Document:

exv10w11

 

Exhibit 10.11

UCI ANNUAL INCENTIVE COMPENSATION PLAN

ELIGIBILITY: This annual incentive compensation (bonus) plan applies to UCI’s
CEO, direct reports to the CEO and select direct reports to the Business Unit
Presidents. This bonus plan replaces all other bonus plans previously in place
for eligible employees.

Effective January 1, 2004, the annual bonus plan will be based on the
information outlined below:

FUNDING: The bonus pool will be funded by audited corporate (UCI) EBITDA and
free cash flow performance, independently weighted at 50%:

	 	 	 	 	 	 	 	 	 	 	 	 	 
	UCI EBITDA
	 	FREE CASH FLOW

	Performance	 	% Funding	 	Performance	 	% Funding
	<137.2
	 	 	0	 	 	 	<31.1	 	 	 	0	 
	137.2
	 	 	50	 	 	 	31.1	 	 	 	50	 
	149.1
	 	 	100	 	 	 	40.5	 	 	 	100	 
	164.0
	 	 	150	 	 	 	52.6	 	 	 	150	 

Performance between stated target performance percents will be funded at an
interpolated rate.

In addition to the funding factor, payouts will be based on pre-established
goals in the following areas:

FINANCIAL PERFORMANCE: (50%) Target payout at the higher of Case 2 or the 2004
plan (EBITDA and free cash flow, equally weighted) for your business unit (or
for UCI if you are a corporate employee). As above, zero achievement if Case 1
not met, 50% achievement (or 25%) if Case 1 is met, etc.

MANAGEMENT OBJECTIVES: (25%) Based on pre-established, measurable objectives
(i.e. reduction in working capital, reduction in receivables, lean
manufacturing, etc.).

DISCRETIONARY: (25%) Based on CEO determination of individual performance as it
relates to UCI’s goals and objectives, team work, customer
relationships/service, safety, lean manufacturing, high standards of business
ethics, etc.

This plan is administered by senior UCI management with the approval of the
Compensation Committee. Individual payments will be based on actual base pay
earned during the plan year. Payments will be made in cash after the conclusion
of the plan year. Maximum payout is 150% of target. Employees must be employed
by UCI or one of its business units on the date bonuses are paid in order to
receive any bonus payment. Employees who become eligible for this program
during the year will receive a pro-rated bonus based on their earnings for the
year while under this plan.

 

 

(SAMPLE CALCULATION ATTACHED)

SAMPLE CALCULATION

Business Unit employee achieves the following performance in 2004:

BU Financial Achievement: performance was at target (50%)

Management Objectives: 20% earned (missed 25% payout)

Discretionary: 20% earned (missed 25% payout)

Total earned prior to funding factor is 90% (50 +20+20)

UCI achieves targeted EBITDA resulting in 100% funding and exceeds the maximum
free cash flow funding resulting in 150% funding. Therefore, the total funding
factor is 125% (100% + 150% divided by 2 equals 125%)

Percentage payout is 90% X 125% or 112.5% of this individual’s target bonus.exv10w27

 

EXHIBIT 10.27

REVOLVING CREDIT AGREEMENT

among

FIRST POTOMAC REALTY INVESTMENT LIMITED PARTNERSHIP

and

OTHER BORROWERS WHICH MAY BECOME PARTIES TO THIS AGREEMENT

and

FLEET NATIONAL BANK

and

OTHER BANKS WHICH MAY BECOME PARTIES TO THIS AGREEMENT

and

FLEET NATIONAL BANK,

AS MANAGING ADMINISTRATIVE AGENT

with

FLEET SECURITIES, INC., AS ARRANGER

Dated as of December 31, 2003

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 	 	 
	§1. DEFINITIONS AND RULES OF INTERPRETATION	 	 	1	 
	

	 	 	§1.1.	 	 	Definitions
	 	 	1	 
	

	 	 	§1.2.	 	 	Rules of Interpretation
	 	 	25	 
	§2. THE REVOLVING CREDIT FACILITY	 	 	26	 
	

	 	 	§2.1.	 	 	Commitment to Lend
	 	 	26	 
	

	 	 	§2.2.	 	 	The Revolving Credit Notes
	 	 	26	 
	

	 	 	§2.3.	 	 	Interest on Revolving Credit Loans; Fees
	 	 	27	 
	

	 	 	§2.4.	 	 	Requests for Revolving Credit Loans
	 	 	29	 
	

	 	 	§2.5.	 	 	Conversion Options
	 	 	30	 
	

	 	 	§2.6.	 	 	Funds for Revolving Credit Loans
	 	 	31	 
	

	 	 	§2.7.	 	 	Reduction of Commitment
	 	 	32	 
	

	 	 	§2.10.	 	 	Increase in Total Commitment
	 	 	33	 
	

	 	 	§2.9.	 	 	Extension of Revolving Credit Maturity Date
	 	 	33	 
	§3. REPAYMENT OF THE REVOLVING CREDIT LOANS	 	 	34	 
	

	 	 	§3.1.	 	 	Maturity
	 	 	34	 
	

	 	 	§3.2.	 	 	Optional Repayments of Revolving Credit Loans
	 	 	34	 
	

	 	 	§3.3.	 	 	Mandatory Repayment of Loans
	 	 	34	 
	§4. CERTAIN GENERAL PROVISIONS	 	 	34	 
	

	 	 	§4.1.	 	 	Funds for Payments
	 	 	34	 
	

	 	 	§4.2.	 	 	Computations
	 	 	35	 

-i-

 

	 	 	 	 	 	 	 	 	 	 	 
	

	 	 	§4.3.	 	 	Inability to Determine Eurodollar Rate
	 	 	35	 
	

	 	 	§4.4.	 	 	Illegality
	 	 	36	 
	

	 	 	§4.5.	 	 	Additional Costs, Etc.
	 	 	36	 
	

	 	 	§4.6.	 	 	Capital Adequacy
	 	 	37	 
	

	 	 	§4.7.	 	 	Certificate; Limitations
	 	 	38	 
	

	 	 	§4.8.	 	 	Indemnity
	 	 	38	 
	

	 	 	§4.9.	 	 	Interest on Overdue Amounts
	 	 	38	 
	§5. LETTERS OF CREDIT	 	 	 	 
	§6. RECOURSE OBLIGATIONS	 	 	42	 
	§7. REPRESENTATIONS AND WARRANTIES	 	 	42	 
	

	 	 	§7.1.	 	 	Authority, Etc.
	 	 	42	 
	

	 	 	§7.2.	 	 	Governmental Approvals
	 	 	45	 
	

	 	 	§7.3.	 	 	Title to Properties; Leases
	 	 	45	 
	

	 	 	§7.4.	 	 	Financial Statements
	 	 	46	 
	

	 	 	§7.5.	 	 	No Material Changes, Etc.
	 	 	46	 
	

	 	 	§7.6.	 	 	Franchises, Patents, Copyrights, Etc.
	 	 	47	 
	

	 	 	§7.7.	 	 	Litigation
	 	 	47	 
	

	 	 	§7.8.	 	 	No Materially Adverse Contracts, Etc.
	 	 	47	 
	

	 	 	§7.9.	 	 	Compliance With Other Instruments, Laws, Etc.
	 	 	48	 
	

	 	 	§7.10.	 	 	Tax Status
	 	 	48	 
	

	 	 	§7.11.	 	 	No Event of Default
	 	 	48	 
	

	 	 	§7.12.	 	 	Investment Company Acts
	 	 	48	 
	

	 	 	§7.13.	 	 	Name, Jurisdiction of Organization; Absence of UCC Financing Statements
	 	 	48	 

-ii-

 

	 	 	 	 	 	 	 	 	 	 	 
	

	 	 	§7.14.	 	 	Absence of Liens
	 	 	48	 
	

	 	 	§7.15.	 	 	Certain Transactions
	 	 	49	 
	

	 	 	§7.16.	 	 	Employee Benefit Plans; Multiemployer Plans; Guaranteed Pension Plans
	 	 	49	 
	

	 	 	§7.17.	 	 	Regulations U and X
	 	 	49	 
	

	 	 	§7.18.	 	 	Environmental Compliance
	 	 	49	 
	

	 	 	§7.19.	 	 	Subsidiaries
	 	 	51	 
	

	 	 	§7.20.	 	 	Loan Documents
	 	 	51	 
	

	 	 	§7.21.	 	 	REIT Status
	 	 	51	 
	

	 	 	§7.22.	 	 	Initial Public Offering Registration Statement
	 	 	51	 
	

	 	 	§7.23.	 	 	REIT Collateral Properties
	 	 	52	 
	§8. AFFIRMATIVE COVENANTS OF THE BORROWER AND BPI	 	 	56	 
	

	 	 	§8.1.	 	 	Punctual Payment
	 	 	56	 
	

	 	 	§8.2.	 	 	Maintenance of Office
	 	 	56	 
	

	 	 	§8.3.	 	 	Records and Accounts
	 	 	56	 
	

	 	 	§8.4.	 	 	Financial Statements, Certificates and Information
	 	 	57	 
	

	 	 	§8.5.	 	 	Notices
	 	 	59	 
	

	 	 	§8.6.	 	 	Existence of Borrower; Maintenance of Properties
	 	 	61	 
	

	 	 	§8.7.	 	 	Existence of BPI; Maintenance of REIT Status of BPI; Maintenance of Properties
	 	 	62	 
	

	 	 	§8.8.	 	 	Insurance
	 	 	62	 
	

	 	 	§8.9.	 	 	Taxes
	 	 	63	 
	

	 	 	§8.10.	 	 	Inspection of Properties and Books
	 	 	63	 
	

	 	 	§8.11.	 	 	Compliance with Laws, Contracts, Licenses, and Permits
	 	 	64	 
	

	 	 	§8.12.	 	 	Use of Proceeds
	 	 	64	 

-iii-

 

	 	 	 	 	 	 	 	 	 	 	 
	

	 	 	§8.13.	 	 	Addition of Borrowing Base Property
	 	 	64	 
	

	 	 	§8.14.	 	 	Additional Borrowers; Solvency of Borrowers; Removal of Borrowers
	 	 	64	 
	

	 	 	§8.15.	 	 	Further Assurances
	 	 	65	 
	

	 	 	§8.16.	 	 	Interest Rate Protection
	 	 	65	 
	

	 	 	§8.17.	 	 	Environmental Indemnification
	 	 	65	 
	

	 	 	§8.18.	 	 	Response Actions
	 	 	66	 
	

	 	 	§8.19.	 	 	Environmental Assessments
	 	 	66	 
	

	 	 	§8.20.	 	 	Employee Benefit Plans
	 	 	66	 
	

	 	 	§8.21.	 	 	No Amendments to Certain Documents
	 	 	67	 
	§9. CERTAIN NEGATIVE COVENANTS OF THE BORROWER AND BPI	 	 	68	 
	

	 	 	§9.1.	 	 	Restrictions on Liabilities
	 	 	68	 
	

	 	 	§9.2.	 	 	Restrictions on Liens, Etc.
	 	 	70	 
	

	 	 	§9.3.	 	 	Restrictions on Investments
	 	 	72	 
	

	 	 	§9.4.	 	 	Merger, Consolidation and Disposition of Assets; Assets of BPI
	 	 	73	 
	

	 	 	§9.5.	 	 	Compliance with Environmental Laws
	 	 	73	 
	

	 	 	§9.6.	 	 	Distributions
	 	 	74	 
	§10. FINANCIAL COVENANTS; COVENANTS REGARDING BORROWING BASE PROPERTIES	 	 	75	 
	

	 	 	§10.1.	 	 	Consolidated Total Indebtedness
	 	 	75	 
	

	 	 	§10.2.	 	 	Interest Coverage Ratio
	 	 	75	 
	

	 	 	§10.3.	 	 	Fixed Charge Coverage Ratio
	 	 	75	 
	

	 	 	§10.4.	 	 	Net Worth
	 	 	75	 
	§11. COLLATERAL SECURITY	 	 	76	 

-iv-

 

	 	 	 	 	 	 	 	 	 	 	 
	§12. CONDITIONS TO THE FIRST ADVANCE	 	 	78	 
	

	 	 	§12.1.	 	 	Loan Documents
	 	 	78	 
	

	 	 	§12.2.	 	 	Certified Copies of Organization Documents
	 	 	78	 
	

	 	 	§12.3.	 	 	By-laws; Resolutions
	 	 	78	 
	

	 	 	§12.4.	 	 	Incumbency Certificate: Authorized Signers
	 	 	79	 
	

	 	 	§12.5.	 	 	Validity of Liens
	 	 	79	 
	

	 	 	§12.6.	 	 	Survey and Taxes
	 	 	79	 
	

	 	 	§12.7.	 	 	Title Insurance, Title Exception Documents
	 	 	79	 
	

	 	 	§12.8.	 	 	Leases, Service Contracts and Other Documents
	 	 	79	 
	

	 	 	§12.9.	 	 	Estoppel Agreements; Subordination, Attornment and Non-Disturbance Agreements
	 	 	80	 
	

	 	 	§12.10.	 	 	Certificates of Insurance
	 	 	80	 
	

	 	 	§12.11.	 	 	Hazardous Substance Assessments
	 	 	80	 
	

	 	 	§12.12.	 	 	Opinion of Counsel Concerning Organization and Loan Documents
	 	 	80	 
	

	 	 	§12.13.	 	 	Certificate of Occupancy
	 	 	80	 
	

	 	 	§12.14.	 	 	Appraisals
	 	 	80	 
	

	 	 	§12.16.	 	 	Structural Condition Assurances
	 	 	81	 
	

	 	 	§12.17.	 	 	Architect’s/Engineer’s Reports; Permit Assurances; Compliance
	 	 	81	 
	

	 	 	§12.18.	 	 	Guaranty
	 	 	81	 
	

	 	 	§12.19.	 	 	Financial Analysis of Initial Collateral Properties
	 	 	81	 
	

	 	 	§12.20.	 	 	Inspection of Collateral Properties
	 	 	81	 
	

	 	 	§12.21.	 	 	Certifications from Government Officials; UCC-11 Reports
	 	 	81	 
	

	 	 	§12.22.	 	 	Completion of Initial Public Offering; IPO Proceeds
	 	 	82	 
	

	 	 	§12.23.	 	 	Proceedings and Documents
	 	 	82	 

-v-

 

	 	 	 	 	 	 	 	 	 	 	 
	§13. CONDITIONS TO ALL BORROWINGS	 	 	82	 
	

	 	 	§13.1.	 	 	Representations True; No Event of Default; Compliance Certificate
	 	 	82	 
	

	 	 	§13.2.	 	 	No Legal Impediment
	 	 	83	 
	

	 	 	§13.3.	 	 	Governmental Regulations
	 	 	83	 
	

	 	 	§13.4.	 	 	Borrowing Documents
	 	 	83	 
	§14. EVENTS OF DEFAULT; ACCELERATION; ETC.	 	 	83	 
	

	 	 	§14.1.	 	 	Events of Default and Acceleration
	 	 	83	 
	

	 	 	§14.2.	 	 	Termination of Commitments
	 	 	87	 
	

	 	 	§14.3.	 	 	Remedies
	 	 	87	 
	15. SECURITY INTEREST AND SET-OFF	 	 	88	 
	

	 	 	15.1	 	 	Security Interest
	 	 	88	 
	

	 	 	15.2	 	 	Set-Off and Debit
	 	 	88	 
	

	 	 	15.3	 	 	Right to Freeze
	 	 	89	 
	

	 	 	15.4	 	 	Additional Rights
	 	 	89	 
	§16. THE AGENT	 	 	89	 
	

	 	 	§16.1.	 	 	Authorization
	 	 	89	 
	

	 	 	§16.2.	 	 	Employees and Agents
	 	 	89	 
	

	 	 	§16.3.	 	 	No Liability
	 	 	90	 
	

	 	 	§16.4.	 	 	No Representations
	 	 	90	 
	

	 	 	§16.5.	 	 	Payments
	 	 	90	 
	

	 	 	§16.6.	 	 	Holders of Notes
	 	 	91	 
	

	 	 	§16.7.	 	 	Indemnity
	 	 	91	 
	

	 	 	§16.8.	 	 	Agent as Lender
	 	 	92	 

-vi-

 

	 	 	 	 	 	 	 	 	 	 	 
	

	 	 	§16.9.	 	 	Notification of Defaults and Events of Default
	 	 	92	 
	

	 	 	§16.10.	 	 	Duties in Case of Enforcement
	 	 	92	 
	

	 	 	§16.11.	 	 	Successor Agent
	 	 	93	 
	

	 	 	§16.12.	 	 	Notices
	 	 	94	 
	§17. EXPENSES	 	 	94	 
	§18. INDEMNIFICATION	 	 	95	 
	§19. SURVIVAL OF COVENANTS, ETC.	 	 	95	 
	§20. ASSIGNMENT; PARTICIPATIONS; ETC.	 	 	96	 
	

	 	 	§20.1.	 	 	Conditions to Assignment by Lenders.
	 	 	96	 
	

	 	 	§20.2.	 	 	Certain Representations and Warranties; Limitations; Covenants
	 	 	97	 
	

	 	 	§20.3.	 	 	Register
	 	 	97	 
	

	 	 	§20.4.	 	 	New Notes
	 	 	98	 
	

	 	 	§20.5.	 	 	Participations
	 	 	98	 
	

	 	 	§20.6.	 	 	Pledge by Lender
	 	 	98	 
	

	 	 	§20.7.	 	 	No Assignment by Borrower
	 	 	99	 
	

	 	 	§20.8.	 	 	Disclosure
	 	 	99	 
	

	 	 	§20.9.	 	 	Syndication
	 	 	99	 
	§21. NOTICES, ETC.	 	 	99	 
	§22. FPLP AS AGENT FOR THE BORROWER	 	 	100	 
	§23. GOVERNING LAW; CONSENT TO JURISDICTION AND SERVICE	 	 	100	 
	§24. HEADINGS	 	 	101	 

-vii-

 

	 	 	 	 	 	 	 	 	 	 	 
	§25. COUNTERPARTS	 	 	101	 
	§26. ENTIRE AGREEMENT, ETC.	 	 	101	 
	§27. WAIVER OF JURY TRIAL AND CERTAIN DAMAGE CLAIMS	 	 	101	 
	§28. CONSENTS, AMENDMENTS, WAIVERS, ETC.	 	 	102	 
	§29. SEVERABILITY	 	 	103	 
	§30. INTEREST RATE LIMITATION	 	 	103	 

