of the
Borrower in the ordinary course of business and which establish a hedge that
hedges interest rate risk in respect of specific Indebtedness of the Borrower or
such Subsidiary of the Borrower, as applicable.

ARTICLE XI. DEFAULT

 

Section 11.1. Events of Default.

Each of the following shall constitute an Event of Default, whatever the reason
for such event and whether it shall be voluntary or involuntary or be effected
by operation of Applicable Law or pursuant to any judgment or order of any
Governmental Authority:

(a) Default in Payment. The Borrower shall fail to pay when due under this
Agreement or any other Loan Document (whether upon demand, at maturity, by
reason of acceleration or otherwise) the principal of, or any interest on, any
of the Loans or any Reimbursement Obligation, or shall fail to pay any of the
other payment Obligations owing by the Borrower under this Agreement or any
other Loan Document, or any other Loan Party shall fail to pay when due any
payment obligation owing by such Loan Party, as applicable, under any Loan
Document to which it is a party and, in the case of interest or any payment
Obligation other than principal of any Loan prior to the Revolving Termination
Date only, such failure shall continue for a period of five (5) days after the
due date thereof.

(b) Default in Performance.

(i) Any Loan Party shall fail to perform or observe any term, covenant,
condition or agreement on its part to be performed or observed and contained in
Section 10.1. and such failure shall continue for a period of ten (10) days; or

(ii) Any Loan Party shall fail to perform or observe any term, covenant,
condition or agreement contained in this Agreement or any other Loan Document to
which it is a party and not otherwise mentioned in this Section, and in the case
of this subsection (b)(ii) only, such failure shall continue for a period of
thirty (30) days after the earlier of (x) the date upon which a Responsible
Officer of the Parent or the Borrower obtains knowledge of such failure or
(y) the date upon which the Borrower has received written notice of such failure
from the Administrative Agent; or

(iii) Any Loan Party shall fail to perform or observe any term, covenant,
condition or agreement set forth in Section 8.9. or 10.10. of this Agreement and
in the case of this subsection (b)(iii) only, such failure shall continue for a
period of sixty (60) days after the date upon which the Borrower has received
written notice of such failure from the Administrative Agent; provided, that in
the event such failure is susceptible of cure but is not cured within said sixty
(60) days, so long as the Borrower or Subsidiary of Borrower is diligently and
continuously pursuing such cure, as evidenced to Administrative Agent’s
reasonable satisfaction, such cure period shall be extended for an additional
one hundred twenty (120) days.

(c) Misrepresentations. Any written statement, representation or warranty made
or deemed made by or on behalf of any Loan Party under this Agreement or under
any other Loan Document, or any

 

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amendment hereto or thereto, or in any other document, certificate or financial
statement at any time furnished by, or at the direction of, any Loan Party to
the Administrative Agent, any Issuing Bank or any Lender in connection with the
Loan Documents, shall at any time prove to have been incorrect or misleading, in
light of the circumstances in which made or deemed made, in any material respect
when furnished or made or deemed made.

(d) Indebtedness Cross-Default.

(i) The Borrower, any other Loan Party or any other Subsidiary of the Borrower
shall default, after any applicable notice and cure period, in the payment of
principal or interest in respect of any Indebtedness (other than (x) the Loans
and Reimbursement Obligations and (y) Nonrecourse Indebtedness) having an
aggregate outstanding principal amount (or, in the case of any Derivatives
Contract, having, without regard to the effect of any close-out netting
provision, a Derivatives Termination Value), in each case individually or in the
aggregate with all other Indebtedness as to which such a default exists, of
$10,000,000 or more (“Material Indebtedness”); or

(ii) (x) The maturity of any Material Indebtedness shall have been accelerated
in accordance with the provisions of any indenture, contract or instrument
evidencing, providing for the creation of or otherwise concerning such Material
Indebtedness or (y) any Material Indebtedness shall have been required to be
prepaid or repurchased prior to the stated maturity thereof, in either case, as
a result of an event of default other than one described in subsection (i) of
this Section 11.1.(d); or

(iii) There occurs an “Event of Default” under and as defined in any Specified
Derivatives Contract as to which the Borrower or any Subsidiary of the Borrower
is a “Defaulting Party” (as defined therein), as a result of which there occurs
an “Early Termination Date” (as defined therein) in respect of any Specified
Derivatives Contract as a result of a “Termination Event” (as defined therein)
as to which the Borrower or any of its Subsidiaries is an “Affected Party” (as
defined therein), in each case individually or in the aggregate with all other
Specified Derivative Contracts as to which such Events of Default have occurred
and are continuing, equals $10,000,000 or more; or

(iv) The Borrower, any other Loan Party or any other Subsidiary of the Borrower
shall default, after any applicable notice and cure period, in the payment of
principal or interest in respect of any Nonrecourse Indebtedness having an
aggregate outstanding principal amount (or, in the case of any Derivatives
Contract, having, without regard to the effect of any close-out netting
provision, a Derivatives Termination Value), in each case individually or in the
aggregate with all other Indebtedness as to which such a default exists, of
$50,000,000 or more.

(e) Voluntary Bankruptcy Proceeding. (x) The Borrower, any other Loan Party or
any Material Subsidiary of the Borrower shall: (i) commence a voluntary case
under the Bankruptcy Code or other federal bankruptcy laws (as now or hereafter
in effect); (ii) file a petition seeking to take advantage of any other
Applicable Laws, domestic or foreign, relating to bankruptcy, insolvency,
reorganization, winding-up, or composition or adjustment of debts; (iii) consent
to, or fail to contest in a timely and appropriate manner, any petition filed
against it in an involuntary case under such bankruptcy laws or other Applicable
Laws or consent to any proceeding or action described in the immediately
following subsection (f); (iv) apply for or consent to, or fail to contest in a
timely and appropriate manner, the appointment of, or the taking of possession
by, a receiver, custodian, trustee, or liquidator of itself or of a substantial
part of its property, domestic or foreign; (v) admit in writing its inability to
pay its debts as

 

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they become due; or (vi) make a general assignment for the benefit of creditors;
or (y) the board of directors (or similar governing body) of the Borrower, any
other Loan Party or any Material Subsidiary of the Borrower or any committee
thereof shall adopt any resolution or otherwise authorize any action to approve
any of the actions referred to in this clause (e).

(f) Involuntary Bankruptcy Proceeding. A case or other proceeding shall be
commenced against the Borrower, any other Loan Party or any Material Subsidiary
of the Borrower in any court of competent jurisdiction seeking: (i) relief under
the Bankruptcy Code or other federal bankruptcy laws (as now or hereafter in
effect) or under any other Applicable Laws, domestic or foreign, relating to
bankruptcy, insolvency, reorganization, winding-up, or composition or adjustment
of debts; or (ii) the appointment of a trustee, receiver, custodian, liquidator
or the like of such Person, or of all or any substantial part of the assets,
domestic or foreign, of such Person, and in the case of either clause (i) or
(ii) such case or proceeding shall continue undismissed or unstayed for a period
of 60 consecutive days, or an order granting the remedy or other relief
requested in such case or proceeding (including, but not limited to, an order
for relief under such Bankruptcy Code or such other federal bankruptcy laws)
shall be entered.

(g) Revocation of Loan Documents. Any Loan Party shall (or shall attempt in
writing to) disavow, revoke or terminate any Loan Document to which it is a
party or shall otherwise challenge or contest in any action, suit or proceeding
in any court or before any Governmental Authority the validity or enforceability
of any Loan Document or any Loan Document shall cease to be in full force and
effect (except as a result of the express terms thereof).

(h) Judgment. A judgment or order for the payment of money or for an injunction
or other non-monetary relief shall be entered against the Borrower, any other
Loan Party, or any other Material Subsidiary of the Borrower by any court or
other tribunal and (i) such judgment or order shall continue for a period of
thirty (30) days without being paid, stayed or dismissed through appropriate
appellate or other judicial proceedings and (ii) either (A) the amount of such
judgment or order for which insurance has not been acknowledged in writing by
the applicable insurance carrier (or the amount as to which the insurer has
denied liability) exceeds, individually or together with all other such
judgments or orders entered against the Loan Parties and the Material
Subsidiaries of the Borrower, $10,000,000 or (B) in the case of an injunction or
other non-monetary relief, such injunction or judgment or order could reasonably
be expected to have a Material Adverse Effect.

(i) Attachment. A non-appealable warrant, writ of attachment, execution or
similar process shall be issued by a court of competent jurisdiction against any
property of the Borrower, any other Loan Party or any other Material Subsidiary
of the Borrower, which exceeds, individually or together with all other such
warrants, writs, executions and processes, $10,000,000 in amount and such
warrant, writ, execution or process shall not be paid, discharged, vacated,
stayed or bonded for a period of thirty (30) days.

(j) ERISA.

(i) Any ERISA Event shall have occurred that results or could reasonably be
expected to result in a Material Adverse Effect.

(ii) The “benefit obligation” of all Plans, to the extent the Borrower is liable
therefor, exceeds the “fair market value of plan assets” for such Plans by an
amount, which if paid out by the Borrower, could reasonably be expected to cause
a Material Adverse Effect.

 

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(k) Material Adverse Effect. There shall occur a Material Adverse Effect with
respect to any Loan Party, as determined by the Administrative Agent in its sole
discretion exercised in good faith.

(l) Change of Control/Change in Management.

(i) Any “person” or “group” (as such terms are used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), other
than members of the Saul Family, is or becomes the “beneficial owner” (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a Person
will be deemed to have “beneficial ownership” of all securities that such Person
has the right to acquire, whether such right is exercisable immediately or only
after the passage of time), directly or indirectly, of more than 25.0% of the
total voting power of the then outstanding voting stock of the Parent;

(ii) During any period of twelve (12) consecutive months ending after the
Agreement Date, individuals who at the beginning of any such 12-month period
constituted the Board of Directors of the Parent (together with any new
directors whose election by such Board or whose nomination for election by the
shareholders of the Parent was approved by a vote of a majority of the directors
then still in office who were either directors at the beginning of such period
or whose election or nomination for election was previously so approved but
excluding any director whose initial nomination for, or assumption of office as,
a director occurs as a result of an actual or threatened solicitation of proxies
or consents for the election or removal of one or more directors by any person
or group other than a solicitation for the election of one or more directors by
or on behalf of the Board of Directors) cease for any reason other than the
death or incapacity of a director to constitute a majority of the Board of
Directors of the Parent then in office;

(iii) The Parent shall cease to own and control, directly or indirectly, at
least 51% of the outstanding Equity Interests of the Borrower; or

(iv) The Parent or a Wholly Owned Subsidiary of the Parent shall cease to be the
sole general partner of the Borrower or shall cease to have the sole and
exclusive power to exercise all management and control over the Borrower.

(m) Unencumbered Properties. The Borrower, any Loan Party or any Subsidiary of
the Borrower shall grant, consent to or permit a Lien (other than a Permitted
Lien) in respect of, or otherwise encumber, or shall sell, convey or otherwise
transfer any Property included in the calculation of Unencumbered Asset Value or
any portion thereof (except with respect to any such sale, conveyance or other
transfer permitted pursuant to the terms of Sections 8.3., 8.4. or 10.4.)
without the prior written consent of the Administrative Agent.

(n) REIT Status. The Parent shall fail to maintain its status as, and election
to be treated as, a REIT under the Internal Revenue Code.

(o) Listing of Shares. The Parent shall fail to maintain at least one class of
common shares of the Parent having trading privileges on the New York Stock
Exchange or the American Stock Exchange or which is subject to price quotations
on The NASDAQ Stock Market’s National Market System.

(p) Investments. The Parent, the Borrower or any Subsidiary of the Borrower
shall make an Investment in or otherwise own the following items and the effect
thereof is to cause the aggregate value of such holdings of such Person in such
assets to exceed such percentages set forth below of Total Asset Value of the
Borrower and its Subsidiaries, at any time (and such condition continues for a
period of ten (10) days):

(i) Investments in Unconsolidated Affiliates, such that the aggregate value of
all such Investments (such value to be equal to the lesser of (I) the purchase
price paid for such Investment and (II) the Fair Market Value of such
Investment) in Unconsolidated Affiliates exceeds 5.0% of Total Asset Value of
the Borrower and its Subsidiaries;

 

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(ii) Mortgage Receivables in favor of the Borrower, any other Loan Party or any
Subsidiary of the Borrower, such that the aggregate book value of any such
Mortgage Receivable exceeds 5.0% of Total Asset Value of the Borrower and its
Subsidiaries;

(iii) Development Properties, such that the value of any such Development
Property (such value to be equal to the aggregate amount of all costs incurred
and paid by the Borrower or the applicable Subsidiary of the Borrower in
connection therewith to date) exceeds 20.0% of Total Asset Value of the Borrower
and its Subsidiaries;

(iv) Unimproved Land (which shall not include (x) any Development Property or
(y) Unimproved Land acquired within the prior twelve (12) months that will
become a Development Property within twelve (12) months of its acquisition) such
that the aggregate book value of all such Unimproved Land (such value to be
equal to the lesser of (I) the purchase price paid for such acquisition and (II)
the Fair Market Value of such real estate) exceeds 10.0% of Total Asset Value of
the Borrower and its Subsidiaries; or

(v) Investments of the type subject to limitation under the foregoing clauses
(i), (ii), (iii) and (iv) in excess of 25% of Total Asset Value of the Borrower
and its Subsidiaries.

(q) Dividends and Other Restricted Payments. The Parent, the Borrower or any
Subsidiary of the Borrower shall declare or make any Restricted Payment, other
than any of the following Restricted Payments so long as no Default or Event of
Default would result therefrom (and such declaration or payment of the
Restricted Payment has not been rescinded, returned, unwound or otherwise
cancelled for a period of ten (10) days):

(i) the Borrower may pay cash dividends or distributions to the Parent and other
holders of partnership interests in the Borrower with respect to any fiscal year
ending during the term of this Agreement to the extent necessary for the Parent
to distribute, and the Parent may so distribute, cash dividends to its
shareholders in an aggregate amount not to exceed the greater of (a) the amount
required to be distributed for the Parent to remain qualified as a REIT for
federal income tax purposes, or (b) 90% of Funds From Operations;

(ii) the Borrower may pay cash dividends or distributions to the Parent and
other holders of partnership interests in the Borrower with respect to any
fiscal year ending during the term of this Agreement to the extent necessary for
the Parent to distribute, and the Parent may so distribute cash distributions to
its shareholders of capital gains resulting from gains from certain asset sales
to the extent necessary to avoid payment of taxes on such asset sales imposed
under Sections 857(b)(3) and 4981 of the Internal Revenue Code;

(iii) a Subsidiary that is not a Wholly Owned Subsidiary may make cash
distributions (ratably in accordance with the percentage of Equity Interests
held) to holders of Equity Interests issued by such Subsidiary; and

 

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(iv) Subsidiaries may pay Restricted Payments to the Borrower or any other Loan
Party;

provided, however, and subject to the provisions of Section 10.1.(j), if a
Default or Event of Default exists, the Borrower may only declare and make cash
distributions to the Parent and other holders of partnership interests in the
Borrower with respect to any fiscal year to the extent necessary for the Parent
to distribute, and the Parent may so distribute, an aggregate amount not to
exceed the minimum amount necessary for the Parent to remain qualified as a REIT
for federal income tax purposes).

 

Section 11.2. Remedies Upon Event of Default.

Upon the occurrence of an Event of Default the following provisions shall apply:

(a) Acceleration; Termination of Facilities.

(i) Automatic. Upon the occurrence of an Event of Default specified in
Sections 11.1.(e) or 11.1.(f), (1)(A) the principal of, and all accrued interest
on, the Loans and the Notes at the time outstanding, (B) an amount equal to the
Stated Amount of all Letters of Credit outstanding as of the date of the
occurrence of such Event of Default for deposit into the Letter of Credit
Collateral Account and (C) all of the other Obligations, including, but not
limited to, the other amounts owed to the Lenders and the Administrative Agent
under this Agreement, the Notes or any of the other Loan Documents shall become
immediately and automatically due and payable without presentment, demand,
protest, or other notice of any kind, all of which are expressly waived by the
Parent and the Borrower, each on behalf of itself and the other Loan Parties,
and (2) the Commitments and the Swingline Commitment and the obligation of the
Issuing Banks to issue Letters of Credit hereunder, shall all immediately and
automatically terminate.

(ii) Optional. If any other Event of Default shall exist, the Administrative
Agent may, and at the direction of the Requisite Lenders shall: (1) declare
(A) the principal of, and accrued interest on, the Loans and the Notes at the
time outstanding, (B) an amount equal to the Stated Amount of all Letters of
Credit outstanding as of the date of the occurrence of such Event of Default for
deposit into the Letter of Credit Collateral Account and (C) all of the other
Obligations, including, but not limited to, the other amounts owed to the
Lenders and the Administrative Agent under this Agreement, the Notes or any of
the other Loan Documents to be forthwith due and payable, whereupon the same
shall immediately become due and payable without presentment, demand, protest or
other notice of any kind, all of which are expressly waived by the Parent and
the Borrower, each on behalf of itself and the other Loan Parties, and
(2) terminate the Commitments and the Swingline Commitment and the obligation of
the Issuing Banks to issue Letters of Credit hereunder.

(b) Loan Documents. The Requisite Lenders may direct the Administrative Agent
to, and the Administrative Agent if so directed shall, exercise any and all of
its rights under any and all of the other Loan Documents.

(c) Applicable Law. The Requisite Lenders may direct the Administrative Agent
to, and the Administrative Agent if so directed shall, exercise all other rights
and remedies it may have under any Applicable Law.

(d) Specified Derivatives Contract Remedies. Notwithstanding any other provision
of this Agreement or other Loan Document, each Specified Derivatives Provider
shall have the right, with

 

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prompt notice to the Administrative Agent, but without the approval or consent
of or other action by the Administrative Agent or the Lenders, and without
limitation of other remedies available to such Specified Derivatives Provider
under contract or Applicable Law, to undertake any of the following: (a) to
declare an event of default, termination event or other similar event under any
Specified Derivatives Contract and to create an “Early Termination Date” (as
defined therein) in respect thereof, (b) to determine net termination amounts in
respect of any and all Specified Derivatives Contracts in accordance with the
terms thereof, and to set off amounts among such contracts, (c) to set off or
proceed against deposit account balances, securities account balances and other
property and amounts held by such Specified Derivatives Provider pursuant to any
Derivatives Support Document, including any “Posted Collateral” (as defined in
any credit support annex included in any such Derivatives Support Document to
which such Specified Derivatives Provider may be a party), and (d) to prosecute
any legal action against the Borrower, any Loan Party or other Subsidiary to
enforce or collect net amounts owing to such Specified Derivatives Provider
pursuant to any Specified Derivatives Contract. For the avoidance of doubt, none
of the events or remedies described above shall by itself constitute a Default
or Event of Default hereunder.

 

Section 11.3. Remedies Upon Default.

Upon the occurrence of an Event of Default specified in Section 11.1.(f), the
Commitments shall immediately and automatically terminate.

 

Section 11.4. Marshaling; Payments Set Aside.

None of the Administrative Agent, any Issuing Bank, any Lender or any Specified
Derivatives Provider shall be under any obligation to marshal any assets in
favor of any Loan Party or any other party or against or in payment of any or
all of the Obligations or the Specified Derivatives Obligations. To the extent
that any Loan Party makes a payment or payments to the Administrative Agent, any
Issuing Bank, any Lender or any Specified Derivatives Provider, or the
Administrative Agent, any Issuing Bank, any Lender or any Specified Derivatives
Provider enforce their security interests or exercise their rights of setoff,
and such payment or payments or the proceeds of such enforcement or setoff or
any part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside and/or required to be repaid to a trustee, receiver or
any other party under any bankruptcy law, state or federal law, common law or
equitable cause, then to the extent of such recovery, the Obligations or
Specified Derivatives Obligations, or part thereof originally intended to be
satisfied, and all Liens, rights and remedies therefor, shall be revived and
continued in full force and effect as if such payment had not been made or such
enforcement or setoff had not occurred.

 

Section 11.5. Allocation of Proceeds.

If an Event of Default exists, all payments received by the Administrative Agent
under any of the Loan Documents, in respect of any principal of or interest on
the Obligations or any other amounts payable by the Borrower hereunder or
thereunder, shall be applied in the following order and priority:

(a) amounts due to the Administrative Agent, the Issuing Banks and the Lenders
in respect of expenses due under Section 13.2. until paid in full, and then
Fees;

(b) payments of interest on Swingline Loans;

(c) payments of interest on all other Loans and Reimbursement Obligations to be
applied for the ratable benefit of the Lenders and the Issuing Banks;

(d) payments of principal of Swingline Loans;

 

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(e) payments of principal of all other Loans, Reimbursement Obligations and
other Letter of Credit Liabilities, to be applied for the ratable benefit of the
Lenders and the Issuing Banks, in such order and priority as the Lenders and the
Issuing Banks, may determine in their sole discretion; provided, however, to the
extent that any amounts available for distribution pursuant to this subsection
are attributable to the issued but undrawn amount of an outstanding Letter of
Credit, such amounts shall be paid to the Administrative Agent for deposit into
the Letter of Credit Collateral Account;

(f) amounts due to the Administrative Agent and the Lenders pursuant to
Sections 12.6. and 13.10.;

(g) payments of all other Obligations and other amounts due under any of the
Loan Documents, if any, to be applied for the ratable benefit of the Lenders;
and

(h) any amount remaining after application as provided above, shall be paid to
the Borrower or whomever else may be legally entitled thereto.

 

Section 11.6. Letter of Credit Collateral Account.

