exv10w1



 





Exhibit 10.1



REVOLVING CREDIT AGREEMENT




among




FIRST POTOMAC REALTY INVESTMENT LIMITED PARTNERSHIP




and




OTHER BORROWERS WHICH MAY BECOME PARTIES TO THIS AGREEMENT

and




KEYBANK NATIONAL ASSOCIATION,




WELLS FARGO NATIONAL BANK




and




OTHER BANKS WHICH MAY BECOME PARTIES TO THIS AGREEMENT




and




KEYBANK NATIONAL ASSOCIATION,

AS MANAGING ADMINISTRATIVE AGENT




and




WELLS FARGO NATIONAL BANK,

AS SYNDICATION AGENT




with




KEYBANC CAPITAL MARKETS,

AS LEAD ARRANGER AND BOOK MANAGER




Dated as of November 30, 2004




 









 






TABLE OF CONTENTS




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







-i-









 






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







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







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







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





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







-vi-









 






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







-vii-









 






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







-viii-









 




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



Exhibits to Revolving Credit Agreement:



Exhibit A – Form of Revolving Credit Note



Exhibit B – Form of Completed Loan Request



Exhibit C – Forms of Compliance Certificates



Exhibit D – Form of Assignment and Assumption



Exhibit E – Form of Joinder Agreement




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Schedules to Revolving Credit Agreement



Schedule 1 Borrowers



Schedule 2 Lender’s Commitments



Schedule 7.1(b) Capitalization



Schedule 7.3(c) Partially-Owned Entities



Schedule 7.7 Litigation



Schedule 7.13 Legal Name; Jurisdiction



Schedule 7.15 Affiliate Transactions



Schedule 7.16 Employee Benefit Plans



Schedule 7.19 Subsidiaries



Schedule 8.19 Employee Benefit Plans



Schedule 9.1 Indebtedness



                 9.1(g) Contingent Liabilities




-x-








 





REVOLVING CREDIT AGREEMENT




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



RECITALS




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



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



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



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



     §1. DEFINITIONS AND RULES OF INTERPRETATION.



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



     AAP Qualification. See §7.6.



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



1









 





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



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



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



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



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



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



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



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



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



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



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



     Arranger. Keybanc Capital Markets.



     Assignment and Assumption. See §20.1.



2









 





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



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



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



     Borrower. See the preamble hereto.



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



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



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



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



     Capitalization Rate. The Capitalization Rate shall
be 9.0%.



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



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



3









 




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




     CERCLA. See §7.18.



     Closing Date. November    , 2004.



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



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



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



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



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



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



4









 





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



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



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



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



5









 




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




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



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



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



     Delinquent Lender. See §16.5(c).




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



6









 




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




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



     Distribution. With respect to:




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




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



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



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



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



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



7









 




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




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



     Environmental Laws. See §7.18(a).



     Environmental Reports. See §7.18



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



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



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



     Event of Default. See §14.1.



     Extension. See §2.9.



     Facility Fee. See §2.3(e).



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



     Financial Statement Date. September 30, 2004.



     Fronting Bank. KeyBank.



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



     GAAP. Generally accepted accounting principles,
consistently applied.



8









 





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



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



     Hazardous Substances. See §7.18(b).



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



     Increase. See §2.8.



     Increase Conditions. The satisfaction of each of the
following:





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





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



9









 




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




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



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




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




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




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




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




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




10










 





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



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



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



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



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



     Letter of Credit Application. See §5.1.1.



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



     Letter of Credit Participation. See §5.1.4.



     Letters of Credit. See §5.1.1.



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



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



11









 





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



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



     Lien. See §9.2.



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



     Loans. The Revolving Credit Loans.



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



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



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



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



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



12









 





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



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



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



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



     Note Record. A Record with respect to any Note.



     Notes. The Revolving Credit Notes.



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



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



13









 





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



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



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



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



     Permitted Liens. Liens permitted by §9.2.



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



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



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



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



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



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



     RCRA. See §7.18.



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



14









 





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



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



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



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



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



     Release. See §7.18(c)(iii).



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



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



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



     SARA. See §7.18.



15









 





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



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



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



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



     Trust. See preamble.



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



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



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



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



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



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



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



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



16









 







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



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



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



     §1.2. Rules of Interpretation.




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




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




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




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




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




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




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




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




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



17









 





     §2. THE REVOLVING CREDIT FACILITY.



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



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



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



18









 







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



     §2.3. Interest on Revolving Credit Loans; Fees.



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



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



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



Table




Applicable Margin




	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Applicable
	 	 	 	 	 	 	Base Rate
	Total Leverage Ratio
	 	Applicable Libor Margin
	 	Margin

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







19









 







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




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



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



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



20









 





     §2.4. Requests for Revolving Credit Loans.