-viii-

 

Exhibits to Revolving Credit Agreement

Exhibit A – Form of Revolving Credit Note

Exhibit B – Form of Completed Loan Request

Exhibit C – Forms of Compliance Certificates

Exhibit D – Collateral Property Conditions

Exhibit E – Form of Assignment and Assumption

Exhibit F – Form of Joinder Agreement

Exhibit G – Environmental Assessments

-ix-

 

Schedules to Revolving Credit Agreement

	 	 	 
	Schedule 1

	 	Borrowers
	 
	 	 
	Schedule 2

	 	Lender’s Commitments
	 
	 	 
	Schedule 7.1(b)

	 	Capitalization
	 
	 	 
	Schedule 7.3(c)

	 	Partially-Owned Entities
	 
	 	 
	Schedule 7.7

	 	Litigation
	 
	 	 
	Schedule 7.13

	 	Legal Name; Jurisdiction
	 
	 	 
	Schedule 7.14

	 	Standard Lease Form
	 
	 	 
	Schedule 7.15

	 	Affiliate Transactions
	 
	 	 
	Schedule 7.16

	 	Employee Benefit Plans
	 
	 	 
	Schedule 7.19

	 	Subsidiaries
	 
	 	 
	Schedule 7.23

	 	Information Regarding Collateral Properties
	7.23(c)

	 	     Buildings
	7.23(d)

	 	     Condition of Building
	7.23(j)

	 	     Historic Status
	7.23(l)

	 	     Leases
	7.23(m)

	 	     Service Agreements
	 
	 	 
	Schedule 9.1

	 	Indebtedness
	9.1(f)

	 	     Existing Indebtedness
	9.1(h)

	 	     Contingent Liabilities
	 
	 	 
	Schedule 8.19

	 	Employee Benefit Plans

-x-

 

REVOLVING CREDIT AGREEMENT

     This REVOLVING CREDIT AGREEMENT is made as of the 31st day of December,
2003, by and among FIRST POTOMAC REALTY INVESTMENT LIMITED PARTNERSHIP, a
Delaware limited partnership (“FPLP”) and the Wholly-Owned Subsidiaries
(defined below) which are listed on Schedule 1 hereto (as such Schedule 1 may
be (or may be deemed to be) amended from time to time (FPLP and any such
Wholly-Owned Subsidiary being hereinafter referred to collectively as the
“Borrower” unless referred to in their individual capacities), having their
principal place of business at 7200 Wisconsin Avenue, Suite 310, Bethesda,
Maryland 20814; FLEET NATIONAL BANK (“Fleet”), having its principal place of
business at 100 Federal Street, Boston, Massachusetts 02110 and the other
lending institutions which may become parties hereto pursuant to §20
(individually, a “Lender” and collectively, the “Lenders”); FLEET, as managing
administrative agent for itself and each other Lender (the “Agent”); and FLEET
SECURITIES, INC., as Arranger.

RECITALS

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

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

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

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

     §1. DEFINITIONS AND RULES OF INTERPRETATION.

 

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

     AAP Qualification. See §7.6.

1

 

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

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

     Additional Collateral Property Conditions. The conditions
precedent to a Real Estate Asset (other than the Initial Collateral Properties,
if any) becoming a Collateral Property, as set forth in §11.4.

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

     Adjusted Net Operating Income. As at any date of determination, an
amount equal to (i) the Net Operating Income of the Collateral Properties for
the two most recently completed fiscal quarters, multiplied by 2;
minus (ii) the Collateral Property Capital Reserve on such date.

     Advance Rate. See definition of “Borrowing Base Availability”.

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

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

     Agent’s Head Office. The Agent’s office located at 100 Federal
Street, Boston, Massachusetts 02110, or at such other location as the Agent may
designate from time to time, or the office of any successor agent permitted
under §16.

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

2

 

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

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

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

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

     Appraised Value of Collateral Properties. On any date of
determination, the amount determined by the Agent from time to time based upon
the applicable MAI Appraisals for the Collateral Properties at such time.

     Arranger. Fleet Securities, Inc.

     Assignment and Assumption. See §20.1.

     Assignments of Contracts. The collateral assignment and security
agreement in respect of contracts, licenses and Permits dated as of the date
hereof pursuant to which the Borrower has granted and assigned (or in the case
of New Collateral Properties, will grant and assign) to the Agent, for the
benefit of the Agent and the Lenders, a security interest in, and assignment
of, the Borrower’s interest its contracts, licenses, Permits and Service
Agreements relating to the Collateral Properties.

     Assignments of Protected Interest Rate Agreement. The one or more
collateral assignments of interest rate agreements entered into by the Borrower
from time to time in favor of the Agent, for the benefit of the Agent and the
Lenders, pursuant to
which the Borrower will assign all of its rights in and to the Protected
Interest Rate Agreement.

     Assignments of Rents and Leases. The collateral assignments of
rents and leases dated as of the date hereof from the Borrower to the Agent
pursuant to which the Borrower has granted and assigned (or in the case of New
Collateral Properties, will grant and assign) to the Agent, for the benefit of
the Agent and the Lenders, a security interest in, and assignment of, the
Borrower’s interest as lessor with respect to all Leases (and rents thereunder)
of all or any part of the Collateral Properties.

     Base Rate. The higher of (i) the variable per annum rate of
interest announced from time to time by Fleet at its head office in Boston,
Massachusetts as its “base rate”

3

 

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

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

     Borrower. See the preamble hereto.

     Borrowing Base. As determined from time to time, the Collateral
Properties.

     Borrowing Base Availability. As of the date that any Loan is to be
made hereunder, an amount equal to the lesser of (i) 70 % (the “Advance Rate”)
of the Collateral Property Value at such time, provided that the Advance
Rate shall be automatically and permanently decreased to 65% at such time as
the Collateral Property Value multiplied by 65% would be at least
equal to $50,000,000, and (ii) the Collateral Debt Service Coverage Amount at
such time. The amount available to be drawn at any time shall be the Borrowing
Base Availability less the Maximum Drawing Amount and all outstanding Loans at
such time.

     Borrowing Base Conditions. See definition of “Collateral
Property(ies)”.

     Borrowing Base NOI. As of any date of determination, the Adjusted
Net Operating Income calculated with respect to the Real Estate Assets which
are Collateral Properties during the quarter upon which such Net Operating
Income is based, provided that such Net Operating Income shall be
adjusted on a pro forma basis to account for Real Estate Assets
that were sold by the Borrower
during such quarter by reducing the Adjusted Net Operating Income by the Net
Operating Income generated by such Real Estate Asset and to account for Real
Estate Assets that were acquired by the Borrower and added to the Borrowing
Base during such quarter by projecting the results generated by any such Real
Estate Asset for the portion of the applicable quarter during which the
Borrower owned such Real Estate Asset over the entire applicable quarter.

     Building Service Equipment. All apparatus, fixtures and articles
of personal property owned by the Borrower now or hereafter attached to or used
or procured for use in connection with the operation or maintenance of any
Building, including, without limitation, all engines, furnaces, boilers,
stokers, pumps, heaters, tank, dynamos, motors, generators, switchboards,
electrical equipment, heating, plumbing, lifting and ventilating apparatus,
air-cooling and air-conditioning apparatus, gas and electric fixtures,
elevators, escalators, fittings, and machinery and all other equipment of every
kind and description,

4

 

used or procured for use in the operation of any Building
(except apparatus, fixtures or articles of personal property belonging to
lessees or other occupants of such building or to Persons other than the
Borrower unless the same be abandoned by any such lessee or other occupant or
Person), together with any and all replacements thereof and additions thereto.

     Buildings. Individually and collectively, the buildings,
structures and improvements now or hereafter located on the Real Estate Assets.

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

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

     Capital Reserve. As at any date of determination, a capital
reserve equal to the total number of square feet of the Real Estate Assets on
such date, multiplied by $0.15.

     Capitalization Rate. The Capitalization Rate shall be 9.5%.

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

     CERCLA. See §7.18.

     Closing Date. December 31, 2003.

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

     Collateral. All of the properties, rights and interests of the
Borrower, whether now owned or hereafter acquired, that are or are intended to
be subject to the security interests, liens and mortgages created by the
Security Documents, including, without limitation, (i) the Collateral
Properties, (ii) the Leases, (iii) the Permits and the Service Agreements, (iv)
any and all proceeds of the foregoing items (i) through (iii), inclusive, and
(v) the Guaranty.

5

 

     Collateral Debt Service Coverage Amount. As of any date of
determination, the maximum principal amount calculated assuming (A) a monthly
loan payment equal to (i) Adjusted Net Operating Income; divided
by (ii) 1.4; with the result of clauses (i) and (ii) being
divided by (iii) 12, (B) monthly interest at a rate per annum
equal to the greatest of (i) the highest interest rate then applicable to the
Loans, (ii) the then annual rate of interest on 10-year United States Treasury
obligations plus 2.50% and (iii) 6.50%, and (C) a 25-year mortgage-style
amortization.

     Collateral Property(ies). As of any date of determination, an
Initial Collateral Property, if any, or a New Collateral Property with respect
to which the Collateral Property Conditions have been met and that: (i) is a
Permitted Property, (ii) is not the subject of a Disqualifying Environmental
Event, (iii) is not a Real Estate Asset Under Development, (iv) is wholly-owned
by the Borrower, and (v) has been improved with a Building or Buildings which
(a) have been issued a certificate of occupancy (where available) or are
otherwise lawfully occupied for their intended use and (b) are in good and
sound operating condition (the foregoing clauses (i) through (v) and the
succeeding proviso being herein referred to collectively as the
“Borrowing Base Conditions”). Any Collateral Property in which the Agent
releases the lien of the Lenders pursuant to §11.3 shall no longer constitute a
Collateral Property.

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

     Collateral Property Conditions. The conditions set forth in
Section 12 hereof and in Exhibit D hereto, and including items relating
to financial analysis, inspection, title insurance, property and liability
insurance coverages, Leases, rent rolls,
environmental site assessment, appraisal and structural review of any proposed
Collateral Property.

     Collateral Property Value. At any date of determination, the sum
of (i) with respect to all Real Estate Assets that have been Collateral
Properties for less than two complete fiscal quarters, an amount equal to the
Appraised Value of Collateral Properties, plus (ii) with respect to all Real
Estate Assets that have been Collateral Properties for at least two complete
fiscal quarters, an amount equal to Borrowing Base NOI divided by
the Capitalization Rate.

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

6

 

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

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

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

     Consolidated EBITDA. In relation to the Borrower, the Trust and
their respective Subsidiaries for any fiscal quarter, an amount equal to,
without double-counting, the net income or loss of the Borrower, the Trust and
their respective Subsidiaries determined in accordance with GAAP (before
minority interests and excluding the adjustment for so-called “straight-line
rent accounting”) for such quarter, plus (x) the following to the extent
deducted in computing such Consolidated net income for such quarter: (i)
Consolidated Total Interest Expense for such quarter, (ii) real estate
depreciation and amortization for such quarter, and (iii) other non-cash
charges for such quarter; and minus (y) all gains attributable to the
sale or other disposition of assets or debt restructurings in such quarter, in
each case adjusted to include the Borrower’s, the Trust’s or any Subsidiary’s
pro rata share of EBITDA (and the items comprising EBITDA) from
any Partially-Owned Entity in such quarter, based on its percentage ownership
interest in such Partially-Owned Entity (or such other amount to which the
Borrower, the Trust or such Subsidiary is entitled or for which the Borrower,
the Trust or such Subsidiary is obligated based on an arm’s length
agreement). In determining Consolidated EBITDA for the purposes of
calculating Fair Market Value of Real Estate Assets and Consolidated Total
Adjusted Asset Value, (i) any and all income of the Borrower, the Trust and
their respective Subsidiaries received from any Real Estate Asset Under
Development or any other Real Estate Asset that is included in such
calculations at its cost basis value shall be excluded, (ii) for the first two
complete fiscal quarters after a Real Estate Asset is acquired, it shall be
included in such calculations at its cost basis value, as determined in
accordance with GAAP, and (iii) Consolidated EBITDA shall be adjusted on a
pro forma basis to account for Real Estate Assets that were sold
by the Borrower during such quarter by reducing the Consolidated EBITDA
generated by such Real Estate Asset and to account for Real Estate Assets that
were acquired by the Borrower during such quarter by projecting the
Consolidated EBITDA generated by any such Real Estate Asset for the portion of
the applicable quarter during which the Borrower owned such Real Estate Asset
over the entire applicable quarter. For purposes of this definition, it is
agreed that (a) for the fiscal quarter ending December 31, 2003, Consolidated
EBITDA is equal to Consolidated EBITDA for the two consecutive fiscal months
ending on December 31, 2003 multiplied by 1.5, (b) for the two consecutive
fiscal quarters ending March 31, 2004, Consolidated EBITDA is equal to
Consolidated EBITDA for the five consecutive

7

 

fiscal months ending on March 31,
2004 multiplied by 1.2, (c) for the four consecutive fiscal quarters ending
December 31, 2003, Consolidated EBITDA is equal to Consolidated EBITDA for the
two consecutive fiscal months ending on December 31, 2003 multiplied by 6, (d)
for the four consecutive fiscal quarters ending March 31, 2004, Consolidated
EBITDA is equal to Consolidated EBITDA for the five consecutive fiscal months
ending on March 31, 2004 multiplied by 2.4, (e) for the four consecutive fiscal
quarters ending June 30, 2004, Consolidated EBITDA is equal to Consolidated
EBITDA for the eight consecutive fiscal months ending on June 30, 2004
multiplied by 1.5 and (f) for the four consecutive
fiscal quarters ending
September 30, 2004, Consolidated EBITDA is equal to Consolidated EBITDA for the
eleven consecutive fiscal months ending on September 30, 2004 multiplied by
1.09. In addition, in respect of charges required to be taken against
Consolidated EBITDA and bonuses and stock grants made by the Trust, in each
case in connection with the Initial Public Offering, only one sixth (1/6) of
the aggregate amount of such Initial Public Offering charges taken in the
fiscal quarter ending December 31, 2003 shall be required to reduce
Consolidated EBITDA for such quarter.

     Consolidated Fixed Charges. For any fiscal quarter, an amount
equal to (i) Consolidated Total Interest Expense for such quarter plus
(ii) the aggregate amount of scheduled principal payments of Indebtedness
(excluding balloon payments at maturity) required to be made during such
quarter by the Borrower, the Trust and their respective Subsidiaries on a
Consolidated basis plus (iii) the dividends and distributions, if any,
paid or required to be paid during such quarter on the Preferred Equity, if
any, of the Borrower, the Trust and their respective Subsidiaries (other than
dividends paid in the form of capital stock). For purposes of this definition,
it is agreed that (a) for the fiscal quarter ending December 31, 2003,
Consolidated Fixed Charges are equal to Consolidated Fixed Charges for the two
consecutive fiscal months ending on December 31, 2003 multiplied by 1.5, (b)
for the four consecutive fiscal quarters ending December 31, 2003, Consolidated
Fixed Charges are equal to Consolidated Fixed Charges for the two consecutive
fiscal months ending on December 31, 2003 multiplied by 6, (c) for the four
consecutive fiscal quarters ending March 31, 2004, Consolidated Fixed Charges
are equal to Consolidated Fixed Charges for the five consecutive fiscal months
ending on March 31, 2004 multiplied by 2.4, (d) for the four consecutive fiscal
quarters ending June 30, 2004, Consolidated Fixed Charges are equal to
Consolidated Fixed Charges for the eight consecutive fiscal months ending on
June 30, 2004 multiplied by 1.5 and (e) for the four consecutive fiscal
quarters ending September 30, 2004, Consolidated Fixed Charges are equal to
Consolidated EBITDA for the eleven consecutive fiscal months ending on
September 30, 2004 multiplied by 1.09.

     Consolidated Tangible Net Worth. As of any date of determination,
an amount equal to the Consolidated tangible net worth of the Borrower and its
Subsidiaries, as determined in accordance with GAAP.

8

 

     Consolidated Total Adjusted Asset Value. As of any date of
determination, the sum of (A) the Fair Market Value of Real Estate Assets as of
such date; plus (B) the value of the Borrower’s assets other than Real
Estate Assets as of such date, as determined in accordance with GAAP.

     Consolidated Total Indebtedness. As of any date of determination,
Consolidated Total Indebtedness means for the Borrower, the Trust and their
respective Subsidiaries, all obligations, contingent or otherwise, which should
be classified on the obligor’s balance sheet as liabilities, or to which
reference should be made by footnotes thereto, all in accordance with GAAP,
including, in any event, the sum of (without double-counting), (i) all Accounts
Payable on such date, and (ii) all Indebtedness outstanding on such date, in
each case whether Recourse, Without Recourse or contingent, provided,
however, that amounts not drawn under the Revolving Credit Loans on such
date shall not be included in calculating Consolidated Total Indebtedness, and
provided, further, that (without double-counting), each of the
following shall be included in Consolidated Total Indebtedness: (a) all
amounts of guarantees, indemnities for borrowed money, stop-loss agreements and
the like provided by the Borrower, the Trust and their respective Subsidiaries,
in each
case in connection with and guarantying repayment of amounts outstanding under
any other Indebtedness; (b) all amounts for which a letter of credit (including
the Letters of Credit) has been issued for the account of the Borrower, the
Trust or any of their respective Subsidiaries; (c) all amounts of bonds posted
by the Borrower, the Trust or any of their respective Subsidiaries guaranteeing
performance or payment obligations; and (d) all liabilities of the Borrower,
the Trust or any of their respective Subsidiaries as partners, members or the
like for liabilities (whether such liabilities are Recourse, Without Recourse
or contingent obligations of the applicable partnership or other Person) of
partnerships or other Persons in which any of them have an equity interest,
which liabilities are for borrowed money or any of the matters listed in
clauses (a), (b) or (c) above. Without limitation of the foregoing (without
double counting), with respect to any Partially-Owned Entity, (x) to the extent
that the Borrower, the Trust or any of their respective Subsidiaries or such
Partially-Owned Entity is providing a completion guaranty in connection with a
construction loan entered into by a Partially-Owned Entity, Consolidated Total
Indebtedness shall include the Borrower’s, the Trust’s or such Subsidiary’s
pro rata liability under the Indebtedness relating to such
completion guaranty (or, if greater, the Borrower’s, the Trust’s or such
Subsidiary’s potential liability under such completion guaranty) and (y) in
connection with the liabilities described in clauses (a) and (d) above (other
than completion guarantees, which are referred to in clause (x)), the
Consolidated Total Indebtedness shall include the portion of the liabilities of
such Partially-Owned Entity which are attributable to the Borrower’s, the
Trust’s or such Subsidiary’s percentage equity interest in such Partially-Owned
Entity or such greater amount of such liabilities for which the Borrower, the
Trust or their respective Subsidiaries are, or have agreed to be, liable by way
of guaranty, indemnity for borrowed money, stop-loss agreement or the like, it
being agreed that, in any case, Indebtedness of a Partially-Owned Entity shall
not be excluded from Consolidated Total Indebtedness by virtue of the liability
of such Partially-Owned Entity

9

 

being Without Recourse. For purposes hereof,
the amount of borrowed money shall equal the sum of (1) the amount of borrowed
money as determined in accordance with GAAP plus (2) the amount of those
contingent liabilities for borrowed money set forth in subsections (a) through
(d) above, but shall exclude any adjustment for so-called “straight-line
interest accounting”.

