Document:

Unassociated Document

     

    EMPLOYMENT
AGREEMENT

     

    This EMPLOYMENT AGREEMENT (this
“Agreement”)
is made and entered into as of December 23, 2010  by and between Eric
Richman (the “Executive”)
and PharmAthene, Inc., a
Delaware corporation (the “Company”).

     

    WITNESSETH:

     

    WHEREAS, the Company desires
to continue to employ the Executive and the Executive desires to accept such
continued employment with the Company subject to the terms and conditions herein
agreed upon:

     

    NOW, THEREFORE, in
consideration of the foregoing and of the mutual covenants and obligations
hereinafter set forth, the parties hereto hereby agree as follows:

     

    
      	
              1.

            	
              Employment;
      Term.  The Company hereby agrees to continue to employ
      the Executive and the Executive hereby accepts such continued employment
      with the Company upon the terms and conditions hereinafter set forth for
      the period commencing on January 1, 2011 (the “Effective
      Date”) and ending on the first anniversary of such
      date.  The term of this Agreement shall be automatically
      extended for an additional year on each anniversary of the date hereof
      unless written notice of non-extension is provided by either party to the
      other party at least 90 days prior to such anniversary.  The
      period of the Executive’s employment under this Agreement, as it may be
      terminated or extended from time to time as provided herein is referred to
      as the “Employment
      Period.”

            

    

     

    
      	
              2.

            	
              Position and Duties.
      

            

    

     

    
      	
               
      

            	
              a.

            	
              Position and Duties
      Generally.  The Executive shall continue to be employed
      by the Company in the position of President and Chief Executive Officer
      and shall faithfully render such executive, managerial, administrative and
      other services as are customarily associated with and incident to such
      position and as the Board may from time to time reasonably require
      consistent with such position.  The Executive shall report to
      the Board of Directors of the Company (the “Board”).

            

    

     

    
      	
               
      

            	
              b.

            	
              Other
      Positions.  The Executive shall hold such other positions
      and executive offices with the Company and/or of any of the Company’s
      subsidiaries or affiliates as may from time to time be authorized by the
      Board.  The Executive shall not be entitled to any compensation
      other than the compensation provided for herein for serving during the
      Employment Period in any other office or position of the Company or any of
      its subsidiaries or affiliates, unless the Compensation Committee
      specifically approves such additional
  compensation.

            

    

     

    
      	
               
      

            	
              c.

            	
              Devotion to
      Employment.  Except for vacation time taken in accordance
      with the Company’s vacation policy in effect from time to time and in
      accordance with the terms of this Agreement and for absences due to
      temporary illness, the Executive shall be a full-time employee of the
      Company and shall devote full time, attention and efforts during the
      Employment Period to the business of the Company and the duties required
      of him in his position.  During the Employment Period, the
      Executive shall not be engaged in any other business activity which, in
      the reasonable judgment of the Board or its designee, conflicts with the
      duties of the Executive hereunder, whether or not such activity is pursued
      for gain, profit or other pecuniary
advantage.

            

    

     

    
      	
              3.

            	
              Compensation;
      Reimbursement.

            

    

     

    
      	
               
      

            	
              a.

            	
              Base
      Salary.  For the Executive’s services, the Company shall
      pay to the Executive an annual base salary of not less than
      $435,000.00 per
      annum, payable in equal periodic installments according to the Company’s
      customary payroll practices, but no less frequently than
      monthly.  The Executive’s base salary shall be subject to review
      annually by the Compensation Committee and shall be subject to increase at
      the option and sole discretion of the Compensation
    Committee.

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              b.

            	
              Bonus.  The
      Executive shall be eligible to receive an annual cash bonus, the target of
      which is no less than 60% of the Executive’s base salary (“Target Bonus
      Amount”) based upon the achievement of certain corporate objectives (the
      achievement of such objectives being determined by the Compensation
      Committee) with such corporate objectives determined by the Compensation
      Committee in consultation with the
Executive.

            

    

     

    
      	
               
      

            	
              c.

            	
              Benefits
      Generally.

            

    

     

    
      	
               
      

            	
              i.

            	
              In
      addition to the salary and cash bonus described above, the Executive shall
      be entitled during the Employment Period to participate in such employee
      benefit plans and programs of the Company, and shall be entitled to such
      other fringe benefits, as are from time to time made available by the
      Company generally to employees of the level, position, tenure, salary,
      age, health and other qualifications of the Executive including, without
      limitation, medical, dental and vision insurance coverage for the
      Executive and the Executive’s dependents, disability, death benefit and
      life insurance and pension plans.

            

    

     

    
      	
               
      

            	
              ii.

            	
              Without
      limiting the generality of the foregoing, the Executive shall be eligible
      for such awards, if any, including stock and stock options under the
      Company’s 2007 Long-Term Incentive Plan or such other plan as the Company
      may from time to time put into effect as shall be granted to the Executive
      by the Compensation Committee or other appropriate designee of the Board
      acting in its sole discretion.

            

    

     

    
      	
               
      

            	
              iii.

            	
              The
      Executive acknowledges and agrees that the Company does not guarantee the
      adoption or continuance of any particular employee benefit plan and
      participation by the Executive in any such plan or program shall be
      subject to the rules and regulations applicable
  thereto.

            

    

     

    
      	
               
      

            	
              d.

            	
              Vacation.  The
      Executive shall be entitled to 20 days of vacation in each calendar
      year.

            

    

     

    
      	
               
      

            	
              e.

            	
              Expenses.  The
      Company shall reimburse the Executive in accordance with the practices in
      effect from time to time for other officers or staff personnel of the
      Company for all reasonable and necessary business and travel expenses and
      other disbursements incurred by the Executive for or on behalf of the
      Company in the performance of the Executive’s duties hereunder, upon
      presentation by the Executive to the Company of appropriate supporting
      documentation.

            

    

     

    
      	
               
      

            	
              f.

            	
              Perquisites.  The
      Executive shall be entitled to those perquisites as the Company shall make
      available from time to time to other executive officers of the Company,
      which shall include, without limitation, the costs for Executive’s use of
      a cellular telephone and personal digital assistant to the extent such
      equipment is used for business
purposes.

            

    

     

    
      	
               
      

            	
              g.

            	
              Stock
      Options.  The Parties agree that on the date of execution
      of this Agreement (the “Execution Date”), Executive was granted a stock
      option to purchase 225,000 shares of the Company’s common stock (the
      “Stock Option”)
      pursuant to the Company’s 2007 Long-Term Incentive Plan, as amended
      (“2007 Plan”), and
      subject to the terms and conditions of the 2007 Plan and of a stock option
      agreement dated as of the Execution Date by the Company and the
      Executive.  The Stock Option shall have a term of 10 years and,
      subject to possible acceleration of vesting as otherwise provided for
      herein, the Stock Option shall vest in installments consistent with the
      Company’s past practice.  The per share exercise price of the
      Stock Option shall be the fair market value of a share of the common stock
      of the Company on the date of grant as determined by the Company in
      accordance with the terms of the 2007 Plan.  In the event of a
      Change in Control, defined below, during the Employment Period and a
      Termination Without Cause or a termination of the Executive’s employment
      for Good Reason occurs on or within twelve months of the consummation of
      the Change in Control, all equity-based awards issued by the Company held
      by the Executive and not then vested shall become immediately and fully
      vested.

            

    

     

    
      
         

      

      
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    As used
herein, “Change in Control” means: (i) an acquisition subsequent to the date
hereof by any person, entity or group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act)
of 30% or more of either (A) the then outstanding shares of common stock of the
Company (“Common Stock”)
or (B) the combined voting power of the then outstanding voting securities of
the Company entitled to vote generally in the election of directors; excluding,
however, the following: (1) any acquisition directly from the Company, other
than an acquisition by virtue of the exercise of a conversion privilege unless
the security being so converted was itself acquired directly from the Company,
(2) any acquisition by the Company and (3) any acquisition by an employee
benefit plan (or related trust) sponsored or maintained by the Company; (ii) a
merger, consolidation, reorganization or similar corporate transaction, whether
or not the Company is the surviving corporation in such transaction, in which
outstanding shares of Common Stock are converted into (A) shares of stock of
another company, other than a conversion into shares of voting common stock of
the successor corporation (or a holding company thereof) representing 80% of the
voting power of all capital stock thereof outstanding immediately after the
merger or consolidation or (B) other securities (of either the Company or
another company) or cash or other property; (iii) the issuance of shares of
Common Stock in connection with a merger, consolidation, reorganization or
similar corporate transaction in an amount in excess of 40% of the number of
shares of Common Stock outstanding immediately prior to the consummation of such
transaction; (iv) (A) the sale or other disposition of all or substantially all
of the assets of the Company or (B) a complete liquidation or dissolution of the
Company; or (v) the adoption by the Board of Directors of the Company of a
resolution to the effect that any person has acquired effective control of the
business and affairs of the Company.

     

    

    
      	
              4.

            	
              Death; Disability.  In
      the event that the Executive dies or is incapacitated or disabled by
      accident, sickness or otherwise, so as to render the Executive mentally or
      physically incapable of performing the services required to be performed
      by the Executive under this Agreement for a period that would entitle the
      Executive to qualify for long-term disability benefits under the Company’s
      then-current long-term disability insurance program or, in the absence of
      such a program, for a period of 120 consecutive days or longer (such
      condition being herein referred to as a “Disability”)
      then (i) in the case of the Executive’s death, the Executive’s employment
      shall be deemed to terminate on the date of the Executive’s death and (ii)
      in the case of a Disability, the Company, at its option, may terminate the
      employment of the Executive under this Agreement immediately upon giving
      the Executive notice to that effect.  The determination to
      terminate the Executive in the event of a Disability shall be made by the
      Board or the Board’s designee.  In the case of a Disability,
      until the Company shall have terminated the Executive’s employment
      hereunder in accordance with the foregoing, the Executive shall be
      entitled to receive compensation provided for herein notwithstanding any
      such physical or mental disability.

            

    

     

    
      	
              5.

            	
              Termination For
      Cause.  The Company may terminate the employment of the
      Executive hereunder at any time during the Employment Period for “cause”
      (such termination being herein referred to as a “Termination
      for Cause”) by giving the Executive notice of such termination,
      which termination shall be effective on the date of such notice or such
      later date as may be specified by the Company.  For purposes of
      this Agreement, “Cause”
      means (i) the Executive’s willful and substantial misconduct that is
      materially injurious to the Company and is either repeated after written
      notice from the Company specifying the misconduct or is continuing and not
      corrected within 20 days after written notice form the Company specifying
      the misconduct, (ii) the Executive’s repeated neglect of duties or failure
      to act which can reasonably be expected to affect materially and adversely
      the business or affairs of the Company after written notice from the
      Company specifying the neglect or failure to act, (iii) the Executive’s
      material breach of any of the agreements contained in Sections 11, 12, 13
      or 15 hereof or of any of the Company’s policies, (iv) the commission by
      the Executive of any material fraudulent act with respect to the business
      and affairs of the Company, (v) the Executive’s conviction of (or plea of
      nolo contendere to) a crime constituting a felony, (vi) demonstrable gross
      negligence, or (vii) habitual insobriety or use of illegal drugs by the
      Executive while performing the Executive’s duties under this Agreement
      which adversely affects the Executives performance of the Executive’s
      duties under this Agreement.

            

    

     

    
      
         

      

      
        - 3
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              6.

            	
              Termination Without
      Cause. The Company may terminate the employment of the Executive
      hereunder at any time without “cause” or fail to extend this Agreement
      pursuant to the terms hereof (such termination being herein referred to as
      “Termination
      Without Cause”) by giving the Executive notice of such termination,
      upon the giving of which such termination shall take effect not later than
      30 days from the date such notice is
given.

            

    

     

    
      	
              7.

            	
              Voluntary Termination by
      Executive. Any termination of the employment of the Executive by
      the Executive otherwise than as a result of death or Disability or for
      Good Reason (as defined below) (such termination being herein referred to
      as “Voluntary
      Termination”).  A Voluntary Termination will be deemed to
      be effective immediately upon such
termination.

            

    

     

    
      	
              8.

            	
              Termination by Executive for
      Good Reason.  Any termination of the employment of the
      Executive by the Executive for Good Reason, which shall be deemed to be
      equivalent to a Termination Without Cause. For purposes of this Agreement
      “Good Reason”
      means (i) any material breach by the Company of any of its obligations
      under this Agreement; (ii) any material reduction in the Executive’s
      duties, authority or responsibilities without the Executive’s consent;
      (iii) any assignment to the Executive of duties or responsibilities
      materially inconsistent with the Executive’s position and duties contained
      in this Agreement without the Executive’s consent; (iv) a relocation of
      the Company’s principal executive offices or the Company determination to
      require the Executive to be based anywhere other than within 25 miles of
      the location at which the Executive on the date hereof performs the
      Executive’s duties; (v) the taking of any action by the Company which
      would deprive the Executive of any material benefit plan (including,
      without limitation, any medical, dental, disability or life insurance);
      (vi) nonrenewal by the Company of this Agreement in accordance with
      Section 1 hereof or (vii) the failure by the Company to obtain the
      specific assumption of this Agreement by any successor or assignee of the
      Company or any person acquiring substantially all of the Company’s assets;
      provided,
      however,
      that the Executive may not terminate the Employment Period for Good Reason
      unless the Executive first provides the Company with written notice
      specifying the Good Reason and providing the Company with 20 days in which
      to remedy the stated reason.

            

    

     

    
      	
              9.

            	
              Effect
      of Termination of Employment.

            

    

     

    
      	
               
      

            	
              a.

            	
              Voluntary Termination;
      Termination For Cause. Upon the termination of the Executive’s
      employment as a result of the Executive’s Voluntary Termination or a
      Termination For Cause, the Executive shall not have any further rights or
      claims against the Company under this Agreement except the right to
      receive (i) the unpaid portion of the base salary provided for in Section
      3(a) hereof, computed on a pro rata basis to the date of termination, (ii)
      payment of the Executive’s accrued but unpaid amounts and extension of
      applicable benefits in accordance with the terms of any incentive
      compensation (including, without limitation, equity compensation),
      retirement, employee welfare or other employee benefit plans or programs
      of the Company in which the Executive is then participating in accordance
      with the terms of such plans or programs, and (iii) reimbursement for any
      expenses for which the Executive shall not have theretofore been
      reimbursed as provided in Section 3
hereof.

            

    

     

    
      	
               
      

            	
              b.

            	
              Termination Without Cause;
      Termination for Good Reason. Upon the termination of the
      Executive’s employment as a result of a Termination Without Cause or for
      Good Reason, the Executive shall not have any further rights or claims
      against the Company under this Agreement except the right to receive (i)
      the payments and other rights provided for in Section 9(a) hereof, (ii)
      severance payments in the form of a continuation of the Executive’s base
      salary as in effect immediately prior to such termination (but without
      giving effect to any reduction in base salary that triggered a Good Reason
      termination) for a period of 12 (twelve) months following the effective
      date of such termination, subject to Section 24, (iii) a lump sum payment
      equal to the then accrued portion of the Executive’s Target Bonus Amount
      as in effect immediately prior to such termination (which includes, for
      the sake of clarity any accrued bonus for the year prior to the date of
      termination to the extent not previously paid and for the year of
      termination), payable within 60 days of termination (subject to Section
      24), (iv) to the extent unvested the option granted by the Company to the
      Executive on May 18, 2010 would be deemed fully vested on the date of
      termination and (v) to the extent that the Executive has elected and is
      continuing to receive COBRA continuation coverage under the Company’s
      group health plan in accordance with Section 4980B of the Internal Revenue
      Code of 1986, as amended (the “Code”),
      the Company shall reduce the COBRA premiums that the Executive is required
      to pay during the first 12 (twelve) months following his termination of
      employment to that amount that the Company charges its active employees
      for the same level of group health
coverage.

            

    

     

    
      
         

      

      
        - 4
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    Notwithstanding
the foregoing, the severance benefits described in clause (ii), (iii) and (iv)
above and the COBRA premium subsidy described in clause (v) above shall be
provided in consideration for, and expressly conditioned upon, the Executive’s
execution of a binding General Release (which shall be provided on or about the
date of termination) containing terms reasonably satisfactory to the Company
within 45 days of the Executive’s termination of employment.  Subject
to Section 24, if the Executive timely executes such General Release and the
applicable revocation period with respect to such General Release lapses, the
Executive will receive the first two months of severance payments 60 days after
his termination of employment and the remaining payments in accordance with the
Company’s payroll practices.  If the Executive does not timely execute
the General Release or if the Executive revokes the General Release within the
applicable revocation period prescribed by law, the Executive shall not be
entitled to receive any severance payments and the Executive will be required to
pay 102% of the applicable premium (as defined in Code Section 4980B) for any
COBRA continuation coverage elected by the Executive.

    

    c.      Termination Without Cause or
Termination for Good Reason Following a Change in Control. Following a
Change in Control (defined below), if requested by the Company’s successor or
acquirer, as applicable, the Executive shall negotiate a new employment
agreement in form and substance acceptable to the Executive in all respects in
his sole discretion.  In the event the Company and the Executive fail
to enter into such new employment agreement within ninety (90) days of the
Change in Control and during the Employment Period a Termination Without Cause
or a termination of the Executive’s employment for Good Reason occurs on or
within twelve months of the consummation of the Change in Control, the Executive
shall not have any further rights or claims against the Company under this
Agreement except the right to receive (i) the payments and other rights provided
for in Section 9(a) hereof, (ii) a lump sum payment equal to the amount of
the  Executive’s base salary as in effect immediately prior to such
termination (but without giving effect to any reduction in base salary that
triggered a Good Reason termination) for a period of 18 (eighteen) months,
payable within 60 days of the date of termination (subject to Section 24), (iii)
a lump sum payment equal to the Executive’s Target Bonus Amount as in effect
immediately prior to such termination and a payment for the prior fiscal year to
the extent that bonuses have not previously been paid on or before the date of
termination (and in the case of the bonus in respect of the prior fiscal year to
the extent such bonus has been earned), payable within 60 days of the date of
termination (subject to Section 24), (iv) all equity-based awards held by
Executive will be deemed fully vested as of the date of termination and (v) to
the extent that the Executive has elected and is continuing to receive COBRA
continuation coverage under the Company’s group health plan in accordance with
Section 4980B of the Code, the Company shall reduce the COBRA premiums that the
Executive is required to pay during the first 12 (twelve) months following his
termination of employment to that amount that the Company charges its active
employees for the same level of group health coverage. Notwithstanding the
foregoing, the severance benefits described in clause (ii), (iii) and (iv) above
and the COBRA premium subsidy described in clause (iv) above shall be provided
in consideration for, and expressly conditioned upon, the Executive’s execution
of a binding General Release (which shall be provided on or about the date of
termination) containing terms reasonably satisfactory to the Company within 45
days of the Executive’s termination of employment.  Subject to Section
24, if the Executive timely executes such General Release and the applicable
revocation period with respect to such General Release lapses, the Executive
will receive the first two months of severance payments 60 days after his
termination of employment and the remaining payments in accordance with the
Company’s payroll practices.  If the Executive does not timely execute
the General Release or if the Executive revokes the General Release within the
applicable revocation period prescribed by law, the Executive shall not be
entitled to receive any severance payments and the Executive will be required to
pay 102% of the applicable premium (as defined in Code Section 4980B) for any
COBRA continuation coverage elected by the Executive.

     

    
      
         

      

      
        - 5
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              d.

            	
              Death and Disability.
      Upon the termination of the Executive’s employment as a result of death or
      Disability, neither the Executive nor the Executive’s beneficiaries or
      estate shall have any further rights or claims against the Company under
      this Agreement except the right to receive the payments and other rights
      provided for in Section 9(a)
hereof.

            

    

     

    
      	
               
      

            	
              e.

            	
              Forfeiture of Rights. In
      the event that, subsequent to termination of employment hereunder, the
      Executive (i) breaches any of the provisions of Sections 11, 12, 13 or 15
      hereof or (ii) makes or facilitates the making of any adverse public
      statements or disclosures with respect to the business or securities of
      the Company, and such breach is not cured within 30 days of written notice
      from the Company detailing such breach, all payments and benefits to which
      the Executive may otherwise have been entitled shall immediately terminate
      and be forfeited, and any portion of such amounts as may have been paid to
      the Executive shall forthwith be returned to the
  Company.

            

    

     

    
      	
               
      

            	
              f.

            	
              Rabbi Trust. If the
      Executive becomes entitled to receive severance payments under Clause (b)
      or (c) above, the Executive’s General Release described in Clause (b)
      above becomes binding and enforceable, the Company shall establish an
      irrevocable grantor trust (a “rabbi trust”), appoint a
      federally or state chartered bank or trust company as the trustee for such
      rabbi trust and shall contribute 12 months (or if in connection with a
      Change of Control, 18 months) of salary continuation payments to such
      rabbi trust and the bonus payments if such bonus payments are required to
      be deferred by Section 24.  The assets of such rabbi trust shall
      be used solely to make the severance payments to the Executive as required
      under this Agreement (or to reimburse the Company for severance payments
      it makes to the Executive); or to satisfy the claims of the Company’s
      unsecured general creditors in the event of the Company’s insolvency or
      bankruptcy.  The rabbi trust may be terminated and any remaining
      assets therein shall revert to the Company after the Executive has
      received all of the severance payments to which he is entitled
      hereunder.  Notwithstanding the foregoing, the provisions of
      this Section 9(f) shall not apply if the funding of the rabbi trust would
      subject the Executive to acceleration of taxation and tax penalties under
      Section 409A(b) of the Code.

            

    

     

    
      	
               
      

            	
              g.

            	
              Directorship. Upon the
      termination of the Executive’s employment for any reason, Executive shall
      resign as a director of the Board.

            

    

     

    
      	
              10.

            	
              Disclosure of Confidential
      Information. The Executive shall not, directly or indirectly, at
      any time during or after the Employment Period, disclose to any person,
      firm, corporation or other business entity, except as required by law, or
      use for any purpose except in the good faith performance of the
      Executive’s duties to the Company, any Confidential Information (as herein
      defined).  For purposes of this Agreement, “Confidential
      Information” means all trade secrets and other non-public
      information of a business, financial , marketing, technical or other
      nature pertaining to the Company or any subsidiary, including information
      of others that the Company or any subsidiary has agreed to keep
      confidential; provided, however, that Confidential Information shall not
      include any information that has entered or enters the public domain
      (other than through breach of the Executive’s obligations under this
      Agreement) or which the Executive is required to disclose by law or legal
      process.  Upon the Company’s request at any time, the Executive
      shall immediately deliver to the Company all materials in the Executive’s
      possession which contain Confidential
  Information.

            

    

     

    
      
         

      

      
        - 6
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              11.

            	
              Restrictive
      Covenant.

            

    

     

    
      	
               
      

            	
              a.

            	
              Term of Restrictive
      Covenant.  The Executive hereby acknowledges and
      recognizes that, during the Employment Period, the Executive shall be
      privy to trade secrets and Confidential Information critical to the
      Company’s business and the Executive further acknowledges and recognizes
      that the Company would find it extremely difficult or impossible to
      replace the Executive and, accordingly, the Executive agrees that, in
      consideration of the benefits to be received by the Executive hereunder,
      the Executive shall not, from and after the date hereof, throughout the
      Employment Period, and for a period of 12 months (18 months if he is
      receiving payments under Section 9(c)) following the termination of the
      Employment Period (i) directly or indirectly engage in the development,
      production, marketing or sale of products that compete (or, upon
      commercialization, would compete) with products of the Company being
      developed (so long as such development has not been abandoned), marketed
      or sold at the time of the  termination of the Employment Period
      (such business or activity being herein referred to as a “Competing
      Business”) whether such engagement shall be as an officer,
      director, owner, employee, partner, affiliate or other participant in any
      Competing Business, (ii) assist others in engaging in any Competing
      Business in the manner described in the foregoing clause (i), or (iii)
      induce other employees of the Company or any subsidiary thereof to
      terminate their employment with the Company or any subsidiary thereof or
      engage in any Competing Business or hire any employees of the Company or
      any subsidiary unless such persons have not been employees of the Company
      for at least 12 months.

            

    

     

    
      	
               
      

            	
              b.

            	
              Sufficient
      Consideration.  The Executive understands that the
      foregoing restrictions may limit the ability of the Executive to earn a
      livelihood in a business similar to the business of the Company, but
      nevertheless believes that the Executive has received and shall receive
      sufficient consideration and other benefits, as an employee of the Company
      and as otherwise provided hereunder, to justify such restrictions which,
      in any event (given the education, skills and ability of the Executive),
      the Executive believes would not prevent the Executive from earning a
      living.

            

    

     

    
      	
              12.

            	
              Non-Disparagement.  The
      Executive shall not engage in conduct, through word, act, gesture or other
      means, or disclose any information to the public or any third party which
      (i) directly or indirectly discredits or disparages in whole or in part
      the company, its subsidiaries, divisions, affiliates and/or successors as
      well as the products and the respective officers, directors, stockholders
      and employees of each of them; (ii) is detrimental to the reputation,
      character or standing of these entities, their products or any of their
      respective officers, directors, stockholders and/or employees; or (iii)
      which generally reflects  negatively on the management
      decisions, strategy or decision-making of these entities.  The
      Company shall not, and shall use commercially reasonable efforts to cause
      its directors and executive officers not to, disparage the Executive to
      any person or entity.  Notwithstanding the foregoing, the
      Company may confer with its advisors and make truthful statements required
      by law.  In addition, it is understood and agreed that factual
      statements made by either party hereto in the ordinary course of business,
      as well as factual statements made in legal actions, legal proceedings, or
      government investigative proceedings that are protected by a qualified
      privilege or immunity are not intended to be construed as
      disparagement.

            

    

     

    
      	
              13.

            	
              Company Right to Inventions.
      The Executive shall promptly disclose, grant and assign to the
      Company, for its sole use and benefit, any and all inventions,
      improvements, technical information and suggestions relating in any way to
      the business of the Company which the Executive may develop or acquire
      during the Employment Period (whether or not during usual working hours),
      together with all patent applications, letters patent, copyrights and
      reissues thereof that may at any time be granted for or upon any such
      invention, improvement or technical information. In connection therewith:
      (i) the Executive shall, without charge, but at the expense of the
      Company, promptly at all times hereafter execute and deliver such
      applications, assignments, descriptions and other instruments as may be
      necessary or proper in the opinion of the Company to vest title to any
      such inventions, improvements, technical information, patent applications,
      patents, copyrights or reissues thereof in the Company and to enable it to
      obtain and maintain the entire right and title thereto throughout the
      world, and (ii) the Executive shall render to the Company, at its expense
      (including a reasonable payment for the time involved in case the
      Executive is not then in its employ), all such assistance as it may
      require in the prosecution of applications for said patents, copyrights or
      reissues thereof, in the prosecution or defense of interferences which may
      be declared involving any said applications, patents or copyrights and in
      any litigation in which the Company may be involved relating to any such
      patents, inventions, improvements or technical
  information.

            

    

     

    
      
         

      

      
        - 7
-

        
          

        

      

      
         

      

    

     

    
      	
              14.

            	
              Prior Employment Agreement;
      Bonus for prior performance. The Employment Agreement between the
      Company and the Executive, as amended, dated April 18, 2008 (the “Original
      Employment Agreement”) is terminated and of no force and effect as of the
      Effective Date of this Agreement, other than those provisions that
      specifically survive a termination thereof, and except that the provision
      in Section 2 of Amendment No. 1 to the Original Employment Agreement,
      dated May 18, 2010 relating to the grant of options to purchase 100,000
      shares of common stock shall remain in effect and shall survive the
      termination of the Original Employment Agreement.  On and as of
      the Execution Date of this Agreement, the Executive has been granted a
      cash bonus in accordance with the terms of the Original Employment
      Agreement equal to 30% of his base salary provided for therein, upon
      achievement of pre-determined corporate objective targets of 50% as
      determined by the Compensation Committee of the Board of Directors, such
      payment to be made within 5 business days of the Execution
      Date.  In addition, the Executive is granted, as of the
      Execution Date, 35,000 shares of restricted common stock under the 2007
      Plan, which shall fully vest on the three month anniversary of the
      Execution Date and otherwise in accordance with the standard form of grant
      agreement provided for under the 2007 Plan (as modified to reflect the
      following sentence), which permits, among other things, for the tax
      withholding obligation arising upon vesting to be satisfied by withholding
      that number of shares with a Fair Market Value (as defined in the Plan)
      equal to the tax withholding.  Notwithstanding anything to the
      contrary contained herein, said shares of restricted common stock shall be
      deemed fully vested (to the extent unvested at such date) on the date of
      the earlier of (i) Executive’s termination of employment with the Company
      for any reason other than as a result of the Executive’s Voluntary
      Termination and (ii) the consummation of a Change in
    Control.

            

    

     

    
      	
              15.

            	
              Enforcement. It is the
      desire and intent of the parties hereto that the provisions of this
      Agreement be enforceable to the fullest extent permissible under the laws
      and public policies applied in each jurisdiction in which enforcement is
      sought. Accordingly, to the extent that a restriction contained in this
      Agreement is more restrictive than permitted by the laws of any
      jurisdiction where this Agreement may be subject to review and
      interpretation, the terms of such restriction, for the purpose only of the
      operation of such restriction in such jurisdiction, shall be the maximum
      restriction allowed by the laws of such jurisdiction and such restriction
      shall be deemed to have been revised accordingly
  herein.

            

    

     

    
      	
              16.

            	
              Remedies;
      Survival.

            

    

     

    
      	
               
      

            	
              a.

            	
              Injunctive
      Relief.  The Executive acknowledges and understands that
      the provisions of the covenants contained in Sections 11, 12, 13 and 15
      hereof, the violation of which cannot be accurately compensated for in
      damages by an action at law, are of crucial importance to the Company, and
      that the breach or threatened breach of the provisions of this Agreement
      would cause the Company irreparable harm. In the event of a breach or
      threatened breach by the Executive of the provisions of Sections 11, 12,
      13 or 15 hereof, the Company shall be entitled to an injunction
      restraining the Executive from such breach. Nothing herein contained shall
      be construed as prohibiting the Company from pursuing any other remedies
      available for any breach or threatened breach of this
      Agreement.

            

    

     

    
      
         

      

      
        - 8
-

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              b.

            	
              Survival.  Notwithstanding
      anything contained in this Agreement to the contrary, the provisions of
      the Sections 3, 9, 11, 12, 13 and 15 through 17 hereof shall survive the
      expiration or earlier termination of this Agreement until, by their terms,
      such provisions are no longer
operative.

            

    

     

    
      	
              17.

            	
              Notices. Notices and
      other communications hereunder shall be in writing and shall be delivered
      personally or sent by air courier or first class certified or registered
      mail, return receipt requested and postage prepaid, addressed as
      follows:

            

    

     

    if to the
Company:

     

    PharmAthene,
Inc.

    One Park
Place, Suite 450

    Annapolis,
Maryland  21401

    

    with a
copy to:

    SNR
Denton US LLP

    101 JFK
Parkway

    Short
Hills, New Jersey 07078

    Attention:  Jeffrey
Baumel, Esq.

     

    if to the Executive to:

     

    Eric
Richman

    At the
address reflected in the payroll records

    

    with a
copy to:

     

    Bonnie
Klugman, Esq.

    Becker,
Glynn, Melamed & Muffly, LLP

    299 Park
Avenue

    NY, NY
10171

    

    All
notices and other communications given to any party hereto in accordance with
the provisions of this Agreement shall be deemed to have been given on the date
of delivery, if personally delivered; on the business day after the date when
sent, if sent by air courier; and on the third business day after the date when
sent, if sent by mail, in each case addressed to such party as provided in this
Section 17 or in accordance with the latest unrevoked direction from such
party.

     

    
      	
              18.

            	
              Binding Agreement;
      Benefit. The provisions of this Agreement shall be binding upon,
      and shall inure to the benefit of, the respective heirs, legal
      representatives and successors of the parties
  hereto.

            

    

     

    
      	
              19.

            	
              Governing Law; Jurisdiction.
      This Agreement shall be governed by, and construed and enforced in
      accordance with, the laws of the State of Maryland applicable to
      contract made and to be performed therein.  Any action to
      enforce any of the provisions of this Agreement shall be brought in a
      court of the State of Maryland or in
      Federal court located within that State.  The parties consent to
      the jurisdiction of such courts and to the service of process in any
      manner provided by Maryland law.  Each party irrevocably waives
      any objection which it may now or hereafter have to the laying of the
      venue of any such suit, action or proceeding brought in such court and any
      claim that such suit, action or proceeding brought in such court has been
      brought in an inconvenient forum and agrees that service of process in
      accordance with the foregoing shall be deemed in every respect effective
      and valid personal service of process upon such party.  All
      reasonable legal fees paid or incurred by Executive in any litigation or
      dispute to enforce Executive’s rights hereunder shall be paid or
      reimbursed by the Company if Executive is the prevailing party in such
      litigation or dispute.

            

    

     

    
      
         

      

      
        - 9
-

        
          

        

      

      
         

      

    

     

    
      	
              20.

            	
              Waiver of Breach. The
      waiver by either party of a breach of any provision of this Agreement by
      the other party must be in writing and shall not operate or be construed
      as a waiver of any subsequent breach by such other
  party.

            

    

     

    
      	
              21.

            	
              Entire Agreement;
      Amendments. This Agreement (together with the applicable documents
      referred to herein) contains the entire agreement between the parties with
      respect to the subject matter hereof and supersedes all prior agreements
      or understandings among the parties with respect thereof, other than the
      Indemnification Agreement dated January 21, 2009 between the Company and
      the Executive which remains in full force and effect. This Agreement may
      be amended only by an agreement in writing signed by the parties
      hereto.

            

    

     

    
      	
              22.

            	
              Headings. The section
      headings contained in this Agreement are for reference purposes only and
      shall not affect in any way the meaning or interpretation of this
      Agreement.

            

    

     

    
      	
              23.

            	
              Severability. Any
      provision of this Agreement that is prohibited or unenforceable in any
      jurisdiction shall, as to such jurisdiction, be ineffective to the extent
      of such prohibition or unenforceability without invalidating the remaining
      provisions hereof, and any such prohibition or unenforceability in any
      jurisdiction shall not invalidate or render unenforceable such provision
      in any other jurisdiction.

            

    

     

    
      	
              24.

            	
              409A Compliance;
      280G.  (a) If Executive is a “specified employee” (as
      determined in accordance with Treasury Regulation Section 1.409A-1(i) or
      any written Company policy implementing such regulation) at the time of
      his termination of employment, then his severance payments that are
      otherwise payable during the first six month period following the
      Executive’s termination of employment (to the extent that such severance
      payments constitute nonqualified deferred compensation within the meaning
      of Section 409A of the Code and the regulations promulgated thereunder)
      shall be deferred until the date that is six months after the Executive’s
      termination of employment (or, if earlier, upon his
      death).  Each salary continuation payment that is due under this
      Agreement shall be treated as a separate payment for purposes of Section
      409A Code.  This Agreement shall be interpreted to comply, or
      otherwise be exempt from, with the requirements of Code Section
      409A.  Accordingly, references to termination of employment
      hereunder shall be interpreted to mean “separation from service” as
      defined in regulations under Section 409A of the Code.  All
      expenses under this Agreement that are reimbursable in accordance with
      Company policy shall be made as soon as practicable after Executive’s
      submission of such expenses in accordance with the Company’s policy, but
      in no event later than the last day of the taxable year following the
      taxable year in which the expense was
incurred.