(a) As collateral security for the prompt payment in full when due of all Letter
of Credit Liabilities and the other Obligations, the Borrower hereby pledges and
grants to the Administrative Agent, for the ratable benefit of the
Administrative Agent, the Issuing Banks and the Lenders as provided herein, a
security interest in all of its right, title and interest in and to the Letter
of Credit Collateral Account and the balances from time to time in the Letter of
Credit Collateral Account (including the investments and reinvestments therein
provided for below). The balances from time to time in the Letter of Credit
Collateral Account shall not constitute payment of any Letter of Credit
Liabilities until applied by the applicable Issuing Bank as provided herein.
Anything in this Agreement to the contrary notwithstanding, funds held in the
Letter of Credit Collateral Account shall be subject to withdrawal only as
provided in this Section.

(b) Amounts on deposit in the Letter of Credit Collateral Account shall be
invested and reinvested by the Administrative Agent in such Cash Equivalents as
the Administrative Agent shall determine in its sole discretion. All such
investments and reinvestments shall be held in the name of and be under the sole
dominion and control of the Administrative Agent for the ratable benefit of the
Administrative Agent, the Issuing Banks and the Lenders; provided, that all
earnings on such investments will be credited to and retained in the Letter of
Credit Collateral Account. The Administrative Agent shall exercise reasonable
care in the custody and preservation of any funds held in the Letter of Credit
Collateral Account and shall be deemed to have exercised such care if such funds
are accorded treatment substantially equivalent to that which the Administrative
Agent accords other funds deposited with the Administrative Agent, it being
understood that the Administrative Agent shall not have any responsibility for
taking any necessary steps to preserve rights against any parties with respect
to any funds held in the Letter of Credit Collateral Account.

(c) If a drawing pursuant to any Letter of Credit occurs on or prior to the
expiration date of such Letter of Credit, the Borrower and the Lenders authorize
the Administrative Agent to use the monies deposited in the Letter of Credit
Collateral Account to reimburse the applicable Issuing Bank for the payment made
by such Issuing Bank to the beneficiary with respect to such drawing or the
payee with respect to such presentment.

(d) If an Event of Default exists, the Administrative Agent may (and, if
instructed by the Requisite Lenders shall, in its further discretion), at any
time and from time to time elect to liquidate any such investments and
reinvestments and apply the proceeds thereof to the Obligations in accordance
with Section 11.5.

 

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(e) So long as no Default or Event of Default exists, and to the extent amounts
on deposit in or credited to the Letter of Credit Collateral Account exceed the
aggregate amount of the Letter of Credit Liabilities then due and owing, the
Administrative Agent shall, from time to time, at the request of the Borrower,
deliver to the Borrower within ten (10) Business Days after the Administrative
Agent’s receipt of such request from the Borrower, against receipt but without
any recourse, warranty or representation whatsoever, such of amount of the
credit balances in the Letter of Credit Collateral Account as exceeds the
aggregate amount of Letter of Credit Liabilities at such time. When all of the
Obligations shall have been indefeasibly paid in full and no Letters of Credit
remain outstanding, the Administrative Agent shall deliver to the Borrower,
against receipt but without any recourse, warranty or representation whatsoever,
the balances remaining in the Letter of Credit Collateral Account.

(f) The Borrower shall pay to the Administrative Agent from time to time such
fees as the Administrative Agent normally charges for similar services in
connection with the Administrative Agent’s administration of the Letter of
Credit Collateral Account and investments and reinvestments of funds therein.

 

Section 11.7. Rescission of Acceleration by Requisite Lenders.

If at any time after acceleration of the maturity of the Loans and the other
Obligations, the Borrower shall pay all arrears of interest and all payments on
account of principal of the Obligations which shall have become due otherwise
than by acceleration (with interest on principal and, to the extent permitted by
Applicable Law, on overdue interest, at the rates specified in this Agreement)
and all Events of Default and Defaults (other than nonpayment of principal of
and accrued interest on the Obligations due and payable solely by virtue of
acceleration) shall become remedied or waived to the satisfaction of the
Requisite Lenders, then by written notice to the Borrower, the Requisite Lenders
may elect, in the sole discretion of such Requisite Lenders, to rescind and
annul the acceleration and its consequences. The provisions of the preceding
sentence are intended merely to bind all of the Lenders to a decision which may
be made at the election of the Requisite Lenders, and are not intended to
benefit the Borrower and do not give the Borrower the right to require the
Lenders to rescind or annul any acceleration hereunder, even if the conditions
set forth herein are satisfied.

 

Section 11.8. Rights Cumulative.

The rights and remedies of the Administrative Agent, the Issuing Banks, the
Lenders and the Specified Derivatives Providers under this Agreement, each of
the other Loan Documents and Specified Derivatives Contracts shall be cumulative
and not exclusive of any rights or remedies which any of them may otherwise have
under Applicable Law. In exercising their respective rights and remedies the
Administrative Agent, the Issuing Banks, the Lenders and the Specified
Derivatives Providers may be selective and no failure or delay by the
Administrative Agent, any of the Issuing Banks, any of the Lenders or any of the
Specified Derivatives Providers in exercising any right shall operate as a
waiver of it, nor shall any single or partial exercise of any power or right
preclude its other or further exercise or the exercise of any other power or
right.

 

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ARTICLE XII. THE ADMINISTRATIVE AGENT

 

Section 12.1. Appointment and Authorization.

Each Lender hereby irrevocably appoints and authorizes the Administrative Agent
to take such action as contractual representative on such Lender’s behalf and to
exercise such powers under this Agreement and the other Loan Documents as are
specifically delegated to the Administrative Agent by the terms hereof and
thereof, together with such powers as are reasonably incidental thereto. Not in
limitation of the foregoing, each Lender authorizes and directs the
Administrative Agent to enter into the Loan Documents for the benefit of the
Lenders. Each Lender hereby agrees that, except as otherwise set forth herein,
any action taken by the Requisite Lenders in accordance with the provisions of
this Agreement or the Loan Documents, and the exercise by the Requisite Lenders
of the powers set forth herein or therein, together with such other powers as
are reasonably incidental thereto, shall be authorized and binding upon all of
the Lenders. Nothing herein shall be construed to deem the Administrative Agent
a trustee or fiduciary for any Lender or to impose on the Administrative Agent
duties or obligations other than those expressly provided for herein. Without
limiting the generality of the foregoing, the use of the terms “Agent,”
“Administrative Agent,” “agent” and similar terms in the Loan Documents with
reference to the Administrative Agent is not intended to connote any fiduciary
or other implied (or express) obligations arising under agency doctrine of any
Applicable Law. Instead, use of such terms is merely a matter of market custom,
and is intended to create or reflect only an administrative relationship between
independent contracting parties. The Administrative Agent shall deliver to each
Lender, promptly upon receipt thereof by the Administrative Agent, copies of
each of the financial statements, certificates, notices and other documents
delivered to the Administrative Agent pursuant to Article IX. that the Borrower
is not otherwise required to deliver directly to the Lenders. The Administrative
Agent will furnish to any Lender, upon the request of such Lender, a copy (or,
where appropriate, an original) of any document, instrument, agreement,
certificate or notice furnished to the Administrative Agent by the Borrower, any
other Loan Party or any other Affiliate of the Borrower, pursuant to this
Agreement or any other Loan Document not already delivered to such Lender
pursuant to the terms of this Agreement or any such other Loan Document. As to
any matters not expressly provided for by the Loan Documents (including, without
limitation, enforcement or collection of any of the Obligations), the
Administrative Agent shall not be required to exercise any discretion or take
any action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Requisite Lenders (or all of the Lenders if explicitly required under any
other provision of this Agreement), and such instructions shall be binding upon
all Lenders and all holders of any of the Obligations; provided, however, that,
notwithstanding anything in this Agreement to the contrary, the Administrative
Agent shall not be required to take any action which exposes the Administrative
Agent to personal liability or which is contrary to this Agreement or any other
Loan Document or Applicable Law. Not in limitation of the foregoing, the
Administrative Agent may exercise any right or remedy it or the Lenders may have
under any Loan Document upon the occurrence of a Default or an Event of Default
unless the Requisite Lenders have directed the Administrative Agent otherwise.
Without limiting the foregoing, no Lender shall have any right of action
whatsoever against the Administrative Agent as a result of the Administrative
Agent acting or refraining from acting under this Agreement or any of the other
Loan Documents in accordance with the instructions of the Requisite Lenders, or
where applicable, all the Lenders.

 

Section 12.2. Wells Fargo as Lender.

Wells Fargo, as a Lender or as a Specified Derivatives Provider, as the case may
be, shall have the same rights and powers under this Agreement and any other
Loan Document and under any Specified Derivatives Contract, as the case may be,
as any other Lender or Specified Derivatives Provider and may exercise the same
as though it were not the Administrative Agent; and the term “Lender” or
“Lenders” shall, unless otherwise expressly indicated, include Wells Fargo in
each case in its individual capacity. Wells Fargo and its Affiliates may each
accept deposits from, maintain deposits or credit balances for,

 

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invest in, lend money to, act as trustee under indentures of, serve as financial
advisor to, and generally engage in any kind of business with the Borrower, any
other Loan Party or any other Affiliate thereof as if it were any other bank and
without any duty to account therefor to any other Issuing Banks, other Lenders,
or any other Specified Derivatives Providers. Further, the Administrative Agent
and any Affiliate may accept fees and other consideration from the Borrower for
services in connection with this Agreement or any Specified Derivatives
Contract, or otherwise without having to account for the same to the other
Issuing Banks, the other Lenders or any other Specified Derivatives Providers.
The Issuing Banks and the Lenders acknowledge that, pursuant to such activities,
Wells Fargo or its Affiliates may receive information regarding the Borrower,
other Loan Parties, other Subsidiaries and other Affiliates (including
information that may be subject to confidentiality obligations in favor of such
Person) and acknowledge that the Administrative Agent shall be under no
obligation to provide such information to them.

 

Section 12.3. Approvals of Lenders.

All communications from the Administrative Agent to any Lender requesting such
Lender’s determination, consent, approval or disapproval (a) shall be given in
the form of a written notice to such Lender, (b) shall be accompanied by a
description of the matter or issue as to which such determination, approval,
consent or disapproval is requested, or shall advise such Lender where
information, if any, regarding such matter or issue may be inspected, or shall
otherwise describe the matter or issue to be resolved, (c) shall include, if
reasonably requested by such Lender and to the extent not previously provided to
such Lender, written materials and, as appropriate, a brief summary of all oral
information provided to the Administrative Agent by the Borrower in respect of
the matter or issue to be resolved, and (d) shall include the Administrative
Agent’s recommended course of action or determination in respect thereof. Unless
a Lender shall give written notice to the Administrative Agent that it
specifically objects to the recommendation or determination of the
Administrative Agent within ten (10) Business Days (or such lesser or greater
period as may be specifically required under the express terms of the Loan
Documents) of receipt of such communication, such Lender shall be deemed to have
conclusively approved of or consented to such recommendation or determination.

 

Section 12.4. Notice of Events of Default.

The Administrative Agent shall not be deemed to have knowledge or notice of the
occurrence of a Default or Event of Default unless the Administrative Agent has
received notice from a Lender or the Borrower referring to this Agreement,
describing with reasonable specificity such Default or Event of Default and
stating that such notice is a “notice of default.” If any Lender (excluding the
Lender which is also serving as the Administrative Agent) becomes aware of any
Default or Event of Default, it shall promptly send to the Administrative Agent
such a “notice of default.” Further, if the Administrative Agent receives such a
“notice of default,” the Administrative Agent shall give prompt notice thereof
to the Lenders.

 

Section 12.5. Administrative Agent’s Reliance.

Notwithstanding any other provisions of this Agreement or any other Loan
Documents, neither the Administrative Agent nor any of its directors, officers,
agents, employees or counsel shall be liable for any action taken or not taken
by it under or in connection with this Agreement or any other Loan Document,
except for its or their own gross negligence or willful misconduct in connection
with its duties expressly set forth herein or therein as determined by a court
of competent jurisdiction in a final non-appealable judgment. Without limiting
the generality of the foregoing, the Administrative Agent may consult with legal
counsel (including its own counsel or counsel for the Borrower or any other Loan
Party), independent public accountants and other experts selected by it and
shall not be liable for any

 

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action taken or omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants or experts. Neither the Administrative Agent
nor any of its directors, officers, agents, employees or counsel: (a) makes any
warranty or representation to any Lender, any Issuing Bank or any other Person,
or shall be responsible to any Lender, any Issuing Bank or any other Person for
any statement, warranty or representation made or deemed made by the Borrower,
any other Loan Party or any other Person in or in connection with this Agreement
or any other Loan Document; (b) shall have any duty to ascertain or to inquire
as to the performance or observance of any of the terms, covenants or conditions
of this Agreement or any other Loan Document or the satisfaction of any
conditions precedent under this Agreement or any Loan Document on the part of
the Borrower or other Persons, or to inspect the property, books or records of
the Borrower or any other Person; (c) shall be responsible to any Lender or any
Issuing Bank for the due execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or any other Loan Document,
any other instrument or document furnished pursuant thereto or any collateral
covered thereby or the perfection or priority of any Lien in favor of the
Administrative Agent on behalf of the Lenders, the Issuing Banks and the
Specified Derivatives Providers in any such collateral; (d) shall have any
liability in respect of any recitals, statements, certifications,
representations or warranties contained in any of the Loan Documents or any
other document, instrument, agreement, certificate or statement delivered in
connection therewith; and (e) shall incur any liability under or in respect of
this Agreement or any other Loan Document by acting upon any notice, consent,
certificate or other instrument or writing (which may be by telephone, telecopy
or electronic mail) believed by it to be genuine and signed, sent or given by
the proper party or parties. The Administrative Agent may execute any of its
duties under the Loan Documents by or through agents, employees or
attorneys-in-fact and shall not be responsible for the negligence or misconduct
of any agent or attorney-in-fact that it selects in the absence of gross
negligence or willful misconduct as determined by a court of competent
jurisdiction in a final non-appealable judgment.

 

Section 12.6. Indemnification of Administrative Agent.

Each Lender agrees to indemnify the Administrative Agent (to the extent not
reimbursed by the Borrower and without limiting the obligation of the Borrower
to do so) pro rata in accordance with such Lender’s respective Pro Rata Share,
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, reasonable out-of-pocket costs and
expenses of any kind or nature whatsoever which may at any time be imposed on,
incurred by, or asserted against the Administrative Agent (in its capacity as
Administrative Agent but not as a Lender) in any way relating to or arising out
of the Loan Documents, any transaction contemplated hereby or thereby or any
action taken or omitted by the Administrative Agent under the Loan Documents
(collectively, “Indemnifiable Amounts”); provided, however, that no Lender shall
be liable for any portion of such Indemnifiable Amounts to the extent resulting
from the Administrative Agent’s gross negligence or willful misconduct as
determined by a court of competent jurisdiction in a final, non-appealable
judgment; provided, however, that no action taken in accordance with the
directions of the Requisite Lenders (or all of the Lenders, if expressly
required hereunder) shall be deemed to constitute gross negligence or willful
misconduct for purposes of this Section. Without limiting the generality of the
foregoing, each Lender agrees to reimburse the Administrative Agent (to the
extent not reimbursed by the Borrower and without limiting the obligation of the
Borrower to do so) promptly upon demand for its ratable share of any
out-of-pocket expenses (including the reasonable fees and expenses of the
counsel to the Administrative Agent) incurred by the Administrative Agent in
connection with the preparation, negotiation, execution, administration, or
enforcement (whether through negotiations, legal proceedings, or otherwise) of,
or legal advice with respect to the rights or responsibilities of the parties
under, the Loan Documents, any suit or action brought by the Administrative
Agent to enforce the terms of the Loan Documents and/or collect any Obligations,
any “lender liability” suit or claim brought against the Administrative Agent
and/or the Lenders, and any claim or suit brought against the Administrative
Agent and/or the Lenders arising under any Environmental Laws. Such
out-of-pocket expenses (including counsel fees) shall be advanced by the

 

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Lenders on the request of the Administrative Agent notwithstanding any claim or
assertion that the Administrative Agent is not entitled to indemnification
hereunder upon receipt of an undertaking by the Administrative Agent that the
Administrative Agent will reimburse the Lenders if it is actually and finally
determined by a court of competent jurisdiction that the Administrative Agent is
not so entitled to indemnification. The agreements in this Section shall survive
the payment of the Loans and all other amounts payable hereunder or under the
other Loan Documents and the termination of this Agreement. If the Borrower
shall reimburse the Administrative Agent for any Indemnifiable Amount following
payment by any Lender to the Administrative Agent in respect of such
Indemnifiable Amount pursuant to this Section, the Administrative Agent shall
share such reimbursement on a ratable basis with each Lender making any such
payment.

 

Section 12.7. Lender Credit Decision, Etc.

Each of the Lenders and each of the Issuing Banks expressly acknowledges and
agrees that neither the Administrative Agent nor any of its officers, directors,
employees, agents, counsel, attorneys-in-fact or other Affiliates has made any
representations or warranties to such Issuing Bank or such Lender and that no
act by the Administrative Agent hereafter taken, including any review of the
affairs of the Borrower, any other Loan Party or any other Subsidiary or
Affiliate, shall be deemed to constitute any such representation or warranty by
the Administrative Agent to any Issuing Bank or any Lender. Each of the Lenders
and each of the Issuing Banks acknowledges that it has made its own credit and
legal analysis and decision to enter into this Agreement and the transactions
contemplated hereby, independently and without reliance upon the Administrative
Agent, any other Issuing Bank, any other Lender or counsel to the Administrative
Agent, or any of their respective officers, directors, employees, agents or
counsel, and based on the financial statements of the Borrower, the other Loan
Parties, the other Subsidiaries and other Affiliates, and inquiries of such
Persons, its independent due diligence of the business and affairs of the
Borrower, the other Loan Parties, the other Subsidiaries and other Persons, its
review of the Loan Documents, the legal opinions required to be delivered to it
hereunder, the advice of its own counsel and such other documents and
information as it has deemed appropriate. Each of the Lenders and each of the
Issuing Banks also acknowledges that it will, independently and without reliance
upon the Administrative Agent, any other Lender, any other Issuing Bank, or
counsel to the Administrative Agent or any of their respective officers,
directors, employees and agents, and based on such review, advice, documents and
information as it shall deem appropriate at the time, continue to make its own
decisions in taking or not taking action under the Loan Documents. The
Administrative Agent shall not be required to keep itself informed as to the
performance or observance by the Borrower or any other Loan Party of the Loan
Documents or any other document referred to or provided for therein or to
inspect the properties or books of, or make any other investigation of, the
Borrower, any other Loan Party or any other Subsidiary. Except for notices,
reports and other documents and information expressly required to be furnished
to the Lenders and the Issuing Banks by the Administrative Agent under this
Agreement or any of the other Loan Documents, the Administrative Agent shall
have no duty or responsibility to provide any Lender or any Issuing Bank with
any credit or other information concerning the business, operations, property,
financial and other condition or creditworthiness of the Borrower, any other
Loan Party or any other Affiliate thereof which may come into possession of the
Administrative Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or other Affiliates. Each of the Lenders and each of the
Issuing Banks acknowledges that the Administrative Agent’s legal counsel in
connection with the transactions contemplated by this Agreement is only acting
as counsel to the Administrative Agent and is not acting as counsel to any
Lender or any Issuing Bank.

 

Section 12.8. Successor Administrative Agent.

The Administrative Agent may resign at any time as Administrative Agent under
the Loan Documents by giving written notice thereof to the Lenders and the
Borrower. Upon any such resignation,

 

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the Requisite Lenders shall have the right to appoint a successor Administrative
Agent which appointment shall, provided no Default or Event of Default exists,
be subject to the Borrower’s approval, which approval shall not be unreasonably
withheld or delayed (except that the Borrower shall, in all events, be deemed to
have approved each Lender as a successor Administrative Agent). If no successor
Administrative Agent shall have been so appointed in accordance with the
immediately preceding sentence, and shall have accepted such appointment, within
thirty (30) days after the current Administrative Agent’s giving of notice of
resignation, then the current Administrative Agent may, on behalf of the Lenders
and the Issuing Banks, appoint a successor Administrative Agent, which shall be
a Lender, if any Lender shall be willing to serve, and otherwise shall be an
Eligible Assignee. Upon the acceptance of any appointment as Administrative
Agent hereunder by a successor Administrative Agent, such successor
Administrative Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the current Administrative Agent, and
the current Administrative Agent shall be discharged from its duties and
obligations under the Loan Documents. Such successor Administrative Agent shall
issue letters of credit in substitution for the Letters of Credit, if any,
outstanding at the time of such succession or shall make other arrangements
satisfactory to the current Administrative Agent, in either case, to assume
effectively the obligations of the current Administrative Agent with respect to
such Letters of Credit. After any Administrative Agent’s resignation hereunder
as Administrative Agent, the provisions of this Article XII. shall continue to
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Administrative Agent under the Loan Documents. Notwithstanding anything
contained herein to the contrary, the Administrative Agent may assign its rights
and duties under the Loan Documents to any of its Affiliates by giving the
Borrower and each Lender prior written notice thereof.

 

Section 12.9. Titled Agents.

Each of the Arranger and the Syndication Agent (each a “Titled Agent”) in each
such respective capacity, assumes no responsibility or obligation hereunder,
including, without limitation, for servicing, enforcement or collection of any
of the Loans, nor any duties as an agent hereunder for the Lenders. The titles
given to the Titled Agents are solely honorific and imply no fiduciary
responsibility on the part of the Titled Agents to the Administrative Agent, any
Lender, the Issuing Bank, the Borrower or any other Loan Party and the use of
such titles does not impose on the Titled Agents any duties or obligations
greater than those of any other Lender or entitle the Titled Agents to any
rights other than those to which any other Lender is entitled.