     Consolidated Total Interest Expense. For any fiscal quarter, the
aggregate amount of interest required in accordance with GAAP to be paid,
accrued, expensed or, to the extent it could be a cash expense in the
applicable quarter, capitalized, without double-counting, by the Borrower, the
Trust and their respective Subsidiaries during such quarter on: (i) all
Indebtedness of the Borrower, the Trust and their respective Subsidiaries
(including the Loans and including original issue discount and amortization of
prepaid interest, if any), (ii) all amounts available for borrowing, or for
drawing under letters of credit (including the Letters of Credit), if any,
issued for the account of the Borrower, the Trust or any of their respective
Subsidiaries, but only if such interest was or is required to be reflected as
an item of expense, and (iii) all commitment fees, agency fees, facility fees,
balance deficiency fees and similar fees and expenses in connection
with the borrowing of money. For purposes of this definition, it is agreed
that (a) for the fiscal quarter ending December 31, 2003, Consolidated Total
Interest Expense is equal to Consolidated Total Interest Expense for the two
consecutive fiscal months ending on December 31, 2003 multiplied by 1.5, (b)
for the four consecutive fiscal quarters ending December 31, 2003, Consolidated
Total Interest Expense is equal to Consolidated Total Interest Expense for the
two consecutive fiscal months ending on December 31, 2003 multiplied by 6, (c)
for the four consecutive fiscal quarters ending March 31, 2004, Consolidated
Total Interest Expense is equal to Consolidated Total Interest Expense for the
five consecutive fiscal months ending on March 31, 2004 multiplied by 2.4, (d)
for the four consecutive fiscal quarters ending June 30, 2004, Consolidated
Total Interest Expense is equal to Consolidated Total Interest Expense for the
eight consecutive fiscal months ending on June 30, 2004 multiplied by 1.5 and
(e) for the four consecutive fiscal quarters ending September 30, 2004,
Consolidated Total Interest Expense is equal to Consolidated Total Interest
Expense for the eleven consecutive fiscal months ending on September 30, 2004
multiplied by 1.09.

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

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

     Delinquent Lender. See §16.5(c).

     Disqualifying Environmental Event. Any Release or threatened
Release of Hazardous Substances, any violation of Environmental Laws or any
other similar

10

 

environmental event with respect to any Collateral Property that
will, in the Agent’s reasonable opinion, cost in excess of $500,000 to
remediate or, which, with respect to all of the Collateral Properties, will, in
the Agent’s reasonable opinion cost in excess of $1,000,000 in the aggregate to
remediate.

     Distribution. With respect to:

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

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

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

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

     Eligible Assignee. Any of (a) a commercial bank (or similar
financial institution) organized under the laws of the United States, or any
State thereof or the District of Columbia, and having total assets in excess of
$500,000,000; (b) a savings and loan association or savings bank organized
under the laws of the United States, or any State thereof or the District of
Columbia, and having a net worth of at least $100,000,000, calculated in
accordance with GAAP; and (c) a commercial bank (or similar financial
institution) organized under the laws of any other country (including the
central bank of such country) which is a member of the Organization for
Economic Cooperation and Development (the “OECD”), or a political subdivision
of any such country, and having total assets in excess of $500,000,000,
provided that such bank (or similar financial institution) is acting
through a branch or agency located in the United States of America.

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

11

 

     Environmental Indemnity Agreement. The one or more Environmental
Indemnity Agreements entered into on or after the date hereof from the Borrower
and the Trust to the Agent and the Lenders pursuant to which the Borrower and
the Trust shall each, among other things, indemnify the Agent and the Lenders
from environmental liability on or affecting the Collateral Properties in
accordance with the terms thereof.

     Environmental Laws. See §7.18(a).

     Environmental Reports. See §7.18

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

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

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

     Event of Default. See §14.1.

     Extension. See §2.9.

     Facility Fee. See §2.3(d).

     Fair Market Value of Real Estate Assets. As of any date of
determination, the sum of (A) with respect to Real Estate Assets other than
Real Estate Assets Under Development, an amount equal to (i)(x) Adjusted EBITDA
for the most recent two (2) consecutive complete fiscal quarters less
management fees paid in such period to the extent not already deducted in
calculating Adjusted EBITDA or, if greater, 3% of total revenues in such period
minus any management fees actually paid in such period and deducted in
calculating Adjusted EBITDA (as such management fee amount is adjusted in
conformity with the adjustments made in determining Adjusted EBITDA for the
applicable quarters), with the sum thereof multiplied by (y) 2;
with the product thereof being divided by (z) the Capitalization
Rate; plus (B) with respect to Real Estate Assets Under Development, an
amount equal to the cost basis value of such Real Estate Asset on such date, as
determined in accordance with GAAP and approved by the Agent. Notwithstanding
the foregoing, in calculating Adjusted EBITDA for purposes of determining the
Fair Market Value of Real Estate Assets only, there shall be added back to
Consolidated EBITDA for the applicable period the aggregate amount of general
and administrative expenses, as determined in accordance with GAAP, incurred by
the Borrower, the Trust and their respective Subsidiaries in such period.

12

 

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

     Financial Statement Date. June 30, 2003.

     Formation Transactions. The “Formation Transactions” as set
forth and described in the Prospectus.

     Fronting Bank. Fleet.

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

     GAAP. Generally accepted accounting principles, consistently
applied.

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

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

     Hazardous Substances. See §7.18(b).

     Increase. See §2.8.

     Increase Conditions. The satisfaction of each of the following:

	 	(a)	 	no Default or Event of Default shall have
occurred and be continuing (both before and after giving
effect to the Increase) and all representations and
warranties contained in the Loan Documents shall be true and
correct as of the effective date of the Increase (except to
the extent that such representations and warranties relate
expressly to an earlier date);

13

 

	 	(b)	 	the Increase shall be extended on the same
terms and conditions applicable to the other Loans;
	 
	 	(c)	 	to the extent any portion of the Increase is
committed to by a third party financial institution or
institutions not already a Lender hereunder, such financial
institution shall be approved by the Agent (such approval not
to be unreasonably withheld or delayed) and each such
financial institution shall have signed a counterpart
signature page becoming a party to this Agreement and a
“Lender” hereunder; and
	 
	 	(d)	 	one or more of the existing Lenders or such
other financial institutions which may become parties hereto
incident to the
Increase have committed in writing pursuant to the terms
hereof to lend the full aggregate amount of the Increase.

     Indebtedness. All obligations, contingent and otherwise, that in
accordance with GAAP should be classified upon the obligor’s balance sheet as
liabilities, or to which reference should be made by footnotes thereto,
including in any event and whether or not so classified: (a) all debt and
similar monetary obligations, whether direct or indirect, including, without
limitation, all Obligations; (b) all liabilities secured by any mortgage,
pledge, security interest, lien, charge, or other encumbrance existing on
property owned or acquired subject thereto, whether or not the liability
secured thereby shall have been assumed; (c) all reimbursement obligations
under letters of credit (including the Letters of Credit); and (d) all
guarantees for borrowed money, endorsements and other contingent obligations,
whether direct or indirect, in respect of indebtedness or obligations of
others, including any obligation to supply funds (including partnership
obligations and capital requirements) to or in any manner to invest in,
directly or indirectly, the debtor, to purchase indebtedness, or to assure the
owner of indebtedness against loss, through an agreement to purchase goods,
supplies, or services for the purpose of enabling the debtor to make payment of
the indebtedness held by such owner or otherwise.

     Initial Collateral Properties. None.

     Initial Public Offering. The initial public offering
of the Trust, as described in the Prospectus.

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

     Interest Period. With respect to each Revolving Credit Loan, but
without duplication of any other Interest Period, (a) initially, the period
commencing on the

14

 

Drawdown Date of such Loan and ending on the last day of one
of the following periods (as selected by the Borrower in a Completed Loan
Request): (i) for any Base Rate Loan, the calendar month in which such Base
Rate Loan is made (whether by borrowing or by conversion from a Libor Rate
Loan), and (ii) for any Libor Rate Loan, 30, 60 or 90 days; and (b) thereafter,
each period commencing at the end of the last day of the immediately preceding
Interest Period applicable to such Revolving Credit Loan and ending on the last
day of the applicable period set forth in (a)(i) and (ii) above (as selected by
the Borrower in a Conversion Request); provided that all of the
foregoing provisions relating to Interest Periods are subject to the following:

     (A) if any Interest Period with respect to a Base Rate Loan
would end on a day that is not a Business Day, that Interest
Period shall end on the next succeeding Business Day;

     (B) if any Interest Period with respect to a Libor Rate
Loan would otherwise end on a day that is not a Business Day,
that Interest Period shall be extended to the next succeeding
Business Day unless the result of such extension would be to
carry such Interest Period into another calendar month, in which
event such Interest Period shall end on the immediately
preceding Business Day;

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

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

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

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

15

 

dividends, interest or otherwise; and (c) there shall not be deducted from the
aggregate amount of Investments any decrease in the value thereof.

     IPO Proceeds. The proceeds of the Initial Public Offering
available to the Borrower (after deducting the costs and expenses incurred in
connection with the Initial Public Offering).

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

     Leases. Leases, licenses and agreements whether written or oral,
relating to the use or occupation of space in or on the Buildings or on the
Real Estate Assets by persons other than the Borrower or any other member of
the Potomac Group, including but not limited to the leases listed on
Schedule 7.23(l).

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

     Letters of Credit. See §5.1.1.

     Letter of Credit Application. See §5.1.1.

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

     Letter of Credit Participation. See §5.1.4.

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

16

 

     Libor Rate. For any Interest Period with respect to a Libor Rate
Loan, means, the rate per annum as determined on the basis of the offered rates
for deposits in Dollars, for a period of time comparable to such Libor Rate
Loan which appears on the Dow Jones Market Service (formerly known as the
Telerate Service) page 3750 as of 11:00 a.m. London time on the day that is two
Business Days preceding the first day of such Libor Rate Loan; provided,
however, if the rate described above does not appear on the Dow Jones
Market Service on any applicable interest determination date, the Libor Rate
shall be the rate (rounded upward, if necessary, to the nearest one
hundred-thousandth of a percentage point), determined on the basis of the
offered rates for deposits in Dollars for a period of time comparable to such
Libor Rate Loan which are offered by four major banks in the London interbank
market at approximately 11:00 a.m. London time, on the day that is two (2)
Business Days preceding the first day of such Libor Rate Loan, as selected by
the Agent. The principal
London office of each of the four major London banks will be requested to
provide a quotation of its Dollar deposit offered rate. If at least two such
quotations are provided, the rate for that date will be the arithmetic mean of
the quotations. If fewer than two quotations are provided as requested, the
rate for that date will be determined on the basis of the rates quoted for
loans in Dollars to leading European banks for a period of time comparable to
such Libor Rate Loan offered by major banks in New York City at approximately
11:00 a.m. New York City time, on the day that is two Business Days preceding
the first day of such Libor Rate Loan. In the event that the Agent is unable
to obtain any such quotation as provided above, it will be deemed that the
Libor Rate cannot be determined. In the event that the Board of Governors of
the Federal Reserve System shall impose a Reserve Percentage with respect to
Libor Rate deposits of any Lender, then for any period during which such
Reserve Percentage shall apply, the Libor Rate shall be equal to the amount
determined above divided by an amount equal to 1 minus the Reserve Percentage.

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

     Lien. See §9.2.

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

     Loans. The Revolving Credit Loans.

     MAI Appraisal. Real property appraisal(s) of the value of any
Collateral Property or property proposed by the Borrower to become a Collateral
Property, determined on a

17

 

market value basis, performed and prepared at the
Borrower’s expense, impartially by an independent MAI qualified appraiser(s)
selected and retained by the Agent, the form and substance of such appraisal(s)
to be subject to review, revision, adjustment and approval by the Agent with
the final determination of value to be made by the Agent. Each such Appraisal
shall have been prepared in accordance with the Uniform Standards of
Professional Appraisal Practice and the Financial Institutions Reform,
Recovery, and Enforcement Act of 1989.

     Major Leases. Those Leases for 10,000 square feet or more of the
net leaseable area of a Building located on a Collateral Property, as such
square footage number may be increased by the Agent in its sole discretion.
For purposes of this definition, all leases to a single tenant and/or its
Affiliates within a building or industrial
park or similar development, in each case located on a Collateral Property,
shall be aggregated.

     Major Tenants. As to any Major Lease, those tenants that are
parties to that Major Lease and any guarantors of those tenants.

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

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

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

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

     Net Operating Income. For any period, an amount equal to (i) the
aggregate rental and other income from the operation of the applicable Real
Estate Assets during such period; minus (ii) all expenses and other
proper charges incurred in connection with the operation of such Real Estate
Assets (including, without limitation, real estate taxes, management fees and
bad debt expenses) during such period; but, in any case, before payment of or
provision for debt service charges for such period, income taxes for such
period, capital expenses for such period, and depreciation, amortization, and
other non-

18

 

cash expenses for such period, all as determined in accordance with
GAAP (except that any rent leveling adjustments shall be excluded from rental
income). For purposes of this definition, it is agreed that (a) for the two
consecutive fiscal quarters ending December 31, 2003, Net Operating Income for
such two quarters shall be equal to the Net Operating Income for the two
consecutive fiscal months ending on December 31, 2003 multiplied by 3, and (b)
for the two consecutive fiscal quarters ending March 30, 2004, Net Operating
Income for such two quarters shall be equal to the Net Operating Income for the
five consecutive fiscal months ending on March 31, 2004 multiplied by 1.2.

     New Collateral Properties. See §11.4. The New Collateral
Properties shall include the Real Estate Assets more particularly described in
the Security Deeds for such properties; (b) the Buildings and Building Service
Equipment located thereon; (c) all other property owned by the Borrower located
on or at the New Collateral Properties incident to any of the same described in
any Security Document or other Loan Document; and (d) all proceeds or products
of any of the foregoing, unless released pursuant to §11.3.

     Note Record. A Record with respect to any Note.

     Notes. The Revolving Credit Notes.

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

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

19

 

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

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

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

     Permitted Liens. Liens permitted by §9.2.

     Permitted Property. A property which is an industrial property or
a so-called flex property and is located in the Mid-Atlantic region.

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

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

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

     Prospectus. See §7.22.

     Prospectus Financials. See §7.4(a).

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

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

     RCRA. See §7.18.

20

 

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

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

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

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

     Registration Statement. See §7.22.

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

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

     Release. See §7.18(c)(iii).

21

 

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

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

     Revolving Credit Notes. Collectively, the separate promissory
notes of the Borrower in favor of each Lender in substantially the form of
Exhibit A hereto, in an aggregate principal amount equal to $50,000,000,
dated as of the date hereof or as of such later date as any Person becomes a
Lender under this Agreement, and completed with appropriate insertions, as each
of such notes may be amended, replaced, substituted and/or restated from time
to time.

     SARA. See §7.18.

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

     SEC Filings. Collectively, (i) the Registration Statement, (ii) the
Prospectus, (iii) each so-called follow-on prospectus filed by the Trust with
the SEC from time to time, (v) each Form 10-K and Form 8-K filed by the Trust
with the SEC from time to time and (vi) each of the other public forms and
reports filed by the Trust with the SEC from time to time.

     Security Deeds. Collectively, the mortgages and deeds of trust
from the Borrower to the Agent for the benefit of the Lenders (or to trustees
named therein acting on behalf of the Agent for the benefit of the Lenders),
pursuant to which the Borrower has conveyed (or in the case of New Collateral
Properties, will convey) to the Agent, for itself and as agent for the Lenders,
the Collateral Properties as security for the Obligations.

     Security Documents. Collectively, the Security Deeds, the
Assignments of Rents and Leases, the Environmental Indemnity Agreements, the
Assignment of Contracts, the Subordination, Attornment and Non-Disturbance
Agreements, the Guaranty, the Assignment of Protected Interest Rate Agreement,
the UCC-1 financing statements executed and delivered in connection therewith,
and all other agreements, instruments or contracts at any time evidencing any
security for the payment of the Obligations.

     Service Agreements. Collectively, the service agreements with
third parties (including the Borrower’s Subsidiaries), whether written or oral,
relating to the operation, management, maintenance, security, finance or
insurance of the Collateral Properties.

     Subordination, Attornment and Non-Disturbance Agreement. An
agreement among the Agent (for the benefit of itself and the Lenders), the
Borrower and a tenant under a

22

 

Collateral Property Lease pursuant to which such
tenant agrees to subordinate its rights under the Lease to the lien of the
applicable Security Deed and agrees to recognize the Agent or its successor in
interest as landlord under the Lease in the event of a foreclosure or
deed-in-lieu under the Security Deed, in form and substance reasonably
satisfactory to the Agent.

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

     Surveys. Instrument surveys of each of the Collateral Properties
dated as of a date satisfactory to the Agent in respect of each Initial
Collateral Property, if any, or, in the case of a New Collateral Property, no
earlier than ninety (90) days before the date upon which such property becomes
a Collateral Property, each of which (except as may otherwise be accepted in
writing by the Agent) shall show the location of all buildings, structures,
easements and utility lines on the applicable Collateral Property, shall be
sufficient to remove the general survey exception from the applicable Title
Policy, shall show that all buildings and structures are within the lot lines
of the applicable Collateral Property, shall not show any encroachments by
others, shall show the zoning district or districts in which the applicable
Collateral Property is located and shall show whether or not the applicable
Collateral Property is located in a flood hazard district as established by the
Federal Emergency Management Agency or any successor agency or is located in
any flood plain, flood hazard or wetland protection district established under
federal, state or local law and, in addition, shall otherwise be in form and
substance reasonably satisfactory to the Agent and meet the then applicable
standards of the Agent.