            

    

     

    (b)    The Company
and Executive shall each cooperate with the other and take commercially
reasonable actions (including the valuation of any restrictive covenants by a
mutually agreed upon valuation firm at the expense of the Company), to avoid or
minimize any excise tax payable pursuant to Section 4999 of the Code with
respect to any payments or benefits to Executive pursuant to this
Agreement.

     

    
      
         

      

      
        - 10
-

        
          

        

      

      
         

      

    

     

    
      	
              25.

            	
              Executive’s
      Acknowledgement.  The Executive acknowledges (a) that the
      Executive has had the opportunity to consult with independent counsel of
      his own choice concerning this Agreement and (b) that the Executive has
      read and understands the Agreement, is fully aware of its legal effect and
      has entered into it freely based on the Executive’s own
      judgment.

            

    

     

    
      	
              26.

            	
              Assignment. This
      Agreement is personal in its nature and the parties hereto shall not,
      without the consent of the other, assign or transfer this Agreement or any
      rights or obligations hereunder; provided, that the provisions hereof
      shall inure to the benefit of, and be binding upon, each successor of the
      Company, whether by merger, consolidation, transfer of all or
      substantially all of its assets or
otherwise.

            

    

     

    
      	
              27.

            	
              Counterparts.  This
      Agreement may be executed in two or more counterparts, each of which shall
      for all purposes constitute one agreement which is binding on all of the
      parties hereto.

            

    

     

    
      	
              28.

            	
              Attorney
      Fees.  The Company shall reimburse Executive for his
      reasonable legal fees and expenses incurred in connection with the
      negotiation and execution of this Agreement in an amount up to
      $5,000.

            

    

     

    IN WITNESS WHEREOF, the
parties have duly executed this Agreement as of the date first above
written.

     

    
      	 
      	
              EXECUTIVE

            	 
      
	 
      	 
      	 
      	 
      
	 
      	
              /s/ Eric Richman

            	 
      
	 
      	
              Eric
      Richman

            	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	
              PHARMATHENE,
      INC.

            	 
      
	 
      	 
      	 
      	 
      
	 
      	
              By

            	
              /s/ Joel McCleary

            	 
      
	 
      	
              Name:

            	
              Joel
      McCleary

            	 
      
	 
      	
              Title:

            	
              Director

            	 
      

    

    

    
      
         

      

      
        - 11
-CREDIT
AGREEMENT

    

    Dated as
of December 28, 2010

    

    by
and among

    

    GLADSTONE
COMMERCIAL LIMITED PARTNERSHIP,

                                                                as
Borrower,

    

    GLADSTONE
COMMERCIAL CORPORATION,

                                         as
Parent Guarantor,

    

    THE
FINANCIAL INSTITUTIONS PARTY HERETO

    AND THEIR
ASSIGNEES UNDER SECTION 12.6.,

                                                                    as
Lenders,

    
      and

    

    

    CAPITAL
ONE, N.A.,

                                                                                       as
Administrative Agent

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    TABLE OF
CONTENTS

     

    
      
        	
                Article
      I. Definitions

              	
                1

              
	 
      	 
      
	
                Section 1.1.  Definitions

              	
                1

              
	
                Section 1.2.  General;
      References to Eastern Time

              	
                23

              
	 
      	 
      
	
                Article
      II. Credit Facility

              	
                23

              
	 
      	 
      
	
                Section 2.1.  Revolving
      Loans

              	
                23

              
	
                Section
      2.2.  Letters of Credit

              	
                25

              
	
                Section 2.3.  Rates
      and Payment of Interest on Loans

              	
                29

              
	
                Section
      2.4  Borrowing Base

              	
                30

              
	
                Section 2.5.  Repayment
      of Loans

              	
                32

              
	
                Section 2.6.  Prepayments

              	
                32

              
	
                Section 2.7.  Continuation

              	
                33

              
	
                Section 2.8.  Notes

              	
                33

              
	
                Section 2.9.  Expiration
      Date of Letters of Credit Past Termination Date

              	
                34

              
	
                Section 2.10.  Amount
      Limitations

              	
                34

              
	
                Section 2.11.  Funds
      Transfer Disbursements

              	
                34

              
	
                Section 2.12.  Increase in
      Commitments

              	
                35

              
	 
      	 
      
	
                Article
      III. Payments, Fees and Other General Provisions

              	
                36

              
	 
      	 
      
	
                Section 3.1.  Payments

              	
                36

              
	
                Section 3.2.  Pro
      Rata Treatment

              	
                37

              
	
                Section 3.3.  Sharing
      of Payments, Etc.

              	
                37

              
	
                Section 3.4.  Several
      Obligations

              	
                38

              
	
                Section 3.5.  Fees

              	
                38

              
	
                Section 3.6.  Computations

              	
                38

              
	
                Section 3.7.  Usury

              	
                39

              
	
                Section 3.8.  Statements
      of Account

              	
                39

              
	
                Section 3.9.  Defaulting
      Lenders

              	
                39

              
	
                Section 3.10.  Taxes;
      Foreign Lenders

              	
                42

              
	 
      	 
      
	
                Article
      IV. Yield Protection, Etc.

              	
                44

              
	 
      	 
      
	
                Section 4.1.  Additional
      Costs; Capital Adequacy

              	
                44

              
	
                Section 4.2.  Suspension
      of LIBOR Loans

              	
                45

              
	
                Section 4.3.  Illegality

              	
                45

              
	
                Section 4.4.  Compensation

              	
                46

              
	
                Section 4.5.  Treatment
      of Affected Loans

              	
                46

              
	
                Section 4.6.  Affected
      Lenders

              	
                47

              
	
                Section 4.7.  Change
      of Lending Office

              	
                47

              
	
                Section 4.8.  Assumptions
      Concerning Funding of LIBOR Loans

              	
                47

              
	 
      	 
      
	
                Article
      V. Conditions Precedent

              	
                47

              
	 
      	 
      
	
                Section 5.1.  Initial
      Conditions Precedent

              	
                47

              
	
                Section 5.2.  Conditions
      Precedent to All Loans and Letters of Credit

              	
                49

              
	 
      	 
      
	
                Article
      VI. Representations and Warranties

              	
                50

              
	 
      	 
      
	
                Section 6.1.  Representations
      and Warranties

              	
                50

              
	
                Section 6.2.  Survival
      of Representations and Warranties, Etc.

              	
                56

              

      

    

     

    
      
         

      

      
        -i-

        
          

        

      

      
         

      

    

     

    
      
        	
                Article
      VII. Affirmative Covenants

              	
                57

              
	 
      	 
      
	
                Section 7.1.  Preservation
      of Existence and Similar Matters

              	
                57

              
	
                Section 7.2.  Compliance
      with Applicable Law

              	
                57

              
	
                Section 7.3.  Maintenance
      of Property

              	
                57

              
	
                Section 7.4.  Conduct
      of Business

              	
                57

              
	
                Section 7.5.  Insurance

              	
                57

              
	
                Section 7.6.  Payment
      of Taxes and Claims

              	
                58

              
	
                Section 7.7.  Books
      and Records; Inspections

              	
                58

              
	
                Section 7.8.  Use
      of Proceeds

              	
                58

              
	
                Section 7.9.  Environmental
      Matters

              	
                59

              
	
                Section 7.10.  Further
      Assurances

              	
                59

              
	
                Section
      7.11.  Material Contracts

              	
                59

              
	
                Section 7.12.  Guarantors

              	
                59

              
	
                Section 7.13.  REIT
      Status

              	
                59

              
	
                Section
      7.14.  Deposit Account

              	
                60

              
	 	 
      
	
                Article
      VIII. Information

              	
                60

              
	 
      	 
      
	
                Section 8.1.  Quarterly
      Financial Statements

              	
                60

              
	
                Section 8.2.  Year-End
      Statements

              	
                60

              
	
                Section
      8.3.  Other Reports

              	
                60

              
	
                Section 8.4.  Compliance
      Certificate

              	
                61

              
	
                Section 8.5.  Other
      Information

              	
                61

              
	
                Section 8.6.  Electronic
      Delivery of Certain Information

              	
                63

              
	
                Section 8.7.  USA
      Patriot Act Notice; Compliance

              	
                64

              
	 
      	 
      
	
                Article
      IX. Negative Covenants

              	
                64

              
	 
      	 
      
	
                Section 9.1.  Financial
      Covenants

              	
                64

              
	
                Section 9.2.  Liens;
      Negative Pledges; Other Matters

              	
                66

              
	
                Section 9.3.  Restrictions
      on Intercompany Transfers

              	
                67

              
	
                Section 9.4.  Merger,
      Consolidation, Sales of Assets and Other Arrangements

              	
                67

              
	
                Section 9.5.  Plans

              	
                68

              
	
                Section 9.6.  Fiscal
      Year

              	
                68

              
	
                Section 9.7.  Modifications
      of Organizational Documents and Material Contracts

              	
                69

              
	
                Section 9.8.  Transactions
      with Affiliates

              	
                69

              
	
                Section 9.9.  Environmental
      Matters

              	
                69

              
	
                Section 9.10.  Derivatives
      Contracts

              	
                69

              
	 
      	 
      
	
                Article
      X. Default

              	
                69

              
	 
      	 
      
	
                Section 10.1.  Events
      of Default

              	
                69

              
	
                Section 10.2.  Remedies
      Upon Event of Default

              	
                72

              
	
                Section 10.3.  Remedies
      Upon Default

              	
                73

              
	
                Section 10.4.  Marshaling;
      Payments Set Aside

              	
                73

              
	
                Section 10.5.  Allocation
      of Proceeds

              	
                74

              
	
                Section 10.6.  Letter
      of Credit Collateral Account

              	
                74

              
	
                Section 10.7.  Performance
      by Administrative Agent

              	
                75

              
	
                Section 10.8.  Rights
      Cumulative

              	
                76

              
	 
      	 
      
	
                Article
      XI. The Administrative Agent

              	
                76

              
	 
      	 
      
	
                Section 11.1.  Appointment
      and Authorization

              	
                76

              
	
                Section 11.2.  Capital
      One, N.A. as Lender

              	
                77

              

      

    

     

    
      
         

      

      
        -ii-

        
          

        

      

      
         

      

    

     

    
      
        	
                Section
      11.3.  Approvals of Lenders

              	
                77

              
	
                Section 11.4.  Notice
      of Events of Default

              	
                77

              
	
                Section 11.5.  Administrative
      Agent’s Reliance

              	
                78

              
	
                Section 11.6.  Indemnification
      of Administrative Agent

              	
                78

              
	
                Section 11.7.  Lender
      Credit Decision, Etc.

              	
                79

              
	
                Section 11.8.  Successor
      Administrative Agent

              	
                80

              
	 
      	 
      
	
                Article
      XII. Miscellaneous

              	
                80

              
	 
      	 
      
	
                Section 12.1.  Notices

              	
                80

              
	
                Section 12.2.  Expenses

              	
                82

              
	
                Section 12.3.  Stamp,
      Intangible and Recording Taxes

              	
                82

              
	
                Section 12.4.  Setoff

              	
                82

              
	
                Section 12.5.  Litigation;
      Jurisdiction; Other Matters; Waivers

              	
                83

              
	
                Section 12.6.  Successors
      and Assigns

              	
                84

              
	
                Section 12.7.  Amendments
      and Waivers

              	
                86

              
	
                Section 12.8.  Nonliability
      of Administrative Agent and Lenders

              	
                88

              
	
                Section 12.9.  Confidentiality

              	
                88

              
	
                Section 12.10.  Indemnification

              	
                89

              
	
                Section 12.11.  Termination;
      Survival

              	
                91

              
	
                Section 12.12.  Severability
      of Provisions

              	
                91

              
	
                Section 12.13.  Governing
      Law

              	
                91

              
	
                Section 12.14.  Counterparts

              	
                91

              
	
                Section 12.15.  Obligations
      with Respect to Loan Parties

              	
                92

              
	
                Section 12.16.  Independence
      of Covenants

              	
                92

              
	
                Section 12.17.  Limitation
      of Liability

              	
                92

              
	
                Section 12.18.  Entire
      Agreement

              	
                92

              
	
                Section 12.19.  Construction

              	
                92

              
	
                Section 12.20.  Headings

              	
                92

              
	
                Section 12.21.  Plan
      Assets

              	
                93

              

      

    

    

    
      	
              SCHEDULE
      I

            	
              Commitments

            

    

    
      	
              SCHEDULE
      1.1.(b)

            	
              List
      of Loan Parties

            

    

    
      	
              SCHEDULE
      2.2.(m)

            	
              List
      of Existing Letters of Credit

            

    

    
      	
              SCHEDULE
      6.1.(b)

            	
              Ownership
      Structure

            

    

    
      	
              SCHEDULE
      6.1.(f)

            	
              Title
      to Properties; Liens

            

    

    
      	
              SCHEDULE
      6.1.(g)

            	
              Indebtedness
      and Guaranties

            

    

    
      	
              SCHEDULE
      6.1.(h)

            	
              Material
      Contracts

            

    

    
      	
              SCHEDULE
      6.1.(i)

            	
              Litigation

            

    

    
      	
              SCHEDULE
      6.1.(r)

            	
              Affiliate
      Transactions

            

    

    
      	
              SCHEDULE
      9.2.(b)

            	
              Negative
      Pledges

            

    

    
      	
              SCHEDULE
      9.3

            	
              Subsidiary
      Restrictions

            

    

     

    
      	
              EXHIBIT
      A

            	
              Form
      of Assignment and Assumption
Agreement

            

    

    
      	
              EXHIBIT
      B

            	
              Form
      of Guaranty

            

    

    
      	
              EXHIBIT
      C

            	
              Form
      of Notice of Borrowing

            

    

    
      	
              EXHIBIT
      D

            	
              Form
      of Borrowing Base Certificate

            

    

    
      	
              EXHIBIT
      E

            	
              Form
      of Notice of Continuation

            

    

    
      	
              EXHIBIT
      F

            	
              Form
      of Revolving Note

            

    

    
      	
              EXHIBIT
      G

            	
              Form
      of Opinion of Counsel

            

    

    
      	
              EXHIBIT
      H

            	
              Form
      of Insurance

            

    

    
      	
              EXHIBIT
      I

            	
              Form
      of Compliance Certificate

            

    

    
      	
              EXHIBIT
      J

            	
              Transfer
      Authorizer Designation Form

            

    

     

    
      
         

      

      
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    THIS
CREDIT AGREEMENT (this “Agreement”) dated as of December 28, 2010 by and among
GLADSTONE COMMERCIAL LIMITED PARTNERSHIP, a limited partnership formed under the
laws of the State of Delaware (the “Borrower”), GLADSTONE COMMERCIAL
CORPORATION, a Maryland corporation (“Parent Guarantor”), each of the financial
institutions initially a signatory hereto together with their successors and
assignees under Section 12.6 (the “Lenders”), and CAPITAL ONE, N.A., as
Administrative Agent (the “Administrative Agent”).

    

    Borrower
has requested that Lenders establish a revolving credit facility in favor of
Borrower, and Lenders are willing to do so on the terms and conditions set forth
herein.  In consideration of the mutual covenants and agreements
herein contained, the parties hereto covenant and agree as follows:

    

    Article
I. Definitions

     

    
      Section 1.1.  Definitions.

    

     

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

    

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

    

    “Additional Costs” has the
meaning given that term in Section 4.1.(b).

    

    “Adjusted Fixed Charge Coverage
Ratio” means, for the preceding four (4) calendar quarters, the ratio of
(i) EBITDA to (ii) Adjusted Fixed Charges for such
period.

    

    “Adjusted Fixed Charges” means,
for any period, the sum of (a) Interest Expense of the Parent Guarantor
determined on a consolidated basis for such period, and (b) all regularly
scheduled principal payments made with respect to Indebtedness of the Parent
Guarantor determined on a consolidated basis for such period during such period,
other than any balloon, bullet or similar principal payment which repays such
Indebtedness in full.  The Parent Guarantor’s Ownership Share of the
Fixed Charges of Unconsolidated Affiliates (other than intercompany amounts) of
the Parent Guarantor shall be included (without duplication) in determinations
of Fixed Charges.

    

    “Administrative Agent” means
Capital One, N.A. as contractual representative of the Lenders under this
Agreement, or any successor Administrative Agent appointed pursuant to Section
11.8.

    

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

    

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

    

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

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    

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

    

    “Applicable Margin” means
either the Applicable LIBOR Margin or the Applicable Base Rate Margin, as
follows:

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            	
                                    Level

                                  	 	
                                    Leverage Ratio

                                  	 	
                                    Applicable LIBOR

                                    Margins

                                  	 	
                                    Applicable Base Rate

                                    Margins

                                  
	
                                    1

                                  	 	
                                    Greater
      than 60%

                                  	 	
                                    300
      basis points

                                  	 	
                                    200
      basis points

                                  
	 	 	 	 	 	 	 
	
                                    2

                                  	 	
                                    Greater
      than 50% but less than or equal to 60%

                                  	 	
                                    275
      basis points

                                  	 	
                                    175
      basis points

                                  
	 	 	 	 	 	 	 
	
                                    3

                                  	 	
                                    Greater
      than 40% but less than or equal to 50%

                                  	 	
                                    250
      basis points

                                  	 	
                                    150
      basis points

                                  
	 	 	 	 	 	 	 
	
                                    4

                                  	 	
                                    Less
      than or equal to 40%

                                  	 	
                                    225
      basis points

                                  	 	
                                    125
      basis
points

                                  

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    

    The
Applicable Margin shall be determined by the Administrative Agent from the
compliance certification and fixed on a quarterly basis, based on the Leverage
Ratio.

    

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

    

    “Availability” shall be defined
in Section 2.1.

    

    “Average Lease Term” means the weighted average of the term
of the leasehold interest under each of the leases of all properties owned
directly or indirectly by the Parent Guarantor other than leases of properties
to which new subsidiaries permitted under Section 9.1(n) are a party, which
weighted average shall be based on the square footage of leased
properties.

    

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

    

    “Bankruptcy Event” means, with
respect to any Person, any of the events of the types described or referred to
in Sections 10.1.(e) and (f).

    

    “Base Rate” means for any day a
fluctuating rate per annum equal to the highest of (a) the Federal Funds Rate
plus 1.5%, and (b) the prime lending rate of interest in effect for such day as
published from time to time in the “Money Rates” section of the Wall Street
Journal.  Any change in the “prime rate” as published in the
Wall Street Journal
shall take effect at the opening of business on the day in which such rate is
published.  In the event that the Wall Street Journal is
discontinued or ceases publishing a “prime rate”, then the Lenders shall agree
on a substitute source for such “prime rate”.

    

    “Base Rate Loan” means a
Revolving Loan bearing interest at a rate based on the Base Rate.

    

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

    
      
         

      

      
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    “Borrower” has the meaning set
forth in the introductory paragraph hereof and shall include the Borrower’s
successors and permitted assigns.

    

    “Borrower Information” has the
meaning given that term in Section 2.3.(c).

    

    “Borrowing Base” means the sum
of: (X) the lesser of either (a) the aggregate appraised value of the Borrowing
Base Properties determined by an appraisal of such property as deemed acceptable
to the Administrative Agent in its reasonable discretion, or (b) the aggregate
Net Operating Income for the Borrowing Base Properties using a capitalization
rate of 9.25%; plus (Y) the aggregate value of First Mortgage Receivables
(provided that each First Mortgage Receivable shall be determined by using the
lower of the outstanding principal balance of such First Mortgage Receivable or
75% of the appraised value of the property securing such First Mortgage
Receivable as determined by an appraisal of such property as deemed acceptable
to the Administrative Agent in its reasonable discretion); provided, however,
that the Borrowing Base shall be adjusted as follows: (i) in the case of
determining value of the Borrowing Base Properties under (X)(b) above, the
portion of the Net Operating Income for a Borrowing Base Property that is
occupied by a tenant who has a Tenant Concentration Percentage of greater than
22% determined with respect to the Borrowing Base Properties shall be removed
from the Borrowing Base to the extent that such portion exceeds 22% with respect
to such Borrowing Base Property; and (ii) in the case of determining value of
the First Mortgage Receivables under (Y) above, in no event shall such aggregate
value exceed 15% of the Borrowing Base. The Borrowing Base may be adjusted from
time to time to reflect the supplementation and/or removal of certain assets as
provided in Section 2.4 of this Agreement and on account of the disposition of
Borrowing Base Properties.

    

    “Borrowing Base Certificate”
has the meaning given that term in Section 2.1.(e).

    

    “Borrowing Base Properties”
means improved real property used to calculate the borrowing base under the
facility which satisfies all of the following requirements: (a) the
Property may be office, industrial, manufacturing, retail distribution, data
center, medical/health care or flex property and is owned on a fee-simple basis,
or leased under a Ground Lease, entirely by the Borrower or a Subsidiary of the
Borrower that is a Guarantor; (b) neither such Property, nor any interest
of the Borrower or any Subsidiary therein, is subject to any lien (other than
Permitted Liens of the types described in clauses (a) through (e) of the
definition of Permitted Liens) or a Negative Pledge; (c) if such Property
is owned or leased by a Subsidiary Guarantor (i) none of the Borrower’s
direct or indirect ownership interest in such Subsidiary Guarantor is subject to
any Lien (other than Permitted Liens of the types described in clauses (a)
through (e) of the definition of Permitted Liens) or to a Negative Pledge; and
(ii) the Borrower directly, or indirectly through a Subsidiary Guarantor,
has the right to take the following actions without the need to obtain the
consent of any Person: (x) to sell, transfer or otherwise dispose of such
Property and (y) to create a Lien on such Property as security for
Indebtedness of the Borrower or such Guarantor, as applicable; (d) such
Property is free of all structural defects or major architectural deficiencies,
title defects, environmental conditions or other adverse matters except for
defects, deficiencies, conditions or other matters individually or collectively
which are not material to the profitable operation of such Property; (e) such
Property has a minimum 90% occupancy rate, which can be waived at the discretion
of the Administrative Agent on a Property by Property basis; and (f) the Initial
Lease Term of a Property shall not be less than five (5) years.

    

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

    
      
         

      

      
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    “Capital One” means Capital
One, N.A.

    

    “Capitalized Lease Obligation”
means obligations under a lease that are required to be capitalized for
financial reporting purposes in accordance with GAAP, provided, however, that
any obligation under a lease not considered a Capital Lease under GAAP on the
Closing Date shall in no event be considered a Capitalized Lease
Obligation.  The amount of a Capitalized Lease Obligation is the
capitalized amount of such obligation as would be required to be reflected on a
balance sheet of the applicable Person prepared in accordance with GAAP as of
the applicable date.

    

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

    

    “Cash Flow” means the sum of
the rents and revenues and all other income from all Borrowing Base Properties
and interest and fees from all Notes Receivable included within the Borrowing
Base for the preceding four (4) quarters minus all property specific insurance,
taxes and maintenance costs incurred by the Borrower and any Subsidiary
Guarantor minus the greater of (i) the actual property management expenses or
(ii) any amount equal to 3% of the gross revenues from such Borrowing Base
Properties.

    

    “Closing Date” means December
28, 2010.

    

    “Collateral Assignment of
Mortgage” means collectively, those certain collateral assignments of
First Mortgage Receivables given by Loan Parties for the benefit of Lender,
together with any further collateral assignments of mortgages given in
substitution or supplement thereof and any amendments or modifications
thereof.

    

    “Commitment” means, as to each
Lender, such Lender’s obligation to make Revolving Loans pursuant to
Section 2.1., to issue (in the case of the Issuing Bank) and to participate
(in the case of the other Lenders) in Letters of Credit pursuant to
Section 2.2.(i) in an amount up to, but not exceeding the amount set forth
for such Lender on Schedule I as such Lender’s “Commitment Amount” or as set
forth in the applicable Assignment and Assumption.

    
      
         

      

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

    

    “Compliance Certificate” has
the meaning given that term in Section 8.4.

    

    “Continue”, “Continuation” and “Continued” each refers to the
continuation of a LIBOR Loan from one Interest Period to another Interest Period
pursuant to Section 2.7.

    

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

    

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

    

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

    

    “Debt Service Coverage Ratio”
means the ratio of Cash Flow to the Implied Debt Service.

    

    “Debt Yield” means Cash Flow
divided by the aggregate outstanding loan balance of the Revolving Credit
Facility.  Debt Yield shall be expressed as a percentage.

    

    “Default” means any of the
events specified in Section 10.1., whether or not there has been satisfied
any requirement for the giving of notice, the lapse of time, or
both.

    

    “Defaulting Lender” means any
Lender, as determined by the Administrative Agent in good faith, that
(a) has failed to fund (or has failed, within 3 Business Days after request
by the Administrative Agent, to confirm that it will comply with the terms of
this Agreement relating to its obligations to fund) any portion of a Loan or
participations in Letter of Credit Liabilities under Section 2.2.(i), in
each case required to be funded by it hereunder within two (2) Business Days of
the date required to be funded by it hereunder, (b) has otherwise failed to
pay to the Administrative Agent or any other Lender any other amount required to
be paid by it hereunder within two (2) Business Days of the date when due,
unless such amount is the subject of a good faith dispute, (c) has notified
the Borrower, the Administrative Agent or any other Lender in writing that, or
has made a public statement to the effect that, it does not intend to comply
with any of its funding obligations under this Agreement, or (d) has (or
its Parent Company has) become or is (i) insolvent, or is generally unable
to pay its debts as they become due, or admits in writing its inability to pay
its debts as they become due, or makes a general assignment for the benefit of
its creditors, or (ii) the subject of a bankruptcy, insolvency, reorganization,
liquidation or similar proceeding, or a receiver, trustee, conservator,
custodian or the like has been appointed for such Lender or its Parent Company,
or such Lender or its Parent Company has taken any action in furtherance of, or
indicating its consent to, approval of or acquiescence in any such proceeding or
appointment, or (iii) adjudicated as, or determined by any Governmental
Authority having regulatory authority over such Person or its assets to be,
insolvent; provided that, for the avoidance of doubt, a Lender shall not be
deemed be a Defaulting Lender solely by virtue of the ownership or acquisition
of any Equity Interest in or control of a Lender or a Parent Company thereof by
a Governmental Authority or an instrumentality thereof.

    
      
         

      

      
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    “Defaulting Lender Excess”
means, with respect to any Defaulting Lender, the excess, if any, of such
Defaulting Lender’s Commitment Percentage of the aggregate outstanding principal
amount of Revolving Loans of all Lenders (calculated as if all Defaulting
Lenders other than such Defaulting Lender had funded all of their respective
Revolving Loans) over the aggregate outstanding principal amount of all
Revolving Loans of such Defaulting Lender.

    

    “Derivatives Contract” means
any and all rate swap transactions, basis swaps, credit derivative transactions,
forward rate transactions, commodity swaps, commodity options, forward commodity
contracts, equity or equity index swaps or options, bond or bond price or bond
index swaps or options or forward bond or forward bond price or forward bond
index transactions, interest rate options, forward foreign exchange
transactions, cap transactions, floor transactions, collar transactions,
currency swap transactions, cross-currency rate swap transactions, currency
options, spot contracts, or any other similar transactions or any combination of
any of the foregoing (including any options to enter into any of the foregoing),
whether or not any such transaction is governed by or subject to any master
agreement.  Not in limitation of the foregoing, the term “Derivatives
Contract” includes any and all transactions of any kind, and the related
confirmations, which are subject to the terms and conditions of, or governed by,
any form of master agreement published by the International Swaps and
Derivatives Association, Inc., any International Foreign Exchange Master
Agreement, or any other master agreement, including any such obligations or
liabilities under any such master agreement.

    

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

    

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

    

    “Dividend Payout Ratio” means that ratio
determined by dividing the dividends payable on common stock by Funds from
Operations (calculated to remove the impact of FAS 141R) for the trailing four
(4) quarters immediately preceding the measurement date.

    

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

    

    “EBITDA” means, with respect to
the Parent Guarantor the determination on a consolidated basis, in accordance
with GAAP, for any period (without duplication): (a) net income (loss)
adjusted to remove the effects of FAS 141R, exclusive of the following (but only
to the extent included in the determination of such net income (loss)):
(i) depreciation and amortization expense (including amortization of
deferred lease and loan costs and lease origination value); (ii) Interest
Expense; (iii) income tax expense; (iv) asset impairment and restructuring
charges; (v) all non-cash charges and non-cash expenses related to grants
of Equity Interests to, the exercise of options related to such Equity Interests
by, and the purchase or redemption of such Equity Interests or such options
from, members of the senior management of the Parent Guarantor and
(vi) extraordinary or non-recurring items, including without limitation,
extraordinary or non-recurring gains and losses; plus (b) the Parent
Guarantor’s Ownership Share of EBITDA of its Unconsolidated
Affiliates.  For purposes of this definition, non-recurring items
shall be deemed to include (x) gains and losses related to the early
extinguishment of Indebtedness, (y) non-recurring severance and other
restructuring charges and (z) transaction costs of acquisitions not
permitted to be capitalized pursuant to GAAP.

    
      
         

      

      
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    “Effective Date” means the
later of (a) the Agreement Date and (b) the date on which all of the
conditions precedent set forth in Section 5.1. shall have been fulfilled or
waived in writing by the Requisite Lenders.

    

    “Eligible Assignee” means (a) a
Lender, (b) an Affiliate of a Lender, and (c) any other United States federal or
state chartered commercial bank of recognized standing, or a commercial bank
organized under the laws of any other country which is a member of the
Organisation for Economic Cooperation and Development, or similar financial
institution, acting through a branch or agency, which bank has capital and
unimpaired surplus in excess of $500,000,000 approved by the Administrative
Agent (such approval not to be unreasonably withheld or delayed); provided that
notwithstanding the foregoing, “Eligible Assignee” shall not include the Parent
Guarantor, the Borrower or any Affiliates or Subsidiaries of the Parent
Guarantor.

    

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

    

    “Equity Interest” means, with
respect to any Person, any share of capital stock of (or other ownership or
profit interests in) such Person, any warrant, option or other right for the
purchase or other acquisition from such Person of any share of capital stock of
(or other ownership or profit interests in) such Person, any security
convertible into or exchangeable for any share of capital stock of (or other
ownership or profit interests in) such Person or warrant, right or option for
the purchase or other acquisition from such Person of such shares (or such other
interests), and any other ownership or profit interest in such Person
(including, without limitation, partnership, member or trust interests therein),
whether voting or nonvoting.

    

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

    

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

    
      
         

      

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

    

    “ERISA Group” means the
Borrower, any Subsidiary, any other Loan Party and all members of a controlled
group of corporations and all trades or businesses (whether or not incorporated)
under common control which, together with the Borrower or any Subsidiary, are
treated as a single employer under Section 414 of the Internal Revenue Code
or Section 4001 of ERISA.

    

    “Event of Default” means any of
the events specified in Section 10.1., provided that any requirement for
notice or lapse of time or any other condition has been satisfied.

    

    “Fair Market Value” means, with
respect to (a) a security listed on a national securities exchange or the
NASDAQ National Market, the price of such security as reported on such exchange
by any widely recognized reporting method customarily relied upon by financial
institutions and (b)  any other property, the price which could reasonably
be expected to be negotiated in an arm's-length free market transaction, for
cash, between a willing seller and a willing buyer, neither of which is under
pressure or compulsion to complete the transaction.

    

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

    

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

    

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

    
      
         

      

      
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    “First Mortgage Receivables”
means a promissory note, indenture or other evidence of indebtedness secured by
a first-priority Mortgage of which (a) the Borrower or any Subsidiary of the
Borrower that is a Guarantor is the holder and retains the rights of collection
of all payments thereunder and (b) the real property subject to such
first-priority Mortgage is not directly or indirectly owned by the Parent
Guarantor or any of its Subsidiaries.

    

    “Fixed Charge Coverage Ratio”
means, for any period, the ratio of (i) EBITDA to (ii) Fixed Charges
for the preceding four (4) calendar quarters.

    

    “Fixed Charges” means, for any
period, the sum of (a) Interest Expense of the Parent Guarantor determined
on a consolidated basis for such period, (b) all regularly scheduled
principal payments made with respect to Indebtedness of the Parent Guarantor
determined on a consolidated basis for such period during such period, other
than any balloon, bullet or similar principal payment which repays such
Indebtedness in full, and (c) all Preferred Dividends paid during such
period.  The Parent Guarantor’s Ownership Share of the Fixed Charges
of Unconsolidated Affiliates (other than intercompany amounts) of the Parent
Guarantor shall be included (without duplication) in determinations of Fixed
Charges.  Fixed Charges shall not include dividends payable on account
of any common stock including Senior Common Stock.

    

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

    

    “Funds From Operations” means,
with respect to the Parent Guarantor and for a given period and determined on a
consolidated basis (a) net income (loss) for such period; minus (or plus)
(b) certain nonrecurring items including gains (or losses) on early
extinguishment of Indebtedness, severance and other restructuring charges,
impairments of and sales of property during such period, Investment Related
Lease Termination Fees and transaction costs of acquisitions not permitted to be
capitalized pursuant to GAAP (FAS 141R); plus
(c) depreciation with respect to such Person’s real estate assets and
amortization (including the amortization of deferred lease costs and lease
origination value and excluding the amortization of deferred financing costs) of
such Person for such period, all after adjustment for unconsolidated
partnerships and joint ventures.  Adjustments for Unconsolidated
Affiliate will be calculated to reflect funds from operations on the same
basis.

    

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

    

    “GE Pool Mortgage” means the
mortgage loan from GE Commercial Finance Business Property Corporation to
certain Subsidiaries of the Borrower in the original principal amount of
$48,015,000, dated September 15, 2008 with a current maturity date of October 1,
2011 which may be extended to the extent that options to extend such maturity
date to October 1, 2013 have actually been exercised.

    

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

    
      
         

      

      
        - 9
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    “Governmental Authority” means
any national, state or local government (whether domestic or foreign), any
political subdivision thereof or any other governmental, quasi-governmental,
judicial, administrative, public or statutory instrumentality, authority, body,
agency, bureau, commission, board, department or other entity (including,
without limitation, the Federal Deposit Insurance Corporation, the Comptroller
of the Currency or the Federal Reserve Board, any central bank or any comparable
authority) or any arbitrator with authority to bind a party at law.