ARTICLE XIII. MISCELLANEOUS

 

Section 13.1. Notices.

Unless otherwise provided herein (including without limitation as provided in
Section 9.5.), communications provided for hereunder shall be in writing and
shall be mailed, telecopied, or delivered as follows:

If to the Borrower:

 

Saul Holdings Limited Partnership

7501 Wisconsin Avenue

Suite 1500 E

Bethesda, MD 20814-6522

Attn: Scott V. Schneider, Chief Financial Officer

Facsimile Number:    (301) 986-6023 Telephone Number:    (301) 986-6220 Email:
scott.schneider@saulcenters.com

 

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With a copy to:

 

Victoria J. Perkins

Senior Vice President and Senior Counsel

B. F. Saul Company

7501 Wisconsin Avenue

Suite 1500 E

Bethesda, Maryland 20814-6522

Facsimile Number:

Telephone Number:

  

(301) 986-6023

(301) 986-6040

Email: victoria.perkins@bfsaulco.com

And a copy to:

 

Jeffrey Grill and Eric Green

Pillsbury Winthrop Shaw Pittman

2300 N Street, N.W.

Washington, D.C. 20037

Facsimile Number:    (202) 663-8007 Telephone Number:    (202) 663-9022 Email:
Jeffrey.grill@pillsburylaw.com and eric.green@pillsburylaw.com

If to the Administrative Agent:

 

Wells Fargo Bank, National Association

123 N Wacker Dr., Suite 1900

Chicago, IL 60606

Attn: Sam Supple, REIT Finance Group

Facsimile Number:    (312) 782-0969 Telephone Number:    (312) 269-4817 Email:
sam.supple@wellsfargo.com

with a copy to:

 

Wells Fargo Bank, N.A.

Commercial Real Estate Portfolio Services

1750 H Street, N.W., Suite 400

Washington, DC 20006

Attn: Loan Administration Manager

Facsimile Number:    (202) 429-2984 Telephone Number:    (202) 303-3020

If to the Administrative Agent under Article II.:

 

Wells Fargo Bank, National Association

Minneapolis Loan Center

MAC N9303-110

608 Second Avenue S., 11th Floor

Minneapolis, Minnesota 55402-1916

Attn: Disbursement Administrator

Facsimile Number:

Telephone Number:

  

(877) 410-5027

(612) 667-4507

 

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If to Wells Fargo Bank, National Association as Issuing Bank:

 

Wells Fargo Bank, National Association

401 Linden Street

Winston-Salem, North Carolina 27101

Attn: Standby Letter of Credit Department

Facsimile Number:

Telephone Number:

  

(336) 735-0950

(800) 776-3862

Email: sblc-new@wellsfargo.com

Letter of Credit No. IS0011738

If to any other Lender or Issuing Bank:

To such Lender’s or Issuing Bank’s address or telecopy number or email address
as set forth in the applicable Administrative Questionnaire

or, as to each party at such other address as shall be designated by such party
in a written notice to the other parties delivered in compliance with this
Section; provided, a Lender or an Issuing Bank shall only be required to give
notice of any such other address to the Administrative Agent and the Borrower.
All such notices and other communications shall be effective (i) if mailed, upon
the first to occur of receipt or the expiration of three (3) Business Days after
the deposit in the United States Postal Service certified mail, postage prepaid
and addressed to the address of the Borrower or the Administrative Agent, the
Issuing Banks and the Lenders at the addresses specified; (ii) if telecopied,
when transmitted (with confirmation); (iii) if hand delivered or sent by
overnight courier, when delivered; or (iv) if delivered in accordance with
Section 9.5. to the extent applicable; provided, however, that, in the case of
the immediately preceding clauses (i), (ii) and (iii), non-receipt of any
communication as of the result of any change of address of which the sending
party was not notified or as the result of a refusal to accept delivery shall be
deemed receipt of such communication. Notwithstanding the immediately preceding
sentence, all notices or communications to the Administrative Agent, any Issuing
Bank or any Lender under Article II. shall be effective only when actually
received. None of the Administrative Agent, any Issuing Bank or any Lender shall
incur any liability to any Loan Party (nor shall the Administrative Agent incur
any liability to the Issuing Banks or the Lenders) for acting upon any
telephonic notice referred to in this Agreement which the Administrative Agent,
such Issuing Bank or such Lender, as the case may be, believes in good faith to
have been given by a Person authorized to deliver such notice or for otherwise
acting in good faith hereunder. Failure of a Person designated to get a copy of
a notice to receive such copy shall not affect the validity of notice properly
given to another Person.

 

Section 13.2. Expenses.

The Borrower agrees (a) to pay or reimburse the Administrative Agent for all of
its reasonable out-of-pocket costs and expenses incurred in connection with the
preparation, negotiation and execution of, and any amendment, supplement or
modification to, any of the Loan Documents (including due diligence expense and
reasonable travel expenses related to closing), and the consummation of the
transactions contemplated hereby and thereby, including the reasonable fees and
disbursements of counsel to the Administrative Agent and all costs and expenses
of the Administrative Agent in connection with the use of IntraLinks, SyndTrak
or other similar information transmission systems in connection with the Loan
Documents, (b) to pay or reimburse the Administrative Agent, the Issuing Banks
and the Lenders

 

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for all their reasonable costs and expenses incurred in connection with the
enforcement or preservation of any rights under the Loan Documents, including
the reasonable fees and disbursements of their respective counsel (including the
allocated fees and expenses of in-house counsel, to the extent in substitution
for, and not in duplication of, outside counsel) and any payments in
indemnification or otherwise payable by the Lenders to the Administrative Agent
pursuant to the Loan Documents; provided, however, that the Borrower shall not
be required to pay the expenses of more than one counsel to the Administrative
Agent and one separate counsel for the Lenders (in addition to the expenses for
any local or special counsel) in connection with such enforcement or
preservation unless the Lenders reasonably determine that joint representation
is not appropriate under the circumstances, (c) to pay, and indemnify and hold
harmless the Administrative Agent, the Issuing Banks and the Lenders from, any
and all recording and filing fees and any and all liabilities with respect to,
or resulting from any failure to pay or delay in paying, documentary, stamp,
excise and other similar taxes, if any, which may be payable or determined to be
payable in connection with the execution and delivery of any of the Loan
Documents, or consummation of any amendment, supplement or modification of, or
any waiver or consent under or in respect of, any Loan Document and (d) to the
extent not already covered by any of the preceding subsections, to pay or
reimburse the fees and disbursements of counsel to the Administrative Agent, any
Issuing Bank and any Lender incurred in connection with the representation of
the Administrative Agent, such Issuing Bank or such Lender in any matter
relating to or arising out of any bankruptcy or other proceeding of the type
described in Sections 11.1.(e) or 11.1.(f), including, without limitation
(i) any motion for relief from any stay or similar order, (ii) the negotiation,
preparation, execution and delivery of any document relating to the Obligations
and (iii) the negotiation and preparation of any debtor-in-possession financing
or any plan of reorganization of the Borrower or any other Loan Party, whether
proposed by the Borrower, such Loan Party, the Lenders or any other Person, and
whether such fees and expenses are incurred prior to, during or after the
commencement of such proceeding or the confirmation or conclusion of any such
proceeding; provided, however, that the Borrower shall not be required to pay
the expenses of more than one counsel to the Administrative Agent and one
separate counsel for the Lenders (in addition to the expenses for any local or
special counsel) in connection with such enforcement or preservation unless the
Lenders reasonably determine that joint representation is not appropriate under
the circumstances. If the Borrower shall fail to pay any amounts required to be
paid by it pursuant to this Section, the Administrative Agent and/or the Lenders
may pay such amounts on behalf of the Borrower and such amounts shall be deemed
to be Obligations owing hereunder.

 

Section 13.3. Stamp, Intangible and Recording Taxes.

The Borrower will pay any and all stamp, excise, intangible, registration,
recordation and similar taxes, fees or charges and shall indemnify the
Administrative Agent and each Lender against any and all liabilities with
respect to or resulting from any delay in the payment or omission to pay any
such taxes, fees or charges, which may be payable or determined to be payable in
connection with the execution, delivery, recording, performance or enforcement
of this Agreement, the Notes and any of the other Loan Documents, the amendment,
supplement, modification or waiver of or consent under this Agreement, the Notes
or any of the other Loan Documents or the perfection of any rights or Liens
under this Agreement, the Notes or any of the other Loan Documents.

 

Section 13.4. Setoff.

Subject to Section 3.3. and in addition to any rights now or hereafter granted
under Applicable Law and not by way of limitation of any such rights, the
Borrower hereby authorizes the Administrative Agent, each Issuing Bank, each
Lender, each Affiliate of the Administrative Agent, each Issuing Bank or any
Lender, at any time or from time to time while an Event of Default is
continuing, without prior notice to the Borrower or to any other Person, any
such notice being hereby expressly waived, but in the case of an Issuing Bank, a
Lender, an Affiliate of an Issuing Bank or a Lender, subject to receipt of the
prior

 

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written consent of the Requisite Lenders exercised in their sole discretion, to
set off and to appropriate and to apply any and all deposits (general or
special, including, but not limited to, indebtedness evidenced by certificates
of deposit, whether matured or unmatured) and any other indebtedness at any time
held or owing by the Administrative Agent, such Issuing Bank, such Lender, any
Affiliate of the Administrative Agent, such Issuing Bank or such Lender, to or
for the credit or the account of the Borrower against and on account of any of
the Obligations, irrespective of whether or not any or all of the Loans and all
other Obligations have been declared to be, or have otherwise become, due and
payable as permitted by Section 11.2., and although such Obligations shall be
contingent or unmatured.

 

Section 13.5. Litigation; Jurisdiction; Other Matters; Waivers.

(a) EACH PARTY HERETO ACKNOWLEDGES THAT ANY DISPUTE OR CONTROVERSY BETWEEN OR
AMONG THE BORROWER, THE ADMINISTRATIVE AGENT, ANY OF THE ISSUING BANKS OR ANY OF
THE LENDERS WOULD BE BASED ON DIFFICULT AND COMPLEX ISSUES OF LAW AND FACT AND
WOULD RESULT IN DELAY AND EXPENSE TO THE PARTIES. ACCORDINGLY, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, EACH OF THE LENDERS, THE ADMINISTRATIVE AGENT, THE
ISSUING BANKS AND THE BORROWER HEREBY WAIVES ITS RIGHT TO A TRIAL BY JURY IN ANY
ACTION OR PROCEEDING OF ANY KIND OR NATURE IN ANY COURT OR TRIBUNAL IN WHICH AN
ACTION MAY BE COMMENCED BY OR AGAINST ANY PARTY HERETO ARISING OUT OF THIS
AGREEMENT, ANY OTHER LOAN DOCUMENT OR BY REASON OF ANY OTHER SUIT, CAUSE OF
ACTION OR DISPUTE WHATSOEVER BETWEEN OR AMONG THE BORROWER, THE ADMINISTRATIVE
AGENT, ANY OF THE ISSUING BANKS OR ANY OF THE LENDERS OF ANY KIND OR NATURE
RELATING TO ANY OF THE LOAN DOCUMENTS.

(b) THE BORROWER AND EACH OTHER LOAN PARTY IRREVOCABLY AND UNCONDITIONALLY
AGREES THAT IT WILL NOT COMMENCE ANY ACTION, LITIGATION OR PROCEEDING OF ANY
KIND OR DESCRIPTION, WHETHER IN LAW OR EQUITY, WHETHER IN CONTRACT OR IN TORT OR
OTHERWISE, AGAINST THE ADMINISTRATIVE AGENT, ANY LENDER, ANY ISSUING BANK, OR
ANY RELATED PARTY OF THE FOREGOING IN ANY WAY RELATING TO THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT OR THE TRANSACTIONS RELATING HERETO OR THERETO, IN ANY FORUM
OTHER THAN THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY, AND
OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND
ANY APPELLATE COURT FROM ANY THEREOF, AND EACH OF THE PARTIES HERETO IRREVOCABLY
AND UNCONDITIONALLY SUBMITS TO THE JURISDICTION OF SUCH COURTS AND AGREES THAT
ALL CLAIMS IN RESPECT OF ANY SUCH ACTION, LITIGATION OR PROCEEDING MAY BE HEARD
AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT
A FINAL, NON-APPEALABLE JUDGMENT IN ANY SUCH ACTION, LITIGATION OR PROCEEDING
SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE
JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR IN
ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT,
ANY LENDER OR ANY ISSUING BANK MAY OTHERWISE HAVE TO BRING ANY ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST THE
BORROWER OR ANY OTHER LOAN PARTY OR ITS PROPERTIES IN THE COURTS OF ANY
APPROPRIATE JURISDICTION. EACH PARTY FURTHER WAIVES ANY OBJECTION THAT IT MAY
NOW OR HEREAFTER HAVE TO THE VENUE OF ANY ACTION BROUGHT IN ACCORDANCE WITH THE
FIRST SENTENCE OF THIS SUBSECTION (b) OR PROCEEDING IN ANY SUCH COURT OR THAT
SUCH ACTION OR

 

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PROCEEDING WAS BROUGHT IN AN INCONVENIENT FORUM AND EACH AGREES NOT TO PLEAD OR
CLAIM THE SAME. THE CHOICE OF FORUM SET FORTH IN THIS SECTION SHALL NOT BE
DEEMED TO PRECLUDE THE BRINGING OF ANY ACTION BY THE ADMINISTRATIVE AGENT, ANY
ISSUING BANK OR ANY LENDER OR THE ENFORCEMENT BY THE ADMINISTRATIVE AGENT, ANY
ISSUING BANK OR ANY LENDER OF ANY JUDGMENT OBTAINED IN SUCH FORUM IN ANY OTHER
APPROPRIATE JURISDICTION.

(c) THE PROVISIONS OF THIS SECTION HAVE BEEN CONSIDERED BY EACH PARTY WITH THE
ADVICE OF COUNSEL AND WITH A FULL UNDERSTANDING OF THE LEGAL CONSEQUENCES
THEREOF, AND SHALL SURVIVE THE PAYMENT OF THE LOANS AND ALL OTHER AMOUNTS
PAYABLE HEREUNDER OR UNDER THE OTHER LOAN DOCUMENTS, THE TERMINATION OR
EXPIRATION OF ALL LETTERS OF CREDIT AND THE TERMINATION OF THIS AGREEMENT.

 

Section 13.6. Successors and Assigns.

(a) Successors and Assigns Generally. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns permitted hereby, except that neither the Borrower nor
any other Loan Party may assign or otherwise transfer any of its rights or
obligations hereunder without the prior written consent of the Administrative
Agent and each Lender and no Lender may assign or otherwise transfer any of its
rights or obligations hereunder except (i) to an Eligible Assignee in accordance
with the provisions of the immediately following subsection (b), (ii) by way of
participation in accordance with the provisions of the immediately following
subsection (d) or (iii) by way of pledge or assignment of a security interest
subject to the restrictions of the immediately following subsection (f) (and,
subject to the last sentence of the immediately following subsection (b), any
other attempted assignment or transfer by any party hereto shall be null and
void). Nothing in this Agreement, expressed or implied, shall be construed to
confer upon any Person (other than the parties hereto, their respective
successors and assigns permitted hereby, Participants to the extent provided in
the immediately following subsection (d) and, to the extent expressly set forth
herein, the Related Parties of the Administrative Agent and the Lenders) any
legal or equitable right, remedy or claim under or by reason of this Agreement.

(b) Assignments by Lenders. Any Lender may at any time assign to one or more
Eligible Assignees all or a portion of its rights and obligations under this
Agreement (including all or a portion of its Commitment and the Loans at the
time owing to it); provided that any such assignment shall be subject to the
following conditions:

(i) Minimum Amounts.

(A) in the case of an assignment of the entire remaining amount of an assigning
Revolving Lender’s Revolving Commitment and the Loans at the time owing to it or
in the case of an assignment to a Lender, an Affiliate of a Lender or an
Approved Fund, no minimum amount need be assigned; and

(B) in any case not described in the immediately preceding subsection (A), the
aggregate amount of the Revolving Commitment (which for this purpose includes
Loans outstanding thereunder) or, if the applicable Revolving Commitment is not
then in effect, the principal outstanding balance of the Loans of the assigning
Lender subject to each such assignment (in each case, determined as of the date
the Assignment and Assumption with respect to such assignment is delivered to
the Administrative Agent or, if “Trade Date” is specified in the Assignment and
Assumption, as of the Trade Date)

 

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shall not be less than $15,000,000 in the case of any assignment of a Revolving
Commitment, unless each of the Administrative Agent and, so long as no Default
or Event of Default shall exist, the Borrower otherwise consents (each such
consent not to be unreasonably withheld or delayed); provided, however, that if,
after giving effect to such assignment, the amount of the Commitment held by
such assigning Lender or the outstanding principal balance of the Loans of such
assigning Lender, as applicable, would be less than $10,000,000 in the case of a
Commitment or Revolving Loans, then such assigning Lender shall assign the
entire amount of its Commitment and the Loans at the time owing to it.

(ii) Proportionate Amounts. Each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender’s rights and
obligations under this Agreement with respect to the Loan or the Revolving
Commitment assigned.

(iii) Required Consents. No consent shall be required for any assignment except
to the extent required by clause (i)(B) of this subsection (b) and, in addition:

(A) the consent of the Borrower (such consent not to be unreasonably withheld or
delayed) shall be required unless (x) a Default or Event of Default shall exist
at the time of such assignment or (y) such assignment is to a Lender; provided
that the Borrower shall be deemed to have consented to any such assignment
unless it shall object thereto by written notice to the Administrative Agent
within five (5) Business Days after having received notice, by delivery of a
paper copy, or by facsimile or email, thereof;

(B) the consent of the Administrative Agent (such consent not to be unreasonably
withheld or delayed) shall be required for assignments in respect of a Revolving
Commitment if such assignment is to a Person that is not already a Lender with a
Commitment, an Affiliate of such a Lender or an Approved Fund with respect to
such a Lender; and

(C) the consent of the Swingline Lender and the Issuing Banks (such consent not
to be unreasonably withheld or delayed) shall be required for any assignment in
respect of a Revolving Commitment.

(iv) Assignment and Acceptance; Notes. The parties to each assignment shall
execute and deliver to the Administrative Agent an Assignment and Acceptance,
together with a processing and recordation fee (which, other than in connection
with an assignment pursuant to Section 5.6., shall not be borne by the Borrower)
of $4,500 for each assignment (or $7,500 if the assignor is a Defaulting
Lender), and the assignee, if it is not a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire. If requested by the
transferor Lender or the Assignee, upon the consummation of any assignment, the
transferor Lender, the Administrative Agent and the Borrower shall make
appropriate arrangements so that new Notes are issued to the Assignee and such
transferor Lender, as appropriate.

(v) No Assignment to Borrower. No such assignment shall be made to the Borrower
or any of the Borrower’s Affiliates or Subsidiaries.

(vi) No Assignment to Natural Persons. No such assignment shall be made to a
natural person.

 

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(vii) Assignments by Specified Derivatives Provider. If the assigning Lender (or
its Affiliate) is a Specified Derivatives Provider and if after giving effect to
such assignment such Lender will hold no further Loans or Revolving Commitments
under this Agreement, such Lender shall undertake such assignment only
contemporaneously with an assignment by such Lender (or its Affiliate, as the
case may be) of all of its Specified Derivatives Contracts to the Assignee or
another Lender (or Affiliate thereof).

Subject to acceptance and recording thereof by the Administrative Agent pursuant
to the immediately following subsection (c), from and after the effective date
specified in each Assignment and Acceptance, the assignee thereunder shall be a
party to this Agreement and, to the extent of the interest assigned by such
Assignment and Assumption, have the rights and obligations of a Lender under
this Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Assumption, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender’s rights and obligations under
this Agreement, such Lender shall cease to be a party hereto) but shall continue
to be entitled to the benefits of Sections 5.4., 13.2. and 13.10. and the other
provisions of this Agreement and the other Loan Documents as provided in
Section 13.11. with respect to facts and circumstances occurring prior to the
effective date of such assignment. Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this
paragraph shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with the
immediately following subsection (d).

(c) Register. The Administrative Agent, acting solely for this purpose as an
agent of the Borrower, shall maintain at the Principal Office a copy of each
Assignment and Assumption delivered to it and a register for the recordation of
the names and addresses of the Lenders, and the Commitments of, and principal
amounts of the Loans owing to, each Lender pursuant to the terms hereof from
time to time (the “Register”). The entries in the Register shall be conclusive,
and the Borrower, the Administrative Agent and the Lenders may treat each Person
whose name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary. The Register shall be available for inspection by the Borrower and any
Lender, at any reasonable time and from time to time upon reasonable prior
notice. Each Lender that sells a participation as described in Section 13.6.(d)
shall, acting solely for this purpose as an agent of the Borrower, maintain a
register on which it enters the name and address of each Participant and the
principal amounts (and stated interest) of each Participant’s interest in the
Loans or other obligations under this Agreement (the “Participant Register”);
provided that no Lender shall have any obligation to disclose all or any portion
of the Participant Register to any Person (including the identity of any
Participant or any information relating to a Participant’s interest in any
Commitments, Loans, or its other obligations under this Agreement) except to the
extent that such disclosure is necessary to establish that such Commitment,
Loan, or other obligation is in registered form under Section 5f.103-1(c) of the
Treasury Regulations. The entries in the Participant Register shall be
conclusive absent manifest error, and such Lender shall treat each person whose
name is recorded in the Participant Register as the owner of such participation
for all purposes of this Agreement notwithstanding any notice to the contrary.