     Surveyor Certificates. Certificates executed by the surveyors who
prepared the Surveys dated as of a date in close proximity to the date of the
applicable survey and containing such information relating to the Collateral
Properties as the Agent or the Title Insurance Company may require, such
certificates to be reasonably satisfactory to the Agent in form and substance.

     Tenant Estoppel. A tenant estoppel certificate addressed to the
Agent (for the benefit of the Agent and the Lenders) executed by a tenant under
a Major Lease which attests to the authenticity and validity of such tenants’
Major Lease and the absence of default by either party thereunder, contains
such other information as the Agent may reasonably require, and contains no
information unsatisfactory to the Agent in its reasonable discretion.

     Title Insurance Company. Fidelity National Title Insurance Company
or other nationally recognized title insurance company first approved by the
Agent.

     Title Policy. For each Collateral Property, an ALTA standard form
title insurance policy (or, if such form is not available, an equivalent form
of mortgage title insurance

23

 

policy acceptable to the Agent) issued by the Title
Insurance Company (with such reinsurance or co-insurance as the Agent may
reasonably require, any such reinsurance to be with direct access agreements)
in an amount equal to the Total Commitment in effect from time to time (or such
lesser amount as the Agent may approve based upon the greater of the Appraised
Value of Collateral Properties attributable to such
Collateral Property and the Collateral Property Value attributable to such
Collateral Property) insuring the priority of the Security Deed and Assignment
of Leases and Rents relating to such Collateral Property, and insuring that the
Borrower holds good and clear record marketable fee simple title to such
Collateral Property, subject only to the encumbrances permitted by the relevant
Security Deed and which shall not contain exceptions for mechanics liens,
persons in occupancy (other than tenants under Leases listed on Schedule
7.23 with respect to the Initial Collateral Properties, if any, and other
than as approved by the Agent with respect to New Collateral Properties, as
tenants only, with no purchase option or right of first refusal) or matters
which would be shown by a survey, shall not insure over any matter except to
the extent that any such affirmative insurance is acceptable to the Agent in
its sole discretion, and shall contain such endorsements and affirmative
insurance as the Agent in its discretion may reasonably require, including but
not limited to (a) comprehensive endorsement, (b) variable rate of interest
endorsement, (c) usury endorsement, (d) revolving credit endorsement, (e) doing
business endorsement, (f) tie-in endorsement, (g) first loss endorsement, (h)
date down endorsement, (i) zoning endorsement, (j) survey endorsement, (k)
access endorsement, (l) creditors’ rights exception deletion endorsement and
(m) tax lot endorsement.

     Total Commitment. As of any date, the sum of the then current
Commitments of the Lenders. As of the Closing Date, the Total Commitment is
$50,000,000. After the Closing Date, the aggregate amount of the Total
Commitment may be increased to an amount not exceeding $100,000,000,
provided that such Increase is in accordance with the provisions of
§2.8.

     Trust. See preamble.

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

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

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

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

24

 

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

     §1.2. Rules of Interpretation.

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

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

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

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

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

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

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

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

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

25

 

     §2. THE REVOLVING CREDIT FACILITY.

 

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

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

     §2.2. The Revolving Credit Notes. The Revolving Credit Loans shall
be evidenced by the Revolving
Credit Notes. A Revolving Credit Note shall be payable to the order of each
Lender in an aggregate principal amount equal to such Lender’s

26

 

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

     §2.3. Interest on Revolving Credit Loans; Fees.

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

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

          (c) With reference to Base Rate Loans and Libor Rate Loans, the
“Applicable Base Rate Margin” the “Applicable Libor Margin” shall be equal to
(A) from the Closing Date through the end of the fiscal month in which the
financial statements required to be delivered pursuant to §8.4(b) for the
fiscal quarter of the Borrower ending December 31, 2003 are delivered to the
Agent, a percentage equal to 0.25% for the Applicable Base Rate Margin and
2.15% for the Applicable Libor Margin, and (B) thereafter, the percentage
determined for each Rate Period by reference to the Table below:

27

 

Table

Applicable Margin

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Applicable
	 	 	 	 	Applicable	 	Base Rate
	Total Leverage Ratio
	 	Libor Margin
	 	Margin

	a)
	 	greater than or equal to 60%	 	 	2.50	%	 	 	0.50	%
	c)
	 	less than 60% but greater than or equal to 55%	 	 	2.25	%	 	 	0.35	%
	d)
	 	less than 55% but greater or equal to than 50%	 	 	2.15	%	 	 	0.25	%
	e)
	 	less than 50%	 	 	1.90	%	 	 	0.15	%

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

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

28

 

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

          (e) The Borrower shall pay to the Agent a fee (in each case, a “Letter of
Credit Fee”) in an amount equal to the Applicable L/C Percentage of the undrawn
amount of each outstanding Letter of Credit, which fee (a) shall be payable
quarterly in arrears on the fifth Business Day of each calendar quarter for the
immediately preceding calendar quarter, with a final payment on the Maturity
Date or any earlier date on which the Commitments shall terminate (which Letter
of Credit Fee shall be pro-rated for any calendar quarter in which such Letter
of Credit is issued, drawn upon or otherwise reduced or terminated) and (b)
shall be for the accounts of the Lenders and the Fronting Bank as follows: (i)
an amount equal to 0.125% per annum of the Letter of Credit Fee shall be for
the account of the Fronting Bank and (ii) the remainder of the Letter of Credit
Fee shall be for the accounts of the Lenders (including the Fronting Bank)
pro rata in accordance with their respective Commitment
Percentages

     §2.4. Requests for Revolving Credit Loans.

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

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

         (ii) Each Completed Loan Request shall be delivered by the
Borrower to the Agent by 10:00 a.m. (x) on the Business Day of the

29

 

proposed Drawdown Date of any Base Rate Loan, and (y) at least
three (3) Business Days prior to the proposed Drawdown Date of any
Libor Rate Loan.

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

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

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

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

         (v) The Agent will use reasonable efforts to cause the
Completed Loan Request to be delivered to each Lender on the same
day it is received by the Agent and will, absent circumstances
outside of its control, cause the Completed Loan Request to be
delivered to each Lender on the Business Day following the day a
Completed Loan Request is received by the Agent.

     §2.5. Conversion Options.

          (a) The Borrower may elect from time to time to convert any outstanding
Revolving Credit Loan to a Revolving Credit Loan of another Type,
provided that (i) subject to the further proviso at the end of this
§2.5(a) and subject to §2.5(b) and §2.5(d), with respect to any conversion of a
Base Rate Loan to a Libor Rate Loan (or a

30

 

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

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

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

          (d) The Borrower may not request or elect a Libor Rate Loan pursuant to
§2.4, elect to convert a Base Rate Loan to a Libor Rate Loan pursuant to
§2.5(a) or elect to continue a Libor Rate Loan pursuant to §2.5(b) if, after
giving effect thereto, there would be greater than four (4) Libor Rate Loans
then outstanding. Any Loan Request or Conversion Request for a Libor Rate Loan
that would create greater than four (4) Libor Rate Loans outstanding shall be
deemed to be a Loan Request or Conversion Request for a Base Rate Loan. By way
of explanation of the foregoing, in the event that the Borrower wishes to
convert or continue two or more Loans into one Libor Rate Loan on the same day
and for identical Interest Periods (or borrow an additional Revolving Credit
Loan simultaneously with converting or continuing a Revolving Credit Loan for
identical
Interest Periods), such Libor Rate Loan shall constitute one single Libor Rate
Loan for purposes of this clause (d).

     §2.6. Funds for Revolving Credit Loans.

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

31

 

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

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

     §2.7. Reduction of Commitment. The Borrower shall have the right
at any time and from time to time upon five (5) Business Days’ prior written
notice to the Agent (with copies to the Agent for each Lender) to reduce by
$5,000,000 or an integral multiple of $1,000,000 in excess thereof (but not
below $20,000,000 or, if greater, the Maximum Drawing Amount) or terminate
entirely the unborrowed portion of the then Total Commitment, whereupon the
Commitments of the Lenders shall be reduced pro rata in
accordance with their respective Commitment Percentages by the amount specified
in such notice or, as the case may be, terminated. Upon the effective date of
any such reduction or termination, the Borrower shall pay to the Agent for the
respective accounts of the Lenders all accrued and unpaid interest on the
amount of such reduction and the

32

 

full amount of the Facility Fee then accrued
and unpaid on the amount of the reduction. No reduction or termination of the
Commitments may be reinstated.

     §2.8. Increase in Total Commitment. At any time prior to the
second anniversary of the Closing Date, the Borrower shall have the right, upon
written notice to the Agent and satisfaction of the Increase Conditions, to
cause the Total Commitment to increase by an amount not at any time exceeding
$20,000,000 (the “Increase”), in which event Schedule 2 will be deemed
to be amended to reflect the increased Commitment of each Lender, if any, that
has agreed in writing to an increase and to add any third party financial
institution that may have become a party to, and a “Lender” under, this
Agreement in connection with the Increase (and the Agent is hereby authorized
to effect such amendment on behalf of the Lenders and the Borrower);
provided, however, that it shall be a condition precedent to the
effectiveness of the Increase that the Increase Conditions shall have been
satisfied. In the event that the Increase results in any change to the
Commitment Percentage of any Lender, then on the effective date of such
Increase in the Total Commitment (i) any new Lender, and any existing Lender
whose Commitment has increased, shall pay to the Agent such amounts as are
necessary to fund its new or increased Commitment Percentage of all existing
Revolving Credit Loans, (ii) the Agent will use the proceeds thereof to pay to
all Lenders whose Commitment Percentage is decreasing such amounts as are
necessary so that each such Lender’s participation in existing Revolving Credit
Loans will be equal to its adjusted Commitment Percentage, and (iii) if the
effective date of such Increase in the Total Commitment occurs on a date other
than the last day of an Interest Period applicable to any outstanding Libor
Rate Loan, the Borrower will be responsible for Libor Breakage Costs and any
other amounts payable pursuant to §4.8 on account of the payments made pursuant
to clause (ii) above. No Lender shall have any obligation to increase its
Commitment in connection with the Increase.

 

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

33

 

     §3. REPAYMENT OF THE LOANS.

 

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

     §3.2. Optional Repayments of Revolving Credit Loans. The Borrower
shall have the right, at its election, to prepay the outstanding amount of the
Revolving Credit Loans, in whole or in part, at any time without penalty or
premium; provided that the outstanding amount of any Libor Rate Loans
may not be prepaid on a date other than the last day of an Interest Period
unless the Borrower pays the Libor Breakage Costs for each Libor Rate Loan so
prepaid at the time of such prepayment. The Borrower shall give the Agent
(with copies to the Agent for each Lender), no later than 10:00 a.m., Boston,
Massachusetts time, at least two (2) Business Days’ prior written notice of any
prepayment pursuant to this §3.2 of any Base Rate Loans, and at least four (4)
Business Days’ notice of any proposed prepayment pursuant to this §3.2 of Libor
Rate Loans, specifying the proposed date of prepayment of Revolving Credit
Loans and the principal amount to be prepaid. Each such partial prepayment of
the Loans shall be in an amount equal to $1,000,000 or an integral multiple of
$1,000,000 in excess thereof or, if less, the outstanding balance of the
Revolving Credit Loans then being repaid, shall be accompanied by the payment
of all charges, if any, outstanding on all Revolving Credit Loans so prepaid
and of all accrued interest on the principal prepaid to the date of payment,
and shall be applied, in the absence of instruction by the Borrower, first to
the principal of Base Rate Loans and then to the principal of Libor Rate Loans.

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

     §4. CERTAIN GENERAL PROVISIONS.

     §4.1. Funds for Payments.

          (a) All payments of principal, interest, fees, and any other amounts due
hereunder or under any of the other Loan Documents shall be made to the Agent,
for the respective accounts of the Lenders or (as the case may be) the Agent,
at the Agent’s Head

34

 

Office, in each case in Dollars and in immediately
available funds. The Borrower shall make each payment of principal of and
interest on the Loans and Reimbursement Obligations which are not converted to
a Loan hereunder and of fees hereunder not later than 12:00 p.m. (Boston,
Massachusetts time) on the due date thereof.

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

     §4.2. Computations. All computations of interest on Libor Rate
Loans and of other fees to the extent applicable shall be based on a 360-day
year and all computations of interest on Base Rate Loans shall be based on a
365/366 day year, in each case paid for the actual number of days elapsed.
Except as otherwise provided in the definition of the term “Interest Period”
with respect to Libor Rate Loans, whenever a payment hereunder or under any of
the other Loan Documents becomes due on a day that is not a Business Day, the
due date for such payment shall be extended to the next succeeding Business
Day, and interest shall accrue during such extension. The outstanding amount
of the Loans as reflected on the Note Records or record attached to any other
Note from time to time shall constitute prima facie evidence of the principal
amount thereof.

     §4.3. Inability to Determine Libor Rate. In the event, prior to
the commencement of any Interest Period relating to any Libor Rate Loan, the
Agent shall determine that adequate and reasonable methods do not exist for
ascertaining the Libor Rate that would otherwise determine the rate of interest
to be applicable to any Libor Rate Loan during any Interest Period, the Agent
shall forthwith give notice of such determination (which shall be conclusive
and binding on the Borrower) to the Borrower and the Lenders. In such event
(a) any Loan Request with respect to Libor Rate Loans shall be automatically
withdrawn and shall be deemed a request for Base Rate Loans, (b) each Libor
Rate Loan will automatically, on the last day of the then current Interest

35

 

Period applicable thereto, become a Base Rate Loan, and (c) the obligations of
the Lenders to make Libor Rate Loans shall be suspended, in each case unless
and until the Agent determines that the circumstances giving rise to such
suspension no longer exist, whereupon the Agent shall so notify the Borrower
and the Lenders.

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

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

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

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

          (c) impose or increase or render applicable (other than to the extent
specifically provided for elsewhere in this Agreement) any special deposit,
reserve, assessment, liquidity, capital adequacy or other similar requirements
(whether or not

36

 

having the force of law) against assets held by, or deposits in
or for the account of, or loans by, or letters of credit issued by, or
commitments of an office of any Lender, or

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

and the result of any of the foregoing is

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

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

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

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

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

37

 

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

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

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

     §4.9. Interest on Overdue Amounts; Late Charge. Notwithstanding
anything to the contrary stated herein, upon the occurrence and during the
continuance of an Event of Default, at the option of the Majority Lenders, to
the extent permitted by applicable law, the unpaid balance of all Obligations
shall bear interest at the rate otherwise applicable thereto plus 2%,
compounded daily until such Event of Default is cured or waived to the
satisfaction of the Agent and the required Lenders. In addition, the Borrower
shall pay a

38

 

late charge equal to five percent (5%) of any amount of interest
charges on the Loans which is not paid within ten (10) days of the date when
due.

     §5. LETTERS OF CREDIT.

     §5.1. Letter of Credit Commitments.

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

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

          §5.1.3. Terms of Letters of Credit. Each Letter of Credit issued,
extended or renewed hereunder shall, among other things, (i) provide for the
payment of sight drafts for honor thereunder when presented in accordance with
the terms thereof and when accompanied by the documents described therein, (ii)
shall have an expiry date no later than one year after its issuance, and (iii)
have an expiry date no later than the date which is fourteen (14) days prior to
the Maturity Date. Each Letter of Credit so issued, extended or renewed shall
be subject to the Uniform Customs.

          §5.1.4. Obligations of Lenders with respect to Letters of Credit.
Each Lender severally agrees that it shall be absolutely liable, without regard
to the occurrence of any Default or Event of Default or any other condition
precedent whatsoever, to the extent of such Lender’s Commitment Percentage, to
reimburse the Fronting Bank on demand for the amount of each draft paid by the
Fronting Bank under each Letter of Credit (such agreement for a Lender being
called herein the “Letter of Credit Participation” of such Lender). Each such
payment made by a Lender shall be treated as a purchase by such Lender of a
participation in the Fronting Bank’s interest in such Letter

39

 

of
Credit and each
Lender shall share, in accordance with its respective Commitment Percentage, in
any interest (but not any fee payable solely for the account of the Fronting
Bank) which accrues and is payable by the Borrower pursuant to §5.2 or
otherwise in connection with such Letter of Credit.

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

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

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

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

     §5.3. Letter of Credit Payments; Funding of a Loan. If any draft
shall be presented or other demand for payment shall be made under any Letter
of Credit, the Fronting Bank will use its reasonable efforts to notify the
Borrower and the Lenders, on or before the date the Fronting Bank intends to
honor such drawing, of the date and amount of the draft presented or demand for
payment and of the date and time when it expects to pay such draft or honor
such demand for payment and, except to the extent the amount of such draft
becomes a Revolving Credit Loan as set forth in this §5.3, Borrower shall
reimburse Agent, as set forth in §5.2. Notwithstanding anything contained in
§5.2 or this §5.3 to the contrary, however, unless Borrower shall have notified
the Agent and

40

 

Fronting Bank prior to 11:00 a.m. (New York time) on the Business
Day immediately prior to the date of such drawing that Borrower intends to
reimburse Fronting Bank for the amount of such drawing with funds other than
the proceeds of Revolving Credit Loans, Borrower shall be deemed to have timely
given a Completed Loan Request pursuant to §2.4 to Agent, requesting a Base
Rate Loan on the date on which such drawing is honored and in an amount equal
to the amount of such drawing. The Borrower may thereafter convert any such
Base Rate Loan to a Revolving Credit Loan of another Type in accordance with
§2.5. Each Lender shall, in accordance with §2.6, make available such Lender’s
Commitment Percentage of such Revolving Credit Loan to Agent, the proceeds of
which shall be applied directly by Agent to reimburse Fronting Bank for the
amount of such draw. In the event that any Lender fails to make available to
Agent the amount of such Lender’s Commitment Percentage of such Revolving
Credit Loan on the date of any drawing, Agent shall be entitled to recover such
amount on demand from such Lender plus any additional amounts payable under
§2.6(b) in the event of a late funding by a Lender. The Fronting Bank is
irrevocably authorized by the Borrower and each of the Lenders to honor draws
on each Letter of Credit by the beneficiary thereof in accordance with the
terms of such Letter of Credit. The responsibility of the Fronting Bank to the
Borrower and the Lenders shall be only to determine that the documents
(including each draft) delivered under each Letter of Credit in connection with
such presentment shall be in conformity in all material respects with such
Letter of Credit in accordance with the Fronting Bank’s customary practices.

