Exhibit 10(q)

 

REVOLVING CREDIT AGREEMENT

 

THIS REVOLVING CREDIT AGREEMENT (the “Agreement”) is made and entered into as of
the 28th day of January, 2005, by and between (i) SAUL HOLDINGS LIMITED
PARTNERSHIP, a Maryland limited partnership (hereinafter called “Borrower”);
(ii) U.S. BANK NATIONAL ASSOCIATION, a national banking association, as
administrative agent and sole lead arranger (“Agent”); (iii) WELLS FARGO BANK,
NATIONAL ASSOCIATION, as syndication agent (“Syndication Agent”), and (iv) U.S.
BANK NATIONAL ASSOCIATION, WELLS FARGO BANK, NATIONAL ASSOCIATION, COMPASS BANK,
SOVEREIGN BANK, FIRST HORIZON BANK and any other lenders who are now or who may
hereafter become parties to this Agreement (collectively, the “Lenders”).

 

WITNESSETH THAT, in consideration of the mutual covenants and agreements
hereinafter set forth, the parties hereto hereby agree as follows:

 

DEFINITIONS

 

For the purposes of this Agreement, the following terms shall have the following
respective meanings, unless the context hereof clearly requires otherwise:

 

Accessibility Regulation: Any federal, state or local law, statute, code,
ordinance, rule, regulation or requirement relating to accessibility to
facilities or properties for disabled, handicapped and/or physically challenged
persons, including, without limitation, the Americans with Disabilities Act of
1991, as amended.

 

Accordion Amount: Up to $50,000,000.00.

 

Accordion Expiration Date: January 27, 2007.

 

Acquisition Costs: All costs of acquiring Real Estate Assets, including purchase
price and reasonable and customary closing costs, as determined by Agent.

 

Adjusted EBITDA: An amount equal to ninety seven percent (97%) of EBITDA.

 

Advance: Any portion of the Loan (or a Swing Loan) advanced to or for the
benefit of Borrower in accordance with the terms hereof and as to which Borrower
has elected or is deemed to have elected one (1) of the available interest rate
options and, if applicable, a LIBOR Rate Period. An Advance may be a LIBOR Rate
Advance or a Loan Rate Advance; provided, however, that if Borrower has made no
election of an interest rate option with respect to any Advance (other than for
a Swing Loan), Borrower shall be deemed to have elected that it be a Loan Rate
Advance. Swing Loans shall be deemed to be Loan Rate Advances.

 

Advance Date: The date on which an Advance of Loan (or Swing Loan) proceeds
requested by Borrower hereunder is funded.

 

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Agreement: This Revolving Credit Agreement, including any amendments hereof and
supplements hereto executed by Borrower and Agent on behalf of Lenders.

 

Applicable Margin: With respect to:

 

(a) Loan Rate Advances — 0.00%.

 

(b) LIBOR Rate Advances — shall be equal to 1.625% unless the Leverage Ratio
requirement set forth below is satisfied in which event the Applicable Margin
for LIBOR Rate Advances shall be reduced as follows:

 

Leverage Ratio

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  Applicable Margin
for LIBOR Rate
Advances

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  ³ 40% and < 50%   1.500 % < 40%   1.400 %

 

Approved Asset: An Unencumbered Asset (including, without limitation, a Proposed
Acquisition that would constitute an Unencumbered Asset upon the acquisition
thereof by Borrower or an Approved Subsidiary) which has been approved by all
Lenders pursuant to Section 2.B.2. A schedule identifying the Approved Assets as
of the date hereof is attached hereto as Exhibit E.

 

Approved Subsidiary: A Subsidiary that (x) is wholly and directly owned and
controlled by Borrower, Guarantor or a combination thereof, (y) has delivered a
Subsidiary Guaranty pursuant to Section 5.09.E hereof that remains in full force
and effect, and (z) holds fee simple title to an Approved Asset.

 

Assignee Lender: As defined in Section 8.8.A hereof.

 

Board: The Board of Governors of the Federal Reserve System or any successor
thereto.

 

Borrower: As defined in the preamble to this Agreement.

 

Business Day: Any day, other than a Saturday, a Sunday, or a Legal Holiday on
which Agent is not open for business.

 

Calculation Date: The date upon which Borrower submits a Draw Request, the date
upon which Borrower requests that Agent issue a Letter of Credit, the date upon
which Borrower requests that an Approved Asset be added to or removed from the
pool of Unencumbered Assets, the date upon which a Capital Event occurs, or the
date upon which there exists an Event of Default under the Loan, as applicable.

 

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Capital Event: The occurrence from time to time of an equity or debt offering by
Borrower (which shall specifically exclude stock issued in connection with a
dividend reinvestment plan), a Disqualifying Environmental Event, or if an
Encumbrance, Imposition or Lien arises against an Approved Asset.

 

Capitalization Value: For any period of determination, an amount equal to the
sum of (a) the aggregate Adjusted EBITDA for the previous four calendar
quarters, divided by eight and three-quarters percent (8.75%) (provided that,
with respect to Real Estate Assets which Borrower or an Approved Subsidiary has
owned for more than three (3) months but less than one (1) year, as of the
Calculation Date, Adjusted EBITDA shall be annualized based upon the period of
time Borrower or an Approved Subsidiary has owned them); (b) 100% of the value
of Unrestricted Cash and Cash Equivalents; (c) with respect to Real Estate
Assets Under Development, including those projects which have been operating for
less than one year, the greater of (x) 100% of the aggregate costs incurred and
paid to the Calculation Date by the Borrower or an Approved Subsidiary or (y)
Adjusted EBITDA (provided that, with respect to Real Estate Assets which have
been in operation for less than one (1) year, as of the Calculation Date,
Adjusted EBITDA shall be annualized based upon the most recent three-month
period) divided by eight and three-quarters percent (8.75%); (d) 60% of the
Acquisition Costs with respect to Real Estate Assets which, as of the date of
calculation, Borrower or an Approved Subsidiary has owned for less than three
(3) months and (e) contractual purchase price of any property subject to a
purchase obligation, repurchase obligation or forward commitment, which
obligation at such time could be specifically enforced by the seller, but only
to the extent such obligations are included in the definition of Total Adjusted
Outstanding Indebtedness or Total Adjusted Committed Indebtedness, as
appropriate.

 

Closing Date: The date of this Agreement.

 

Code: The Internal Revenue Code of 1986, as amended.

 

Commitment Percentage: Each Lender’s share of all right, title, and interest in
the Loan and the Loan Documents, as set forth on Schedule 1 attached hereto, as
amended and modified by unilateral action of Agent from time to time to reflect
the sale or assignment of a portion or portions of the Loan.

 

Debt Service: For any period of determination, the following amount incurred by
Borrower during the previous four (4) fiscal quarters, as determined by Agent in
its sole discretion: (a) Interest Expense plus (b) the aggregate amount of
scheduled principal payments of indebtedness of the Borrower (excluding optional
prepayments but expressly including scheduled principal payments in respect of
any indebtedness which is not amortized through equal periodic installments of
principal and interest over the term of such indebtedness, including, without
limitation, balloon payments at maturity that are not refinanced or paid off on
or before the maturity date thereof) required to be made during such time period
by the Borrower plus (c) the aggregate amount of capitalized interest required
in accordance with GAAP to be paid or accrued by the Borrower during such time
period, plus (d) expenses attributable to preferred stock (including preferred
stock dividends whether the preferred stock is classified upon the obligor’s
balance sheet as equity or liability) or a similar type of investment.

 

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Declining Bank: As defined in Section 3.6(a) hereof.

 

Default Rate: As defined in Section 1.12 hereof.

 

Defaulting Lender: Any Lender who for any reason shall fail or refuse to abide
by its obligations under the Loan Documents or this Agreement within the time
periods specified for performance of such obligation or, if no time frame is
specified, if such failure or refusal continues for a period of five (5)
Business Days after notice from Agent.

 

Disqualifying Environmental Event: Any release or threatened release of
Hazardous Substances, any violation of Environmental Laws or any other similar
environmental event with respect to a Real Estate Asset which is not cured
within sixty (60) days or that would cause, in Agent’s determination, such Real
Estate Asset to no longer be financeable on a non-recourse (with customary
exceptions) debt basis under the then generally accepted underwriting standards
of national insurance company or pension fund real estate institutional lenders.
In the event that such release or threatened release, violation or similar
environmental event is susceptible of cure but is not cured within said sixty
(60) days, so long as Borrower is diligently and continuously pursuing such
cure, as evidenced to Agent’s satisfaction, Agent shall permit Borrower an
additional one hundred twenty (120) days to effectuate such cure; provided,
however that such additional one hundred twenty (120) days shall not apply where
such release or threatened release, violation or similar environmental event
results, in Agent’s judgment, in a matter which is of an emergency nature.

 

Distribution. With respect to:

 

(i) the Borrower, any distribution of cash or other cash equivalent, directly or
indirectly, to the partners of the Borrower; or any other distribution on or in
respect of any partnership interests of the Borrower excluding distributions
reinvested pursuant to Borrower’s distribution reinvestment program; and

 

(ii) the Guarantor, the declaration or payment of any dividend on or in respect
of any shares of any class of capital stock of Guarantor, excluding dividends
payable solely in shares of common stock by Guarantor and dividends reinvested
pursuant to Guarantor’s dividend reinvestment program; the purchase, redemption,
or other retirement of any shares of any class of capital stock of Guarantor,
directly or indirectly through a subsidiary of Guarantor, or otherwise; the
return of capital by Guarantor to its shareholders as such; or any other
distribution on or in respect of any shares of any class of capital stock of
Guarantor (except as excluded above).

 

Draw Request: A written request by Borrower for an Advance of Loan proceeds
under this Agreement, in the form and with the certifications included within
Exhibit A attached hereto and hereby made a part hereof.

 

EBITDA: For any period of determination, an amount equal to the net income of
Borrower and Guarantor on a consolidated basis and their pro rata share of
earnings of unconsolidated subsidiaries, the unconsolidated subsidiaries of the
general partners of

 

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Borrower, and joint ventures in which Borrower, Guarantor and/or Borrower’s
general partners is a party, and before interest, taxes, depreciation,
amortization and gains and losses on property sales, extraordinary items and
other non-recurring gains or losses, all as calculated in accordance with GAAP,
as determined by Agent.

 

Encumbrance: As defined in Section 5.6.

 

Environmental Law: Any judgment, decree, order, law, license, rule or regulation
pertaining to environmental matters, including without limitation, those arising
under the Resource Conservation and Recovery Act (“RCRA”), the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 as amended
(“CERCLA”), the Superfund Amendments and Reauthorization Act of 1986 (“SARA”),
the Federal Clean Water Act, the Federal Clean Air Act, the Toxic Substances
Control Act, or any state or local statute, regulation, ordinance, order or
decree relating to health, safety or the environment.

 

Euro Day: A Business Day which is also a day on which commercial banks are open
for international business (including dealings in dollar deposits) in London,
England.

 

Event of Default: Any event set forth in Section 6.1.

 

Existing Lenders: As defined in Section 3.6(c).

 

Extension Period: As defined in Section 1.4.

 

Extension Request: As defined in Section 1.4.

 

Federal Funds Rate: As of any date of determination, the rate set forth in the
weekly statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Board (including any such
successor, “H.15(519)”) for such date opposite the caption “Federal Funds
(Effective)”. If for any relevant date such rate is not yet published in
H.15(519), the rate for such date will be the rate set forth in the daily
statistical release designated as the Composite 3:30 p.m. Quotations for U.S.
Government Securities, or any successor publication, published by the Federal
Reserve Bank of New York (including any such successor, the “Composite 3:30 p.m.
Quotation”) for such date under the caption “Federal Funds Effective Rate”. If
on any relevant date the appropriate rate for such date is not yet published in
either H.15(519) or the Composite 3:30 p.m. Quotation, the rate for such date
will be the arithmetic mean of the rates for the last transaction in overnight
Federal funds arranged prior to 9:00 a.m. (New York City time) on that date by
each of three leading brokers of Federal funds transactions in New York City
selected by Agent.

 

Fee Letter. That certain fee letter of even date herewith, between the Borrower
and Agent.

 

First Solicitation: As defined in Section 3.6(a).

 

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Forward Purchase Contract. A purchase agreement entered into by the Borrower for
the fee or leasehold purchase of a retail, office or industrial real estate
property to be constructed.

 

Funds from Operations. Net income, computed in accordance with GAAP, excluding
minority interests, gains, or losses from debt restructuring and sales of
property (inclusive of non-recurring items such as asset sales or property
valuation adjustments), plus depreciation and amortization, and after
adjustments for unconsolidated partnerships and joint ventures. Adjustments for
unconsolidated partnerships and joint ventures will be calculated to reflect
Funds From Operations on the same basis.

 

GAAP: Generally accepted accounting principles 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 or in such other statements by such other entity as
may be approved by a significant segment of the accounting profession, which are
applicable to the circumstances as of any date of determination. Except as may
be expressly provided to the contrary herein, all accounting terms used herein
shall be interpreted, and all accounting determinations hereunder shall be made,
in accordance with GAAP. To the extent any change in GAAP affects any
computation or determination required to be made pursuant to this Agreement,
such computation or determination shall be made as if such change in GAAP had
not occurred, unless Borrower and Majority Lenders agree in writing on an
adjustment to said computation or determination to account for such change in
GAAP.

 

Governmental Requirements: All laws, statutes, codes, ordinances, and
governmental rules, regulations and requirements applicable to Borrower,
Guarantor, Agent, any Lender and/or the Approved Assets.

 

Guarantor: Saul Centers, Inc., a Maryland corporation.

 

Guaranty: That certain Guaranty of even date herewith, executed by Guarantor to
Agent on behalf of the Lenders to guaranty the Loan, as the same may be amended,
modified or replaced from time to time.

 

Hazardous Substances: Any hazardous waste, as defined by 42 U.S.C. § 9601(5),
any hazardous substances as defined by 42 U.S.C. § 9601(14), any pollutant or
contaminant as defined by 42 U.S.C. §9601(33) or any toxic substances, oil or
hazardous materials or other chemicals or substances regulated by any
Environmental Laws.

 

Immediately Available Funds: Funds with good value on the day and in the city in
which payment is received.

 

Imposition: As defined in Section 5.6.

 

Interest Differential: That sum equal to the greater of zero (0) or the
financial loss incurred by the Lenders resulting from prepayment of a LIBOR Rate
Advance, calculated as the difference between the amount of interest the Lenders
would have earned (from like investments in the Money Markets as of the first
day of the LIBOR Rate

 

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Advance) had prepayment not occurred and the interest the Lenders will actually
earn (from like investments in the Money Markets as of the date of prepayment)
as a result of the redeployment of funds from the prepayment.

 

Interest Expense: For any period of determination, an amount determined by Agent
in its sole discretion equal to the aggregate amount of interest required in
accordance with GAAP to be paid or accrued (but excluding interest reserves
funded from the proceeds of any construction loan) by the Borrower during such
time period on: (i) all indebtedness of the Borrower (including the Loan and
including original issue discount and amortization of prepaid interest, if any)
(ii) all amounts available for borrowing, or for drawing under letters of
credit, if any, issued for the account of the Borrower, but only if such
interest was or is required to be reflected as an item of expense, excluding
commitment fees, agency fees, facility fees, balance deficiency fees and similar
fees and expenses in connection with the borrowing of money and (iii) preferred
stock or a similar type of investment.

 

Legal Holiday: New Year’s Day, Martin Luther King’s Birthday, President’s Day,
Memorial Day, Fourth of July, Labor Day, Columbus Day, Veteran’s Day,
Thanksgiving Day and Christmas Day.

 

Lenders: Each Lender that is a party to this Agreement and which hereafter
becomes party to this Credit Agreement, collectively, and each of their
respective permitted successors and assigns.

 

Letter of Credit: An irrevocable letter of credit issued by Agent pursuant to
this Agreement for the account of Borrower.

 

Letter of Credit Fee: As defined in Section 2.A.7.

 

Letter of Credit Participation: As defined in Section 2.A.9.

 

Leverage Ratio: The ratio of Total Adjusted Outstanding Indebtedness to
Capitalization Value.

 

LIBOR: With respect to each LIBOR Rate Period applicable to any requested LIBOR
Rate Advance, the rate per annum (rounded up to the next whole multiple of
1/100th of 1%) equal to the rate obtained by dividing (a) the LIBOR rate quoted
by Agent from Telerate Page 3750 or any successor thereto, at approximately 5:00
o’clock a.m., Central time, on the second Euro Day prior to the first day of
such LIBOR Rate Period for delivery in Immediately Available Funds on the first
day of such LIBOR Rate Period for the approximate number of days as are in such
LIBOR Rate Period and in an amount comparable to the principal amount of such
LIBOR Rate Advance being made by the Lenders for which LIBOR is being
determined, by (b) a percentage equal to 100% minus the maximum rate in effect
on the first day of such LIBOR Rate Period at which reserves (including any
marginal, supplemental or emergency reserves) are required to be maintained by
the Lenders under Regulation D against “Eurocurrency liabilities” (as such term
is defined in Regulation D). LIBOR shall be adjusted automatically on and as of
the effective date of any change in such reserve requirements.

 

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LIBOR Rate: A rate of interest equal to LIBOR plus the Applicable Margin.

 

LIBOR Rate Advance: Any portion of the Principal Balance which bears interest at
a LIBOR Rate; provided, however, that any LIBOR Rate Advance must be in the
aggregate principal amount of at least $1,000,000.00.

 

LIBOR Rate Notice: A telephonic notice from Borrower to Agent, received by Agent
prior to 10:00 o’clock a.m. (Central time) on a Euro Day at least three (3) Euro
Days prior to the date the LIBOR Rate is to be applicable with respect to such
portion of the Principal Balance referred to therein, in which Borrower elects
to have said portion of the Principal Balance, or a portion thereof as specified
in said notice, be a LIBOR Rate Advance.

 

LIBOR Rate Period: The period commencing on the date any LIBOR Rate Advance is
made and ending one (1) month, two (2) months, three (3) months or six (6)
months thereafter as selected by Borrower in the applicable LIBOR Rate Notice;
provided, however, that (a) if any LIBOR Rate Period would end on a day that is
not a Euro Day, such LIBOR Rate Period shall extend to the next Euro Day,
unless, in the case of said LIBOR Rate Advance, such Euro Day would fall in the
next calendar month, in which event such LIBOR Rate Period shall end on the
immediately preceding Euro Day, and (b) no LIBOR Rate Period shall end later
than the then applicable Maturity Date.

 

Loan: The loan evidenced by the Note.

 

Loan Availability: That portion of the Revolving Commitment Amount determined by
Agent to be available to be advanced as more particularly described in Section
2.B.3.

 

Loan Documents: The documents described in Section 2.B.1, which evidence, secure
or otherwise relate to the Loan, including but not limited to the Note, this
Agreement, the Fee Letter, the Letter of Credit applications, the Letters of
Credit, the Closing Certification, the Sworn Statement, the Guaranty, each
Subsidiary Guaranty and including any amendments thereof and supplements thereto
executed by Agent and Borrower (and/or any other party thereto).

 

Loan Rate: A rate of interest equal to the Prime Rate. Changes in the Loan Rate
shall become effective on the same day as the date of any change in the Prime
Rate and shall apply to all advances made hereunder (other than LIBOR Rate
Advances), whether such advances are made prior to, the same day as, or
subsequent to any particular change in the Loan Rate. In no event shall the Loan
Rate ever exceed the maximum rate permitted by applicable law (if any such
maximum rate is established by applicable law), and such maximum rate shall
change if and when applicable law changes to permit a higher maximum rate.

 

Loan Rate Advance: Any portion of the Principal Balance which bears interest at
the Loan Rate.

 

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Major Asset: The Unencumbered Assets known as Beacon, French Market and
Southdale, and such other Approved Assets as Borrower and all Lenders may agree
to designate as a Major Asset from time to time.

 

Majority Lenders: Lenders holding not less than sixty-six and two-thirds of one
percent (66 2/3%) of the then aggregate outstanding unpaid principal amount of
the Loan or, if no such principal amount is then outstanding, not less than
sixty-six and two-thirds of one percent (66 2/3%) of the Revolving Commitment.

 

Maturity Date: January 27, 2008, unless extended pursuant to the terms of
Section 1.4.

 

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

 

Minimum Equity Value: For any period of determination, an amount equal to
Capitalization Value less Total Adjusted Outstanding Indebtedness.

 

Minimum Lease Up Requirement: The requirement that any Real Estate Asset that on
any date of determination has been improved with a building or buildings has
been leased to third party tenants and has an aggregate average occupancy of all
building(s) in such Real Estate Asset of not less than seventy five percent
(75%) for the fiscal quarter most recently ended, other than Lexington and West
Park, and except as otherwise approved by Majority Lenders; provided, however,
in the event that the occupancy rate with respect to any Approved Asset meeting
the Minimum Lease Up Requirement as of the date hereof falls below seventy-five
percent (75%), Borrower shall have a period of eight (8) months thereafter to
re-lease such asset in order to satisfy the Minimum Lease Up Requirement before
such property shall no longer be deemed an Approved Asset. If, at any time
thereafter, such former Approved Asset again meets the Minimum Lease-Up
Requirement, it shall, as of the date it meets such requirement, again be deemed
an Approved Asset. For purposes of this definition, a tenant shall be deemed to
be in “occupancy” if such tenant or its subtenant(s) is in possession of the
leased premises and such tenant is paying stipulated rent, if any; provided,
however, when determining whether the Minimum Lease Up Requirement has been
satisfied pursuant to Section 2.B.2 hereof, a tenant shall be deemed to be in
occupancy if, within six (6) months prior to the date of determination, such
tenant entered into a lease for space in the Real Estate Asset which such tenant
previously did not occupy and there exists no default under such lease and no
material contingencies to such tenant’s occupancy under the lease other than
completion of tenant improvement work.