(d) Participations. Any Lender may at any time, without the consent of, or
notice to, the Borrower or the Administrative Agent, sell participations to any
Person (other than a natural person or the Borrower or any of the Borrower’s
Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion of such
Lender’s rights and/or obligations under this Agreement (including all or a
portion of its Commitment and/or the Loans owing to it); provided that (i) such
Lender’s obligations under this Agreement shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations and (iii) the Borrower, the Administrative Agent
and the Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender’s

 

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rights and obligations under this Agreement. Any agreement or instrument
pursuant to which a Lender sells such a participation shall provide that such
Lender shall retain the sole right to enforce this Agreement and to approve any
amendment, modification or waiver of any provision of this Agreement; provided
that such agreement or instrument may provide that such Lender will not, without
the consent of the Participant, agree to (w) increase such Lender’s Commitment,
(x) extend the date fixed for the payment of principal on the Loans or portions
thereof owing to such Lender, (y) reduce the rate at which interest is payable
thereon or (z) release any Guarantor from its Obligations under the Guaranty,
except pursuant to the terms of this Agreement. Subject to the immediately
following subsection (e), the Borrower agrees that each Participant shall be
entitled to the benefits of Sections 3.10., 5.1., 5.4. to the same extent as if
it were a Lender and had acquired its interest by assignment pursuant to
paragraph (b) of this Section. To the extent permitted by Applicable Law, each
Participant also shall be entitled to the benefits of Section 13.4. as though it
were a Lender, provided such Participant agrees to be subject to Section 3.3. as
though it were a Lender.

(e) Limitations upon Participant Rights. A Participant shall not be entitled to
receive any greater payment under Sections 3.10. and 5.1. than the applicable
Lender would have been entitled to receive with respect to the participation
sold to such Participant, unless the sale of the participation to such
Participant is made with the Borrower’s prior written consent. A Participant
that would be a Foreign Lender if it were a Lender shall not be entitled to the
benefits of Section 3.10. unless the Borrower is notified of the participation
sold to such Participant and such Participant agrees, for the benefit of the
Borrower and the Administrative Agent, to comply with Section 3.10.(c) as though
it were a Lender.

(f) Certain Pledges. Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement to secure
obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank; provided that no such pledge or
assignment shall release such Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto or
entitled to the rights of an assignee hereunder.

(g) No Registration. Each Lender agrees that, without the prior written consent
of the Borrower and the Administrative Agent, it will not make any assignment
hereunder in any manner or under any circumstances that would require
registration or qualification of, or filings in respect of, any Loan or Note
under the Securities Act or any other securities laws of the United States of
America or of any other jurisdiction.

 

Section 13.7. Amendments and Waivers.

(a) Generally. Except as otherwise expressly provided in this Agreement, (i) any
consent or approval required or permitted by this Agreement or any other Loan
Document to be given by the Lenders may be given, (ii) any term of this
Agreement or of any other Loan Document may be amended, (iii) the performance or
observance by the Borrower, any other Loan Party or any other Subsidiary of any
terms of this Agreement or such other Loan Document may be waived, and (iv) 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 Requisite Lenders (or the Administrative
Agent at the written direction of the Requisite Lenders), and, in the case of an
amendment to any Loan Document, the written consent of each Loan Party which is
party thereto. Subject to the immediately following subsections (c) and (d), any
term of this Agreement or of any other Loan Document relating to the rights or
obligations of the Revolving Lenders, and not any other Lenders, may be amended,
and the performance or observance by the Borrower or any other Loan Party or any
Subsidiary of any such terms may be waived (either generally or in a particular
instance and either retroactively or prospectively) with, and only with, the
written consent of the Requisite Lenders (and, in the case of an amendment to
any Loan Document, the written consent of each Loan Party a party thereto).

 

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(b) Consent of Lenders Directly Affected. In addition to the foregoing
requirements, no amendment, waiver or consent shall, unless in writing, and
signed by each of the Lenders directly and adversely affected thereby (or the
Administrative Agent at the written direction of such Lenders), do any of the
following:

(i) increase the Commitments of the Lenders (excluding any increase as a result
of an assignment of Commitments permitted under Section 13.6.) or subject the
Lenders to any additional obligations to lend money or issue or participate in
letters of credit;

(ii) reduce the principal of, or interest that has accrued or the rates of
interest that will be charged on the outstanding principal amount of, any Loans
or other Obligations;

(iii) reduce the amount of any Fees payable to the Lenders hereunder;

(iv) modify the definition of “Revolving Termination Date” (except in accordance
with Section 2.12.), otherwise postpone any date fixed for any payment of
principal of, or interest on, any Loans or for the payment of Fees or any other
Obligations, or extend the expiration date of any Letter of Credit beyond the
Revolving Termination Date;

(v) modify the definitions of “Revolving Commitment Percentage” or “Pro Rata
Share” or amend or otherwise modify the provisions of Section 3.2.;

(vi) amend this Section or amend the definitions of the terms used in this
Agreement or the other Loan Documents insofar as such definitions affect the
substance of this Section;

(vii) modify the definition of the term “Requisite Lenders” or modify in any
other manner the number or percentage of the Lenders required to make any
determinations or waive any rights hereunder or to modify any provision hereof;

(viii) release any Guarantor from its obligations under the Guaranty except as
contemplated by Section 8.12.(b);

(ix) waive a Default or Event of Default under Section 11.1.(a), except as
provided in Section 11.7.; or

(x) amend, or waive the Borrower’s compliance with, Section 2.14.

(c) Amendment or Waiver by Administrative Agent. The Administrative Agent may,
subject to the terms of subsection (b) above, (i) approve any amendment to this
Agreement that is administrative in nature or is otherwise determined by the
Administrative Agent in good faith not to be material, and (ii) waive any
obligation or waive or confirm as cured any default of any Loan Party hereunder
or under any of the Loan Documents, to the extent such waiver is determined by
the Administrative Agent to be administrative in nature or such obligation or
default is not material.

(d) Amendment of Administrative Agent’s Duties, Etc. No amendment, waiver or
consent unless in writing and signed by the Administrative Agent, in addition to
the Lenders required hereinabove to take such action (but without duplication),
shall affect the rights or duties of the Administrative Agent under this
Agreement or any of the other Loan Documents. Any amendment, waiver or consent
relating to Section 2.3. or the obligations of the Swingline Lender under this
Agreement or any other Loan Document shall, in addition to the Lenders required
hereinabove to take such action (but without duplication), require the written
consent of the Swingline Lender. Any amendment, waiver or consent

 

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relating to Section 2.2. or the obligations of the Issuing Banks under this
Agreement or any other Loan Document shall, in addition to the Lenders required
hereinabove to take such action (but without duplication), require the written
consent of the Issuing Banks. Any amendment, waiver or consent with respect to
any Loan Document that (i) diminishes the rights of a Specified Derivatives
Provider in a manner or to an extent dissimilar to that affecting the Lenders or
(ii) increases the liabilities or obligations of a Specified Derivatives
Provider shall, in addition to the Lenders required hereinabove to take such
action, require the consent of the Lender that is (or having an Affiliate that
is) such Specified Derivatives Provider. No waiver shall extend to or affect any
obligation not expressly waived or impair any right consequent thereon and any
amendment, waiver or consent shall be effective only in the specific instance
and for the specific purpose set forth therein. No course of dealing or delay or
omission on the part of the Administrative Agent or any Lender in exercising any
right shall operate as a waiver thereof or otherwise be prejudicial thereto. Any
Event of Default occurring hereunder shall continue to exist until such time as
such Event of Default is waived in writing in accordance with the terms of this
Section, notwithstanding any attempted cure or other action by the Borrower, any
other Loan Party or any other Person subsequent to the occurrence of such Event
of Default. Within fifteen (15) Business Days following written request therefor
from the Borrower (together with such additional information as the
Administrative Agent and the Lenders shall reasonably request in respect
thereof), the Administrative Agent and the Lenders shall use commercially
reasonable efforts to respond to any request for a waiver, amendment or other
modification of the Loan Documentation in respect of any Default or Event of
Default, provided that the failure of the Administrative Agent or any Lender to
so respond shall not constitute a waiver, amendment or other modification, or
release of any claim under any Loan Document, in respect of any such Default or
Event of Default. Except as otherwise explicitly provided for herein or in any
other Loan Document, no notice to or demand upon the Borrower shall entitle the
Borrower to other or further notice or demand in similar or other circumstances.

 

Section 13.8. Nonliability of Administrative Agent and Lenders.

The relationship between the Borrower, on the one hand, and the Lenders, the
Issuing Banks and the Administrative Agent, on the other hand, shall be solely
that of borrower and lender. None of the Administrative Agent, any Issuing Bank
or any Lender shall have any fiduciary responsibilities to the Borrower and no
provision in this Agreement or in any of the other Loan Documents, and no course
of dealing between or among any of the parties hereto, shall be deemed to create
any fiduciary duty owing by the Administrative Agent, any Issuing Bank or any
Lender to any Lender, the Borrower, any Subsidiary or any other Loan Party. None
of the Administrative Agent, any Issuing Bank or any Lender undertakes any
responsibility to the Borrower to review or inform the Borrower of any matter in
connection with any phase of the Borrower’s business or operations.

 

Section 13.9. Confidentiality.

Except as otherwise provided by Applicable Law, the Administrative Agent, each
Issuing Bank and each Lender shall maintain the confidentiality of all
Information (as defined below) in accordance with its customary procedure for
handling confidential information of this nature and in accordance with safe and
sound banking practices but in any event may make disclosure: (a) to its
Affiliates and to its and its Affiliates’ respective partners, directors,
officers, employees, agents, advisors and other representatives that have a need
to know in connection with the transactions contemplated by this Agreement and
the other Loan Documents (provided that the Persons to whom such disclosure is
made shall be informed of the confidential nature of such Information and
instructed to keep such Information confidential); (b) subject to an agreement
containing provisions substantially the same as those of this Section, to
(i) any actual or proposed Assignee, Participant or other transferee in
connection with a potential transfer of any Commitment or participation therein
as permitted hereunder, or (ii) any actual or prospective counterparty (or its
advisors) to any swap or derivative transaction relating to the Borrower and its
obligations; (c) as

 

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required or requested by any Governmental Authority or representative thereof or
pursuant to legal process or in connection with any legal proceedings, or as
otherwise required by Applicable Law; (d) to the Administrative Agent’s, such
Issuing Bank’s or such Lender’s independent auditors and other professional
advisors (provided they shall be notified of the confidential nature of the
information); (e) in connection with the exercise of any remedies under any Loan
Document (or any Specified Derivatives Contract) or any action or proceeding
relating to any Loan Document (or any such Specified Derivatives Contract) or
the enforcement of rights hereunder or thereunder; (f) to the extent such
Information (i) becomes publicly available other than as a result of a breach of
this Section by the Administrative Agent, such Issuing Bank or such Lender or
(ii) becomes available to the Administrative Agent, any Issuing Bank, any Lender
or any Affiliate of the Administrative Agent, any Issuing Bank or any Lender on
a nonconfidential basis from a source other than the Borrower or any Affiliate
of the Borrower which source is not actually known by the Administrative Agent,
such Issuing Bank or such Lender, as applicable, to be subject to a
confidentiality obligation in respect thereof; (g) to the extent requested by,
or required to be disclosed to, any nationally recognized rating agency or
regulatory or similar authority (including any self-regulatory authority, such
as the National Association of Insurance Commissioners) having or purporting to
have jurisdiction over it; (h) to bank trade publications, such information to
consist of deal terms and other information customarily found in such
publications; (i) to any other party hereto; and (j) with the consent of the
Borrower. Notwithstanding the foregoing, the Administrative Agent, each Issuing
Bank and each Lender may disclose any such confidential information, to
Governmental Authorities in connection with any regulatory examination of the
Administrative Agent, such Issuing Bank or such Lender or in accordance with the
generally applicable regulatory compliance policy of the Administrative Agent,
such Issuing Bank or such Lender. As used in this Section, the term
“Information” means all information received from the Borrower, any other Loan
Party, any other Subsidiary or Affiliate relating to any Loan Party or any of
their respective businesses, other than any such information that is available
to the Administrative Agent, any Lender or any Issuing Bank on a nonconfidential
basis prior to disclosure by the Borrower, any other Loan Party, any other
Subsidiary or any Affiliate. Any Person required to maintain the confidentiality
of Information as provided in this Section shall be considered to have complied
with its obligation to do so if such Person has exercised the same degree of
care to maintain the confidentiality of such Information as such Person would
accord to its own confidential information.

 

Section 13.10. Indemnification.

(a) The Borrower shall and hereby agrees to indemnify, defend and hold harmless
the Administrative Agent, the Issuing Banks, the Lenders, all of the Affiliates
of each of the Administrative Agent, any of the Issuing Banks or any of the
Lenders, and their respective directors, officers, shareholders, agents,
employees and counsel (each referred to herein as an “Indemnified Party”) from
and against any and all of the following (collectively, the “Indemnified
Costs”): losses, costs, claims, penalties, damages, liabilities, deficiencies,
judgments or reasonable expenses of every kind and nature (including, without
limitation, amounts paid in settlement, court costs and the fees and
disbursements of counsel incurred in connection with any litigation,
investigation, claim or proceeding or any advice rendered in connection
therewith, but excluding Indemnified Costs indemnification in respect of which
is specifically covered by Section 3.10. or 5.1. or expressly excluded from the
coverage of such Sections) incurred by an Indemnified Party in connection with,
arising out of, or by reason of, any suit, cause of action, claim, arbitration,
investigation or settlement, consent decree or other proceeding (the foregoing
referred to herein as an “Indemnity Proceeding”) which is in any way related
directly or indirectly to: (i) this Agreement or any other Loan Document or the
transactions contemplated thereby; (ii) the making of any Loans or issuance of
Letters of Credit hereunder; (iii) any actual or proposed use by the Borrower of
the proceeds of the Loans or Letters of Credit; (iv) the Administrative Agent’s,
any Issuing Bank’s or any Lender’s entering into this Agreement; (v) the fact
that the Administrative Agent, the Issuing Banks and the Lenders have
established the credit facility evidenced hereby in favor of the Borrower
pursuant to

 

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the Loan Documents; (vi) the fact that the Administrative Agent, the Issuing
Banks and the Lenders are creditors of the Borrower and have or are alleged to
have information regarding the financial condition, strategic plans or business
operations of the Borrower and the Subsidiaries pursuant to the Loan Documents;
(vii) the fact that the Administrative Agent, the Issuing Banks and the Lenders
are material creditors of the Borrower and are alleged to influence directly or
indirectly the business decisions or affairs of the Borrower and the
Subsidiaries or their financial condition; (viii) the exercise of any right or
remedy the Administrative Agent, the Issuing Banks or the Lenders may have under
this Agreement or the other Loan Documents; (ix) any civil penalty or fine
assessed by the OFAC against, and all costs and expenses (including reasonable
counsel fees and disbursements) incurred in connection with defense thereof by,
the Administrative Agent, any Issuing Bank or any Lender as a result of conduct
of the Borrower, any other Loan Party or any other Subsidiary that violates a
sanction administered or enforced by the OFAC; or (x) any violation or
non-compliance by the Borrower or any Subsidiary of any Applicable Law
(including any Environmental Law) including, but not limited to, any Indemnity
Proceeding commenced by (A) the Internal Revenue Service or state taxing
authority or (B) any Governmental Authority or other Person under any
Environmental Law, including any Indemnity Proceeding commenced by a
Governmental Authority or other Person seeking remedial or other action to cause
the Borrower or its Subsidiaries (or its respective properties) (or the
Administrative Agent and/or the Lenders and/or the Issuing Banks as successors
to the Borrower) to be in compliance with such Environmental Laws; provided,
however, that the Borrower shall not be obligated to indemnify any Indemnified
Party for any acts or omissions of such Indemnified Party in connection with
matters described in this subsection to the extent arising from (x) the gross
negligence or willful misconduct of any Indemnified Party, as determined by a
court of competent jurisdiction in a final, non-appealable judgment or (y) any
dispute solely among the Indemnified Parties (other than claims against an
Indemnified Party in its capacity as the Administrative Agent) and not arising
out of any act or omission of the Parent, the Borrower, any other Loan Party or
any other Subsidiary of the Parent or any of their respective Affiliates.

(b) The Borrower’s indemnification obligations under this Section shall apply to
all Indemnity Proceedings arising out of, or related to, the foregoing whether
or not an Indemnified Party is a named party in such Indemnity Proceeding. In
this connection, this indemnification shall cover all Indemnified Costs of any
Indemnified Party in connection with any deposition of any Indemnified Party or
compliance with any subpoena (including any subpoena requesting the production
of documents). This indemnification shall, among other things, apply to any
Indemnity Proceeding commenced by other creditors of the Borrower or any
Subsidiary, any shareholder of the Borrower or any Subsidiary (whether such
shareholder(s) are prosecuting such Indemnity Proceeding in their individual
capacity or derivatively on behalf of the Borrower), any account debtor of the
Borrower or any Subsidiary or by any Governmental Authority. If indemnification
is to be sought hereunder by an Indemnified Party, then such Indemnified Party
shall promptly notify the Borrower of the commencement of any Indemnity
Proceeding; provided, however, that the failure to so notify the Borrower shall
not otherwise relieve the Borrower from any liability that it may have to such
Indemnified Party pursuant to this Section 13.10.

(c) This indemnification shall apply to any Indemnity Proceeding arising during
the pendency of any bankruptcy proceeding filed by or against the Borrower
and/or any Subsidiary.

(d) All out-of-pocket fees and expenses of, and all amounts paid to third
persons by, an Indemnified Party shall be advanced by the Borrower at the
request of such Indemnified Party notwithstanding any claim or assertion by the
Borrower that such Indemnified Party is not entitled to indemnification
hereunder upon receipt of an undertaking by such Indemnified Party that such
Indemnified Party will reimburse the Borrower if it is actually and finally
determined by a court of competent jurisdiction that such Indemnified Party is
not so entitled to indemnification hereunder.

 

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(e) An Indemnified Party may conduct its own investigation and defense of, and
may formulate its own strategy with respect to, any Indemnity Proceeding covered
by this Section and, as provided above, all Indemnified Costs incurred by such
Indemnified Party shall be reimbursed by the Borrower. No action taken by legal
counsel chosen by an Indemnified Party in investigating or defending against any
such Indemnity Proceeding shall vitiate or in any way impair the obligations and
duties of the Borrower hereunder to indemnify and hold harmless each such
Indemnified Party; provided, however, that if (i) the Borrower is required to
indemnify an Indemnified Party pursuant hereto and (ii) the Borrower has
provided evidence reasonably satisfactory to such Indemnified Party that the
Borrower has the financial wherewithal to reimburse such Indemnified Party for
any amount paid by such Indemnified Party with respect to such Indemnity
Proceeding, such Indemnified Party shall not settle or compromise any such
Indemnity Proceeding without the prior written consent of the Borrower (which
consent shall not be unreasonably withheld or delayed). Notwithstanding the
foregoing, an Indemnified Party may settle or compromise any such Indemnity
Proceeding without the prior written consent of the Borrower where (x) no
monetary relief is sought against such Indemnified Party in such Indemnity
Proceeding or (y) there is an allegation of a violation of law by such
Indemnified Party.

(f) If and to the extent that the obligations of the Borrower under this Section
are unenforceable for any reason, the Borrower hereby agrees to make the maximum
contribution to the payment and satisfaction of such obligations which is
permissible under Applicable Law.

(g) The Borrower’s obligations under this Section shall survive any termination
of this Agreement and the other Loan Documents and the payment in full in cash
of the Obligations, and are in addition to, and not in substitution of, any of
the other obligations set forth in this Agreement or any other Loan Document to
which it is a party.

References in this Section 13.10. to “Lender” or “Lenders” shall be deemed to
include such Persons (and their Affiliates) in their capacity as Specified
Derivatives Providers.

 

Section 13.11. Termination; Survival.

This Agreement shall terminate at such time as (a) all of the Commitments have
been terminated, (b) all Letters of Credit have terminated or expired or been
canceled, (c) none of the Lenders is obligated any longer under this Agreement
to make any Loans and none of the Issuing Banks is obligated any longer under
this Agreement to issue Letters of Credit and (d) all Obligations (other than
obligations which survive as provided in the following sentence) have been paid
and satisfied in full. The indemnities to which the Administrative Agent, the
Issuing Banks and the Lenders are entitled under the provisions of
Sections 3.10., 5.1., 5.4., 12.6., 13.2. and 13.10. and any other provision of
this Agreement and the other Loan Documents, and the provisions of
Section 13.5., shall continue in full force and effect and shall protect the
Administrative Agent, the Issuing Banks and the Lenders (i) notwithstanding any
termination of this Agreement, or of the other Loan Documents, against events
arising after such termination as well as before and (ii) at all times after any
such party ceases to be a party to this Agreement with respect to all matters
and events existing on or prior to the date such party ceased to be a party to
this Agreement.

 

Section 13.12. Severability of Provisions.

If any provision of this Agreement or the other Loan Documents shall be
determined by a court of competent jurisdiction to be invalid or unenforceable,
that provision shall be deemed severed from the Loan Documents, and the
validity, legality and enforceability of the remaining provisions shall remain
in full force as though the invalid, illegal, or unenforceable provision had
never been part of the Loan Documents.

 

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Section 13.13. GOVERNING LAW.

THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY
PERFORMED, IN SUCH STATE.

 

Section 13.14. Counterparts.