     §5.4. Obligations Absolute. The Borrower’s and the Lenders’
obligations under this §5 shall be absolute and unconditional under any and all
circumstances and irrespective of the occurrence of any Default or Event of
Default or any condition precedent whatsoever or any setoff, counterclaim or
defense to payment which the Borrower may have or have had against the Agent,
any Lender or any beneficiary of a Letter of Credit. The Borrower and the
Lenders further agree with the Fronting Bank, the Agent and the other Lenders
that the Fronting Bank shall not be responsible for, and the Borrower’s
Reimbursement Obligations under §5.2 and the Lenders obligations under §5.3
shall not be affected by, among other things, the validity or genuineness of
documents or of any endorsements thereon, even if such documents should in fact
prove to be in any or all respects invalid, fraudulent or forged, or any
dispute between or among the Borrower, the beneficiary of any Letter of Credit
or any financing institution or other party to whom any Letter of Credit may be
transferred, or any claims or defenses whatsoever of the Borrower against the
beneficiary of any Letter of Credit or any such transferee. The Fronting Bank,
the Agent and the Lenders shall not be liable for any error, omission,
interruption or delay in transmission, dispatch or delivery of any message or
advice, however transmitted, in connection with any Letter of Credit. The
Borrower and the Lenders agree that any action taken or omitted by the Fronting
Bank or the Agent under or in connection with each Letter of Credit and the
related drafts and documents shall be binding upon the Borrower and shall not
result in any liability on the part of the Fronting Bank, the Agent or any
Lender to the Borrower.

41

 

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

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

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

     §7.1. Authority, Etc.

          (a) Organization: Good Standing.

             (i) FPLP is a limited partnership duly organized,
validly existing and in good standing under the laws of its
state of organization; FPLP has all requisite limited
partnership power to own its properties and conduct its
business as now conducted and as presently contemplated;
and FPLP is in good standing as a foreign entity and is
duly authorized to do business in the jurisdictions where
the Collateral Properties owned by it are

42

 

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

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

          (b) Capitalization. The outstanding equity of FPLP is comprised of
a general partner interest and limited partner interests, all of which have
been duly issued and are outstanding and fully paid and non-assessable. All of
the issued and outstanding general partner interests of FPLP are owned and held
of record by the Trust. There are no outstanding securities or agreements
exchangeable for or convertible into or carrying any rights to acquire a
general partner interest in FPLP. There are no outstanding

43

 

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

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

44

 

condition (financial or otherwise) or properties
of the Trust, FPLP or any other member of the Potomac Group) or result in the
creation of any mortgage,
pledge, security interest, lien, encumbrance or charge upon any of the
properties or assets of the Borrower or the Trust.

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

          (e) Consents to Transfers. All necessary consents by any Person
(including, without limitation, any partner or mortgagee) to the transfer of
any Real Estate Asset or interest in a Partially-Owned Entity contemplated by
the Formation Transactions to permit the Borrower to be the valid owner thereof
have been obtained, and copies thereof have been delivered to the Agent.

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

     §7.3. Title to Properties; Leases.

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

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

          (b) The Borrower and the Trust will, as of the Closing Date, own all of
the assets as reflected in the financial statements of the Borrower and the
Trust described in §7.4, the Registration Statement, the Prospectus, and any
so-called follow-on prospectus or acquired since the date of such financial
statements (except property and assets sold or otherwise disposed of in the
ordinary course of business since that date).

          (c) Each of the direct or indirect interests of the Borrower in any
Partially-Owned Entity is set forth on Schedule 7.3(c) attached hereto,
including the type

45

 

of entity in which the interest is held, the percentage interest owned by the
Borrower in such entity, the capacity in which the Borrower holds the interest,
and the Borrower’s ownership interest therein.

     §7.4. Financial Statements. The following financial statements
have been furnished to each of the Lenders:

          (a) The unaudited pro forma condensed consolidated balance
sheet of the Trust and its Subsidiaries as of June 30, 2003, and their related
unaudited condensed consolidated statements of operations for the fiscal year
ended December 31, 2003 and for the six months ended June 30, 2003, prepared as
if the Initial Public Offering and all of the Formation Transactions set forth
in the Prospectus had occurred as of June 30, 2003 in the case of the balance
sheet and as of the beginning of the fiscal year presented and carried forward
through the year or interim period presented in the case of the statements of
operations, contained in pages F-3 through F-9, inclusive, of the Prospectus,
together with (x) the audited combined financial statements for the First
Potomac Predecessor (as defined in the Prospectus, page F-12), combined in
accordance with GAAP, contained in pages F-12 through F-26, inclusive, of the
Prospectus and (y) the audited combined balance sheet of the Trust as of July
15, 2003 contained in pages F-10 and F-11, inclusive of the Prospectus
(collectively, the “Prospectus Financials”). Such Prospectus Financials have
been prepared in accordance with GAAP and, assuming such Formation Transactions
had occurred as of June 30, 2003 in the case of the pro forma
balance sheet and as of the beginning of the fiscal year presented and carried
forward through the year or interim period presented in the case of the
pro forma statements of operations, fairly present the financial
condition of the Trust and its Subsidiaries (or such First Potomac Predecessor,
as the case may be) as at the close of business on the date thereof and the
results of operations for the fiscal year then ended. There are no contingent
liabilities of the Trust or any of its Subsidiaries (or such First Potomac
Predecessor, as the case may be) as of such date known to the officers of the
Trust or any of its Subsidiaries (or such First Potomac Predecessor, as the
case may be) not disclosed in the Prospectus Financials.

          (b) A summary of information relating to the Properties (as described in
the Prospectus, pages 66-76) as of June 30, 2003, including true, accurate and
complete information as to the average annual base rents, occupancy rates and
lease expiration information, together with the audited statements of revenues
and certain expenses with respect to certain of such Properties contained in
pages F-27-F-44 of the Prospectus, all of which information contained in such
audited statements was prepared in accordance with GAAP and fairly presents the
revenues and certain expenses of the applicable Properties as of the dates and
for the periods presented.

     §7.5 No Material Changes, Etc. Since the Financial Statement Date,
there has occurred no
materially adverse change in the business, operations, assets, condition
(financial or otherwise) or properties of the Trust, FPLP or any other member
of the

46

 

Potomac Group. Since the Financial Statement Date and the Closing Date
(or such later date upon which a Real Estate Assets became a Collateral
Property), there has been no material adverse change to the Net Operating
Income of any Real Estate Asset that is a Collateral Property.

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

     §7.7 Litigation. Except as disclosed on Schedule 7.7, there
are no actions, suits, proceedings or investigations of any kind pending or, to
the Borrower’s or the Trust’s knowledge, threatened against the Borrower, the
Trust or any of their respective Subsidiaries before any court, tribunal or
administrative agency or board that, if adversely determined, could reasonably
be expected to, either individually or in the aggregate, materially adversely
affect the business, operations, assets, condition (financial or otherwise) or
properties of the Trust, FPLP or any other member of the Potomac Group, or
materially impair the right of the Trust, FPLP or any other member of the
Potomac Group, to carry on its businesses substantially as now conducted by it,
or result in any substantial liability not fully covered by insurance, or for
which adequate reserves are not maintained, as reflected in the applicable
consolidated financial statements or SEC Filings of the Borrower and the Trust,
or which question the validity of this Agreement or any of the other Loan
Documents, or any action taken or to be taken pursuant hereto or thereto.

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

47

 

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

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

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

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

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

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

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

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

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

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

          (a) None of the Borrower, its Subsidiaries, the Trust or any operator of
the Real Estate Assets or any portion thereof, or any operations thereon is in
violation, or alleged violation, of any judgment, decree, order, law, license,
rule or regulation pertaining to environmental matters, including without
limitation, those arising under the Resource Conservation and Recovery Act
(“RCRA”), the Comprehensive Environmental Response, Compensation and Liability
Act of 1980 as amended (“CERCLA”), the Superfund Amendments and Reauthorization
Act of 1986 (“SARA”), the Federal Clean Water Act, the Federal Clean Air Act,
the Toxic Substances Control Act, or any state or local statute, regulation,
ordinance, order or decree relating to health, safety or the environment
(hereinafter “Environmental Laws”), which violation or alleged violation has,
or its remediation would have, by itself or when aggregated with all such other
violations or alleged violations, a material adverse effect on the business,
operations, assets, condition (financial or otherwise), properties or prospects
of the Trust, FPLP or

49

 

any other member of the Potomac Group, or constitutes a
Disqualifying Environmental Event with respect to any of the Collateral
Properties.

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

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

50

 

only
in compliance with all applicable Environmental Laws; any of which events
described in clauses (i) through (v) above would have a material adverse effect
on the business, operations, assets, condition (financial or otherwise),
properties or prospects of the Trust, FPLP or any other member of the Potomac
Group, or constitutes a Disqualifying Environmental Event with respect to any
of the Collateral Properties.

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

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

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

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

     §7.22. Initial Public Offering Registration Statement.

     (a) A Registration Statement on Form S-11 (File No. 333-107172) with
respect to the common shares (as described in the Registration Statement) has
been prepared by the Trust in conformity with the requirements of the
Securities Act of 1933, as amended (the “Act”), and the rules and regulations
(the “Rules and Regulations”) of the Securities and Exchange Commission
thereunder; and has been filed with the SEC. The Trust has prepared and has
filed amendments to such registration statement, which amendments have been
similarly prepared. There has been delivered to the Agent copies of such
registration statement and amendments, together with copies of each exhibit
filed therewith. The Trust has also prepared a related preliminary prospectus,
a copy of which has also been provided to the Agent. The Trust has also filed
with the SEC (or will timely file) one of the following: (i) prior to
effectiveness of such registration statement, a further amendment thereto,
including the form of final prospectus, or (ii) a final prospectus in
accordance with Rules 430A and 424(b) of the Rules and Regulations. As

51

 

filed,
such amendment and form of final prospectus, or such final prospectus, include
all Rule 430A Information.

     The term “Registration Statement” as used in this Agreement means the
above registration statement at the time such registration statement became
effective and, in the event any post-effective amendment thereto became
effective, shall also mean such registration statement as so amended;
provided, however, that such term shall also include all Rule
430A Information deemed to be included in such registration statement at the
time such registration statement became effective as provided by Rule 430A of
the Rules and Regulations. The term “Prospectus” as used in this Agreement
shall mean the prospectus relating to the common shares in the form in which it
is first filed with the SEC pursuant to Rule 424(b) of the Rules and
Regulations or, if no filing pursuant to Rule 424(b) of the Rules and
Regulations is required, means the form of final prospectus included in the
Registration Statement at the time such registration statement became
effective, and shall include any preliminary Prospectus. The term “Rule 430A
Information” means information with respect to the Common Stock and the
offering thereof permitted to be omitted from the Registration Statement when
it became effective pursuant to Rule 430A of the Rules and Regulations.

     (b) The SEC has not issued any order preventing or suspending the use of
any preliminary Prospectus, and each preliminary Prospectus has conformed in
all material respects to the requirements of the Act and the Rules and
Regulations and, as of its date, has not included any untrue statement of a
material fact or omitted to state a material fact necessary to make the
statements therein not misleading; as of the Closing Date, the Registration
Statement has become effective and the Registration Statement and the
Prospectus, and any amendments or supplements thereto, contain all material
statements and information required to be included therein by the Act and the
Rules and Regulations
and in all material respects conform to the requirements of the Act and the
Rules and Regulations, and neither the Registration Statement nor the
Prospectus, nor any amendment or supplement thereto, contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading.

     §7.23. Collateral Properties. The Borrower makes the following
representations and warranties concerning the Collateral Properties:

          (a) Off-Site Utilities. All water, sewer, drainage, electric,
gas, telephone and other utilities are installed to the property lines of each
Collateral Property and are connected to the Buildings or improvements located
thereon with valid permits and are adequate to service the Building in full
compliance with applicable law. Each such Building is properly and legally
connected directly to, and served exclusively by, public water and sewer
systems. Except pursuant to easements which have been obtained and are insured
as appurtenant rights not subject to extinguishment under the Title Policies,

52

 

no easements benefiting the Borrower over land of others are required for any
such utilities, and no drainage of surface or other water across land of others
is required.

          (b) Access; Etc. The streets abutting each Collateral Property are
public roads, to which each Collateral Property has physically open and
uncontrolled direct access by trucks and other motor vehicles and by foot, or
are private ways (with physically open and uncontrolled direct access by trucks
and other motor vehicles and by foot to public roads) to which each Collateral
Property has direct access without charge or liability for maintenance or
repair, except as may be provided in the Permitted Liens. Except pursuant to
easements which have been obtained and are disclosed in the Surveys and are
insured as appurtenant rights not subject to extinguishment under the Title
Policies, no easements over land of others are required for such means of
access and egress.

          (c) Independent Building. Except as set forth in Schedule
7.23(c), the Buildings on each Collateral Property are fully independent
from any other real estate in all respects including, without limitation, in
respect of structural integrity, heating, ventilating and air conditioning,
plumbing, mechanical and other operating and mechanical systems, and
electrical, sanitation and water systems, all of which are connected directly
to off-site utilities located in public streets or ways or recorded easements
as set forth in §7.23(a) or (b) above. The Buildings are located on lots which
are separately assessed for purposes of real estate tax assessment and payment.
Except as shown on the Survey and made subject to affirmative title insurance
against enforced alteration or removal, the Buildings, all Building Service
Equipment and all paved or landscaped areas related to or used in connection
with the Buildings are located wholly within the perimeter lines of the lot or
lots on which the Collateral Properties are located.

          (d) Condition of Building; No Asbestos. Except as set forth in the
engineering reports provided to the Agent and listed on Schedule 7.23(d)
or the Environmental Reports, to the best of the Borrower’s knowledge, there
are no material defects in the roof, foundation, structural elements and
masonry walls of the Buildings or their heating, ventilating and air
conditioning, electrical, sprinkler, plumbing or other mechanical systems or
their Building Service Equipment; the Buildings are fully sprinklered to the
extent required by law; and no friable asbestos is located in or on the
Buildings.

          (e) Building Compliance with Law; Permits. The Buildings as
presently constructed do not violate any applicable federal or state law or
governmental regulation, or any local ordinance, order or regulation,
including, without limitation, laws, regulations, or ordinances relating to
zoning, building use and occupancy, subdivision control, fire protection,
health and sanitation. The Buildings comply with applicable zoning laws and
regulations and the zoning laws permit use of the Buildings for their current
use. There is such number of loading docks and facilities and parking spaces
on the lot or lots on which each Collateral Property is located as is adequate
(i) under the

53

 

zoning laws and regulations to permit use of the Buildings for
its current use, and (ii) to satisfy any obligations owed to lessees under
Leases for the Collateral Property. All private ways providing access to each
Collateral Property are zoned in a manner which will permit access to the
Buildings over such ways by trucks and other commercial and industrial
vehicles, to the extent necessary to continue the existing use of such
Buildings. All Permits legally required for the operation and maintenance of
each Collateral Property, including, without limitation, building permits,
curb-cut permits, water connection permits, sewer extension or connection
permits and other permits relating to the use of utilities, and permits
required under the Federal Clean Air Act, as amended, the Federal Clean Water
Act, as amended (including, without limitation, a so-called “404 Permit”), and
by state and/or local law or regulations consistent with the requirements of
said Acts, have been validly issued by the appropriate governmental Persons and
are now in full force and effect. With respect to each Collateral Property and
the operation thereof, the Borrower is in compliance in all respects with the
Americans with Disabilities Act and similar applicable state and/or local
requirements.

          (f) No Required Real Property Consents, Permits, Etc. The
Borrower has received no notices of, nor has any knowledge of, any Permits,
utility installations and connections (including, without limitation, drainage
facilities, curb cuts and street openings), or private consents required for
the maintenance, operation, servicing and use of the Collateral Properties or
the Buildings for their current use which have not been granted, effected, or
performed and completed (as the case may be) or any fees or charges therefor
which have not been fully paid. No such approvals, consents, permits or
licenses, (including, without limitation, any railway siding agreements) will
terminate, or become void or voidable or terminable on any foreclosure sale of
any Collateral Property pursuant to the applicable Security Deed.

          (g) Suits; Judgments. To the best of the Borrower’s knowledge,
there are no outstanding notices, suits, orders, decrees or judgments relating
to zoning, building use and occupancy, fire, health, sanitation, or other
violations affecting, against, or with respect to, the Collateral Property or
any part thereof.

          (h) Insurance. The Borrower has not received any notices from any
insurer or its agent requiring performance of any work with respect to each
Collateral Property or canceling or threatening to cancel any policy of
insurance, and each Collateral Property complies with the requirements of its
insurance carrier(s) and is insured in accordance with the insurance
requirements of the Agent as made known to the Borrower.

          (i) Real Property Taxes; Special Assessments. There are no unpaid
or outstanding real estate or other taxes or assessments on or against any
Collateral Property or any part thereof which are payable by Borrower or
tenants (except only real estate taxes not yet due and payable). There are no
betterment assessments or other special assessments presently pending with
respect to any portion of any Collateral Property,

54

 

other than as shown on
municipal lien certificates delivered to the Agent and the Borrower has
received no notice of any such special assessment being contemplated.

          (j) Historic Status. Except as may be set forth in Schedule
7.23(j), the Buildings are not historic structures or landmarks and neither
the Buildings nor any Collateral Property is located within any historic
district pursuant to any federal, state or local law or governmental
regulation.

          (k) Eminent Domain. There are no pending eminent domain
proceedings against any Collateral Property or any part thereof, and, to the
best of the Borrower’s knowledge, no such proceedings are presently threatened
or contemplated by any taking authority.