 

Money Markets: One or more wholesale funding markets available to Agent,
including negotiable certificates of deposit, commercial paper, eurodollar
deposits, bank notes, federal funds and others.

 

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Net Equity Proceeds: The proceeds of a sale of an equity interest in the
Borrower or the Guarantor (including those attributable to a dividend
reinvestment program), net of usual and customary closing costs and expenses.

 

New Lenders: As defined in Section 3.6(b).

 

New Notes: As defined in Section 3.6(b).

 

Note: Individually or collectively as the context may require, the Unsecured
Revolving Promissory Note(s) of even date herewith executed and delivered by
Borrower to Lenders to evidence the Loan, together with (a) any New Notes and/or
Supplemental Notes issued pursuant to Section 3.6 hereof, and (b) any Swing Loan
Note executed and delivered by Borrower to the Swing Lender to evidence a Swing
Loan, in the aggregate maximum principal amount of up to One Hundred Fifty
Million and 00/100ths Dollars ($150,000,000.00) plus the Accordion Amount, if
applicable, as any or all of the foregoing may be amended, modified or replaced
from time to time.

 

Obligations: All indebtedness, obligations and liabilities of the Borrower to
any of the Lenders, the Swing Lender and the Agent, individually or
collectively, under this Agreement, any of the other Loan Documents, or in
respect to the Loan, the Note or Reimbursement Obligations incurred or the
Letter of Credit applications or the Letters of Credit, any Swing Loan or other
instruments at any time evidencing any thereof, whether existing on the date of
this Agreement or arising or incurred hereafter, direct or indirect, joint or
several, absolute or contingent, matured or unmatured, liquidated or
unliquidated, secured or unsecured, arising by contract, operation of law or
otherwise.

 

Outstanding Percentage: As defined in Section 3.6(c) hereof.

 

Permanent Loan Estimate: For any period of determination, a determination by
Agent of a hypothetical principal amount of indebtedness which Borrower could
incur assuming (i) payments of annual debt service equal to Unencumbered
Adjusted EBITDA measured with respect to the Approved Assets divided by 1.35,
(ii) an interest rate equal to the greater of (a) two and one-quarter percent
(2.25%) in excess of the then-current annual yield on ten-year United States
Treasury obligations issued most recently prior to such date and (b) seven and
three-quarters percent (7.75%), and (iii) a twenty five (25) year principal
amortization schedule.

 

Person: Any natural person, corporation, limited liability company, partnership
(general or limited), limited liability partnership, joint venture, firm,
association, trust, unincorporated organization, government or governmental
agency or political subdivision or any other entity, whether acting in an
individual, fiduciary or other capacity.

 

Prime Rate: The rate publicly announced by Agent from time to time as its prime
rate, as and when such rate changes; provided, however, that Agent may lend to
its customers at interest rates that are at, above or below the Prime Rate.

 

Principal Balance: One Hundred Fifty Million and 00/100ths Dollars
($150,000,000.00) or so much thereof as may have been advanced to or for the
benefit of Borrower (including, without limitation, under any Swing Loan) and
remains unpaid from time to time, as such amount may be increased pursuant to
Section 3.6 hereof.

 

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Proposed Acquisition: A Real Estate Asset that would constitute an Unencumbered
Asset at the time of its acquisition.

 

Real Estate Assets: The fixed and tangible properties consisting of land,
buildings and/or other improvements owned or ground leased (subject to the
following proviso) by the Borrower or by an Approved Subsidiary at the relevant
time of reference thereto, provided however that with the exception of the
Unencumbered Assets known as Beacon, Olney and Southdale, a ground leased
property shall not be deemed a Real Estate Asset (and thus shall not be eligible
as an Approved Asset) unless unanimously approved as such by the Lenders.

 

Real Estate Assets Under Development: Any Real Estate Assets for which the
Borrower (or Approved Subsidiary) is actively pursuing construction and for
which construction is proceeding to completion without undue delay from permit
denial, construction delays or otherwise, all pursuant to such Person’s ordinary
course of business; provided that such Real Estate Asset will no longer be
considered a Real Estate Asset Under Development on the date which is twelve
(12) months after the Borrower (or Approved Subsidiary) obtains the necessary
governmental approvals to permit occupancy of the building. Notwithstanding the
foregoing, tenant improvements to previously constructed and/or leased Real
Estate Assets shall not be considered Real Estate Assets Under Development.

 

Refunding Date: As defined in Section 3.5(c).

 

Regulation D; Regulation U: Regulations D and U, respectively (or any substitute
regulations), of the Board, together with all amendments from time to time
thereto.

 

Regulatory Change: Any change, after the date hereof in United States Federal,
state or foreign laws, regulations or treaties or the adoption or making after
such date of any interpretations, directives or requests applying to Agent
and/or the Lenders under any federal, state or foreign laws or regulations
(whether or not having the force of law) by any court or governmental or
monetary authority charged with the interpretation or administration thereof.

 

Reimbursement Obligations: The Borrower’s obligation to reimburse the Lenders
and the Agent on account of any drawing under any Letter of Credit as provided
in Section 2.A.4. Notwithstanding the foregoing, unless Borrower shall notify
Agent of its intention to repay the Reimbursement Obligations on the date of the
related drawing under any Letter of Credit, as set forth in Section 2.A.4, such
Reimbursement Obligation shall simultaneously with such drawing be converted to
and become a Loan Rate Advance.

 

Requested Increase: As defined in Section 3.6(a).

 

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Revolving Commitment: The obligation of the Lenders to make Advances to Borrower
and to participate in the issuance, extension and renewal of Letters of Credit
and the obligation of Agent to issue, extend and renew Letters of Credit, in an
aggregate principal amount at any time not to exceed the Revolving Commitment
Amount upon the terms and subject to the conditions and limitations set forth in
this Agreement.

 

Revolving Commitment Amount: One Hundred Fifty Million and 00/100ths Dollars
($150,000,000.00), as such amount may be increased in accordance with the
provisions of Section 3.6(a) hereof.

 

Shortfall: As defined in Section 3.6(a).

 

Subsidiary: For any entity, any corporation, partnership or other entity of
which at least a majority of the securities or other ownership interests having
by the terms thereof ordinary voting power to elect a majority of the board of
directors or other persons performing similar functions of such corporation,
partnership or other entity (without regard to the occurrence of any
contingency) which is at the time directly or indirectly owned or controlled by
such entity or one or more subsidiaries of such entity or by such entity and one
or more subsidiaries of such entity.

 

Subsidiary Guaranty: As defined in Section 5.09.E.

 

Supplemental Notes: As defined in Section 3.6(b).

 

Swing Lender: U.S. Bank National Association, in its capacity as the lender
under the Swing Loan facility described in Section 3.5, and its successors in
such capacity.

 

Swing Loan: A loan made by the Swing Lender pursuant to Section 3.5.

 

Swing Loan Commitment: $20,000,000.

 

Swing Loan Draw Request: A written request by Borrower for an Advance of Swing
Loan proceeds under this Agreement, in the form and with the certifications
included within Exhibit A-2 attached hereto and hereby made a part hereof.

 

Swing Loan Maturity Date: As defined in Section 3.5.

 

Swing Loan Note: As defined in Section 3.5.

 

Swing Loan Refund Amount: As defined in Section 3.5.

 

Termination Date: The earlier of (a) the Maturity Date, or (b) the date on which
the Note is declared to be immediately due and payable pursuant to the terms
hereof or of the Note.

 

Total Adjusted Committed Indebtedness: As of any date of determination, the sum
as determined by Agent of all committed obligations, contingent and otherwise of
the Borrower and Borrower’s pro rata share of all committed obligations of
Borrower’s

 

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unconsolidated subsidiaries, the unconsolidated subsidiaries of the general
partners of Borrower, and joint ventures in which Borrower and/or Borrower’s
general partners is a party, whether secured or unsecured, that in accordance
with GAAP should be classified upon the obligor’s balance sheet as liabilities,
or to which reference should be made by footnotes thereto, including in any
event and whether or not so classified: (a) the committed amount of all debt and
similar monetary obligations, whether direct or indirect (excluding trade
payables and other operating expenses paid by Borrower within sixty days); (b)
the committed amount of all liabilities secured by any mortgage, pledge,
security interest, lien, charge, or other encumbrance existing on property owned
or acquired subject thereto, whether or not the liability secured thereby shall
have been assumed; (c) the maximum liability which Borrower could incur under
all guarantees for borrowed money, endorsements and other contingent
obligations, whether direct or indirect, in respect of indebtedness or
obligations of others, including any obligation to supply funds (including
partnership obligations and capital requirements) to or in any manner to invest
in, directly or indirectly, the debtor, to purchase indebtedness, or to assure
the owner of indebtedness against loss, through an agreement to purchase goods,
supplies, or services for the purpose of enabling the debtor to make payment of
the indebtedness held by such owner or otherwise, and the obligations to
reimburse the issuer in respect of any letters of credit; (d) preferred stock
outstanding or a similar type of investment; and (e) all liability under forward
equity arrangements and Forward Purchase Contracts which at such time could be
specifically enforced by the seller thereunder. For the avoidance of doubt,
preferred stock outstanding or a similar type of investment that in accordance
with GAAP is classified upon the obligor’s balance sheet as equity shall not be
included in the definition of “Total Adjusted Committed Indebtedness.”

 

Total Adjusted Outstanding Indebtedness: As of any date of determination, the
sum as determined by Agent of all advanced and outstanding obligations,
contingent and otherwise of the Borrower and Borrower’s pro rata share of all
advanced and outstanding obligations of Borrower’s unconsolidated subsidiaries,
the unconsolidated subsidiaries of the general partners of Borrower, and joint
ventures in which Borrower and/or Borrower’s general partners is a party,
whether secured or unsecured, that in accordance with GAAP should be classified
upon the obligor’s balance sheet as liabilities, or to which reference should be
made by footnotes thereto, including in any event and whether or not so
classified: (a) all debt and similar monetary obligations, whether direct or
indirect (excluding trade payables and other operating expenses paid by Borrower
within sixty days); (b) all liabilities secured by any mortgage, pledge,
security interest, lien, charge, or other encumbrance existing on property owned
or acquired subject thereto, whether or not the liability secured thereby shall
have been assumed; (c) all guarantees for borrowed money, endorsements and other
contingent obligations, whether direct or indirect, in respect of advanced and
outstanding indebtedness or obligations of others, including any obligation to
supply funds (including partnership obligations and capital requirements) to or
in any manner to invest in, directly or indirectly, the debtor, to purchase
indebtedness, or to assure the owner of indebtedness against loss, through an
agreement to purchase goods, supplies, or services for the purpose of enabling
the debtor to make payment of the indebtedness held by such owner or otherwise,
and the obligations to reimburse the issuer in respect of any letters of credit;
(d) preferred stock outstanding or a similar type of investment; and (e) all
liability under forward equity arrangements and Forward Purchase Contracts which
at such time could be specifically enforced by the seller thereunder. For

 

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the avoidance of doubt, preferred stock outstanding or a similar type of
investment that in accordance with GAAP is classified upon the obligor’s balance
sheet as equity shall not be included in the definition of “Total Adjusted
Outstanding Indebtedness.”

 

Total Revolving Outstandings: As of any date of determination, the aggregate
unpaid principal balance of Advances outstanding on such date.

 

Unencumbered Adjusted EBITDA: Adjusted EBITDA calculated only with respect to
the Approved Assets.

 

Unencumbered Asset. Any Real Estate Asset that on any date of determination: (a)
is not subject to any material liens (including any such lien imposed by the
organizational documents of the owner of such asset), (b) is not the subject of
any matter that materially adversely affects the value of such Real Estate
Asset, (c) is not the subject of a Disqualifying Environmental Event, (d) has
been improved with a building or buildings which (1) have been issued a
certificate of occupancy (where available) or is otherwise lawfully occupied for
its intended use, and (2) are fully operational, (e) is wholly owned or
ground-leased (to the extent permitted hereunder) by the Borrower or an Approved
Subsidiary and (f) has not been designated by the Borrower in writing to the
Agent as a Real Estate Asset that is not an Unencumbered Asset, which
designation shall not be permitted during the continuance of an Event of Default
and shall be accompanied by a compliance certificate in the form of Exhibit B-6
attached hereto.

 

Uniform Customs: With respect to any Letter of Credit, the Uniform Customs and
Practice for Documentary Credits (1993 Revision), International Chamber of
Commerce Publication No. 500, or any successor version thereof adopted by the
Agent in the ordinary course of its business as a letter of credit issuer and in
effect at the time of issuance of such Letter of Credit.

 

Unrestricted Cash and Cash Equivalents: As of any date of determination, the sum
of (a) the aggregate amount of unrestricted cash then held by the Borrower and
(b) the aggregate amount of unrestricted cash equivalents (valued at fair market
value) then held by the Borrower. As used in this definition, (i) “unrestricted”
means the specified asset is not subject to any liens in favor of any Person and
(ii) “cash equivalents” include overnight deposits and also means that such
asset has a liquid, par value in cash and is convertible to cash on demand.
Notwithstanding anything contained herein to the contrary, the term Unrestricted
Cash and Cash Equivalents shall not include the commitments of the Lenders to
make Advances under this Agreement or any other commitments from which the
access to such cash or cash equivalents would create indebtedness or tenant
security and other restricted deposits, until forfeited or otherwise entitled to
be retained by the Borrower.

 

ARTICLE I.

LOAN

 

1.1 Principal Advances

 

Upon the terms and subject to the conditions set forth in this Agreement, each
Lender severally, but not jointly, agrees to lend to Borrower, pro rata in
accordance with

 

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its Commitment Percentage, and Borrower agrees to borrow from Lenders, on a
revolving basis, at any time and from time to time, in accordance with the terms
hereof, from the Closing Date to the Termination Date, during which period
Borrower may borrow, repay and reborrow in accordance with the terms hereof, for
the purpose of acquisitions, pre-development, development, and
renovations/expansions, entitled land (not to exceed 20% of the Revolving
Commitment Amount in the aggregate at any one time), short-term working capital
(including Distributions not to exceed $10,000,000.00 in the aggregate at any
one time), principal amortization requirements and letters of credit issued for
the account of Borrower (not to exceed $10,000,000.00 in the aggregate at any
one time); provided, however, that (A) at no time shall any Lender be obligated
to lend to Borrower more than its Commitment Percentage of the total amount of
proceeds of the Loan which Borrower is then qualified to receive hereunder, and
(B) the amount of the Total Revolving Outstandings shall never exceed the lesser
of (x) the Revolving Commitment Amount and (y) the Loan Availability. In no
event shall Borrower use Loan proceeds in connection with the acquisition of
unentitled land (i.e., land with none of the following: (i) existing or approved
infrastructure, (ii) access or entitlement to utilities or (iii) plan for
development), mortgages or public or private securities (other than the purchase
of shares in Saul Centers, Inc. not to exceed $5,000,000.00 in the aggregate at
any one time), without in each instance obtaining Agent’s prior written consent.

 

All Advances by each Lender shall be evidenced by a Note. Each Note executed by
the Borrower shall be in the aggregate principal amount equal to such Lender’s
Commitment Percentage of the Revolving Commitment Amount. Each Lender shall
enter in its ledgers and records the amount of each such Advance, and of each
payment made upon the Loan, and each Lender is authorized by Borrower to enter
on a schedule attached to the Note a record of such Advances and payments;
provided, however, that the failure by any Lender to make any such entry or any
error by such Lender in making such entry shall not limit or otherwise affect
the Obligations. Notwithstanding the express principal amount of the Note,
Borrower shall not at any time be obligated to repay more or less than the total
of all Advances made by each Lender pursuant hereto and to the other Loan
Documents, together with interest thereon at the rates specified below and in
the Note, computed on each Advance from the date it is so made by such Lender,
and all other advances made by such Lender pursuant to the terms of the Loan
Documents, with interest thereon as therein provided, less all payments of
principal of and interest on the Note, and of such advances and interest
thereon, made by Borrower. The entire unpaid principal amount of the Loan shall
be due and payable on the Termination Date.

 

1.2 Payment of Interest and Principal. Interest shall accrue on the Principal
Balance from and after the date hereof. All interest payable hereunder shall be
computed on the basis of a 360 day year, but shall be charged for the actual
number of days principal is unpaid. Interest accruing in accordance herewith
shall be payable, in arrears, on the first Business Day of each calendar month,
commencing with the first Business Day of the next calendar month following the
calendar month in which the initial advance is made to Borrower, and continuing
on the first Business Day of each and every calendar month thereafter until the
Principal Balance (as advanced and readvanced) and all accrued interest thereon
are paid in full. Agent shall provide a monthly notice to Borrower setting forth
the amount of interest due and the due date thereof, which notice shall be
mailed on or prior to the tenth (10th) day preceding the first day of each
month; provided, however,

 

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that Borrower shall be obligated to pay interest on the Loan (and any Swing
Loan) when due regardless of the date Borrower receives such notice. All unpaid,
accrued interest shall be paid in full on the Termination Date.

 

In the event that the interest and/or charges in the nature of interest, if any,
provided for by this Agreement or by any other Loan Document, shall contravene a
legal or statutory limitation applicable to the Loan (or any Swing Loan), if
any, Borrower shall pay only such amounts as would legally be permitted;
provided, however, that if the defense of usury and all similar defenses are
unavailable to Borrower, Borrower shall pay all amounts provided for herein. If,
for any reason, amounts in excess of the amounts permitted in the foregoing
sentence shall have been paid, received, collected or applied hereunder, whether
by reason of acceleration or otherwise, then, and in that event, any such excess
amounts shall be applied to principal, unless principal has been fully paid, in
which event such excess amount shall be refunded to Borrower.

 

1.3 Prepayment. The Principal Balance and accrued interest thereon may be
prepaid in full or in part at any time, without premium or penalty (other than
as set forth in Section 1.11 with respect to prepayments of any LIBOR Rate
Advances), after a minimum of one (1) Business Day prior written notice from
Borrower to Agent of the date of prepayment. Upon any such prepayment in full,
Borrower may terminate this Agreement, without fee or penalty, pursuant to
written notice to Agent. Each prepayment shall be in an amount not less than the
lesser of $100,000.00 or the Principal Balance.

 

1.4 Maturity Date; Extension. If not sooner paid in accordance with the terms
hereof, the Principal Balance, together with all unpaid interest accrued
thereon, shall be due and payable, in full, on the Maturity Date; provided,
however, the Maturity Date may be extended for one (1) additional period of one
(1) year (the “Extension Period) upon the written request (the “Extension
Request”) of Borrower given not less than thirty (30) days nor more than one
hundred twenty (120) days prior to the Maturity Date, such extension being
subject to satisfaction of all of the following conditions:

 

A. Payment on or before the first day of the Extension Period of the Extension
Fee set forth in the Fee Letter;

 

B. At the time of the Extension Request and on the first day of the Extension
Period, there shall exist no uncured Event of Default (as hereinafter defined)
or event which, with the giving of notice or passage of time, or both, could
become an Event of Default;

 

C. Borrower shall deliver to Agent all financial information relating to
Borrower and Guarantor required hereunder, and such information shall reflect
that no material adverse change, financial or otherwise, as determined by Agent,
in its sole discretion, shall have occurred with respect to Borrower or
Guarantor;

 

Notwithstanding Borrower’s right to extend the Maturity Date of the Loan as set
forth above, Borrower hereby agrees that Agent and the Lenders shall have no
commitment or obligation to extend the Maturity Date beyond January 27, 2008
unless each of the foregoing conditions shall have been satisfied.

 

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1.5 Calculation of Interest. From and after the date hereof, and until the date
on which the Note is paid in full, Borrower shall pay interest on the Principal
Balance at the Loan Rate, as the same may fluctuate from time to time; provided,
however, subject to the limitations stated herein, Borrower may elect in
accordance with the procedures set forth herein to have interest accrue and be
paid on all or a portion of the outstanding Principal Balance (other than with
respect to a Swing Loan) at a rate per annum equal to the LIBOR Rate.

 

1.6 LIBOR Pricing Options. Borrower may elect to fix the rate of interest
payable upon the Principal Balance (other than with respect to a Swing Loan) or
any portion thereof pursuant to the provisions of this Section. The provisions
of this Section 1.6 shall govern the computation, accrual and payment of
interest with respect to the Principal Balance or any portion thereof for which
Borrower properly makes such an election. If no Event of Default has occurred
and is continuing under this Agreement or any of the other Loan Documents,
Borrower may from time to time elect, by a LIBOR Rate Notice, to pay interest on
the LIBOR Rate Advance described in said LIBOR Rate Notice at a LIBOR Rate
during the LIBOR Rate Period specified in said LIBOR Rate Notice; provided,
however, Borrower may not elect to have more than five (5) LIBOR Rate Advances
outstanding at any one time. Upon request by Borrower, prior to the submission
by Borrower to Agent of any LIBOR Rate Notice, Agent shall by telephone advise
Borrower from time to time of the then applicable LIBOR Rate with respect to any
LIBOR Rate Period promptly after the same is determined by Agent, which
determination shall be final, conclusive and binding on Borrower. All interest
accruing hereunder at a LIBOR Rate shall accrue and be computed and charged in
the same manner as interest at the Loan Rate. From and after the end of each
LIBOR Rate Period, in the event Borrower does not timely select another interest
rate option at least three (3) Euro Days before a particular LIBOR Rate Advance
expires, Agent may, at any time thereafter convert such LIBOR Rate Advance to a
Loan Rate Advance, but until such conversion, the funds advanced under the
expired LIBOR Rate Advance shall continue to accrue interest at the same rate as
the interest rate under such expired LIBOR Rate Advance. Agent’s internal
records of applicable interest rates shall be determinative in the absence of
manifest error. Notwithstanding the foregoing, all LIBOR Rate Periods at any one
time outstanding shall end on not more than five (5) different dates, and the
duration of any LIBOR Rate Periods which would exceed such limitation shall be
adjusted to coincide with the remaining term of such other shorter LIBOR Rate
Period(s) as Borrower shall notify Agent of in writing, or absent such notice,
as Agent may elect. Except as hereinafter expressly provided, no LIBOR Rate
Advance may be repaid or prepaid on any day other than the last day of the LIBOR
Rate Period applicable thereto; provided, however, that if Agent is required by
any applicable law, statute, rule, regulation or requirement to accept any such
prepayment, Borrower shall also pay to Agent for the benefit of the Lenders,
from time to time, on demand, any sums necessary to compensate the Lenders for
all costs, expenses, claims, penalties and liabilities incurred by the Lenders
by virtue of the repayment or prepayment of funds, or the inability of the
Lenders to repay or prepay funds borrowed by the Lenders in the London interbank
market to advance to Borrower.