To facilitate execution, this Agreement and any amendments, waivers, consents or
supplements may be executed in any number of counterparts as may be convenient
or required (which may be effectively delivered by facsimile, in portable
document format (“PDF”) or other similar electronic means). It shall not be
necessary that the signature of, or on behalf of, each party, or that the
signature of all persons required to bind any party, appear on each counterpart.
All counterparts shall collectively constitute a single document. It shall not
be necessary in making proof of this document to produce or account for more
than a single counterpart containing the respective signatures of, or on behalf
of, each of the parties hereto.

 

Section 13.15. Obligations with Respect to Loan Parties.

The obligations of the Borrower to direct or prohibit the taking of certain
actions by the other Loan Parties as specified herein shall be absolute and not
subject to any defense the Borrower may have that the Borrower does not control
such Loan Parties.

 

Section 13.16. Independence of Covenants.

All covenants hereunder shall be given in any jurisdiction independent effect so
that if a particular action or condition is prohibited by any of such covenants,
the fact that it would be permitted by an exception to, or be otherwise within
the limitations of, another covenant shall not avoid the occurrence of a Default
or an Event of Default if such action is taken or condition exists contrary to
such prohibition.

 

Section 13.17. Limitation of Liability.

None of the Administrative Agent, any Issuing Bank or any Lender, or any
Affiliate, officer, director, employee, attorney, or agent of the Administrative
Agent, any Issuing Bank or any Lender shall have any liability with respect to,
and the Borrower hereby waives, releases, and agrees not to sue any of them
upon, any claim for any special, indirect, incidental, consequential or punitive
damages suffered or incurred by the Borrower in connection with, arising out of,
or in any way related to, this Agreement, any of the other Loan Documents, or
any of the transactions contemplated by this Agreement or any of the other Loan
Documents. The Borrower shall not have any liability with respect to any claim
for any special, indirect, incidental, consequential or punitive damages
suffered or incurred by the Administrative Agent, any Issuing Bank or any Lender
or any of the Administrative Agent’s, any Issuing Bank’s or any Lender’s
Affiliates, officers, directors, employees, attorneys, or agents for punitive
damages in respect of any claim in connection with, arising out of, or in any
way related to, this Agreement, any of the other Loan Documents, or any of the
transactions contemplated by this Agreement or financed hereby (other than
punitive damages of a third party awarded against the Administrative Agent, any
Issuing Bank or any Lender for which the Borrower may be responsible to the
extent covered by Section 13.10.).

 

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Section 13.18. Entire Agreement.

This Agreement, the Notes, the other Loan Documents embody the final, entire
agreement among the parties hereto and supersede any and all prior commitments,
agreements, representations, and understandings, whether written or oral,
relating to the subject matter hereof and thereof and may not be contradicted or
varied by evidence of prior, contemporaneous, or subsequent oral agreements or
discussions of the parties hereto. There are no oral agreements among the
parties hereto.

 

Section 13.19. Construction.

The Administrative Agent, each Issuing Bank, the Borrower and each Lender
acknowledge that each of them has had the benefit of legal counsel of its own
choice and has been afforded an opportunity to review this Agreement and the
other Loan Documents with its legal counsel and that this Agreement and the
other Loan Documents shall be construed as if jointly drafted by the
Administrative Agent, each Issuing Bank, the Borrower and each Lender.

 

Section 13.20. Headings.

The paragraph and section headings in this Agreement are provided for
convenience of reference only and shall not affect its construction or
interpretation.

NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS, THE AGENT AND THE LENDERS SHALL LOOK SOLELY TO THE BORROWER AND THE
OTHER LOAN PARTIES FOR THE ENFORCEMENT OF ANY CLAIM AGAINST THE BORROWER AND
SUCH LOAN PARTY UNDER OR IN RESPECT OF ANY OF THE LOAN DOCUMENTS AND ACCORDINGLY
NEITHER THE DIRECTORS, OFFICERS, EMPLOYEES, NOR SHAREHOLDERS OF THE BORROWER OR
ANY OTHER LOAN PARTY SHALL HAVE ANY PERSONAL LIABILITY FOR OBLIGATIONS ENTERED
INTO BY OR ON BEHALF OF THE BORROWER OR ANY OTHER LOAN PARTY.

[Signatures on Following Pages]

 

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

 

SAUL HOLDINGS LIMITED PARTNERSHIP By: Saul Centers, Inc., General Partner By:  

/s/ B. Francis Saul II

  Name:  

B. Francis Saul II

  Title:  

CEO

[Signatures Continued on Next Page]

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

[Signature Page to Credit Agreement with Saul Holdings Limited Partnership]

 

WELLS FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent, as a Lender and
as an Issuing Bank By:  

/s/ Sam Supple

  Name:  

Sam Supple

  Title:  

Senior Vice President

[Signatures Continued on Next Page]

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

[Signature Page to Credit Agreement with Saul Holdings Limited Partnership]

 

JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, as a Lender and as Syndication Agent
By:  

/s/ Elizabeth R. Johnson

  Name:  

Elizabeth R. Johnson

  Title:  

Senior Credit Banker

[Signatures Continued on Next Page]

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

[Signature Page to Credit Agreement with Saul Holdings Limited Partnership]

 

CAPITAL ONE, N.A., as a Lender By:  

/s/ Frederick H. Denecke

  Name:  

Frederick H. Denecke

  Title:  

Vice President

[Signatures Continued on Next Page]

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

[Signature Page to Credit Agreement with Saul Holdings Limited Partnership]

 

CITIZENS BANK OF PENNSYLVANIA, as a Lender By:  

/s/ Zach David

  Name:  

Zach David

  Title:  

S.V.P.

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

SCHEDULE I

COMMITMENTS

 

Name of Lender

   Revolving Commitments  

Wells Fargo Bank, National Association

   $ 65,000,000   

JPMorgan Chase Bank, National Association

     55,000,000   

Capital One, N.A.

     35,000,000   

Citizens Bank of Pennsylvania

     20,000,000      

 

 

 

Total:

   $ 175,000,000      

 

 

 

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

Credit Agreement    Loan Parties By: Saul Holdings L.P. and Lenders, Wells Fargo
Bank, Agent    Schedule 1.1

 

1. Saul Subsidiary I Limited Partnership (MD)

 

2. 11503 Rockville Pike LLC (DE)

 

3. Westview Village Center LLC (DE)

 

4. Kentlands Lot 1, LLC (MD)

 

5. Briggs Chaney Plaza, LLC (MD)

 

6. Avenel VI, Inc. (MD)

 

7. Metro Pike Center LLC (DE)

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

LOGO [g357773ex10apg110.jpg]

Schedule 7.1 (b)

Saul Centers, Inc Ownership as of: May 15, 2012 05/15/2012

Ownership Structure

The Saul Organization

B F Saul REIT (MD) 52-6053341 9.64%

Dearborn, L.L.C. (DE) 52-6053341 6.83%

Avenel Exec. Park Phase II, L.L.C. (MD) 52-6053341 0.04%

SHLP Unit Acquisition Corp (MD) 45-3363029 5.65%

B. F. Saul Property Company (MD) 52-1006075 0.85%

Westminster Investing Corp. (NY) 52-0785483 0.91%

Van Ness Square Corp. (MD) 52-1794658 2.16%

Saul Centers, Inc

Cusip # 804395 10 1

52-1833074 (MD)

26.07%(a)

73.93%

Limited Partner General Partner

Interest Interest

6,914,229 units 19,607,217 shares 100% Subsidiary

Saul Holdings, L.P. Avenel VI, Inc.

(37 Properties/multiple loans)(nominee holder- portion of property)

52-1833076 (MD) 52-2269067 (MD)

100% members 100% member

Ashburn Village Center LLC (DE) 11503 Rockville Pike LLC (DE)

Briggs Chaney Plaza, LLC (MD) Kentlands Lot 1, LLC (MD)

Leesburg Pike Center LLC (DE) Westview Village Center LLC (DE)

Metro Pike Center LLC (DE) Kentlands Square LLC (DE)

Ravenwood Shopping Center LLC (DE) Severna Park Marketplace LLC (DE)

Smallwood Village Center LLC (DE) Cranberry Square LLC (DE)

Thruway Shopping Center LLC (DE)

Clarendon Center LLC (DE)

Seven Comers Center LLC (DE)

( 1 Property/1 loan, each)( 1 Property/0 loan, each)

52-1833076 52-1833076

100% member

Avenel Business Park LLC (DE)

100% member Kentlands Square Subsidiary LLC (DE) Saul Monocacy LLC (MD)

100% member Severna Park Marketplace Subsidiary LLC (DE)

100% member Cranberry Square Subsidiary LLC (DE)

(single member LLCs, 1 loan/0 property, ea)( 1 loan/0 property, each)

52-1833076 52-1833076

1.0% General 99.0% Limited 99.0% Limited 1.0% General

Partner Interest Partner Interest Partner Interest Partner Interest

Saul Subsidiary II L.P. Saul Subsidiary I L.P.

( 3 Properties/1 loan )(6 Properties)

52-1833079 (MD) 52-1833078 (MD)

100% member

White Oak Subsidiary LLC

( 0 Property/1 loan)

52-1833078 (DE)

(a) Saul Centers holds 100% of 40,000 8% Series A and 31,731.15 9% Series B
preferred units issued by Saul Holdings, L.P. (liquidation preference of
$179,327,875)

(b) Saul Centers has no unconsolidated subsidiaries.

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

Credit Agreement    Unconsolidated Affiliates By: Saul Holdings L.P. and
Lenders, Wells Fargo Bank, Agent   

Schedule 7.1(b), Part II

There are no Unconsolidated Affiliates

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

Saul Centers, Inc.

Schedule of Current Portfolio Properties

March 31, 2012

     Properties owneded by Saul Centers, Saul Holdings LP and its subsidiaries
Schedule 7.1 (f)

 

Property

  

Location

   Leasable Area
(Square Feet)      Land
Area
(Acres)          Percentage  (1)
Leased
Mar-12  

Shopping Centers

           

Ashburn Village

   Ashburn, VA      221,770         26.4         91 % 

Ashland Square Phase I

   Dumfries, VA      16,550         2.0         100 % 

Beacon Center

   Alexandria, VA      358,015         32.3         100 % 

Belvedere Gardens

   Baltimore, MD      54,941         4.8         93 % 

BJ’s Wholesale Club

   Alexandria, VA      115,660         9.6         100 % 

Boca Valley Plaza

   Boca Raton, FL      121,269         12.7         81 % 

Boulevard

   Fairfax, VA      49,140         5.0         98 % 

Briggs Chaney MarketPlace

   Silver Spring, MD      194,347         18.2         100 % 

Broadlands Village

   Ashburn, VA      159,734         24.0         90 % 

Countryside Marketplace

   Sterling, VA      141,696         16.0         90 % 

Cranberry Square

   Westminster, MD      141,569         18.9         91 % 

Cruse MarketPlace

   Cumming, GA      78,686         10.6         88 % 

Flagship Center

   Rockville, MD      21,500         0.5         100 % 

French Market

   Oklahoma City, OK      244,724         13.8         94 % 

Germantown

   Germantown, MD      27,241         2.7         91 % 

Giant

   Milford Mill, MD      70,040         5.0         94 % 

The Glen

   Woodbridge, VA      135,870         14.7         98 % 

Great Eastern

   District Heights, MD      255,398         31.9         99 % 

Great Falls Center

   Great Falls, VA      91,666         11.0         99 % 

Hampshire Langley

   Takoma Park, MD      131,700         9.9         95 % 

Hunt Club Corners

   Apopka, FL      101,522         13.1         94 % 

Jamestown Place

   Altamonte Springs, FL      96,372         10.9         92 % 

Kentlands Square I

   Gaithersburg, MD      114,381         11.5         100 % 

Kentlands Square II

   Gaithersburg, MD      240,683         22.3         100 % 

Kentlands Place

   Gaithersburg, MD      40,648         3.4         97 % 

 

1 of 3 pages

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Saul Centers, Inc.

Schedule of Current Portfolio Properties

March 31, 2012

      Properties owneded by Saul Centers, Saul Holdings LP and its subsidiaries
Schedule 7.1 (f)

 

 

 

Property

  

Location

   Leasable Area
(Square Feet)      Land
Area
(Acres)          Percentage  (1)
Leased
Mar-12  

Shopping Centers (continued)

           

Lansdowne Town Center

   Leesburg, VA      189,352         23.4         96 % 

Leesburg Pike Plaza

   Baileys Crossroads, VA      97,752         9.4         95 % 

Lumberton Plaza

   Lumberton, NJ      193,044         23.3         82 % 

Metro Pike Center

   Rockville, MD      67,487         4.6         74 % 

Shops at Monocacy

   Frederick, MD      109,144         13.0         86 % 

Northrock

   Warrenton, VA      103,439         15.4         78 % 

Olde Forte Village

   Ft. Washington, MD      143,577         16.0         93 % 

Olney

   Olney, MD      53,765         3.7         95 % 

Orchard Park

   Dunwoody, GA      87,885         10.5         88 % 

Palm Springs Center

   Altamonte Springs, FL      126,446         12.0         94 % 

Ravenwood

   Baltimore, MD      93,328         8.0         91 % 

11503 Rockville Pike

   Rockville, MD      20,149         1.9         100 % 

Seabreeze Plaza

   Palm Harbor, FL      146,673         18.4         96 % 

Marketplace at Sea Colony

   Bethany Beach, DE      21,677         5.1         95 % 

Seven Corners

   Falls Church, VA      574,831         31.6         91 % 

Severna Park Marketplace

   Severna Park, MD      254,174         20.6         100 % 

Shops at Fairfax

   Fairfax, VA      68,743         6.7         100 % 

Smallwood Village Center

   Waldorf, MD      173,281         25.1         69 % 

Southdale

   Glen Burnie, MD      484,115         39.6         93 % 

Southside Plaza

   Richmond, VA      371,761         32.8         93 % 

South Dekalb Plaza

   Atlanta, GA      163,418         14.6         89 % 

Thruway

   Winston-Salem, NC      362,600         30.5         90 % 

Village Center

   Centreville, VA      146,309         17.2         94 % 

West Park

   Oklahoma City, OK      76,610         11.2         12 % 

Westview Village

   Frederick, MD      100,997         10.4         57 % 

White Oak

   Silver Spring, MD      480,276         28.5         99 %       

 

 

    

 

 

    

 

 

     Total Shopping Centers      7,935,955         764.7         91.9 %       

 

 

    

 

 

    

 

 

 

 

2 of 3 pages

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Saul Centers, Inc.

Schedule of Current Portfolio Properties

March 31, 2012

      Properties owneded by Saul Centers, Saul Holdings LP and its subsidiaries
Schedule 7.1 (f)

 

 

 

Property

  

Location

   Leasable Area
(Square Feet)     Land
Area
(Acres)         Percentage  (1)
Leased
Mar-12      

Mixed-Use Properties

           

Avenel Business Park

   Gaithersburg, MD      390,579        37.1        82 %   

Clarendon Center-North Block

   Arlington, VA      108,387        0.6        86 %    Development Property,
base-building construction completed.

Clarendon Center-South Block

   Arlington, VA      104,638        1.3        99 %    Development Property,
base-building construction completed.

Clarendon Center Residential-South Block

   (244 units)      188,671          98 %    Development Property, construction
completed.

Crosstown Business Center

   Tulsa, OK      197,127        22.4        87 %   

601 Pennsylvania Ave.

   Washington, DC      226,604        1.0        95 %   

Van Ness Square

   Washington, DC      159,411  (3)      1.4  (3)      60 %   

Washington Square

   Alexandria, VA      235,042        2.0        92 %         

 

 

   

 

 

   

 

 

       Total Mixed-Use Properties      1,610,459        65.8        85.5 %      
  

 

 

   

 

 

   

 

 

       Total Portfolio      9,546,414        830.5        90.9 %         

 

 

   

 

 

   

 

 

   

Land Parcels

           

Ashland Square Phase II

   Manassas, VA        17.3       

New Market

   New Market, MD        35.5               

 

 

         Total Land Parcels        52.8               

 

 

     

 

(1) Percentage leased is a percentage of rentable square feet leased for
commercial space and a percentage of units leased for apartments.

(2) Total percentage leased is for commercial space only.

(3) Includes 2011 acquisition of 4469 Connecticut Avenue (2,918 SF).

 

3 of 3 pages

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LOGO [g357773ex10apg115.jpg]

Saul Centers, Inc Indebtedness & Guaranties

Schedule 7.1(g)

Total Indebtedness

( dollars in thousands )

Lender Initial

Loan

Amount 04/30/2012

Balance

Outstanding Security

Mortgage Debt

Northwestern Mutual $38,500 $24,196 601 Pennsylvania Avenue

Deutsche Banc Mortgage 11,334 10,188 Smallwood Village Center

Compass Bank 15,200 15,066 Northrock

PNC Bank 16,169 15,963 Metro Pike Center

Teachers (TIAA) 8,825 7,138 Cruse Marketplace

Allstate 16,579 14,222 Seabreeze Plaza

Allstate 21,800 17,266 Shops at Fairfax, Boulevard

Metropolitan Life 42,500 35,175 Washington Square

AEGON USA 48,000 39,422 Broadlands, Glen, Kentlands Sq I

AEGON USA 15,500 12,752 Olde Forte Village

Allstate 21,350 17,606 Countryside

Metropolitan Life 21,000 17,483 Briggs Chaney Plaza

Teachers (TIAA) 18,750 15,581 Shops at Monocacy

Teachers (TIAA) 13,000 11,609 Boca Valley Plaza

Metropolitan Life 12,500 10,551 Palm Springs Center

Wells Fargo 45,600 44,111 Thruway

Metropolitan Life 10,500 9,138 Jamestown Place

Teachers (TIAA) 7,000 6,448 Hunt Club Corners

Teachers (TIAA) 40,000 37,211 Lansdowne Town Center

Nationwide 12,000 11,271 Orchard Park

Allstate 12,750 12,127 BJs Warehouse

Thrivent 18,756 16,709 Great Falls

Aviva 18,500 17,713 Leesburg Pike

Thrivent 16,000 15,344 Village Center

John Hancock 27,500 26,934 White Oak

Aviva 33,500 32,142 Avenel Business Park

Met Life 33,000 31,909 Ashburn Village

Principal Group 17,000 16,655 Ravenwood

Prudential Life 125,000 122,747 Clarendon Center

Principal Group 38,000 37,644 Severna Park Marketplace

Prudential Life 43,000 42,689 Kentlands Square II

AEGON 20,000 19,894 Cranberry Square

Prudential Life 73,000 73,000 Seven Corners

Total mortgage debt $837,904

Guarantees (other than non-recourse carve-outs):

Great Falls Center mortgage $3,900

Metro Pike Center mortgage (25%) 3,991

Clarendon Center mortgage 27,600

Northrock term loan (50%) 7,533

$43,024

Saul Holdings also has a $177 letter of credit outstanding with US Bank
pertaining to the development of Ashland Square.

Page 1 of 1

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Credit Agreement    Material Contracts By: Saul Holdings L.P. and Lenders, Wells
Fargo Bank, Agent    Schedule 7.1(h)

 

  1. Clarendon Center LLC promissory note and deed of trust dated March 23,
2011, to The Prudential Life Insurance Company of America.

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

Credit Agreement    Litigation By: Saul Holdings L.P. and Lenders, Wells Fargo
Bank, Agent    Schedule 7.1(i)

None

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

Credit Agreement    Affiliate Transactions By: Saul Holdings L.P. and Lenders,
Wells Fargo Bank, Agent    Schedule 7.1(r)

 

  1. Shared Services Agreement, dated as of July 1, 2004, between B. F. Saul
Company and Saul Centers, Inc., as amended

 

  2. Corporate headquarters sublease by B. F. Saul Company to Saul Holdings
Limited Partnership, as amended.

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

Credit Agreement    By:   Saul Holdings L.P. and Lenders, Wells Fargo Bank,
Agent    Schedule 10.2

 

  1. Purchase Money Deed of Trust, Security Agreement and Fixture Filing, dated
November 14, 2007 in favor of Wendelin A. White and Diane S. Richer as Trustees
for the benefit of Saul Holdings Limited Partnership, encumbering Westview
Village Center.

 

  2. Purchase Money Deed of Trust, Security Agreement and Fixture Filing, dated
October 1, 2010, in favor of Wendelin A. White and Diane S. Richer as Trustees
for the benefit of Saul Holdings Limited Partnership, encumbering 11503
Rockville Pike.

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

EXHIBIT A

FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT

THIS ASSIGNMENT AND ASSUMPTION AGREEMENT dated as of                     ,
20     (the “Agreement”) by and among                                          
                    (the “Assignor”),                                          
                    (the “Assignee”), SAUL HOLDINGS LIMITED PARTNERSHIP (the
“Borrower”), and WELLS FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent
(the “Administrative Agent”).

WHEREAS, the Assignor is a Lender under that certain Credit Agreement dated as
of                     , 2012 (as amended, restated, supplemented or otherwise
modified from time to time, the “Credit Agreement”), by and among the Borrower,
the Lenders from time to time parties thereto, the Issuing Banks from time to
time parties thereto, the Administrative Agent, and the other parties thereto;

WHEREAS, the Assignor desires to assign to the Assignee all or a portion of the
Assignor’s Revolving Commitment under the Credit Agreement, all on the terms and
conditions set forth herein and therein; and

WHEREAS, the [Borrower and the] Administrative Agent consent[s] to such
assignment on the terms and conditions set forth herein.

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

Section 1. Assignment.