          (l) Leases. A rent roll as of [September 30, 2003] with respect
to all Leases of any portion of the Collateral Properties is accurately and
completely set forth in all material respects in Schedule 7.23(l) as the
same shall be supplemented each fiscal quarter by a certificate signed by an
authorized officer of the Borrower. The Leases reflected on such rent roll
constitute the sole and complete agreements and understandings relating to
leasing or licensing of space in the Buildings or at the Collateral Properties
by the Borrower. The Borrower has delivered or made available to the Agent a
true and complete copy of all Leases relating to the Collateral Properties.
There are no occupancies, rights, privileges or licenses in or to the Buildings
or any other part of the Collateral Properties other than pursuant to the
Leases reflected on the rent roll set forth in Schedule 7.23(l). Except
as set forth in Schedule 7.23(l), the Collateral Property Leases
reflected on the Schedule 7.23(l) rent roll are in full force and
effect, in accordance with their respective terms, and, to the best of the
Borrower’s knowledge, no tenant under any of such Leases has failed to make a
required
payment thereunder or failed to comply with any other material term, condition
or provision contained therein, nor are there any defenses, counterclaims,
offsets, concessions or rebates available to any tenant thereunder, and the
Borrower has not given or made, or received, any notice of default, or any
claim, which remains uncured or unsatisfied, with respect to any of such Leases
and, to the best of the Borrower’s knowledge there is no basis for any such
claim or notice of default by any tenant. The Schedule 7.23(l) rent
roll accurately and completely sets forth all rents payable by and security, if
any, deposited by tenants, no tenant having paid more than one month’s rent in
advance. All tenant improvements or work to be done, furnished or paid for by
the Borrower, or credited or allowed to a tenant, for, or in connection with,
the Building pursuant to any Lease relating to a Collateral Property has been
completed and paid for or provided for in a manner satisfactory to the Agent.
No leasing, brokerage or like commissions, fees or payments are due or may
become due from the Borrower in respect of the Leases relating to Collateral
Properties, except as set forth on Schedule 7.23(l), or reflected in the
financial statements delivered pursuant to §7.4.

55

 

          (m) Service Agreements. Except as listed on Schedule
7.23(m) or reflected in the financial statements delivered pursuant to
§7.4, there are no Service Agreements relating to the operation, maintenance
and management of the Buildings, the Collateral Properties, or any part thereof
which are terminable upon more than six (6) months notice. All property
management and leasing agency agreements for the Collateral Properties are
terminable upon thirty (30) days or less notice by mortgagee after foreclosure
or deed-in-lieu. To the best of the Borrower’s knowledge, there are no claims
or any bases for claims in respect of the Collateral Properties or their
operation by any party to any Service Agreements.

          (n) Other Material Real Property Agreements; No Options. There
are no material agreements pertaining to the Collateral Properties, the
Buildings or the operation or maintenance of either thereof other than as
described in this Agreement (including the Schedules hereto and the Title
Policies) or otherwise disclosed in writing to the Agent by the Borrower; and
no Person has any right or option to acquire the Buildings or the Collateral
Properties or any portion thereof or interest therein or lease any portion
thereof or additional portion thereof (other than expansion by existing tenants
of leased premises disclosed in the Leases), or provide services therefor.

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

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

     §8.2.
Maintenance of Office; Jurisdiction of Organization, Etc.
Each of the Borrower and the Trust will maintain its chief executive office in
Bethesda, Maryland, or at such other place in the United States of America as
each of them shall designate by written notice to the Agent to be delivered at
least thirty (30) days prior to any change of chief executive office, where,
subject to §21, notices, presentations and demands to or upon the Borrower and
the Trust in respect of the Loan Documents may be given or made. Neither the
Trust nor the Borrower will change its jurisdiction of organization, name or
corporate structure without giving the Agent at least thirty (30) days prior
written notice of such change.

     §8.3. Records and Accounts. Each of the Borrower and the Trust
will (a) keep, and cause each of its Subsidiaries to keep, true and accurate
records and books of account in which full, true and correct entries will be
made in accordance with GAAP and (b) maintain adequate accounts and reserves
for all taxes (including income taxes),

56

 

contingencies, depreciation and
amortization of its properties and the properties of its Subsidiaries.

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

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

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

          (c) Upon the request of the Agent and as soon as practicable, but in any
event not later than ninety (90) days after the end of each of its fiscal
years, statements of Net Operating Income and outstanding Indebtedness as at
the end of such fiscal year and for the fiscal year then ended in respect of
each Real Estate Asset (including each Collateral Property), each prepared in
accordance with GAAP consistent with the definitions of Net Operating Income
and outstanding Indebtedness used in this

57

 

Agreement and a rent roll in respect
of each Collateral Property, in each case certified by the chief financial or
accounting officer of the Borrower as true and correct;

          (d) Upon the request of the Agent and as soon as practicable, but in any
event not later than forty-five (45) days after the end of each of the fiscal
quarters of the Borrower, (i) copies of the unaudited statements of Net
Operating Income and outstanding Indebtedness as at the end of such quarter and
for the portion of the fiscal year then elapsed in respect of each Real Estate
Asset (including each Collateral Property), each prepared in accordance with
GAAP consistent with the definitions of Net Operating Income and outstanding
Indebtedness used in this Agreement and a rent roll in respect of each
Collateral Property, in each case certified by the chief financial or
accounting officer of the Borrower to present fairly the Net Operating Income
and outstanding Indebtedness and rent roll in respect of each such Real Estate
Asset, and (ii) an occupancy analysis in respect of each Real Estate Asset
(including each Collateral Property) certified by the chief financial officer
of the Borrower to be true and complete;

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

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

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

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

          (i) as soon as practicable, but in any event not later than ninety (90)
days after the end of each fiscal year of the Trust, copies of the Form 10-K
statement filed by the Trust with the SEC for such fiscal year, and as soon as
practicable, but in any event not later than fifty (50) days after the end of
each fiscal quarter of the Trust copies of the Form 10-Q statement filed by the
Trust with the SEC for such fiscal quarter, provided

58

 

that, in either
case, if the SEC has granted an extension for the filing of such statements,
the Trust shall deliver such statements to the Agent within ten (10) days after
the filing thereof with the SEC;

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

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

          (l) in the event that the definition of “funds from operations” is revised
by the Board of Governors of the National Association of Real Estate Investment
Trusts, a report, certified by the chief financial or accounting officer of the
Borrower, of the “funds from operations” of the Borrower based on the
definition as in effect on the date of this Agreement and based on the
definition as so revised from time to time, which such report shall be
delivered to the Agent (with copies to the Agent for each Lender) with the
financial statements required to be delivered pursuant to §8.4(b) above;

          (m) promptly following the Agent’s request therefor, copies of the annual
financial statements, if any, delivered by any Major Tenants or guarantors of
Major Leases; and

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

     §8.5. Notices.

          (a) Defaults. The Borrower and the Trust will, promptly after
obtaining knowledge of the same, notify the Agent in writing (with copies to
the Agent for each Lender) of the occurrence of any Default or Event of
Default. If any Person shall give any notice or take any other action in
respect of (x) a claimed Default (whether or not constituting an Event of
Default) under this Agreement or (y) a claimed failure by the Borrower, the
Trust or any of their respective Subsidiaries, as applicable, to comply with
any term, condition or provision of or under any note, evidence of
Indebtedness, indenture or other obligation in excess of $7,000,000,
individually or in the aggregate, to which or with respect to which any of them
is a party or obligor, whether as principal or surety, and such failure to
comply would permit the holder of such note or obligation or other evidence of
Indebtedness to accelerate the maturity thereof, the Borrower shall

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forthwith
give written notice thereof to the Agent and each of the Lenders, describing
the notice or action and the nature of the claimed failure to comply.

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

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

          (d) Notice of Litigation and Judgments. The Borrower and the Trust
will give notice to the Agent in writing (with copies to the Agent for each
Lender) within three (3) days of becoming aware of any litigation or
proceedings threatened in writing or any pending litigation and proceedings an
adverse determination in which could

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

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

          (f) Notice of Default under Major Leases. The Borrower will
simultaneously give to the Agent (with copies for each Lender) copies of any
notice (i) given by the Borrower to a Major Tenant or (ii) received by the
Borrower from any Major Tenant, of the occurrence of any failure of the party
receiving such notice to comply with any of the material terms, covenants,
conditions or agreements under any of the Major Leases.

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

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

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

     §8.8. Insurance. The Borrower and the Trust will maintain
insurance on the Collateral Properties as required by the Security Deeds, and
the Borrower and the Trust will maintain with respect to their other
properties, and will cause each of its Subsidiaries to maintain, with
financially sound and reputable insurers, insurance with respect to such
properties and its business against such casualties and contingencies as shall
be in accordance with the general practices of businesses engaged in similar
activities in similar geographic areas and in amounts, containing such terms,
in such forms and for such periods as may be reasonable and prudent. The Agent
shall be named as loss payee, mortgagee and additional insured under the
Borrower’s insurance on Collateral Properties and shall be given at least
thirty (30) days notice of cancellation, termination or material amendment.

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     §8.9. Taxes. The Borrower will, and will cause the Trust and each
of their respective Subsidiaries to, pay or cause to be paid real estate taxes,
other taxes, assessments and other governmental charges against the Real Estate
Assets before the same become delinquent and will duly pay and discharge, or
cause to be paid and discharged, before the same shall become overdue, all
taxes, assessments and other governmental charges imposed upon its sales and
activities, or any part thereof, or upon the income or profits therefrom, as
well as all claims for labor, materials, or supplies that if unpaid might by
law become a lien or charge upon any of the Real Estate Assets; provided
that any such tax, assessment, charge, levy or claim need not be paid if the
validity or amount thereof shall currently be contested in good faith by
appropriate proceedings and if the Borrower or the Trust shall have set aside
on its books adequate reserves with respect thereto, and, in the case of claims
for labor, materials or supplies affecting the Collateral Properties, put into
effect bonding arrangements as necessary to prevent liens based on such claims
from attaching to any Collateral Property which would have priority over the
lien of the Security Deed for such Collateral Property; and provided
further that the Borrower or the Trust will pay all such taxes, assessments,
charges, levies or claims forthwith prior to the consummation of proceedings to
foreclose any lien that may have attached as security therefor. Promptly upon
request by the Agent if required for bank regulatory compliance purposes or
similar
bank purposes, the Borrower will provide evidence of the payment of real estate
taxes, other taxes, assessments and other governmental charges against the Real
Estate Assets in the form of receipted tax bills or other form reasonably
acceptable to the Agent, or evidence of the existence of applicable contests as
contemplated herein.

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

          (b) The Borrower hereby agrees that each of the Lenders and the Agent (and
each of their respective, and their respective affiliates’, employees,
officers, directors, agents and advisors (collectively, “Representatives”) is,
and has been from the commencement of discussions with respect to the facility
established by the Agreement (the “Facility”), permitted to disclose to any and
all Persons, without limitation of any kind, the structure and tax aspects (as
such terms are used in Code sections 6011 and 6111) of the Facility, and all
materials of any kind (including opinions or other tax analyses) that are or
have been provided to such Lender or the Agent related to such

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structure and
tax aspects. In this regard, the Lenders and the Agent intend that this
transaction will not be a “confidential transaction” under Code sections 6011,
6111 or 6112, and the regulations promulgated thereunder.

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

     §8.12. Use of Proceeds. Subject at all times to the other
provisions of this Agreement, including without limitation §7.17, the Borrower
will use the proceeds of the Loans solely to finance acquisitions of Permitted
Properties and for its working capital and general corporate purposes.

     §8.13. Additional Borrower; Solvency of Borrower; Removal of
Borrower.

          (a) If, after the Closing Date, FPLP wishes to designate as a Collateral
Property a Real Estate Asset that otherwise qualifies as a Collateral Property
but is owned by a Person other than the Borrower, FPLP shall cause such Person
(which Person must be a Wholly-owned Subsidiary of FPLP) to become a party to
this Agreement and the other applicable Loan Documents prior to such Real
Estate Asset becoming a Collateral Property hereunder. The liability of each
Person which is from time to time a Borrower hereunder shall be joint and
several with each other Borrower for all Obligations for so long as such
Borrower is a Borrower hereunder (provided that FPLP shall at all times
be a Borrower hereunder). In accordance with §11.3, at any time and from time
to time but only for so long as no Default or Event of Default shall then
exist, FPLP may notify Agent, in writing (each, a “Release Notice”), that the
Borrower would like one (1) or more Collateral Properties to be removed from
the Borrowing Base. Such Release Notice shall be accompanied by a Certificate
of Compliance in the form of Exhibit C-3, evidencing compliance with
§2.1 and §10 after giving effect to the requested release. Prior to the
effectiveness of any such release, the Agent shall have the right to require

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new MAI Appraisals for each of the Real Estate Assets which would remain in the
Borrowing Base for which the existing MAI Appraisal is more than 12 months old
to confirm the Borrower’s compliance with the provisions hereof (except that if
there are more than ten (10) Real Estate Assets remaining in the Borrowing Base
after giving effect to the release, such new MAI Appraisals shall not be
required). Upon the Agent’s receipt of such Release Notice and its
satisfaction with the Certificate of Compliance and the results of any MAI
Appraisals (which the Agent shall endeavor to have completed within 60 days
after receipt of the applicable Release Notice), such Collateral Properties
(each, a “Released Property”) shall be removed from the Borrowing Base and any
Wholly-owned Subsidiary which is the owner of a Released Property (and is not
the owner of any other Collateral Property) and which is then a Borrower (other
than FPLP) hereunder shall be released from its obligations hereunder
(including the Obligations). FPLP will not permit any Borrower (other than
FPLP) that owns any Collateral Property to have any
Subsidiaries unless such Subsidiary’s business, obligations and undertakings
are exclusively related to the business of such Borrower.

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

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

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

     §8.16. Environmental Indemnification. The Borrower and the Trust
each covenants and agrees that it will indemnify and hold the Agent and each
Lender, and each of their respective Affiliates, harmless from and against any
and all claims, expense, damage, loss or liability incurred by the Agent or any
Lender in connection with environmental matters with respect to the Collateral
Properties, as more fully set forth in the Environmental Indemnity Agreement
for each respective Collateral Property. It is expressly acknowledged by the
Borrower and the Trust that each Environmental

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Indemnity Agreement shall
survive any foreclosure or any modification, release or discharge of any or all
of the Security Documents or the repayment of the amounts owing under the Notes
and this Agreement and the termination of this Agreement and the obligations of
the Lenders hereunder and shall inure to the benefit of the Agent and the
Lenders and their respective Affiliates, their respective successors, and their
respective assigns under the Loan Documents.

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

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

     §8.19. Employee Benefit Plans.

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

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

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

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

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

     §8.21. Leases; Lease Approvals. The Borrower will
use commercially reasonable efforts to (and at the Agent’s request during the
continuance of a Default or Event of Default, will promptly) exercise or
enforce its rights under those provisions of the Major Leases requiring the
delivery of financial statements, rent rolls, lease summaries, subleases and
other information from tenants under Leases or guarantors of Lease obligations
to the Borrower, and, during the continuance of a Default or Event of Default,
will deliver to the Agent (with copies for each Lender) copies of all material
information so delivered by any of the tenants or guarantors immediately
following the Borrower’s receipt thereof. After an Event of Default has
occurred and while it is continuing, the Agent shall have the right, and the
Borrower hereby authorizes the Agent, to communicate directly with any of the
tenants or guarantors for any purpose contemplated by this Agreement or any of
the Security Documents. In the event that any of the Leases is terminated, the
Borrower will take or cause to be taken all steps within the power of the
Borrower to market and lease the untenanted rentable area of the Buildings to
such

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tenants and in the case of any Major Lease, upon such terms and conditions
as may be reasonably approved by the Agent. Any proposed lease (i) for the
occupancy of 10,000 square feet or more of the net leasable area of a Building
located on a Collateral Property, or (ii) for any space in a Collateral
Property which, when aggregated with all other leases in the Building (or in an
office park or similar
development which includes such Building) to the tenant under such proposed
lease and/or its Affiliates, would cause such proposed tenant to occupy 10,000
square feet or more of the net leasable area of a Building, office park or
similar development, shall be submitted to the Agent (with copies for each
Lender) and approved by the Agent prior to execution, provided that if
the Agent has not approved or disapproved such lease within fifteen (15) days
of receipt of the final form of such Lease together with a request for approval
as to which the Agent shall have, within fifteen (15) days prior thereto,
received copies of the lease term sheet and tenant financials (to the extent
such tenant financials were available), and (ii) provided,
further that the final request for approval and the envelope in which it
was delivered have been each appropriately marked with the following legend:
“TIME SENSITIVE — RESPONSE REQUIRED WITHIN FIFTEEN (15) DAYS”, such lease will
be deemed automatically approved. The approval of the Agent shall not be
required for any Lease of any other portion of a Collateral Property of less
than 10,000 square feet so long as (i) such Lease is substantially in the form
of the standard form of lease submitted to and approved by the Agent and
attached hereto as Schedule 7.14 or in such other standard form as the
Agent may hereafter approve (in either case, with such customary modifications
thereto as may be negotiated by the Borrower and the tenant thereunder), and
(ii) the terms of such Lease are consistent with the Borrower’s most recent
leasing plan delivered to the Agent. A copy of any new Lease shall be
delivered to the Agent promptly following execution of such Lease.

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

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

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

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

          (c) Indebtedness (other than relating to the Collateral Properties) in an
aggregate amount not in excess of $250,000 in respect of taxes, assessments,

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governmental charges or levies and claims for labor, materials and supplies to
the extent
that payment therefor shall not at the time be required to be made in
accordance with the provisions of §8.9;

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

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

          (f) Indebtedness of the Borrower existing on the Closing Date and listed
and described on Schedule 9.1 hereto or in the financial statements
delivered pursuant to §7.4, including any refinancing of any debt listed on
Schedule 9.1(f) hereto, provided that (i) such refinancing is
Without Recourse to the Borrower or the Trust and is Without Recourse to any of
the respective assets of any of the Borrower or the Trust other than to the
specific Real Estate Asset being refinanced, and (ii) at the time of any such
refinancing and after giving effect thereto, there exists no Default or Event
of Default hereunder;

          (g) Indebtedness of the Borrower incurred after the Closing Date,
provided that: (i) such Indebtedness is Without Recourse to the Borrower
or the Trust and is Without Recourse to any of the respective assets of any of
the Borrower or the Trust other than to the specific Real Estate Asset or
Assets acquired, refinanced or rehabilitated with the proceeds of such
Indebtedness, and (ii) at the time any such Indebtedness is incurred and after
giving effect thereto, there exists no Default or Event of Default hereunder;
and

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

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

          (j) Recourse Indebtedness of the Borrower incurred after the Closing Date
(other than relating to the Collateral Properties) in connection with the
purchase of or the construction of or renovation of improvements on any Real
Estate Asset,
provided that (i)

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the aggregate principal amount of Indebtedness
permitted by this clause (j) shall not exceed $10,000,000 at any time
outstanding, and (ii) at the time any such Indebtedness is incurred and after
giving effect thereto, there exists no Default or Event of Default hereunder.