    

    “Ground Lease” means any ground
lease with respect to a Borrowing Base Property a ground lease containing the
following terms and conditions: (a) an expiration date on or after
January 1, 2050, inclusive of any unexercised extension options that may be
exercised by the lessee without the consent or approval of the lessor (or in the
absence of a remaining term of such length, the right to purchase or otherwise
acquire the fee simple title to the leased property on terms advantageous to the
lessee); (b) the right of the lessee to mortgage and encumber its interest
in the leased property without the consent of the lessor or, if required, such
consent is obtained; (c) the obligation of the lessor to give the holder of
any mortgage lien on such leased property written notice of any defaults on the
part of the lessee and agreement of such lessor that such lease will not be
terminated until such holder has had a reasonable opportunity to cure or
complete foreclosures, and fails to do so; (d) reasonable transferability
of the lessee’s interest under such lease, including ability to sublease; and
(e) such other rights customarily required by mortgagees making a loan
secured by the interest of the holder of the leasehold estate demised pursuant
to a ground lease.  Notwithstanding subsection (a) above, the ground
lease to which WPI07 Tulsa OK LLC is a  party as of the date hereof
shall for purposes of this Agreement and the other Loan Documents be deemed to
be a “Ground Lease” as defined above.

    

    “Guarantor” means any Person
that is a party to the Guaranty as a “Guarantor” and in any event shall include
Parent Guarantor and each Subsidiary Guarantor.

    

    “Guaranty”, “Guaranteed” or to “Guarantee” as applied to any
obligation means and includes:  (a) a guaranty (other than by
endorsement of negotiable instruments for collection or deposit in the ordinary
course of business), directly or indirectly, in any manner, of any part or all
of such obligation, or (b) an agreement, direct or indirect, contingent or
otherwise, and whether or not constituting a guaranty, the practical effect of
which is to assure the payment or performance (or payment of damages in the
event of nonperformance) of any part or all of such obligation whether by:
(i) the purchase of securities or obligations, (ii) the purchase, sale
or lease (as lessee or lessor) of property or the purchase or sale of services
primarily for the purpose of enabling the obligor with respect to such
obligation to make any payment or performance (or payment of damages in the
event of nonperformance) of or on account of any part or all of such obligation,
or to assure the owner of such obligation against loss, (iii) the supplying
of funds to or in any other manner investing in the obligor with respect to such
obligation, (iv) repayment of amounts drawn down by beneficiaries of
letters of credit (including Letters of Credit), or (v) the supplying of
funds to or investing in a Person on account of all or any part of such Person’s
obligation under a Guaranty of any obligation or indemnifying or holding
harmless, in any way, such Person against any part or all of such
obligation.  As the context requires, “Guaranty” shall also mean the
guaranty executed and delivered pursuant to Section 5.1. or 7.12. and
substantially in the form of Exhibit B.

    

    “Hazardous Materials” means all
or any of the following: (a) substances that are defined or listed in, or
otherwise classified pursuant to, any applicable Environmental Laws as
“hazardous substances”, “hazardous materials”, “hazardous wastes”, “toxic
substances” or any other formulation intended to define, list or classify
substances by reason of deleterious properties such as ignitability,
corrosivity, reactivity, carcinogenicity, reproductive toxicity, “TCLP” toxicity
or “EP toxicity”; (b) oil, petroleum or petroleum derived substances,
natural gas, natural gas liquids or synthetic gas and drilling fluids, produced
waters and other wastes associated with the exploration, development or
production of crude oil, natural gas or geothermal resources; (c) any
flammable substances or explosives or any radioactive materials;
(d) asbestos in any form; (e) toxic mold; and (f) electrical equipment
which contains any oil or dielectric fluid containing levels of polychlorinated
biphenyls in excess of fifty parts per million.

    
      
         

      

      
        - 10
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    “Implied Debt Service” means
an amount equal to the deemed annual payment where the principal amount of the
Loan then outstanding shall be amortized mortgage style over a 25 year term with
interest calculated at a rate equal to the greater of either: (i) 7.0%, or (ii)
the ten (10) year U.S. Treasury rate plus 225 basis points.

    

    “Indebtedness” means, with
respect to a Person, at the time of computation thereof, all of the following
(without duplication): (a) all obligations of such Person in respect of
money borrowed (net of the impact of any full or partial defeasance and
excluding trade debt, which shall in no event exceed $1,000,000 and be payable
in 60 days or less and incurred in the ordinary course of business);
(b) all obligations of such Person, whether or not for money borrowed
(i) represented by notes payable, or drafts accepted, in each case
representing extensions of credit, (ii) evidenced by bonds, debentures,
notes or similar instruments, or (iii) constituting purchase money
indebtedness, conditional sales contracts, title retention debt instruments or
other similar instruments, upon which interest charges are customarily paid or
that are issued or assumed as full or partial payment for property or services
rendered; (c) accounts payable that exceed, in the aggregate, 5% of Total Asset
Value; (d) Capitalized Lease Obligations of such Person (including ground
leases to the extent required under GAAP to be reported as a liability);
(e) all reimbursement obligations of such Person under any letters of
credit or acceptances (whether or not the same have been presented for payment);
(f) all Off-Balance Sheet Obligations of such Person; (g) all
obligations of such Person to purchase, redeem, retire, defease or otherwise
make any payment in respect of any Mandatorily Redeemable Stock issued by such
Person or any other Person, valued at the greater of its voluntary or
involuntary liquidation preference plus accrued and unpaid dividends;
(h) all obligations of such Person in respect of any purchase obligation,
repurchase obligation, takeout commitment or forward equity commitment, in each
case evidenced by a binding agreement (excluding any such obligation to the
extent the obligation can be satisfied by the issuance of Equity Interests
(other than Mandatorily Redeemable Stock)); (i) net obligations under any
Derivatives Contract not entered into as a hedge against existing or future
Indebtedness, in an amount equal to the Derivatives Termination Value thereof;
(j) all Indebtedness of other Persons which such Person has guaranteed or
is otherwise recourse to such Person (except for guaranties with Nonrecourse
Exceptions); (k) all Indebtedness of another Person secured by (or for
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien on property or assets owned by such
Person, even though such Person has not assumed or become liable for the payment
of such Indebtedness or other payment obligation; and (l) such Person’s
Ownership Share  of the Indebtedness of any Unconsolidated Affiliate
of such Person.  All Loans and Letter of Credit Liabilities shall
constitute Indebtedness of the Borrower.  The calculation of
Indebtedness shall not include any fair value adjustments to the carrying value
of liabilities to record such liabilities at fair value pursuant to electing the
fair value option election under FASB ASC 825-10-25 (formerly known as FAS 159,
The Fair Value Option for Financial Assets and Financial Liabilities) or other
FASB standards allowing entities to elect fair value option for financial
liabilities.  Accordingly, the amount of liabilities that included in
the calculation of Indebtedness shall be the historical cost basis, which
generally is the contractual amount owed adjusted for amortization or accretion
of any premium or discount.

    

    “Initial Lease Term” shall mean
a term of a lease as determined by a term of tenancy without reference to any
extension.

    

    “Intellectual Property” has the
meaning given that term in Section 6.1.(s).

    

    “Interest Coverage Ratio” means
the ratio of (i) EBITDA to (ii) Interest Expense for the preceding
four (4) calendar quarters.

    
      
         

      

      
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    “Interest Expense” means, with
respect to a Person and for any period, without duplication, (a) total
interest expense of such Person, excluding capitalized interest funded under a
construction loan interest reserve account, determined on a consolidated basis
in accordance with GAAP of such Person for such period, plus (b) such
Person’s Ownership Share of Interest Expense of Unconsolidated Affiliates of
such Person for such period.  Interest Expense shall exclude non-cash
debt-mark-to-market adjustments, non-cash loan cost amortization, non-cash
forward starting swap amortization or accretion, gains or losses related to
early extinguishment of Indebtedness and any other non-cash interest expense
items resulting from the application of GAAP.  For the avoidance of
doubt, Preferred Dividends are not considered interest expense.

    

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

    

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

    

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

    

    “Investment Related Lease Termination
Fees” means fee income or expense generated through the purposeful
negotiation of the termination of a lease of a Property.

    

    “Issuing Bank” means Capital
One, N.A. and Branch Banking and Trust Company, each in its capacity as the
issuer of Letters of Credit pursuant to Section 2.4.

    

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

    

    “Lender” means each financial
institution from time to time party hereto as a “Lender” together with its
respective successors and permitted assigns.

    
      
         

      

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

    

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

    

    “Letter of Credit Collateral
Account” means a special blocked, non-interest bearing deposit account
maintained by the Administrative Agent and under its sole dominion and control
and for which Borrower grants (and subjects to the control of) Administrative
Agent, for the benefit of the Administrative Agent, the Issuing Bank and the
Lenders, and agrees to maintain, a first priority security interest in all such
cash collateral and other credit support, and in all the proceeds of the
foregoing, all as security for the Obligations to which such cash collateral and
other credit support may be applied.

    

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

    

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

    

    “Leverage Ratio” means the
ratio of the total outstanding debt of the Parent Guarantor, including any
mortgage or property level debt (including the secured revolver outstanding)
divided by Total Asset Value.

    

    “LIBOR” means, for the Interest
Period for any LIBOR Loan, the rate of interest, rounded up to the nearest whole
multiple of one-hundredth of one percent (0.01%), obtained by dividing (i) the
rate of interest, rounded upward to the nearest whole multiple of one-hundredth
of one percent (0.01%), referred to as the BBA (British Bankers’ Association)
LIBOR rate as set forth by any service selected by the Administrative Agent that
has been nominated by the British Bankers’ Association as an authorized
information vendor for the purpose of displaying such rate for deposits in
Dollars at approximately 12:00 p.m. Eastern time, two (2) Business Days
prior to the date of commencement of such Interest Period for purposes of
calculating effective rates of interest for loans or obligations making
reference thereto, for an amount approximately equal to the applicable LIBOR
Loan and for a period of time approximately equal to such Interest Period by (ii) a percentage
equal to 1 minus the stated
maximum rate (stated as a decimal) of all reserves, if any, required to be
maintained with respect to Eurocurrency funding (currently referred to as
“Eurocurrency liabilities”) as specified in Regulation D of the Board of
Governors of the Federal Reserve System (or against any other category of
liabilities which includes deposits by reference to which the interest rate on
LIBOR Loans is determined or any applicable category of extensions of credit or
other assets which includes loans by an office of any Lender outside of the
United States of America).  Any change in such maximum rate shall
result in a change in LIBOR on the date on which such change in such maximum
rate becomes effective.

    
      
         

      

      
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    “LIBOR Loan” means a Revolving
Loan bearing interest at a rate based on LIBOR.

    

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

    

    “Loan” means a Revolving
Loan.

    

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

    

    “Loan Party” means the
Borrower, each Guarantor and each other Person who guarantees all or a portion
of the Obligations and/or who pledges any collateral to secure all or a portion
of the Obligations.  Schedule 1.1.(b) sets forth the Loan Parties
in addition to the Borrower as of the Agreement Date.

    

    “Mandatorily Redeemable Stock”
means, with respect to any Person, any Equity Interest of such Person which by
the terms of such Equity Interest (or by the terms of any security into which it
is convertible or for which it is exchangeable or exercisable), upon the
happening of any event or otherwise (a) matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise (other than an
Equity Interest to the extent redeemable in exchange for common stock or other
equivalent common Equity Interests), (b) is convertible into or
exchangeable or exercisable for Indebtedness or Mandatorily Redeemable Stock, or
(c) is redeemable at the option of the holder thereof, in whole or in part
(other than an Equity Interest which is redeemable solely in exchange for common
stock or other equivalent common Equity Interests), in each case, on or prior to
the date on which all Loans are scheduled to be due and payable in
full.  Notwithstanding the foregoing, Equity Interests related to the
Borrower’s long term incentive plan or performance based equity plan shall not
be deemed to be Mandatorily Redeemable Stock for purposes of
this Agreement.

    

    “Material Adverse Effect” means
a materially adverse effect on (a) the business, assets, liabilities,
financial condition or results of operations of the Borrower, the Parent
Guarantor and its Subsidiaries taken as a whole, (b) the ability of the
Borrower or any other Loan Party to perform its payment or other material
obligations under any Loan Document to which it is a party, (c) the
validity or enforceability of any of the Loan Documents, (d) the rights and
remedies of the Lenders, the Issuing Bank and the Administrative Agent under any
of the Loan Documents or (e) the timely payment of the principal of or
interest on the Loans or other amounts payable in connection therewith or the
timely payment of all Reimbursement Obligations.

    

    “Material Contract” means any
contract or other arrangement (other than Loan Documents), whether written or
oral, to which the Borrower or any other Loan Party is a party as to which the
breach, nonperformance, cancellation or failure to renew by any party thereto
could reasonably be expected to have a Material Adverse Effect on the Borrower
or such other Loan Party.

    
      
         

      

      
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    “Material Indebtedness” has
the meaning given to that term in Section 10.1(d).

    

    “Maximum Revolving Loan Amount”
means, subject to the provisions of Section 2.12 hereof, Fifty Million Dollars
($50,000,000.00).

    

    “Membership Interest Pledge”
means those certain membership interest pledge agreements by the Loan Parties
given as collateral to secure the repayment of the Obligations, together with
any membership interest pledge agreements given in substitution or supplement
thereof and any amendments or modifications thereof.

    

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

    

    “Mortgage” means a mortgage,
special assessment liens, deed of trust, deed to secure debt or similar security
instrument made, or consented to, by a Person owning an interest in real
property granting a Lien (excluding Permitted Liens) on such interest in real
property as security for the payment of Indebtedness of such Person or another
Person.

    

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

    

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

    

    “Net Operating Income” or
“NOI” means, for any
Property and for a given period, the sum of the following (without duplication
and determined on a consistent basis with prior periods): (a) rents and
other revenues received or earned in the ordinary course from such Property
(including proceeds of rent loss or business interruption insurance but
excluding pre-paid rents and revenues and security deposits except to the extent
applied in satisfaction of tenants’ obligations for rent) minus (b) all
Property level expenses not paid by the tenant, excluding interest, and
inclusive of an appropriate accrual for expenses related to the ownership,
operation or maintenance of such Property during the respective period,
including but not limited to property taxes, assessments and other impositions,
insurance, utilities, payroll costs, maintenance, repair and landscaping
expenses, marketing expenses, and general and administrative expenses minus (c) the
greater of (i) the actual property management fee paid to a third party
during such period (if applicable) and (ii) an imputed management fee in
the amount of 1.0% of the gross revenues for such Property for such
period.

    

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

    
      
         

      

      
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    “Nonrecourse Exceptions” means,
with respect to Indebtedness that is not Recourse, reasonable and customary
exceptions to recourse, including, without limitation, for fraud, willful
misrepresentation, willful misconduct, misapplication of funds (including
misappropriation of security deposits and failure to apply rents to operating
expenses or debt service), indemnities relating to environmental matters and
waste of property constituting security for such Indebtedness that is not
Recourse, affirmative bad acts, post-default interest, attorney’s fees and other
costs of collection to the extent not covered by the value of the property
constituting security for such Indebtedness that is not Recourse and other
similar exceptions to nonrecourse liability.  Nonrecourse Exceptions
shall also include the contingent liability of a Person in respect of
Indebtedness that is not Recourse of another Person providing for liability
arising upon the occurrence of a Bankruptcy Event with respect to such other
Person or the occurrence of a violation of a due on sale clause or a due on
finance clause or a violation of special purpose entity covenants (whether such
liability arises under a Guaranty of such Indebtedness that is not Recourse
enforceable only upon the occurrence of such Bankruptcy Event or such violation,
as an obligation to pay to the holder of such Indebtedness that is not Recourse
damages resulting from the occurrence of such Bankruptcy Event or violation, or
otherwise); provided, however, upon the occurrence of such Bankruptcy Event or
any such violation with respect to such other Person, or once such liability
shall otherwise cease to be contingent, then such liability shall be considered
Recourse Indebtedness to the extent of the claim for liability.

    

    “Note” means a Revolving
Note.

    

    “Notes Receivable” means a
promissory note of which the Borrower or any Subsidiary is the holder and
retains the rights of collection of all payments thereunder.

    

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

    

    “Notice of Continuation” means
a notice substantially in the form of Exhibit E (or
such other form reasonably acceptable to the Administrative Agent and containing
the information required in such Exhibit) to be delivered to the Administrative
Agent pursuant to Section 2.7. evidencing the Borrower’s request for the
Continuation of a LIBOR Loan.

    

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

    

    “Occupancy Rate” means, with
respect to a Property at any time, the ratio, expressed as a percentage, of
(a) the net rentable square footage of
such Property leased by tenants or subtenants that are not Affiliates paying
rent not materially less than market rates (determined at the time the
applicable lease was entered into) pursuant to binding leases as to which no
material default has occurred and has continued unremedied for 60 or more days
to (b) the aggregate net rentable square footage of such
Property.

    
      
         

      

      
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    “Off-Balance Sheet Obligations”
means liabilities and obligations of the Borrower, any Subsidiary or any other
Person in respect of “off-balance sheet arrangements” (as defined in
Item 303(a)(4)(ii) of Regulation S-K promulgated under the Securities Act)
which the Borrower would be required to disclose in the “Management’s Discussion
and Analysis of Financial Condition and Results of Operations” section of a
report on Form 10-Q or Form 10-K (or their equivalents if not applicable) which
the Borrower is (or if it were) required to file with the Securities and
Exchange Commission (or any Governmental Authority substituted
therefor).

    

    “OFAC” has the meaning given
that term in Section 6.1.(w).

    

    “Ownership Share” means, with
respect to any Subsidiary of a Person (other than a Wholly Owned Subsidiary) or
any Unconsolidated Affiliate of a Person, the greater of (a) such Person’s
relative nominal direct and indirect ownership interest (expressed as a
percentage) in such Subsidiary or Unconsolidated Affiliate or (b) subject to
compliance with Section 8.4.(m), such Person’s relative direct and indirect
economic interest (calculated as a percentage) in such Subsidiary or
Unconsolidated Affiliate determined in accordance with the applicable provisions
of the declaration of trust, articles or certificate of incorporation, articles
of organization, partnership agreement, joint venture agreement or other
applicable organizational document of such Subsidiary or Unconsolidated
Affiliate.

    

    “Parent Company” shall mean,
with respect to a Lender, any Person Controlling such Lender, including without
limitation, the bank holding company (as defined in Regulation Y of the
Board of Governors of the Federal Reserve System), if any, of such
Lender.

    

    “Parent Guarantor” has the
meaning set forth in the Preamble of this Agreement.

    

    “Participant” has the meaning
given that term in Section 12.6.(d).

    

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

    

    “Permitted Liens” means, as to
any Person, (a) Liens securing taxes, assessments and other charges or
levies imposed by any Governmental Authority (excluding any lien imposed
pursuant to any of the provisions of ERISA or pursuant to any Environmental
Laws) or the claims of materialmen, mechanics, carriers, warehousemen or
landlords for labor, materials, supplies or rentals incurred in the ordinary
course of business, which, in each case, are not at the time required to be paid
or discharged under Section 7.6.; (b) liens consisting of deposits or
pledges made, in the ordinary course of business, in connection with, or to
secure payment of, obligations under workers’ compensation, unemployment
insurance or similar Applicable Laws; (c) liens and encumbrances reflected in the
owner’s title policies issued to the Subsidiary Guarantors upon acquisition of
the Borrowing Base Properties and other liens consisting of encumbrances in the
nature of zoning restrictions, easements, and rights or restrictions of record
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, a Guarantor or
a Subsidiary of such Person is a party and other minor non-monetary liens or
encumbrances, which do not materially detract from the value of such property or
impair the intended use thereof in the business of such Person; (d) the rights
of tenants under leases or subleases or other occupancy agreements not
interfering with the ordinary conduct of business of such Person;
(e) Liens in favor of the Administrative Agent for the benefit of
the Lenders, the Issuing Bank and each Specified Derivatives Provider;
(f) liens in favor of the Borrower or a Guarantor securing obligations
owing by a Subsidiary to the Borrower or a Guarantor; (g) liens on assets other
than the Borrowing Base Properties with respect to Indebtedness or judgments
that do not cause a Default under Section 10.1(h) of this Agreement to the
extent such Indebtedness or such judgment is not prohibited by this Agreement;
and (h) liens in existence as of the Agreement Date and set forth in Part
II of Schedule 6.1.(f).

    
      
         

      

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

    

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

    

    “Plan Asset Regulations” means
the regulations promulgated under ERISA Section 3(42) and, absent any such
regulations, the regulations at 29 C.F.R. 2510.3-101 as expressly modified by
ERISA Section 3(42).

    

    “Pocket Mortgage” means those
certain deeds of trust or mortgages granted against the Borrowing Base
Properties (as may be substituted or supplemented in the future) which Lender
has agreed to hold in escrow as of the Closing Date and may record at any time
following the occurrence of an Event of Default (i.e., prior to an Event of
Default, the same are not operative), provided that if (i) if the Event of
Default giving rise to recordation of any Pocket Mortgage was not an Event of
Default under Section 10.1(a) or Section 10.1(b)(i) (as to Section 9.1 only)
hereof and (ii) the Borrower has fully cured such Event of Default, then the
Borrower may  request the release of such Pocket Mortgage within 15
Business Days following Administrative Agent’s receipt of all quarterly
reporting certificates required to be delivered pursuant to this Agreement and
Administrative Agent shall deliver a release for any recorded Pocket Mortgage if
such certificates evidence the Borrower’s compliance with all of the covenants
referenced in such certificates.  In addition, if (i) the Event of
Default giving rise to recordation of any Pocket Mortgage was relating to an
Event of Default under Section 10.1(b)(i) as to Section 9.1 only and (ii) the
Borrower has fully cured such Event of Default, then the Borrower may request
the release of such Pocket Mortgage within 15 Business Days following the
Administrative Agent’s receipt of all quarterly reporting certificates required
to be delivered pursuant to this Agreement for two (2) quarterly reporting
cycles and Administrative Agent shall deliver a released for any recorded Pocket
Mortgage if all of such certificates for both quarterly reporting cycles
evidence the Borrower’s compliance with all of the covenants required in all
such certificates.

    

    “Post-Default Rate” means at
the option of the Administrative Agent, in respect of any principal of any Loan
or  any other Obligation that is not paid when due (whether at stated
maturity, by acceleration, by optional or mandatory prepayment or otherwise), a
rate per annum equal to the Base Rate as in effect from time to time plus the Applicable
LIBOR Margin plus two percent
(2.0%).

    

    “Potential Defaulting Lender”
means any Lender, as reasonably determined by the Administrative Agent or the
Issuing Bank, as applicable, that: (a) has failed to comply with, or has
made a public statement to the effect that it does not intend to comply with,
its funding obligations under one or more syndicated credit facilities or other
agreements in which it commits or is obligated to extend credit (other than this
Agreement); (b)  has a Parent Company or other Affiliate that is subject to
any condition or event described in the immediately preceding clause (a);
or (c) has, or whose Parent Company has, a Credit Rating of less than
BBB-/Baa3 (or equivalent) from either S&P or Moody’s.

    
      
         

      

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

    

    “Preferred Equity Interests”
means, with respect to any Person, shares of capital stock of, or other Equity
Interests in, such Person which are entitled to preference or priority over any
other capital stock of, or other Equity Interest in, such Person in respect of
the payment of dividends or distribution of assets upon liquidation or
both.  Senior Common Stock is not a Preferred Equity
Interest.

    

    “Principal Office” means the
office of the Administrative Agent located at 7501 Wisconsin Avenue, 12th Floor,
Bethesda, Maryland 20814, or any other subsequent office that the Administrative
Agent shall have specified as the Principal Office by written notice to the
Borrower and the Lenders.

    

    “Principal Shareholders” means
any shareholder owning a five percent (5%) or greater interest in the Parent
Guarantor.

    

    “Property” means any parcel of
real property owned or leased (in whole or in part) or operated by the Borrower,
any Subsidiary or any Unconsolidated Affiliate of the Borrower and which is
located in a state of the United States of America or the District of
Columbia.

    

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

    

    “Rating Agency” means S&P,
Moody’s or Fitch.

    

    “Recourse”  means
with reference to any obligation or liability, any liability or obligation that
is not without recourse to the obligor thereunder, directly or indirectly,
provided that an obligation or liability shall not be deemed “Recourse” if as to
Borrower or a Loan Party such liability or obligation is recourse to only
specified assets or with respect to Nonrecourse Exceptions.  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., by reason of a guaranty or contribution
obligation, by operation of law or by reason of such Person’s being a general
partner of such obligor).

    

    “Register” has the meaning
given that term in Section 12.6.(c).

    

    “Regulatory Change” means, with
respect to any Lender, any change effective after the Agreement Date in
Applicable Law (including without limitation, Regulation D of the Board of
Governors of the Federal Reserve System) or the adoption or making after such
date of any interpretation, directive or request applying to a class of banks,
including such Lender, of or under any Applicable Law (whether or not having the
force of law and whether or not failure to comply therewith would be unlawful)
by any Governmental Authority or monetary authority charged with the
interpretation or administration thereof or compliance by any Lender with any
request or directive regarding capital adequacy.

    
      
         

      

      
        - 19
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    “Reimbursement Obligation”
means the absolute, unconditional and irrevocable obligation of the Borrower to
reimburse the Issuing Bank for any drawing honored by the Issuing Bank under a
Letter of Credit.

    

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

    

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

    

    “Release” means any present or
past releasing, spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, disposing or dumping.

    

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

    

    “Responsible Officer” means
with respect to the Borrower or any Loan Party, the trustee, the president,
treasurer, the chief executive officer, and the chief financial officer of the
Borrower or such Loan Party, or of the general partner or managing member of the
Borrower or such Loan Party.

    

    “Restricted Payment” means
(a) any dividend or other distribution, direct or indirect, on account of
any Equity Interest of the Borrower or any Subsidiary Guarantor now or hereafter
outstanding, except a dividend payable solely in Equity Interests of identical
class to the holders of that class; (b) any redemption, conversion,
exchange, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any Equity Interest of the
Borrower or any Subsidiary Guarantor now or hereafter outstanding; and
(c) any payment made to retire, or to obtain the surrender of, any
outstanding warrants, options or other rights to acquire any Equity Interests of
the Borrower or any Subsidiary Guarantor now or hereafter
outstanding.

    

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

    

    “Revolving Credit Facility”
shall have the meaning given to such term in Section 2.1 of this
Agreement

    

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

    

    “SEC” means Securities and
Exchange Commission.

    

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

    
      
         

      

      
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    “Senior Common Stock” means
the common equity of the Parent Guarantor either issued through a Regulation D
offering or registered with the SEC but not traded on an
exchange.  Senior Common Stock and its dividends shall be treated as
common stock for purposes of all compliance calculations.

    

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

    

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

    

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

    

    “S&P” means Standard &
Poor’s Rating Services, a division of The McGraw-Hill Companies, Inc. and its
successors.

    

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

    

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

    

    “Subsidiary Guarantor” means a
Subsidiary of the Borrower that is a party to the Guaranty as a
Guarantor.

    

    “Tangible Net Worth” means, as
of a given date, Total Asset Value less total outstanding debt of the Parent
Guarantor determined on a consolidated basis.

    

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

    

    “Tenant Concentration
Percentage” means that percentage calculated by dividing the Net
Operating Income of a single tenant by the aggregate Net Operating Income of all
Properties owned directly or indirectly by the Parent Guarantor.

    

    “Termination Date” means
December 28, 2013.

    
      
         

      

      
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    “Total Asset Value” means the
sum of all of the following of the Parent Guarantor on a consolidated basis
determined in accordance with GAAP applied on a consistent basis (and without
duplication): (a) with respect to each Property owned directly or
indirectly by the Parent Guarantor, the quotient of (i) Net Operating
Income attributable to such Property for the period of four (4) consecutive
fiscal quarters most recently ended (for any property owned for more than two
quarters but less than four quarters, the annualized Net Operating Income
attributable to such Property), divided by (ii) the capitalization rate of
9%, plus (b) the undepreciated GAAP book value of Properties acquired
during the most recent two (2) consecutive fiscal quarters, plus (c) the
aggregate GAAP book value of all properties under construction that will be
completed within 12 months of the date included in Total Asset Value, plus
(d) the aggregate GAAP book value of all Undeveloped Land, plus
(e) all cash and Cash Equivalents, plus (f) the aggregate GAAP book
value of all Notes Receivable, plus (g) the aggregate GAAP book value of all
joint ventures limited to the ownership percentage of the Parent Guarantor
(whether owned directly or indirectly), plus (h) the aggregate GAAP book value
of debt or equity investments held by any new subsidiary permitted by Section
9.1(n), up to 10% of Total Asset Value, it being agreed that all amounts
exceeding 10% of Total Asset Value shall not be included in the Total Asset
Value calculation.  The Parent Guarantor’s (direct or indirect)
Ownership Share of assets held by Unconsolidated Affiliates will be included in
Total Asset Value calculations consistent with the above described treatment for
wholly owned assets.

    

    “Total Liabilities” means, as
of a given date, the aggregate principal amount of all Indebtedness of the
Borrower and its Subsidiaries determined on a consolidated basis, including the
Borrower’s Ownership Share of the Indebtedness of any Unconsolidated Affiliate
of the Borrower.

    

    “Transfer Authorizer Designation
Form” means a form substantially in the form of Exhibit J to be
delivered to the Administrative Agent pursuant to Section 5.1.(a), as the
same may be amended, restated or modified from time to time with the prior
written approval of the Administrative Agent.

    

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

    

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

    

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

    

    “Unhedged Variable Rate
Exposure” means any Indebtedness accruing interest at a variable rate
that is not fixed or otherwise subject to a rate protection product including,
without limitation, dollar denominated or cross-currency interest rate exchange
agreements, forward currency exchange agreements, interest rate cap or collar
protection agreements, forward rate currency or interest rate options, puts,
warrants or interest rate “swap” agreements.

    

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

    
      
         

      

      
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      Section 1.2.  General;
References to Eastern Time.

    

     

    Unless otherwise indicated, all
accounting terms, ratios and measurements shall be interpreted or determined in
accordance with GAAP as in effect from time to time; provided that, if at any
time any change in GAAP would affect the computation of any financial ratio or
requirement set forth in any Loan Document, and either the Borrower or the
Requisite Lenders shall so request, the Administrative Agent, the Lenders and
the Borrower shall negotiate in good faith to amend such ratio or requirement to
preserve the original intent thereof in light of such change in GAAP (subject to
the approval of the Requisite Lenders) with the express understanding that the
effect of any such change in GAAP shall be neutral with respect to the Borrower
or any other party impacted by any amended ratio, requirement or calculation
made in connection therewith and with the further understanding that any fees in
connection therewith shall in no event exceed 0.25% times the amount of the
Commitments; provided further that, until so amended, (i) such ratio or
requirement shall continue to be computed in accordance with GAAP prior to such
change therein and (ii) the Borrower shall provide to the Administrative Agent
and the Lenders financial statements and other documents required under this
Agreement or as reasonably requested hereunder setting forth a reconciliation
between calculations of such ratio or requirement made before and after giving
effect to such change in GAAP.  References in this Agreement to
“Sections”, “Articles”, “Exhibits” and “Schedules” are to sections, articles,
exhibits and schedules herein and hereto unless otherwise
indicated.  References in this Agreement to any document, instrument
or agreement (a) shall include all exhibits, schedules and other
attachments thereto, (b) shall include all documents, instruments or
agreements issued or executed in replacement thereof, to the extent permitted
hereby and (c) shall mean such document, instrument or agreement, or
replacement or predecessor thereto, as amended, supplemented, restated or
otherwise modified from time to time to the extent not otherwise stated herein
or prohibited hereby and in effect at any given time.  Wherever from
the context it appears appropriate, each term stated in either the singular or
plural shall include the singular and plural, and pronouns stated in the
masculine, feminine or neuter gender shall include the masculine, the feminine
and the neuter.  Titles and captions of Articles, Sections,
subsections and clauses in this Agreement are for convenience only, and neither
limit nor amplify the provisions of this Agreement.  Unless otherwise
indicated, all references to time are references to Eastern
time.  Unless explicitly set forth to the contrary, a reference to
“Subsidiary” means a Subsidiary of the Borrower or a Subsidiary of such
Subsidiary and a reference to an “Affiliate” means a reference to an Affiliate
of the Borrower.

    

    Article
II. Credit Facility

     

    
      Section 2.1.  Revolving
Loans.

    

     

    (a)           Subject
to the terms and conditions set forth in this Agreement, each Lender severally
and not jointly agrees to make Revolving Loans to the Borrower during the period
from and including the Effective Date to but excluding the Termination Date, in
an aggregate principal amount at any one time outstanding up to, but not
exceeding, such Lender’s Commitment (the “Revolving Credit
Facility”). From the date of this Agreement through the Termination Date,
unless an Event of Default occurs and is continuing, the Borrower may borrow,
repay and reborrow under this Agreement; provided, however, that all outstanding
principal plus accrued and unpaid interest and costs shall be paid in full on
the Termination Date.

    

    (b)           Availability
for Revolving Loans under the Revolving Credit Facility shall be calculated by
the Administrative Agent by reference to the Availability as defined in Section
2.1(d) below, as such Availability is reasonably determined by the
Administrative Agent from time to time.

    
      
         

      

      
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    (c)           Advances
made under the Revolving Credit Facility are evidenced by, among other things,
Revolving Credit Notes made by the Borrower payable to each of the Lenders for
their Commitment, which shall be in substantially the form of Exhibit
F hereto, which Advances made by the Lenders to the Borrower under the
Revolving Credit Facility shall not exceed the aggregate principal amount of the
Availability.  All Advances made by the Lenders under this Agreement,
and all of the Borrower’s other liabilities to the Bank under or pursuant to
this Agreement, are payable as set forth herein.

    

    (d)           As
used herein, the term “Availability” refers
at any time to the lesser of (i) and (ii), below:

    

    (i)  (A)
Maximum Revolving Loan Amount, minus (B) the aggregate amount of all Advances
made and outstanding under the Revolving Credit Facility immediately prior to
any such Advance, plus the aggregate amounts then undrawn on all outstanding
Letters of Credit, acceptances, and any other accommodations issued or incurred
by the Lenders for the account and/or the benefit of the Borrower;
and

    

    (ii)  (A)
sixty five percent (65%) of the Borrowing Base; minus (B) the aggregate amount
of all Advances made and outstanding under the Revolving Credit Facility
immediately prior to any such Advance, plus the aggregate amounts then undrawn
on all outstanding Letters of Credit, acceptances, or any other accommodations
issued or incurred by the Lenders for the account and/or the benefit of the
Borrower.

    

    (e)           Requests for Revolving
Loans. Not later than 12:00 p.m. Eastern time at least three (3) Business
Days prior to a borrowing of Revolving Loans that are to be LIBOR Loans, the
Borrower shall deliver to the Administrative Agent a Notice of Borrowing,
together with an originally executed borrowing base certificate (“Borrowing Base
Certificate”) in the form attached hereto as Exhibit
D.  Each Notice of Borrowing shall specify the aggregate
principal amount of the Revolving Loans to be borrowed, the date such Revolving
Loans are to be borrowed (which must be a Business Day), and the initial
Interest Period for such Revolving Loans.  Each Notice of Borrowing
shall be irrevocable once given and binding on the Borrower.