(a) Subject to the terms and conditions of this Agreement and in consideration
of the payment to be made by the Assignee to the Assignor pursuant to Section 2
of this Agreement, effective as of                     , 20     (the “Assignment
Date”) the Assignor hereby irrevocably sells, transfers and assigns to the
Assignee, without recourse, a $         interest (such interest being the
“Assigned Commitment”) in and to the Assignor’s Revolving Commitment, and all of
the other rights and obligations of the Assignor under the Credit Agreement,
such Assignor’s Revolving Note, and the other Loan Documents, representing     %
in respect of the aggregate amount of all Lenders’ Revolving Commitments,
including without limitation, a principal amount of outstanding Revolving Loans
equal to $        , all voting rights of the Assignor associated with the
Assigned Commitment, all rights to receive interest on such amount of Loans and
all Fees with respect to the Assigned Commitment and other rights of the
Assignor under the Credit Agreement and the other Loan Documents with respect to
the Assigned Commitment, all as if the Assignee were an original Lender under
and signatory to the Credit Agreement having a Revolving Commitment equal to the
amount of the Assigned Commitment. The Assignee, subject to the terms and
conditions hereof, hereby assumes all obligations of the Assignor with respect
to the Assigned Commitment as if the Assignee were an original Lender under and
signatory to the Credit Agreement having a Revolving Commitment equal to the
Assigned Commitment, which obligations shall include, but shall not be limited
to, the obligation of the Assignor to make Revolving Loans to the Borrower with
respect to the Assigned Commitment and the obligation to indemnify the
Administrative Agent as provided in the Credit Agreement (the foregoing
obligations, together with all other similar obligations more particularly set
forth in the Credit Agreement and the other Loan Documents, shall be referred to
hereinafter, collectively, as the “Assigned Obligations”). The Assignor shall
have no further duties or obligations with respect to, and shall have no further
interest in, the Assigned Obligations or the Assigned Commitment from and after
the Assignment Date.

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

(b) The assignment by the Assignor to the Assignee hereunder is without recourse
to the Assignor. The Assignee makes and confirms to the Administrative Agent,
the Assignor, and the other Lenders all of the representations, warranties and
covenants of a Lender under Article XII of the Credit Agreement. Not in
limitation of the foregoing, the Assignee acknowledges and agrees that, except
as set forth in Section 4. below, the Assignor is making no representations or
warranties with respect to, and the Assignee hereby releases and discharges the
Assignor for any responsibility or liability for: (i) the present or future
solvency or financial condition of the Borrower, any other Loan Party or any
other Subsidiary, (ii) any representations, warranties, statements or
information made or furnished by the Borrower, any other Loan Party or any other
Subsidiary in connection with the Credit Agreement or otherwise, (iii) the
validity, efficacy, sufficiency, or enforceability of the Credit Agreement, any
Loan Document or any other document or instrument executed in connection
therewith, or the collectibility of the Assigned Obligations, (iv) the
perfection, priority or validity of any Lien with respect to any collateral at
any time securing the Obligations or the Assigned Obligations under the Notes or
the Credit Agreement and (v) the performance or failure to perform by the
Borrower or any other Loan Party of any obligation under the Credit Agreement or
any other Loan Document. Further, the Assignee acknowledges that it has,
independently and without reliance upon the Administrative Agent, any other
Lender or counsel to the Administrative Agent or any of their respective
officers, directors, employees and agents and based on the financial statements
supplied by the Borrower and such other documents and information as it has
deemed appropriate, made its own credit analysis and decision to become a Lender
under the Credit Agreement. The Assignee also acknowledges that it will,
independently and without reliance upon the Administrative 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 the Credit Agreement or any Note or pursuant to any other
obligation. The Administrative Agent shall have no duty or responsibility
whatsoever, either initially or on a continuing basis, to provide the Assignee
with any credit or other information with respect to the Borrower, any other
Loan Party or any other Subsidiary or to notify the undersigned of any Default
or Event of Default except as expressly provided in the Credit Agreement. The
Assignee has not relied on the Administrative Agent as to any legal or factual
matter in connection therewith or in connection with the transactions
contemplated thereunder.

Section 2. Payment by Assignee. In consideration of the assignment made pursuant
to Section 1. of this Agreement, the Assignee agrees to pay to the Assignor on
the Assignment Date, an amount equal to $         representing the aggregate
principal amount outstanding of the Revolving Loans owing to the Assignor under
the Credit Agreement and the other Loan Documents being assigned hereby.

Section 3. Payments by Assignor. The Assignor agrees to pay to the
Administrative Agent on the Assignment Date the administrative fee payable under
Section 13.6.(b)(iv) of the Credit Agreement.

Section 4. Representations and Warranties of Assignor. The Assignor hereby
represents and warrants to the Assignee that (a) as of the Assignment Date
(i) the Assignor is a Lender under the Credit Agreement having a Revolving
Commitment under the Credit Agreement immediately prior to the Assignment Date,
equal to $         and that the Assignor is not in default of its obligations
under the Credit Agreement; and (ii) the outstanding balance of Revolving Loans
owing to the Assignor (without reduction by any assignments thereof which have
not yet become effective) is $        ; and (b) it is the legal and beneficial
owner of the Assigned Commitment which is free and clear of any adverse claim
created by the Assignor.

 

A-2

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

Section 5. Representations, Warranties and Agreements of Assignee. The Assignee
(a) represents and warrants that it is (i) legally authorized to enter into this
Agreement; (ii) an “accredited investor” (as such term is used in Regulation D
of the Securities Act) and (iii) an Eligible Assignee; (b) confirms that it has
received a copy of the Credit Agreement, together with copies of the most recent
financial statements delivered pursuant thereto and such other documents and
information (including without limitation the Loan Documents) as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Agreement; (c) appoints and authorizes the Administrative Agent to take such
action as contractual representative on its behalf and to exercise such powers
under the Loan Documents as are delegated to the Administrative Agent by the
terms thereof together with such powers as are reasonably incidental thereto;
(d) agrees that it will become a party to and shall be bound by the Credit
Agreement and the other Loan Documents to which the other Lenders are a party on
the Assignment Date and will perform in accordance therewith all of the
obligations which are required to be performed by it as a Lender; and (e) is
either (i) not organized under the laws of a jurisdiction other than that in
which the Borrower is a resident for tax purposes or (ii) has delivered to the
Administrative Agent (with an additional copy for the Borrower) such items
required under Section 3.10. of the Credit Agreement.

Section 6. Recording and Acknowledgment by the Administrative Agent. Following
the execution of this Agreement, the Assignor will deliver to the Administrative
Agent (a) a duly executed copy of this Agreement for acknowledgment and
recording by the Administrative Agent and (b) the Assignor’s Revolving Note.
Upon such acknowledgment and recording, from and after the Assignment Date, the
Administrative Agent shall make all payments in respect of the interest assigned
hereby (including payments of principal, interest, fees and other amounts) to
the Assignee. The Assignor and Assignee shall make all appropriate adjustments
in payments under the Credit Agreement for periods prior to the Assignment Date
directly between themselves.

Section 7. Addresses. The Assignee specifies as its address for notices and its
Lending Office for all Loans, the offices set forth below:

 

 

  

 

   Attention:  

 

  

Telephone No.:  

 

  

Telecopy No.:  

 

  

Section 8. Payment Instructions. All payments to be made to the Assignee under
this Agreement by the Assignor, and all payments to be made to the Assignee
under the Credit Agreement, shall be made as provided in the Credit Agreement in
accordance with the following instructions:

 

 

  

 

  

 

  

 

  

Section 9. Effectiveness of Assignment. This Agreement, and the assignment and
assumption contemplated herein, shall not be effective until (a) this Agreement
is executed and delivered by each of the Assignor, the Assignee, the
Administrative Agent and if required, the Borrower, and (b) the payment to the
Assignor of the amounts owing by the Assignee pursuant to Section 2. hereof and
(c) the payment to the Administrative Agent of the amounts owing by the Assignor
pursuant to Section 3. hereof. Upon recording and acknowledgment of this
Agreement by the Administrative Agent, from and after the Assignment Date,
(i) the Assignee shall be a party to the Credit Agreement and, to the extent
provided in

 

A-3

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

this Agreement, have the rights and obligations of a Lender thereunder and
(ii) the Assignor shall, to the extent provided in this Agreement, relinquish
its rights (except as otherwise provided in Section 13.11 of the Credit
Agreement) and be released from its obligations under the Credit Agreement;
provided, however, that if the Assignor does not assign its entire interest
under the Loan Documents, it shall remain a Lender entitled to all of the
benefits and subject to all of the obligations thereunder with respect to its
Commitment.

Section 10. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS
EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH STATE.

Section 11. Counterparts. This Agreement may be executed in any number of
counterparts each of which, when taken together, shall constitute one and the
same agreement.

Section 12. Headings. Section headings have been inserted herein for convenience
only and shall not be construed to be a part hereof.

Section 13. Amendments; Waivers. This Agreement may not be amended, changed,
waived or modified except by a writing executed by the Assignee and the
Assignor.

Section 14. Entire Agreement. This Agreement embodies the entire agreement
between the Assignor and the Assignee with respect to the subject matter hereof
and supersedes all other prior arrangements and understandings relating to the
subject matter hereof.

Section 15. Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and permitted
assigns.

Section 16. Definitions. Terms not otherwise defined herein are used herein with
the respective meanings given them in the Credit Agreement.

[Include this Section only if the Borrower’s consent is required under
Section 13.6.(b) of the Credit Agreement] Section 17. Agreements of the
Borrower. The Borrower hereby agrees that the Assignee shall be a Lender under
the Credit Agreement having a Revolving Commitment equal to the Assigned
Commitment. The Borrower agrees that the Assignee shall have all of the rights
and remedies of a Lender under the Credit Agreement and the other Loan Documents
as if the Assignee were an original Lender under and signatory to the Credit
Agreement, including, but not limited to, the right of a Lender to receive
payments of principal and of interest accruing after the effectiveness of this
Assignment with respect to the Assigned Obligations, if any, and to the
Revolving Loans made by the Lenders after the date hereof and to receive the
Fees accruing after the effectiveness of this Assignment payable to the Lenders
as provided in the Credit Agreement. Further, the Assignee shall be entitled to
the benefit of the indemnification provisions from the Borrower in favor of the
Lenders as provided in the Credit Agreement and the other Loan Documents. The
Borrower further agrees, upon the execution and delivery of this Agreement and
surrender to the Administrative Agent of the original Revolving Note by the
Assignor and cancellation thereof by the Administrative Agent or other provision
in respect thereof in accordance with Section 2.10. of the Credit Agreement, to
execute in favor of the Assignee a Revolving Note in an initial amount equal to
the Assigned Commitment. Further, the Borrower agrees that, upon the execution
and delivery of this Agreement, the Borrower shall owe the Assigned Obligations
to the Assignee as if the Assignee were the Lender originally making such Loans
and entering into such other obligations.

 

A-4

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[Signatures on Following Page]

 

A-5

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

IN WITNESS WHEREOF, the parties hereto have duly executed this Assignment and
Assumption Agreement as of the date and year first written above.

 

ASSIGNOR: [NAME OF ASSIGNOR] By:  

 

  Name:  

 

  Title:  

 

Payment Instructions [Bank] [Address] ABA No. : Account No.: Account Name:
Reference: ASSIGNEE: [NAME OF ASSIGNEE] By:  

 

  Name:  

 

  Title:  

 

Payment Instructions [Bank] [Address] ABA No. : Account No.: Account Name:
Reference:

[Signatures continued on Following Page]

 

A-6

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

Agreed and Consented to as of the date first written above.

[Include signature of the Borrower only if required under Section 13.6.(c) of
the Credit Agreement]

BORROWER: SAUL HOLDINGS LIMITED PARTNERSHIP By:   Saul Centers, Inc., its
General Partner By:  

 

  Name:  

 

  Title:  

 

Accepted as of the date first written above.

ADMINISTRATIVE AGENT:

WELLS FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent

 

By:  

 

  Name:  

 

  Title:  

 

 

A-7

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EXHIBIT B

FORM OF GUARANTY

THIS GUARANTY dated as of                      , 2012 executed and delivered by
each of the undersigned and the other Persons from time to time party hereto
pursuant to the execution and delivery of an Accession Agreement in the form of
Annex I hereto (all of the undersigned, together with such other Persons each a
“Guarantor” and collectively, the “Guarantors”) in favor of WELLS FARGO BANK,
NATIONAL ASSOCIATION, in its capacity as Administrative Agent (the
“Administrative Agent”) for the Lenders under that certain Credit Agreement
dated as of May 21, 2012 (as amended, restated, supplemented or otherwise
modified from time to time, the “Credit Agreement”), by and among Saul Holdings
Limited Partnership (the “Borrower”), the Lenders from time to time parties
thereto (the “Lenders”), the Issuing Banks from time to time parties thereto
(the “Issuing Banks”), the Administrative Agent, and the other parties thereto,
for its benefit and the benefit of the Lenders and the Issuing Banks (the
Administrative Agent, the Lenders and the Issuing Banks, each individually a
“Guarantied Party” and collectively, the “Guarantied Parties”).

WHEREAS, pursuant to the Credit Agreement, the Administrative Agent and the
Lenders have agreed to make available to the Borrower certain financial
accommodations on the terms and conditions set forth in the Credit Agreement;

WHEREAS, each Guarantor is owned or controlled by the Borrower, or is otherwise
an Affiliate of the Borrower;

WHEREAS, the Borrower, each Guarantor and the other Subsidiaries of the
Borrower, though separate legal entities, are mutually dependent on each other
in the conduct of their respective businesses as an integrated operation and
have determined it to be in their mutual best interests to obtain financing from
the Administrative Agent, the Lenders and the Issuing Banks through their
collective efforts;

WHEREAS, each Guarantor acknowledges that it will receive direct and indirect
benefits from the Administrative Agent, the Lenders and the Issuing Banks making
such financial accommodations available to the Borrower under the Credit
Agreement and, accordingly, each Guarantor is willing to guarantee the
Borrower’s obligations to the Administrative Agent, the Lenders and the Issuing
Banks on the terms and conditions contained herein; and

WHEREAS, each Guarantor’s execution and delivery of this Guaranty is a condition
to the Administrative Agent and the other Guarantied Parties’ making, and
continuing to make, such financial accommodations to the Borrower.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged by each Guarantor, each Guarantor agrees as
follows:

Section 1. Guaranty. Each Guarantor hereby absolutely, irrevocably and
unconditionally guaranties the due and punctual payment and performance when
due, whether at stated maturity, by acceleration or otherwise, of all of the
following (collectively referred to as the “Guarantied Obligations”): (a) all
indebtedness and obligations owing by the Borrower or any other Loan Party to
any Lender or the Administrative Agent under or in connection with the Credit
Agreement and any other Loan Document to which the Borrower or such other Loan
Party is a party, including without limitation, the repayment of all principal
of the Revolving Loans and Swingline Loans, all Letter of Credit Liabilities,
and the payment of all interest, fees, charges, reasonable attorneys’ fees and
other amounts payable to any Lender, the Issuing Banks or the Administrative
Agent thereunder; (b) any and all

 

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extensions, renewals, modifications, amendments or substitutions of the
foregoing; (c) all expenses, including, without limitation, reasonable
attorneys’ fees and disbursements, that are incurred by the Administrative Agent
or any other Guarantied Party in the enforcement of any of the foregoing or any
obligation of such Guarantor hereunder; and (d) all other Obligations.

Section 2. Guaranty of Payment and Not of Collection. This Guaranty is a
guaranty of payment, and not of collection, and a debt of each Guarantor for its
own account. Accordingly, the Guarantied Parties shall not be obligated or
required before enforcing this Guaranty against any Guarantor: (a) to pursue any
right or remedy the Guarantied Parties may have against the Borrower, any other
Loan Party or any other Person or commence any suit or other proceeding against
the Borrower, any other Loan Party or any other Person in any court or other
tribunal; (b) to make any claim in a liquidation or bankruptcy of the Borrower,
any other Loan Party or any other Person; (c) to make demand of the Borrower,
any other Loan Party or any other Person; or (d) to enforce or seek to enforce
or realize upon any collateral security held by the Guarantied Parties which may
secure any of the Guarantied Obligations.

Section 3. Guaranty Absolute. Each Guarantor guarantees that the Guarantied
Obligations will be paid strictly in accordance with the terms of the documents
evidencing the same, regardless of any Applicable Law now or hereafter in effect
in any jurisdiction affecting any of such terms or the rights of the Guarantied
Parties with respect thereto. The liability of each Guarantor under this
Guaranty shall be absolute, irrevocable and unconditional in accordance with its
terms and shall remain in full force and effect without regard to, and shall not
be released, suspended, discharged, terminated or otherwise affected by, any
circumstance or occurrence whatsoever, including without limitation, the
following (whether or not such Guarantor consents thereto or has notice
thereof):

(a) (i) any change in the amount, interest rate or due date or other term of any
of the Guarantied Obligations, (ii) any change in the time, place or manner of
payment of all or any portion of the Guarantied Obligations, (iii) any amendment
or waiver of, or consent to the departure from or other indulgence with respect
to, the Credit Agreement, any other Loan Document or any other document or
instrument evidencing or relating to any Guarantied Obligations, or (iv) any
waiver, renewal, extension, addition, or supplement to, or deletion from, or any
other action or inaction under or in respect of, the Credit Agreement, any of
the other Loan Documents, or any other documents, instruments or agreements
relating to the Guarantied Obligations or any other instrument or agreement
referred to therein or evidencing any Guarantied Obligations or any assignment
or transfer of any of the foregoing;

(b) any lack of validity or enforceability of the Credit Agreement or any of the
other Loan Documents (the “Credit Documents”) or any other document, instrument
or agreement referred to therein or evidencing any Guarantied Obligations or any
assignment or transfer of any of the foregoing;

(c) any furnishing to the Guarantied Parties of any security for the Guarantied
Obligations, or any sale, exchange, release or surrender of, or realization on,
any collateral securing any of the Guarantied Obligations;

(d) any settlement or compromise by the Borrower or any other Loan Party of any
of the Guarantied Obligations, any security therefor, or any liability of any
other party with respect to the Guarantied Obligations, or any subordination of
the payment of the Guarantied Obligations to the payment of any other liability
of the Borrower or any other Loan Party;

(e) any bankruptcy, insolvency, reorganization, composition, adjustment,
dissolution, liquidation or other like proceeding relating to such Guarantor,
the Borrower, any other Loan Party or any other Person, or any action taken with
respect to this Guaranty by any trustee or receiver, or by any court, in any
such proceeding;

 

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(f) any act or failure to act by the Borrower, any other Loan Party or any other
Person which may adversely affect such Guarantor’s subrogation rights, if any,
against the Borrower or any other Loan Party to recover payments made under this
Guaranty;

(g) any nonperfection or impairment of any security interest or other Lien on
any collateral, if any, securing in any way any of the Guarantied Obligations;

(h) any application of sums paid by the Borrower, any Guarantor or any other
Person with respect to the liabilities of the Borrower to the Guarantied
Parties, regardless of what liabilities of the Borrower remain unpaid;

(i) any defect, limitation or insufficiency in the borrowing powers of the
Borrower or in the exercise thereof; or

(j) any other circumstance which might otherwise constitute a defense available
to, or a discharge of, a Guarantor hereunder (other than indefeasible payment in
full in cash or release or termination of the obligations of any Guarantor
hereunder by the Guarantied Parties pursuant to the terms of the Credit
Agreement).

Section 4. Action with Respect to Guarantied Obligations. The Guarantied Parties
may, at any time and from time to time, without the consent of, or notice to,
any Guarantor, and without discharging any Guarantor from its obligations
hereunder, take any and all actions described in Section 3. and may otherwise:
(a) amend, modify, alter or supplement the terms of any of the Guarantied
Obligations, including, but not limited to, extending or shortening the time of
payment of any of the Guarantied Obligations or changing the interest rate that
may accrue on any of the Guarantied Obligations; (b) amend, modify, alter or
supplement the Credit Agreement or any other Credit Document; (c) sell,
exchange, release or otherwise deal with all, or any part, of any collateral
securing any of the Guarantied Obligations; (d) release any Loan Party or other
Person liable in any manner for the payment or collection of the Guarantied
Obligations; (e) exercise, or refrain from exercising, any rights against the
Borrower, any other Loan Party or any other Person; and (f) apply any sum, by
whomsoever paid or however realized, to the Guarantied Obligations in such order
as the Guarantied Parties shall elect, in the case of each of the foregoing
clauses (a) through (e) above, pursuant to the terms of the Credit Agreement and
the other Loan Documents.

Section 5. Representations and Warranties. Each Guarantor hereby makes to the
Administrative Agent and the other Guarantied Parties all of the representations
and warranties made by the Borrower with respect to such Guarantor in the Credit
Agreement and the other Loan Documents, as if the same were set forth herein in
full mutatis mutandis.

Section 6. Covenants. Each Guarantor will comply with all covenants with which
the Borrower is to cause such Guarantor to comply under the terms of the Credit
Agreement or any of the other Loan Documents.

Section 7. Waiver. Each Guarantor, to the fullest extent permitted by Applicable
Law, hereby waives notice of acceptance hereof or any presentment, demand,
protest or notice of any kind, other than demand for payment hereunder, and any
other act or thing, or omission or delay to do any other act or thing, which in
any manner or to any extent might vary the risk of such Guarantor or which
otherwise might operate to discharge such Guarantor from its obligations
hereunder.

 

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Section 8. Inability to Accelerate Loan. If the Guarantied Parties or any of
them are prevented under Applicable Law or otherwise from demanding or
accelerating payment of any of the Guarantied Obligations by reason of any
automatic stay or otherwise, the Administrative Agent and/or the other
Guarantied Parties shall be entitled to receive from each Guarantor, upon demand
therefor, the sums which otherwise would have been due had such demand or
acceleration occurred.