 

1.7 Regulatory Costs. Notwithstanding any other provision herein, if any
Regulatory Change shall change the basis of taxation of payments to the Lenders
of the principal of or

 

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interest on any LIBOR Rate Advance or any other fees or amounts payable
hereunder (other than taxes imposed on the overall net income of the Lenders by
the jurisdiction in which the Lenders have their principal offices or by any
political subdivision or taxing authority therein), or shall subject the Lenders
to any new or additional charge, fee, withholding or tax of any kind with
respect to the Loan hereunder or change the method of taxation of the Loan or
impose, modify or deem applicable any reserve, special deposit or similar
requirement against assets of, deposits with or for the account of, or credit or
loan commitments extended by, the Lenders (except any such reserve requirement
which is reflected in LIBOR) or shall impose on a Lender or the London interbank
market any other condition affecting this Agreement, the Note or the LIBOR Rate
Advances made by the Lenders, and the result of any of the foregoing shall be to
increase the cost to the Lenders of making or maintaining any LIBOR Rate Advance
or to reduce the amount of any sum received or receivable by a Lender hereunder
(whether of principal, interest or otherwise) in respect thereof, by an amount
deemed by such Lender to be material, then Borrower shall pay to Agent for the
benefit of such Lender upon demand, such additional amount or amounts as will
compensate such Lender for such additional costs or reduction, including lost
income resulting therefrom as reasonably determined by such Lender. A statement
from such Lender setting forth such amount or amounts as shall be necessary to
so compensate such Lender shall be delivered to Borrower and shall, in the
absence of manifest error, be conclusive and binding upon Borrower. Borrower
shall pay Agent on behalf of such Lender the amount shown as due on any such
statement within ten (10) Business Days after its receipt of the same. Failure
on the part of any Lender to demand compensation for any increased costs, lost
income or reduction in amounts received or receivable shall not constitute a
waiver of such Lender’s rights to demand compensation for any increased costs or
reduction in amounts received or receivable. The protection under this section
shall be available to the Lenders regardless of any possible contention of the
invalidity or inapplicability of any law, regulation or directive which shall
give rise to any demand by the Lenders.

 

1.8 Inability to Determine LIBOR. In the event that on the date for determining
LIBOR in respect of the LIBOR Rate Period for any LIBOR Rate Advance, Agent
shall determine (which determination shall be conclusive in the absence of
manifest error) that, by reason of circumstances affecting the London interbank
market, adequate and fair means do not exist for ascertaining LIBOR for such
LIBOR Rate Period, Agent shall promptly give to Borrower telephonic notice
(confirmed as soon as practicable in writing) of the nature and effect of such
circumstances. After receipt of such notice and during the existence of such
circumstances, Borrower shall have no right to elect a LIBOR Rate with respect
to advances hereunder; provided that nothing in this Section shall affect the
LIBOR Rate then in effect on any LIBOR Rate Advance outstanding at the time of
receipt by Borrower of such notice until the expiration of the LIBOR Rate Period
in effect with respect to such LIBOR Rate Advance at such time.

 

1.9 Illegality. Notwithstanding anything to the contrary herein contained, if
any Regulatory Change shall make it unlawful for any Lender to make or maintain
any LIBOR Rate Advance or to give effect to its obligations as contemplated
hereby, then, by written notice to Borrower, Agent may:

 

A. Declare that LIBOR Rate Advances will not thereafter be made hereunder, in
which event Borrower shall be prohibited from requesting LIBOR Rate Advances,
and the Lenders shall not be required to make LIBOR Rate Advances to Borrower,
hereunder unless such declaration is subsequently withdrawn; and

 

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B. Require, but only to the extent the Regulatory Change affects outstanding
LIBOR Rate Advances, that all outstanding LIBOR Rate Advances made by the
Lenders be added to, and become a part of, the Loan Rate Advance hereunder, in
which event all such LIBOR Rate Advances shall automatically be added to, and
become a part of, the Loan Rate Advance as of the effective date of such notice
as is hereinafter provided for (notwithstanding any provisions of the Note or
this Agreement to the contrary), and interest shall accrue thereon, from and
after said date, at the Loan Rate or the Default Rate, whichever is then
applicable. For purposes of this Section, a notice to Borrower by Agent shall be
effective on the date of receipt by Borrower.

 

1.10 Capital Adequacy. Borrower shall also pay to the applicable Lenders from
time to time on demand such amounts as such Lender may determine to be necessary
to compensate such Lender for any costs which such Lender determines are
attributable to the extension of credit hereunder in respect of any amount of
capital maintained by such Lender or any of its affiliates pursuant to any law,
guideline or regulation of any jurisdiction or any interpretation, directive or
request (whether or not having the force of law) of any court or governmental or
monetary authority enacted, whether proposed on the date of this Agreement or
enacted, promulgated or issued after the date of this Agreement. Without
limiting the foregoing, such compensation shall include an amount equal to any
reduction in return on assets or return on equity to a level below that which
the Lenders could have achieved absent their extension of credit hereunder and
but for such law, regulation, interpretation, directive or request.

 

1.11 Indemnification of Agent and the Lenders. If a LIBOR Rate Advance is
prepaid, whether by the Borrower as a result of acceleration upon default or
otherwise, the Borrower agrees to pay all of the losses, costs, expenses and
Interest Differential (as determined by the Agent) of Agent and the Lenders
incurred or sustained as a result of such prepayment. Because of the short-term
nature of this facility, the Borrower agrees that the Interest Differential
shall not be discounted to its present value. Any prepayment of a LIBOR Rate
Advance shall be in an amount equal to the remaining entire principal balance of
such advance. Agent shall provide to Borrower a statement, signed by an officer
of Agent, explaining any such loss or expense and setting forth, if applicable,
the computations used to determine such loss or expense which shall be
conclusive and binding on Borrower, absent manifest error.

 

1.12 Default Rate. If a default shall occur and continue beyond any applicable
notice, cure or grace period under the Note, this Agreement or any of the other
Loan Documents or the entire Principal Balance, all interest accrued thereon,
and all other amounts payable under the Loan have not been repaid on or before
the Maturity Date, then the entire Principal Balance shall (without notice to or
demand upon Borrower) become due and payable on said date, together with all
unpaid, accrued interest thereon and all other amounts payable under the Loan,
and with interest computed thereon from and after that date at a rate which is
four percent (4%) per annum in excess of the Loan Rate or the

 

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LIBOR Rate, as applicable, or at the maximum lawful rate of interest which may
be charged thereon by Agent, if any, whichever is less (hereinafter called
“Default Rate”), until all such amounts are paid in full.

 

1.13 Late Payment Charge. In the event that any required payment of principal
and/or interest hereunder (other than full payment at maturity) is not made
within five (5) days of the due date thereof, Borrower shall pay to Agent an
additional payment of a late payment charge to compensate for Lenders’ loss of
use of funds and for the expenses of handling the delinquent payment, in an
amount equal to five percent (5.0%) of such delinquent payment. In the event the
maturity of the indebtedness hereunder is accelerated by Agent, this section
shall apply only to payments overdue prior to the time of such acceleration.

 

1.14 Effective Rate. Borrower, Agent and the Lenders agree that no payment of
interest or other consideration made or agreed to be made by Borrower to Agent
and/or the Lenders pursuant to this Agreement, the Note or any other instrument
referring to or securing the Note shall, at any time, be deemed to have been
computed at an interest rate in excess of the maximum rate of interest
permissible by law, if any. In the event such payments of interest or other
consideration provided for in this Agreement, the Note or any other instrument
referring to or securing the Note shall result in payment of an effective rate
of interest which, for any period of time, is in excess of the limit of the
usury law or any other law applicable to the Loan evidenced by the Note, all
sums in excess of those lawfully collectible as interest for the period in
question shall, without further agreement or notice between or by any party or
parties hereto, be applied to the Principal Balance immediately upon receipt of
such monies by Agent with the same force and effect as though Borrower had
specifically designated, and Agent had agreed to accept, such extra payments as
a principal payment, without premium or penalty. If principal has been fully
paid, any such excess amount shall be refunded to Borrower. This provision shall
control over every other obligation of Borrower, Agent and the Lenders hereunder
and under the Note and any other instrument which secures the Note.

 

1.15 Payments. All payments made under the Note shall be applied to any late
payment charge then due, to accrued interest, to the Principal Balance and, if
Agent and the Lenders have advanced any sums under the terms of any instrument
which secures the Note, to repayment of the funds so advanced, even though the
same have become part of the Principal Balance, together with interest thereon
at the Default Rate, in such order as Agent, at its option, may elect. All
payments made under the Loan shall be made in Immediately Available Funds,
without counterclaim or set off and free and clear of, and without any deduction
or withholding for, any taxes or other payments.

 

1.16 Fees. On the date hereof and on or before the dates set forth therein,
Borrower shall pay Agent all fees, costs and expenses referenced in the Fee
Letter. The agency fee set forth in the Fee Letter is for the services to be
performed by Agent in acting as Agent and is fully earned on the date paid. The
agency fee paid to the Agent is solely for its own account and is nonrefundable.

 

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1.17 Non-Usage Fees

 

In addition to any other fees set forth in this Agreement, Borrower shall pay to
Agent on behalf of Lenders in Immediately Available Funds a non-usage fee equal
to the percentage set forth below per annum multiplied by the unadvanced portion
of the Revolving Commitment Amount (after deducting the undrawn amount of any
Letters of Credit outstanding hereunder), payable on the first day of each
calendar quarter, calculated in arrears based on the average daily balance of
the unadvanced portion of the Revolving Commitment Amount during the prior
calendar quarter; the first payment of such fee shall be due and payable on
April 1, 2005 and shall be pro rated based upon that portion of the calendar
quarter during which the Revolving Commitment is outstanding. The non-usage fee
shall be shared among the Lenders in accordance with the daily average
Commitment Percentages of the Lenders during such calendar quarter.

 

The non-usage fee shall be equal to 0.15%; provided, however, in the event that
Agent determines in its sole discretion (and to the extent that such
determination is in reliance upon documentation provided by Borrower, copies
shall be provided to each Lender by Agent) that the average daily balance of the
unadvanced portion of the Revolving Commitment Amount during the prior calendar
quarter shall have been greater than or equal to fifty percent (50%) of the
Revolving Commitment Amount, then the non-usage fee as to such quarter shall be
equal to 0.20% per annum.

 

ARTICLE II.A.

LETTERS OF CREDIT

 

2.A Terms of the Letter of Credit Facility

 

2.A.1. Letters of Credit. Upon the terms and subject to the conditions of this
Agreement, Agent agrees, in its individual capacity, to issue, extend and renew
Letters of Credit for the account of Borrower from time to time between the
Closing Date and the Termination Date in such form as may be requested by
Borrower and reasonably agreed to by Agent and in such amounts as the Borrower
shall request up to an aggregate amount at any time outstanding not exceeding
the Revolving Commitment Amount; provided, however, that, after giving effect to
such issuance, (a) the Maximum Drawing Amount shall not exceed $10,000,000.00 at
any time, (b) the sum of (i) the Maximum Drawing Amount on all Letters of Credit
and (ii) Total Revolving Outstandings shall not exceed the Loan Availability in
effect at any time, and (c) the total number of Letters of Credit outstanding
shall not exceed five (5).

 

2.A.2. Procedures for Letters of Credit. Each request for a Letter of Credit
shall be made by the Borrower, in writing, by telex, facsimile transmission or
electronic conveyance received by the Agent by 2:00 p.m. (Central time) on a
Business Day which is not less than five (5) Business Days preceding the
requested date of issuance (which shall also be a Business Day) and shall be
accompanied by a certificate executed by the Borrower in the form of Exhibit
B-7. Each request for a Letter of Credit shall specify (i) the date of issuance
of the requested Letter of Credit, (ii) the amount of the requested Letter of
Credit, (iii) the name of the account party on such Letter of Credit, and (iv)
the beneficiary of such Letter of Credit. The Agent may require that such
request be made on such letter of credit application and reimbursement agreement
form as the Agent may from time to time specify, along with satisfactory
evidence of the authority and incumbency of the

 

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representative of the Borrower making such request. Each request for a Letter of
Credit shall be deemed a representation by the Borrower that, on the date of
issuance of such Letter of Credit and after giving effect thereto, the
applicable conditions specified in Article III have been and will be satisfied.
Unless the Agent determines that any applicable condition specified in Article
III has not been satisfied, the Agent will issue the requested Letter of Credit
at its principal office in Minneapolis, Minnesota not later than 3:00 p.m. on
the requested date of issuance.

 

2.A.3. Terms of Letters of Credit. Letters of Credit shall be issued in support
of obligations of the Borrower. All Letters of Credit must expire not later than
thirty (30) days prior to the Maturity Date. Each Letter of Credit so issued,
extended or renewed shall be subject to the Uniform Customs.

 

2.A.4. Agreement to Repay Letter of Credit Drawing. If the Agent has received
documents purporting to draw under a Letter of Credit that the Agent believes
conform to the requirements of the Letter of Credit, or if the Agent has decided
that it will comply with the Borrower’s written request or authorization to pay
a drawing on any Letter of Credit that the Agent does not believe conforms to
the requirements of the Letter of Credit, it will notify Borrower, of that fact.
Except as contemplated in Section 2.A.10 below, the Borrower shall reimburse the
Agent for the account of the Agent or (as the case may be) the Lenders by 9:30
a.m. (Central time) on the day on which such drawing is to be paid in
Immediately Available Funds in an amount equal to the amount of such drawing. In
addition, Borrower agrees to reimburse or pay to Agent for the account of the
Agent or (as the case may be) the Lenders with respect to each Letter of Credit
issued, extended or renewed by Agent hereunder:

 

A. Upon reduction (but not termination) of the Revolving Commitment Amount to an
amount less than the then Maximum Drawing Amount, an amount equal to such
difference, which amount shall be held by the Agent in a non-interest bearing
account as cash collateral for the benefit of Lenders and the Agent for all
Reimbursement Obligations, and

 

B. Upon the termination of the Revolving Commitment, or the acceleration of the
Reimbursement Obligations with respect to all Letters of Credit in accordance
with Section 6.2(C), an amount equal to the then Maximum Drawing Amount on all
Letters of Credit, which amount shall be held by Agent in a non-interest bearing
account as cash collateral for the benefit of Lenders and Agent for all
Reimbursement Obligations.

 

2.A.5. Obligations Absolute. The obligation of the Borrower under Section 2.A.4.
to repay the Agent for any amount drawn on any Letter of Credit shall be
absolute, unconditional and irrevocable, shall continue for so long as any
Letter of Credit is outstanding, notwithstanding any termination of this
Agreement, and shall be paid strictly in accordance with the terms of this
Agreement, under all circumstances whatsoever, including without limitation the
following circumstances:

 

A. Any lack of validity or enforceability of any Letter of Credit;

 

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B. The existence of any claim, setoff, defense or other right which the Borrower
may have or claim at any time against any beneficiary, transferee or holder of
any Letter of Credit (or any Person for whom any such beneficiary, transferee or
holder may be acting), the Agent or any other Person, whether in connection with
a Letter of Credit, this Agreement, the transactions contemplated hereby, or any
unrelated transaction; or

 

C. Any statement or any other document presented under any Letter of Credit
proving to be forged, fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect whatsoever.

 

Neither the Agent nor its officers, directors or employees shall be liable or
responsible for, and the Obligations of the Borrower shall not be impaired by:

 

(i) The use which may be made of any Letter of Credit or any acts or omissions
of any beneficiary, transferee or holder thereof in connection therewith;

 

(ii) The validity, sufficiency or genuineness of documents, or of any
endorsements thereon, even if such documents or endorsements should, in fact,
prove to be in any or all respects invalid, insufficient, fraudulent or forged;

 

(iii) The acceptance by the Agent of documents that appear on their face to be
in order, without responsibility for further investigation, regardless of any
notice or information to the contrary; or

 

(iv) Any other action of the Agent in making or failing to make payment under
any Letter of Credit if in good faith and in conformity with U.S. or foreign
laws, regulations or customs applicable thereto.

 

2.A.6. Increased Cost for Letters of Credit. If any Regulatory Change shall
either (a) impose, modify or make applicable any reserve, deposit, capital
adequacy or similar requirement against Letters of Credit issued by the Agent,
or (b) shall impose on the Agent any other conditions affecting this Agreement
or any Letter of Credit; and the result of any of the foregoing is to increase
the cost to the Agent of issuing or maintaining any Letter of Credit, or reduce
the amount of any sum received or receivable by the Agent hereunder, then, upon
written demand (which demand shall be given by the Agent promptly after it
determines such increased cost or reduction), the Borrower shall pay to the
Agent the additional amount or amounts as will compensate the Agent for such
actual or imputed increased cost or reduction. A certificate submitted to the
Borrower by the Agent setting forth the basis for the determination of such
additional amount or amounts necessary to compensate the Agent as aforesaid, and
stating in reasonable detail the basis for the charge and the method of
computation, shall be conclusive and binding on the Borrower absent error.

 

2.A.7. Letter of Credit Fees. For each Letter of Credit issued, the Borrower
shall pay to the Agent (a) a fee equal to the higher of (a) $1,000.00, or (b)
12.5 basis points on each Letter of Credit face amount, payable upon issuance of
each such Letter of Credit, and (b) a fee (a “Letter of Credit Fee”) in an
amount equal to the Applicable Margin per

 

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annum multiplied by the face amount of each outstanding Letter of Credit, which
Letter of Credit Fee (i) shall be payable quarterly in arrears on the first day
of each calendar quarter for the immediately preceding calendar quarter (which
Letter of Credit Fee shall be pro-rated for any calendar quarter in which such
Letter of Credit is issued, drawn upon or otherwise reduced or terminated) and
(ii) shall be for the account of the Lenders pro rata in accordance with their
respective Commitment Percentages. In addition to the Letter of Credit Fee, the
Borrower shall pay to the Agent, on demand, all amendment, drawing and other
fees regularly charged by the Agent to its letter of credit customers and all
out-of-pocket expenses incurred by the Agent in connection with the issuance,
amendment, administration or payment of any Letter of Credit.

 

2.A.8 Regulations U and X. No portion of any Letter of Credit is to be obtained
for the purpose of purchasing or carrying any “margin security” or “margin
stock” as such terms are used in Regulations U and X of the Board, 12 C.F.R.
Parts 221 and 224.

 

2.A.9 Letter of Credit Participation. Each Lender severally agrees that it shall
be absolutely liable, without regard to the occurrence of any default or Event
of Default or any other condition precedent whatsoever, to the extent of such
Lender’s Commitment Percentage, to reimburse Agent on demand pursuant to Section
2.A.10 for the amount of each draft paid by Agent under each Letter of Credit to
the extent that such amount is not reimbursed by the Borrower pursuant to
Section 2.A.4 (such agreement for a Lender being called herein the “Letter of
Credit Participation” of such Lender).

 

2.A.10 Letter of Credit Payments; Advance of Loan. Notwithstanding anything
contained in Section 2.A.4 above to the contrary, unless Borrower shall have
notified the Agent prior to 11:00 a.m. (Central time) on the Business Day
immediately prior to the date of such drawing that Borrower intends to reimburse
Agent for the amount of such drawing, Borrower shall be deemed to have requested
a Loan Rate Advance on the date on which such drawing is honored and in an
amount equal to the amount of such drawing. The Borrower may thereafter convert
any such Loan Rate Advance to a LIBOR Rate Advance in accordance with Section
1.6. Each Lender shall, in accordance with Section 1.1, make available such
Lender’s Commitment Percentage of such Advance to Agent, the proceeds of which
shall be applied directly by Agent to reimburse Agent and/or Lenders for the
amount of such draw. Agent is irrevocably authorized by the Borrower and each of
the Lenders to honor draws on each Letter of Credit by the beneficiary thereof
in accordance with the terms of the Letter of Credit. The responsibility of the
Agent to the Borrower and the Lenders shall be only to determine that the
documents (including each draft) delivered under each Letter of Credit in
connection with such presentment shall be in conformity in all material respects
with such Letter of Credit.

 

2.A.11 Existing Letter of Credit. The parties hereto acknowledge and agree that
that certain Letter of Credit No. SLCMMSP03477 in the face amount of
$2,100,000.00, issued by Agent for the benefit of Teachers Insurance and Annuity
Association of America on behalf of Borrower, shall be deemed to have been
issued pursuant to this Agreement, in accordance with the terms and conditions
set forth in this Article IIA.

 

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ARTICLE II.B

CONDITIONS OF BORROWING

 

Lenders shall not be required to make any Advances hereunder until the
pre-closing requirements, conditions and other requirements set forth below have
been completed and fulfilled to the satisfaction of Agent, with respect to said
Advance, at Borrower’s sole cost and expense.

 

2.B.1 Prerequisites to Effectiveness of Agreement

 

The obligations of Lenders to make Advances and the effectiveness of this
Agreement are subject to the following documents, certificates and opinions,
each in form and substance acceptable to Agent and its counsel, having been
delivered to and approved by Agent. It is agreed, however, that Lenders may, in
their discretion, make such Advances prior to completion and fulfillment of any
or all of such pre-closing requirements, conditions and other requirements,
without waiving its right to require such completion and fulfillment before any
additional Advances are made.