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




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




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




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




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




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




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




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



21









 





     §2.5. Conversion Options.



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



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



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



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



     §2.6. Funds for Revolving Credit Loans.



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



22









 







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



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



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



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



23









 







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



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



     §3. REPAYMENT OF THE LOANS.



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



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



24









 







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



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



     §4. CERTAIN GENERAL PROVISIONS.



     §4.1. Funds for Payments.



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



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



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



25









 







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



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



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



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



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



26









 





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



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



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


and the result of any of the foregoing is





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




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




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


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




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



27









 







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



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



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



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



     §5. LETTERS OF CREDIT.



28









 





     §5.1. Letter of Credit Commitments.



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



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



29









 







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



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



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



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



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



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



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



30









 





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



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



31









 





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



32









 





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



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



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



     §7.1. Authority, Etc.




     (a) Organization: Good Standing.




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



33









 







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




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



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



34









 







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



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



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



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



     §7.3. Title to Properties; Leases.



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




35










 





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



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



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



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



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



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



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



36









 







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



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



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



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



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



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



37









 





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



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



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



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



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



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



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



38









 




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




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



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



39









 




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




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



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



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



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



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



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



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



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



40









 




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




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



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



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



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



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



41









 




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




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



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



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



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



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



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



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



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



42









 




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




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



     §8.5. Notices.



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



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



43









 





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



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



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



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



44









 







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



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



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



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



45









 







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



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



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



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



46









 







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



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



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



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



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



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



47









 





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



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



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



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



48









 







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



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



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



     §8.19. Employee Benefit Plans.



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



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



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



49









 




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




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



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



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



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



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



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



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



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



50









 





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



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



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



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



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



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



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



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



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



51









 







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



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



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



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



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



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



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



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



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



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



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



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



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



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



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



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



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



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



53









 





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



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



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



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



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



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



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



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



54









 




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




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



     §9.6. Distributions.



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



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



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



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



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



55









 







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



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



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



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



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



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



     §11. [Reserved.]



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



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



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



56









 







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



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



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



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



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



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



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



57









 





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



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



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



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



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



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



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



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



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



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



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



58









 







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



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



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



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



     §13.5. [Reserved.] 



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



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



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




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



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



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



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



59









 





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



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



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



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



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




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



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



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



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



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



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



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



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



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



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



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



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



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



     §15. SECURITY INTEREST AND SET-OFF.



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



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



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



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



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



     §16. THE AGENT.



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



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



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



64









 







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



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



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



     §16.5. Payments.



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



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



65









 







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



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



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



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



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



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



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



66









 







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



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



67









 





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



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



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



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



68









 







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



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



     §20. ASSIGNMENT; PARTICIPATIONS; ETC.



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



69









 







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



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



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



70









 







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



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



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



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



71









 







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



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



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



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



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



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



72









 







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



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



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



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


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




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



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



73









 







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



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



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



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



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



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



74









 







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



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




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




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




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




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




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




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



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



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



75









 







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




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


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




(Remainder of page intentionally left blank)




76









 








[Signature pages to Revolving Credit Agreement]




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



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

	 	 	 	

	

	 	 	 	Name: John Scott
	

	 	 	 	Title:   Vice President
	

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

	 	 	 	

	

	 	 	 	Name: Jennifer A. Dakin
	

	 	 	 	Title:  Assistant Vice President
	

	 	 	 	 







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

	 	 	 	 	 	 	 	 
	

	 	 	 	 	 	By:
	 	/s/ Barry Bass
	

	 	 	 	 	 	 	 	

	

	 	 	 	 	 	 	 	Barry Bass, Senior Vice President and
	

	 	 	 	 	 	 	 	Chief Financial Officer







(Signatures continued on next page)




77









 





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

	 	 	 	 	 	 	 	 	 	 
	

	 	 	 	 	 	 	 	By:
	 	/s/ Barry Bass
	

	 	 	 	 	 	 	 	 	 	

	

	 	 	 	 	 	 	 	 	 	Barry Bass, Senior Vice President and
	

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

	 	 	 	 	 	 	 	 	 	 
	

	 	 	 	 	 	 	 	By:
	 	/s/ Barry Bass
	

	 	 	 	 	 	 	 	 	 	

	

	 	 	 	 	 	 	 	 	 	Barry Bass, Senior Vice President and
	

	 	 	 	 	 	 	 	 	 	Chief Financial Officer







(Signatures continued on next page)




78









 





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

	 	 	 	 	 	 	 	 
	

	 	 	 	 	 	By:
	 	/s/ Barry Bass
	

	 	 	 	 	 	 	 	

	

	 	 	 	 	 	 	 	Barry Bass, Senior Vice President and
	

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







79