    

    (f)           Funding of Revolving
Loans.  Promptly after receipt of a Notice of Borrowing under
the immediately preceding subsection (e), the Administrative Agent
shall notify each Lender of the proposed borrowing.  Each Lender shall
deposit an amount equal to the Revolving Loan to be made by such Lender to the
Borrower with the Administrative Agent at the Principal Office, in immediately
available funds not later than 12:00 p.m. Eastern time on the date of such
proposed Revolving Loans.  Subject to fulfillment of all applicable
conditions set forth herein, the Administrative Agent shall make available to
the Borrower in the account specified in the Transfer Authorizer Designation
Form, not later than 3:00 p.m. Eastern time on the date of the requested
borrowing of Revolving Loans, the proceeds of such amounts received by the
Administrative Agent.

    
      
         

      

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

    

    
      Section
2.2.  Letters of Credit.

    

     

    (a)           Letters of
Credit.  Subject to the terms and conditions of this Agreement,
including without limitation, Section 2.10., the Issuing Bank, on behalf of
the Lenders, agrees to issue for the account of the Borrower during the period
from and including the Effective Date to, but excluding, the date 30 days prior
to the Termination Date, one or more standby letters of credit (each a “Letter
of Credit”) up to a maximum aggregate Stated Amount at any one time outstanding
not to exceed $20,000,000 as such amount may be reduced from time to time in
accordance with the terms hereof (the “L/C Commitment Amount”).

    

    (b)           Terms of Letters of
Credit.  At the time of issuance, the amount, form, terms and
conditions of each Letter of Credit, and of any drafts or acceptances
thereunder, shall be subject to approval by the Issuing Bank and the
Borrower.  Notwithstanding the foregoing, in no event may (i) the
expiration date of any Letter of Credit extend beyond the date that is 30 days
prior to the Termination Date, or (ii) any Letter of Credit have an initial
duration in excess of one year; provided, however, a Letter of Credit may
contain a provision providing for the extension of the expiration date is in the
absence of a notice of non-renewal from the Issuing Bank but in no event shall
any such provision permit the extension of the expiration date of such Letter of
Credit beyond the date that is thirty (30) days prior to the Termination Date;
provided, further, that a Letter of Credit may, as a result of its express terms
or as the result of the effect of an automatic extension provision, have an
expiration date beyond the date that is 30 days prior to the Termination Date so
long as the Borrower delivers to the Administrative Agent for the benefit of the
Issuing Bank no later than 30 days prior to the Termination Date cash collateral
for such Letter of Credit for deposit into the Letter of Credit Collateral
Account in an amount equal to the Stated Amount of such Letter of
Credit.  The initial Stated Amount of each Letter of Credit shall be
at least $25,000 (or such lesser amount as may be acceptable to the Borrower,
the Issuing Bank and the Administrative Agent).

    
      
         

      

      
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    (c)           Requests for Issuance of
Letters of Credit.  The Borrower shall give the Issuing Bank
and the Administrative Agent written notice at least five (5) Business Days
prior to the requested date of issuance of a Letter of Credit, such notice to
describe in reasonable detail the proposed terms of such Letter of Credit and
the nature of the transactions or obligations proposed to be supported by such
Letter of Credit, and in any event shall set forth with respect to such Letter
of Credit the proposed (i) initial Stated Amount, (ii) beneficiary,
and (iii) expiration date. The Borrower shall also execute and deliver such
customary applications and agreements for standby letters of credit, and other
forms as requested from time to time by the Issuing Bank.  Provided
the Borrower has given the notice prescribed by the first sentence of this
subsection and delivered such applications and agreements referred to in the
preceding sentence, subject to the other terms and conditions of this Agreement,
including the satisfaction of any applicable conditions precedent set forth in
Article 5.2., the Issuing Bank shall issue the requested Letter of Credit
for the benefit of the stipulated beneficiary on the requested date of issuance
or any prior date after which the Issuing Bank has received all of the items
required to be delivered to it under this subsection; provided, however, the
Issuing Bank shall have no obligation to issue such requested Letter of Credit
prior to the date five (5) Business Days following such date of
receipt.  The Issuing Bank shall not at any time be obligated to issue
any Letter of Credit if such issuance would conflict with, or cause the
Administrative Agent or any Lender to exceed any limits imposed by, any
Applicable Law.  References herein to “issue” and derivations thereof
with respect to Letters of Credit shall also include extensions or modifications
of any outstanding Letters of Credit, unless the context otherwise
requires.  All Letters of Credit issued shall be remitted to the
Borrower, or if requested by the Borrower in writing to the Issuing Bank,
directly to the beneficiary set forth on such Letter of Credit by overnight
courier.  The Issuing Bank shall deliver to the Borrower a copy of
each issued Letter of Credit within a reasonable time after the date of issuance
thereof.  To the extent any term of a Letter of Credit Document is
inconsistent with a term of any Loan Document, the term of such Loan Document
shall control.

    

    (d)           Reimbursement
Obligations.  Upon receipt by the Issuing Bank from the
beneficiary of a Letter of Credit of any demand for payment under such Letter of
Credit, the Issuing Bank shall promptly notify the Borrower and the
Administrative Agent of the amount to be paid by the Issuing Bank as a result of
such demand and the date on which payment is to be made by the Issuing Bank to
such beneficiary in respect of such demand; provided, however, that the Issuing
Bank’s failure to give, or delay in giving, such notice shall not discharge the
Borrower in any respect from the applicable Reimbursement
Obligation.  The Borrower hereby absolutely, unconditionally and
irrevocably agrees to pay and reimburse the Issuing Bank for the amount of each
demand for payment under such Letter of Credit at or prior to the date on which
payment is to be made by the Issuing Bank to the beneficiary thereunder, without
presentment, demand, protest or other formalities of any kind.  Upon
receipt by the Issuing Bank of any payment in respect of any Reimbursement
Obligation, the Issuing Bank shall promptly pay to each Lender that has acquired
a participation therein under the second sentence of the immediately following
subsection (i) such Lender’s Commitment Percentage of such payment.

    

    (e)           Manner of
Reimbursement.  Upon its receipt of a notice referred to in the
immediately preceding subsection (d), the Borrower shall advise the
Administrative Agent and the Issuing Bank whether or not the Borrower intends to
borrow hereunder to finance its obligation to reimburse the Issuing Bank for the
amount of the related demand for payment and, if it does, the Borrower shall
submit a timely request for such borrowing as provided in the applicable
provisions of this Agreement.  If the Borrower fails to so advise the
Administrative Agent and the Issuing Bank, or if the Borrower fails to reimburse
the Issuing Bank for a demand for payment under a Letter of Credit by the date
of such payment, the failure of which the Issuing Bank shall promptly notify the
Administrative Agent, then (i) if the applicable conditions contained in
Article V. would permit the making of Revolving Loans, the Borrower shall
be deemed to have requested a borrowing of Revolving Loans in an amount equal to
the unpaid Reimbursement Obligation and the Administrative Agent shall give each
Lender prompt notice of the amount of the Revolving Loan to be made available to
the Administrative Agent not later than 10:00 a.m. Eastern time and (ii) if
such conditions would not permit the making of Revolving Loans, the provisions
of subsection (j) of this Section shall apply.  Repayment of a
Reimbursement Obligation will reduce the Reimbursement Obligation by the amount
of the payment.

    

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

    
      
         

      

      
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    (g)           Issuing Bank’s Duties
Regarding Letters of Credit; Unconditional Nature of Reimbursement
Obligations.  In examining documents presented in connection
with drawings under Letters of Credit and making payments under such Letters of
Credit against such documents, the Issuing Bank shall only be required to use
the same standard of care as it uses in connection with examining documents
presented in connection with drawings under letters of credit in which it has
not sold participations and making payments under such letters of
credit.  The Borrower assumes all risks of the acts and omissions of,
or misuse of the Letters of Credit by, the respective beneficiaries of such
Letters of Credit.  In furtherance and not in limitation of the
foregoing, none of the Issuing Bank, Administrative Agent or any of the Lenders
shall be responsible for, and the Borrower’s obligations in respect of Letters
of Credit shall not be affected in any manner by, (i) the form, validity,
sufficiency, accuracy, genuineness or legal effects of any document submitted by
any party in connection with the application for and issuance of or any drawing
honored under any Letter of Credit even if such document should in fact prove to
be in any or all respects invalid, insufficient, inaccurate, fraudulent or
forged; (ii) the validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign any Letter of Credit, or the
rights or benefits thereunder or proceeds thereof, in whole or in part, which
may prove to be invalid or ineffective for any reason; (iii) failure of the
beneficiary of any Letter of Credit to comply fully with conditions required in
order to draw upon such Letter of Credit; (iv) errors, omissions,
interruptions or delays in transmission or delivery of any messages, by mail,
cable, facsimile, electronic mail, telecopy or otherwise, whether or not they be
in cipher; (v) errors in interpretation of technical terms; (vi) any
loss or delay in the transmission or otherwise of any document required in order
to make a drawing under any Letter of Credit, or of the proceeds thereof;
(vii) the misapplication by the beneficiary of any Letter of Credit, or of
the proceeds of any drawing under any Letter of Credit; or (viii) any
consequences arising from causes beyond the control of the Issuing Bank,
Administrative Agent or the Lenders.  None of the above shall affect,
impair or prevent the vesting of any of the Issuing Bank’s or Administrative
Agent’s rights or powers hereunder.  Any action taken or omitted to be
taken by the Issuing Bank under or in connection with any Letter of Credit, if
taken or omitted in the absence of gross negligence or willful misconduct (as
determined by a court of competent jurisdiction in a final, non-appealable
judgment), shall not create against the Issuing Bank any liability to the
Borrower, the Administrative Agent or any Lender.  In this regard, the
obligation of the Borrower to reimburse the Issuing Bank for any drawing made
under any Letter of Credit, and to repay any Revolving Loan made pursuant to the
second sentence of the immediately preceding subsection (e), shall be absolute,
unconditional and irrevocable and shall be paid strictly in accordance with the
terms of this Agreement and any other applicable Letter of Credit Document under
all circumstances whatsoever, including without limitation, the following
circumstances: (A) any lack of validity or enforceability of any Letter of
Credit Document or any term or provisions therein; (B) any amendment or
waiver of or any consent to departure from all or any of the Letter of Credit
Documents; (C) the existence of any claim, setoff, defense or other right
which the Borrower may have at any time against the Issuing Bank, the
Administrative Agent or any Lender, any beneficiary of a Letter of Credit or any
other Person, whether in connection with this Agreement, the transactions
contemplated hereby or in the Letter of Credit Documents or any unrelated
transaction; (D) any breach of contract or dispute between the Borrower,
the Issuing Bank, the Administrative Agent, any Lender or any other Person;
(E) any demand, statement or any other document presented under a Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any respect
or any statement therein or made in connection therewith being untrue or
inaccurate in any respect whatsoever; (F) any non-application or
misapplication by the beneficiary of a Letter of Credit or of the proceeds of
any drawing under such Letter of Credit; (G) payment by the Issuing Bank
under any Letter of Credit against presentation of a draft or certificate which
does not strictly comply with the terms of such Letter of Credit; and
(H) any other act, omission to act, delay or circumstance whatsoever that
might, but for the provisions of this Section, constitute a legal or equitable
defense to or discharge of the Borrower’s Reimbursement
Obligations.  Notwithstanding anything to the contrary contained in
this Section or Section 12.10., but not in limitation of the Borrower’s
unconditional obligation to reimburse the Issuing Bank for any drawing made
under a Letter of Credit as provided in this Section and to repay any Revolving
Loan made pursuant to the second sentence of the immediately preceding
subsection (e), the Borrower shall have no obligation to indemnify the
Administrative Agent, the Issuing Bank or any Lender in respect of any liability
incurred by the Administrative Agent, the Issuing Bank or such Lender arising
solely out of the gross negligence or willful misconduct of the Administrative
Agent, the Issuing Bank or such Lender in respect of a Letter of Credit as
determined by a court of competent jurisdiction in a final, non-appealable
judgment.

    
      
         

      

      
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    (h)           Amendments,
Etc.  The issuance by the Issuing Bank of any amendment,
supplement or other modification to any Letter of Credit shall be subject to the
same conditions applicable under this Agreement to the issuance of new Letters
of Credit (including, without limitation, that the request therefor be made
through the Issuing Bank), and no such amendment, supplement or other
modification shall be issued unless either (i) the respective Letter of
Credit affected thereby would have complied with such conditions had it
originally been issued hereunder in such amended, supplemented or modified form
or (ii) the Administrative Agent and Requisite Lenders (or all of the
Lenders if required by Section 12.7.) shall have consented
thereto.  In connection with any such amendment, supplement or other
modification, the Borrower shall pay the fees, if any.

    

    (i)           Lenders’ Participation in
Letters of Credit.  Immediately upon the date of issuance by
the Issuing Bank of all Letters of Credit, each Lender shall be deemed to have
absolutely, irrevocably and unconditionally purchased and received from the
Issuing Bank, without recourse or warranty, an undivided interest and
participation to the extent of such Lender’s Commitment Percentage of the
liability of the Issuing Bank with respect to such Letter of Credit and each
Lender thereby shall absolutely, unconditionally and irrevocably assume, as
primary obligor and not as surety, and shall be unconditionally obligated to the
Issuing Bank to pay and discharge when due, such Lender’s Commitment Percentage
of the Issuing Bank’s liability under such Letter of Credit.  In
addition, upon the making of each payment by a Lender to the Administrative
Agent for the account of the Issuing Bank in respect of any Letter of Credit
pursuant to the immediately following subsection (j), such Lender shall,
automatically and without any further action on the part of the Issuing Bank,
Administrative Agent or such Lender, acquire (i) a participation in an
amount equal to such payment in the Reimbursement Obligation owing to the
Issuing Bank by the Borrower in respect of such Letter of Credit and (ii) a
participation in a percentage equal to such Lender’s Commitment Percentage in
any interest or other amounts payable by the Borrower in respect of such
Reimbursement Obligation (other than the Fees payable to the Issuing Bank
pursuant to the terms of this Agreement, if any).

    

    (j)           Payment Obligation of
Lenders.  Each Lender severally agrees to pay to the
Administrative Agent, for the account of the Issuing Bank, on demand in
immediately available funds in Dollars the amount of such Lender’s Commitment
Percentage of each drawing paid by the Issuing Bank under each Letter of Credit
to the extent such amount is not reimbursed by the Borrower pursuant to the
immediately preceding subsection 2.2.(d); provided, however, that in respect of
any drawing under any Letter of Credit, the maximum amount that any Lender shall
be required to fund, whether as a Revolving Loan or as a participation, shall
not exceed such Lender’s Commitment Percentage of such drawing.  If
the notice referenced in the second sentence of Section 2.2.(e) is received by a
Lender not later than 12:00 p.m. Eastern time, then such Lender shall make such
payment available to the Administrative Agent not later than 12:00 p.m. Eastern
time on the date of demand therefor; otherwise, such payment shall be made
available to the Administrative Agent not later than 2:00 p.m. Eastern time on
the next succeeding Business Day.  Each Lender’s obligation to make
such payments to the Administrative Agent under this subsection, and the
Administrative Agent’s right to receive the same for the account of the Issuing
Bank, shall be absolute, irrevocable and unconditional and shall not be affected
in any way by any circumstance whatsoever, including without limitation,
(i) the failure of any other Lender to make its payment under this
subsection, (ii) the financial condition of the Borrower or any other Loan
Party, (iii) the existence of any Default or Event of Default, including
any Event of Default described in Section 10.1.(e) or (f) or (iv) the
termination of the Commitments.  Each such payment to the
Administrative Agent for the account of the Issuing Bank shall be made without
any offset, abatement, withholding or deduction whatsoever.

    
      
         

      

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

    

    (l)           Defaulting
Lenders.  Upon demand by the Administrative Agent at any time
while a Lender is a Defaulting Lender or a Potential Defaulting Lender, the
Borrower shall deliver to the Administrative Agent, for the benefit of the
Issuing Bank, within one Business Day of such demand, cash collateral or other
credit support satisfactory to the Issuing Bank in its sole discretion in an
amount equal to such Defaulting Lender’s or Potential Defaulting Lender’s
Commitment Percentage of the Letter of Credit Liabilities then
outstanding.

    

    (m)           Existing Letters of
Credit.  The Administrative Agent, the Lenders and the Borrower
agree that (i) the letters of credit outstanding as of the Closing Date as set
forth on Schedule 2.2(m) hereto shall for all purposes as of the Effective Date
be deemed to be “Letters of Credit” issued pursuant to and shall be subject to
all terms and conditions of this Agreement applicable to Letters of Credit and
(ii) all collateral securing such obligations will be immediately released by
the Administrative Agent and the Lenders to the Borrower.

    

    
      Section 2.3.  Rates
and Payment of Interest on Loans.

    

     

    (a)           Rate.  The
Borrower promises to pay to the Administrative Agent for the account of each
Lender interest on the unpaid principal amount of each (i) LIBOR Loan made by
such Lender for the period from and including the date of the making of such
LIBOR Loan to but excluding the date such LIBOR Loan shall be paid in full, at
LIBOR for such LIBOR Loan for the Interest Period therefor, plus the Applicable
LIBOR Margin; and (ii) Base Rate Loan made by such Lender for the period from
and including the date of the making of such Base Rate Loan to but excluding the
date such Base Rate Loan shall be paid in full, at the Base Rate for such Loan,
plus the Applicable Base Rate Margin.

    

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

    

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

    
      
         

      

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

    

    Section 2.4.  Borrowing
Base.

     

    (a)           Addition of Borrowing Base
Properties.  The Borrowing Base may be supplemented from time
to time to reflect additional Borrowing Base Properties and/or First Mortgage
Receivables. To supplement the Borrowing Base, the Borrower shall submit to
Administrative Agent the following materials for its review and
approval:

     

    In the
case of a proposed supplement to Borrowing Base Properties, the Borrower shall
provide Administrative Agent with a formal written request to add the Property
to the Borrowing Base, along with a due diligence package for such
Property.  The due diligence package shall include a current appraisal
(which shall be dated within 180 days of the proposed date of addition of such
Property as a Borrowing Base Property), an environmental assessment, a property
condition report, copies of all tenant lease(s), Borrower’s investment write-up,
and a copy of the owner’s policy of title insurance (or proforma policy/marked
commitment accompanied by an irrevocable obligation of the title insurer to
issue such policy) and survey, along with a written certification by the
Borrower that such Property satisfies the criteria set forth for it to be deemed
a Borrowing Base Property hereunder and that such Property has a minimum Initial
Lease Term of not less than five (5) years.  Administrative Agent may
request additional information if it reasonably believes that such additional
information is necessary for its decision to add a Property to the Borrowing
Base.

     

    In the
case of a proposed supplement to First Mortgage Receivables, the Borrower shall
provide Administrative Agent with copies of the documents evidencing such note,
indenture or other evidence of indebtedness and the Mortgage securing same, and
all such other information as may be required for Administrative Agent to
determine whether such loan qualifies as a First Mortgage Receivable, along with
a written certification by the Borrower that such loan satisfies the criteria
set forth for it to be deemed a First Mortgage Receivable
hereunder.

    
      
         

      

      
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    Upon
Administrative Agent’s receipt of a complete due diligence package and
certification from the Borrower as provided herein, Administrative Agent shall
determine in its reasonable discretion whether such proposed supplement to the
Borrowing Base qualifies as a Borrowing Base Property or First Mortgage
Receivable, as appropriate, for inclusion in the determination of the Borrowing
Base.  Administrative Agent shall inform the Borrower within ten (10)
Business Days following submission of all of the due diligence materials,
application and certification required by this Agreement if the proposed
supplement is approved for inclusion in the Borrowing Base; if the
Administrative Agent shall fail to inform the Borrower within such ten (10)
Business Day period, then Borrower shall notify Administrative Agent of such
failure and provide two (2) additional Business Days for Administrative Agent’s
determination, and if the Administrative Agent does not respond within such
additional two (2) Business Day period then the proposed supplement to the
Borrowing Base shall be deemed to have been approved. If approved (or if deemed
to have been approved), such Borrowing Base Property or First Mortgage
Receivable, as appropriate, shall be added to the Borrowing Base upon execution
and delivery of a Subsidiary Guaranty and Accession Agreement by the Subsidiary
owning either the proposed Borrowing Base Property or First Mortgage Receivable
in the forms prescribed by Administrative Agent and annexed hereto and, in the
case of a First Mortgage Receivable, delivery of the original note, indenture or
other evidence of indebtedness endorsed payable to the order of the
Administrative Agent.  Additionally, within forty five (45) days
following the addition of such Borrowing Base Property or First Mortgage
Receivable, as appropriate, being added to the Borrowing Base, the Borrower
shall provide the Administrative Agent with the following: (i) for any Borrowing
Base Property, a Pocket Mortgage with an opinion of counsel; (ii) for any First
Mortgage Receivable, a Collateral Assignment of Mortgage; and (iii) and, in case
of both of the foregoing sections (i) and (ii), a Membership Interest Pledge in
the entity that owns such Borrowing Base Property or First Mortgage
Receivable.

     

    (b)          Release of Collateral and
Subsidiary Guarantors.  Provided no Default or Event of Default
shall have occurred hereunder and be continuing (or would exist immediately
after giving effect to the transactions contemplated by this Section 2.4(b)),
the Administrative Agent shall release the Equity Interests in a Subsidiary
Guarantor from the lien or security title of the Loan Documents encumbering the
same and terminate such Subsidiary Guarantor’s guaranty of the Obligations, upon
the request of the Borrower subject to and upon the following terms and
conditions:

     

    (i)           the
Borrower shall deliver to the Administrative Agent written notice of its desire
to obtain such release no later than three (3) Business Days prior to the date
on which such release is to be effected together with a Borrowing Base
Certificate as set forth in Exhibit D showing the effect on Availability without
the inclusion of the Borrowing Base Property proposed to be
released;

     

    (ii)          the
Borrower shall certify to the Administrative Agent that no Default or Event of
Default exists or shall exist after giving effect to such release;

     

    (iii)         the
Borrower shall pay all reasonable costs and expenses of the Administrative Agent
in connection with such release, including without limitation, reasonable
attorney’s fees; and

     

    (iv)         to
the extent necessary to comply with Section 2.1, any amount necessary to have
the principal amount outstanding be within the Availability taking into account
the removal of the Borrowing Base Property proposed to be released.

     

    Upon satisfaction of the terms and
conditions of this Section 2.4(b), the Administrative Agent shall immediately
(x) execute and deliver to Borrower a release letter with respect to the
applicable Equity Interests and Subsidiary Guarantors; (y) file an amendment to
Agent’s UCC financing statement evidencing the termination and release of
Administrative Agent’s security interest and lien in the applicable Equity
Interest; and (z) return to the Borrower, as applicable, the original (A) Pocket
Mortgage executed by the Subsidiary Guarantor being released, or (B) documents
evidencing and/or securing the First Mortgage receivables owned by the
Subsidiary Guarantor being released, all without the need for any consent from,
or notice to, any Lender.

    
      
         

      

      
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    Section 2.5.  Repayment
of Loans.  The Borrower shall repay the entire outstanding
principal amount of, and all accrued but unpaid interest on, the Revolving Loans
plus any and all costs payable hereunder or pursuant to any Loan Document on the
Termination Date.

     

    
      Section 2.6.  Prepayments.

    

     

    (a)          Subject
to Section 4.4., the Borrower may prepay any Loan at any time without
premium or penalty.  The Borrower shall give the Administrative Agent
at least one Business Day’s prior written notice of the prepayment of any
Loan.  Except during the continuance of an Event of Default and after
the payment of all accrued but unpaid interest, fees, expenses and other charges
then due, remaining amounts shall be applied as directed by the
Borrower.

     

    (b)          At
its option and upon three (3) days written notice to the Administrative Agent,
the Borrower may prepay any LIBOR Loan in whole from time to time without
premium or penalty on the last Business Day of the then current Interest Period
with respect thereto and with any accrued interest on the principal being
prepaid to the date of such repayment, provided, however, that the Borrower
acknowledges that additional obligations may be associated with any such
prepayment including, without limitation, breakage and other costs and fees
incurred by the Administrative Agent for prepayments of a LIBOR Loan made on any
day that is not the last day of the relevant Interest Period (regardless of the
source of such prepayment and whether voluntary, by acceleration or
otherwise).  All such prepayments of a LIBOR Loan shall be applied
first to fees and expenses then due hereunder, then, unless otherwise directed
by the Borrower (except during the continuance of an Event of Default), to
interest on the unpaid principal balance accrued to the date of prepayment and
last to the principal balance then due hereunder.

     

    (c)          If
the Borrower has entered into a swap agreement, prepayment shall be governed by
the terms of the swap agreement.

     

    (d)          In
connection with the Borrower’s obligation to pay any LIBOR Loan prepayment fees,
the Borrower agrees to reimburse the Administrative Agent (without duplication)
for any increase in the cost to the Administrative Agent, or reduction in the
amount of any sum receivable by the Administrative Agent, in respect, or as a
result of:

    

    
      	
               
      

            	
              i.

            	
              any
      conversion or repayment or prepayment of the principal amount of any LIBOR
      Loan on a date other than the scheduled last day of the Interest Period
      applicable thereto; or

            

    

    

    
      	
               
      

            	
              ii.

            	
              any
      loans not being made as LIBOR Loans in accordance with the borrowing
      request thereof.

            

    

    

    (e)    
     Mandatory.

    

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

    
      
         

      

      
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    (ii)          Application of Mandatory
Prepayments.  Amounts paid under the preceding
subsection (e)(i) shall be applied to pay all amounts of principal
outstanding on the Loans and any Reimbursement Obligations pro rata in
accordance with Section 3.2. and if any Letters of Credit are outstanding
at such time, the remainder, if any, shall be deposited into the Letter of
Credit Collateral Account for application to any Reimbursement
Obligations.  Amounts paid under the preceding subsection (d)
shall be applied in accordance with Section 3.2.(e).  If the
Borrower is required to pay any outstanding LIBOR Loans by reason of this
subsection (e)(ii) prior to the end of the applicable Interest Period therefor,
the Borrower shall pay all amounts due under Section 4.4.

    

    
       
Section 2.7.  Continuation.

    

     

    So long as no Default under Section
10.1(a) or 10.1(b)(i) (as to Section 9.1 of Article IX only) or Event of Default
exists, the Borrower may on any Business Day, with respect to any LIBOR Loan,
elect to maintain such LIBOR Loan or any portion thereof as a LIBOR Loan by
selecting a new Interest Period for such LIBOR Loan.  Each new
Interest Period selected under this Section shall commence on the last day of
the immediately preceding Interest Period.  Each selection of a new
Interest Period shall be made by the Borrower giving to the Administrative Agent
a Notice of Continuation not later than 12:00 p.m. Eastern time on the third
Business Day prior to the date of any such Continuation.  Such notice
by the Borrower of a Continuation shall be by telecopy, electronic mail or other
similar form of communication in the form of a Notice of Continuation,
specifying (a) the proposed date of such Continuation, (b) the LIBOR
Loans and portions thereof subject to such Continuation and (c) the
duration of the selected Interest Period, all of which shall be specified in
such manner as is necessary to comply with all limitations on Loans outstanding
hereunder.  Each Notice of Continuation shall be irrevocable by and
binding on the Borrower once given.  Promptly after receipt of a
Notice of Continuation, the Administrative Agent shall notify each Lender of the
proposed Continuation.  If the Borrower shall fail to select in a
timely manner a new Interest Period for any LIBOR Loan in accordance with this
Section, such Loan will automatically, on the last day of the current Interest
Period therefor, continue as a LIBOR Loan with an Interest Period of one
month.

    

    
      Section 2.8.  Notes.

    

     

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

    

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

    

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

    
      
         

      

      
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      Section 2.9.  Expiration
Date of Letters of Credit Past Termination Date.

    

     

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

    

    
      Section 2.10.  Amount
Limitations.

    

     

    Notwithstanding any other term of this
Agreement or any other Loan Document, no Lender shall be required to make a
Loan, nor shall the Issuing Bank be required to issue a Letter of Credit, if
immediately after the making of such Loan, or the issuance of such Letter of
Credit if the aggregate principal amount of all outstanding Revolving Loans,
together with the aggregate amount of all Letter of Credit Liabilities, would
exceed the aggregate amount of the Commitments at such time.

    

    
      Section 2.11.  Funds
Transfer Disbursements.

    

     

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

    

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

    
      
         

      

      
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    (c)           Limitation of
Liability.  None of the Administrative Agent, the Issuing Bank
or any Lender shall be liable to the Borrower or any other parties for (i)
errors, acts or failures to act of others, including other entities, banks,
communications carriers or clearinghouses, through which the Borrower’s
transfers may be made or information received or transmitted, and no such entity
shall be deemed an agent of the Administrative Agent, the Issuing Bank or any
Lender, (ii) any loss, liability or delay caused by fires, earthquakes, wars,
civil disturbances, power surges or failures, acts of government, labor
disputes, failures in communications networks, legal constraints or other events
beyond Administrative Agent’s, Issuing Bank’s or any Lender’s control, or (iii)
any special, consequential, indirect or punitive damages, whether or not (x) any
claim for these damages is based on tort or contract or (y) the Administrative
Agent, the Issuing Bank, any Lender or the Borrower knew or should have known
the likelihood of these damages in any situation.  None of the
Administrative Agent, the Issuing Bank or any Lender makes any representations
or warranties other than those expressly made in this Agreement.

    

    Section 2.12.  Increase
in Commitments.

    

    The Borrower shall have the right to
request increases in the aggregate amount of the Commitments by providing
written notice to the Administrative Agent, which notice shall be irrevocable
once given; provided, however, that after
giving effect to any such increases the aggregate amount of the Commitments
(including the existing Commitments) shall not exceed
$75,000,000.  Each such increase in the Commitments must be an
aggregate minimum amount of $5,000,000 and integral multiples of $5,000,000 in
excess thereof.  The Administrative Agent, in consultation with the
Borrower, shall manage all aspects of the syndication of such increase in the
Commitments, including decisions as to the selection of the existing Lenders
and/or other banks, financial institutions and other institutional lenders to be
approached with respect to such increase and the allocations of the increase in
the Commitments among such existing Lenders and/or other banks, financial
institutions and other institutional lenders.  No Lender shall be
obligated in any way whatsoever to increase its Commitment or provide a new
Commitment, and any new Lender becoming a party to this Agreement in connection
with any such requested increase must be an Eligible Assignee.  If a
new Lender becomes a party to this Agreement, or if any existing Lender is
increasing its Commitment, such Lender shall on the date it becomes a Lender
hereunder (or in the case of an existing Lender, increases its Commitment) (and
as a condition thereto) purchase from the other Lenders its Commitment
Percentage (determined with respect to the Lenders’ respective Commitments and
after giving effect to the increase of Commitments) of any outstanding Revolving
Loans, by making available to the Administrative Agent for the account of such
other Lenders, in same day funds, an amount equal to the sum of (A) the
portion of the outstanding principal amount of such Revolving Loans to be
purchased by such Lender, plus (B) the
aggregate amount of payments previously made by the other Lenders under
Section 2.4.(j) that have not been repaid, plus
(C) interest accrued and unpaid to and as of such date on such portion of
the outstanding principal amount of such Revolving Loans.  The
Borrower shall pay to the Lenders amounts payable, if any, to such Lenders under
Section 4.4. as a result of the prepayment of any such LIBOR
Loans.  Effecting the increase of the Commitments under this Section
is subject to the following conditions precedent:  (x) no Default
or Event of Default shall be in existence on the effective date of such
increase, (y) the representations and warranties made or deemed made by the
Borrower or any other Loan Party in any Loan Document to which such Loan Party
is a party shall be true and correct in all material respects on the effective
date of such increase except to the extent that such representations and
warranties expressly relate solely to an earlier date (in which case such
representations and warranties shall have been true and accurate on and as of
such earlier date) and except for changes in factual circumstances not
prohibited hereunder, and (z)  the Administrative Agent shall have received
each of the following, in form and substance satisfactory to the Administrative
Agent:  (i) if not previously delivered to the Administrative Agent,
copies certified by the Secretary or Assistant Secretary of (A) all partnership
or other necessary action taken by the Borrower to authorize such increase and
(B) all corporate, partnership, member or other necessary action taken by each
Guarantor authorizing the guaranty of such increase, (ii) an opinion of
counsel to the Borrower and the Guarantors, addressed to the Administrative
Agent and the Lenders covering such matters as reasonably requested by the
Administrative Agent, and (iii) new Revolving Notes executed by the
Borrower, payable to any new Lenders and replacement Revolving Notes executed by
the Borrower, payable to any existing Lenders increasing their Commitments, in
the amount of such Lender’s Commitment at the time of the effectiveness of the
applicable increase in the aggregate amount of the Commitments.  In
connection with any increase in the aggregate amount of the Commitments pursuant
to this Section 2.12. any Lender becoming a party hereto shall execute such
documents and agreements as the Administrative Agent may reasonably
request.

    
      
         

      

      
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    Article
III. Payments, Fees and Other General Provisions

     

    
      Section 3.1.  Payments.

    

     

    (a)           Payments by
Borrower.  Except to the extent otherwise provided herein, all
payments of principal, interest, Fees and other amounts to be made by the
Borrower under this Agreement, the Notes or any other Loan Document shall be
made in Dollars, in immediately available funds, without setoff, deduction or
counterclaim, to the Administrative Agent at the Principal Office, not later
than 11:00 a.m. Eastern time on the date on which such payment shall become due
(each such payment made after such time on such due date to be deemed to have
been made on the next succeeding Business Day); provided, with respect to any
Fees or other amounts to be made by the Borrower, excluding regularly scheduled
payments of principal and interest, Administrative Agent shall forward an
invoice to the Borrower, including reasonable detail therein, at least one
Business Day prior to such payment being due, further provided that in all
events the failure of the Administrative Agent to send such invoice in no way
excuses the Borrower from making payment of amounts due
hereunder.  Upon the Borrower’s written request, Administrative Agent
shall satisfy such invoice, or portion thereof, from funds available in the
Borrower’s operating account at Capital One.  Subject to Section
10.5., the Borrower shall, at the time of making each payment under this
Agreement or any other Loan Document, specify to the Administrative Agent the
amounts payable by the Borrower hereunder to which such payment is to be
applied.  Each payment received by the Administrative Agent for the
account of a Lender under this Agreement or any Note shall be paid to such
Lender by wire transfer of immediately available funds in accordance with the
wiring instructions provided by such Lender to the Administrative Agent from
time to time, for the account of such Lender at the applicable Lending Office of
such Lender.  Each payment received by the Administrative Agent for
the account of the Issuing Bank under this Agreement shall be paid to the
Issuing Bank by wire transfer of immediately available funds in accordance with
the wiring instructions provided by the Issuing Bank to the Administrative Agent
from time to time, for the account of the Issuing Bank.  In the event
the Administrative Agent fails to pay such amounts to such Lender or the Issuing
Bank, as the case may be, within one Business Day of receipt of such amounts,
the Administrative Agent shall pay interest on such amount until paid at a rate
per annum equal to the rate charged on such amounts as determined in accordance
with this Agreement.  If the due date of any payment under this
Agreement or any other Loan Document would otherwise fall on a day which is not
a Business Day such date shall be extended to the next succeeding Business Day
and interest shall continue to accrue at the rate, if any, applicable to such
payment for the period of such extension.