 

A. This Agreement duly executed by Borrower, Agent, Swing Lender and Lenders;
the Note duly executed by Borrower; the Fee Letter; and the Guaranty duly
executed by Guarantor;

 

B. A copy of the Certificate of Limited Partnership of Borrower and all
amendments thereto, and a Certificate of Good Standing for Borrower, currently
certified by the Secretary of State of its state of organization; Borrower’s
Agreement of Limited Partnership, and any necessary consents and resolutions
authorizing the transactions described herein, all currently certified by
Borrower’s general partner, and upon which Agent and Lenders may rely until
revoked by written notice to Agent;

 

C. A copy of the Articles of Incorporation of Guarantor and all amendments
thereto, and a Certificate of Good Standing for Guarantor, each currently
certified by the Secretary of State of its state of incorporation; Guarantor’s
By-Laws, Resolutions of Guarantor’s Board of Directors authorizing the
transactions described herein, and an incumbency certificate for Guarantor
(including the names, titles and specimen signatures of officers thereof
authorized to execute Loan Documents), all currently certified by Guarantor’s
corporate secretary or assistant secretary, as appropriate, and upon which Agent
and Lenders may rely until revoked by written notice to Agent;

 

D. A Certificate from the general partner of Borrower and from a duly authorized
officer of Guarantor, setting forth the names, titles, specimen signatures and
telephone numbers of all persons authorized to (i) sign Draw Requests and/or
other documents, instruments, certificates and agreements to be delivered by
Borrower and/or Guarantor to Agent, and/or (ii) to give instructions to Agent
hereunder, each of which Certificates shall be deemed to be in full force and
effect until forty-eight (48) hours after receipt by Agent of an amendment
thereof duly executed by a duly authorized officer or Guarantor;

 

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E. A signed, written opinion from counsel to Borrower and Guarantor, addressed
to Agent and currently dated, as to the due organization, existence,
qualification and good standing of Borrower and Guarantor; as to the due
authorization, validity, legality, binding nature and enforceability of the Loan
Documents listed in Section 2.B.1.A, without the consent or approval of any
other Person; that, to such counsel’s knowledge, the execution, delivery and
performance by Borrower and Guarantor of the Loan Documents to which each is a
party will not violate any contracts or agreements of Borrower or Guarantor or
any applicable Governmental Requirements; as to the absence, to such counsel’s
knowledge, of litigation or governmental proceedings which could materially,
adversely affect Borrower or Guarantor; and such other matters as may be
required by Agent on behalf of Lenders;

 

F. The most current available annual financial statements for Borrower and
Guarantor on a consolidated basis, as well as financial statements on a
consolidated basis for each of the three (3) full fiscal years immediately
preceding the time period covered by said current financial statements; and

 

G. A sworn statement from and agreement by Borrower and Guarantor listing all
guarantees and contingent liabilities to which Borrower and Guarantor are a
party or for which Borrower or Guarantor may be liable and agreeing to
periodically update said listing, to which sworn statement shall be attached (or
in which sworn statement shall be described) current financial statements of
Borrower and of Guarantor, which shall be, in such sworn statement, certified
and sworn to by Borrower and Guarantor as being true, correct, complete and not
misleading in any material respect, and Borrower and Guarantor shall also, in
such sworn statement, certify that there has been no material change in the
financial status of Borrower or of Guarantor since the dates thereof.

 

H. With respect to each Unencumbered Asset which is to become an Approved Asset
on the Closing Date, (i) a written description of the Unencumbered Asset,
including the size, legal description and location of the Unencumbered Asset;
(ii) a title report, dated within thirty (30) days of the date on which such
Unencumbered Asset is included as an Approved Asset, running in favor of the
Agent on behalf of the Lenders, together with a copy of each document referred
to therein (collectively “Title Evidence”), evidencing that such Real Estate
Asset is an Unencumbered Asset; (iii) a current, certified rent roll for such
Unencumbered Asset; (iv) operating statements for the prior three (3) years, if
available (but in no event less than the prior twelve (12) months); (v) market,
location and demographic information; (vi) pro forma operating and capital
budgets and (vii) such other information as may be reasonably requested by
Agent.

 

I. Receipt of a Closing Certificate and a Compliance Certificate in the form
attached hereto as Exhibit B-1 (if Borrower has requested that an Advance be
funded on the Closing Date).

 

J. The Borrower agrees that at the request of Agent it will furnish supplements
of all materials described in this Section 2.B.1 to Agent after the Closing
Date, updating such material.

 

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

 

L. The Borrower shall have paid to the Agent, for the account of the Lenders or
for its own account, as applicable, all of the fees and expenses that are due
and payable as of the Closing Date in accordance with this Agreement.

 

M. The obligation of the Agent to issue any Letter of Credit shall be subject to
the fulfillment of the following conditions:

 

(1) Representations and Warranties. The representations and warranties contained
in Article IV shall be true and correct on and as of the date upon which
Borrower requests that Agent issue the Letter of Credit and on the date of
issuance of each Letter of Credit with the same force and effect as if made on
such date.

 

(2) No Default. No default or Event of Default shall have occurred and be
continuing on the date upon which Borrower requests that Agent issue the Letter
of Credit and on the date of issuance of each Letter of Credit or will exist
upon issuance of the Letter of Credit.

 

(3) Notices and Requests. The Agent shall have received the Borrower’s
application for such Letter of Credit specified under Section 2.A.2.

 

(4) No Legal Impediment. No change shall have occurred in any law or regulations
thereunder or interpretations thereof that in the reasonable opinion of the
Agent or Majority Lenders would make it illegal for Agent or Lenders to
participate in the issuance, extension or renewal of such Letter of Credit or,
in the reasonable opinion of the Agent, would make it illegal to issue, extend
or renew such Letter of Credit.

 

2.B.2 Conditions Precedent to Approval of an Asset as an Approved Asset

 

If and when Borrower wishes to have Lenders approve an Unencumbered Asset or
Proposed Acquisition for inclusion as an Approved Asset, Borrower shall submit
to Agent a written request for such approval, together with a certificate,
signed by Borrower in the form attached hereto as Exhibit B-3, that the Real
Estate Asset or Proposed Acquisition complies with all of the terms, provisions
and conditions of this Agreement (with respect to a Proposed Acquisition,
subject only to the acquisition of the asset), and the following conditions must
be satisfied in the sole discretion of Agent (in reliance upon documentation
provided by Borrower, copies of which shall be provided to each Lender by Agent
within two (2) Business Days after receipt by Agent):

 

A. Borrower shall provide, at the time of its request for approval, (i) a
written description of the Real Estate Asset or Proposed Acquisition, including
its size, legal description and location; (ii) Title Evidence evidencing that
such asset is an Unencumbered Asset (or in the case of a Proposed Acquisition,
would be an Unencumbered Asset upon

 

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acquisition by Borrower or an Approved Subsidiary; (iii) a current, certified
rent roll for such asset; (iv) operating statements for the prior three (3)
years, if available (but in no event less than the prior twelve (12) months);
(v) market, location and demographic information; (vi) pro forma operating and
capital budgets; (vii) evidence that such Unencumbered Asset or such Proposed
Acquisition meets the Minimum Lease Up Requirement; and (viii) such other
information as may be reasonably requested by Agent.

 

B. Agent shall have completed to its satisfaction, and at the Borrower’s
expense, an inspection of the Unencumbered Asset or Proposed Acquisition, if it
elects to do so.

 

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

 

Upon receipt of the above-mentioned written request, certificate and other items
(“Approval Prerequisites”), Agent may, on behalf of the Lenders, engage legal
counsel to review the deliveries, all at Borrower’s sole cost and expense. If
the Approval Prerequisites are satisfied as determined by Agent, whose approval
shall not be unreasonably withheld, and if the proposed Unencumbered Asset or
Proposed Acquisition complies with the terms, provisions, requirements and
conditions of this Agreement, also in Agent’s reasonable determination, Agent
shall, after receiving approval from all Lenders, approve (x) the proposed
Unencumbered Asset as an Approved Asset, or (y) the Proposed Acquisition as an
Approved Asset subject to the consummation of the acquisition thereof by
Borrower (or Approved Subsidiary), in writing, which approval shall be given or
withheld within ten (10) business days of receipt of the Approval Prerequisites.

 

Nothing set forth herein or in any other Loan Document shall be read, deemed,
construed or interpreted to impose any explicit or implicit obligation of any
kind upon the Lenders to approve any Unencumbered Asset or Proposed Acquisition
so that it is thereafter included as an Approved Asset, such approval to be, in
each instance, subject to the sole discretion of the Lenders in all respects;
provided, however, that if the Approval Prerequisites with respect to a property
constituting a Proposed Acquisition are satisfactory to all Lenders, the Lenders
will not unreasonably withhold their consent to such Proposed Acquisition
becoming an Approved Asset.

 

In no event shall the Lenders be obligated to make advances for a Proposed
Acquisition unless such property is acquired by Borrower or an Approved
Subsidiary and approved as an Approved Asset by all Lenders (pursuant to the
provisions of this Agreement).

 

2.B.3 Determination of Loan Availability

 

A. Loan Availability shall be calculated by Agent on behalf of the Lenders on
the first day of each calendar quarter and on each Calculation Date.

 

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B. For any period of determination, Loan Availability shall equal the lesser of
the following amounts:

 

1. Unencumbered Adjusted EBITDA for the previous four (4) quarters (x)
multiplied by sixty percent (60%) and (y) divided by eight and three-quarters
percent (8.75%) or

 

2. The Permanent Loan Estimate (using Unencumbered Adjusted EBITDA for the
previous four (4) quarters) for such Approved Assets.

 

provided, however, Loan Availability shall be reduced on a dollar for dollar
basis by (x) the face amount of any Letters of Credit issued by Agent and
outstanding hereunder, (y) the aggregate balance of any Swing Loans made by the
Swing Lender and outstanding hereunder, and (z) one and one-half (1.5) times the
amount of any Imposition, Lien or Encumbrance arising with respect to any
Approved Asset until same is paid in full, discharged or bonded over to the
satisfaction of the Agent (provided that such Imposition, Lien or Encumbrance is
less than one percent (1%) of the Capitalization Value of the Approved Asset, it
being acknowledged that for so long as any Imposition, Lien or Encumbrance in
excess of such amount encumbers an Approved Asset, such Real Estate Asset shall
not be an Approved Asset) and (z) any other unsecured indebtedness of Borrower
or Guarantor.

 

C. In no event shall Lenders be obligated to make Advances which in the
aggregate exceed Loan Availability as determined by Agent from time to time. If
at any time Loan Availability is less than the Total Revolving Outstandings,
Borrower shall, within thirty (30) days of such determination by Agent, either
(i) cure the cause of such reduction in Loan Availability, or (ii) pay the
excess to Agent on behalf of the Lenders. No additional Advances shall be made
hereunder and no additional Letters of Credit shall be issued hereunder until
such time as Agent determines that Loan Availability exceeds the Total Revolving
Outstandings. It shall be an Event of Default if Borrower fails to cure the
cause of the reduction in Loan Availability or make the required payment within
such thirty (30) day period.

 

ARTICLE III.

ADVANCES OF LOAN PROCEEDS

 

3.1 General

 

Subject to the limitations on Advances contained elsewhere in this Agreement,
the Loan proceeds shall be advanced by Agent, to or for the benefit of Borrower,
in accordance with the terms and conditions set forth in this Article III. All
monies advanced by Agent and each Lender (including amounts payable to such
Lender and advanced by such Lender to itself pursuant to the terms hereof) shall
constitute loans made to Borrower under this Agreement, evidenced by the Note
and secured by the other Loan Documents, and interest shall be computed thereon
as prescribed by this Agreement and the Note, from the date advanced to or for
the benefit of Borrower.

 

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No Advance shall constitute a waiver of any condition precedent to the
obligation of any Lender to make any further Advance or preclude Agent from
thereafter requiring Borrower to satisfy any such condition precedent with
respect to any prior or further Advance. No Advance shall constitute a waiver of
any default or Event of Default hereunder which may exist at the time of said
Advance, whether or not the same is known to such Lender. All conditions
precedent to the obligation of Agent to make any Advance on behalf of Lenders
are imposed hereby solely for the benefit of Agent and Lenders, and no other
party may require satisfaction of any such condition precedent or shall be
entitled to assume that Agent will make or refuse to make any Advance in the
absence of strict compliance with such condition precedent. All requirements of
this Agreement may be waived by Agent, in whole or in part, at any time.

 

Each Lender may, but shall not be obligated to, advance to itself, when due,
from the proceeds of the Loan, without further order or request from Borrower,
all interest payable to such Lender under the terms hereof or of the Note, and
may, at such Lender’s option, without any obligation to do so, advance to itself
all other sums due or to become due to such Lender under this Agreement or under
any of the other Loan Documents, including but not limited to its fees,
administration fees, attorneys’ fees, other consultants’ fees and all
out-of-pocket expenses incurred by such Lender in connection with this Agreement
and with the Loan. Each Lender shall also have the right, but not the
obligation, after the occurrence of an Event of Default, to advance to Agent the
proceeds of the Loan for application by Agent to the satisfaction of any of
Borrower’s other obligations hereunder or under any of the other Loan Documents.

 

3.2 Inspections

 

Agent shall have access to each Real Estate Asset at all reasonable times and
shall have the right to enter each Real Estate Asset and to conduct such
inspections thereof as it shall deem necessary or desirable for the protection
of the Lenders’ interests; provided that Agent gives reasonable prior notice
thereof to Borrower. Borrower may elect to accompany Agent on any such
inspections. No Lender shall be obligated to conduct any inspection of any Real
Estate Asset.

 

Neither Borrower nor any third party shall have the right to use or rely upon
any reports generated by Agent for any purpose whatsoever. Borrower shall be
responsible for making its own inspections of each Approved Asset.

 

3.3 Agent and Lender Responsibility

 

It is expressly understood and agreed that neither Agent nor any Lender assumes
liability or responsibility for any representations made by Borrower or for any
acts on the part of Borrower.

 

3.4 Procedure for Advances

 

A. At the time of each Advance, there shall exist no default or Event of Default
hereunder, and all representations and warranties made herein shall be true and
correct

 

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on and as of each Advance Date with the same effect as if made on that date.
Each Advance (other than under a Swing Loan) shall be made pursuant to a Draw
Request submitted by Borrower to Agent on behalf of the Lenders. Each Advance
under a Swing Loan shall be made pursuant to a Swing Loan Draw Request submitted
by Borrower to Agent and Swing Lender (if a party other than Agent).

 

B. With respect to each Draw Request:

 

(I) Not later than 10:00 A.M. (Central time) three (3) Euro Business Days prior
to the Advance Date if any portion of the requested Advance is desired by
Borrower to be a LIBOR Rate Advance, and one Business Day prior to the Advance
Date if any portion of the requested Advance is to be a Loan Rate Advance,
Borrower shall deliver to Agent a request, in writing, designating the amount of
such portion (in the minimum amount of $1,000,000.00 and in integral multiples
of $100,000.00 in excess thereof) and designating the initial LIBOR Rate Period
applicable thereto. If no such request is made by Borrower with respect to any
Advance, the entire Advance shall be deemed to be a Loan Rate Advance.

 

(II) On each Advance Date, if all the terms and conditions of this Agreement
have been complied with by Borrower, to the satisfaction of Agent, if no default
or Event of Default exists hereunder, and if Agent has approved the Draw
Request, each Lender shall advance to Agent its Commitment Percentage of the
principal amount of the requested Advance by delivering to Agent a wire transfer
of funds. Agent shall then forward the Advance to Borrower. All Advances
actually so made shall be deemed to be loans to Borrower, shall reduce the
available amount of the Revolving Loan Commitment, and shall bear interest at
the rates provided herein from the date so advanced.

 

C. With respect to each Swing Loan Draw Request, Borrower shall deliver any such
request no later than 10:00 A.M. (Central time) on the requested Advance Date.
On each such Advance Date, if all the terms and conditions of this Agreement
have been complied with by Borrower, to the satisfaction of Agent and Swing
Lender (if a party other than Agent), if no default or Event of Default exists
hereunder, and if Agent and Swing Lender (if a party other than Agent) have
approved the Swing Loan Draw Request, the Swing Lender shall advance to Agent
the amount of the approved Advance. Agent shall then forward the Advance to
Borrower. All Advances actually so made shall be deemed to be loans to Borrower,
shall reduce the available amount of the Swing Loan Commitment, and shall bear
interest at the rates provided herein from the date so advanced.

 

D. Each Lender shall also have the right, but not the obligation, so long as an
Event of Default exists hereunder, to advance to Agent the proceeds of any
Advance for application to the satisfaction of any of Borrower’s Obligations.
Any Advance by a Lender for such purpose shall be part of the Loan and shall be
evidenced and secured by the Loan Documents from the date made. Borrower hereby
authorizes each Lender, so long as an Event of Default exists hereunder, to
hold, use, advance and apply Loan proceeds for the payment or performance of any
obligation of Borrower hereunder, including but not limited to the obligation to
pay interest on the Loan.

 

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E. In the event that Agent (and/or the Swing Lender (if a party other than
Agent) in the case of a Swing Loan Request) shall determine, in its sole
judgment, that proper documentation to support a requested Advance, as required
by this Agreement, has not been furnished, it may withhold payment of such
Advance, or of such portion of such Advance as shall not be so supported by
proper documentation, and shall promptly notify Borrower of the discrepancy in
or omission of such documentation. Until such time as such discrepancy or
omission is corrected to the satisfaction of such Agent (and/or the Swing
Lender, as applicable), it may withhold such funds.

 

F. Borrower shall provide notice to Agent in the Draw Request of the proposed
use of the requested Advance. If Borrower anticipates using the Advance for
purposes of financing construction on a Real Estate Asset Under Development,
Borrower shall provide evidence to Agent at the time of each such Draw Request
that Borrower or an Approved Subsidiary has entered into leases for not less
than fifty percent (50%) of the rentable square footage of such Real Estate
Asset Under Development (which leases must be on arms-length terms and
conditions if with an affiliate of Borrower). If Borrower fails to provide the
foregoing evidence, Agent shall have no obligation to make the requested Advance
for such construction.

 

3.5 Swing Loans.

 

(a) During the term of this Agreement, the Lenders agree, on the terms and
conditions set forth in this Agreement, to make advances to Borrower pursuant to
this Section from time to time in amounts such that (i) the aggregate of such
advance and amount of Swing Loans theretofore advanced and still outstanding
does not at any time exceed the Swing Loan Commitment and (ii) the amount of
such advance does not exceed the Loan Availability. Each advance under this
Section shall be in an aggregate principal amount of $1,000,000 or a larger
multiple of $100,000 (except that any such advance may be in the aggregate
available amount of Swing Loans determined in accordance with the immediately
preceding sentence). With the foregoing limits, Borrower may borrow under this
Section, repay or, to the extent permitted by Section 1.3, prepay Swing Loans
and reborrow under this Section at any time during the term of this Agreement.

 

(b) The Agent shall, on behalf of Borrower (which hereby irrevocably directs the
Agent to act on its behalf), on notice given by Agent no later than 1:00 p.m.
(Central time) on the Business Day immediately following the funding of any
Swing Loan, request each Lender to make, and each Lender hereby agrees to make,
an advance, in an amount (with respect to each Lender, its “Swing Loan Refund
Amount”) equal to such Lender’s Commitment Percentage of the aggregate principal
amount of the Swing Loans (the “Refunded Swing Loans”) outstanding on the date
of such notice, to repay the Swing Lender. Unless any of the events described in
Section 6.1(J) with respect to Borrower shall have occurred and be continuing
(in which case the procedures of Section 3.5(c) shall apply), each Lender shall
make such advance of available to Agent at Agent’s office in immediately
available funds, not later than 1:00 p.m. (Central time), on the fifth Business
Day immediately following the date of such notice. Agent shall immediately apply
such proceeds to repay Refunded Swing Loans. Effective on the day such advances
are made, the portion of the Swing Loans so paid shall no longer be outstanding
as Swing Loans, shall no longer be due as Swing Loans under the Swing Loan Note
held by the Swing

 

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Lender, and shall be due as Advances under the respective Notes issued to the
Lenders. Borrower authorizes the Agent to charge Borrower’s accounts with Agent
(up to the amount available in each such accounts) in order to immediately pay
the amount of such Refunded Swing Loans to the extent amounts received from the
Lenders are not sufficient to repay in full such Refunded Swing Loans.

 

(c) If, prior to the time advances would have otherwise been made by Lenders
pursuant to Section 3.5(b), one of the events described in Section 6.1(J) with
respect to the Borrower shall have occurred and be continuing, each Lender
shall, on the date such advances were to have been made pursuant to the notice
referred to in Section 3.5(b) (the “Refunding Date”), purchase an undivided
participating interest in the Swing Loans in an amount equal to such Lender’s
Swing Loan Refund Amount. On the Refunding Date, each Lender shall transfer to
the Agent, in immediately available funds, such Lender’s Swing Loan Refund
Amount, and upon receipt thereof, the Agent shall deliver to such Lender a Swing
Loan participation certificate dated the date of Agent’s receipt of such funds
and in the Swing Loan Refund Amount of such Lender.

 

(d) Whenever, at any time after the Agent has received from any Lender such
Lender’s Swing Loan Refund Amount pursuant to Section 3.5(c), the Agent receives
any payment on account of the Swing Loans in which the Lenders have purchased
participations pursuant to said Section 3.5(c), the Agent will promptly
distribute to each such Lender its ratable share (determined on the basis of the
Swing Loan Refund Amounts of all of the Lenders) of such payment (appropriately
adjusted, in the case of interest payments, to reflect the period of time during
which such Lender’s participating interest was outstanding and funded);
provided, however, that in the event that such payment received by the Agent is
required to be returned, such Lender will return to the Agent any portion
thereof previously distributed to it by the Agent.