Section 9. Reinstatement of Guarantied Obligations. If claim is ever made on the
Administrative Agent or any other Guarantied Party for repayment or recovery of
any amount or amounts received in payment or on account of any of the Guarantied
Obligations, and the Administrative Agent or such other Guarantied Party repays
all or part of said amount by reason of (a) any judgment, decree or order of any
court or administrative body of competent jurisdiction, or (b) any settlement or
compromise of any such claim effected by the Administrative Agent or such other
Guarantied Party with any such claimant (including the Borrower or a trustee in
bankruptcy for the Borrower), then and in such event each Guarantor agrees that
any such judgment, decree, order, settlement or compromise shall be binding on
it, notwithstanding any revocation hereof or the cancellation of the Credit
Agreement, any of the other Loan Documents, or any other instrument evidencing
any liability of the Borrower, and such Guarantor shall be and remain liable to
the Administrative Agent or such other Guarantied Party for the amounts so
repaid or recovered to the same extent as if such amount had never originally
been paid to the Administrative Agent or such other Guarantied Party, except to
the extent such amount is determined, in a final, non-appealable judgment by a
court of competent jurisdiction, to have been collected by the Administrative
Agent or such other Guarantied Party in violation of the Credit Agreement or
other Loan Document.

Section 10. Subrogation. Upon the making by any Guarantor of any payment
hereunder for the account of the Borrower, such Guarantor shall be subrogated to
the rights of the payee against the Borrower; provided, however, that such
Guarantor shall not enforce any right or receive any payment by way of
subrogation or otherwise take any action in respect of any other claim or cause
of action such Guarantor may have against the Borrower arising by reason of any
payment or performance by such Guarantor pursuant to this Guaranty, unless and
until all of the Guarantied Obligations have been indefeasibly paid and
performed in full. If any amount shall be paid to such Guarantor on account of
or in respect of such subrogation rights or other claims or causes of action,
such Guarantor shall hold such amount in trust for the benefit of the Guarantied
Parties and shall forthwith pay such amount to the Administrative Agent to be
credited and applied against the Guarantied Obligations, whether matured or
unmatured, in accordance with the terms of the Credit Agreement or to be held by
the Administrative Agent as collateral security for any Guarantied Obligations
existing.

Section 11. Payments Free and Clear. All sums payable by each Guarantor
hereunder, whether of principal, interest, fees, expenses, premiums or
otherwise, shall be paid in full, without set-off or counterclaim or any
deduction or withholding whatsoever (including any Taxes, subject to
Section 3.10. of the Credit Agreement), and if such Guarantor is required by
Applicable Law or by any Governmental Authority to make any such deduction or
withholding such Guarantor shall pay to the Administrative Agent and the Lenders
such additional amount as will result in the receipt by the Administrative Agent
and the Lenders of the full amount payable hereunder had such deduction or
withholding not occurred or been required.

Section 12. Set-off. In addition to any rights now or hereafter granted under
any of the other Loan Documents or Applicable Law and not by way of limitation
of any such rights, each Guarantor hereby authorizes each Guarantied Party, at
any time while an Event of Default exists, without any prior

 

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notice to such Guarantor or to any other Person, any such notice being hereby
expressly waived, but in the case of a Lender or an Issuing Bank subject to
receipt of the prior written consent of the Administrative Agent and Requisite
Lenders, exercised in their sole discretion, to set-off and to appropriate and
to apply any and all deposits (general or special, including, but not limited
to, indebtedness evidenced by certificates of deposit, whether matured or
unmatured) and any other indebtedness at any time held or owing by the
Administrative Agent, such Issuing Bank or such Lender or any affiliate of the
Administrative Agent, such Issuing Bank, or such Lender to or for the credit or
the account of the Borrower against and on account of any of the Guarantied
Obligations, although such obligations shall be contingent or unmatured.

Section 13. Subordination. Each Guarantor hereby expressly covenants and agrees
for the benefit of the Guarantied Parties that all obligations and liabilities
of the Borrower to such Guarantor of whatever description, including without
limitation, all intercompany receivables of such Guarantor from the Borrower
(collectively, the “Junior Claims”) shall be subordinate and junior in right of
payment to all Guarantied Obligations. If an Event of Default shall exist, then
no Guarantor shall accept any direct or indirect payment (in cash, property or
securities, by setoff or otherwise) from the Borrower on account of or in any
manner in respect of any Junior Claim until all of the Guarantied Obligations
have been indefeasibly paid in full.

Section 14. Avoidance Provisions. It is the intent of each Guarantor, the
Administrative Agent and the other Guarantied Parties that in any Proceeding,
such Guarantor’s maximum obligation hereunder shall equal, but not exceed, the
maximum amount which would not otherwise cause the obligations of such Guarantor
hereunder (or any other obligations of such Guarantor to the Guarantied Parties)
to be avoidable or unenforceable against such Guarantor in such Proceeding as a
result of Applicable Law, including without limitation, (a) Section 548 of the
Bankruptcy Code of 1978, as amended (the “Bankruptcy Code”) and (b) any state
fraudulent transfer or fraudulent conveyance act or statute applied in such
Proceeding, whether by virtue of Section 544 of the Bankruptcy Code or
otherwise. The Applicable Laws under which the possible avoidance or
unenforceability of the obligations of such Guarantor hereunder (or any other
obligations of such Guarantor to the Guarantied Parties) shall be determined in
any such Proceeding are referred to as the “Avoidance Provisions”. Accordingly,
to the extent that the obligations of any Guarantor hereunder would otherwise be
subject to avoidance under the Avoidance Provisions, the maximum Guarantied
Obligations for which such Guarantor shall be liable hereunder shall be reduced
to that amount which, as of the time any of the Guarantied Obligations are
deemed to have been incurred under the Avoidance Provisions, would not cause the
obligations of any Guarantor hereunder (or any other obligations of such
Guarantor to the Guarantied Parties), to be subject to avoidance under the
Avoidance Provisions. This Section is intended solely to preserve the rights of
the Administrative Agent and the other Guarantied Parties hereunder to the
maximum extent that would not cause the obligations of any Guarantor hereunder
to be subject to avoidance under the Avoidance Provisions, and no Guarantor or
any other Person shall have any right or claim under this Section as against the
Guarantied Parties that would not otherwise be available to such Person under
the Avoidance Provisions.

Section 15. Information. Each Guarantor assumes all responsibility for being and
keeping itself informed of the financial condition of the Borrower and the other
Loan Parties, and of all other circumstances bearing upon the risk of nonpayment
of any of the Guarantied Obligations and the nature, scope and extent of the
risks that such Guarantor assumes and incurs hereunder, and agrees that neither
of the Administrative Agent nor any other Guarantied Party shall have any duty
whatsoever to advise any Guarantor of information regarding such circumstances
or risks.

 

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Section 16. Governing Law. THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS
EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH STATE.

SECTION 17. WAIVER OF JURY TRIAL.

(a) EACH GUARANTOR, AND EACH OF THE ADMINISTRATIVE AGENT AND THE OTHER
GUARANTIED PARTIES BY ACCEPTING THE BENEFITS HEREOF, ACKNOWLEDGES THAT ANY
DISPUTE OR CONTROVERSY BETWEEN SUCH GUARANTOR, THE ADMINISTRATIVE AGENT OR ANY
OF THE OTHER GUARANTIED PARTES WOULD BE BASED ON DIFFICULT AND COMPLEX ISSUES OF
LAW AND FACT AND WOULD RESULT IN DELAY AND EXPENSE TO THE PARTIES. ACCORDINGLY,
TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE GUARANTORS, THE
ADMINISTRATIVE AGENT AND THE OTHER GUARANTIED PARTIES HEREBY WAIVES ITS RIGHT TO
A TRIAL BY JURY IN ANY ACTION OR PROCEEDING OF ANY KIND OR NATURE IN ANY COURT
OR TRIBUNAL IN WHICH AN ACTION MAY BE COMMENCED BY OR AGAINST ANY PARTY HERETO
ARISING OUT OF THIS GUARANTY.

(b) EACH GUARANTOR IRREVOCABLY AND UNCONDITIONALLY AGREES THAT IT WILL NOT
COMMENCE ANY ACTION, LITIGATION OR PROCEEDING OF ANY KIND OR DESCRIPTION,
WHETHER IN LAW OR EQUITY, WHETHER IN CONTRACT OR IN TORT OR OTHERWISE, AGAINST
THE ADMINISTRATIVE AGENT, ANY LENDER, ANY ISSUING BANK, OR ANY RELATED PARTY OF
THE FOREGOING IN ANY WAY RELATING TO THIS GUARANTY OR ANY OTHER LOAN DOCUMENT OR
THE TRANSACTIONS RELATING HERETO OR THERETO, IN ANY FORUM OTHER THAN THE COURTS
OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY, AND OF THE UNITED STATES
DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT
FROM ANY THEREOF, AND EACH OF THE PARTIES HERETO, AND EACH OF THE ADMINISTRATIVE
AGENT AND THE OTHER GUARANTIED PARTIES BY ACCEPTING THE BENEFITS HEREOF,
IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE JURISDICTION OF SUCH COURTS AND
AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION, LITIGATION OR PROCEEDING
MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH PARTY FURTHER
WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH
ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS
BROUGHT IN AN INCONVENIENT FORUM AND EACH AGREES NOT TO PLEAD OR CLAIM THE SAME.
THE CHOICE OF FORUM SET FORTH IN THIS SECTION SHALL NOT BE DEEMED TO PRECLUDE
THE BRINGING OF ANY ACTION BY THE ADMINISTRATIVE AGENT OR ANY OTHER GUARANTIED
PARTY OR THE ENFORCEMENT BY THE ADMINISTRATIVE AGENT OR ANY OTHER GUARANTIED
PARTY OF ANY JUDGMENT OBTAINED IN SUCH FORUM IN ANY OTHER APPROPRIATE
JURISDICTION.

(c) THE PROVISIONS OF THIS SECTION HAVE BEEN CONSIDERED BY EACH PARTY WITH THE
ADVICE OF COUNSEL AND WITH A FULL UNDERSTANDING OF THE LEGAL CONSEQUENCES
THEREOF, AND SHALL SURVIVE THE PAYMENT OF THE LOANS AND ALL OTHER AMOUNTS
PAYABLE HEREUNDER OR UNDER THE OTHER LOAN DOCUMENTS, THE TERMINATION OR
EXPIRATION OF ALL LETTERS OF CREDIT AND THE TERMINATION OF THIS GUARANTY.

 

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Section 18. Loan Accounts. The Administrative Agent and each Lender may maintain
books and accounts setting forth the amounts of principal, interest and other
sums paid and payable with respect to the Guarantied Obligations arising under
or in connection with the Credit Agreement, and in the case of any dispute
relating to any of the outstanding amount, payment or receipt of any of the
Guarantied Obligations or otherwise, the entries in such books and accounts
shall constitute prima facie evidence of amounts and other matters set forth
therein. The failure of the Administrative Agent or any Lender to maintain such
books and accounts shall not in any way relieve or discharge any Guarantor of
any of its obligations hereunder.

Section 19. Waiver of Remedies. No delay or failure on the part of the
Administrative Agent or any other Guarantied Party in the exercise of any right
or remedy it may have against any Guarantor hereunder or otherwise shall operate
as a waiver thereof, and no single or partial exercise by the Administrative
Agent or any other Guarantied Party of any such right or remedy shall preclude
any other or further exercise thereof or the exercise of any other such right or
remedy.

Section 20. Termination. This Guaranty shall remain in full force and effect
with respect to each Guarantor until payment in full in cash of the Guarantied
Obligations and the other Obligations and the termination or cancellation of the
Credit Agreement in accordance with its terms.

Section 21. Successors and Assigns. Each reference herein to the Administrative
Agent or any other Guarantied Party shall be deemed to include such Person’s
respective successors and assigns (including, but not limited to, any holder of
the Guarantied Obligations) in whose favor the provisions of this Guaranty also
shall inure, and each reference herein to each Guarantor shall be deemed to
include such Guarantor’s successors and assigns, upon whom this Guaranty also
shall be binding. The Guarantied Parties may, in accordance with the applicable
provisions of the Credit Agreement, assign, transfer or sell any Guarantied
Obligation, or grant or sell participations in any Guarantied Obligations, to
any Person without the consent of, or notice to, any Guarantor and without
releasing, discharging or modifying any Guarantor’s obligations hereunder.
Subject to Section 13.9. of the Credit Agreement, each Guarantor hereby consents
to the delivery by the Administrative Agent and any other Guarantied Party to
any Eligible Assignee or Participant (or any prospective Eligible Assignee or
Participant) of any financial or other information regarding the Borrower or any
Guarantor. No Guarantor may assign or transfer its obligations hereunder to any
Person without the prior written consent of all Lenders and any such assignment
or other transfer to which all of the Lenders have not so consented shall be
null and void.

Section 22. JOINT AND SEVERAL OBLIGATIONS. THE OBLIGATIONS OF THE GUARANTORS
HEREUNDER SHALL BE JOINT AND SEVERAL, AND ACCORDINGLY, EACH GUARANTOR CONFIRMS
THAT IT IS LIABLE FOR THE FULL AMOUNT OF THE “GUARANTIED OBLIGATIONS” AND ALL OF
THE OBLIGATIONS AND LIABILITIES OF EACH OF THE OTHER GUARANTORS HEREUNDER.

Section 23. Amendments. This Guaranty may not be amended except in writing
signed by the Administrative Agent and each Guarantor, subject to Section 13.7
of the Credit Agreement.

Section 24. Payments. All payments to be made by any Guarantor pursuant to this
Guaranty shall be made in Dollars, in immediately available funds to the
Administrative Agent at its Principal Office, not later than 1:00 p.m. Central
time, on the date one Business Day after demand therefor.

Section 25. Notices. All notices, requests and other communications hereunder
shall be in writing (including facsimile transmission or similar writing) and
shall be given (a) to each Guarantor at its

 

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address set forth below its signature hereto, (b) to the Administrative Agent or
any other Guarantied Party at its address for notices provided for in the Credit
Agreement, or (c) as to each such party at such other address as such party
shall designate in a written notice to the other parties. Each such notice,
request or other communication shall be effective (i) if mailed, when received;
(ii) if telecopied, when transmitted (with confirmation); or (iii) if hand
delivered, when delivered; provided, however, that any notice of a change of
address for notices shall not be effective until received.

Section 26. Severability. In case any provision of this Guaranty shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.

Section 27. Headings. Section headings used in this Guaranty are for convenience
only and shall not affect the construction of this Guaranty.

Section 28. Limitation of Liability. Neither the Administrative Agent nor any
other Guarantied Party, nor any affiliate, officer, director, employee,
attorney, or agent of the Administrative Agent or any other Guarantied Party,
shall have any liability with respect to, and each Guarantor hereby waives,
releases, and agrees not to sue any of them upon, any claim for any special,
indirect, incidental, or consequential damages suffered or incurred by a
Guarantor in connection with, arising out of, or in any way related to, this
Guaranty or any of the other Credit Documents, or any of the transactions
contemplated by this Guaranty, the Credit Agreement or any of the other Loan
Documents. Each Guarantor hereby waives, releases, and agrees not to sue the
Administrative Agent or any other Guarantied Party or any of the Administrative
Agent’s or any other Guarantied Party’s affiliates, officers, directors,
employees, attorneys, or agents for punitive damages in respect of any claim in
connection with, arising out of, or in any way related to, this Guaranty, the
Credit Agreement or any of the other Credit Documents, or any of the
transactions contemplated by thereby.

Section 29. Electronic Delivery of Certain Information. Each Guarantor
acknowledges and agrees that information regarding the Guarantor may be
delivered electronically pursuant to Section 9.5 of the Credit Agreement.

Section 30. Definitions. (a) For the purposes of this Guaranty:

“Proceeding” means any of the following: (x) any Guarantor shall: (i) commence a
voluntary case under the Bankruptcy Code or other federal bankruptcy laws (as
now or hereafter in effect); (ii) file a petition seeking to take advantage of
any other Applicable Laws, domestic or foreign, relating to bankruptcy,
insolvency, reorganization, winding-up, or composition or adjustment of debts;
(iii) consent to, or fail to contest in a timely and appropriate manner, any
petition filed against it in an involuntary case under such bankruptcy laws or
other Applicable Laws or consent to any proceeding or action described in the
immediately following subsection (z); (iv) apply for or consent to, or fail to
contest in a timely and appropriate manner, the appointment of, or the taking of
possession by, a receiver, custodian, trustee, or liquidator of itself or of a
substantial part of its property, domestic or foreign; (v) admit in writing its
inability to pay its debts as they become due; or (vi) make a general assignment
for the benefit of creditors; (y) the board of directors (or similar governing
body) of any Guarantor or any committee thereof shall adopt any resolution or
otherwise authorize any action to approve any of the actions referred to in this
definition of “Proceeding”; or (z) a case or other proceeding shall be commenced
against any Guarantor in any court of competent jurisdiction seeking: (i) relief
under the Bankruptcy Code or other federal bankruptcy laws (as now or hereafter
in effect) or under any other Applicable Laws, domestic or foreign, relating to
bankruptcy, insolvency, reorganization, winding-up, or composition or adjustment
of debts; or (ii) the appointment of a trustee, receiver, custodian, liquidator
or the like of such Person, or of

 

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all or any substantial part of the assets, domestic or foreign, of such Person,
and in the case of either clause (i) or (ii) such case or proceeding shall
continue undismissed or unstayed for a period of 60 consecutive days, or an
order granting the remedy or other relief requested in such case or proceeding
(including, but not limited to, an order for relief under such Bankruptcy Code
or such other federal bankruptcy laws) shall be entered.

(b) Terms not otherwise defined herein are used herein with the respective
meanings given them in the Credit Agreement.

[Signatures on Following Page]

 

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IN WITNESS WHEREOF, each Guarantor has duly executed and delivered this Guaranty
as of the date and year first written above.

 

[GUARANTOR] By:  

 

  Name:  

 

  Title:  

 

Address for Notices for all Guarantors: c/o SAUL CENTERS, INC. 7501 Wisconsin
Ave., Suite 1500 E Bethesda, MD 20814 Attention:       Scott V. Schneider
Facsimile:       (301) 986-6023 Telephone:       (301) 986-6022

 

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ANNEX I

FORM OF ACCESSION AGREEMENT

THIS ACCESSION AGREEMENT dated as of             ,         , executed and
delivered by                             , a                      (the “New
Guarantor”) in favor of WELLS FARGO BANK, NATIONAL ASSOCIATION, in its capacity
as Administrative Agent (the “Administrative Agent”) for the Lenders under that
certain Credit Agreement dated as of May 21, 2012 (as amended, restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”),
by and among Saul Holdings Limited Partnership (the “Borrower”), the Lenders
from time to time parties thereto (the “Lenders”), the Issuing Banks from time
to time parties thereto (the “Issuing Banks”), Wells Fargo Bank, National
Association, as Administrative Agent (the “Administrative Agent”), and the other
parties thereto, for its benefit and the benefit of the Lenders and the Issuing
Banks (the Administrative Agent, the Lenders and the Issuing Banks, each
individually a “Guarantied Party” and collectively, the “Guarantied Parties”).

WHEREAS, pursuant to the Credit Agreement, the Administrative Agent and the
Lenders have agreed to make available to the Borrower certain financial
accommodations on the terms and conditions set forth in the Credit Agreement;

WHEREAS, New Guarantor is owned or controlled by the Borrower, or is otherwise
an Affiliate of the Borrower;

WHEREAS, the Borrower, the New Guarantor and the other Subsidiaries of the
Borrower, though separate legal entities, are mutually dependent on each other
in the conduct of their respective businesses as an integrated operation and
have determined it to be in their mutual best interests to obtain financing from
the Administrative Agent, the Lenders and the Issuing Banks through their
collective efforts;

WHEREAS, New Guarantor acknowledges that it will receive direct and indirect
benefits from the Administrative Agent, the Lenders and the Issuing Banks making
such financial accommodations available to the Borrower under the Credit
Agreement and, accordingly, New Guarantor is willing to guarantee the Borrower’s
obligations to the Administrative Agent, the Lenders and the Issuing Banks on
the terms and conditions contained herein; and

WHEREAS, the New Guarantor’s execution and delivery of this Agreement is a
condition to the Administrative Agent and the Lenders continuing to make such
financial accommodations to the Borrower.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged by the New Guarantor, the New Guarantor agrees
as follows:

Section 1. Accession to Guaranty. The New Guarantor hereby agrees that it is a
“Guarantor” under that certain Guaranty dated as of May 21, 2012 (as amended,
restated, supplemented or otherwise modified from time to time, the “Guaranty”)
made by each of the Guarantors party thereto in favor of the Administrative
Agent and the other Guarantied Parties and assumes all obligations of a
“Guarantor” thereunder, all as if the New Guarantor had been an original
signatory to the Guaranty. Without limiting the generality of the foregoing, the
New Guarantor hereby:

(a) irrevocably and unconditionally guarantees the due and punctual payment and
performance when due, whether at stated maturity, by acceleration or otherwise,
of all Guarantied Obligations (as defined in the Guaranty);

 

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(b) makes to the Administrative Agent and the other Guarantied Parties as of the
date hereof each of the representations and warranties contained in Section 5 of
the Guaranty as to itself as a Guarantor and agrees to be bound by each of the
covenants contained in Section 6 of the Guaranty; and

(c) consents and agrees to each provision set forth in the Guaranty.

SECTION 2. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS
EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH STATE.

Section 3. Definitions. Capitalized terms used herein and not otherwise defined
herein shall have their respective defined meanings given them in the Credit
Agreement.

[Signatures on Next Page]

 

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IN WITNESS WHEREOF, the New Guarantor has caused this Accession Agreement to be
duly executed and delivered under seal by its duly authorized officers as of the
date first written above.