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

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

     §9.2. Restrictions on Liens, Etc. (a) Create or incur or suffer to
be created or incurred or to exist any lien, mortgage, pledge, attachment,
security interest or other rights of third parties of any kind upon any of the
Collateral Properties, whether now owned or hereafter acquired, or upon the
income or profits therefrom; (b) acquire, or agree or have an option to
acquire, any property or assets upon conditional sale or other title retention
or purchase money security agreement, device or arrangement in connection with
the operation of the Collateral Properties; (c) suffer to exist with respect to
the Collateral Properties, any taxes, assessments, governmental charges and
claims for labor, materials and supplies for which payment thereof is not being
contested or for which payment notwithstanding a contest is required to be made
in accordance with the provisions of §8.9 and has not been timely made; or (d)
sell, assign, pledge or otherwise transfer for security any accounts, contract
rights, general intangibles, chattel paper or instruments, with or without
recourse, relating to the Collateral Properties (the foregoing items (a)
through (d) being sometimes referred to in this §9.2 collectively as “Liens”),
provided that the Borrower may create or incur or suffer to be created
or incurred or to exist:

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

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

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

          (iv) Liens with respect to Collateral Properties which are noted as
exceptions to coverage in Title Policies approved by the Agent and, with
respect to Real Estate Assets which are not Collateral Properties, encumbrances
on properties consisting of easements, rights of way, covenants, zoning and
other land-use restrictions, building
restrictions, restrictions on the use of real property and defects and
irregularities in the

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

          (v) any Leases entered into in the ordinary course of business in
compliance with the terms of §8.21 hereof;

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

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

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

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

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

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

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

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

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

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

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

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

          (f) any Investments now or hereafter made in any Wholly-owned Subsidiary;
and Investments now or hereafter made in any Partially-Owned Entity (or other
Person for which the Borrower has any funding obligation) so long as such
Investment is made in connection with Permitted Properties and provided
that
the aggregate amounts actually invested by Borrower (or if not invested
directly by Borrower,

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actually invested by an Affiliate of the Borrower for
which the Borrower has any funding obligation) and such Wholly-owned Subsidiary
at any time in any Partially-Owned Entity (or other such Person) will not
exceed ten percent (10%) of the Consolidated Total Adjusted Asset Value at the
time of any such Investment; and

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

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

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

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

          (b) sell, transfer or otherwise dispose of any Real Estate Assets or other
property, including any equity interest in any Person in any single transaction
(or series of related transactions) having a sales price (net of any
Indebtedness secured by a Lien on such Real Estate Assets, if any), in excess
of $10,000,000 (collectively and individually, “Sell” or a “Sale”) or grant a
Lien to secure Indebtedness (an “Indebtedness Lien”) in any single transaction
in an amount in excess of $10,000,000 unless, in each such event, the Borrower
has provided to the Agent (with copies to the Agent for each Lender) a
compliance certificate in the form of Exhibit C-3, hereto signed by the
chief financial officer or chief accounting officer of the Borrower, setting
forth in reasonable detail computations evidencing compliance with the
covenants contained in §10 hereof and certifying that no Default or Event of
Default would exist or occur and be continuing after giving effect to all such
proposed Sales or Indebtedness Liens (and the
use of proceeds of such Sales or Indebtedness Liens to pay Indebtedness
outstanding hereunder).

     §9.5. Compliance with Environmental Laws. (a) Use any of the Real
Estate Assets or any portion thereof as a facility for the handling,
processing, storage or disposal

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

     §9.6. Distributions.

          (a) The Borrower will not make (i) annual Distributions in excess of 90%
of “funds from operations”; or (ii) any Distributions during any period after
any Event of Default has occurred; provided, however, (a) that
the Borrower may at all times (including while an Event of Default is
continuing) make Distributions to the extent (after taking into account all
available funds of the Trust from all other sources) required in order to
enable the Trust to continue to qualify as a REIT and (b) in the event that the
Borrower cures any such Event of Default in clause (ii) above and the Agent has
accepted such cure prior to accelerating the Loan, the limitation of clause
(ii) above shall cease to apply with respect to such Event of Default.

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

     §9.7. Leases. The Borrower will not materially amend, supplement
or otherwise modify, or terminate or cancel, or accept the surrender of any
Major Lease, or grant any material concessions to or waive any material
performance of any of the Major Tenants under the Major Leases without the
prior approval of the Agent, which approval shall not be unreasonably withheld,
conditioned or delayed, provided that the Borrower may, without such
approval, terminate a Major Lease if the Major Tenant is in material default of
such Lease. The Borrower and the Lenders acknowledge and agree that, among
other things, an amendment or modification (including by waiver or estoppel) of
any monetary obligation, the term, or any construction obligation under a Major
Lease (other than settlement of disputed common area charges, percentage or
other non-fixed rent disputes in an amount not exceeding five percent (5%) of
total annual rent (as used herein, total annual rent shall not include items
constituting additional rent such as tax or insurance payments), and additive
construction change orders adding less than
ten percent (10%) to the total cost of the tenant improvements to a Major
Lease), shall be deemed material. Except to the extent required by existing
Leases, or Leases entered into after the Closing Date in accordance with the
terms of this Agreement, the Borrower will not grant any consent to any
assignment of any of the Major Leases by any of the Major Tenants or any change
in control of any Major Tenant if such change in control is prohibited by the
relevant Major Lease without the prior approval of the Agent, which approval
shall not be

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unreasonably withheld, conditioned or delayed. The Borrower,
without the approval of the Agent, will not, directly or indirectly, cause or
permit to exist (beyond applicable notice and grace periods provided for in the
Major Lease in question) any condition within its control which would result in
the termination or cancellation of, or which would relieve the performance of
any obligation of any of the Major Tenants under, the Major Leases, subject to
force majeure, fire or other casualty.

     For purposes of this §9.7, the Agent agrees that with respect to any
approval by the Agent required hereunder (provided that any request for
approval and the envelope in which it was delivered have been appropriately
marked with the following legend: “TIME SENSITIVE — RESPONSE REQUIRED WITHIN
FIFTEEN (15) DAYS”), if the Agent has not approved or disapproved of any action
to be taken by the Borrower within fifteen (15) days of receipt of written
request or notice by the Borrower, such request will be deemed automatically
approved; provided that, in the case of any such amendment or
modification, the Agent shall have, within fifteen (15) days prior thereto,
received copies of such proposed amendment or modification.

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

     §10.1. Consolidated Total Leverage Ratio. At any time, (i)
Consolidated Total Indebtedness shall not exceed 65% of (ii) Consolidated
Total Adjusted Asset Value. This covenant shall be tested quarterly as of the
last day of the applicable quarter.

     §10.2. Interest Coverage Ratio. As at the end of any fiscal
quarter, the ratio of (i) Adjusted EBITDA for the four consecutive fiscal
quarters ending on the last day of such fiscal quarter to (ii) Consolidated
Total Interest Expense for the four consecutive fiscal quarters ending on the
last day of such fiscal quarter must exceed 2.00 to 1.0.

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

     §10.4. Net Worth. As at the end of any fiscal quarter or any other
date of measurement, the Consolidated Tangible Net Worth of the Borrower and
its Subsidiaries shall not be less than the sum of (i) $73,000,000 plus
(ii) 75% of the aggregate proceeds received by the Trust (net of fees and
expenses customarily incurred in transactions of such type) in connection with
any offering of stock in the Trust, plus (iii) 75% of the aggregate
value of operating units issued by the Borrower in connection with asset or
stock acquisitions (valued at the time of issuance by reference to the terms of
the agreement pursuant to which such units are issued), in each case after the
Closing Date and on or prior to the date such determination of Consolidated Net
Worth is made.

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     §10.5. Occupancy. From and after January 1, 2005, the Collateral
Properties shall at all times maintain a stabilized occupancy of 80% in the
aggregate under Leases satisfactory to the Agent.

     §11. COLLATERAL SECURITY.

          §11.1. Security. The Obligations shall be secured by (i) a
perfected first priority lien and security interest to be held by the Agent for
the benefit of the Lenders (subject only to Permitted Liens) in each of the
Collateral Properties, pursuant to the terms of the Security Deed applicable to
each Collateral Property to which the Borrower is a party, (ii) a perfected
first priority assignment and security interest to be held by the Agent for the
benefit of the Lenders (subject only to Permitted Liens) in the Collateral
Property Leases pursuant to the Assignments of Rents and Leases applicable to
each Collateral Property, (iii) a perfected first priority assignment and
security interest to be held by the Agent for the benefit of the Lenders
(subject only to Permitted Liens), in the contracts, licenses, Permits and
Service Contracts pursuant to the Assignment of Contracts applicable to each
Collateral Property, (iv) a perfected first priority lien and security interest
to be held by the Agent (subject only to the Permitted Liens) in all furniture,
fixtures, equipment, building materials, general intangibles and other personal
property owned by the Borrower relating to the Collateral Properties, (v) the
Guaranty, (vi) the Environmental Indemnity Agreement applicable to each
Collateral Property, and (vii) a perfected first priority assignment and
security interest, to be held by the Agent for the benefit of the Lenders, in
the Protected Interest Rate Agreement.

          §11.2. Recourse. Notwithstanding the foregoing Collateral, as
more fully set forth in §6 above, the Obligations are full recourse obligations
of the Borrower and the Trust and all of its assets and properties shall be
available for the payment in full in cash and performance of the Obligations.

          §11.3. Release. From time to time during the term of the Loans
but only so long as no Default or Event of Default shall then exist, the
Borrower may request the Agent (on behalf of the Lenders) to release the
security interest in and lien on any Collateral Property in accordance with the
provisions of §8.13.

          §11.4. Addition of Collateral Property. From time to time during
the term of the Loans, the Borrower may request the Lenders to replace or add
to the Collateral then held by the Agent for the benefit of the Lenders. Any
such request for replacement or addition may be approved only with the prior
written consent of the Majority Lenders, which approval may be given or
withheld in each Lender’s sole discretion. The Lenders shall approve or deny
such request within fifteen (15) days of receipt, provided that the
Agent has received (with copies for each Lender), at or prior to the time such
request is made, all of the information regarding the Real Estate Asset
proposed to be added to the Collateral required by the Collateral Property
Conditions.

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     Any property so approved by the Majority Lenders as a replacement of or
addition to the Collateral (a “New Collateral Property”) shall secure the Loans
and shall be included in the calculation of Borrowing Base Value upon
satisfaction of all of the Collateral Property Conditions and the Additional
Collateral Property Conditions. The Borrower shall reimburse the Agent for
its costs and expenses (including reasonable attorneys’ fees and expenses of
the Agent) in evaluating the proposed New Collateral Property and, if approved,
causing it to secure the Obligations. Without in any way limiting the absolute
discretion of the Lenders to approve or deny any request to include a property
as a New Collateral Property, before a property shall become a New Collateral
Property, the Borrower shall have, in any case, satisfied each of the following
conditions (the “Additional Collateral Property Conditions”):

            (a) The Borrowing Base Conditions have been met with respect to the
proposed New Collateral Property (whether or not the proposed New Collateral
Property is then owned by the Borrower or is a proposed Collateral Property)
and the Borrower shall have executed and delivered to the Agent (with copies
for each Lender), with respect to the proposed New Collateral Property,
agreements or other documentation substantially similar to the Security
Documents (adjusted to reflect differences in the laws of the state in which
the New Collateral Property is located) to provide Lenders with the rights and
benefits afforded under the Security Documents with respect to the New
Collateral Property, including, without limitation, the creation evidencing and
securing of a perfected first priority lien in favor of the Agent, for the
benefit of the Lenders, in the New Collateral Property (including, without
limitation, (i) the Leases, (ii) the contracts, licenses, Permits and Service
Contracts relating thereto, and (iii) the Building and Building Service
Equipment relating thereto);

            (b) The Borrower shall satisfy, with respect to the proposed New
Collateral Property, to the satisfaction of the Agent (in its sole discretion),
each of the Collateral Property Conditions with respect to each New Collateral
Property;

            (c) No Default or Event of Default shall exist under this Agreement or
any other Loan Document at the time of any acceptance of a New Collateral
Property and each of the representations and warranties made by or on behalf of
the Borrower, the Trust or any of their respective Subsidiaries contained in
this Agreement, the other Loan Documents or in any document or instrument
delivered pursuant to or in connection with this Agreement shall be true as of
the date as of which they were made and shall also be true in all material
respects at and as of the time of any acceptance of a New Collateral Property,
with the same effect as if made at and as of that time (except to the extent
that such representations and warranties relate expressly to an earlier date);

            (d) The New Collateral Property shall be 100% owned in fee simple by the
Borrower and shall be unencumbered (other than in favor of the Agent and the
Lenders or in connection with Permitted Liens);

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            (e) The Majority Lenders shall, in their sole discretion, have approved
in writing the addition of the property as a New Collateral Property for
inclusion in the Borrowing Base; and

            (f) The Borrower shall have duly executed and delivered to the Agent the
Joinder Documents (including the documents, instruments, certificates and
agreements required thereby).

     As of the Closing Date, the Borrower acknowledges that there will be no
Collateral Properties, and each Real Estate Asset which is proposed to become a
Collateral Property after the date hereof will constitute a New Collateral
Property.

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

 

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

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

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

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and/or the Borrower is a party, each certified by the
secretary as of a recent date to be true and complete.

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

     §12.5. Validity of Liens. The Security Documents
shall be effective to create, on the Closing Date or, if earlier, on the date
such Security Documents are recorded or filed with the appropriate offices, in
favor of the Agent, on behalf of the Lenders, a legal, valid and enforceable
first (except for Permitted Liens entitled to priority under applicable law)
security interest in the Collateral. All filings, recordings, deliveries of
instruments and other actions necessary or desirable in the opinion of the
Agent to protect and preserve such security interests shall have been duly
executed, and ready to be effected on or prior to the Closing Date. The Agent
shall have received evidence thereof in form and substance reasonably
satisfactory to the Agent.

     §12.6. Survey and Taxes. The Agent shall have
received (a) a Survey of each of the Initial Collateral Properties, if any,
together with the applicable Surveyor Certificate, bearing dates acceptable to
the Agent, and in form and substance reasonably acceptable to the Agent, and
(b) evidence of payment of real estate taxes and municipal charges on the
Initial Collateral Properties, if any, which are or will become due and payable
on or before the Closing Date.

     §12.7. Title Insurance; Title Exception
Documents; Zoning Matters. The Agent (on behalf of the Lenders) shall
have received a Title Policy for each of the Initial Collateral Properties, if
any. The Agent (on behalf of the Lenders) shall have received true and
accurate copies of all documents listed as exceptions under such policy. The
Agent shall also have received zoning endorsements (where available under
applicable law and regulation) to the Title Policies for the Initial Collateral
Properties, if any, or, if not so available, such other evidence as is
available, such as zoning letters, from public authorities that each of such
Initial Collateral Properties is, as of the Closing Date, in full compliance
with all applicable zoning, environmental and land use requirements.

     §12.8. Leases, Service Contracts and
Other Documents. The Agent shall have received from the Borrower
true copies of all Initial Collateral Property Leases, if any, all material
Service Agreements relating to any Initial Collateral Properties, and all
Organizational Documents.

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     §12.9. Estoppel Agreements; Subordination,
Attornment and Non-Disturbance Agreements. The
Agent shall have received for the Agent and the Lenders (a) Subordination,
Attornment and Non-Disturbance Agreements, in form and substance satisfactory
to the Agent, from each of the tenants under the Collateral Property Leases,
and (b) Estoppel Agreements in form and substance satisfactory to the Agent
dated no earlier than thirty (30) days prior to the Closing Date, from each of
the tenants under the Collateral Property Leases.

     §12.10. Certificates of Insurance. The Agent shall
have received (a) certificates of insurance as to all of the insurance
maintained by Borrower on the Initial Collateral Properties, if any (including
flood insurance if necessary) from the insurer or an independent insurance
broker dated as of the Closing Date, identifying insurers, types of insurance,
insurance limits, and policy terms and insurance binders naming the Agent as
Mortgagee, loss payee and additional insured; (b) if requested by the Agent,
certified copies of all policies evidencing such insurance (or certificates
therefor signed by the
insurer or an agent authorized to bind the insurer); and (c) such further
information and certificates from Borrower, its insurers and insurance brokers
as the Agent may reasonably request.

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

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

     §12.13. Certificate of Occupancy. The Agent shall
have received final Certificates of Occupancy (or the equivalent under the law
of the applicable jurisdiction if a Certificate of Occupancy is not available
providing evidence satisfactory to the Agent of the Borrower’s right to
lawfully occupy the Buildings) for each of the Initial Collateral Properties,
if any.

     §12.14. Appraisals. The Agent and each of the Lenders shall have
received MAI Appraisals dated as of a recent date for each of the Initial
Collateral Properties, if any, in

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form and substance satisfactory to the Agent
(which MAI Appraisals are subject to review by the Agent and adjustment in
accordance with the Appraisal Determination Process).

     §12.15. Additional Opinions. The Agent shall also have received
from Morgan, Lewis & Bockius LLP, as counsel to the Borrower and the Guarantor,
a copy of their favorable opinion addressed to the underwriters of the Initial
Public Offering, regarding, inter alia, matters relating to
certain securities laws in connection with the Initial Public Offering and the
qualification of the Trust as a REIT.

     §12.16. Structural Condition Assurances. The Agent
and each of the Lenders shall have received evidence satisfactory to the Agent
and each of the Lenders as to the good physical condition of the Buildings and
that utilities and public water and sewer service is available at the lot lines
of the Initial Collateral Properties, if any, and connected directly to the
Buildings with all necessary permits.