 

(e) Each Lender’s obligation to make an advance under its Revolving Commitment
as provided in Section 3.5(b) or to purchase a participating interest pursuant
to Section 3.5(c) shall be absolute and unconditional and shall not be affected
by any circumstance, including, without limitation, (i) any set-off,
counterclaim, recoupment, defense or other right which such Lender, Borrower or
any other Person may have against the Agent or any other Person, (ii) the
occurrence or continuance of an Event of Default, the termination or reduction
of the Revolving Commitments or the non-satisfaction of any condition precedent
to the making of any advance of the Loans, (iii) any adverse change in the
condition (financial or otherwise) of Borrower or any other Person, (iv) any
breach of this Agreement by Borrower, any other Lender or any other Person or
(v) any other circumstance, happening or event whatsoever, whether or not
similar to any of the foregoing.

 

(f) For purposes of Article III, Advances of Swing Loans shall be deemed to be
Loan Rate Advances.

 

(g) If not sooner paid in accordance with the terms hereof, Swing Loans shall be
due and payable, in full, at the earlier of five (5) Business Days after said
amounts are advanced or the Maturity Date (the “Swing Loan Maturity Date”).

 

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(h) Any Swing Loan made by the Swing Lender shall be evidenced by, and repaid
with interest in accordance with, a promissory note of Borrower in the form of
Exhibit G duly completed and executed by Borrower, payable to the Swing Lender
(such note, as the same may hereafter be amended, modified, extended, severed,
assigned, substituted, renewed or restated from time to time, the “Swing Loan
Note”).

 

3.6 Additional Loan Commitments.

 

(a) Borrower may, from time to time, up to a maximum of three (3) requests,
request the Lenders to increase their Revolving Commitments, so as to increase
the Revolving Commitment Amount to an amount no greater than the sum of (1) the
Accordion Amount plus (2) $150,000,000. The increase in the Revolving Commitment
Amount pursuant to any such particular request shall be at least an amount (the
“Minimum Request”) equal to the lesser of (x) $10,000,000 or (y) the Accordion
Amount less all previous increases in the Revolving Commitment Amount pursuant
to this Section. Borrower shall make each such request by giving notice to Agent
no later than forty-five (45) days prior to the Accordion Expiration Date, which
notice shall set forth the amount (which shall be no less than the Minimum
Request) of the requested increase in the Revolving Commitment Amount (the
“Requested Increase”) and such other details with respect to such increase as
Agent shall reasonably request. Agent will use commercially reasonable efforts,
with the assistance of Borrower, to arrange a syndicate of Lenders with
Revolving Commitments (including the then-existing Revolving Commitments)
aggregating the then existing Revolving Commitment Amount plus the Requested
Increase. Upon receipt of notice as aforesaid from Borrower, Agent shall
promptly send a copy of such notice to each Lender and shall request that each
Lender increase its Revolving Commitment by an amount equal to its Commitment
Percentage of the Requested Increase (the “First Solicitation”). Each Lender
shall have the right, but not the obligation, to increase its Revolving
Commitment by an amount equal to its Commitment Percentage of the Requested
Increase, and shall have a period of fifteen (15) days from the First
Solicitation to notify Agent whether or not such Lender elects so to increase
its Revolving Commitment. Any Lender that fails to respond to the First
Solicitation in writing within such fifteen (15)-day period will be deemed to
have elected not to increase its Revolving Commitment. If all Lenders elect to
increase their respective Revolving Commitments by amounts equal to their
respective Commitment Percentages of the Requested Increase, Agent shall so
notify Borrower, Agent and each of the Lenders, and Borrower shall proceed in
accordance with Section 3.6(b) below. If any Lender (any such Lender, a
“Declining Bank”) shall not elect or shall be deemed to have elected not to
increase its Revolving Commitment as aforesaid, (i) the amount of such Declining
Lender’s Revolving Commitment shall be unchanged, (ii) Agent shall notify
Borrower and each of the Lenders as to which Lenders have elected to increase
their Revolving Commitments and by what amounts and (iii) if Borrower so
requests, Agent shall use commercially reasonable efforts to either (A) solicit
from the Lenders that elected to increase their respective Revolving Commitments
a further increase in their Revolving Commitments in an aggregate amount equal
to all or any portion of the aggregate amount of the Declining Lenders’
Commitment Percentage of the Requested Increase (the “Shortfall”) or (B) submit
a list of proposed syndicate members that are not then a party to this Agreement
to Borrower for its review and approval (such approval not to be unreasonably
withheld or delayed) in order to obtain additional commitments in an amount
equal to the Shortfall. From and after the

 

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Accordion Expiration Date, Agent shall have no further obligation to syndicate
the Facility or to obtain or accept any additional Revolving Commitments except
to the extent that Agent may be continuing to use commercially reasonable
efforts to satisfy any Requested Increase that is timely given in accordance
with this Section 3.6(a).

 

(b) In connection with increases to the Revolving Commitments of some or all of
the Lenders as provided in Section 3.6(a) above, Borrower shall execute
supplemental Notes (the “Supplemental Notes”) evidencing such increases, as well
as such other confirmatory modifications to this Agreement as Agent shall
reasonably request. In connection with the addition of lenders as a result of
solicitations by Agent pursuant to clause (B) of Section 3.6(a) above (“New
Lenders”), Borrower, Agent and each New Lender shall execute an acceptance
letter in the form of Exhibit F (“Acceptance Letter”). Borrower shall execute a
Note payable to each New Lender in the amount of the New Lender’s Revolving
Commitment (a “New Note”) and Borrower and Agent (with the consent of only the
New Lenders and those Lenders increasing their Revolving Commitments) shall
execute such confirmatory modifications to this Agreement as Agent shall
reasonably request, whereupon the New Lender shall become, and have the rights
and obligations of, a “Lender”, with a Revolving Commitment in the amount set
forth in such Acceptance Letter. The Lenders shall have no right of approval
with respect to a New Lender’s becoming a Lender or the amount of its Revolving
Commitment. Each Supplemental Note and New Note shall constitute one of the
Unsecured Revolving Promissory Notes constituting the “Note” for all purposes of
this Agreement.

 

(c) If at the time a New Lender becomes a Lender (or a Lender increases its
Revolving Commitment) pursuant to this Section there is any principal
outstanding under the Note of the previously admitted Lenders (the “Existing
Lenders”), such New Lender (or Lender increasing its Revolving Commitment) shall
remit to Agent an amount equal to the Outstanding Percentage (as defined below)
multiplied by the Revolving Commitment of the New Lender (or the amount of the
increase in the Revolving Commitment of a Lender increasing its Revolving
Commitment), which amount shall be deemed advanced under the Revolving
Commitment of the New Lender (or the Lender increasing its Revolving
Commitment). Agent shall pay such amount to the Existing Lenders in accordance
with the Existing Lenders’ respective Commitment Percentages (as calculated
immediately prior to the admission of the New Lender (or the increase in a
Lender’s Revolving Commitment)), and such payment shall effect an automatic
reduction of the outstanding principal balance under the respective Notes of the
Existing Lenders. For purposes of this Section, the term “Outstanding
Percentage” means the ratio of (i) the aggregate outstanding principal amount
under all of the Notes of the Existing Lenders, immediately prior to the
admission of the New Lender (or the increase in the Revolving Commitment of a
Lender), to (ii) the aggregate of the Revolving Commitments of the Existing
Lenders (as increased pursuant to this Section, if applicable) and the New
Lenders.

 

(d) The fees payable by the Borrower upon any increase of the Revolving
Commitments shall be as set forth in the Fee Letter and agreed upon by the
Borrower, the Agent, the New Lenders and those Lenders increasing their
Revolving Commitments. Nothing in this Section 3.6 shall constitute or be deemed
to constitute an agreement or commitment by any Lender to increase its Revolving
Commitment hereunder.

 

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ARTICLE IV.

REPRESENTATIONS AND WARRANTIES OF BORROWER

 

Borrower represents and warrants to Agent and Lenders that:

 

4.1 Legal Status of Borrower

 

Borrower is a limited partnership, duly organized, validly existing and in good
standing under the laws of the State of Maryland and is duly authorized to
transact business in the jurisdictions in which the Approved Assets owned by it
are located, and has all power, authority, permits, consents, authorizations and
licenses necessary to carry on its business, to acquire, develop, demolish,
construct, renovate, expand, equip, own and operate each Approved Asset owned by
Borrower and to execute, deliver and perform this Agreement and the other Loan
Documents; and this Agreement and the other Loan Documents executed to date by
Borrower have been duly authorized, executed and delivered by and on behalf of
Borrower so as to constitute this Agreement and said other Loan Documents the
valid and binding obligations of Borrower, enforceable in accordance with their
terms.

 

4.2 No Breach of Applicable Agreements or Laws

 

The consummation of the transactions contemplated hereby and the execution,
delivery and/or performance of this Agreement and the other Loan Documents will
not result in any breach of or constitute a default under the organizational
documents of Borrower, Guarantor or any Approved Subsidiary, any mortgage, deed
of trust, lease, bank loan, credit agreement, guaranty or other instrument or
violate any Governmental Requirements, to which Borrower, Guarantor or any
Approved Subsidiary is a party, or by which Borrower, Guarantor or any Approved
Subsidiary may be bound or affected.

 

4.3 No Litigation or Defaults

 

There are no actions, suits or proceedings pending or, to the knowledge of
Borrower, threatened, in writing, against or affecting Borrower, Guarantor, any
Approved Subsidiary or the Approved Assets, in which an adverse result would
have a material adverse effect upon Borrower, Guarantor, any Approved Subsidiary
or the Approved Assets, except as listed on Schedule 4.3 attached hereto and
hereby made a part hereof, or involving the validity or enforceability of the
Loan Documents or the priority of the lien thereof, at law or in equity; and, to
the best knowledge of Borrower, Guarantor and any Approved Subsidiary, none of
Borrower, Guarantor or any Approved Subsidiary is in default under any order,
writ, injunction, decree or demand of any court or any administrative body
having jurisdiction over Borrower, Guarantor or any Approved Subsidiary.

 

4.4 Financial and Other Information

 

The financial statements of, and other financial and cash flow information for,
Borrower, Guarantor and all Subsidiaries on a consolidated basis previously or
hereafter delivered to Agent fairly and accurately present, or will, in all
material respects, fairly and accurately present, the financial condition of
Borrower, Guarantor and such Subsidiaries

 

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on a consolidated basis as of the dates of such statements and information, and
the cash flows of Borrower, Guarantor and such Subsidiaries for the periods
covered by such information, and neither this Agreement nor any document,
financial statement, financial, cash flow or credit information, certificate or
statement referred to herein or furnished to Agent by Borrower, Guarantor and
such Subsidiaries contains, or will contain, any untrue statement of a material
fact or omits, or will omit, a material fact, or is or will be misleading in any
material respect.

 

4.5 No Defaults under Loan Documents or Other Agreements

 

There is no default or Event of Default on the part of Borrower under the Loan
Documents and none of Borrower, Guarantor nor any Approved Subsidiary is in
default beyond applicable notice, grace or cure periods under any instrument or
agreement under and subject to which any recourse indebtedness in excess of
$100,000.00 in the aggregate or any nonrecourse indebtedness in excess of
$10,000,000.00 in the aggregate for borrowed money has been issued or is
secured.

 

4.6 Fiscal Years

 

The fiscal year of Borrower, Guarantor and all Subsidiaries ends on December 31.

 

4.7 Guarantor

 

Guarantor is a corporation duly organized, validly existing and in good standing
under the laws of the State of Maryland, and has all power, authority, permits,
consents, authorizations and licenses necessary to carry on its business in the
State of Maryland and to execute, deliver and perform the Guaranty and the other
Loan Documents to which it is or will be a party, and all actions required to
authorize the execution, delivery and performance by it of the Guaranty and such
other Loan Documents have been duly taken and are in full force and effect; and
the Guaranty and such other Loan Documents have been duly authorized, executed
and delivered by and on behalf of Guarantor so as to constitute the Guaranty and
such other Loan Documents, when executed by Guarantor, to be the valid and
binding obligations of Guarantor, enforceable in accordance with their terms.

 

4.8 No Brokers

 

Borrower has not (nor has any Approved Subsidiary) dealt with any brokers in
connection with this Loan and no brokerage fees or commissions are payable by or
to any person in connection with this Agreement or the Advances. Neither Agent
nor any Lender shall be responsible for the payment of any fees or commissions
to any broker and Borrower shall indemnify, defend and hold Agent and Lenders
harmless from and against any claims, liabilities, obligations, damages, costs
and expenses (including attorneys’ fees and disbursements) made against or
incurred by Agent and Lenders as a result of claims made by any broker or person
claiming by, through or under Borrower, Guarantor or their affiliates in
connection with the Loan.

 

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4.9 No Violation of Usury Laws

 

The undersigned represents and warrants that the Loan and this Note are made
exclusively for business purposes in connection with holding, developing, and
managing real estate for profit, within the meaning and intent of Maryland Code
Annotated, Commercial Law Section 12-103(e), as amended, and that none of the
proceeds of the Loan or the Note will be used for personal, family or household
purposes of any person.

 

4.10 Subsidiaries

 

Except for Saul Subsidiary I Limited Partnership, Saul Subsidiary II Limited
Partnership, Guarantor, Saul QRS, Inc., Avenel VI, Inc., Briggs Chaney Plaza,
LLC, Kentlands Lot 1, LLC and Saul Monocacy, LLC, there are no entities which
are required under GAAP to be consolidated with Borrower for financial reporting
purposes, except as otherwise disclosed to Agent in writing from time to time.
Each Approved Subsidiary is duly organized, validly existing and in good
standing in the state of its organization and is duly authorized to transact
business in the jurisdictions in which the Approved Assets owned by it are
located, and has all power, authority, permits, consents, authorizations and
licenses necessary to carry on its business, to acquire, develop, demolish,
construct, renovate, expand, equip, own and operate each Approved Asset owned by
it and to execute, deliver and perform the Subsidiary Guaranty required under
Section 5.09.E hereof, and such Subsidiary Guaranty and any other Loan Documents
executed to date by such Approved Subsidiary have been duly authorized, executed
and delivered by and on behalf of such Approved Subsidiary so as to constitute
such Subsidiary Guaranty and said other Loan Documents the valid and binding
obligations of said Approved Subsidiary, enforceable in accordance with their
terms.

 

4.11 Miscellaneous

 

Borrower is not (nor is any Approved Subsidiary),

 

A. Engaged principally or as one of its important activities in the business of
extending credit for the purpose of purchasing or carrying margin stock (as
defined in Regulation U of the Board), and the value of all margin stock owned
by Borrower does not constitute more than twenty-five percent (25%) of the value
of the assets of Borrower. No portion of any Advance is to be used, and no
portion of any Letter of Credit is to be obtained, for the purpose of purchasing
or carrying any “margin security” or “margin stock” as such terms are used in
Regulations U and X of the Board, 12 C.F.R. Parts 221 and 224.

 

B. An “investment company” or a company “controlled” by an investment company
within the meaning of the Investment Company Act of 1940, as amended.

 

C. A “holding company” or a “subsidiary company” of a holding company or an
“affiliate” of a holding company or a subsidiary company of a holding company
within the meaning of the Public Utility Holding Company Act of 1935, as
amended.

 

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4.12 REIT Status

 

Guarantor has not taken any action that would prevent it from maintaining its
existence as a qualified real estate investment trust within the meaning of the
Internal Revenue Code or from maintaining such qualification at all times during
the term of the Revolving Commitment and for so long as any Letter of Credit
remains outstanding.

 

4.13 Title to Properties

 

The Borrower (or an Approved Subsidiary) has good title as of the Closing Date
to the Approved Assets (with respect to Approved Assets designated as such on
the Closing Date, as identified on Exhibit E hereto) or the date of designation
as an Approved Asset (with respect to Approved Assets acquired and/or designated
as such after the Closing Date), and in each case to the best of its knowledge
thereafter; the Borrower (or an Approved Subsidiary) holds good and clear record
and marketable fee simple title thereto, subject to no mortgages, conditional
sales agreements, title retention agreements, liens or, except as otherwise set
forth in the title reports delivered by Borrower, encumbrances.

 

4.14 Representation as to Environmental Matters. Borrower, and each Approved
Subsidiary as to Real Estate Assets owned by it, hereby represents and warrants
that as of the date hereof, no Disqualifying Environmental Event, release or, to
Borrower’s (and such Approved Subsidiary’s, as applicable) knowledge, threatened
release of Hazardous Substances, violation of Environmental Laws or similar
environmental event with respect to any Approved Asset that could become a
Disqualifying Environmental Event has occurred with respect to the Approved
Assets which remains uncured.

 

THE WARRANTIES AND REPRESENTATIONS IN THIS ARTICLE IV, AND ANY ADDITIONAL
REPRESENTATIONS AND WARRANTIES CONTAINED HEREIN AND IN THE OTHER LOAN DOCUMENTS,
SHALL BE DEEMED TO HAVE BEEN RENEWED AND RESTATED BY BORROWER AND GUARANTOR AT
THE TIME OF EACH REQUEST BY BORROWER FOR AN ADVANCE.

 

ARTICLE V.

COVENANTS OF BORROWER

 

While this Agreement is in effect, and until Agent and Lenders have been paid in
full the principal of and interest on all Advances made by Lenders hereunder and
all other amounts payable hereunder and under the other Loan Documents and so
long as any Letter of Credit is outstanding:

 

5.1 Paying Costs of Loan

 

Borrower shall pay all reasonable costs and expenses of Agent and all costs and
expenses of Borrower (and any Approved Subsidiary) in connection with each
Approved Asset and the Loan, the preparation and review of the Loan Documents
and the evaluation, making, closing, funding, administration, transfer and/or
repayment of the Loan and the review of Unencumbered Assets, including but not
limited to the attorneys’ fees, consultants’ fees, administration fees, and all
other costs and expenses payable to third parties incurred by Agent or Borrower
in connection with the Loan. Such costs and expenses shall be so paid by
Borrower whether or not the Loan is fully advanced.

 

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5.2 Maintenance of Ownership Structure

 

B.F. Saul II or B.F. Saul III, members of their respective families and trusts
for the benefit of any of the same and companies or other entities controlled
directly or indirectly, by any of the same, shall at all times own, directly or
indirectly, at least ten percent (10%), in the aggregate, of (x) the limited
partnership units of Borrower, and (y) the common stock of Guarantor on a fully
diluted basis.

 

5.3 Keeping of Records

 

Borrower shall set up and maintain accurate and complete books, accounts and
records pertaining to each Approved Asset in a manner reasonably acceptable to
Agent. Borrower will permit representatives of Agent to have free access to and
to inspect and copy all books, records and contracts of Borrower relating to
each Approved Asset, and will permit representatives of Agent to have free
access to and to inspect and copy all other books, records and contracts of
Borrower at all reasonable times and upon reasonable prior notice to Borrower.
Any such inspection shall be for the sole benefit and protection of Agent, and
neither Agent nor any Lender shall have any obligation to disclose the results
thereof to Borrower or to any third party.

 

5.4 Providing Financial Information

 

Borrower shall furnish to Agent such financial information concerning Borrower
and Guarantor, and Borrower’s and Guarantor’s other assets and investments, as
Agent may reasonably request, and shall furnish to Agent, at Borrower’s sole
cost and expense the following:

 

A. Fiscal Year. Not later than one hundred ten (110) days after the end of each
fiscal year, a consolidated balance sheet, a consolidated statement of profit
and loss and consolidated statement of cash flows, as of the end of such fiscal
year, for the Borrower and Guarantor, on a consolidated basis certified by
independent accountants satisfactory to Agent as being complete and correct and
fairly presenting the financial condition and results of operations as of the
end of such year and for that fiscal year for Borrower and Guarantor together
with a statement from the chief financial officer for Borrower and the
Guarantor, in the forms attached hereto as Exhibits B-4 and B-5.

 

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B. Fiscal Quarter.

 

(i) Not later than forty five (45) days after the end of each fiscal quarter,
ending March 31, June 30 and September 30, a balance sheet, statement of profit
and loss and statement of cash flows for such fiscal quarter, for the Guarantor
and its consolidated subsidiaries, to be prepared on an accrual basis and
certified as complete and correct by the chief financial officer of such
entities; and

 

(ii) Not later than forty five (45) days after the end of each fiscal quarter, a
statement from the chief financial officer for the Borrower and the Guarantor,
in the forms attached hereto as Exhibits B-4 and B-5, together with
documentation showing all calculations necessary to support such statement.

 

C. Copies of all 8Ks, 10Ks and 10Qs filed with the U.S. Securities and Exchange
Commission, the Maryland State Securities Commission, and any other state
regulators regarding the Guarantor, which shall be delivered to Agent as and
when filed or distributed; and

 

D. Not later than sixty (60) days after the end of each fiscal year, a copy of
the pro forma operating and capital budgets for each of the Approved Assets for
the succeeding fiscal year, which Budget shall be in form satisfactory to the
Agent, in its reasonable discretion.

 

E. Not later than forty-five (45) days after the end of each fiscal quarter, a
copy of the rent roll for each of the Approved Assets as of the end of such
quarter in form satisfactory to the Agent, and a tenant lease expiration
summary, each certified as being true, correct and complete by the chief
financial officer of the Borrower.

 

F. Such other statements or reports as the Lenders may through Agent reasonably
request in form and detail satisfactory to such Lenders.

 

All such financial statements shall be in reasonable detail, shall be prepared
in general accordance with GAAP (except that assets may be valued based on
market value), or in accordance with another accounting method acceptable to
Agent, and shall be certified as true, correct and complete by Borrower (by its
chief financial officer) or Guarantor. In addition, Borrower shall permit Agent
and each Lender to examine all of Borrower’s and Guarantor’s books and records
pertaining thereto.

 

5.5 Maintaining Insurance Coverage

 

Borrower shall, at all times until Agent and Lenders have been fully repaid all
indebtedness evidenced by the Note, maintain, or cause to be maintained, in
effect, adequate insurance with respect to each Approved Asset, including
casualty insurance on a 100% replacement cost basis.