    

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

    
      
         

      

      
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      Section 3.2.  Pro
Rata Treatment.

    

     

    Except to the extent otherwise provided
herein: (a) each borrowing from the Lenders under Section 2.1.(a), and
2.2. (e) shall be made from the Lenders, and each payment of the fees under
Sections 3.5.(a), 3.5.(b), the first sentence of 3.5.(c) and 3.5.(d) shall
be made for the account of the Lenders, pro rata according to the amounts of
their respective Commitments; (b) each payment or prepayment of principal
of Revolving Loans shall be made for the account of the Lenders pro rata in
accordance with the respective unpaid principal amounts of the Revolving Loans
held by them, provided that, subject to Section 3.9., if immediately prior
to giving effect to any such payment in respect of any Revolving Loans the
outstanding principal amount of the Revolving Loans shall not be held by the
Lenders pro rata in accordance with their respective Commitments in effect at
the time such Revolving Loans were made, then such payment shall be applied to
the Revolving Loans in such manner as shall result, as nearly as is practicable,
in the outstanding principal amount of the Revolving Loans being held by the
Lenders pro rata in accordance with their respective Commitments; (c) each
payment of interest on Revolving Loans shall be made for the account of the
Lenders pro rata in accordance with the amounts of interest on such Revolving
Loans then due and payable to the respective Lenders; (d) the making, and
Continuation of Revolving Loans shall be made pro rata among the Lenders
according to the amounts of their respective Revolving Loans and the then
current Interest Period for each Lender’s portion of each such Loan shall be
coterminous; and (e) the Lenders’ participation in, and payment obligations
in respect of, Letters of Credit under Section 2.4., shall be in accordance
with their respective Commitment Percentages.

    

    
      Section 3.3.  Sharing
of Payments, Etc.

    

     

    If a Lender shall obtain payment of any
principal of, or interest on, any of its Loans under this Agreement or shall
obtain payment on any other Obligation owing by the Borrower or any other Loan
Party through the exercise of any right of set-off, banker’s lien, counterclaim
or similar right or otherwise or through voluntary prepayments directly to a
Lender or other payments made by or on behalf of the Borrower or any other Loan
Party to a Lender not in accordance with the terms of this Agreement and such
payment should be distributed to the Lenders in accordance with
Section 3.2. or Section 10.5., as applicable, such Lender shall
promptly purchase from the other Lenders participations in (or, if and to the
extent specified by such Lender, direct interests in) the Loans made by the
other Lenders or other Obligations owed to such other Lenders in such amounts,
and make such other adjustments from time to time as shall be equitable, to the
end that all the Lenders shall share the benefit of such payment (net of any
reasonable expenses which may actually be incurred by such Lender in obtaining
or preserving such benefit) in accordance with the requirements of
Section 3.2. or Section 10.5., as applicable.  To such end, all
the Lenders shall make appropriate adjustments among themselves (by the resale
of participations sold or otherwise) if such payment is rescinded or must
otherwise be restored.  The Borrower agrees that any Lender so
purchasing a direct interest in the Loans or other Obligations owed to such
other Lenders may exercise all rights of set-off, banker’s lien, counterclaim or
similar rights with respect to such interest.  Nothing contained
herein shall require any Lender to exercise any such right or shall affect the
right of any Lender to exercise and retain the benefits of exercising, any such
right with respect to any other indebtedness or obligation of the
Borrower.

    
      
         

      

      
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      Section 3.4.  Several
Obligations.

    

     

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

    

    
      Section 3.5.  Fees.

    

     

    (a)           Closing
Expenses.  On the Effective Date, the Borrower agrees to pay to
the Administrative Agent and each Lender all out-of-pocket third party expenses
incurred by the Administrative Agent as have been agreed to in writing by the
Borrower and the Administrative Agent including but not limited to all
appraisal, environmental audit and review report fees.

    

    (b)           Upfront Fee. The Borrower shall pay to
Administrative Agent for the account of each Lender in accordance with its
Commitment Percentage, a commitment fee equal to 0.75% times the total
Commitment at Closing.

    

    (c)           Facility
Fees.  The Borrower shall pay to Administrative Agent for the
ratable account of each Lender, in accordance with its Commitment Percentage, a
facility fee equal to 0.25% times the Commitment
regardless of usage.  The facility fee shall accrue at all times and
shall be due and payable quarterly in arrears on the last Business Day of each
March, June, September and December, commencing with the first such date to
occur after the Closing Date and on the Termination Date (and, if applicable,
thereafter on demand).

    

    (d)           Letter
of Credit Fees.  The
Borrower shall pay a commission on all outstanding Letters of Credit at a
per annum rate equal to the Applicable LIBOR Margin then in effect with respect
to LIBOR Loans on the face amount of each such Letter of Credit. Such commission
shall be shared ratably among the Lenders and shall be payable quarterly in
arrears.  A fronting fee equal to 0.20% per annum on the face amount
of each Letter of Credit shall be payable quarterly in arrears to the Issuing
Bank for its own account. In addition, customary administrative, issuance,
amendment, payment and negotiation charges shall be payable to the Issuing Bank
for its own account.

    

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

    

    
      Section 3.6.  Computations.

    

     

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

     

    
      
        
        

      

      
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      Section 3.7.  Usury.

    

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

    

    
      Section 3.8.  Statements
of Account.

    

     

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

    

    
      Section 3.9.  Defaulting
Lenders.

    

     

    (a)           Generally.  If
any Lender shall become a Defaulting Lender, then such Defaulting Lender’s right
to participate in the administration of the Loans, this Agreement and the other
Loan Documents, including without limitation, any right to vote in respect of
any amendment, consent or waiver of the terms of this Agreement or any other
Loan Document, or to direct any action or inaction of the Administrative Agent
or to be taken into account in the calculation of the Requisite Lenders shall be
suspended while such Lender remains a Defaulting Lender; provided, however, that
the foregoing shall not permit an increase in such Lender’s Commitment or an
extension of the maturity date of such Lender’s Loans or other Obligations owing
to such Lender, in each case, without such Lender’s consent.  If a
Lender is a Defaulting Lender because it has failed to make timely payment to
the Administrative Agent of any amount required to be paid to the Administrative
Agent hereunder (without giving effect to any notice or cure periods), then the
Administrative Agent shall be entitled (i) to collect interest from such
Defaulting Lender on such delinquent payment for the period from the date on
which the payment was due until the date on which the payment is made at the
Federal Funds Rate, (ii) to withhold or setoff and to apply in satisfaction
of the defaulted payment and any related interest, any amounts otherwise payable
to such Defaulting Lender under this Agreement or any other Loan Document and
(iii) to bring an action or suit against such Defaulting Lender in a court
of competent jurisdiction to recover the defaulted amount and any related
interest.  No Commitment of any Lender shall be increased or otherwise
affected, and except as otherwise expressly provided in this Section,
performance by the Borrower of its obligations hereunder and under the other
Loan Documents shall not be excused or otherwise modified, as a result of the
operation of this Section. The rights and remedies of the Borrower, the
Administrative Agent, the Issuing Bank, and the Lenders against a Defaulting
Lender under this Section are in addition to any other rights and remedies the
Borrower, the Administrative Agent, the Issuing Bank, and the Lenders may have
against such Defaulting Lender under this Agreement, any of the other Loan
Documents, Applicable Law or otherwise.  Upon the determination by the
Administrative Agent that a Lender is a Defaulting Lender or a Potential
Defaulting Lender, the Administrative Agent will promptly notify the Lenders and
the Borrower of such determination; provided, however, that the failure of the
Administrative Agent to give such notice shall not release the Borrower or any
Lender from any of its obligations hereunder or effect any such determination by
the Administrative Agent.

    
      
         

      

      
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    (b)           Treatment of
Payments.  Until the Defaulting Lender Excess of a Defaulting
Lender has been reduced to zero, any payment of the principal of the Revolving
Loans owing to the Defaulting Lender shall, unless the Requisite Lenders agree
otherwise, be applied to the outstanding principal balance of the Revolving
Loans of the applicable Lenders that are not Defaulting
Lenders.  Subject to the preceding sentence, any amount paid by the
Borrower for the account of a Defaulting Lender under this Agreement or any
other Loan Document will not be paid or distributed to such Defaulting Lender,
but will instead be applied by the Administrative Agent to the making of
payments from time to time in the following order of priority until such
Defaulting Lender has ceased to be a Defaulting Lender (in accordance with
subsection (f), (g) or (h) below: first, to the payment
of any amounts owing by such Defaulting Lender to the Administrative Agent under
this Agreement; second, to the
payment on a pro rata basis of any amounts owing by such Defaulting Lender or to
the Issuing Bank under this Agreement; third, if determined
by the Administrative Agent or requested by the Issuing Bank, held as cash
collateral for such Defaulting Lender’s Commitment Percentage of the Letter of
Credit Liabilities then outstanding, subject to the provisions of the
immediately following subsection (e); fourth, to the
funding of any Loan in respect of which such Defaulting Lender has failed to
fund its portion thereof as required by this Agreement, as determined by the
Administrative Agent; fifth, if so
determined by the Administrative Agent and the Borrower, held in such account as
cash collateral for future funding obligations of the Defaulting Lender in
respect of any Loans under this Agreement; and sixth, after the
termination of the Commitments and payment in full of all Obligations, to such
Defaulting Lender or as a court of competent jurisdiction may otherwise
direct.

    

    (c)           Fees.  During
any period that a Lender is a Defaulting Lender, (i) such Defaulting
Lender’s Commitment and outstanding Revolving Loans shall be excluded for
purposes of calculating any Fee payable to the Lenders under
Sections 3.5.(b) and 3.5.(c), and (ii) such Defaulting Lender shall
not be entitled to receive any such Fees otherwise payable to such Defaulting
Lender under such Sections.

    

    (d)           Borrowing
Requests.  While any Lender is a Defaulting Lender or a
Potential Defaulting Lender, the Borrower authorizes each of the Administrative
Agent and the Issuing Bank (which authorization is irrevocable and coupled with
an interest) to give, in such Person’s discretion, Notices of Revolving
Borrowing pursuant to Section 2.1. in such amounts and at such times as may
be required to (i) reimburse any Reimbursement Obligation that has become
due and payable, or (ii) cash collateralize the Obligations of the Borrower
in respect of outstanding Letters of Credit in an amount equal to the aggregate
amount of the obligations (contingent or otherwise) of such Defaulting Lender or
Potential Defaulting Lender in respect of such Letters of Credit.

    

    (e)           Cash Collateral for Letters
of Credit.  All cash collateral and other credit support
provided pursuant to Section 2.2.(l) or the immediately preceding
subsection (b) or (d) (other than credit support not constituting funds
subject to deposit) shall be maintained in the Letter of Credit Collateral
Account.  Such cash collateral and other credit support (or the
appropriate portion thereof) shall be released from the Letter of Credit
Collateral Account promptly following (i) the elimination of the applicable
Letter of Credit Obligations (including by the termination of the status of the
a Lender as a Defaulting Lender), or (ii) the Administrative Agent’s good faith
reasonable determination that there exists excess cash collateral and other
credit support; provided, however, (x) cash
collateral and other credit support shall not be released if a Default or Event
of Default exists (and following application as provided in this subsection may
be otherwise applied in accordance with Section 10.5.) and (y) the
Borrower, the Administrative Agent, and the Issuing Bank may agree that such
cash collateral and other credit support shall not be released but instead held
to support future anticipated exposure with respect to Letters of
Credit.

    
      
         

      

      
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    (f)           Purchase of Defaulting
Lender’s Commitment.  During any period that a Lender is a
Defaulting Lender, the Borrower may, by giving written notice thereof to the
Administrative Agent and the other Lenders (including the Defaulting Lender),
demand that such Defaulting Lender assign its Commitment to an Eligible Assignee
subject to and in accordance with the provisions of
Section 12.6.(b).  No party hereto shall have any obligation
whatsoever to initiate any such replacement or to assist in finding an Eligible
Assignee.  In addition, any Lender who is not a Defaulting Lender may,
but shall not be obligated, in its sole discretion, to acquire the face amount
of all or a portion of such Defaulting Lender’s Commitment via an assignment
subject to and in accordance with the provisions of
Section 12.6.(b).  In connection with any such assignment, such
Defaulting Lender shall promptly execute all documents reasonably requested to
effect such assignment, including an appropriate Assignment and Acceptance and,
notwithstanding Section 12.6.(b), shall pay to the Administrative Agent an
assignment fee in the amount of $10,000.  No such assignment shall be
effective unless and until, in addition to the other conditions thereto set
forth herein, the parties to the assignment shall make such additional payments
to the Administrative Agent in an aggregate amount sufficient with any
applicable amounts held pursuant to the immediately preceding
subsection (e), upon distribution thereof as appropriate (which may be
outright payment, purchases by the assignee of participations or
subparticipations, or other compensating actions, including funding, with the
consent of the Borrower and the Administrative Agent, the applicable pro rata
share of Loans previously requested but not funded by the Defaulting Lender, to
each of which the applicable assignee and assignor hereby irrevocably consent),
to (x) pay and satisfy in full all payment liabilities then owed by such
Defaulting Lender to the Administrative Agent, the Issuing Bank or any Lender
hereunder (and interest accrued thereon), and (y) acquire (and fund as
appropriate) such Defaulting Lenders full pro rata share of all Loans and
participations in Letters of Credit.  Notwithstanding the foregoing,
in the event that any assignment of rights and obligations of any Defaulting
Lender hereunder shall become effective under Applicable Law without compliance
with the provisions of this paragraph, then the assignee of such interest shall
be deemed to be a Defaulting Lender for all purposes of this Agreement until
such compliance occurs.

    

    (g)           Termination of Defaulting
Lender’s Commitments.  During any period that a Lender is a
Defaulting Lender, the Borrower may terminate in full the Commitments of such
Defaulting Lender by giving notice to such Defaulting Lender and the
Administrative Agent (such termination, a “Defaulting Lender Termination”) so
long as on the effective date of such Defaulting Lender Termination and after
giving effect thereto and to any repayment of Revolving Loans in connection
therewith: (i) no Default or Event of Default exists (unless the Requisite
Lenders otherwise consent to such Defaulting Lender Termination), (ii) no
Revolving Loans shall be outstanding, and (iii) the sum of (x) the
Letter of Credit Liabilities, and (y) the amount of cash collateral and
other credit support then held by the Administrative Agent pursuant to
Section 2.4.(l) shall not exceed the aggregate Commitments of all Lenders
that are not Defaulting Lenders.  Each such notice shall specify the
effective date of such Defaulting Lender Termination (the “Defaulting Lender
Termination Date”), which shall be not less than 5 Business Days (or such
shorter period as agreed to by the Administrative Agent and such Defaulting
Lender) after the date on which such notice is delivered to such Defaulting
Lender and the Administrative Agent.  On each such Defaulting Lender
Termination Date, (i) the Commitments of such Defaulting Lender shall be
reduced to zero, (ii) such Defaulting Lender shall cease to be a “Lender”
hereunder (provided that any Defaulting Lender shall continue to be entitled to
the indemnification provisions contained herein, but only with respect to
matters arising prior to the applicable Defaulting Lender Termination Date),
(iii) the Commitments of all other Lenders shall remain unchanged and
(iv) the Commitment Percentages of outstanding Letter of Credit Liabilities
will be reallocated by the Administrative Agent among the Lenders (other than
the Defaulting Lender) in accordance with their Commitment Percentages after
giving effect to the Defaulting Lender Termination.

    
      
         

      

      
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    (h)           Cure.  If
the Borrower, the Administrative Agent, and the Issuing Bank agree in writing in
their discretion that a Lender that is a Defaulting Lender or a Potential
Defaulting Lender should no longer be deemed to be a Defaulting Lender or
Potential Defaulting Lender, as the case may be, the Administrative Agent will
so notify the Lenders, whereupon as of the effective date specified in such
notice and subject to any conditions set forth therein, such Lender will, to the
extent applicable, purchase such portion of outstanding Revolving Loans of the
other Lenders and make such other adjustments as the Administrative Agent may
determine to be necessary to cause the interest of the Lenders in the Revolving
Loans, and Letter of Credit Liabilities to be on a pro rata basis in accordance
with their respective Commitment Percentages, whereupon such Lender will cease
to be a Defaulting Lender or Potential Defaulting Lender; provided that no
adjustments will be made retroactively with respect to fees accrued or payments
made by or on behalf of the Borrower while such Lender was a Defaulting Lender;
and provided,
further, that except to the extent otherwise expressly agreed by the affected
parties, no cure by a Lender under this subsection of its status as a Defaulting
Lender or Potential Defaulting Lender will constitute a waiver or release of any
claim of any party hereunder arising from such Lender’s having been a Defaulting
Lender or Potential Defaulting Lender.

    

    
      Section 3.10.  Taxes;
Foreign Lenders.

    

     

    (a)           Taxes
Generally.  All payments by the Borrower of principal of, and
interest on, the Loans and all other Obligations shall be made free and clear of
and without deduction for any present or future excise, stamp or other taxes,
fees, duties, levies, imposts, charges, deductions, withholdings or other
charges of any nature whatsoever imposed by any taxing authority, but excluding
(i) franchise taxes, (ii) any taxes (other than withholding taxes)
that would not be imposed but for a connection between the Administrative Agent,
the Issuing Bank or a Lender and the jurisdiction imposing such taxes (other
than a connection arising solely by virtue of the activities of the
Administrative Agent, the Issuing Bank or such Lender pursuant to or in respect
of this Agreement or any other Loan Document), (iii)  any taxes imposed on
or measured by the Issuing Bank’s or any Lender’s assets, net income, receipts
or branch profits, (iv) any taxes arising after the Agreement Date solely
as a result of or attributable to a Lender changing its designated Lending
Office after the date such Lender becomes a party hereto and (v) any taxes
imposed by Sections 1471 through Section 1474 of the Internal Revenue Code
(including any official interpretations thereof, collectively “FATCA”) on any
“withholdable payment” payable to the Administrative Agent, the Issuing Bank or
any Lender as a result of the failure of such Person to satisfy the applicable
requirements as set forth in FATCA after December 31, 2012 (such
non-excluded items being collectively called “Taxes”).  If any
withholding or deduction from any payment to be made by the Borrower hereunder
is required in respect of any Taxes pursuant to any Applicable Law, then the
Borrower will:

    

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

    

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

    

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

    
      
         

      

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

    

    (c)           Tax Forms. Prior to
the date that any Lender becomes a party hereto, such Lender shall deliver to
the Borrower and the Administrative Agent such certificates, documents or other
evidence, as required by the Internal Revenue Code or Treasury Regulations
issued pursuant thereto (including Internal Revenue Service Forms W-9,
W-8ECI and/or W-8BEN, as applicable, or appropriate successor forms), properly
completed, currently effective and duly executed by such Lender establishing
that payments to it hereunder and under the Notes are (i) not subject to United
States Federal backup withholding tax and (ii) not subject to United States
Federal withholding tax under the Internal Revenue Code.  Each such
Lender shall, to the extent it may lawfully do so, (x) deliver further copies of
such forms or other appropriate certifications on or before the date that any
such forms expire or become obsolete and after the occurrence of any event
requiring a change in the most recent form delivered to the Borrower or the
Administrative Agent and (y) obtain such extensions of the time for filing, and
renew such forms and certifications thereof, as may be reasonably requested by
the Borrower or the Administrative Agent.  The Borrower shall not be
required to pay any amount pursuant to the last sentence of subsection (a) above
to any Lender or the Administrative Agent, if it is organized under the laws of
a jurisdiction other than that in which the Borrower is a resident for tax
purposes, if such Lender or the Administrative Agent, as applicable, fails to
comply with the requirements of this subsection.  If any such Lender,
to the extent it may lawfully do so, fails to deliver the above forms or other
documentation, then the Administrative Agent may withhold from such payment to
such Lender such amounts as are required by the Internal Revenue Code. If any
Governmental Authority asserts that the Administrative Agent did not properly
withhold or backup withhold, as the case may be, any tax or other amount from
payments made to or for the account of any Lender, such Lender shall indemnify
the Administrative Agent therefor, including all penalties and interest, any
taxes imposed by any jurisdiction on the amounts payable to the Administrative
Agent under this Section, and costs and expenses (including all reasonable fees
and disbursements of any law firm or other external counsel and the allocated
cost of internal legal services and all disbursements of internal counsel) of
the Administrative Agent.  The obligation of the Lenders under this
Section shall survive the termination of the Commitments, repayment of all
Obligations and the resignation or replacement of the Administrative
Agent.

    

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

     

    
      
        
        

      

      
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    Article
IV. Yield Protection, Etc.

     

    
      Section 4.1.  Additional
Costs; Capital Adequacy.

    

    (a)           Capital
Adequacy.  If any Lender reasonably in good faith determines
that compliance with any law or regulation or with any guideline or request from
any central bank or other Governmental Authority (whether or not having the
force of law) affects or would affect the amount of capital required or expected
to be maintained by such Lender, or any corporation controlling such Lender, as
a consequence of, or with reference to, such Lender’s Commitments or its making
or maintaining Loans or participating in Letters of Credit below the rate which
such Lender or such corporation controlling such Lender could have achieved but
for such compliance (taking into account the policies of such Lender or such
corporation with regard to capital), then the Borrower shall, from time to time,
within thirty (30) days after written demand by such Lender, pay to such Lender
additional amounts sufficient to compensate such Lender or such corporation
controlling such Lender to the extent that such Lender reasonably determines
such increase in capital is allocable to such Lender’s obligations
hereunder.

    

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

    

    (c)           Lender’s Suspension of LIBOR
Loans.  Without limiting the effect of the provisions of the
immediately preceding subsection (a) and (b), if by reason of any Regulatory
Change, any Lender either (i) incurs Additional Costs based on or measured by
the excess above a specified level of the amount of a category of deposits or
other liabilities of such Lender that includes deposits by reference to which
the interest rate on LIBOR Loans is determined as provided in  this
Agreement or a category of extensions of credit or other assets of such Lender
that includes LIBOR Loans or (ii) becomes subject to restrictions on the amount
of such a category of liabilities or assets that it may hold, then, if such
Lender so elects by notice to the Borrower (with a copy to the Administrative
Agent), the obligation of such Lender to make or Continue LIBOR Loans shall be
suspended until such Regulatory Change ceases to be in effect (in which case the
provisions of Section 4.5. shall apply).

    
      
         

      

      
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    (d)           Additional Costs in Respect
of Letters of Credit.  Without limiting the obligations of the
Borrower under the preceding subsections of this Section (but without
duplication), if as a result of any Regulatory Change or any risk-based capital
guideline or other requirement heretofore or hereafter issued by any
Governmental Authority there shall be imposed, modified or deemed applicable any
tax, reserve, special deposit, capital adequacy or similar requirement against
or with respect to or measured by reference to Letters of Credit and the result
shall be to increase the cost to the Issuing Bank of issuing (or any Lender of
purchasing participations in) or maintaining its obligation hereunder to issue
(or purchase participations in) any Letter of Credit or reduce any amount
receivable by the Issuing Bank or any Lender hereunder in respect of any Letter
of Credit, then, upon demand by the Issuing Bank or such Lender, the Borrower
shall pay immediately to the Issuing Bank or, in the case of such Lender, to the
Administrative Agent for the account of such Lender, from time to time as
specified by the Issuing Bank or such Lender, such additional amounts as shall
be sufficient to compensate the Issuing Bank or such Lender for such increased
costs or reductions in amount.

    

    (e)           Notification and
Determination of Additional Costs.  Each of the Administrative
Agent, Issuing Bank and each Lender, as the case may be, agrees to notify the
Borrower of any event occurring after the Agreement Date entitling the
Administrative Agent, the Issuing Bank or such Lender to compensation under any
of the preceding subsections of this Section as promptly as practicable;
provided, however, that the failure of the Administrative Agent, the Issuing
Bank or any Lender to give such notice shall not release the Borrower from any
of its obligations hereunder (and in the case of a Lender, to the Administrative
Agent).  The Administrative Agent, the Issuing Bank and each Lender,
as the case may be, agrees to furnish to the Borrower (and in the case of the
Issuing Bank or a Lender, to the Administrative Agent as well) a certificate
setting forth the basis and amount of each request for compensation under this
Section.  Determinations by the Administrative Agent, the Issuing Bank
or such Lender, as the case may be, of the effect of any Regulatory Change shall
be conclusive and binding for all purposes, absent manifest error.

    

    
      Section 4.2.  Suspension
of LIBOR Loans.

    

     

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

    

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

    

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

    

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

    

    
      Section 4.3.  Illegality.

    

     

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

    
      
         

      

      
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      Section 4.4.  Compensation.

    

     

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

    

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

    

    (b)         
any failure by the Borrower for any reason (including, without limitation, the
failure of any of the applicable conditions precedent specified in Article 5.2.
to be satisfied) to borrow a LIBOR Loan from such Lender on the date for such
borrowing, or Continue a LIBOR Loan on the requested date of such
Continuation.

    

    Not in
limitation of the foregoing, such compensation shall include, without
limitation, (i) in the case of a LIBOR Loan, an amount equal to the then present
value of (A) the amount of interest that would have accrued on such LIBOR Loan
for the remainder of the Interest Period at the rate applicable to such LIBOR
Loan, less (B) the amount of interest that would accrue on the same LIBOR Loan
for the same period if LIBOR were set on the date on which such LIBOR Loan was
repaid, prepaid or the date on which the Borrower failed to borrow, or Continue
such LIBOR Loan, as applicable, calculating present value by using as a discount
rate LIBOR quoted on such date.  The Administrative Agent shall
provide the Borrower with a statement setting forth the basis for requesting
such compensation and the method for determining the amount
thereof.  Any such statement shall be conclusive absent manifest
error.

    

    
      Section 4.5.  Treatment
of Affected Loans.

    

     

    If the obligation of any Lender to make
LIBOR Loans or to Continue, shall be suspended pursuant to Section 4.1.(c),
Section 4.2. or Section 4.3. then such Lender’s LIBOR Loans shall be
automatically Converted into Base Rate Loans on the last day(s) of the then
current Interest Period(s) for LIBOR Loans and, unless and until such Lender
gives notice as provided below that the circumstances specified in
Section 4.1.(c), Section 4.2. or Section 4.3. that gave rise to
such Conversion no longer exist:

    

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

    

    (ii)          all
Loans that would otherwise be made or Continued by such Lender as LIBOR Loans
shall be made or Continued instead as Base Rate Loans.

    

    If such
Lender gives notice to the Borrower (with a copy to the Administrative Agent)
that the circumstances specified in Section 4.2 or 4.3. that gave rise to
the Conversion of such Lender’s LIBOR Loans pursuant to this Section no longer
exist (which such Lender agrees to do promptly upon such circumstances ceasing
to exist) at a time when LIBOR Loans made by other Lenders are outstanding, then
such Lender’s Base Rate Loans shall be automatically Converted, on the first
day(s) of the next succeeding Interest Period(s) for such outstanding LIBOR
Loans, to the extent necessary so that, after giving effect thereto, all Loans
held by the Lenders holding LIBOR Loans and by such Lender are held pro rata (as
to principal amounts and Interest Periods) in accordance with their respective
Commitments.

    
      
         

      

      
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      Section 4.6.  Affected
Lenders.

    

     

    If (a) a Lender requests
compensation pursuant to Section 3.10. or 4.1., and the Requisite Lenders
are not also doing the same, or (b) the obligation of any Lender to make
LIBOR Loans or to Continue LIBOR Loans shall be suspended pursuant to
Section 4.1.(b) or 4.3. but the obligation of the Requisite Lenders shall
not have been suspended under such Sections, then, so long as there does not
then exist any Default or Event of Default, the Borrower may demand that such
Lender (the “Affected Lender”), and upon such demand the Affected Lender shall
promptly, assign its Commitment to an Eligible Assignee subject to and in
accordance with the provisions of Section 12.6.(b) for a purchase price
equal to the aggregate principal balance of all Loans then owing to the Affected
Lender plus any accrued but unpaid interest thereon and accrued but unpaid fees
owing to the Affected Lender, or any other amount as may be mutually agreed upon
by such Affected Lender and Eligible Assignee.  Each of the
Administrative Agent and the Affected Lender shall reasonably cooperate in
effectuating the replacement of such Affected Lender under this Section, but at
no time shall the Administrative Agent, such Affected Lender nor any other
Lender be obligated in any way whatsoever to initiate any such replacement or to
assist in finding an Eligible Assignee.  The exercise by the Borrower
of its rights under this Section shall be at the Borrower’s sole cost and
expense and at no cost or expense to the Administrative Agent, the Affected
Lender or any of the other Lenders.  The terms of this Section shall
not in any way limit the Borrower’s obligation to pay to any Affected Lender
compensation owing to such Affected Lender pursuant to this Agreement
(including, without limitation, pursuant to Sections 3.10., 4.1. or 4.4.)
with respect to any period up to the date of replacement.

    

    
      Section 4.7.  Change
of Lending Office.

    

     

    Each Lender agrees that it will use
reasonable efforts (consistent with its internal policy and legal and regulatory
restrictions) to designate an alternate Lending Office with respect to any of
its Loans affected by the matters or circumstances described in
Sections 3.10., 4.1. or 4.3. to reduce the liability of the Borrower or
avoid the results provided thereunder, so long as such designation is not
disadvantageous to such Lender as determined by such Lender in its sole
discretion, except that such Lender shall have no obligation to designate a
Lending Office located in the United States of America.

    

    
      Section 4.8.  Assumptions
Concerning Funding of LIBOR Loans.

    

     

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

    

    Article
V. Conditions Precedent

     

    
      Section 5.1.  Initial
Conditions Precedent.

    

     

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

    
      
         

      

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

    

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

    

    (ii)          Revolving
Notes executed by the Borrower, payable to each applicable Lender and complying
with the terms of Section 2.12.(a);

    

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

    

    (iv)         Pledge
of Membership Interest

    

    (v)          Pocket
Mortgage

    

    (vi)         Assignment
of Mortgage Note, if any

    

    (vii)     
  an opinion of counsel to the Borrower and the other Loan Parties,
addressed to the Administrative Agent and the Lenders and covering the matters
set forth in Exhibit
G;

    

    (viii)     
  Title, survey, and leases for each Borrowing Base Property (as
ordered by the Borrower)

    

    (ix)        
property inspections, appraisals and environmental assessments and reports for
each of the Borrowing Base Properties (as ordered by the Lender).

    

    (x)          
Certificate of the Borrower certifying that it has not received a condemnation
notice and to its knowledge there is not threatened condemnation on any of the
Borrowing Base Properties.

    

    (xi)         
 Environmental Indemnity Agreement

    

    (xii)         
Insurance for each Borrowing Base Property (including but not limited to hazard,
liability, rent loss and flood insurance (if applicable)) as specifically
described on Exhibit
H attached hereto;

    

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

    

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

    

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

    
      
         

      

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

    

    (xvii)      a
Compliance Certificate calculated on a pro forma basis for the Borrower’s fiscal
quarter ending September 30, 2010;

    

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

    

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

    

    (xxi)        Title
Bring Downs as may be required by Lender; and

    

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

    

    

    
      Section 5.2.  Conditions
Precedent to All Loans and Letters of Credit.

    

     

    The obligations of (i) Lenders to make
any Loans and (ii) the Issuing Bank to issue Letters of Credit are each subject
to the further conditions precedent that: (a) no Default or Event of
Default shall exist as of the date of the making of such Loan or date of
issuance of such Letter of Credit or would exist immediately after giving effect
thereto, and no violation of the limits described in Section 2.10. would
occur after giving effect thereto; (b) the representations and warranties
made or deemed made by the Borrower and each other Loan Party in the Loan
Documents to which any of them is a party, shall be true and correct on and as
of the date of the making of such Loan or date of issuance of such Letter of
Credit with the same force and effect as if made on and as of such date except
to the extent that such representations and warranties expressly relate solely
to an earlier date (in which case such representations and warranties shall have
been true and accurate on and as of such earlier date) and except for changes in
factual circumstances not prohibited hereunder; (c) in the case of the
borrowing of Revolving Loans, the Administrative Agent shall have received a
timely Notice of Borrowing and a Borrowing Base Certificate, and (d) in the
case of the issuance of a Letter of Credit, no Lender shall be a Defaulting
Lender or Potential Defaulting Lender; provided, however, in the case of the
issuance of a Letter of Credit, the Issuing Bank may, in its sole and absolute
discretion, waive this condition precedent on behalf of itself and all Lenders
if cash collateral or other credit support satisfactory to the Issuing Bank has
been pledged or otherwise provided to the Administrative Agent for the benefit
of the Issuing Bank in respect of such Defaulting Lender’s or Potential
Defaulting Lender’s participation in such Letter of Credit in accordance with
Section 2.2.(l).  Each Credit Event shall constitute a
certification by the Borrower to the effect set forth in the preceding sentence
(both as of the date of the giving of notice relating to such Credit Event and,
unless the Borrower otherwise notifies the Administrative Agent prior to the
date of such Credit Event, as of the date of the occurrence of such Credit
Event).  In addition, the Borrower shall be deemed to have represented
to the Administrative Agent and the Lenders at the time any Loan is made or any
Letter of Credit is issued that all conditions to the making of such Loan or
issuing of such Letter of Credit contained in this Section 5.2 have been
satisfied (and such additional requests for documents, certificate, instruments,
reports, assessments searches, etc as may be reasonably requested by the
Administrative Agent from time to time).

    
      
         

      

      
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    Article
VI. Representations and Warranties

     

    
      Section 6.1.  Representations
and Warranties.

    

     

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

    

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

    

    (b)           Ownership
Structure.  Part I of Schedule 6.1.(b) is, as of the
Agreement Date, a complete and correct list of all Subsidiaries of the Borrower
setting forth for each such Subsidiary, (i) the jurisdiction of
organization of such Subsidiary, (ii) each Person holding any Equity
Interests in such Subsidiary, (iii) the nature of the Equity Interests held
by each such Person, (iv) the percentage of ownership of such Subsidiary
represented by such Equity Interests, and (v) whether such Subsidiary is a
Subsidiary Guarantor.  As of the Agreement Date, except as disclosed
in such Schedule, (A) the Borrower owns, free and clear of all Liens (other
than Permitted Liens (but not Permitted Liens of the type described in clauses
(f) and (g) of the definition of such term)), and has the unencumbered right to
vote, all outstanding Equity Interests in each Subsidiary Guarantor,
(B) all of the issued and outstanding capital stock of each Subsidiary
Guarantor organized as a corporation is validly issued, fully paid and
nonassessable and (C) there are no outstanding subscriptions, options,
warrants, commitments, preemptive rights or agreements of any kind (including,
without limitation, any stockholders’ or voting trust agreements) for the
issuance, sale, registration or voting of, or outstanding securities convertible
into, any additional shares of capital stock of any class, or partnership or
other ownership interests of any type in, any Subsidiary.  As of the
Agreement Date, Part II of Schedule 6.1.(b) correctly sets forth all
Unconsolidated Affiliates of Parent Guarantor, including the correct legal name
of such Person, the type of legal entity which each such Person is, all Equity
Interests in such Person held directly or indirectly by Parent Guarantor’s
Ownership Share of each such Unconsolidated Affiliate.  All
debentures, bonds, notes and all other securities of each Loan Party and their
respective Subsidiaries presently issued and outstanding are validly and
properly issued in accordance with all applicable laws, including, but not
limited to, the "Blue Sky" laws of all applicable states and the federal
securities laws.