 

[NEW GUARANTOR] By:  

 

  Name:  

 

  Title:  

 

(CORPORATE SEAL) Address for Notices:

 

c/o SAUL CENTERS, INC. 7501 Wisconsin Ave., Suite 1500 E Bethesda, MD 20814
Attention:       Scott V. Schneider Facsimile:       (301) 986-6023 Telephone:  
    (301) 986-6022

 

Accepted:

WELLS FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent

By:  

 

  Name:  

 

  Title:  

 

 

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EXHIBIT C

FORM OF NOTICE OF BORROWING

                    , 20    

Wells Fargo Bank, National Association

Minneapolis Loan Center

733 Marquette Avenue, 10th Floor

Minneapolis, MN 55402

Attention:                                         

Ladies and Gentlemen:

Reference is made to that certain Credit Agreement dated as of May 21, 2012 (as
amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”), by and among Saul Holdings Limited Partnership (the
“Borrower”), the Lenders from time to time parties thereto (the “Lenders”), the
Issuing Banks from time to time parties thereto, Wells Fargo Bank, National
Association, as Administrative Agent (the “Administrative Agent”), and the other
parties thereto. Capitalized terms used herein, and not otherwise defined
herein, have their respective meanings given them in the Credit Agreement.

 

  1. Pursuant to Section 2.1(b) of the Credit Agreement, the Borrower hereby
requests that the Lenders make Revolving Loans to the Borrower in an aggregate
amount equal to $        .

 

  2. The Borrower requests that such Revolving Loans be made available to the
Borrower on                     , 20    .

 

  3. The Borrower hereby requests that such Revolving Loans be of the following
Type:

[Check one box only]

 

  ¨ Base Rate Loan

  ¨ LIBOR Loan, with an initial Interest Period for a duration of:

[Check one box only]

 

  ¨ one month

  ¨ two months

  ¨ three months

  ¨ six months

  ¨ other:                                         

The Borrower hereby certifies to the Administrative Agent and the Lenders that
as of the date hereof, as of the date of the making of the requested Revolving
Loans, and after making such Revolving Loans, (a) no Default or Event of Default
exists or would exist, and none of the limits specified in Section 2.14. would
be violated; and (b) the representations and warranties made or deemed made by
the Borrower and each other Loan Party in the Loan Documents to which any of
them is a party, are and shall be true and correct in all material respects
(except in the case of any representation or warranty qualified by materiality,
in which case such representation and warranty shall be true and correct in all
respects)

 

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with the same force and effect as if made on and as of such date except to the
extent that such representations and warranties expressly relate solely to an
earlier date (in which case such representations and warranties shall have been
true and correct in all material respects (except in the case of any
representation or warranty qualified by materiality, in which case such
representation and warranty shall be true and correct in all respects) on and as
of such earlier date) and except for changes in factual circumstances not
expressly prohibited under the Loan Documents. In addition, the Borrower
certifies to the Administrative Agent and the Lenders that all conditions to the
making of the requested Revolving Loans contained in Article VI. of the Credit
Agreement will have been satisfied (or waived in accordance with the terms of
the Credit Agreement) at the time such Revolving Loans are made.

 

SAUL HOLDINGS LIMITED PARTNERSHIP By:   Saul Centers, Inc., its General Partner
By:  

 

  Name:  

 

  Title:  

 

 

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EXHIBIT D

FORM OF NOTICE OF CONTINUATION

                    , 20    

Wells Fargo Bank, National Association

Minneapolis Loan Center

733 Marquette Avenue, 10th Floor

Minneapolis, MN 55402

Attention:                                         

Ladies and Gentlemen:

Reference is made to that certain Credit Agreement dated as of May 21, 2012 (as
amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”), by and among Saul Holdings Limited Partnership (the
“Borrower”), the Lenders from time to time parties thereto (the “Lenders”), the
Issuing Banks from time to time parties thereto, Wells Fargo Bank, National
Association, as Administrative Agent (the “Administrative Agent”), and the other
parties thereto. Capitalized terms used herein, and not otherwise defined
herein, have their respective meanings given them in the Credit Agreement.

Pursuant to Section 2.8. of the Credit Agreement, the Borrower hereby requests a
Continuation of Loans under the Credit Agreement, and in that connection sets
forth below the information relating to such Continuation as required by such
Section of the Credit Agreement:

 

  1. The requested date of such Continuation is                     , 20    .

 

  2. The aggregate principal amount of the Loans subject to the requested
Continuation is $         and the portion of such principal amount as to which
such Continuation is requested is $        .

 

  3. The current Interest Period of the Loans subject to such Continuation ends
on                     , 20    .

 

  4. The duration of the Interest Period for the Loans or portion thereof
subject to such Continuation is:

[Check one box only]

 

  ¨ one month

  ¨ two months

  ¨ three months

  ¨ six months

[Continued on next page]

 

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The Borrower hereby certifies to the Administrative Agent and the Lenders that
as of the date hereof, as of the proposed date of the requested Continuation,
and after giving effect to such Continuation, no Default or Event of Default
exists or will exist.

If notice of the requested Continuation was given previously by telephone, this
notice shall be considered the written confirmation of such telephone notice
required under Section 2.8. of the Credit Agreement.

 

SAUL HOLDINGS LIMITED PARTNERSHIP By:   Saul Centers, Inc., its General Partner
By:  

 

  Name:  

 

  Title:  

 

 

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EXHIBIT E

FORM OF NOTICE OF CONVERSION

                    , 20    

Wells Fargo Bank, National Association

Minneapolis Loan Center

733 Marquette Avenue, 10th Floor

Minneapolis, MN 55402

Attention:                                         

Ladies and Gentlemen:

Reference is made to that certain Credit Agreement dated as of May 21, 2012 (as
amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”), by and among Saul Holdings Limited Partnership (the
“Borrower”), the Lenders from time to time parties thereto (the “Lenders”), the
Issuing Banks from time to time parties thereto, Wells Fargo Bank, National
Association, as Administrative Agent (the “Administrative Agent”), and the other
parties thereto. Capitalized terms used herein, and not otherwise defined
herein, have their respective meanings given them in the Credit Agreement.

Pursuant to Section 2.9. of the Credit Agreement, the Borrower hereby requests a
Conversion of Loans of one Type into Loans of another Type under the Credit
Agreement, and in that connection sets forth below the information relating to
such Conversion as required by such Section of the Credit Agreement:

 

  1. The requested date of such Conversion is                     , 20    .

 

  2. The Type of Loans to be Converted pursuant hereto is currently:

[Check one box only]

 

  ¨ Base Rate Loan

  ¨ LIBOR Loan

 

  3. The aggregate principal amount of the Loans subject to the requested
Conversion is $         and the portion of such principal amount as to which
such Conversion is requested is $        .

 

  4. The amount of such Loans to be so Converted is to be converted into Loans
of the following Type:

[Check one box only]

 

  ¨ Base Rate Loan

  ¨ LIBOR Loan, with an initial Interest Period for a duration of:

 

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[Check one box only]

 

  ¨ one month

  ¨ two months

  ¨ three months

  ¨ six months

  ¨ other:                                         

The Borrower hereby certifies to the Administrative Agent and the Lenders that
as of the date hereof, as of the proposed date of the requested Conversion, and
after giving effect to such Conversion, no Default or Event of Default exists or
will exist.

If notice of the requested Conversion was given previously by telephone, this
notice shall be considered the written confirmation of such telephone notice
required under Section 2.9. of the Credit Agreement.

 

SAUL HOLDINGS LIMITED PARTNERSHIP By:   Saul Centers, Inc., its General Partner
By:  

 

  Name:  

 

  Title:  

 

 

E-2

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EXHIBIT F

FORM OF NOTICE OF SWINGLINE BORROWING

                    , 20    

Wells Fargo Bank, National Association

Minneapolis Loan Center

733 Marquette Avenue, 10th Floor

Minneapolis, MN 55402

Attention:                                         

Ladies and Gentlemen:

Reference is made to that certain Credit Agreement dated as of May 21, 2012 (as
amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”), by and among Saul Holdings Limited Partnership (the
“Borrower”), the Lenders from time to time parties thereto (the “Lenders”), the
Issuing Banks from time to time parties thereto, Wells Fargo Bank, National
Association, as Administrative Agent (the “Administrative Agent”), and the other
parties thereto. Capitalized terms used herein, and not otherwise defined
herein, have their respective meanings given them in the Credit Agreement.

 

  1. Pursuant to Section 2.4(b) of the Credit Agreement, the Borrower hereby
requests that the Swingline Lender make a Swingline Loan to the Borrower in an
amount equal to $        .

 

  2. The Borrower requests that such Swingline Loan be made available to the
Borrower on                     , 20    .

 

  3. The Borrower requests that the proceeds of such Swingline Loan be made
available to the Borrower by                         .

The Borrower hereby certifies to the Administrative Agent, the Swingline Lender
and the other Lenders that as of the date hereof, as of the date of the making
of the requested Swingline Loan, and after the making of such Swingline Loan,
(a) no Default or Event of Default exists or would exist, and none of the limits
specified in Section 2.14. of the Credit Agreement would be violated; and
(b) the representations and warranties made or deemed made by the Borrower and
each other Loan Party in the Loan Documents to which any of them is a party, are
and shall be true and correct in all material respects (except in the case of
any representation or warranty qualified by materiality, in which case such
representation and warranty shall be true and correct in all respects) with the
same force and effect as if made on and as of such date except to the extent
that such representations and warranties expressly relate solely to an earlier
date (in which case such representations and warranties shall have been true and
correct in all material respects (except in the case of any representation or
warranty qualified by materiality, in which case such representation and
warranty shall be true and correct in all respects) on and as of such earlier
date) and except for changes in factual circumstances not expressly prohibited
under the Loan Documents. In addition, the Borrower certifies to the
Administrative Agent and the Lenders that all conditions to the making of the
requested Swingline Loan contained in Article VI. of the Credit Agreement will
have been satisfied (or waived in accordance with the terms of the Credit
Agreement) at the time such Swingline Loan is made.

 

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[Continued on next page]

 

F-2

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If notice of the requested borrowing of this Swingline Loan was previously given
by telephone, this notice is to be considered the written confirmation of such
telephone notice required by Section 2.3(b) of the Credit Agreement.

 

SAUL HOLDINGS LIMITED PARTNERSHIP By:   Saul Centers, Inc., its General Partner
By:  

 

  Name:  

 

  Title:  

 

 

F-3

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EXHIBIT G

FORM OF REVOLVING NOTE

 

$                                   , 20    

FOR VALUE RECEIVED, the undersigned, SAUL HOLDINGS LIMITED PARTNERSHIP (the
“Borrower”) hereby unconditionally promises to pay to the order of
                                                              (the “Lender”), in
care of Wells Fargo Bank, National Association, as Administrative Agent (the
“Administrative Agent”), to its address at Minneapolis Loan Center of
Administrative Agent, 733 Marquette Avenue, 10th Floor, Minneapolis, MN 55402,
or at such other address as may be specified by the Administrative Agent to the
Borrower, the principal sum of                                          
                    AND     /100 DOLLARS ($        ), or such lesser amount as
may be the then outstanding and unpaid balance of all Revolving Loans made by
the Lender to the Borrower pursuant to, and in accordance with the terms of, the
Credit Agreement.

The Borrower further agrees to pay interest at said office, in Dollars, on the
unpaid principal amount owing hereunder from time to time on the dates and at
the rates and at the times specified in the Credit Agreement.

This Revolving Note is one of the “Revolving Notes” referred to in that certain
Credit Agreement dated as of May 21, 2012 (as amended, restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”), by and among the
Borrower, the Lenders from time to time parties thereto (the “Lenders”), the
Issuing Banks from time to time parties thereto, the Administrative Agent, and
the other parties thereto, and is subject to, and entitled to, all provisions
and benefits thereof. Capitalized terms used herein and not defined herein shall
have the respective meanings given to such terms in the Credit Agreement. The
Credit Agreement, among other things, (a) provides for the making of Revolving
Loans by the Lender to the Borrower from time to time in an aggregate amount not
to exceed at any time outstanding the Dollar amount first above mentioned,
(b) permits the prepayment of the Loans by the Borrower subject to certain terms
and conditions and (c) provides for the acceleration of the Revolving Loans upon
the occurrence of certain specified events.

The Borrower hereby waives presentment, demand, protest and notice of any kind.
No failure to exercise, and no delay in exercising any rights hereunder on the
part of the holder hereof shall operate as a waiver of such rights.

Time is of the essence for this Note.

[This Note is given in replacement of the Revolving Note dated                 
    , 20    , in the original principal amount of $         previously delivered
to the Lender under the Credit Agreement. THIS NOTE IS NOT INTENDED TO BE, AND
SHALL NOT BE CONSTRUED TO BE, A NOVATION OF ANY OF THE OBLIGATIONS OWING UNDER
OR IN CONNECTION WITH THE OTHER NOTE.]1

THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY
PERFORMED, IN SUCH STATE.

 

1 

Language to be included in case of an assignment and need to issue a replacement
note to an existing Lender, either because such Lender’s Commitment has
increased or decreased from what it was initially.

 

G-1

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IN WITNESS WHEREOF, the undersigned has executed and delivered this Revolving
Note under seal as of the date first written above.

 

SAUL HOLDINGS LIMITED PARTNERSHIP By:   Saul Centers, Inc., its General Partner
By:  

 

  Name:  

 

  Title:  

 

 

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EXHIBIT H

FORM OF SWINGLINE NOTE

 

$                                    , 20    

FOR VALUE RECEIVED, the undersigned, SAUL HOLDINGS LIMITED PARTNERSHIP (the
“Borrower”), hereby promises to pay to the order of WELLS FARGO BANK, NATIONAL
ASSOCIATION (the “Swingline Lender”) to its address at Minneapolis Loan Center
of Administrative Agent, 733 Marquette Avenue, 10th Floor, Minneapolis, MN
55402, or at such other address as may be specified by the Swingline Lender to
the Borrower, the principal sum of                                          
                    AND NO/100 DOLLARS ($        ) (or such lesser amount as
shall equal the aggregate unpaid principal amount of Swingline Loans made by the
Swingline Lender to the Borrower under the Credit Agreement), on the dates and
in the principal amounts provided in the Credit Agreement, and to pay interest
on the unpaid principal amount owing hereunder, at the rates and on the dates
provided in the Credit Agreement.

The date, amount of each Swingline Loan, and each payment made on account of the
principal thereof, shall be recorded by the Swingline Lender on its books and,
prior to any transfer of this Swingline Note (this “Note”), endorsed by the
Swingline Lender on the schedule attached hereto or any continuation thereof,
provided that the failure of the Swingline Lender to make any such recordation
or endorsement shall not affect the obligations of the Borrower to make a
payment when due of any amount owing under the Credit Agreement or hereunder in
respect of the Swingline Loans.

This Note is the “Swingline Note” referred to in that certain Credit Agreement
dated as of May 21, 2012 (as amended, restated, supplemented or otherwise
modified from time to time, the “Credit Agreement”), by and among the Borrower,
the Lenders from time to time parties thereto (the “Lenders”), the Issuing Banks
from time to time parties thereto, Wells Fargo Bank, National Association, as
Administrative Agent, and the other parties thereto, and evidences Swingline
Loans made to the Borrower thereunder. Terms used but not otherwise defined in
this Note have the respective meanings assigned to them in the Credit Agreement.

The Credit Agreement provides for the acceleration of the maturity of this Note
upon the occurrence of certain events and for prepayments of Swingline Loans
upon the terms and conditions specified therein.

THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY
PERFORMED, IN SUCH STATE.

The Borrower hereby waives presentment for payment, demand, notice of demand,
notice of non-payment, protest, notice of protest and all other similar notices.

Time is of the essence for this Note.

 

H-1

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IN WITNESS WHEREOF, the undersigned has executed and delivered this Swingline
Note under seal as of the date first written above.

 

SAUL HOLDINGS LIMITED PARTNERSHIP By:   Saul Centers, Inc., its General Partner
By:  

 

  Name:  

 

  Title:  

 

 

H-2

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SCHEDULE OF SWINGLINE LOANS

This Note evidences Swingline Loans made under the within-described Credit
Agreement to the Borrower, on the dates and in the principal amounts set forth
below, subject to the payments and prepayments of principal set forth below:

 

Date of Loan

   Principal
Amount of
Loan    Amount Paid
or Prepaid    Unpaid
Principal
Amount    Notation
Made By                                                            

 

H-3

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Loan No. 1005595

EXHIBIT I

TRANSFER AUTHORIZER DESIGNATION

(For Disbursement of Loan Proceeds by Funds Transfer)

 

¨ NEW    ¨ REPLACE PREVIOUS DESIGNATION   

¨ ADD

  

¨ CHANGE

   ¨ DELETE LINE NUMBER   

The following representatives of SAUL HOLDINGS LIMITED PARTNERSHIP (“Borrower”)
are authorized to request the disbursement of Loan Proceeds and initiate funds
transfers for Loan Number 1005595 assigned to the unsecured revolving credit
facility evidenced by that certain Credit Agreement dated as of May 21, 2012 (as
amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”), by and among the Borrower, the Lenders from time to time
parties thereto (the “Lenders”), the Issuing Banks from time to time parties
thereto, Wells Fargo Bank, National Association, as Administrative Agent (the
“Administrative Agent”), and the other parties thereto. The Administrative Agent
is authorized to rely on this Transfer Authorizer Designation until it has
received a new Transfer Authorizer Designation signed by Borrower, even in the
event that any or all of the foregoing information may have changed.

 

    

Name

  

Title

  

Maximum
Wire

Amount

                                            

[Continued on next page]

 

I-1

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Loan No. 1005595

 

Beneficiary Bank and Account Holder Information

1.

 

Transfer Funds to (Receiving Party Account Name):

Receiving Party Account Number:

Receiving Bank Name, City and State:

   Receiving Bank Routing (ABA) Number

Maximum Transfer Amount:

  

Further Credit Information/Instructions:

2.

 

Transfer Funds to (Receiving Party Account Name):

Receiving Party Account Number:

Receiving Bank Name, City and State:

   Receiving Bank Routing (ABA) Number

Maximum Transfer Amount:

  

Further Credit Information/Instructions:

3.

 

Transfer Funds to (Receiving Party Account Name):

Receiving Party Account Number:

Receiving Bank Name, City and State:

   Receiving Bank Routing (ABA) Number

Maximum Transfer Amount:

  

Further Credit Information/Instructions:

 

1 Maximum Wire Amount may not exceed the Loan Amount.

 

I-2

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Loan No. 1005595

 

Date:                     , 20    

 

“BORROWER”

SAUL HOLDINGS LIMITED PARTNERSHIP,

a Maryland limited partnership

By:   Saul Centers, Inc., its General Partner By:  

 

  Name:  

 

  Title:  

 

 

I-3

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EXHIBIT J

FORM OF OPINION OF COUNSEL TO THE BORROWER AND GUARANTORS

[ATTACHED]

 

J-1

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EXHIBIT K

FORM OF COMPLIANCE CERTIFICATE

Reference is made to that certain Credit Agreement dated as of                 
    , 2012 (as amended, restated, supplemented or otherwise modified from time
to time, the “Credit Agreement”), by and among Saul Holdings Limited Partnership
(the “Borrower”), the Lenders from time to time parties thereto (the “Lenders”),
Wells Fargo Bank, National Association, as Administrative Agent (the
“Administrative Agent”), and the other parties thereto. Capitalized terms used
herein, and not otherwise defined herein, have their respective meanings given
to them in the Credit Agreement.

Pursuant to Section 9.3 of the Credit Agreement, the undersigned hereby
certifies to the Administrative Agent and the Lenders that:

1. (a) The undersigned has reviewed the terms of the Credit Agreement and has
made a review of the transactions, financial condition and other affairs of the
Borrower and its Subsidiaries as of, and during the [quarterly][annual]
accounting period ending on                     , 20     and (b) such review has
not disclosed the existence during such accounting period, and the undersigned
does not have knowledge of the existence, as of the date hereof, of any
condition or event constituting a Default or Event of Default [except as set
forth on Attachment A hereto, which accurately describes the nature of the
conditions(s) or event(s) that constitute (a) Default(s) or (an) Event(s) of
Default and the actions which the Borrower (is taking)(is planning to take) with
respect to such condition(s) or event(s)].

2. Schedule 1 attached hereto accurately and completely sets forth the
calculations required to establish compliance with Section 10.1 of the Credit
Agreement on the date of the financial statements for the accounting period set
forth above.

3. Borrower’s Funds from Operations for such [quarterly][annual] accounting
period ending on                     , 20     were $         (subject to
correction arising in the course of audit).

4. The representations and warranties of the Borrower and the other Loan Parties
contained in the Credit Agreement and the other Loan Documents are true and
correct in all material respects (except in the case of any representation or
warranty qualified by materiality, in which case such representation and
warranty shall be true and correct in all respects), except to the extent such
representations or warranties expressly relate solely to an earlier date (in
which case such representations and warranties shall have been true and correct
in all material respects (except in the case of any representation or warranty
qualified by materiality, in which case such representation and warranty shall
be true and correct in all respects) on and as of such earlier date) and except
for changes in factual circumstances not expressly prohibited under the Credit
Agreement or the other Loan Documents.

 

K-1

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IN WITNESS WHEREOF, the undersigned has signed this Compliance Certificate on
and as of                     , 20    .

 

SAUL HOLDINGS LIMITED PARTNERSHIP By:   Saul Centers, Inc., its General Partner
By:  

 

Name:  

 

Title:   Chief Financial Officer

 

K-2