 

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5.6 Transferring, Conveying or Encumbering Approved Assets; Payment of
Impositions and Liens; Maintenance of Existence

 

Borrower shall not voluntarily or involuntarily agree to, cause, suffer or
permit (A) any sale, transfer or conveyance of any interest of Borrower,
Guarantor or any Approved Subsidiary, legal or equitable, in any Approved Asset
or any part or portion thereof; or (B) any mortgage, pledge, encumbrance or lien
to be imposed or remain outstanding against any Approved Asset, or any security
interest to exist therein (hereinafter each called an “Encumbrance”), except as
created by the Loan Documents (if any). In the event that any Encumbrance arises
against any Approved Asset, Borrower shall give written notice thereof to Agent
within five (5) days after the imposition of such Encumbrance. Agent shall
thereupon recalculate Loan Availability taking into account such Encumbrance. If
necessary, Borrower shall make a payment as required pursuant to Section 2.B.3
if Loan Availability is then less than Total Revolving Outstandings.

 

Borrower shall, before any penalty or interest attaches thereto because of
delinquency in payment, pay and discharge, or cause to be paid and discharged,
all taxes, assessments, levies and governmental charges imposed upon or against
each Approved Asset or upon or against the Note or the indebtedness evidenced
hereby (hereinafter referred to as “Impositions”). In the event any Impositions
are payable in installments, Borrower shall have the right to pay the same in
such installments, even though such Impositions then bear interest, so long as
Borrower pays each such installment prior to delinquency. Borrower shall not
suffer to exist and shall promptly pay and discharge (or cause to be paid and
discharged) any mechanic’s, statutory or other lien or Encumbrance on the
Approved Asset or any part thereof (hereinafter collectively referred to as
“Liens”). In the event that any Imposition or Lien arises against any Approved
Asset, Borrower shall give written notice thereof to Agent within five (5) days
after the occurrence of such Imposition or Lien. Agent shall thereupon
recalculate Loan Availability taking into account such Imposition or Lien. If
necessary, Borrower shall make a payment as required pursuant to Section 2.B.3
if Loan Availability is then less than Total Revolving Outstandings.

 

Borrower shall maintain (and shall cause any Approved Subsidiary to maintain)
its existence as a duly organized and qualified limited partnership (or such
other entity, in the case of any Approved Subsidiary), in good standing under
the laws of the state of its formation and the laws of each state in which any
Approved Asset owned by it is located, and none of Borrower, Guarantor nor any
such Approved Subsidiary shall be dissolved, merged, wound-up or terminated.
Borrower shall cause Guarantor at all times to (x) maintain its existence as a
qualified real estate investment trust (a “REIT”) within the meaning of the
Internal Revenue Code and not to take any action which could lead to its
disqualification as a REIT, (y) except with the prior written consent of Agent,
not to be unreasonably withheld, cause its shares to be listed and admitted to
trading on the New York Stock Exchange or a successor stock exchange and (z)
maintain its existence as a Maryland corporation. Within thirty (30) days after
request by Agent from time to time, Guarantor shall provide evidence that
Guarantor continues to qualify as a REIT.

 

5.7 Complying with the Loan Documents, Contracts and Laws

 

Borrower shall cause all of the representations, warranties and covenants herein
to remain true and correct during the term of the Loan, shall comply with and
perform all of its agreements and obligations under the Loan Documents, and
shall comply with all

 

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requests by Agent which are consistent with the terms thereof. Borrower shall
promptly provide Agent with copies of any notices of default or deficiency
received from any creditor under loans with a principal balance in excess of
$100,000.00 and shall promptly cure the same. Borrower shall comply in all
material respects with all applicable laws, rules, regulations, orders and
directions of any governmental authority having jurisdiction over it or its
business.

 

5.8 Financial Covenants

 

Borrower hereby covenants and agrees that so long as the Revolving Commitment
remains outstanding, as of the end of each fiscal quarter and on each
Calculation Date:

 

A. Minimum Equity Value. Borrower shall have Minimum Equity Value of not less
than the sum of $400,000,000.00 plus ninety percent (90%) of Net Equity
Proceeds.

 

B. Portfolio Loan to Value. The ratio of Total Adjusted Outstanding Indebtedness
to Capitalization Value does not exceed sixty percent (60%).

 

C. Interest Expense Coverage. The ratio of Adjusted EBITDA to Interest Expense
is not less than 2.10 to 1.

 

D. Debt Service Coverage. The ratio of Adjusted EBITDA to Debt Service is not
less than 1.55 to 1.

 

E. Minimum Fixed Rate Debt. Not less than sixty percent (60%) of Total Adjusted
Committed Indebtedness (other than the Loan, with respect to which only the
principal outstanding on the date of calculation shall be included) shall (x)
accrue interest at a fixed rate of interest and (y) have an initial term of not
less than five (5) years. Absent Majority Lenders’ prior written approval, the
Revolving Commitment shall constitute the only unsecured indebtedness incurred
by Borrower. In addition, Borrower hereby agrees that to the extent Borrower
would like to incur secured indebtedness accruing interest at a floating rate of
interest from time to time, Borrower shall provide prior written notice to
Agent. In the event that at any time Borrower intends to receive advances under
indebtedness accruing interest at a floating rate of interest (including the
Revolving Commitment), which advances aggregate in excess of the Revolving
Commitment Amount, then Borrower shall provide prior written notice thereof to
Agent and Agent may thereupon require that the Borrower make interest rate
protection arrangements satisfactory to Borrower and Agent with respect to all
advances of floating rate indebtedness (including the Revolving Commitment)
exceeding in the aggregate the Revolving Commitment Amount. The Borrower shall
thereafter maintain such arrangements in full force and effect, and shall not,
without the approval of the Majority Lenders, modify, terminate, or transfer
such arrangements.

 

F. Payout Ratio. Distributions shall not exceed ninety percent (90%) of Funds
from Operations with respect to the Borrower and the Guarantor on a consolidated
basis (or, if greater, the amount required to be distributed under Section
857(a) of the Code).

 

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5.9 Miscellaneous

 

Borrower shall, and shall cause each Approved Subsidiary, if applicable, to,
also:

 

A. Maintain its qualification to transact business in its state of organization,
in each state in which an Approved Asset owned by it is located, and in each
jurisdiction where failure so to qualify would permanently preclude Borrower (or
such Approved Subsidiary) from enforcing its rights with respect to any material
asset or would expose Borrower (or such Approved Subsidiary) to any material
liability.

 

B. File all tax returns and reports which are required by law to be filed by it
and pay before they become delinquent all taxes, assessments and governmental
charges and levies imposed upon it and all claims or demands of any kind which,
if unpaid, might result in the creation of a lien upon its property.

 

C. Give prompt written notice to Agent of (i) the breach of any representation,
warranty or covenant contained in this Agreement or in any of the Loan Documents
(which notice shall be accompanied by a certificate from Borrower in the form of
Exhibit B-8 attached hereto); (ii) the creation of any Encumbrance, Lien or
Imposition in excess of $50,000.00 against any Approved Asset; (iii) the
occurrence of any Capital Event (which notice shall be accompanied by a
certificate from Borrower in the form of Exhibit B-6 attached hereto) and any
release or threatened release of Hazardous Substances, any violation of
Environmental Laws or similar environmental event with respect to a Real Estate
Asset that could become a Disqualifying Environmental Event; and (iv) the
commencement of any action, suit or proceeding before any court or arbitrator or
any governmental department, board, agency or other instrumentality affecting
Borrower or Guarantor or any property of Borrower or Guarantor or to which
Borrower or Guarantor is a party in which an adverse determination or result
could have a material adverse effect on the business, operations, property or
condition (financial or otherwise) of Borrower or Guarantor or on the ability of
any of them to perform its respective obligations under this Agreement and the
other Loan Documents, stating the nature and status of such action, suit or
proceeding. The Borrower will and will cause the Guarantor to give notice to the
Agent in form and detail reasonably satisfactory to the Agent, within ten (10)
days of any judgment not covered by insurance, final or otherwise, against the
Borrower the Guarantor in an amount in excess of $100,000.

 

D. Maintain, preserve, protect and keep the Real Estate Assets in good repair,
working order and condition and make all necessary and proper repairs, renewals
and replacements, normal wear and tear excepted. Borrower further covenants and
agrees to continue (and cause each Approved Subsidiary to continue) to operate
its business in substantially the same fashion as currently in effect,
including, without limitation, acquiring Real Estate Assets of the same quality
as the Real Estate Assets currently owned by Borrower and operating and
maintaining such Real Estate Assets in substantially the same manner and with
the same standard of care and quality as is currently employed by Borrower.

 

E. Within thirty (30) days of any entity becoming a Subsidiary of Borrower,
Borrower shall deliver to Agent each of the following in form and substance
satisfactory to

 

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the Agent: (a) a guaranty executed by such Subsidiary in substantially the same
form as the guaranty provided by Guaranty of even date herewith (each, a
“Subsidiary Guaranty”), pursuant to which the Subsidiary guaranties the full and
prompt payment and performance of all of the Obligations of Borrower under the
Loan and (b) the items listed in Sections 2.B.1.C through G with respect to such
Subsidiary; provided, however, (i) if such Subsidiary is expressly prohibited
from becoming a guarantor of the Loan pursuant to a written agreement with a
third party financial institution making a loan to such Subsidiary (the “Third
Party Loan”), then, such Subsidiary shall not be required to enter into a
Subsidiary Guaranty of the Loan until such time as the Third Party Loan has been
repaid in full or the documents evidencing such Third Party Loan no longer
contain such a restriction, or (ii) if such Subsidiary is created solely for
administrative purposes and holds no interest in real property, then, such
Subsidiary shall not be required to enter into a Subsidiary Guaranty.
Notwithstanding the foregoing, in no event shall (x) an Unencumbered Asset owned
by a Subsidiary qualify as an Approved Asset or (y) a Subsidiary qualify as an
Approved Subsidiary, unless such Subsidiary shall have provided a Subsidiary
Guaranty pursuant to this Section 5.9.E that remains in full force and effect.

 

5.10 Covenants relating to Environmental Law.

 

Borrower covenants and agrees as follows:

 

A. Except for substances of a quantity normally used for maintenance or
operation of a commercial office building or retail shopping center, as
applicable, which are used, stored and disposed of in accordance with all
applicable Environmental Laws (as hereinafter defined), Borrower shall not (and
shall not permit any Approved Subsidiary to) place, store, locate, generate,
produce, create, process, treat, handle, transport, incorporate, discharge,
emit, spill, release, deposit or dispose of any Hazardous Substance (as
hereinafter defined) in, upon, under, over or from the Approved Assets, and
shall not permit any Hazardous Substance to be placed, stored, located,
generated, produced, created, processed, treated, handled, transported,
incorporated, discharged, emitted, spilled, released, deposited, disposed of or
to escape therein, thereupon, thereunder, thereover or therefrom. Borrower shall
cause all Hazardous Substances found on or under the Approved Assets to be
properly removed therefrom and properly disposed of at Borrower’s sole cost and
expense in accordance with all applicable Environmental Laws. Borrower shall not
(and shall not permit any Approved Subsidiary to) install or permit to be
installed any underground storage tank therein or thereunder, and shall comply
(and cause each Approved Subsidiary to comply) with all Environmental Laws which
are applicable to the Approved Assets. At any time, and from time to time, in
the event Agent determines, in its sole discretion, that there may be an issue
with respect to Hazardous Substances or compliance with Environmental Laws with
respect to the Approved Assets or if an Event of Default exists hereunder, if
Agent so requests, Borrower shall provide to Agent an environmental review,
audit, assessment and/or report relating to the Approved Assets, at Borrower’s
sole cost and expense, by an engineer or scientist acceptable to Agent.

 

B. Borrower shall comply (and shall cause each Approved Subsidiary to comply)
with all Accessibility Regulations which are applicable to the Approved Assets.

 

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C. Borrower shall, promptly after obtaining knowledge thereof, advise Agent in
writing of (i) any activity in violation of any applicable Environmental Law
relating to the Approved Assets, (ii) any governmental or regulatory actions
(including, without limitation, information requests) instituted or threatened
in writing under any Environmental Law or any Accessibility Regulation affecting
the Approved Assets, including, without limitation, any notice of inspection,
abatement, noncompliance or potential liability, (iii) all claims made or
threatened in writing by any third party against Borrower or the Approved Assets
relating to any Hazardous Substance or a violation of any Environmental Law or
any Accessibility Regulation and (iv) discovery by Borrower of any occurrence or
condition on or under the Approved Assets or on or under any real property
adjoining or in the vicinity of the Approved Assets which could subject
Borrower, Agent, the Lenders or the Approved Assets to a claim under any
Environmental Law or Accessibility Regulation or to any restrictions on
ownership, occupancy, transferability or use of the Approved Assets under any
Environmental Law or Accessibility Regulation. Borrower shall promptly deliver
to Agent copies of all orders, notices, permits, applications, or other
communications and reports, and of such other documentation or records as Agent
may reasonably request, relating to any such activity, Environmental Law,
Accessibility Regulation, violations, actions, claims, discovery or event which
Borrower receives or which are susceptible of being obtained by Borrower without
undue cost or expense and without the necessity for initiating legal proceedings
to obtain the same.

 

D. If Borrower or any other Person (including, without limitation, any Approved
Subsidiary) undertakes any investigation or corrective action, including,
without limitation, any response, removal, detoxification or other remedial
action, pursuant to any requirement of any Environmental Law or Accessibility
Regulation, Borrower shall obtain and deliver to Agent a written report, in form
and substance acceptable to Agent, from a consultant acceptable to Agent,
stating that all required action has been properly taken and that, upon
completion of said action, the Approved Assets is in compliance with such
Environmental Law and/or Accessibility Regulation.

 

ARTICLE VI.

DEFAULTS

 

6.1 Events of Default

 

Each of the following events shall constitute an Event of Default under this
Agreement:

 

A. Borrower shall default in the payment of principal due according to the terms
hereof or of the Note and shall fail to cure said default within five (5) days
after the due date thereof, provided, however, in no event shall such grace
period apply with respect to payments due on the Termination Date;

 

B. Borrower shall default in the payment of interest on Advances made by
Lenders, or in the payment of any fees, including any Letter of Credit Fee, or
any other amounts payable hereunder, under the Note or under any of the other
Loan Documents and shall fail to cure said default within five (5) days after
the due date thereof;

 

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C. Borrower or any Approved Subsidiary shall default in the performance of or
fail to observe any of the covenants contained in Section 5.8 of this Agreement
and such default, if curable, as determined by Agent, is not cured within ten
(10) days;

 

D. Borrower or any Approved Subsidiary shall default in the performance or
observance of any other agreement, covenant or condition required to be
performed or observed by Borrower under the terms of this Agreement or the Loan
Documents, which default, if curable, is not cured within thirty (30) days after
Agent gives Borrower written notice thereof other than a default under Section
5.10 hereof or any other event, circumstance or omission as to which another
notice and/or cure period is provided for hereunder or which otherwise is
separately addressed in this Section 6.1.

 

E. Borrower or any Approved Subsidiary shall default in the performance of any
covenant contained in Section 5.10 hereof which is not cured within sixty (60)
days; provided, however, in the event that such breach is susceptible of cure
but is not cured within said sixty (60) days, so long as Borrower or such
Approved Subsidiary is diligently and continuously pursuing such cure, as
evidenced to Agent’s reasonable satisfaction, Agent shall permit Borrower or
such Approved Subsidiary an additional one hundred twenty (120) days to
effectuate such cure;

 

F. Any representation or warranty made by Borrower or Guarantor in this
Agreement or in any of the other Loan Documents, or in any certificate or
document furnished under the terms of this Agreement or in connection with the
Loan, shall be untrue or incomplete in any material respect;

 

G. Any other event or occurrence herein expressly stated to be an Event of
Default occurs or exists;

 

H. Any Loan Document is not in full force and effect or a default has occurred
and is continuing thereunder after giving effect to any cure or grace period in
any such document;

 

I. Any mortgaging, conveyance or other voluntary transfer or encumbrance of any
of the Approved Assets or any portion thereof occurs without the prior consent
of Agent; provided, however, the prior written consent of all Lenders shall be
required with respect to any mortgaging, conveyance or other voluntary transfer
or encumbrance of any of the Major Assets or any portion thereof;

 

J. Borrower, Guarantor or any Approved Subsidiary shall commit an act of
bankruptcy, shall file a voluntary petition in a bankruptcy, reorganization,
composition, readjustment, arrangement, insolvency, liquidation, dissolution or
similar proceeding under any present or future statute, law or regulation, shall
consent to voluntary or involuntary adjudication in bankruptcy or to
reorganization, or shall be adjudicated bankrupt or insolvent under any
applicable law or laws pursuant to a voluntary proceeding, or admits, in
writing, to having become insolvent or to be unable to pay its debts as they
become due, or becomes unable to pay its debts as they mature, or makes an
assignment for the benefit of its creditors, or is dissolved, liquidated,
terminated or merged, or if it applies for, or if it consents to, the
appointment of a trustee, custodian or receiver for it or a substantial portion
of its assets;

 

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K. A custodian, trustee or receiver is appointed for any portion of the assets
of Borrower, Guarantor, or any Approved Subsidiary, or an involuntary petition
in bankruptcy or insolvency is filed against Borrower, Guarantor or any Approved
Subsidiary and is not discharged within ninety (90) days after such appointment
or filing;

 

L. Borrower, Guarantor or any Approved Subsidiary, permits the attachment or
judicial seizure of any of its assets with a value in excess of One Hundred
Thousand and No/100ths Dollars ($100,000.00);

 

M. Borrower, Guarantor or any Approved Subsidiary, shall be dissolved,
liquidated, terminated or merged without Agent’s prior written consent or
Guarantor shall amend its articles of incorporation without the prior written
consent of Agent (except as may be expressly required by law or regulation) or
Guarantor shall fail to (x) maintain its existence as a qualified REIT within
the meaning of the Internal Revenue Code, (y) except with the prior written
consent of Agent, not to be unreasonably withheld, cause its shares to be listed
and admitted to trading on the New York Stock Exchange or a successor stock
exchange at any time or (z) maintain its existence as a Maryland corporation;

 

N. Guarantor shall be terminated, dissolved, liquidated or wound-up, or shall
contest, repudiate or purport to revoke the Guaranty, or the Guaranty for any
reason (except pursuant to the express terms thereof) shall cease to be in full
force and effect as to Guarantor or shall be judicially declared unenforceable
or null and void, or any Approved Subsidiary shall contest, repudiate or purport
to revoke its Subsidiary Guaranty given pursuant to Section 5.09.E, or its
Subsidiary Guaranty for any reason (except pursuant to the express terms thereof
or pursuant to the dissolution or merger of such subsidiary and consequent
distribution of assets to Borrower) shall cease to be in full force and effect
as to such Approved Subsidiary or shall be judicially declared unenforceable or
null and void;

 

O. Any entity comprising the Borrower or Guarantor is enjoined, restrained or in
any way prevented by any court order or judgment or if a notice of lien, levy,
or assessment is filed of record with respect to all or any part of the Approved
Assets by any governmental department, office or agency which could materially
adversely affect the performance of the obligations of such parties hereunder or
under the Loan Documents, or if any proceeding is filed or commenced seeking to
enjoin, restrain or in any way prevent the foregoing parties from conducting all
or a substantial part of their respective business affairs and failure to
vacate, stay, dismiss, set aside or remedy any of the foregoing within sixty
(60) days after the occurrence thereof;

 

P. The default (after the expiration of any notice or cure periods) under any
recourse indebtedness in excess of $100,000.00 in the aggregate or any
nonrecourse indebtedness in excess of $10,000,000.00 in the aggregate of
Borrower or Guarantor, or the maturity of any recourse indebtedness in excess of
$100,000.00 in the aggregate or any nonrecourse indebtedness in excess of
$10,000,000.00 in the aggregate of Borrower or Guarantor (other than
indebtedness under this Agreement) shall be accelerated, or Borrower or
Guarantor shall fail to pay any such recourse indebtedness in excess of
$100,000.00 in the aggregate or any nonrecourse indebtedness in excess of

 

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$10,000,000.00 in the aggregate, in each case when due (after the lapse of any
applicable grace period) or, in the case of such indebtedness payable on demand,
when demanded (after the lapse of any applicable grace period), or any event
shall occur or condition shall exist and shall continue for more than the period
of grace, if any, applicable thereto and shall have the effect of causing, or
permitting the holder of any such indebtedness or any trustee or other person,
party or entity acting on behalf of such holder to cause, such recourse
indebtedness in excess of $100,000.00 in the aggregate or any nonrecourse
indebtedness in excess of $10,000,000.00 in the aggregate to become due prior to
its stated maturity or to realize upon any collateral given as security
therefor;

 

Q. There shall occur a material adverse change of any kind, financial or
otherwise with respect to Borrower, Guarantor or any Approved Subsidiary, as
determined by Agent in its sole discretion;

 

R. There shall occur any default (after the expiration of any notice or cure
periods) under any other loans from one or more Lenders to Borrower, Guarantor
or any Approved Subsidiary.

 

6.2 Rights and Remedies

 

Upon the occurrence of an Event of Default, unless such Event of Default is
subsequently waived in writing by Agent on behalf of Lenders, Agent, acting on
behalf of the Lenders, or Lenders, as the case may be, in each case subject to
Section 8.4.C, shall be entitled to exercise any or all of the following rights
and remedies, consecutively or simultaneously, and in any order:

 

A. Agent may make one (1) or more further Advances, without liability on the
part of the Lenders to make any subsequent Advances.

 

B. Agent may suspend the obligation of the Lenders to make Advances under this
Agreement, without notice to Borrower.

 

C. Subject to the provisions of Sections 2.A.9 and 2.A.10, Agent may terminate
the obligation of the Lenders to make Advances under this Agreement, and declare
the entire unpaid principal balance of the Advances made under this Agreement
and all Reimbursement Obligations to be immediately due and payable, together
with accrued and unpaid interest on such Advances, without notice to or demand
on Borrower.