    
      
         

      

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

    

    (d)           Compliance of Loan Documents
with Laws.  The execution, delivery and performance of this
Agreement, the other Loan Documents to which any Loan Party is a party in
accordance with their respective terms and the borrowings and other extensions
of credit hereunder do not and will not, by the passage of time, the giving of
notice, or both:  (i) require any Governmental Approval or
violate any Applicable Law (including all Environmental Laws) relating to the
Borrower or any other Loan Party in any material respect, except for
Governmental Approvals already obtained; (ii) conflict with, result in a
breach of or constitute a default under the organizational documents of any Loan
Party, or any Material Contract; or (iii) result in or require the creation
or imposition of any Lien upon or with respect to any property now owned or
hereafter acquired by any Loan Party other than in favor of the Administrative
Agent for its benefit and the benefit of the Lenders and the Issuing
Bank.

    

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

    

    (f)           Title to Properties;
Liens.  Part I of Schedule 6.1.(f) is, as of the Agreement
Date, a complete and correct listing of all Properties of the Borrower and each
Loan Party, setting forth, for each such Property, and the current Occupancy
Rate of such Property.  Each of the Borrower and each Loan Party has
good, marketable and legal title to, or a valid leasehold interest in, its
respective material assets.  As of the Agreement Date, there are no
Liens on any material assets of the Borrower or any Loan Party except for
Permitted Liens.

    

    (g)           Existing
Indebtedness.  Schedule 6.1.(g) is, as of the Agreement
Date, a complete and correct listing of all Indebtedness (including all
Guarantees) of each of the Borrower and the other Loan Parties, and if such
Indebtedness is secured by any Lien, a description of all of the property
subject to such Lien. As of the Agreement Date, the Borrower and the other Loan
Parties have performed and are in compliance with all of the terms of such
Indebtedness and all instruments and agreements relating thereto in all material
respects, and there exists no default or event of default, or event or condition
which with the giving of notice, the lapse of time, or both, would constitute a
material default or event of default, with respect to any such
Indebtedness.

    

    (h)           Material
Contracts.  Schedule 6.1.(h) is, as of the Agreement Date,
a true, correct and complete listing of all Material Contracts.  Each
of the Borrower and the other Loan Parties that is party to any Material
Contract has performed and is in compliance with all of the terms of such
Material Contract, and there exists no default or event of default, or event or
condition which with the giving of notice, the lapse of time, or both, would
constitute such a default or event of default, with respect to any such Material
Contract.

    

    (i)        
   Litigation.  Except
as set forth on Schedule 6.1.(i), there are no actions, suits or
proceedings pending (nor, to the knowledge of any Loan Party, are there any
actions, suits or proceedings threatened) against or affecting the Borrower, any
other Loan Party, any other Subsidiary or any of their respective property in
any court or before any arbitrator of any kind or before or by any other
Governmental Authority which, (i) could reasonably be expected to have a
Material Adverse Effect or (ii) in any manner draws into question the validity
or enforceability of any Loan Documents.

    
      
         

      

      
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    (j)           Taxes.  All
federal, state and other material tax returns of the Borrower and each other
Loan Party required by Applicable Law to be filed have been duly filed, and all
federal, state and other material taxes, assessments and other governmental
charges or levies upon each Loan Party and their respective properties, income,
profits and assets which are due and payable have been paid, except any such
nonpayment or non-filing which is at the time permitted under Section 7.6
or additionally with respect to property taxes, non-payment shall not constitute
a breach of the representations set forth in this subclause (j) if the Borrower
shall have paid the property taxes for any Property not timely paid by the
tenant thereof within 15 days of the time that the Borrower or Subsidiary
Guarantor has received notice of non-payment.  No Loan Party is aware
of or has received notice of any delinquency or nonpayment of property
taxes.  To the best knowledge of Parent Guarantor and the Borrower, as
of the Agreement Date, none of the United States income tax returns of the
Borrower or any other Loan Party is under audit.  All charges,
accruals and reserves on the books of the Borrower and the other Loan Parties in
respect of any material taxes or other governmental charges are in accordance
with GAAP in all material respects.

    

    (k)           Financial
Statements.  The Borrower has furnished to each Lender copies
of (i) the audited consolidated balance sheet of Parent Guarantor and its
consolidated Subsidiaries for the fiscal year ended December 31, 2009, and the
related audited consolidated statements of operations and income and cash flow
for the fiscal year ended on such date, with the opinion thereon of Price
Waterhouse Coopers LLP, and (ii) the unaudited consolidated balance sheet
of Parent Guarantor and its consolidated Subsidiaries for the fiscal quarter
ended September 30, 2010, and the related unaudited consolidated statements of
net income of Parent Guarantor and its consolidated Subsidiaries for the fiscal
quarter ended on such date.  Such financial statements (including in
each case related schedules and notes) are complete and correct in all material
respects and present fairly, in accordance with GAAP consistently applied
throughout the periods involved, the consolidated financial position of Parent
Guarantor and its consolidated Subsidiaries as at their respective dates and the
results of operations and the cash flow for such periods (subject, as to interim
statements, to changes resulting from normal year-end audit
adjustments).  Neither the Borrower nor any Subsidiary Guarantor has
on the Agreement Date any material contingent liabilities, liabilities,
liabilities for taxes, unusual or long-term commitments or unrealized or forward
anticipated losses from any unfavorable commitments that would be required to be
set forth in its financial statements or notes thereto, except as referred to or
reflected or provided for in said financial statements.

    

    (l)          
 No Material
Adverse Change.  Since September 30, 2010, there has been no
event, change, circumstance or occurrence that could reasonably be expected to
have a Material Adverse Effect.  Each of the Borrower, the other Loan
Parties and the other Subsidiaries is Solvent and after giving effect to the
execution and delivery of the Loan Documents and the making of the Advances
under this Agreement will remain Solvent.

    

    (m)          ERISA.

    

     
(i)           Each
Benefit Arrangement is in compliance with the applicable provisions of ERISA,
the Internal Revenue Code and other Applicable Laws in all material
respects.  Except with respect to Multiemployer Plans, each Qualified
Plan (A) has received a favorable determination, opinion or advisory letter
from the Internal Revenue Service that covers all plan provisions of and
amendment to such Qualified Plans.  To the best knowledge of Parent
Guarantor (which includes due inquiry having been made), nothing has occurred
which would cause the loss of reliance on the Qualified Plan’s favorable
determination letter or opinion letter.

    
      
         

      

      
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(ii)           With
respect to any Benefit Arrangement that provides welfare benefits (as defined in
Section 3(1) of ERISA) to retired employees, all liabilities for such benefits
have been accrued on the Borrower’s financial statements in accordance with FASB
ASC 715.  The “benefit obligation” of all Plans does not exceed the
“fair value of plan assets” for such Plans by more than $10,000,000 all as
determined by and with such terms defined in accordance with FASB ASC
715.

    

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

    

     
(iv)           To the
knowledge of the Parent Guarantor, neither the Borrower nor any other Loan Party
is an entity whose assets are deemed to be “plan assets” as that term is defined
in the Plan Asset Regulations.

    

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

    
      
         

      

      
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    (o)           Environmental
Laws.  From time to time the Borrower and other applicable Loan
Party  will conduct reviews of the effect of Environmental Laws on
such Properties that have reasonably and in good faith been identified by a Loan
Party or the Administrative Agent as properties which if not diligently
administered, could cause the Loan Parties not to be in compliance with the
requirements of the Loan Documents applicable to environmental matters,
including without limitation, Properties that a Loan Party identifies and
evaluates associated actual and potential liabilities and costs (including,
without limitation, determining whether any capital or operating expenditures
are required for clean-up or closure of properties presently or previously
owned, determining whether any capital or operating expenditures are required to
achieve or maintain compliance in all material respects with Environmental Laws
or required as a condition of any Governmental Approval, any contract, or any
related constraints on operating activities, determining whether any costs or
liabilities exist in connection with on-site or off-site treatment, storage,
handling and disposal of wastes or Hazardous Materials, and determining whether
any actual or potential liabilities to third parties, including employees, and
any related costs and expenses exist).  Each of the Borrower, each
other Loan Party and each other Subsidiary: (i) is in compliance with all
Environmental Laws applicable to its business, operations and the Properties,
(ii) has obtained all Governmental Approvals which are required under
Environmental Laws, and each such Governmental Approval is in full force and
effect, and (iii) is in compliance with all terms and conditions of such
Governmental Approvals, where with respect to each of the immediately preceding
clauses (i) through (iii) the failure to obtain or to comply with could
reasonably be expected to have a Material Adverse Effect.  Except for
any of the following matters that could not reasonably be expected to have a
Material Adverse Effect, no Loan Party has any knowledge of any notice of, any
past, present, or pending releases, events, conditions, circumstances,
activities, practices, incidents, facts, occurrences, actions, or plans that,
with respect to any Loan Party or any other Subsidiary, their respective
businesses, operations or with respect to the Properties, shall:  (x)
cause or contribute to an actual or alleged violation of or noncompliance with
Environmental Laws, (y) cause or contribute to any other potential common-law or
legal claim or other liability under Applicable Law, or (z) cause any
Property of the Borrower, any other Loan Party or any other Subsidiary to become
subject to any restrictions on ownership, occupancy, use or transferability
under any Environmental Law or require the filing or recording of any notice,
approval or disclosure document under any Environmental Law and, with respect to
the immediately preceding clauses (x) through (z) is based on or related to the
on-site or off-site manufacture, generation, processing, distribution, use,
treatment, storage, disposal, transport, removal, clean up or handling, or the
emission, discharge, release or threatened release of any wastes or Hazardous
Material in violation of Environmental Laws, or any other requirement under
Environmental Laws.  There is no civil, criminal, or administrative
action, suit, demand, claim, hearing, notice, or demand letter, mandate, order,
lien, request, investigation (of which investigation the Borrower has received
notice), or proceeding pending or, to the Borrower’s knowledge after due
inquiry, threatened, against the Borrower, any other Loan Party or any other
Subsidiary relating in any way to Environmental Laws which, reasonably could be
expected to have a Material Adverse Effect.  None of the Properties is
listed on or proposed for listing on the National Priority List promulgated
pursuant to the Comprehensive Environmental Response, Compensation and Liability
Act of 1980 and its implementing regulations, or any state or local priority
list promulgated pursuant to any analogous state or local law.  To the
Borrower’s knowledge, no Hazardous Materials generated at or transported from
the Properties are or have been transported to, or disposed of at, any location
that is listed or proposed for listing on the National Priority List or any
analogous state or local priority list, or any other location that is or has
been the subject of a clean-up, removal or remedial action pursuant to any
Environmental Law, except to the extent that such transportation or disposal
could not reasonably be expected to result in a Material Adverse
Effect.

    

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

    

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

    

    (r)           Affiliate
Transactions.  Except as permitted by Section 9.8. or as
otherwise set forth on Schedule 6.1.(r), none of the Borrower or any other Loan
Party is a party to or bound by any agreement or arrangement  with any
Affiliate, excluding governance documents.

    
      
         

      

      
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    (s)           Intellectual
Property.  Each of the Borrower and the other Loan Parties owns
or has the right to use, under valid license agreements or otherwise, all
material patents, licenses, franchises, trademarks, trademark rights, service
marks, service mark rights,  trade names, trade name rights, trade
secrets and copyrights (collectively, “Intellectual Property”) necessary to the
conduct of its businesses, to their knowledge, without known conflict with any
patent, license, franchise, trademark, trademark right, service mark, service
mark right, trade secret, trade name, copyright, or other proprietary right of
any other Person that could reasonably be expected to have a Material Adverse
Effect.  All such Intellectual Property is fully protected and/or duly
and properly registered, filed or issued in the appropriate office and
jurisdictions for such registrations, filing or issuances, except to the extent
the lack of registration, filing or issuance could not reasonably be expected to
have a Material Adverse Effect.  No material claim has been asserted
by any Person with respect to the use of any such Intellectual Property by the
Borrower or any other Loan Party, or challenging or questioning the validity or
effectiveness of any such Intellectual Property.

    

    (t)           Business.  As
of the Agreement Date, the Borrower and the other Loan Parties are predominantly
engaged in the business of acquiring, owning, operating, managing, leasing,
developing and re-developing office, manufacturing, retail, distribution, data
center, medical/health care, flex or industrial properties and making mortgage
loans with respect to commercial real estate, together with other business
activities reasonably related or incidental thereto.

    

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

    

    (v)           Accuracy and Completeness of
Information.  All written information, reports and other papers
and data (other than financial statements, financial projections and other
forward looking statements) furnished to the Administrative Agent or any Lender
by, on behalf of, or at the direction of, the Borrower, any other Loan Party or
any other Subsidiary in connection with or relating in any way to this Agreement
or any other Loan Document were, at the time the same were so furnished,
complete and correct in all material respects when taken as a whole, to the
extent necessary to give the recipient a true and accurate knowledge of the
subject matter.  All financial projections and other forward looking
statements prepared by or on behalf of the Borrower, any other Loan Party or any
other Subsidiary that have been or may hereafter be made available to the
Administrative Agent or any Lender were or will be prepared in good faith based
on reasonable assumptions (it being understood that actual results may vary from
such projections, and such projections do not and are not intended to provide
any guarantee or assurance that actual results will be consistent with such
projections).  No fact is known to any Loan Party which has had, or
may reasonably be expect to in the future have (so far as any Loan Party can
reasonably foresee), a Material Adverse Effect which has not been set forth in
the financial statements referred to in Section 6.1.(k) or in such
information, reports or other papers or data or otherwise disclosed in writing
to the Administrative Agent and the Lenders.  No document furnished or
written statement made to the Administrative Agent or any Lender in connection
with the negotiation, preparation or execution of, or pursuant to, this
Agreement or any of the other Loan Documents contains or will contain any untrue
statement of a material fact, or omits or will omit to state a material fact
necessary in order to make the statements contained therein not misleading when
taken as a whole.

    
      
         

      

      
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    (w)           OFAC/USA PATRIOT
Act.  None of the Borrower, any of the other Loan Parties or
any of the other Subsidiaries: (i) is a person named on the list of Specially
Designated Nationals or Blocked Persons maintained by the U.S. Department of the
Treasury’s Office of Foreign Assets Control (“OFAC”) available at
http://www.treas.gov/offices/enforcement/ofac/index.shtml or as otherwise
published from time to time; (ii) is (A) an agency of the government of a
country, (B) an organization controlled by a country, or (C) a person resident
in a country that is subject to a sanctions program identified on the list
maintained by OFAC and available at
http://www.treas.gov/offices/enforcement/ofac/index.shtml, or as otherwise
published from time to time, as such program may be applicable to such agency,
organization or person; or (iii) derives any of its assets or operating income
from investments in or transactions with any such country, agency, organization
or person; and none of the proceeds from any Loan, and none of the Letters of
Credit, will be used to finance any operations, investments or activities in, or
make any payments to, any such country, agency, organization, or person. None of
the Loan Parties, nor any of their respective Subsidiaries, is in violation of
any laws relating to terrorism or money laundering, including, without
limitation, the Patriot Act, except as may be disclosed in writing to the
Administrative Agent and the Lenders.  No Loan Party nor any
Subsidiary or Unconsolidated Affiliate of the Parent Guarantor is (1) a Person
that resides or has a place of business in a country or territory named on the
OFAC list or which is designated as a Non- Cooperative Jurisdiction by the
Financial Action Task Force on Money Laundering ("FATF"), or whose subscription
funds are transferred from or through such a jurisdiction; (2) a "Foreign Shell
Bank" within the meaning of the USA PATRIOT Act, i.e., a foreign bank that does
not have a physical presence in any country and that is not affiliated with a
bank that has a physical presence and an acceptable level of regulation and
supervision; or (3) a person or entity that resides in or is organized under the
laws of a jurisdiction designated by the United States Secretary of the Treasury
under Section 311 or 312 of the USA PATRIOT Act as warranting special measures
due to money laundering concerns.

    

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

    

    (y)           Public Utility Holding
Company Act. No Loan Party nor any Subsidiary of a Loan Party is a
"holding company", or a "subsidiary company" of a "holding company", or an
"affiliate" of a "holding company" or of a "subsidiary company" of a "holding
company", as such terms are defined in the Public Utility Holding Company Act of
2005, as may be amended.

    

    (y)           Labor Matters. There
are no significant strikes or lockouts, or, to the knowledge of any Loan Party,
there are no slowdowns or other labor disputes against any Loan Party or any
Subsidiary of any Loan Party pending or, to the knowledge of any Loan Party,
threatened. The hours worked by and payment made to employees of the Loan
Parties have been in material compliance with the Fair Labor Standards Act and
any other applicable federal, state or foreign law dealing with such
matters.

    

    (z)           Tax Shelter
Regulations. The Borrower does not intend to treat the Advances and
related transactions as being a "reportable transaction" (within the meaning of
Treasury Regulation Section 1.6011-4). In the event the Borrower determines to
take any action inconsistent with such intention, they will promptly notify
Administrative Agent thereof. If the Borrower so notifies Administrative Agent,
Borrower acknowledges that one or more of the Banks may treat its Advances as
part of a transaction that is subject to Treasury Regulation 301.6112-1, and
that such Bank or Banks, as applicable, will maintain the lists and other
records required by such Treasury Regulation.

    

    
      Section 6.2.  Survival
of Representations and Warranties, Etc.

    

     

    All statements contained in any
certificate, financial statement or other Loan Document delivered by or on
behalf of any Loan Party or any other Subsidiary to the Administrative Agent or
any Lender pursuant to or in connection with this Agreement or any of the other
Loan Documents (including, but not limited to, any such statement made in or in
connection with any amendment thereto or any statement contained in any
certificate, financial statement or other instrument delivered by or on behalf
of any Loan Party prior to the Agreement Date and delivered to the
Administrative Agent or any Lender in connection with the underwriting or
closing the transactions contemplated hereby) shall constitute representations
and warranties made by the Borrower under this Agreement.  All
representations and warranties made under this Agreement and the other Loan
Documents shall be deemed to be made at and as of the Agreement Date, the
Effective Date, the date on which any extension of the Termination Date is
effectuated pursuant to Section 2.14. and at and as of the
date of the occurrence of each Credit Event, except to the extent that such
representations and warranties expressly relate solely to an earlier date (in
which case such representations and warranties shall have been true and accurate
on and as of such earlier date) and except for changes in factual circumstances
not prohibited hereunder.  All such representations and warranties
shall survive the effectiveness of this Agreement, the execution and delivery of
the Loan Documents and the making of the Loans and the issuance of the Letters
of Credit.

    
      
         

      

      
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    Article
VII. Affirmative Covenants

     

    For so long as this Agreement is in
effect, unless the Requisite Lenders (or, if required pursuant to
Section 12.7., all of the Lenders) shall otherwise consent in the manner
provided for in Section 12.7., the Borrower shall comply with the following
covenants:

    

    
      Section 7.1.  Preservation
of Existence and Similar Matters.

    

     

    Except as otherwise permitted under
Section 9.4., the Borrower shall, and shall cause each other Loan Party to,
preserve and maintain its respective existence, rights, franchises, licenses and
privileges in the jurisdiction of its incorporation or formation and qualify and
remain qualified and authorized to do business in each jurisdiction in which the
character of its properties or the nature of its business requires such
qualification and authorization and where the failure to be so authorized and
qualified could reasonably be expected to have a Material Adverse
Effect.

    

    
      Section 7.2.  Compliance
with Applicable Law.

    

     

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

    

    
      Section 7.3.  Maintenance
of Property.

    

     

    In addition to the requirements of any
of the other Loan Documents, the Borrower, subject to the terms and conditions
of the leases of any applicable Property, shall, and shall cause each other Loan
Party to, (a) protect and preserve all of the Borrowing Base Properties,
including, but not limited to, all material Intellectual Property necessary to
the conduct of its respective business, and maintain in good repair, working
order and condition all material tangible properties, ordinary wear and tear
excepted, and (b) from time to time make or cause to be made all needed and
appropriate repairs, renewals, replacements and additions to such Borrowing Base
Properties, so that the business carried on in connection therewith may be
properly conducted at all times.

    

    
      Section 7.4.  Conduct
of Business.

    

     

    The Borrower shall, and shall cause
each other Loan Party to, carry on its respective businesses as described in
Section 6.1.(t) and not enter into any line of business not described in
Section 6.1.(t).

    

    
      Section 7.5.  Insurance.

    

     

    In addition to the requirements of any
of the other Loan Documents, the Borrower shall, and shall cause each other Loan
Party to, maintain insurance with financially sound and reputable insurance
companies against such risks and in such amounts as is customarily maintained by
Persons engaged in similar businesses in similar geographic areas or as may be
required by Applicable Law. The Borrower shall, and shall cause each Subsidiary
that is not a Loan Party to, maintain insurance with financially sound and
reputable insurance companies against such risks and in such amounts as is
customarily maintained  by persons engaged in similar businesses in
similar geographic areas or as may be required by Applicable Law.  The
Borrower shall from time to time deliver to the Administrative Agent upon
request a detailed list, together with proof of all policies of the insurance
then in effect, stating the names of the insurance companies, the amounts and
rates of the insurance, the dates of the expiration thereof and the properties
and risks covered thereby.

    
      
         

      

      
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      Section 7.6.  Payment
of Taxes and Claims.

    

     

    The Borrower shall, and shall cause
each other Loan Party to, pay and discharge when due (a) all material
taxes, assessments and governmental charges or levies imposed upon it or upon
its income or profits or upon any properties belonging to it, and (b) all
lawful claims of materialmen, mechanics, carriers, warehousemen and landlords
for labor, materials, supplies and rentals which, if unpaid, might become a Lien
on any material properties of such Person; provided, however, that this Section
shall not require the payment or discharge of any such tax, assessment, charge,
levy or claim which is being contested in good faith by appropriate proceedings
which operate to suspend the collection thereof and for which adequate reserves
have been established on the books of such Person in accordance with
GAAP.  The Borrower shall, and shall cause each Subsidiary that is not
a Loan Party to, pay and discharge when due all material taxes, assessments and
governmental charges or levies imposed upon it or upon its income or profits or
upon any properties belonging to it.

    

    
      Section 7.7.  Books
and Records; Inspections.

    

     

    The Borrower shall, and shall cause
each other Loan Party to, keep proper books of record and account in which full,
true and correct entries shall be made of all dealings and transactions in
relation to its business and activities.  The Borrower shall, and
shall cause each other Loan Party to, permit representatives of the
Administrative Agent or any Lender to visit and inspect any of their respective
properties (subject to the rights of tenants), to examine and make abstracts
from any of their respective books and records and to discuss their respective
affairs, finances and accounts with their respective officers, employees and
independent public accountants (in the presence of an officer of the Borrower if
an Event of Default does not then exist), all at such reasonable times during
business hours and as often as may reasonably be requested (but not more often
than once per calendar year until the occurrence of an Event of Default, at
which time then Administrative Agent or any Lender may thereafter visit and
inspect as often as deemed necessary or desirable) and upon reasonable prior
notice.  The Borrower shall be obligated to reimburse the
Administrative Agent and the Lenders for their costs and expenses incurred in
connection with the exercise of their rights under this Section once per
calendar year prior to the occurrence of an Event of Default and for all visits
and inspections while a Default or Event of Default exists.  If
requested by the Administrative Agent, the Borrower shall execute an
authorization letter addressed to its accountants authorizing the Administrative
Agent or any Lender to discuss the financial affairs of the Borrower, any other
Loan Party or any other Subsidiary with the Borrower’s accountants.

    

    
      Section 7.8.  Use
of Proceeds.

    

     

    The Borrower will use the proceeds of
Loans only for the general working capital, capital expenditures and other
general corporate purposes (including without limitation, property acquisitions
and improvements, and mortgage note purchases).  The Borrower shall
only use Letters of Credit for the same purposes for which it may use the
proceeds of Loans.  The Borrower shall not, and shall not permit any
other Loan Party or any other Subsidiary to, use any part of such proceeds to
purchase or carry, or to reduce or retire or refinance any credit incurred to
purchase or carry, any margin stock (within the meaning of Regulation U or
Regulation X of the Board of Governors of the Federal Reserve System) or to
extend credit to others for the purpose of purchasing or carrying any such
margin stock.

    
      
         

      

      
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      Section 7.9.  Environmental
Matters.

    

     

    The Borrower shall, and shall cause
each other Loan Party and each other Subsidiary to, comply with all
Environmental Laws the failure with which to comply could reasonably be expected
to have a Material Adverse Effect.  The Borrower shall comply, and
shall cause each other Loan Party and each other Subsidiary to comply, and the
Borrower shall use, and shall cause each other Loan Party and each other
Subsidiary to use, commercially reasonable efforts, subject to the terms and
conditions of the lease of any applicable Property, to cause all other Persons
occupying, using or present on the Properties to comply, with all Environmental
Laws in all material respects.  The Borrower shall, and shall cause
each other Loan Party, subject to the terms and conditions of the lease of any
applicable Property, and each other Subsidiary to, promptly take all actions and
pay or arrange to pay all costs necessary for it and for the Properties to
comply in all material respects with all Environmental Laws and all Governmental
Approvals, including actions to remove and dispose of all Hazardous Materials
and to clean up the Properties as required under Environmental
Laws.  The Borrower shall, and shall cause each other Loan Party and
each other Subsidiary to, promptly take all actions necessary to prevent the
imposition of any Liens on any of their respective properties arising out of or
related to any Environmental Laws.  Nothing in this Section shall
impose any obligation or liability whatsoever on the Administrative Agent or any
Lender.

    

    
      Section 7.10.  Further
Assurances.

    

     

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

    

    
      Section
7.11.  Material Contracts.

    

     

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

    

    
      Section 7.12.  Guarantors.

    

     

    If any Person becomes a Subsidiary
Guarantor after the Effective Date, the Borrower shall deliver to the
Administrative Agent each of the following items, each in form and substance
satisfactory to the Administrative Agent: (i) a Subsidiary Guaranty and an
Accession Agreement executed by such Subsidiary Guarantor, and (ii) the
items that would have been delivered under subsections (iv) including the
certificated interests pledged, (v), (vi), (vii), (xiii), (ix), (x), (xii),
(xiii), (xiv), (xv) and (xx) of Section 5.1.(a) if such Subsidiary had been
a Subsidiary Guarantor on the Agreement Date within the timeframes specified in
Section 2.4.

    

    
      Section 7.13.  REIT
Status.

    

     

    The Borrower shall at all times take,
or cause to be taken, all actions necessary for Parent Guarantor to maintain its
status as a REIT.

    
      
         

      

      
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    Section 7.14 Deposit Account.

    

    The Borrower shall have opened and
transferred its primary cash management and operating Deposit Account to the
Administrative Agent.

    

    Article
VIII. Information

     

    For so long as this Agreement is in
effect, unless the Requisite Lenders (or, if required pursuant to
Section 12.7., all of the Lenders) shall otherwise consent in the manner
set forth in Section 12.7., the Borrower shall furnish to the
Administrative Agent and shall cause the Parent Guarantor to furnish to the
Administrative Agent, for distribution to each of the Lenders:

    

    
      Section 8.1.  Quarterly
Financial Statements.

    

     

    As soon as available and in any event
within 45 days after the end of each of the first, second and third fiscal
quarters of the Borrower, the unaudited consolidated balance sheet of the
Borrower, the Parent Guarantor and its Subsidiaries as at the end of such period
and the related unaudited consolidated statements of operations and equity of
the Borrower, the Parent Guarantor and its Subsidiaries for such period, setting
forth in each case in comparative form the figures as of the end of and for the
corresponding periods of the previous fiscal year, all of which shall be in form
and detail reasonably satisfactory to the Administrative Agent and shall be
certified by the chief executive officer or chief financial officer of the
Borrower, in his or her opinion, to present fairly, in accordance with GAAP on
the same basis as used in preparation of the Parent Guarantor’s Form 10-Q
statements filed with the SEC, and in all material respects, the consolidated
financial position of the Borrower, the Parent Guarantor and its Subsidiaries as
at the date thereof and the results of operations for such period (subject to
normal year-end audit adjustments), provided that the Form 10-Q filed with the
SEC shall satisfy the requirements hereof.

    

    
      Section 8.2.  Year-End
Statements.

    

     

    As soon as available and in any event
within 90 days after the end of each fiscal year of the Borrower, the audited
consolidated balance sheet of the Borrower, the Parent Guarantor and its
Subsidiaries as at the end of such fiscal year and the related audited
consolidated statements of operations and comprehensive income, equity and cash
flows of the Borrower, the Parent Guarantor and its Subsidiaries for such fiscal
year, setting forth in comparative form the figures as at the end of and for the
previous fiscal year, all of which shall be in form and detail reasonably
satisfactory to the Administrative Agent and shall be (a) certified by the
chief executive officer or chief financial officer of the Borrower, in his or
her opinion, to present fairly, in accordance with GAAP and in all material
respects, the consolidated financial position of the Borrower and its
Subsidiaries as of the date thereof and the results of operations for such
period and (b) accompanied by the report thereon of independent certified
public accountants of recognized national standing acceptable to the
Administrative Agent, whose report shall be unqualified and in scope and
substance reasonably satisfactory to the Requisite Lenders and who shall have
authorized the Borrower to deliver such financial statements and report thereon
to the Administrative Agent and the Lenders pursuant to this Agreement, provided
that the Form 10-K filed with the SEC shall satisfy the requirements
hereof.

    

    Section 8.3.  Other
Reports.  As soon as practicable, but in any event not later
than ninety (90) days after the end of each fiscal year of the Parent Guarantor,
copies of the Form 10-K statement filed by the Parent Guarantor with the SEC for
such fiscal year, and as soon as practicable, but in any event not later than
forty-five (45) days after the end of each of the first three fiscal quarters of
the fiscal year of the Parent Guarantor, copies of the Form 10-Q statement filed
by the Parent Guarantor with the SEC for such fiscal quarter, provided that, in
either case, if the Parent Guarantor has filed an extension for the filing of
such statements, the parent Guarantor shall deliver such statements to the
Administrative Agent within ten (10) days after the filing thereof with the SEC
which filing shall be within fifteen (15) days of the Parent Guarantor’s filing
for such extension or such sooner time as required to avert a Material Adverse
Effect on the Parent Guarantor.  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 Parent Guarantor shall be furnished to the
Administrative Agent.

    
      
         

      

      
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      Section 8.4.  Compliance
Certificate.

    

     

    At the time the financial statements
are furnished pursuant to Sections 8.1., 8.2. or 8.3, and, if the Requisite
Lenders reasonably believe that a Default or an Event of Default may exist or
may be likely to occur as a result of the failure to perform or observe any
term, covenant, condition or agreement contained in Section 9.1., within 45
Business Days of fiscal quarter and within 90 days of the fiscal year
end,  a certificate substantially in the form of Exhibit I (a
“Compliance Certificate”) executed on behalf of the Borrower by a Responsible
Officer (a) setting forth in reasonable detail as of the end of such
quarterly accounting period, fiscal year or other fiscal period, as the case may
be, the calculations required to establish whether the applicable Loan Party was
in compliance with the covenants contained in Section 9.1.; and
(b) stating that, to such officer’s knowledge, information and belief, no
Default or Event of Default exists, or, if such is not the case, specifying such
Default or Event of Default and its nature, when it occurred, whether it is
continuing and the steps being taken by the Borrower with respect to such event,
condition or failure.  Together with the delivery of each Compliance
Certificate, the Borrower shall deliver (A) a report, in form and detail
reasonably satisfactory to the Administrative Agent, setting forth a statement
of Funds From Operations for the fiscal period then ending; and (B) a list
of all Persons that have become a Subsidiary Guarantor and copy of all Material
Contracts, in each case, since the date of the Compliance Certificate most
recently delivered by the Borrower hereunder.

    

    
      Section 8.5.  Other
Information.

    

     

    (a)           intentionally
omitted;

    

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

    

    (c)           Prompt
notice of the sale, transfer or other disposition in any one transaction or a
series of related transactions of any asset or portfolio of assets of the
Borrower, any other Subsidiary or any other Loan Party for aggregate
consideration in excess of $5,000,000; provided, that no such notice shall be
required for sales, transfers or other dispositions to the Borrower, any other
Subsidiary or any other Loan Party;

    

    (d)           If
any ERISA Event shall occur that individually, or together with any other ERISA
Event that has occurred, could reasonably be expected to result in the
imposition of a Lien or the posting of a bond or other security for an amount in
excess of $2,000,000, the Borrower shall promptly deliver a certificate of a
Responsible Officer of the Borrower setting forth details as to such occurrence
and the action, if any, which the Borrower or applicable member of the ERISA
Group is required or proposes to take;

    
      
         

      

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

    

    (f)     
      A copy of any amendment to the certificate
or articles of incorporation or formation, bylaws, partnership agreement or
other similar organizational documents of the Borrower or any other Loan
Party  within 10 Business Days after the Administrative Agent’s
reasonable request;

    

    (g)           Prompt
notice of any change in individuals that are Responsible Officers of the
Borrower or any other Loan Party;

    

    (h)           Prompt
notice of any change in the business, assets, liabilities, financial condition,
results of operations or business prospects of any Loan Party or any other
Subsidiary which has had, or could reasonably be expected to have, a Material
Adverse Effect;

    

    (i)       
    Notice of the occurrence of any of the following
promptly upon a Responsible Officer of the Borrower obtaining knowledge thereof;
(i) any Default or Event of Default or (ii) any event which constitutes or
which with the passage of time, the giving of notice, or otherwise, would
constitute a default or event of default by any Loan Party under any Material
Contract to which any such Person is a party or by which any such Person or any
of its respective properties may be bound;

    

    (j)        
   Prompt notice of any order, judgment or decree in excess of
$1,000,000 having been entered against any Loan Party or any other Subsidiary or
any of their respective properties or assets;

    

    (k)           Prompt
notice of any notification of a material violation of any Applicable Law or any
inquiry shall have been received by any Loan Party or any other Subsidiary from
any Governmental Authority alleging the same or any inquiry, in either case,
which could reasonably be expected to have a Material Adverse
Effect;

    

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

    

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

    

    (n)           Promptly,
upon each request, information identifying the Borrower as a Lender may request
in order to comply with the USA Patriot Act (Title III of Pub. L. 107-56 (signed
into law October 26, 2001));

    
      
         

      

      
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    (o)           Promptly,
and in any event within 3 Business Days after the Borrower obtains knowledge
thereof, written notice of the occurrence of any of the following, which whether
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect:  (i) the Borrower, any other Loan Party
or any other Subsidiary shall receive notice that any violation of or
noncompliance with any Environmental Law has or may have been committed or is
threatened; (ii) the Borrower, any other Loan Party or any other Subsidiary
shall receive notice that any administrative or judicial complaint, order or
petition has been filed or other proceeding has been initiated, or is about to
be filed or initiated against any such Person alleging any violation of or
noncompliance with any Environmental Law or requiring any such Person to take
any action in connection with the release or threatened release of Hazardous
Materials; (iii) the Borrower, any other Loan Party or any other Subsidiary
shall receive any notice from a Governmental Authority or private party alleging
that any such Person may be liable or responsible for any costs associated with
a response to, or remediation or cleanup of, a release or threatened release of
Hazardous Materials or any damages caused thereby; or (iv) the Borrower, any
other Loan Party or any other Subsidiary shall receive notice of any other fact,
circumstance or condition that could reasonably be expected to form the basis of
an environmental claim, and the matters covered by such notice(s);
and

    

    (p)           From
time to time and promptly upon each reasonable request, such data, certificates,
reports, statements, opinions of counsel (to the extent expressly required in
this Agreement), documents or further information regarding any Property or the
business, assets, liabilities, financial condition, results of operations or
business prospects of the Borrower, any of its Subsidiaries, or any other Loan
Party as the Administrative Agent or any Lender may reasonably
request.