 

D. Agent may terminate its obligation to issue, extend or renew Letters of
Credit.

 

E. Agent may exercise any or all remedies specified herein and/or in the other
Loan Documents, and/or any other remedies available at law, in equity or under
statute.

 

F. Agent may take action on behalf of Borrower to correct the circumstances
which are the subject of the Event of Default, which action shall not be deemed
to cure the Event of Default.

 

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G. Borrower hereby irrevocably authorizes Lenders to set off any sum due to or
incurred by Lenders against all deposits and credits of Borrower with, and any
and all claims of Borrower against, Lenders. Such right shall exist whether or
not Agent shall have made any demand hereunder or under any other Loan Document,
whether or not said sums, or any part thereof, or deposits and credits held for
the account of Borrower is or are matured or unmatured, and regardless of the
existence or adequacy of any collateral, guaranty or any other security, right
or remedy available to Agent. Agent agrees that, as promptly as is reasonably
possible after the exercise of any such setoff right, Agent shall notify
Borrower of the exercise of such setoff right; provided, however, that the
failure of Agent to provide such notice shall not affect the validity of the
exercise of such setoff rights. Nothing in this Agreement shall be deemed a
waiver or prohibition of or restriction on Lenders to all rights of banker’s
lien, setoff and counterclaim available pursuant to law.

 

ARTICLE VII.

MISCELLANEOUS

 

7.1 Binding Effect; Waivers; Cumulative Rights and Remedies

 

The provisions of this Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective heirs, executors, administrators,
personal representatives, legal representatives, successors and assigns, subject
to the provisions of Section 5.6; provided, however, that neither this Agreement
nor the proceeds of the Loan may be assigned by Borrower voluntarily, by
operation of law or otherwise, without the prior written consent of Agent (it
being agreed that the prior written consent of all Lenders shall be required if
Borrower desires to assign this Agreement). No delay on the part of Agent or
Lenders in exercising any right, remedy, power or privilege hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, remedy, power or privilege hereunder constitute such a waiver or exhaust
the same, all of which shall be continuing. The rights and remedies of Agent and
Lenders specified in this Agreement shall be in addition to, and not exclusive
of, any other rights and remedies which Agent would otherwise have at law, in
equity or by statute, and all such rights and remedies, together with Agent’s
rights and remedies under the other Loan Documents, are cumulative and may be
exercised individually, concurrently, successively and in any order.

 

7.2 Survival

 

All agreements, representations and warranties made in this Agreement shall
survive the execution of this Agreement, the making of the Advances by Lenders,
and the execution of the other Loan Documents, and shall continue until Lenders
receive payment in full of all indebtedness of Borrower incurred under this
Agreement and under the other Loan Documents and for so long as any Letter of
Credit remains outstanding.

 

7.3 Governing Law; Waiver of Jury Trial

 

THIS AGREEMENT, THE RIGHTS OF THE PARTIES HEREUNDER, AND THE CONSTRUCTION,
INTERPRETATION, VALIDITY AND ENFORCEABILITY HEREOF AND OF ALL OF THE LOAN
DOCUMENTS SHALL BE GOVERNED BY, AND

 

50

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CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF MARYLAND,
WITHOUT GIVING EFFECT TO CONFLICT OF LAWS PRINCIPLES THEREOF, BUT GIVING EFFECT
TO FEDERAL LAWS OF THE UNITED STATES RELATING TO NATIONAL BANKS. BORROWER, AGENT
AND LENDERS HEREBY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR
PROCEEDING RELATING TO THE LOAN, THE LOAN DOCUMENTS AND/OR THE TRANSACTIONS
CONTEMPLATED THEREBY. AT THE OPTION OF LENDERS, THIS AGREEMENT MAY BE ENFORCED
IN ANY FEDERAL COURT SITTING IN THE STATE OF MARYLAND OR MARYLAND STATE COURT;
AND BORROWER CONSENTS TO THE JURISDICTION AND VENUE OF ANY SUCH COURT AND WAIVES
ANY ARGUMENT THAT VENUE IN SUCH FORUM IS NOT CONVENIENT. IN THE EVENT BORROWER
COMMENCES ANY ACTION IN ANOTHER JURISDICTION OR VENUE UNDER ANY TORT OR CONTRACT
THEORY ARISING DIRECTLY OR INDIRECTLY FROM THE RELATIONSHIP CREATED BY THIS
AGREEMENT, AGENT, AT ITS OPTION, SHALL BE ENTITLED TO HAVE THE CASE TRANSFERRED
TO ONE OF THE JURISDICTIONS AND VENUES ABOVE-DESCRIBED, OR IF SUCH TRANSFER
CANNOT BE ACCOMPLISHED UNDER APPLICABLE LAW, TO HAVE SUCH CASE DISMISSED WITHOUT
PREJUDICE.

 

7.4 Counterparts

 

This Agreement may be executed in any number of counterparts, all of which shall
constitute a single agreement.

 

7.5 Notices

 

Any notice required or permitted to be given by either Borrower to Agent on
behalf of the Banks or by Agent on behalf of the Banks to Borrower under the
terms of this Agreement, or documents related hereto, shall be in writing and
shall be sent by manual delivery, telegram, facsimile transmission, overnight
courier, or United States registered or certified mail, return receipt requested
(postage prepaid), addressed to such party at the address specified on the
signature page hereof, or at such other address in the United States of America
as such party shall have specified to the other party hereto in writing, at
least ten (10) days prior to the effective date of said change of address. All
periods of notice shall be measured from the date of delivery thereof if
manually delivered, from the date of sending thereof if sent by telegram or
facsimile transmission, from the first Business Day after the date of sending if
sent by overnight courier, or from four (4) days after the date of mailing if so
mailed; provided, however, that any notice to Lenders designating, continuing or
converting any Advance as or into a LIBOR Rate Advance shall be deemed to have
been given upon telephonic notice from Borrower to Agent, as more particularly
set forth herein.

 

7.6 No Third Party Reliance

 

No third party shall be entitled to rely upon this Agreement or to have any of
the benefits of any Lender’s interest hereunder, unless such third party is an
express assignee of all or a portion of Lenders’ interest hereunder.

 

7.7 [Intentionally Omitted.]

 

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7.8 Time of the Essence

 

Time is of the essence hereof with respect to the dates, terms and conditions of
this Agreement.

 

7.9 Entire Agreement; No Oral Modifications

 

This Agreement, the Guaranty, the other Loan Documents and the other documents
mentioned herein set forth the entire agreement of the parties with respect to
the Loan and supersede all prior written or oral understandings and agreements
between them with respect thereto. No modification or waiver of any provision of
this Agreement shall be effective unless set forth in writing and signed by the
parties hereto.

 

7.10 Captions

 

The headings or captions of the Articles and Sections set forth herein are for
convenience only, are not a part of this Agreement and are not to be considered
in interpreting this Agreement.

 

7.11 Borrower-Lender Relationship

 

The relationship between Borrower, Agent and Lenders created hereby and by the
other Loan Documents shall be that of a borrower and a lender only, and in no
event shall Agent or any Lender be deemed to be a partner of, or a joint
venturer with, Borrower.

 

7.12 Rules of Interpretation

 

In this Agreement, in the computation of a period of time from a specified date
to a later specified date, unless otherwise stated, the word “from” means “from
and including” and the word “to” or “until” each means “to but excluding”. The
words “hereof”, “herein” and “hereunder” and words of similar import when used
in this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement. References to Sections, Subsections,
Exhibits, schedules and like references are to this Agreement unless otherwise
expressly provided. The words “include”, “includes” and “including” shall be
deemed to be followed by the phrase “without limitation”. Unless the context in
which used herein otherwise clearly requires, “or” has the inclusive meaning
represented by the phrase “and/or” where permitted by the context.

 

7.13 Expenses

 

Borrower agrees to pay (a) the costs of producing and reproducing this
Agreement, the other Loan Documents and the other agreements and instruments
mentioned herein, (b) the reasonable fees, expenses and disbursements of the
Agent’s outside counsel or any local counsel to the Agent incurred in connection
with the preparation, administration or interpretation of the Loan Documents and
other instruments mentioned herein, each closing hereunder, and amendments,
modifications, approvals, consents or waivers hereto or hereunder, (c) the fees,
expenses and disbursements of the Agent incurred by the Agent

 

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in connection with the preparation, administration or interpretation of the Loan
Documents and other instruments mentioned herein, including, without limitation,
the costs incurred by the Agent in connection with its inspection of the
Unencumbered Assets, and the fees and disbursements of the Agent’s counsel in
preparing the documentation, (d) [intentionally omitted], (e) all expenses
(including attorneys’ fees and costs, which attorneys may be employees of any
Lender or the Agent, and the fees and costs of appraisers, engineers, investment
bankers, surveyors or other experts retained by the Lender or Agent in
connection with any such enforcement proceedings) incurred by any Lender or the
Agent in connection with (i) the enforcement of or preservation of rights under
any of the Loan Documents against the Borrower or any of its Subsidiaries or any
Guarantor or the administration thereof after the occurrence and during the
continuance of an Event of Default (including, without limitation, expenses
incurred in any restructuring and/or “workout” of the Loan), and (ii) any
litigation, proceeding or dispute whether arising hereunder or otherwise, in any
way related to any Lender’s or the Agent’s relationship with the Borrower or any
of its Subsidiaries or any Guarantor, (f) all reasonable fees, expenses and
disbursements of the Agent incurred in connection with title searches, and (g)
all costs incurred by the Agent in the future in connection with its
inspection(s) of the Unencumbered Assets. The covenants of this Section shall
survive payment or satisfaction of payment of amounts owing with respect to the
Note.

 

ARTICLE VIII.

AGENCY PROVISIONS

 

8.1 Agency.

 

A. Appointment and Authorization. Each Lender hereby appoints and authorizes
Agent to act as sole agent under this Agreement and the other Loan Documents,
authorizes and directs Agent to enter into the Loan Documents other than this
Agreement for the benefit of the Lenders, and authorizes the Agent to take such
action on its behalf under the provisions of this Agreement and the Loan
Documents and to exercise such powers as are set forth herein or therein,
together with such other powers as are reasonably incidental thereto. In
furtherance thereof, Lenders hereby ratify the execution and delivery by Agent
of this Agreement, the acceptance by Agent of all of the other Loan Documents
and the terms and conditions of the Loan Documents. The Agent hereby accepts
such appointment. Agent shall exercise all rights and powers of Agent under this
Agreement, including the administration of the Loan and disbursement of
Advances, except as otherwise expressly provided in this Agreement. The
Borrower, without further inquiry or investigation, shall, and is hereby
authorized by the Lenders to, assume that all actions taken by the Agent
hereunder and in connection with or under the Loan Documents are duly authorized
by the Lenders.

 

B. Non-Liability of Agent and Indemnity.

 

(1) Agent shall have no duties or responsibilities except those expressly set
forth in this Agreement or in the other Loan Documents. Agent shall administer
the Loan in accordance with the terms and conditions of this Agreement in the
same manner as it customarily does for similar loans for its own account. The
duties of the Agent shall be mechanical and administrative in nature; the Agent
shall not have by reason of this

 

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Agreement a fiduciary relationship in respect of any Lender; and nothing in this
Agreement or any Loan Document, expressed or implied, is intended to or shall be
so construed as to impose upon the Agent any obligations in respect of this
Agreement or any Loan Document except as expressly set forth herein or therein.
Neither Agent nor any of its respective directors, officers, agents or employees
shall be liable to any Lender for any action taken or not taken by them under or
in connection with this Agreement or under any of the other Loan Documents other
than Agent’s gross negligence and willful misconduct. In this regard, Agent may
consult with independent legal counsel, accountants and other professionals or
experts selected by it, and shall not be liable for any action taken or not
taken by it or them in good faith in accordance with the advice of such legal
counsel, accountants or other professionals or experts. In the absence of gross
negligence or willful misconduct, Agent shall not be liable for any
apportionment or distribution of payments made by it in good faith pursuant to
the terms of this Agreement, and if any such apportionment or distribution is
subsequently determined to have been made in error, the sole recourse of any
person to whom payment was due, but not made, shall be to recover from the
recipients of such payments any payment in excess of the amount to which they
are determined to have been entitled.

 

(2) In the event the Agent is not reimbursed and indemnified by the Borrower,
within ten (10) Business Days of demand therefor by Agent, each Lender will
reimburse and indemnify the Agent, and its directors, officers, agents and
employees, in proportion to its respective Commitment Percentage of the Loan,
for and against any claims, actions, judgments, costs, expenses or disbursements
of whatsoever kind or nature which may be imposed on, asserted against or
incurred by the Agent, or its directors, officers, agents, or employees in
performing its duties hereunder or under any Loan Document; provided, however,
that no Lender shall be liable for any of the foregoing to the extent that they
arise from the gross negligence or willful misconduct of the party to be
indemnified. The obligations of the Lenders under this Section 8.1.B(2) shall
survive the payment in full of all obligations of Borrower and the termination
of this Agreement.

 

8.2 Resignation of Agent; Removal.

 

A. U.S. Bank National Association or any successor agent may resign as Agent at
any time by written notice delivered to the Borrower and the Lenders (if any).
Such resignation shall be effective upon the earlier to occur of thirty (30)
days following such notice or a successor’s acceptance of appointment as the
Agent. In addition, in the event of Agent’s gross negligence or willful
misconduct (as determined by all Lenders) or for cause duly shown (as determined
by the Majority Lenders), Agent may be removed by giving thirty (30) days prior
written notice to Agent and Borrower; provided, however, for purposes of
calculating such approval in this context, Agent shall be deemed a Defaulting
Lender and its Commitment Percentage shall therefore be disregarded and excluded
for voting purposes only.

 

B. In the case of any of the events described in Section 8.2.A, (A) the Majority
Lenders shall appoint a successor Agent from among the Lenders so long as such
successor meets the requirements described in Sections 8.8.A(2) and 8.8.A(3)
hereof; provided, however, that the resigning Agent shall be entitled to appoint
a successor agent who, so long as no Event of Default exists hereunder, has been
approved by Borrower, which

 

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approval shall not be unreasonably withheld, conditioned or delayed, and who
meets the requirements of Sections 8.8.A(2) and 8.8.A(3) as Agent, if the
Majority Lenders have not appointed a successor within thirty (30) days after
the date the resigning Agent gave notice of resignation; (B) upon a successor’s
acceptance of appointment (and assumption of the Agent’s obligations hereunder
arising after the date of such appointment), the successor will thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the resigning or removed Agent; (C) upon the effectiveness of any resignation
or removal, the resigning or removed Agent will thereupon be discharged from the
duties and obligations of Agent which thereafter arise under the Credit
Agreement; and (D) any resigning Agent shall have the benefit of any indemnities
provided in the Loan Documents and this Agreement.

 

8.3 Administration.

 

A. Expenses. Each Lender shall reimburse the Agent for its Commitment Percentage
of any expenses with respect to the administration, enforcement or collection of
the Loan which are not reimbursed by the Borrower pursuant to and within the
period required by the Loan Documents, or if not specified in the Loan
Documents, promptly after the date of demand therefor made by the Agent, other
than those resulting directly from Agent’s gross negligence or willful
misconduct. The Agent shall have the right, but not the obligation, to incur
such expenditures prior to reimbursement therefor by the Lenders.

 

B. Documents; Information; Inspection. Except for the Note executed in favor of
each Lender and for Loan Documents sent for filing or recording (which are not
returned following recording), Agent shall hold and maintain a duplicate set of
all original Loan Documents. The Agent shall promptly deliver to each Lender a
copy or counterpart of execution copy of each Loan Document. The Agent shall
forward, within four (4) Business Days after receipt, to each Lender a copy of
each financial statement of Borrower or rent roll or other financial statement
for the Real Estate Assets received from Borrower. Upon request of any Lender,
the Agent shall promptly forward to such Lender each financial statement of
Borrower received by Agent. The Lenders may, upon reasonable prior notice and
during the Agent’s normal business hours, inspect and make copies of such books
and records of Agent that relate to this Loan.

 

8.4 Actions by Agent; Required Consents.

 

A. Except as specified below, Agent shall exercise its sole discretion to act or
not to act under the Loan Documents and the appropriate action with respect
thereto. Such discretion may be exercised with respect to the granting of
approvals, consents, and modifications under the Loan Documents and with respect
to the exercise or refraining from exercise of rights under the Loan Documents.

 

B. Notwithstanding Section 8.4.A, the following matters shall require the prior
consent of all of the Lenders:

 

(1) any change (other than as currently contemplated in the Loan Documents) in
the interest rate under the Loan;

 

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(2) any reduction in the amount of any payment of any fees other than fees paid
solely to the Agent;

 

(3) release of any guarantor;

 

(4) any change (other than by operation of the Loan Documents) in the Maturity
Date of the Loan or in the conditions for extension of the Maturity Date;

 

(5) any release, termination, modification or amendment of any indemnity
provided in the Loan Documents;

 

(6) any forgiveness of principal, interest or other amounts payable under the
Loan (other than late fees) or any extension of time for payment of principal or
interest;

 

(7) any increase in the Revolving Commitment Amount (as such may be increased in
accordance with the provisions of Section 3.6(a) hereof) or the Loan;

 

(8) any amendment to the covenants contained in Section 5.8 hereof;

 

(9) any amendment to this Section 8.4.B or Section 8.2; and

 

(10) any change in the definition of “Majority Lenders.”

 

C. Notwithstanding Section 8.4.B, the prior consent of the Majority Lenders
shall be required for the acceleration of any indebtedness under the Loan
Documents, or the pursuit of remedies against the Borrower;

 

D. In case one or more Events of Default have occurred and shall be continuing,
and whether or not acceleration of the Loan shall have occurred, the Agent
shall, if (a) so requested by the Majority Lenders and (b) the Lenders have
provided to the Agent such additional indemnities and assurances against
expenses and liabilities as the Agent may reasonably request, proceed to enforce
the provisions of this Agreement and the other Loan Documents and exercise all
or any such other legal and equitable and other rights or remedies as it may
have in respect of enforcement of the Lenders’ rights against the Borrower under
this Agreement and the other Loan Documents. The Majority Lenders may direct the
Agent in writing as to the method and the extent of any such enforcement, the
Lenders (including any Lender which is not one of the Majority Lenders so
directing the Agent in writing) hereby agreeing to ratably and severally
indemnify and hold the Agent harmless from all liabilities incurred in respect
of all actions taken or omitted in accordance with such directions, provided
that the Agent need not comply with any such direction to the extent that the
Agent reasonably believes the Agent’s compliance with such direction to be
unlawful or commercially unreasonable in any applicable jurisdiction.

 

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8.5 Payments.

 

A. Interest Rates and Disbursement Matters. Lenders and Agent specifically agree
to the following operational and administrative procedures as between
themselves:

 

(1) The Prime Rate (as established from time to time) shall in each instance be
the rate established from time to time by Agent.

 

(2) Agent shall notify each Lender by telephone or facsimile of the election by
the Borrower (A) to apply the Loan Rate one (1) Business Day prior to the date
on which the Loan Rate shall be effective and (B) to apply the LIBOR Rate two
(2) Business Days prior to the date on which the LIBOR Rate shall be effective.
Agent shall notify each Lender by telephone or facsimile of its Commitment
Percentage of a proposed Advance of the Loan and the date of such disbursement
two (2) Business Days prior to such disbursement with respect to disbursements
which are to bear interest at the Loan Rate or the LIBOR Rate, such notice to be
delivered by facsimile. All notices from Agent to the Lenders shall also
include: (i) the amount of such Advance requested by Borrower, (ii) the amount
approved for advance by Agent, (iii) each Lender’s Commitment Percentage of such
proposed Advance, and (iv) the date such Advance is scheduled to be made to
Borrower. Each Lender may request copies of any additional materials submitted
to Agent by Borrower after Agent and the Lenders have made any Advance. Each
Lender shall deposit by wire transfer of Immediately Available Funds to Agent’s
account as specified on Exhibit D hereto the amount of such Commitment
Percentage no later than 11:00 a.m. (Central time) on the date of such
disbursement.

 

Unless Agent shall have been notified by any Lender not later than the close of
business (Central time) on the Business Day immediately preceding the date for
funding in respect of any Advance that such Lender does not intend to make
available to Agent such Lender’s Commitment Percentage of such Advance, Agent
may assume that such Lender has made such amount available to Agent. In any case
where a Lender does not for any reason make available to Agent such Lender’s
Commitment Percentage of such Advance, Agent, in its sole discretion, may, but
shall not be obligated to, fund to Borrower such Lender’s Commitment Percentage
of such Advance. If the amount so funded by Agent is not in fact made available
to Agent by the responsible Lender, then such Lender hereby assigns to Agent any
payments received by Agent from Borrower in repayment of such amount, together
with interest thereon at the rate applicable to such Advance.

 

(3) If any Lender fails to deliver funds to Agent for a disbursement by the time
required by subsection (2) above, such Lender shall pay to Agent interest on
such funds at the Federal Funds Rate, as announced by the Federal Reserve Bank
of New York, for each day (or portion thereof) until such funds are delivered.
Any interest paid pursuant to this section shall be divided among the Lenders
which funded the applicable disbursement.

 

(4) Agent shall wire transfer to each Lender at such Lender’s account as
designated on Exhibit D hereto its Commitment Percentage of any payments (to the
extent payable pursuant to Section 8.5.B)) within one (1) Business Day of
Agent’s receipt of such

 

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payment. Agent shall pay to the Lenders interest thereon, at the Federal Funds
Rate from the Business Day following receipt of such funds by Agent until such
funds are paid in Immediately Available Funds to the Lender.

 

(5) Any Lender desiring to make a claim for costs or taxes payable by Borrower
shall deliver a certificate to Agent setting forth the basis and calculation
thereof and the Agent shall forward such certificate to the Borrower. Except as
provided in the Loan Documents, each Lender shall be responsible for any taxes
payable in respect of amounts paid hereunder. All payments made by Agent to
Lenders shall be made without withholding for taxes, charges, or levies, except
as may be required by law. Each Lender shall on demand from Agent provide
completed and signed copies of certificates required to show exemption of such
Lender from United States withholding taxes.