    

    For
purposes of this Section 8.5, unless another timeframe is specified herein,
“prompt” notification or certification shall be delivered no later than seven
(7) days following the happening of such event giving rise to such
deliverable

    

    
      Section 8.6.  Electronic
Delivery of Certain Information.

    

     

    (a)           Documents
required to be delivered pursuant to the Loan Documents shall be delivered by
electronic communication and delivery, including, the Internet, e-mail or
intranet websites to which the Administrative Agent and each Lender have access
(including a commercial, third-party website such as www.Edgar.com
<http://www.sec.gov/edgar> or a website sponsored or hosted by the
Administrative Agent or the Borrower) provided that the foregoing shall not
apply to (i) notices to any Lender (or the Issuing Bank) pursuant to
Article II. and (ii) any Lender that has notified the Administrative Agent and
the Borrower that it cannot or does not want to receive electronic
communications.  The Administrative Agent or the Borrower may, in its
discretion, agree to accept notices and other communications to it hereunder by
electronic delivery pursuant to procedures approved by it for all or particular
notices or communications.  Documents or notices delivered
electronically shall be deemed to have been delivered 24 hours after the date
and time on which the Administrative Agent or the Borrower posts such documents
or the documents become available on a commercial website and the Administrative
Agent or Borrower notifies each Lender of said posting and provides a link
thereto provided if such notice or other communication is not sent or posted
during the normal business hours of the recipient, said posting date and time
shall be deemed to have commenced as of  12:00 p.m. Eastern time on
the opening of business on the next business day for the
recipient.  The Administrative Agent shall have no obligation to
request the delivery of or to maintain paper copies of the documents delivered
electronically, and in any event shall have no responsibility to monitor
compliance by the Borrower with any such request for delivery.  Each
Lender shall be solely responsible for requesting delivery to it of paper copies
and maintaining its paper or electronic documents.

    

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

     

    
      
        
        

      

      
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      Section 8.7.  USA
Patriot Act Notice; Compliance.

    

    The USA
Patriot Act of 2001 (Public Law 107-56) and federal regulations issued with
respect thereto require all financial institutions to obtain, verify and record
certain information that identifies individuals or business entities which open
an “account” with such financial institution.  Consequently, a Lender
(for itself and/or as Administrative Agent for all Lenders hereunder) may from
time-to-time request, and the Borrower shall, and shall cause the other Loan
Parties to, provide to such Lender, such Loan Party’s name, address, tax
identification number and/or such other identification information as shall be
necessary for such Lender to comply with federal law.  An “account”
for this purpose may include, without limitation, a deposit account, cash
management service, a transaction or asset account, a credit account, a loan or
other extension of credit, and/or other financial services product.

    

    Article
IX. Negative Covenants

     

    For so long as this Agreement is in
effect, unless the Requisite Lenders (or, if required pursuant to
Section 12.7., all of the Lenders) shall otherwise consent in the manner
set forth in Section 12.7., the Borrower shall satisfy and comply with the
following covenants:

    

    
      Section 9.1.  Financial
Covenants.

    

     

    The following financial covenants shall
be measured quarterly as of each fiscal quarter end date and shall be determined
on a consolidated basis and, where applicable, shall be determined on a trailing
twelve (12) month basis.

    

    (a)           Debt Service Coverage
Ratio.  The Borrowing Base Properties shall realize a Debt
Service Coverage Ratio equal to or greater than 1.5 to 1.0.

    

    (b)           Debt
Yield.  The Borrower shall maintain a Debt Yield of not less
than 12% determined with respect to the Borrowing Base Properties.

    

    (c)           Leverage
Ratio.  The Parent Guarantor shall not permit the Leverage
Ratio to exceed 70% at any time.

    

    (d)           Limit on Recourse
Indebtedness.  The Parent Guarantor and Borrower shall not have
Recourse Indebtedness (excluding Indebtedness outstanding under this Revolving
Credit Facility) of: more than 15% of Total Asset Value.

    

    (e)           Interest Coverage
Ratio.  The Parent Guarantor shall not permit the Interest
Coverage Ratio to be less than 1.75 to 1.00.

    

    (f)           Adjusted Fixed Charge
Coverage Ratio.  The Parent Guarantor shall not permit the
Adjusted Fixed Charge Coverage Ratio to be less than 1.50 to 1.00.

    

    (g)           Fixed Charge Coverage
Ratio.  The Parent Guarantor shall not permit the Fixed Charge
Coverage Ratio to be less than 1.35 to 1.00.

    

    (h)           Tangible Net
Worth.  The Parent Guarantor shall not permit its Tangible Net
Worth to be less than (i) $135,000,000 plus (A) 75% of
the Net Proceeds of all common Equity Issuances effected at any time after the
Agreement Date by the Parent Guarantor to any Person other than the Borrower or
any of its Subsidiaries, minus (B) 100% of the amount of all payments by the
Parent Guarantor in respect of the redemption, retirement, repurchase or other
acquisition for value of any common Equity Interest of the Parent Guarantor now
or hereafter outstanding, or to retire, or to obtain the surrender of, any
outstanding warrants, options, or other rights to acquire any common Equity
Interests of the Parent Guarantor now or hereafter outstanding.

    
      
         

      

      
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    (i)           
Average Lease
Term.  The Parent Guarantor shall not permit the Average Lease
Term to be less than 5 years.

    

    (j)           
Tenant Concentration
Percentage.  The Parent Guarantor shall not permit the Tenant
Concentration Percentage to exceed 25% of the aggregated NOI.

    

    (k)          
Unhedged Variable Rate
Exposure.  The Parent Guarantor shall not permit the Unhedged
Variable Rate Exposure to exceed 25% of the Total Asset Value at any
time.

    

    (l)          
 Dividend Payout
Ratio.  The Parent Guarantor shall not permit the Dividend
Payout Ratio to exceed 95% at any time.

    

    (m)          Permitted
Investments.  The Parent Guarantor shall not (whether directly
or indirectly) make an Investment in or otherwise own the following items which
would cause the aggregate value of such holdings of Parent Guarantor to exceed
the following percentages of Total Asset Value at any time:

    

     
(i)           Investments
in Unconsolidated Affiliates of the Borrower, such that the aggregate value of
all such Investments (as determined in accordance with GAAP) exceeds 10% of
Total Asset Value at any time.

     

     
(ii)          Maximum
construction in progress exceeds 5% (construction in progress shall not include
tenant improvements or building improvements for buildings that have executed
leases).

    

     
(iii)         Maximum unimproved
land exceeds 5%.

    

     
(iv)         Mortgage Loan exposure
in favor of the Borrower, any of its Subsidiaries or any other Loan Party, where
such exposure exceeds 20% of Total Asset Value;

    

     
(v)          Common stock,
Preferred Stock and other Equity Interests in Persons (other than Subsidiaries
and Unconsolidated Affiliates) that are publicly traded, such that the aggregate
value of such interests calculated on the basis of the lower of cost or market,
exceeds 5% of Total Asset Value;

    

     
(iv)         Aggregate of the above
investments exceeds 30%.

    

    (n)           New
Subsidiary.  Parent Guarantor shall be permitted to form a
wholly owned subsidiary outside of Borrower for the purpose of purchasing and
holding other investments including mortgage and real estate debt investments,
for purposes of this Section 9.1(n), the financials of which subsidiary shall
not be consolidated in the financial statements of Gladstone Commercial
Corporation for purposes hereof.  None of the assets held by such
subsidiary shall be included in the restricted percentages set forth in
subsection (m) immediately above.  Any investments of the type set
forth in subsection (m) immediately above greater than 10% of Total Asset Value
shall not be included in the calculation of Total Asset Value.

    

    (o)           Dividends and Other
Restricted Payments.  If a Default or Event of
Default  exists, the Borrower shall not declare or make any Restricted
Payments except as may be necessary to remain in compliance with Section 7.13
hereof or consistent with (ii) of the next sentence hereof.  If a
Default or Event of Default exists, the Borrower shall not permit any of the
Subsidiary Guarantors to, declare or make any Restricted Payments except that
the Subsidiary Guarantors may declare and make the following Restricted
Payments:

    
      
         

      

      
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(i)           except
where the Principal Shareholders have elected to have Parent Guarantor
discontinue its status as a REIT, the Borrower may make cash distributions to
its partners in an amount required to be distributed for Parent Guarantor to
remain in compliance with Section 7.13. and to avoid incurring any
corporate level income taxes and any excise taxes under Sections 857(b) and 4981
of the Internal Revenue Code; and

    

     
(ii)           in the
event that the Principal Shareholders have elected to have Parent Guarantor
discontinue its status as a REIT and Parent Guarantor is entity taxed as a
corporation, the Borrower may declare and make cash distributions to partners of
the Borrower which will be sufficient for the partners to pay all income tax
liabilities (including payments of estimated tax in respect  thereof)
under federal and applicable state and local laws imposed on the partner’s
allocable shares of the Borrower’s taxable income.

    

    If a
Default or Event of Default specified in Section 10.1.(a),
Section 10.1.(f) or Section 10.1.(g) shall exist or if an Event of
Default specified in Section 10.1(b) as to Section 9.1 shall exist, or if as a
result of the occurrence of any other Event of Default any of the Obligations
have been accelerated pursuant to Section 10.2.(a), the Borrower shall not,
and shall not permit any Subsidiary to, make any Restricted Payments to any
Person other than to the Borrower or any Subsidiary without the prior written
consent of the Administrative Agent.

    

    (p)           GE Pool
Mortgage.  If the aggregate amount of cash principal payments
including any balloon payments (other than regularly scheduled monthly cash
principal payments, if any) associated with the GE Pool Mortgage due and payable
within 180 days of the final maturity date of the GE Pool Mortgage (as the same
may be extended) is greater than $10,000,000 (the “GE Condition”), then for so
long as the GE Condition exists, the sum of Cash and Cash Equivalents of the
Borrower, plus Availability, shall be equal to or greater than the sum of the
aggregate amount of cash principal payments payable on account of the GE Pool
Mortgage, plus $5,000,000.

    

    
      Section 9.2.  Negative
Pledges; Other Matters.

    

     

    (a)           Except
for Permitted Liens, the Borrower shall not, and shall not permit any Subsidiary
Guarantor or other Loan Party to, create, assume, or incur any Lien upon any of
the Borrowing Base Properties, assets, income or profits of any character
whether now owned or hereafter acquired.

    

    (b)           The
Borrower shall not, and shall not permit any Subsidiary Guarantor or other Loan
Party to, enter into, assume or otherwise be bound by any Negative Pledge with
respect to the Borrowing Base Properties except for a Negative Pledge contained
in (i) any agreement (x) evidencing Indebtedness which the Borrower or
such Subsidiary Guarantor may create, incur, assume, or permit or suffer to
exist without breaching Section 9.1.; (y) which Indebtedness is
secured by a Permitted Lien, and (z) which prohibits the creation of any
other Lien on only the property securing such Indebtedness as of the date such
agreement was entered into or assumed (together with replacement property and
customary provisions in respect of proceeds, accessions, and other
after-acquired property); (ii) leases and other agreements (other than leases or
agreements in respect of any Borrowing Base Property where any Loan Party is the
lessor) restricting the assignment, sublease, or pledge thereof; (iii) the
organizational documents or other agreements binding on any Subsidiary Guarantor
(but only to the extent such Negative Pledge covers any Equity Interest in such
Subsidiary Guarantor or the property or assets of such Subsidiary Guarantor);
(iv) any agreements governing an Investment made in an Unconsolidated
Affiliate (but only to the extent such Negative Pledge covers any Equity
Interest in such Unconsolidated Affiliate); (v) any agreement relating to the
sale of a Subsidiary Guarantor or assets pending such sale, provided that in any
such case the Negative Pledge applies only to the Subsidiary Guarantor or the
assets that are the subject of such sale; or (vi) any agreements more
particularly described on Schedule 9.2.(b) to this Agreement and any
extensions, renewals, refinancings, or replacements of such
agreements.

    
      
         

      

      
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      Section
9.3. Restrictions on Intercompany Transfers.

    

     

    The Borrower shall not, and shall not
permit any Subsidiary Guarantor to, create or otherwise cause or suffer to exist
or become effective any consensual encumbrance or restriction of any kind on the
ability of such Loan Party to: (i) pay dividends or make any other distribution
on any of such Loan Party’s capital stock or other equity interests owned by the
Borrower or any Subsidiary Guarantor; (ii) pay any Indebtedness owed to the
Borrower or any Subsidiary; (iii) make loans or advances to the Borrower or any
Subsidiary Guarantor; or (iv) transfer any of its property or assets to the
Borrower or any Subsidiary Guarantor, except for any such encumbrances or
restrictions, (A) contained in agreements relating to the sale of a Subsidiary
Guarantor or assets pending such sale, or relating to Indebtedness secured by a
Lien on assets that the Borrower or such Subsidiary Guarantor may create, incur,
assume, or permit or suffer to exist without breaching Section 9.1. and 9.2.(a),
provided that in any such case the encumbrances and restrictions apply only to
the Subsidiary Guarantor or the assets that are the subject of such sale or
Lien, as the case may be, (B) set forth in the organizational documents or other
agreements binding on or applicable to any Subsidiary Guarantor (but only to the
extent such encumbrance or restriction covers any Equity Interest in such
Subsidiary Guarantor or the property or assets of such Subsidiary Guarantor),
(C) contained in an agreement that governs an Investment in an Unconsolidated
Affiliate (but only to the extent such encumbrance or restriction covers any
Equity Interest in such Unconsolidated Affiliate) or (D) contained in the
agreements described on Schedule 9.3 to this Agreement and any renewals,
extensions, refinancings, or replacements of any such agreements.

    

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

    

     

    The Borrower shall not, and shall not
permit any Subsidiary Guarantor to, (a) enter into any transaction of merger or
consolidation, (b) liquidate, windup or dissolve itself (or suffer any
liquidation or dissolution) or (c) convey, sell, lease, sublease, transfer or
otherwise dispose of, in one transaction or a series of transactions, all or
substantially all of its business or assets, whether now owned or hereafter
acquired; provided, however, that:

    

    (i)           any
of the actions described in the immediately preceding clauses (a) through (c)
may be taken with respect to any Loan Party (other than the Borrower) so long as
immediately prior to the taking of such action, and immediately thereafter and
after giving effect thereto, no Default or Event of Default is or would be in
existence; notwithstanding the foregoing, any such Loan Party (other than the
Borrower) may enter into a transaction of merger (excluding any merger being
effected in connection with the sale of any Subsidiary Guarantor not otherwise
prohibited by this Section or any other provision of any Loan Document, and
excluding any merger described in subsection (iii) below) pursuant to which such
Loan Party is not the survivor of such merger only if (w) the Borrower shall
have given the Administrative Agent and the Lenders at least 15 Business Days’
prior written notice of such merger, such notice to include a certification to
the effect that immediately after and after giving effect to such action, no
Default or Event of Default is or would be in existence; (x) within 15 Business
Days of consummation of such merger, the survivor entity (if such Person is a
Subsidiary but not already a Guarantor) shall have executed and delivered an
assumption agreement in form and substance satisfactory to the Administrative
Agent pursuant to which such survivor entity shall expressly assume all of such
Loan Party’s Obligations under the Loan Documents to which it is a party; (y)
within 30 days of consummation of such merger, such survivor entity delivers to
the Administrative Agent the following: (A) items of the type referred to in
subsections (iv) through (viii) and (xii) of Section 5.1.(a) with respect to the
survivor entity as in effect after consummation of such merger (if not
previously delivered to the Administrative Agent and still in effect), (B)
copies of all documents entered into by such Loan Party or the survivor entity
to effectuate the consummation of such merger, including, but not limited to,
articles of merger and the plan of merger, (C) copies, certified by the
Secretary or Assistant Secretary (or other individual performing similar
functions) of such Loan Party or the survivor entity, of all corporate and
shareholder action authorizing such merger and (D) copies of any filings with
the Securities and Exchange Commission in connection with such merger; and (z)
such Loan Party and such survivor entity each takes such other action and
delivers such other documents, instruments, opinions and agreements as the
Administrative Agent may reasonably request;

    
      
         

      

      
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    (ii)          the
Borrower and the Subsidiary Guarantors may lease and sublease their respective
assets, as lessor or sublessor (as the case may be), in the ordinary course of
their business;

    

    (iii)         a
Person may merge with and into the Borrower so long as (x) the Borrower is the
survivor of such merger, (y) immediately prior to such merger, and immediately
thereafter and after giving effect thereto, no Default or Event of Default is or
would be in existence, (z) the Borrower shall have given the Administrative
Agent and the Lenders at least 15 Business Days’ prior written notice of such
merger, such notice to include a certification as to the matters described in
the immediately preceding clause (y) (except that in the case of the merger of a
Subsidiary with and into the Borrower such notice may be given no later than 5
Business Days following the consummation of such merger); and

    

    (iv)         the
Borrower and each Subsidiary may convey, sell, transfer, lease, or otherwise
dispose of assets among themselves.

    

    
      Section
9.5. Plans.

    

     

    The Borrower shall not, and shall not
permit any other Loan Party to become an entity whose assets are deemed to be
“plan assets” within the meaning of the Plan Asset Regulations. The Borrower
shall not cause or permit to occur, and shall not permit any other member of the
ERISA Group to cause or permit to occur, any ERISA Event if such ERISA Event
could reasonably be expected to have a Material Adverse Effect.

    

    
      Section
9.6. Fiscal Year.

    

     

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

    

    
      Section
9.7. Modifications of Organizational Documents and Material
Contracts.

    

     

    The Borrower shall not, and shall not
permit any other Loan Party to, amend, supplement, restate or otherwise modify
its certificate or articles of incorporation or formation, by-laws, operating
agreement, declaration of trust, partnership agreement or other applicable
organizational document if such amendment, supplement, restatement or other
modification (a) is adverse to the interest of the Administrative Agent, the
Issuing Bank or the Lenders or (b) could reasonably be expected to have a
Material Adverse Effect. The Borrower shall not, and shall not permit any Loan
Party to, enter into any amendment or modification to any Material Contract
which could reasonably be expected to have a Material Adverse
Effect.

    
      
         

      

      
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      Section
9.8. Transactions with Affiliates.

    

     

    Except for management agreements, the
Borrower shall not permit to exist or enter into, and shall not permit any other
Loan Party to permit to exist or enter into, any transaction (including the
purchase, sale, lease or exchange of any property or the rendering of any
service) with any Affiliate, except transactions in the ordinary course of and
pursuant to the reasonable requirements of the business of the Borrower, or such
other Loan Party and upon fair and reasonable terms which are no less favorable
to the Borrower, or such other Loan Party than would be obtained in a comparable
arm’s length transaction with a Person that is not an Affiliate.

    

    
      Section
9.9. Environmental Matters.

    

     

    The Borrower shall not, and shall not
permit any other Loan Party, any other Subsidiary and shall use commercially
reasonable efforts to not permit any other Person to, use, generate, discharge,
emit, manufacture, handle, process, store, release, transport, remove, dispose
of or clean up any Hazardous Materials on, under or from the Properties in
material violation of any Environmental Law or in a manner that could reasonably
be expected to lead to any material environmental claim or pose a material risk
to human health, safety or the environment. Nothing in this Section shall impose
any obligation or liability whatsoever on the Administrative Agent or any
Lender.

    

    
      Section
9.10. Derivatives Contracts.

    

     

    The Borrower shall not, and shall not
permit any other Loan Party to enter into or become obligated in respect of,
Derivatives Contracts, other than Derivatives Contracts entered into by the
Borrower, or any such Loan Party in the ordinary course of business and which
establish an effective hedge in respect of liabilities, commitments or assets
held or reasonably anticipated by the Borrower, or such other Loan
Party.

    

    Article
X. Default

     

    
      Section
10.1. Events of Default.

    

     

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

    

    (a)          Default in
Payment.

    

    (i)           The
Borrower shall fail to pay when due under this Agreement or any other Loan
Document (whether upon demand, at maturity, by reason of acceleration or
otherwise) the principal of any of the Loans or any Reimbursement Obligation;
or

    

    (ii)          The
Borrower shall fail to pay when due under this Agreement or any other Loan
Document (whether upon demand, at maturity, by reason of acceleration or
otherwise) any interest on any of the Loans or any of the other payment
Obligations (other than those subject to the immediately preceding clause (i))
owing by the Borrower under this Agreement, any other Loan Document or any other
Loan Party shall fail to pay when due any payment Obligation owing by such other
Loan Party under any Loan Document to which it is a party, and in the case of
this subsection (a)(ii) only, such failure shall continue for a period of 5
Business Days.

    
      
         

      

      
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    (b)          Default in
Performance.

    

    (i)           Any
Loan Party shall fail to perform or observe any term, covenant, condition or
agreement on its part to be performed or observed and contained in Sections 8.1,
8.2, 8.3, 8.4, 8.6 and 8.7 or Article IX.; or

    

    (ii)          Any
Loan Party shall fail to perform or observe any term, covenant, condition or
agreement on its part to be performed or observed and contained in Section 8.5,
and in the case of this subsection 10.1(b)(ii) only, such failure shall continue
for a period of two (2) Business Days after the date such report is due pursuant
to such Section 8.5.

    

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

    

    (c)          Misrepresentations.
Any written statement, representation or warranty made or deemed made by or on
behalf of any Loan Party under this Agreement or under any other Loan Document,
or any amendment hereto or thereto, or in any other writing or statement at any
time furnished by, or at the direction of, any Loan Party to the Administrative
Agent, the Issuing Bank or any Lender, shall at any time prove to have been
incorrect or misleading in any material respect when furnished or made or deemed
made.

    

    (d)          Indebtedness
Cross-Default.

    

    (i)           The
Borrower or any other Loan Party shall fail to make any payment when due and
payable in respect of any Indebtedness (other than the Loans and Reimbursement
Obligations) having an aggregate outstanding principal amount (or, in the case
of any Derivatives Contract, having, without regard to the effect of any
close-out netting provision, a Derivatives Termination Value) of $5,000,000 or
more as to Indebtedness that is Recourse or $30,000,000 or more as to
Indebtedness that is not Recourse (collectively, “Material Indebtedness”);
or

    

    (ii)          (x)
The maturity of any Material Indebtedness shall have been accelerated in
accordance with the provisions of any indenture, contract or instrument
evidencing, providing for the creation of or otherwise concerning such Material
Indebtedness or (y) any Material Indebtedness shall have been required to be
prepaid or repurchased prior to the stated maturity thereof (excluding any
required prepayment or repurchase resulting from the voluntary disposition by
the Borrower or any other Loan Party of any assets secured by such Material
Indebtedness); or

    

    (iii)         Any
other event shall have occurred and be continuing which, with or without the
passage of time, the giving of notice, or otherwise, would permit any holder or
holders of any Material Indebtedness, any trustee or agent acting on behalf of
such holder or holders or any other Person, to accelerate the maturity of any
such Material Indebtedness or require any such Material Indebtedness to be
prepaid or repurchased prior to its stated maturity.

    
      
         

      

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

    

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

    

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

    

    (h)           Judgment. A judgment
or order for the payment of money or for an injunction or other non-monetary
relief shall be entered against the Borrower or any other Loan Party by any
court or other tribunal and (i) such judgment or order shall continue for a
period of 20 days without being paid, bonded, stayed or dismissed through
appropriate appellate proceedings and (ii) either (A) the amount of such
judgment or order for which insurance has not been acknowledged in writing by
the applicable insurance carrier (or the amount as to which the insurer has
denied liability) exceeds, individually or together with all other such
judgments or orders entered against the Loan Parties, $10,000,000 or (B) in the
case of an injunction or other non-monetary relief, such injunction or judgment
or order could reasonably be expected to have a Material Adverse
Effect.

    

    (i)       
    Attachment. A
warrant, writ of attachment, execution or similar process shall be issued
against any property of the Borrower or any other Loan Party, which exceeds,
individually or together with all other such warrants, writs, executions and
processes, $20,000,000 in amount and such warrant, writ, execution or process
shall not be paid, discharged, vacated, stayed or bonded for a period of 30
days; provided, however, that if a bond has been issued in favor of the claimant
or other Person obtaining such warrant, writ, execution or process, the issuer
of such bond shall execute a waiver or subordination agreement in form and
substance satisfactory to the Administrative Agent pursuant to which the issuer
of such bond subordinates its right of reimbursement, contribution or
subrogation to the Obligations and waives or subordinates any Lien it may have
on the assets of the Borrower or any other Loan Party.

    
      
         

      

      
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    (j)           ERISA.

    

    (i)           Any
ERISA Event shall have occurred that results or could reasonably be expected to
result in liability to any member of the ERISA Group aggregating in excess of
$5,000,000; or

    

    (ii)          The
“benefit obligation” of all Plans exceeds the “fair value of plan assets” for
such Plans by more than $5,000,000, all as determined, and with such terms
defined, in accordance with FASB ASC 715.

     

    (k)           Loan Documents. An
Event of Default (as defined therein) shall occur under any of the other Loan
Documents.

    

    (l)           Change of
Control.

    

    (i)           Parent
Guarantor shall cease to own and control, directly or indirectly, at least 51.0%
of the total voting power of the then outstanding voting Equity Interests of the
Borrower or the General Partner; or

    

    (ii)          Any
“person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”)), excluding the
Principal Shareholders, shall become, or obtain rights (whether by means or
warrants, options or otherwise) to become, the “beneficial owner” (as defined in
Rules 13(d)-3 and 13(d)-5 under the Exchange Act), directly or indirectly, of
more than 49.0% of the outstanding Equity Interests of Parent Guarantor;
or

    

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

    

    
      Section
10.2. Remedies Upon Event of Default.

    

     

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

    

    (a)          Acceleration; Termination of
Facilities.

    

    (i)           Automatic. Upon the
occurrence of an Event of Default specified in Sections 10.1.(e) or 10.1.(f),
(1)(A) the principal of, and all accrued interest on, the Loans and the Notes at
the time outstanding, (B) an amount equal to the Stated Amount of all Letters of
Credit outstanding as of the date of the occurrence of such Event of Default for
deposit into the Letter of Credit Collateral Account and (C) all of the other
Obligations, including, but not limited to, the other amounts owed to the
Lenders and the Administrative Agent under this Agreement, the Notes or any of
the other Loan Documents shall become immediately and automatically due and
payable without presentment, demand, protest, or other notice of any kind, all
of which are expressly waived by the Borrower on behalf of itself and the other
Loan Parties, and (2) the Commitments and the obligation of the Issuing Bank to
issue Letters of Credit hereunder, shall all immediately and automatically
terminate.

    
      
         

      

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

    

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

    

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

    

    (d)           Appointment of
Receiver. To the extent permitted by Applicable Law, the Administrative
Agent and the Lenders shall be entitled to the appointment of a receiver for the
assets and properties of the Borrower and the Subsidiary Guarantors, without
notice of any kind whatsoever and without regard to the adequacy of any security
for the Obligations or the solvency of any party bound for its payment, to take
possession of all or any portion of the property and/or the business operations
of the Borrower and the Subsidiary Guarantors and to exercise such power as the
court shall confer upon such receiver.

    

    
      Section
10.3. Remedies Upon Default.

    

     

    Upon the occurrence of a Default
specified in Section 10.1.(e) and (f), the Commitments shall immediately and
automatically terminate.

    

    
      Section
10.4. Marshaling; Payments Set Aside.

    

     

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

    
      
         

      

      
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      Section
10.5. Allocation of Proceeds.

    

     

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

    

    (a)          amounts
due to the Administrative Agent, the Issuing Bank and the Lenders in respect of
expenses due under Section 12.2 until paid in full, and then Fees;

    

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

    

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

    

    (d)          amounts
due to the Administrative Agent and the Lenders pursuant to Sections 11.6 and
12.10;

    

    (e)          payments
of all other Obligations and other amounts due and owing by the Borrower and the
other Loan Parties under any of the Loan Documents to be applied for the ratable
benefit of the Lenders; and

    

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

    

    
      Section
10.6. Letter of Credit Collateral Account.

    

     

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

    
      
         

      

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

    

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

    

    (d)           If
an Event of Default exists, the Administrative Agent may (and, if instructed by
the Requisite Lenders, shall) in its (or their) discretion at any time and from
time to time elect to liquidate any such investments and reinvestments and apply
the proceeds thereof to the Obligations in accordance with Section
10.5.

    

    (e)           So
long as no Default under Section 10.1(a) or 10.1(b)(i) (as to Section 9.1 of
Article IX only) or Event of Default exists, and to the extent amounts on
deposit in or credited to the Letter of Credit Collateral Account exceed the
aggregate amount of the Letter of Credit Liabilities then due and owing, the
Administrative Agent shall, from time to time, at the request of the Borrower,
deliver to the Borrower within 3 Business Days after the Administrative Agent’s
receipt of such request from the Borrower, against receipt but without any
recourse, warranty or representation whatsoever, such amount of the credit
balances in the Letter of Credit Collateral Account as exceeds the aggregate
amount of Letter of Credit Liabilities at such time. When all of the Obligations
shall have been indefeasibly paid in full and no Letters of Credit remain
outstanding, the Administrative Agent shall deliver to the Borrower, against
receipt but without any recourse, warranty or representation whatsoever, the
balances remaining in the Letter of Credit Collateral Account in immediately
available funds to an account designated by the Borrower.

    

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

    

    
      Section
10.7. Performance by Administrative Agent.

    

     

    If the Borrower or any other Loan Party
shall fail to perform any covenant, duty or agreement contained in any of the
Loan Documents, the Administrative Agent may, after notice to the Borrower,
perform or attempt to perform such covenant, duty or agreement on behalf of the
Borrower or such other Loan Party after the expiration of any cure or grace
periods set forth herein. In such event, the Borrower shall, at the request of
the Administrative Agent, promptly pay any amount reasonably expended by the
Administrative Agent in such performance or attempted performance to the
Administrative Agent, together with interest thereon at the applicable
Post-Default Rate from the date of such expenditure until paid. Notwithstanding
the foregoing, neither the Administrative Agent nor any Lender shall have any
liability or responsibility whatsoever for the performance of any obligation of
the Borrower under this Agreement or any other Loan Document.

    
      
         

      

      
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      Section
10.8. Rights Cumulative.

    

     

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

    

    Article
XI. The Administrative Agent

     

    
      Section
11.1. Appointment and Authorization.

    

     

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

    
      
         

      

      
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      Section
11.2. Capital One as Lender.

    

     

    Capital One, as a Lender, shall have
the same rights and powers under this Agreement and any other Loan Document, as
any other Lender and may exercise the same as though it were not the
Administrative Agent; and the term “Lender” or “Lenders” shall, unless otherwise
expressly indicated, include Capital One in each case in its individual
capacity. Capital One and its affiliates may each accept deposits from, maintain
deposits or credit balances for, invest in, lend money to, act as trustee under
indentures of, serve as financial advisor to, and generally engage in any kind
of business with the Borrower, any other Loan Party or any other affiliate
thereof as if it were any other bank and without any duty to account therefor to
the Issuing Bank, or other Lenders. Further, the Administrative Agent and any
affiliate may accept fees and other consideration from the Borrower for services
in connection with this Agreement, or otherwise without having to account for
the same to the Issuing Bank, or the other Lenders. The Issuing Bank and the
Lenders acknowledge that, pursuant to such activities, Capital One or its
affiliates may receive information regarding the Borrower, other Loan Parties,
other Subsidiaries and other Affiliates (including information that may be
subject to confidentiality obligations in favor of such Person) and acknowledge
that the Administrative Agent shall be under no obligation to provide such
information to them.

    

    
      Section
11.3. Approvals of Lenders.

    

     

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

    

    
      Section
11.4. Notice of Events of Default.

    

     

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

    
      
         

      

      
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      Section
11.5. Administrative Agent’s Reliance.

    

     

    Notwithstanding any other provisions of
this Agreement or any other Loan Documents, neither the Administrative Agent nor
any of its directors, officers, agents, employees or counsel shall be liable for
any action taken or not taken by it under or in connection with this Agreement
or any other Loan Document, except for its or their own gross negligence or
willful misconduct in connection with its duties expressly set forth herein or
therein as determined by a court of competent jurisdiction in a final
non-appealable judgment. Without limiting the generality of the foregoing, the
Administrative Agent may consult with legal counsel (including its own counsel
or counsel for the Borrower or any other Loan Party), independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants or experts. Neither the Administrative Agent
nor any of its directors, officers, agents, employees or counsel: (a) makes any
warranty or representation to any Lender, the Issuing Bank or any other Person,
or shall be responsible to any Lender, the Issuing Bank or any other Person for
any statement, warranty or representation made or deemed made by the Borrower,
any other Loan Party or any other Person in or in connection with this Agreement
or any other Loan Document; (b) shall have any duty to ascertain or to inquire
as to the performance or observance of any of the terms, covenants or conditions
of this Agreement or any other Loan Document or the satisfaction of any
conditions precedent under this Agreement or any Loan Document on the part of
the Borrower or other Persons, or to inspect the property, books or records of
the Borrower or any other Person; (c) shall be responsible to any Lender or the
Issuing Bank for the due execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or any other Loan Document,
any other instrument or document furnished pursuant thereto or any collateral
covered thereby or the perfection or priority of any Lien in favor of the
Administrative Agent on behalf of the Lenders, the Issuing Bank and the
Specified Derivatives Providers in any such collateral; (d) shall have any
liability in respect of any recitals, statements, certifications,
representations or warranties contained in any of the Loan Documents or any
other document, instrument, agreement, certificate or statement delivered in
connection therewith; and (e) shall incur any liability under or in respect of
this Agreement or any other Loan Document by acting upon any notice, consent,
certificate or other instrument or writing (which may be by telephone, telecopy
or electronic mail) believed by it to be genuine and signed, sent or given by
the proper party or parties. The Administrative Agent may execute any of its
duties under the Loan Documents by or through agents, employees or
attorneys-in-fact and shall not be responsible for the negligence or misconduct
of any agent or attorney-in-fact that it selects in the absence of gross
negligence or willful misconduct as determined by a court of competent
jurisdiction in a final non-appealable judgment.