 

B. Application of Recoveries. Lenders and Agent agree that all payments made and
actually received by the Agent in respect of the Loan (from any person or
source) shall be applied in the following order of priority (based on Commitment
Percentages thereof):

 

(1) to the reimbursement of any costs incurred by the Agent to administer,
enforce, collect or deal with the Loan (including payments made pursuant to
Sections 8.5.A(2) and (3) hereof (or to reimbursement of the Lenders to the
extent such costs have been paid by the Lenders);

 

(2) to the payment of all interest (including interest calculated at the Default
Rate) due and payable on the Note;

 

(3) to the payment of fees payable under the Loan Documents;

 

(4) to the payment of principal of the Note; and

 

(5) to the Borrower.

 

C. Excess Payments. If any Lender shall obtain any payment (whether voluntary,
involuntary, through the exercise of any right of set-off or otherwise) on
account of its interest in the Loan in excess of its Commitment Percentage in
the Loan, such Lender will pay the excess to Agent and Agent shall pay to the
other Lenders their respective proportionate share thereof; provided, however,
that if all or any portion of such excess payment is thereafter recovered by the
Borrower or other party entitled thereto through legal action or otherwise, each
Lender shall reimburse the party returning such excess payment in an amount
equal to such Lender’s Commitment Percentage of the excess payment.

 

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

 

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paid pro rata to the Lenders in accordance with their respective Commitment
Percentages. If a court of competent jurisdiction shall adjudge that any amount
received and distributed by the Agent is to be repaid, each Person to whom any
such distribution shall have been made shall either repay to the Agent its
proportionate share of the amount so adjudged to be repaid or shall pay over the
same in such manner and to such Persons as shall be determined by such court.

 

8.6 Defaulting Lender.

 

A. Defaults. If for any reason any Lender becomes a Defaulting Lender, then in
addition to the rights and remedies that may be available to the Agent and the
other Lenders at law and in equity, such Defaulting Lender’s right to
participate in the administration of the Loan and the Loan Documents, including,
without limitation, any rights to consent to or direct any action or inaction of
the Agent, shall be suspended during the pendency of such failure or refusal.
Borrower acknowledges and agrees that (a) the obligations of the Lenders under
this Agreement are several, (b) no Lender is or will be obligated to lend
Borrower more than the amount set forth in Schedule 1 hereto for such Lender,
nor to fund any part of any advance except upon fulfillment of all applicable
conditions precedent provided herein and in the other Loan Documents, (c) except
to the extent expressly provided in this Agreement, Borrower shall have no
recourse or claim against a non-defaulting Lender nor against Agent (so long as
the same have otherwise complied with their obligations under this Agreement),
for any deficiency or any liability, loss, damage or expense resulting from the
default of a Defaulting Lender, and (d) the Commitment Percentage of the
Revolving Commitment Amount of any Lender shall not be increased or decreased as
a result of the failure by any other Lender to perform its obligation to make an
advance.

 

B. Remedies. If for any reason the Defaulting Lender fails to make timely
payment to any other party to this Agreement of any amount required to be paid
to it hereunder, in addition to other rights and remedies which such other party
may have under Section 8.6.A or otherwise, such other party shall be entitled
(1) to collect interest from the Defaulting Lender for the period from the date
on which the payment was due until the date on which the payment is made for
each day during such period at the Federal Funds Rate, (2) to withhold or set
off, and to apply to the payment of the defaulted amount and any related
interest, any amounts to be paid to the Defaulting Lender under this Agreement,
(3) to bring an action or suit against the Defaulting Lender in a court of
competent jurisdiction to recover the defaulted amount and any related interest,
(4) to arrange for the purchase of the Commitment Percentage of the Defaulting
Lender as provided in Section 8.6.D, and (5) to advance funds on behalf of the
Defaulting Lender as provided in Section 8.6.E.

 

C. Indemnity. The Defaulting Lender shall indemnify, defend, and hold Agent and
each of the other Lenders harmless from and against any and all losses, damages,
liabilities, and expense (including attorneys’ fees) which they may actually
sustain or incur by reason of or in consequence of the Defaulting Lender’s
failure or refusal to abide by the terms of this Agreement.

 

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D. Purchase Right. If a Lender becomes a Defaulting Lender, the other Lenders
who are not Defaulting Lenders shall have the right, but not the obligation, in
their sole discretion, to acquire (pro rata based on the Commitment Percentages
of the Lenders exercising such right) all of such Defaulting Lender’s right,
title, and interest in and to the Loan. The purchase price shall be the
principal and accrued interest allocable to the Defaulting Lender’s Commitment
Percentage of the Loan and shall be paid on the closing day of such purchase. On
the date of closing of such purchase, the Defaulting Lender shall pay the Agent
a processing fee of $3,500. The Defaulting Lender shall retain liability for all
obligations in respect of the Loan and this Agreement arising prior to the date
of transfer (but releasing Defaulting Lender’s liability for all obligations in
respect of the Loan and this Agreement arising from and after the date of
transfer) and shall execute and deliver such documents as may be reasonably
necessary to effect such transfer.

 

E. Default Loans. If a Lender becomes a Defaulting Lender, the other Lenders may
(pro rata based on the Commitment Percentages of the Lenders exercising such
right), but are not obligated to, make advances to the Agent in the aggregate
amount that the Defaulting Lender is obligated to advance under the Credit
Agreement or this Agreement. Such advances shall be treated as loans made to the
Defaulting Lender, shall bear interest at the Default Rate (payable on demand),
shall be due and payable upon demand, and shall be paid prior to any payment
being made to the Defaulting Lender.

 

F. Cumulative Remedies and Survival. The exercise of the above remedies shall
not reduce, diminish or liquidate the Defaulting Lender’s obligation for the
sharing of losses and reimbursement of costs, liabilities, and expenses under
the Loan Documents and this Agreement. The obligations of the Defaulting Lender
arising prior to any purchase pursuant to Section 8.6.D shall survive any such
purchase.

 

8.7 Representations, Warranties and Acknowledgments.

 

A. Authorization, etc. Each Lender represents and warrants, as of the date
hereof, as follows:

 

(1) Such Lender has all necessary corporate power and authority to own its
interest in the Loan and the Loan Documents, and has all necessary corporate
power and authority to perform its obligations with respect to this Agreement
and the Loan Documents;

 

(2) The execution and delivery of this Agreement and all other instruments and
documents executed and delivered in connection therewith by such Lender have
been duly authorized by all requisite corporate action of such Lender; and

 

(3) No approval, authorization, order, license or consent of, or registration of
filing with, any governmental authority or other person is required in
connection with such Lender’s execution and delivery of this Agreement by such
Lender.

 

B. Independent Decision. Each Lender agrees that it has, independently and
without reliance upon any other party hereto, or upon the directors, officers,
agents or employees of any other party hereto, but only in reliance upon
information supplied to it by

 

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or on behalf of the Borrower and upon such other information as it has deemed
appropriate, made its own independent credit analysis and decision to enter into
this Agreement and the Loan Documents. Without limiting the foregoing, each
Lender acknowledges that it has received copies of the Loan Documents and
financial statements, certificates, instruments, documents, affidavits,
resolutions and agreements as it deems necessary to make its credit analysis and
decisions in respect of the Loan. Each Lender also agrees that it shall,
independently and without reliance upon any other party hereto, continue to make
its own independent credit analyses and decisions in acting or not acting under
the Loan Documents. Except as specifically provided herein, the Agent shall have
no duty or responsibility, either initially or on a continuing basis, to provide
any Lender with any credit or other information with respect thereto, whether
coming into its possession before the Closing Date or at any time or times
thereafter.

 

C. No Reliance. Each Lender hereby acknowledges that, except as specifically set
forth herein, Agent (i) makes no warranty or representation to Lenders for any
statements, warranties or representations (written or otherwise, express or
implied) made in or in connection with the Loan Documents for the financial
condition of the Borrower or for the title or the value of any of the collateral
for the Loan, and (ii) shall not be responsible to the Lenders for any recitals,
statements, representations or warranties herein or for the due execution,
effectiveness, legality, validity, enforceability, genuineness, sufficiency, or
collectibility of any of the Loan Documents or any other instrument or document
furnished pursuant thereto or in connection with the Loan or the legality,
validity, enforceability, genuineness, sufficiency, perfection or priority of
any rights in all or any portion of the collateral for the Loan. The Agent shall
not be bound to ascertain whether any notice, consent, waiver or request
delivered to it by the Borrower or any holder of any Note shall have been duly
authorized or is true, accurate and complete. Agent shall not be required to
make any inquiry concerning either the performance or observance of any of the
terms, provisions or conditions of this Agreement or any of the other Loan
Documents or the financial condition of the Borrower or Guarantor, or the
existence or possible existence of any Event of Default or any default which,
with the giving of notice, passage of time, or both, would become an Event of
Default.

 

8.8 Assignments; Participation.

 

A. Permitted Assignments. Any Lender may assign to any affiliate of such Lender
all or a portion of its respective Commitment Percentage of the Loan, in such a
manner as to create privity of contract between such affiliate and the Borrower
and to make such affiliate a Lender for all purposes hereunder; provided,
however any Lender serving as Agent hereunder shall hold not less than
$20,000,000.00 of the total commitment so long as there exists no Event of
Default. Any Lender may assign to any entity which meets the following
conditions (“Assignee Lender”) all or a portion of its respective Commitment
Percentage of the Loan, in such a manner as to create privity of contract
between such person and the Borrower and to make such person a Lender for all
purposes hereunder:

 

(1) The minimum portion of the total commitment which the assigning Lender may
assign to an Assignee Lender (the “Assigned Interest”) shall be Five Million and
00/100ths Dollars ($5,000,000.00).

 

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(2) An Assignee Lender (or its direct or indirect parent) shall be either (A) a
commercial lender organized under the laws of the United States, or any state
thereof, and having total assets in excess of Ten Billion Dollars
($10,000,000,000) or (B) a U.S. branch of a commercial bank organized under the
laws of any other country which has total assets in excess of Ten Billion
Dollars ($10,000,000,000) or (C) any other U.S. financial institution which has
total assets in excess of Ten Billion Dollars ($10,000,000,000).

 

(3) The senior unsecured debt of an Assignee Lender (or its direct or indirect
parent) shall have a rating of Baa-2 or higher from Moody’s Investors Service,
Inc. or a comparable rating agency.

 

(4) Such assignment shall have been approved by Agent and, so long as no Event
of Default exists hereunder or under the other Loan Documents, by Borrower.
Borrower shall notify Agent within five (5) Business Days after receipt of
notice of such proposal to advise Agent of whether it approves the proposed
assignee. If Borrower disapproves such assignee, then, unless Borrower provides
a reasonable basis for withholding its consent to such proposed assignee, Agent
shall notify all of the Lenders who shall thereupon have a right of first
refusal, exercisable within ten (10) Business Days after receipt of Agent’s
notice, to elect to acquire, pro rata based upon the percentage which its
respective Commitment Percentage bears to the aggregate Commitment Percentages
of all Lenders electing to purchase the Assigned Interest. The closing of such
assignment to the electing Lenders shall occur twenty (20) Business Days after
Agent’s notice. If none of the Lenders exercise their right to purchase, the
assigning Lender may thereafter convey the Assigned Interest to the originally
proposed assignee, notwithstanding that Borrower did not approve such proposed
assignee. It shall not be deemed to be reasonable for the Borrower to withhold
its consent if such proposed assignee meets the criteria outlined in Section
8.8(A)((2) and (3) hereof. No sub-assignments shall be permitted.

 

(5) The Assignee Lender shall have paid to the Agent an administrative fee of
$3,500.00 to process the admission of such Assignee Lender.

 

(6) The Assignee Lender shall not be Borrower or any affiliates of Borrower.

 

B. Assignment and Assumption. The Borrower and Agent may continue to deal solely
and directly with the assigning Lender in connection with the interest so
assigned to an Assignee Lender (or to an affiliate of such Lender) until such
time as (i) written notice of such assignment, together with payment
instructions, addresses and related information with respect to the Assignee
Lender (or such affiliate) shall have been given to the Borrower and Agent by
the assigning Lender and the Assignee Lender (or such affiliate); (ii) the
assigning Lender and the Assignee Lender (or such affiliate) shall have
delivered to the Borrower and Agent an Assignment and Assumption Agreement in
the form attached hereto as Exhibit C.

 

Promptly following a request therefor, Borrower will execute and deliver to
Agent an appropriate replacement promissory note or replacement promissory
notes, in

 

62

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each case designated as such, in favor of each assignee (and assignor, if such
assignor is retaining a portion of its Commitment Percentage and advances)
reflecting such assignee’s (and assignor’s) Commitment Percentage of the
Revolving Commitment Amount. Promptly following the execution and delivery of
such replacement promissory note(s) the original promissory note or notes
evidencing all or a portion of the Commitment Percentage of the Revolving
Commitment Amount and advances being assigned shall be canceled and returned to
Borrower.

 

C. Notice by Agent. Promptly following receipt by Agent of an executed
Assignment and Assumption Agreement, Agent shall give notice to the Borrower and
to the Lenders of: (i) the effectiveness of the assignment by the assigning
Lender to the Assignee Lender (or the affiliate of the Lender); and (ii) the
revised percentages and maximum amounts of the Commitment Percentage of the
Revolving Commitment Amount in effect as a result of such assignment.

 

D. Adjustment of Shares. Immediately upon delivery of the Assignment and
Assumption Agreement to Agent, this Agreement shall be deemed to be amended to
the extent, but only to the extent, necessary to reflect the addition of the
Assignee Lender (or affiliate of the Lender) and the resulting adjustment of the
Commitment Percentage arising therefrom. The Commitment Percentage of the
Revolving Commitment Amount assigned to each Assignee Lender (or such affiliate)
shall reduce the Commitment Percentage of the Revolving Commitment Amount of the
assigning Lender by a like amount.

 

E. Rights of Assignee. From and after the date upon which Agent notifies the
assigning Lender that it has received an executed Assignment and Assumption
Agreement: (1) the Assignee Lender (or the Lender’s affiliate) thereunder shall
be a party to this Agreement and, to the extent that rights and obligations
hereunder have been assigned to it pursuant to such Assignment and Assumption
Agreement, shall have the rights and obligations of a Lender under this
Agreement; and (2) the assigning Lender shall, to the extent that rights and
obligations under this Agreement have been assigned by it pursuant to such
Assignment and Assumption Agreement, relinquish its rights and be released from
its obligations under this Agreement.

 

F. Assignee’s Agreements. By executing and delivering an Assignment and
Assumption Agreement, the Assignee Lender (or the Lender’s affiliate) thereunder
confirms and agrees as follows: (1) other than as provided in such Assignment
and Assumption Agreement, the assigning Lender makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement, the Note or any other instrument or document furnished
pursuant to the Loan; (2) the assigning Lender makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of the Borrower or any other parties or the performance or observance by the
Borrower of any of its Obligations; (3) the Assignee Lender (or such affiliate)
has received a copy of this Agreement, together with such other documents and
information as the Assignee Lender (or such affiliate) has deemed appropriate to
make its own credit analysis and decision to enter into the Assignment and
Assumption Agreement; (4) the Assignee

 

63

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Lender (or such affiliate) will, independently and without reliance upon Agent,
continue to make its own credit decisions in taking or not taking action under
this Agreement; (5) the Assignee Lender (or such affiliate) hereby appoints and
authorizes Agent to take such action as administrative agent on its behalf and
to exercise such powers under the Loan Documents and this Agreement as are
delegated to Agent thereunder and hereunder, together with such powers as are
reasonably incidental thereto; and (6) the Assignee Lender (or such affiliate)
agrees that it will perform all of the obligations which by the terms of this
Agreement are required to be performed by it as a Lender and confirms the
representations and warranties of the assigning Lender under this Agreement.

 

8.9 Other Business. The Agent and each Lender may accept deposits from, lend
money to, and generally engage in any kind of banking, trust or other business
with Borrower or any affiliate of Borrower as if it were not performing the
duties specified herein, and may accept fees and other considerations from the
Borrower or any such affiliate for services in connection with this Agreement
and otherwise without having to account for the same to the other parties
hereto.

 

8.10 Consents. If the Agent requests in writing the consent or approval from the
Lenders and any Lender does not respond to such request within seven (7)
Business Days (or such other period as may be provided herein), such Lender
shall be deemed to have given such consent or approval.

 

8.11 Agent as Lender. In its individual capacity as a Lender, U.S. Bank National
Association shall have the same obligations and the same rights, powers and
privileges in respect to its Commitment Percentage and the Advances made by it,
and as the holder of a Note as it would have were it not also the Agent.

 

8.12 Notification of Defaults and Events of Default. Agent and each Lender
hereby agree that, upon learning of the existence of a default or an Event of
Default, it shall (to the extent notice has not previously been provided)
promptly notify the other parties to this Agreement (other than Borrower)
thereof. The Agent hereby agrees that upon receipt of any notice under this
provision it shall promptly notify the other Lenders of the existence of such
default or Event of Default. Agent shall provide to Lenders copies of any notice
of a default or an Event of Default which Agent delivers to Borrower.

 

8.13 No Reliance by Borrower. The provisions of this Article VIII are for the
benefit of Agent, the Lenders, and other than the portions of Section 8.8 that
pertain specifically to Borrower, Borrower shall have no right to rely on or
enforce any of the provisions hereof; provided, however, the foregoing shall in
no way limit Borrower’s obligations under this Article VIII. In performing its
functions and duties under this Agreement, Agent shall act solely as agent of
the Lenders and does not assume and shall not be deemed to have assumed any
obligation toward or relationship of agency or trust with or for Borrower or any
other person.

 

8.14 Reliance. Agent shall be entitled to rely upon any written notices,
statements, certificates, orders or other documents, telecopies or any telephone
message believed by it in good faith to be genuine and correct and to have been
signed, sent or made by the proper person, and with respect to all matters
pertaining to this Agreement or any of the other

 

64

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Loan Documents and its duties hereunder or thereunder, upon advice of legal
counsel (including counsel for Borrower), independent public accountants and
other experts selected by it.

 

8.15 Pledge to Federal Reserve Bank. Anything in this Agreement to the contrary
notwithstanding, without the need to comply with any of the formal or procedural
requirements of this Agreement, including this Section 8.15, any Lender may at
any time and from time to time pledge and assign all or any portion of its
rights under all or any of the Loan Documents to a Federal Reserve Bank;
provided that no such pledge or assignment shall release such Lender from its
obligations thereunder. To facilitate any such pledge or assignment, Agent
shall, at the request of such Lender, enter into a letter agreement with the
Federal Reserve Bank in, or substantially in, the form of the exhibit to
Appendix C to the Federal Reserve Bank of New York Operating Circular No. 10.

 

65

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[Signature page to Revolving Credit Agreement]

 

IN WITNESS WHEREOF, each party has caused this Agreement to be duly executed and
delivered as of the day and year first above set forth.

 

SAUL HOLDINGS LIMITED PARTNERSHIP, a

Maryland limited partnership

By:

 

Saul Centers, Inc., a Maryland corporation, its

sole general partner

   

By:

 

/s/ B. Francis Saul II

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

       

B. Francis Saul II

       

Chairman

Address:

 

7501 Wisconsin Avenue, Suite 1500

Bethesda, Maryland 20814

 

66

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[Signature page to Revolving Credit Agreement]

 

AGENT: U.S. BANK NATIONAL ASSOCIATION By:  

/s/ Michael Raarup

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

    Michael Raarup     Senior Vice President     Address:   800 Nicollet Mall  
      BC-MN-H03A         Minneapolis, MN 55402-7020         Attn:  

Michael Raarup

Senior Vice President

 

67

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[Signature page to Revolving Credit Agreement]

 

SYNDICATION AGENT: WELLS FARGO BANK, NATIONAL ASSOCIATION By:  

/s/ Mark F. Monahan

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

    Mark F. Monahan     Vice President Address:   1750 H Street, N.W., Suite 400
    Washington, D.C. 20006     Attn: Manager, Loan Administration

 

68

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

[Signature page to Revolving Credit Agreement]

 

LENDER: U.S. BANK NATIONAL ASSOCIATION By:  

/s/ Michael Raarup

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

    Michael Raarup     Senior Vice President Address:   800 Nicollet Mall    
BC-MN-H03A     Minneapolis, MN 55402-7020     Attn:  

Michael Raarup

Senior Vice President

 

69

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[Signature page to Revolving Credit Agreement]

 

LENDER: WELLS FARGO BANK, NATIONAL ASSOCIATION By:  

/s/ Mark F. Monahan

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

    Mark F. Monahan     Vice President Address:   1750 H Street, N.W., Suite 400
    Washington, D.C. 20006     Attn: Manager, Loan Administration

 

70

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[Signature page to Revolving Credit Agreement]

 

LENDER: COMPASS BANK By:  

/s/ S. Kent Gorman

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

    S. Kent Gorman     Senior Vice President Address:   15 South 20th Street,
Suite 1500     Birmingham, AL 35233     Attn: Kent Gorman

 

71

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[Signature page to Revolving Credit Agreement]

 

LENDER: FIRST HORIZON BANK By:  

/s/ J. Jordan O’Neill II

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

    J. Jordan O’Neill II     Senior Vice President Address:   420 North 20th
Street     Birmingham, Alabama 35203     Attn:  

Sidney Clapp

Assistant Vice President

 

72

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[Signature page to Revolving Credit Agreement]

 

LENDER: SOVEREIGN BANK By:  

/s/ Jill A. Murphy

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

    Jill A. Murphy     Vice President Address:   2312 New Road, Suite 1    
Northfield, NJ 08225     Attn:  

Jill A. Murphy

Vice President

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[SCHEDULES AND EXHIBITS INTENTIONALLY OMITTED]

 

73