    

    
      Section
11.6. Indemnification of Administrative Agent.

    

     

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

    
      
         

      

      
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      Section
11.7. Lender Credit Decision, Etc.

    

     

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

    
      
         

      

      
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      Section
11.8. Successor Administrative Agent.

    

     

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

    

    Article
XII. Miscellaneous

     

    
      Section
12.1. Notices.

    

     

    Unless otherwise provided herein
(including without limitation as provided in Section 8.5.), communications
provided for hereunder shall be in writing and shall be mailed, telecopied, or
delivered as follows:

    

    If to the Borrower:

    

    Gladstone
Commercial Limited Partnership

    1521
Westbranch Drive, Suite 200

    McLean,
VA 22102

    Attention: 
Gary Gerson

    Danielle
Jones

    
      
         

      

      
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    Telecopier:
703.287.5903

    Telephone:
703.287-5855

     703.387.5853

    Electronic
Mail: gary.gerson@gladstonecompanies.com

    danielle.jones@gladstonecompanies.com

    

    If to the Administrative
Agent:

    

    Capital One, N.A.

    7501 Wisconsin Avenue, 12th
Floor

    Bethesda,
MD 20814

    Attn:
Sadhvi Subramanian

    Telecopier: 
240.497.7702

    Telephone:
240.497.7714

    

    If to the Issuing Bank:

    

    Capital One, N.A.

    7501 Wisconsin Avenue, 12th
Floor

    Bethesda,
MD 20814

    Attn:
Sadhvi Subramanian

    Telecopier: 
240.497.7702

    Telephone: 
240.497.7714

    

    If to any other Lender:

    

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

    

    or, as to
each party at such other address as shall be designated by such party in a
written notice to the other parties delivered in compliance with this Section;
provided, a Lender or the Issuing Bank shall only be required to give notice of
any such other address to the Administrative Agent and the Borrower. All such
notices and other communications shall be effective (i) if mailed, upon the
first to occur of receipt or the expiration of 3 days after the deposit in the
United States Postal Service mail, postage prepaid and addressed to the address
of the Borrower or the Administrative Agent, the Issuing Bank and Lenders at the
addresses specified; (ii) if telecopied, when transmission is verified; (iii) if
hand delivered or sent by overnight courier, when delivered; or (iv) if
delivered in accordance with Section 8.5. to the extent applicable; provided,
however, that, in the case of the immediately preceding clauses (i), (ii) and
(iii), non-receipt of any communication as of the result of any change of
address of which the sending party was not notified or as the result of a
refusal to accept delivery shall be deemed receipt of such communication.
Notwithstanding the immediately preceding sentence, all notices or
communications to the Administrative Agent, the Issuing Bank or any Lender under
Article II. shall be effective only when actually received. None of the
Administrative Agent, the Issuing Bank or any Lender shall incur any liability
to any Loan Party (nor shall the Administrative Agent incur any liability to the
Issuing Bank or the Lenders) for acting upon any telephonic notice referred to
in this Agreement which the Administrative Agent, the Issuing Bank or such
Lender, as the case may be, believes in good faith to have been given by a
Person authorized to deliver such notice or for otherwise acting in good faith
hereunder. Failure of a Person designated to get a copy of a notice to receive
such copy shall not affect the validity of notice properly given to another
Person.

    
      
         

      

      
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      Section
12.2. Expenses.

    

     

    The Borrower agrees (a) to pay or
reimburse the Administrative Agent for all of its reasonable out-of-pocket costs
and expenses incurred in connection with the preparation, negotiation and
execution of, and any amendment, supplement or modification to, any of the Loan
Documents (including due diligence expense and reasonable travel expenses
related to closing), and the consummation of the transactions contemplated
hereby and thereby, including the reasonable fees and disbursements of counsel
to the Administrative Agent and all costs and expenses of the Administrative
Agent in connection with the use of IntraLinks, SyndTrak or other similar
information transmission systems in connection with the Loan Documents, (b) to
pay or reimburse the Administrative Agent, the Issuing Bank and the Lenders for
all their reasonable costs and expenses incurred in connection with the
enforcement or preservation of any rights under the Loan Documents, including
the reasonable fees and disbursements of their respective counsel actually
incurred (including, without limitation, the reasonable fees, charges and
disbursements of outside counsel and the allocated cost of inside counsel, but
not both) and any payments in indemnification or otherwise payable by the
Lenders to the Administrative Agent pursuant to the Loan Documents, (c)
intentionally omitted and (d) to the extent not already covered by any of the
preceding subsections, to pay or reimburse the fees and disbursements of counsel
to the Administrative Agent, the Issuing Bank and any Lender incurred in
connection with the representation of the Administrative Agent, the Issuing Bank
or such Lender in any matter relating to or arising out of any bankruptcy or
other proceeding of the type described in Sections 10.1.(e) or 10.1.(f),
including, without limitation (i) any motion for relief from any stay or similar
order, (ii) the negotiation, preparation, execution and delivery of any document
relating to the Obligations and (iii) the negotiation and preparation of any
debtor-in-possession financing or any plan of reorganization of the Borrower or
any other Loan Party, whether proposed by the Borrower, such Loan Party, the
Lenders or any other Person, and whether such fees and expenses are incurred
prior to, during or after the commencement of such proceeding or the
confirmation or conclusion of any such proceeding. If the Borrower shall fail to
pay any amounts required to be paid by it pursuant to this Section, the
Administrative Agent and/or the Lenders may pay such amounts on behalf of the
Borrower and such amounts shall be deemed to be Obligations owing
hereunder.

    

    
      Section
12.3. Stamp, Intangible and Recording Taxes.

    

     

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

    

    
      Section
12.4. Setoff.

    

     

    Subject to Section 3.3. and in addition
to any rights now or hereafter granted under Applicable Law and not by way of
limitation of any such rights, the Borrower hereby authorizes the Administrative
Agent, the Issuing Bank, each Lender, each Affiliate of the Administrative
Agent, the Issuing Bank or any Lender, at any time or from time to time while an
Event of Default exists, without notice to the Borrower or to any other Person,
any such notice being hereby expressly waived, but in the case of the Issuing
Bank, a Lender, an Affiliate of the Issuing Bank or a Lender, subject to receipt
of the prior written consent of the Requisite Lenders exercised in their sole
discretion, to set off and to appropriate and to apply any and all deposits
(general or special, including, but not limited to, indebtedness evidenced by
certificates of deposit, whether matured or unmatured) and any other
indebtedness at any time held or owing by the Administrative Agent, the Issuing
Bank, such Lender, any Affiliate of the Administrative Agent, the Issuing Bank
or such Lender, to or for the credit or the account of the Borrower against and
on account of any of the Obligations, irrespective of whether or not any or all
of the Loans and all other Obligations have been declared to be, or have
otherwise become, due and payable as permitted by Section 10.2., and although
such Obligations shall be contingent or unmatured.

    
      
         

      

      
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      Section 12.5.  Litigation;
Jurisdiction; Other Matters; Waivers.

    

     

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

    

     (b)           EACH
OF THE BORROWER, THE ADMINISTRATIVE AGENT, THE ISSUING BANK AND EACH LENDER
HEREBY AGREES THAT THE FEDERAL DISTRICT COURT OF THE DISTRICT OF MARYLAND AND
ANY STATE COURT LOCATED IN THE BETHESDA, MARYLAND SHALL HAVE JURISDICTION TO
HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN OR AMONG THE BORROWER, THE
ADMINISTRATIVE AGENT, THE ISSUING BANK OR ANY OF THE LENDERS, ARISING OUT OF
THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR IN CONNECTION WITH OR BY REASON OF
ANY OTHER SUIT, CAUSE OF ACTION OR DISPUTE WHATSOEVER BETWEEN OR AMONG THE
BORROWER, THE ADMINISTRATIVE AGENT, THE ISSUING BANK OR ANY OF THE LENDERS OF
ANY KIND OR NATURE RELATING TO ANY OF THE LOAN DOCUMENTS.  THE
BORROWER, THE ISSUING BANK AND EACH OF THE LENDERS EXPRESSLY SUBMIT AND CONSENT
IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR PROCEEDING COMMENCED IN SUCH
COURTS WITH RESPECT TO SUCH CLAIMS OR DISPUTES.  EACH PARTY FURTHER
WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH
ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS
BROUGHT IN AN INCONVENIENT FORUM AND EACH AGREES NOT TO PLEAD OR CLAIM THE
SAME.  THE CHOICE OF FORUM SET FORTH IN THIS SECTION SHALL NOT BE
DEEMED TO PRECLUDE THE BRINGING OF ANY ACTION BY THE ADMINISTRATIVE AGENT, THE
ISSUING BANK OR ANY LENDER OR THE ENFORCEMENT BY THE ADMINISTRATIVE AGENT, THE
ISSUING BANK OR ANY LENDER OF ANY JUDGMENT OBTAINED IN SUCH FORUM IN ANY OTHER
APPROPRIATE JURISDICTION.

    

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

       

    
      
        
        

      

      
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      Section 12.6.  Successors
and Assigns.

    

     

     (a)           Successors and Assigns
Generally.  The provisions of this Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns permitted hereby, except that the Borrower may not assign
or otherwise transfer any of its rights or obligations hereunder without the
prior written consent of the Administrative Agent and each Lender and no Lender
may assign or otherwise transfer any of its rights or obligations hereunder
except (i) to an Eligible Assignee in accordance with the provisions of the
immediately following subsection (b), (ii) by way of participation in
accordance with the provisions of the immediately following subsection (d)
or (iii) by way of pledge or assignment of a security interest subject to
the restrictions of the immediately following subsection (f) (and any other
attempted assignment or transfer by any party hereto shall be null and
void).  Nothing in this Agreement, expressed or implied, shall be
construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby, any legal or equitable
right, remedy or claim under or by reason of this Agreement.

    

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

    

    
      	
               
      

            	
               (i)

            	
              Minimum
      Amounts.

            

    

    

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

    

    (B)           in
any case not described in the immediately preceding subsection (A), the
aggregate amount of the Commitment (which for this purpose includes Loans
outstanding thereunder) or, if the applicable Commitment is not then in effect,
the principal outstanding balance of the Loans of the assigning Lender both
subject to, and retained following, each such assignment (in each case,
determined as of the date the Assignment and Assumption with respect to such
assignment is delivered to the Administrative Agent or, if “Trade Date” is
specified in the Assignment and Assumption, as of the Trade Date) shall not be
less than $5,000,000, unless each of the Administrative Agent and, so long as no
Default or Event of Default shall exist, the Borrower otherwise consents (each
such consent not to be unreasonably withheld or delayed).

    

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

    

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

    

    (A)           the
consent of the Borrower (such consent not to be unreasonably withheld or
delayed) shall be required unless (x) a Default under Section 10.1(a) or
10.1(b)(i) (as to Section 9.1 of Article IX only) or Event of Default shall
exist at the time of such assignment or (y) such assignment is to a Lender,
an Affiliate of a Lender; provided that the Borrower shall be deemed to have
consented to any such assignment unless it shall object thereto by written
notice to the Administrative Agent within 5 Business Days after having
received notice thereof; and

     

    
      
        
        

      

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

    

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

    

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

    

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

    

    Subject
to acceptance and recording thereof by the Administrative Agent pursuant to the
immediately following subsection (c), from and after the effective date
specified in each Assignment and Acceptance, the assignee thereunder shall be a
party to this Agreement and, to the extent of the interest assigned by such
Assignment and Assumption, have the rights and obligations of a Lender under
this Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Assumption, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender’s rights and obligations under
this Agreement, such Lender shall cease to be a party hereto) but shall continue
to be entitled to the benefits of Sections 4.4., 12.2. and 12.10. and the
other provisions of this Agreement and the other Loan Documents as provided in
Section 12.11. with respect to facts and circumstances occurring prior to
the effective date of such assignment.  Any assignment or transfer by
a Lender of rights or obligations under this Agreement that does not comply with
this paragraph shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with the
immediately following subsection (d).

    

    (c)           Register.  The
Administrative Agent, acting solely for this purpose as an agent of the
Borrower, shall maintain at the Principal Office a copy of each Assignment and
Assumption delivered to it and a register for the recordation of the names and
addresses of the Lenders, and the Commitments of, and principal amounts of the
Loans owing to, each Lender pursuant to the terms hereof from time to time (the
“Register”).  The entries in the Register shall be conclusive, and the
Borrower, the Administrative Agent and the Lenders may treat each Person whose
name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary.  The Register shall be available for inspection by the
Borrower and any Lender, at any reasonable time and from time to time upon
reasonable prior notice.

     

    
      
        
        

      

      
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    (d)           Participations.  Any
Lender may at any time, without the consent of, or notice to, the Borrower or
the Administrative Agent, sell participations to any Person (other than a
natural person or the Borrower or any of the Borrower’s Affiliates or
Subsidiaries) (each, a “Participant”) in all or a portion of such Lender’s
rights and/or obligations under this Agreement (including all or a portion or
its Commitments and/or the Loans owing to it); provided that (i) such Lender’s
obligations under this Agreement shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations and (iii) the Borrower, the Administrative Agent and the
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender’s rights and obligations under this
Agreement.  Any agreement or instrument pursuant to which a Lender
sells such a participation shall provide that such Lender shall retain the sole
right to enforce this Agreement and to approve any amendment, modification or
waiver of any provision of this Agreement; provided that such agreement or
instrument may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, modification or waiver of any provision of
any Loan Document that (i) increases such Lender’s Commitment, (ii) extends the
date fixed for the payment of principal on the Loans or portions thereof owing
to such Lender, or (iii) reduces the rate at which interest is payable
thereon.

    

    (e)           Limitations upon Participant
Rights.  A Participant shall not be entitled to receive any
greater payment under Sections 3.10. and 4.1. or 4.4.

    

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

    

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

    

    
      Section 12.7.  Amendments
and Waivers.

    

     

    (a)           Except
as otherwise expressly provided in this Agreement, (i) any consent or approval
required or permitted by this Agreement or any other Loan Document to be given
by the Lenders may be given, (ii) any term of this Agreement or of any other
Loan Document may be amended, (iii) the performance or observance by the
Borrower, any other Loan Party or any other Subsidiary of any terms of this
Agreement or such other Loan Document may be waived, and (iv) the continuance of
any Default or Event of Default may be waived (either generally or in a
particular instance and either retroactively or prospectively) with, but only
with, the written consent of the Requisite Lenders (or the Administrative Agent
at the written direction of the Requisite Lenders), and, in the case of an
amendment to any Loan Document, the written consent of each Loan Party which is
party thereto.

    

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

    

    (i)           increase
the Commitments of the Lenders (excluding any increase as a result of as
assignment of Commitments permitted under Section 12.6 and any increases
contemplated under Section 2.12.) or subject the Lenders to any additional
obligations;

     

    
      
        
        

      

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

    

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

    

    (iii)          modify
the definition of “Termination Date”, or otherwise postpone any date fixed for
any payment of principal of, or interest on, any Loans or for the payment of
Fees or any other Obligations;

    

    (iv)          modify
the definition of “Commitment Percentage” or amend or otherwise modify the
provisions of Section 3.2.;

    

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

    

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

    

    (vii)         release
any Guarantor from its obligations under the Guaranty except as contemplated by
Section 7.12.(b);

    

    (viii)        waive
a Default or Event of Default under Section 10.1.(a) or Section 10.1.
(l);

    

    (ix)          amend,
or waive the Borrower’s compliance with, Section 2.10;

    

    (x)           modify
the definition of “Defaulting Lender” or amend or otherwise modify the
provisions of Section 3.9; or

    

    (xi)           modify
the provisions of Sections 3.2 or 3.3 in a manner that would alter the order of
application of payments or alter the pro rata treatment of a
payment.

    

    (d)           No
amendment, waiver or consent unless in writing and signed by the Administrative
Agent, in addition to the Lenders required hereinabove to take such action,
shall affect the rights or duties of the Administrative Agent under this
Agreement or any of the other Loan Documents.  Any amendment, waiver
or consent relating to Section 2.2. or the obligations of the Issuing Bank
under this Agreement or any other Loan Document shall, in addition to the
Lenders required hereinabove to take such action, require the written consent of
the Issuing Bank.  No waiver shall extend to or affect any obligation
not expressly waived or impair any right consequent thereon and any amendment,
waiver or consent shall be effective only in the specific instance and for the
specific purpose set forth therein.  No course of dealing or delay or
omission on the part of the Administrative Agent or any Lender in exercising any
right shall operate as a waiver thereof or otherwise be prejudicial
thereto.  Any Event of Default occurring hereunder shall continue to
exist until such time as such Event of Default is waived in writing in
accordance with the terms of this Section which can include a retroactive
waiver, notwithstanding any attempted cure or other action by the Borrower, any
other Loan Party or any other Person subsequent to the occurrence of such Event
of Default.  Except as otherwise explicitly provided for herein or in
any other Loan Document, no notice to or demand upon the Borrower shall entitle
the Borrower to other or further notice or demand in similar or other
circumstances.

     

    
      
        
        

      

      
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      Section 12.8.  Nonliability
of Administrative Agent and Lenders.

    

     

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

    

    
      Section 12.9.  Confidentiality.

    

     

    Except as otherwise provided by
Applicable Law, the Administrative Agent, the Issuing Bank and each Lender shall
maintain the confidentiality of all Information (as defined below) in accordance
with its customary procedure for handling confidential information of this
nature and in accordance with safe and sound banking practices but in any event
may make disclosure: (a) to its Affiliates and to its and its Affiliates’
respective partners, directors, officers, employees, agents, advisors and other
representatives (it being understood that the Persons to whom such disclosure is
made will be informed of the confidential nature of such Information and
instructed to keep such Information confidential and the disclosing party shall
be responsible for any breach of this provision by such affiliated party);
(b) subject to an agreement containing provisions substantially the same as
those of this Section, to (i) any actual or proposed Assignee, Participant
or other transferee in connection with a potential transfer of any Commitment or
participation therein as permitted hereunder, or (ii) any actual or
prospective counterparty (or its advisors) to any swap or derivative transaction
relating to the Borrower and its obligations; (c) as required or requested
by any Governmental Authority or representative thereof or pursuant to legal
process or in connection with any legal proceedings, or otherwise required by
Applicable Law; (d) to the Administrative Agent’s, Issuing Bank’s or such
Lender’s independent auditors and other professional advisors (provided they
shall be notified of the confidential nature of the information);
(e) intentionally omitted; (f) to the extent such Information
(i) becomes publicly available other than as a result of a breach of this
Section actually known by the Administrative Agent or such Lender to be a breach
of this Section or (ii) becomes available to the Administrative Agent, any
Lender or any Affiliate of the Administrative Agent or any Lender on a
nonconfidential basis from a source other than the Borrower or any Affiliate of
the Borrower; (g) to the extent requested by, or required to be disclosed
to, any nationally recognized rating agency or regulatory or similar authority
(including any self-regulatory authority, such as the National Association of
Insurance Commissioners) having or purporting to have jurisdiction over it;
(h) to bank trade publications, such information to consist of deal terms
and other information customarily found in such publications; (i) to any
other party hereto; and (j) with the consent of the Borrower.
Notwithstanding the foregoing, the Administrative Agent and each Lender may
disclose any such confidential information, without notice to the Borrower or
any other Loan Party, to Governmental Authorities in connection with any
regulatory examination of the Administrative Agent or such Lender or in
accordance with the regulatory compliance policy of the Administrative Agent or
such Lender.  As used in this Section, the term “Information” means
all information received from the Borrower, any other Loan Party, any other
Subsidiary or Affiliate relating to any Loan Party or any of their respective
businesses, other than any such information that is available to the
Administrative Agent, any Lender or the Issuing Bank on a nonconfidential basis
prior to disclosure by the Borrower, any other Loan Party, any other Subsidiary
or any Affiliate, provided that, in the case of any such information received
from the Borrower, any other Loan Party, any other Subsidiary or any Affiliate
after the date hereof, such information is clearly identified at the time of
delivery as confidential.  Any Person required to maintain the
confidentiality of Information as provided in this Section shall be considered
to have complied with its obligation to do so if such Person has exercised the
same degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information.

     

    
      
        
        

      

      
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      Section 12.10.  Indemnification.

    

     

    (a)           The
Borrower shall and hereby agrees to indemnify, defend and hold harmless the
Administrative Agent, the Issuing Bank, the Lenders, all of the Affiliates of
each of the Administrative Agent, the Issuing Bank or any of the Lenders, and
their respective directors, officers, shareholders, agents, employees and
counsel (each referred to herein as an “Indemnified Party”) from and against any
and all of the following (collectively, the “Indemnified
Costs”):  losses, costs, claims, penalties, damages, liabilities,
deficiencies, judgments or expenses of every kind and nature (including, without
limitation, amounts paid in settlement, court costs and the reasonable fees and
disbursements of counsel incurred in connection with any litigation,
investigation, claim or proceeding or any advice rendered in connection
therewith, but excluding Indemnified Costs indemnification in respect of which
is specifically covered by Section 3.10. or 4.1. or expressly excluded from
the coverage of such Sections) incurred by an Indemnified Party in connection
with, arising out of, or by reason of, any suit, cause of action, claim,
arbitration, investigation or settlement, consent decree or other proceeding
(the foregoing referred to herein as an “Indemnity Proceeding”) which is in any
way related directly or indirectly to: (i) this Agreement or any other Loan
Document or the transactions contemplated thereby; (ii) the making of any
Loans or issuance of Letters of Credit hereunder; (iii) any actual or
proposed use by the Borrower of the proceeds of the Loans or Letters of Credit;
(iv) the Administrative Agent’s, the Issuing Bank’s or any Lender’s
entering into this Agreement; (v) the fact that the Administrative Agent,
the Issuing Bank and the Lenders have established the credit facility evidenced
hereby in favor of the Borrower; (vi) the fact that the Administrative
Agent, the Issuing Bank and the Lenders are creditors of the Borrower and have
or are alleged to have information regarding the financial condition, strategic
plans or business operations of the Borrower and the Subsidiaries;
(vii) the fact that the Administrative Agent, the Issuing Bank and the
Lenders are material creditors of the Borrower and are alleged to influence
directly or indirectly the business decisions or affairs of the Borrower and the
Subsidiaries or their financial condition; (viii) the exercise of any right
or remedy the Administrative Agent, the Issuing Bank or the Lenders may have
under this Agreement or the other Loan Documents; (ix) any civil penalty or fine
assessed by the OFAC against, and all costs and expenses (including reasonable
counsel fees and disbursements) incurred in connection with defense thereof by,
the Administrative Agent, the Issuing Bank or any Lender as a result of conduct
of the Borrower, any other Loan Party or any other Subsidiary that violates a
sanction administered or enforced by the OFAC; or (x) any violation or
non-compliance by the Borrower or any Subsidiary of any Applicable Law
(including any Environmental Law) including, but not limited to, any Indemnity
Proceeding commenced by (A) the Internal Revenue Service or state taxing
authority or (B) any Governmental Authority or other Person under any
Environmental Law, including any Indemnity Proceeding commenced by a
Governmental Authority or other Person seeking remedial or other action to cause
the Borrower or its Subsidiaries (or its respective properties) (or the
Administrative Agent and/or the Lenders and/or the Issuing Bank as successors to
the Borrower) to be in compliance with such Environmental Laws; provided, however, that the
Borrower shall not be obligated to indemnify any Indemnified Party for any acts
or omissions of any Indemnified Party in connection with matters described in
this subsection to the extent arising from the gross negligence or willful
misconduct of any Indemnified Party, as determined by a court of competent
jurisdiction in a final, non-appealable judgment.

    

    (b)           The
Borrower’s indemnification obligations under this Section shall apply to all
Indemnity Proceedings arising out of, or related to, the foregoing whether or
not an Indemnified Party is a named party in such Indemnity
Proceeding.  In this regard, this indemnification shall cover all
Indemnified Costs of any Indemnified Party in connection with any deposition of
any Indemnified Party or compliance with any subpoena (including any subpoena
requesting the production of documents).  This indemnification shall,
among other things, apply to any Indemnity Proceeding commenced by other
creditors of the Borrower or any Subsidiary, any shareholder of the Borrower or
any Subsidiary (whether such shareholder(s) are prosecuting such Indemnity
Proceeding in their individual capacity or derivatively on behalf of the
Borrower), any account debtor of the Borrower or any Subsidiary or by any
Governmental Authority.

     

    
      
        
        

      

      
        - 89
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    (c)           This
indemnification shall apply to any Indemnity Proceeding arising during the
pendency of any bankruptcy proceeding filed by or against the Borrower and/or
any Subsidiary.

    

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

    

    (e)           Promptly
after receipt by an Indemnified Party of written notice of any loss, claim,
damage or liability in respect of which indemnity may be sought by it hereunder,
such Indemnified Party will notify the Borrower thereof, provided that the
failure to give any such notice hereunder shall not affect the obligation of the
Borrower under this Agreement or any of the other Loan
Documents.  Thereafter, such Indemnified Party and the Borrower shall
consult and cooperate, in good faith to the extent appropriate, with a view to
minimizing the cost to the Borrower of its obligations
hereunder.  Subject to the foregoing, an Indemnified Party may conduct
its own investigation and defense of, and may formulate its own strategy with
respect to, any Indemnity Proceeding covered by this Section and, as provided
above, all Indemnified Costs incurred by such Indemnified Party shall be
reimbursed by the Borrower.  No action taken by legal counsel chosen
by an Indemnified Party in investigating or defending against any such Indemnity
Proceeding shall vitiate or in any way impair the obligations and duties of the
Borrower hereunder to indemnify and hold harmless each such Indemnified Party;
provided, however, that if (i) the Borrower is required to indemnify an
Indemnified Party pursuant hereto and (ii) the Borrower has provided
evidence reasonably satisfactory to such Indemnified Party that the Borrower has
the financial wherewithal to reimburse such Indemnified Party for any amount
paid by such Indemnified Party with respect to such Indemnity Proceeding, such
Indemnified Party shall not settle or compromise any such Indemnity Proceeding
without the prior written consent of the Borrower (which consent shall not be
unreasonably withheld or delayed).  Notwithstanding the foregoing, an
Indemnified Party may settle or compromise any such Indemnity Proceeding without
the prior written consent of the Borrower where (x) no monetary relief is
sought against such Indemnified Party in such Indemnity Proceeding or
(y) there is an allegation of a violation of law by such Indemnified Party,
provided however, that in either case the Indemnified Party shall provide notice
of such settlement or compromise to Borrower not later than two (2) Business
Days prior to such settlement or compromise providing reasonable detail as to
the material elements of such settlement or compromise.

    

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

    

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

     

    
      
        
        

      

      
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      Section 12.11.  Termination;
Survival.

    

     

    This Agreement shall terminate at such
time as (a) all of the Commitments have been terminated, (b) all
Letters of Credit have terminated, expired or been cancelled (other than Letters
of Credit the expiration dates of which extend beyond the Termination Date as
permitted under Section 2.2.(b) and in respect of which the Borrower has
satisfied the requirements of such Section), (c) none of the Lenders is
obligated any longer under this Agreement to make any Loans and the Issuing Bank
is no longer obligated under this Agreement to issue Letters of Credit and
(d) all Obligations (other than obligations which survive as provided in
the following sentence) have been paid and satisfied in full; provided, however,
if on the Termination Date or any other date the Commitments are terminated or
reduced to zero (whether voluntarily, by reason of the occurrence of an Event of
Default or otherwise) any Letters of Credit remain outstanding, then the
provisions of this Agreement applicable to the Borrower and the Administrative
Agent with respect to Letters of Credit, including without limitation, the terms
of Section 10.6. and the Borrower’s reimbursement obligations under
Section 2.2.(d), shall remain in effect until all such Letters of Credit
have expired, have been cancelled or have otherwise terminated. The indemnities
to which the Administrative Agent, the Issuing Bank and the Lenders are entitled
under the provisions of Sections 3.10., 4.1., 4.4., 11.6., 12.2. and 12.10.
and any other provision of this Agreement and the other Loan Documents, and the
provisions of Section 12.5., shall continue in full
force and effect and shall protect the Administrative Agent, the Issuing Bank
and the Lenders (i) notwithstanding any termination of this Agreement, or
of the other Loan Documents, against events arising after such termination as
well as before and (ii) at all times after any such party ceases to be a
party to this Agreement with respect to all matters and events existing on or
prior to the date such party ceased to be a party to this
Agreement.

    

    
      Section 12.12.  Severability
of Provisions.

    

     

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

    

    
      Section 12.13.  GOVERNING
LAW.

    

     

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

    

    
      Section 12.14.  Counterparts.

    

     

    To facilitate execution, this Agreement
and any amendments, waivers, consents or supplements may be executed in any
number of counterparts as may be convenient or required.  It shall not
be necessary that the signature of, or on behalf of, each party, or that the
signature of all persons required to bind any party, appear on each
counterpart.  All counterparts shall collectively constitute a single
document.  It shall not be necessary in making proof of this document
to produce or account for more than a single counterpart containing the
respective signatures of, or on behalf of, each of the parties
hereto.

     

    
      
        
        

      

      
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      Section 12.15.  Obligations
with Respect to Loan Parties.

    

     

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

    

    
      Section 12.16.  Independence
of Covenants.

    

     

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

    

    
      Section 12.17.  Limitation
of Liability.

    

     

    None of the Administrative Agent, the
Issuing Bank or any Lender, or any affiliate, officer, director, employee,
attorney, or agent of the Administrative Agent, the Issuing Bank or any Lender
shall have any liability with respect to, and the Borrower hereby waives,
releases, and agrees not to sue any of them upon, any claim for any special,
indirect, incidental, or consequential damages suffered or incurred by the
Borrower in connection with, arising out of, or in any way related to, this
Agreement, any of the other Loan Documents, or any of the transactions
contemplated by this Agreement or any of the other Loan
Documents.  The Borrower hereby waives, releases, and agrees not to
sue the Administrative Agent, the Issuing Bank or any Lender or any of the
Administrative Agent’s, the Issuing Bank’s or any Lender’s affiliates, officers,
directors, employees, attorneys, or agents for punitive damages in respect of
any claim in connection with, arising out of, or in any way related to, this
Agreement, any of the other Loan Documents, or any of the transactions
contemplated by this Agreement or financed hereby.

    

    
      Section 12.18.  Entire
Agreement.

    

     

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

    

    
      Section 12.19.  Construction.

    

     

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

    

    
      Section 12.20.  Headings.

    

     

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

     

    
      
        
        

      

      
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Section 12.21.  Plan
Assets.

     

    Each Lender represents and agrees that
the source of funds used by it to facilitate this Agreement and the extensions
of credit to be made by it as contemplated hereunder do not, and shall not,
include “plan assets” within the meaning of the Plan Asset
Regulations.

    

    [Signatures
on Following Pages]

    
      
         

      

      
        - 93
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      IN WITNESS WHEREOF, the parties hereto
have caused this Credit Agreement to be executed by their authorized officers
all as of the day and year first above written.

      

      
        
          
            
              
                
                  
                    
                      
                        
                          	 
      	
                                  GLADSTONE
      COMMERCIAL LIMITED PARTNERSHIP

                                
	 
      	 
      	 
      	 
	 
      	
                                  By:

                                	
                                  GCLP
      Business Trust II, its general partner

                                	 
	 
      	 
      	 
      	 
	 
      	 
      	
                                  By:

                                	
                                  /s/ David J. Gladstone

                                	 
	
                                  :

                                	 
      	
                                  Name: 

                                	
                                  David J. Gladstone

                                	,
	 
      	 
      	
                                  solely
      in his capacity as Trustee, and not

                                	 
	 
      	 
      	
                                  in
      his individual capacity

                                	 
	 
      	 
      	
                                  Title:  Trustee

                                	 
	 
      	 
      	 
      	 
	 
      	 
      	
                                  By:

                                	
                                  /s/ Gary Gerson

                                	 
	 
      	 
      	
                                  Name:

                                	
                                  Gary Gerson

                                	,
	 
      	 
      	
                                  solely
      in his capacity as Trustee, and not

                                	 
	 
      	 
      	
                                  in
      his individual capacity

                                	 
	 
      	 
      	
                                  Title:  Trustee

                                	 

                        

                      

                    

                  

                

              

            

          

        

      

      

      
        
          
            
              
                
                  	 
      	
                          GLADSTONE
      COMMERCIAL CORPORATION

                        	 
	 
      	 
      	 
	 
      	
                          By:

                        	
                          /s/ David J.
      Gladstone

                        	 
	 
      	
                          Name: 

                        	
                          David J. Gladstone

                        	 
	 
      	
                          Title:

                        	
                          Chairman and Chief Executive
      Officer

                        	 

                

              

            

          

        

      

      

      [Signatures
Continued on Next Page]

      
        
           

        

        
          P-1

          
            

          

        

        
           

        

      

      [Signature Page to Credit
Agreement

      with
Gladstone Commercial Limited Partnership]

      

      
        
          
            
              
                
                  	 
      	
                          CAPITAL
      ONE, N.A.

                        	 
	 
      	 
      	
                          as
      Administrative Agent, the Issuing Bank and as a Lender

                        
	 
      	 
      	 
      	 
	 
      	 
      	
                            By:  

                        	
                          /s/ Frederick H. Denecke

                        	 
	 
      	 
      	
                          Name:
      Frederick H. Denecke

                        	 
	 
      	 
      	
                          Title:
      Vice President

                        	 

                

              

            

          

        

      

      

      [Signatures Continued on Next
Page]

       

      
        
          
          

        

        
          P-2

          
            

          

        

        
          
          

        

      

       

      [Signature Page to Credit
Agreement

      with
Gladstone Commercial Limited Partnership]

      

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                	 
      	
                                        BRANCH
      BANKING AND TRUST COMPANY, as an Issuing

                                        Bank
      and as a Lender

                                      
	 
      	 
      	 
      	 
	 
      	
                                        By: 

                                      	 
      	 
	 
      	
                                           Name: 

                                      	 
      	 
	 
      	
                                           Title:

                                      	 
      	 

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

       

      
        
           

        

        
          P-3

          
            

          

        

        
           

        

      

      
        SCHEDULE
I

      

      

      
        Commitments

      

      

      
        
          
            
              
                	
                        Lender

                      	 	
                        Commitment Amount

                      	 
	
                        Capital
      One, N.A.

                      	 	$	35,000,000	 
	
                        Branch
      Banking and Trust Company

                      	 	$	15,000,000	 
	 
      	 	 	 	 
	
                        TOTAL

                      	 	$	50,000,000	 

              

            

          

        

      

       

      
        
           

        

        
          P-1

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