     §12.17. Architect’s/Engineer’s Reports; Permit
Assurances; Compliance. The Agent shall have received, to the
extent required by the Agent, satisfactory reports addressed to the Agent, from
engineers or architects with respect to each of the Initial Collateral
Properties, if any. The Agent shall have received evidence reasonably
satisfactory to the Agent that (i) all activities being conducted on the
Initial Collateral Properties, if any, which require federal, state or local
Permits have been duly licensed and that such Permits are in full force and
effect, and (ii) the Initial Collateral Properties, if any, are in compliance
with all zoning, land use, environmental, architectural access, historical and
building laws.

 

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

     §12.19 Financial Analysis of Initial
Collateral Properties. Each of the Lenders shall have completed
to its satisfaction, a financial analysis of each Initial Collateral Property,
if any.

     §12.20 Inspection of Collateral Properties.
The Agent shall have completed to its satisfaction an inspection of the Initial
Collateral Properties, if any, at the Borrower’s expense.

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

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

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     §12.22. Completion of Initial Public
Offering; IPO Proceeds. The Trust (i) shall have
successfully completed the Initial Public Offering and shall have received net
IPO Proceeds of at least $75,000,000 or such greater amount as may be necessary
to enable the Borrower to be in
compliance with the terms hereof on the Closing Date; and (ii) all Formation
Transactions (as described in the Prospectus) shall have been completed.

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

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

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

     §12.26. Subordination Agreements. The Borrower shall have
delivered to the Agent, to the extent required by the Agent, a subordination
agreement satisfactory to Agent from each of the counterparties to any property
management agreement or leasing agreement entered into in connection with an
Initial Collateral Property, if any.

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

     §13.1. Representations True; No Event of Default; Compliance
Certificate. Each of the representations and warranties made by or on
behalf of the Borrower, the Trust or any of their respective Subsidiaries
contained in this Agreement, the other Loan Documents or in any document or
instrument delivered pursuant to or in connection with this Agreement shall be
true as of the date as of which they were made and shall also be true at and as
of the time of the making of each Loan, and the issuance, extension or renewal
of any Letter of Credit, with the same effect as if made at and as of that time
(except to the extent that such representations and warranties relate expressly
to an earlier date); and no Default or Event of Default under this Agreement
shall have occurred and be continuing on the date of any Completed Loan Request
or on the Drawdown Date of any Loan or Letter of Credit.

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

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

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

     §13.5. Date Down Endorsement. If requested by the Agent in
its discretion, the Agent shall have received an irrevocable commitment from
the Title Insurance Company to issue date down endorsements for each Title
Policy covering the then Collateral Properties, which endorsements shall insure
that the funds to be advanced as part of the requested Revolving Credit Loan or
Letter of Credit will be secured by the Collateral Properties in a first
priority lien position subject only to Permitted Liens.

     §13.6. New Collateral Property. To the extent the Completed
Loan Request is for a funding based upon any New Collateral Property being part
of the Borrowing Base, the Agent shall have determined that the Collateral
Property Conditions and the Additional Collateral Property Conditions have been
satisfied with respect to such New Collateral Property.

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

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

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

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

     (b) the Borrower shall fail to pay any interest on the Loans or any other
sums due hereunder or under any of the other Loan Documents or any fee letter
(including,

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without limitation, amounts due under §8.16) when the same shall
become due and payable, and such failure continues for three (3) days;

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

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

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

          (f) the Borrower, the Trust or any of its Subsidiaries or, to the extent
of Recourse to the Borrower, the Trust or such Subsidiaries thereunder, any
Partially-Owned Entity or other of their respective Affiliates, shall fail to
pay at maturity, or within any applicable period of grace, any Indebtedness for
borrowed money or credit received or in respect of any Capitalized Leases,
which is in excess of $7,000,000, either individually or in the aggregate, or
fail to observe or perform any material term, covenant, condition or agreement
contained in any agreement, document or instrument by which it is bound
evidencing, securing or otherwise relating to such Indebtedness or Recourse
obligations, evidencing or securing borrowed money or credit received or in
respect of any Capitalized Leases for such period of time (after the giving of
appropriate notice if required) as would permit the holder or holders thereof
or of any obligations issued thereunder in excess of $7,000,000, either
individually or in the aggregate, to accelerate the maturity thereof;

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

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FPLP, the Trust or any of their respective
Subsidiaries and (i) any of FPLP, the Trust or any of their respective
Subsidiaries shall indicate its approval thereof, consent thereto or
acquiescence therein or (ii) any such petition, application, case or other
proceeding shall continue undismissed, or unstayed and in effect, for a period
of forty-five (45) days;

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

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

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

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

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

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District Court to administer such
Plan; or the PBGC shall have instituted proceedings to terminate such
Guaranteed Pension Plan;

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

          (n) the failure of Louis Donatelli and/or Douglas Donatelli, for any
reason, to cease to retain the titles Chairman of the Board and Chief
Executive Officer of the Trust, respectively, and to perform the functions
typically performed under such respective offices and to be actively involved
in strategic planning and decision-making for the Trust, unless within six (6)
months after such failure, the Board of Directors or Board of Trustees has duly
elected or appointed a qualified substitute to replace such individual who is
acceptable to the Majority Lenders in their sole discretion (as notified to the
Borrower by the Agent in writing); or the occurrence of any transaction in
which any “person” or “group” (within the meaning of Section 13(d) and 14(d)(2)
of the Securities Exchange Act of 1934) becomes the “beneficial owner” (as
defined in Rule 13d-3 under the Securities Exchange Act of 1934), directly or
indirectly, of a sufficient number of shares of all classes of stock then
outstanding of the Trust ordinarily entitled to vote in the election of
directors, empowering such “person” or “group” to elect a majority of the Board
of Directors or Board of Trustees of the Trust, who did not have such power
before such transaction; or

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

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

     Notwithstanding the foregoing provisions of this §14.1, in the event of a
Default or Event of Default arising as a result of the inclusion of any Real
Estate Asset in the Borrowing Base at any particular time of reference, if such
Default or Event of Default is

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capable of being cured by the exclusion of such
Real Estate Asset from the Borrowing Base in accordance with, and subject to,
§8.13 and from all other covenant calculations under §10 or otherwise, the
Borrower shall be permitted a period not to exceed five (5) days to submit to
the Agent (with copies to the Agent for each Bank) a compliance certificate in
the form of Exhibit C hereto evidencing compliance with §2.1 and with
all of the covenants set forth in §10 (with calculations evidencing such
compliance after excluding from Borrowing Base NOI all of the Adjusted Net
Operating Income generated by the Real Estate Asset to be excluded from the
Borrowing Base) and with the Borrowing Base Conditions, and otherwise
certifying that, after giving effect to the exclusion of such Real Estate Asset
from the Borrowing Base, no Default or Event of Default will be continuing.

     §14.2. Termination of Commitments. If any one or more Events of
Default specified in §14.1(g) or §14.1(h) shall occur, any unused portion of
the Commitments or other commitments to extend credit hereunder shall forthwith
terminate and the Lenders shall be relieved of all obligations to make Loans to
the Borrower and the Agent and the Fronting Bank shall be relieved of all
further obligations to issue, extend or renew Letters of Credit. If any other
Event of Default shall have occurred and be continuing, whether or not the
Lenders shall have accelerated the maturity of the Loans pursuant to §14.1, any
Lender may terminate the unused portion of that Lender’s Commitment or other
commitment to extend credit hereunder, and upon such notice being given such
unused portion of such Commitment or other commitment shall terminate
immediately, such Lender shall be relieved of all further obligations to make
Loans and the Fronting Bank shall be relieved of all further obligations to
issue, extend or renew Letters of Credit and the Total Commitments shall be
reduced accordingly. No such termination of a Commitment or other commitment
to extend credit hereunder shall relieve the Borrower of any of the Obligations
or any of its existing obligations to such Lender arising under other
agreements or instruments.

 

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

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other remedy given hereunder or
under any of the other Loan Documents or now or hereafter existing at law or in
equity or by statute or any other provision of law.

     §15. SECURITY INTEREST AND SET-OFF.

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

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

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retain and apply to the payment of
the Note held by such Lender any amount in excess of its ratable portion of the
payments received by all of the Lenders with respect to the Note held by all of
the Lenders, such Lender will make such disposition and arrangements with the
other Lenders with respect to such excess, either by way of distribution, pro
tanto assignment of claims, subrogation or otherwise as shall result in each
Lender receiving in respect of the Note held by it its proportionate payment as
contemplated by this Agreement; provided that if all or any part of such excess
payment is thereafter recovered from such Lender, such disposition and
arrangements shall be rescinded and the amount restored to the extent of such
recovery, but without interest.

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

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

     §16. THE AGENT.

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

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

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

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

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

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

     §16.5. Payments.

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

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          (b) If in the reasonable opinion of the Agent the distribution of any
amount received by it in such capacity hereunder, under the Notes or under any
of the other Loan Documents might involve it in material liability, it may
refrain from making distribution until its right to make distribution shall
have been adjudicated by a court of competent jurisdiction, provided
that the Agent shall invest any such undistributed amounts in overnight
obligations on behalf of the Lenders and interest thereon shall be paid
pro rata to the Lenders. If a court of competent jurisdiction
shall adjudge that any amount received and distributed by the Agent is to be
repaid, each Person to whom any such distribution shall have been made shall
either repay to the Agent its proportionate share of the amount so adjudged to
be repaid or shall pay over the same in such manner and to such Persons as
shall be determined by such court.

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

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

     §16.7. Indemnity. The Lenders ratably and severally agree hereby
to indemnify and hold harmless the Agent and its Affiliates from and against
any and all claims, actions and suits (whether groundless or otherwise),
losses, damages, costs, expenses (including any expenses for which the Agent
has not been reimbursed by the Borrower as required by §17), and liabilities of
every nature and character arising out of or related to this Agreement, the
Notes, or any of the other Loan Documents or the transactions contemplated or
evidenced hereby or thereby, or the Agent’s actions taken hereunder or

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thereunder, except to the extent that any of the same shall be directly caused
by the Agent’s willful misconduct or gross negligence, as finally determined by
a court of competent jurisdiction.

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

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

 

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

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     (b) If title to any or all of the Collateral is acquired on behalf of the
Lenders in foreclosure, by deed in lieu of foreclosure, or otherwise, title
shall be taken in the name of a nominee as the Agent and the Majority Lenders
may mutually agree, provided that approval of such entity shall not be
unreasonably withheld. The entity holding title shall acknowledge in writing
that such title is being held on behalf of the Lenders in proportion to their
Commitment Percentage from time to time and will hold such title consistent
with this Agreement and any workout plan approved in accordance with this
Agreement. Upon taking title to the Collateral, the Agent shall, either itself
or through an agent selected by Agent (which agent may be a subsidiary or
Affiliate of Agent), manage, conserve, protect and operate the Collateral in
accordance with any approved workout plan until otherwise directed by the
Majority Lenders. Agent shall submit a proposed workout plan to the Lenders
for approval within sixty (60) Business Days after taking title to the
Collateral. Each workout plan shall require the approval of the Majority
Lenders. Upon such approval, the Agent shall implement the workout plan. If
the Majority Lenders do not approve a proposed workout plan within thirty (30)
Business Days after submittal, Agent may implement the proposed workout plan or
take such other actions to protect the Collateral as it may deem reasonably
necessary or appropriate to preserve the value thereof. All proceeds collected
from the Collateral shall be used first to pay all expenses incurred in
connection with the Collateral and then shall be distributed to the Lenders in
accordance with the terms hereof. To the extent not authorized in such
approved workout plan, any material decision regarding the operation,
maintenance, sale or other disposition of any Collateral after taking title to
the Collateral (including any action to bring such Collateral into compliance
with applicable Environmental Laws) shall be subject to approval of the
Majority Lenders; provided,
however, that pending such approval, Agent may take any action it
determines reasonably necessary to preserve or maintain any such Collateral.

     §16.11. Successor Agent. Fleet, or any successor Agent, may resign
as Agent at any time by giving at least 30 days prior written notice thereof to
the Lenders and to the Borrower. Any such resignation shall be effective upon
appointment and acceptance of a successor Agent, as hereinafter provided. Upon
any such resignation, the Majority Lenders shall have the right to appoint a
successor Agent, which is a Lender under this Agreement, provided that
so long as no Default or Event of Default has occurred and is continuing the
Borrower shall have the right to approve any successor Agent, which approval
shall not be unreasonably withheld. If, in the case of a resignation by the
Agent, no successor Agent shall have been so appointed by the Majority Lenders
and approved by the Borrower, and shall have accepted such appointment, within
thirty (30) days after the retiring Agent’s giving of notice of resignation,
then the retiring Agent may, on behalf of the Lenders, appoint any one of the
other Lenders as a successor Agent. The Borrower acknowledges that any Lender
which acquires Fleet is acceptable as a successor Agent. Upon the acceptance
of any appointment as Agent hereunder by a successor Agent, such successor
Agent shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent, and the retiring Agent shall be

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discharged from all further duties and obligations as Agent under this
Agreement. After any Agent’s resignation hereunder as Agent, the provisions of
this §16 shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Agent under this Agreement. The Agent agrees that it
shall not assign any of its rights or duties as Agent to any other Person.

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

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

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repayment of the amounts owing under
the Notes and this Agreement and the termination of this Agreement and the
obligations of the Lenders hereunder.

     §18. INDEMNIFICATION. The Borrower agrees to indemnify and hold
harmless the Agent and each of the Lenders and the shareholders, directors,
agents, officers, subsidiaries and affiliates of the Agent and each of the
Lenders from and against any and all claims, actions and suits, whether
groundless or otherwise, and from and against any and all liabilities, losses
(including amounts, if any, owing to any Lender pursuant to §§4.4, 4.5, 4.6 and
4.8), settlement payments, obligations, damages and expenses of every nature
and character in connection therewith, arising out of this Agreement or any of
the other Loan Documents or the transactions contemplated hereby or thereby or
which otherwise arise in connection with the financing, including, without
limitation, (a) any actual or proposed use by the Borrower or any of its
Subsidiaries of the proceeds of any of the Loans, (b) the Borrower or any of
its Subsidiaries entering into or performing this Agreement or any of the other
Loan Documents, or (c) pursuant to §8.16, in each case including, without
limitation, the reasonable fees and disbursements of counsel and allocated
costs of internal counsel incurred in connection with any such investigation,
litigation or other proceeding, provided, however, that the Borrower
shall not be obligated under this §18 to indemnify any Person for liabilities
arising from such Person’s own gross negligence, willful misconduct or breach
of this Agreement, as finally determined by a court of competent jurisdiction.
In litigation, or the preparation therefor, the Borrower shall be
entitled to select counsel reasonably acceptable to the Majority Lenders, and
the Agent (as approved by the Majority Lenders) shall be entitled to select
their own supervisory counsel, and, in addition to the foregoing indemnity, the
Borrower agrees to pay promptly the reasonable fees and expenses of each such
counsel. Prior to any settlement of any such litigation by the Lenders, the
Lenders shall provide the Borrower and the Trust with notice and an opportunity
to address any of their concerns with the Lenders, and the Lenders shall not
settle any litigation without first obtaining Borrower’s consent thereto, which
consent shall not be unreasonably withheld or delayed. If and to the extent
that the obligations of the Borrower under this §18 are unenforceable for any
reason, the Borrower hereby agrees to make the maximum contribution to the
payment in satisfaction of such obligations which is permissible under
applicable law. The provisions of this §18 shall survive the repayment of the
amounts owing under the Notes and this Agreement and the termination of this
Agreement and the obligations of the Lenders hereunder and shall continue in
full force and effect as long as the possibility of any such claim, action,
cause of action or suit exists.

     §19. SURVIVAL OF COVENANTS, ETC. All covenants, agreements,
representations and warranties made herein, in the Notes, in any of the other
Loan Documents or in any documents or other papers delivered by or on behalf of
the Borrower or any of its Subsidiaries or the Trust pursuant hereto shall be
deemed to have been relied upon by the Lenders and the Agent, notwithstanding
any investigation heretofore or hereafter made by any of them, and shall
survive the making by the Lenders of any of the Loans and the issuance,
extension or renewal of any Letter of Credit, as herein

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contemplated, and shall
continue in full force and effect so long as any Letter of Credit or any amount
due under this Agreement or the Notes or any of the other Loan Documents
remains outstanding or any Lender has any obligation to make any Loans or
purchase Letter of Credit Participations or the Fronting Bank has any
obligation to issue, extend or renew Letters of Credit. The indemnification
obligations of the Borrower provided herein and in the other Loan Documents
shall survive the full repayment of amounts due and the termination of the
obligations of the Lenders hereunder and thereunder to the extent provided
herein and therein. All statements contained in any certificate or other paper
delivered to any Lender or the Agent at any time by or on behalf of the
Borrower or any of its Subsidiaries or the Trust pursuant hereto or in
connection with the transactions contemplated hereby shall constitute
representations and warranties by the Borrower or such Subsidiary or the Trust
hereunder.

     §20. ASSIGNMENT; PARTICIPATIONS; ETC.

 

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

     Notwithstanding the provisions of subclause (a) of the preceding
paragraph, any Lender may, without the consent of the Borrower, make an
assignment otherwise

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permitted hereunder to (x) another Lender, and (y) an
Affiliate of such Lender, provided that such Affiliate is an Eligible
Assignee.

     §20.2. Certain Representations and Warranties; Limitations;
Covenants. By executing and delivering an Assignment and Assumption, the
parties to the assignment thereunder confirm to and agree with each other and
the other parties hereto as follows: (a) other than the representation and
warranty that it is the legal and beneficial owner of the interest being
assigned thereby free and clear of any adverse claim, the assigning Lender
makes no representation or warranty and assumes no responsibility with respect
to any statements, warranties or representations made in or in connection with
this Agreement or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement, the other Loan Documents
or any other instrument or document furnished pursuant hereto; (b) the
assigning Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower and its
Subsidiaries or the Trust or any other Person primarily or secondarily liable
in respect of any of the Obligations, or the performance or observance by the
Borrower and its Subsidiaries or the Trust or any other Person primarily or
secondarily liable in respect of any of the Obligations of any of their
obligations under this Agreement or any of the other Loan Documents or any
other instrument or document furnished pursuant hereto or thereto; (c) such
assignee confirms that it has received a copy of this Agreement, together with
copies of the most recent financial statements referred to in §7.4 and §8.4 and
such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into such Assignment and Assumption;
(d) such assignee will, independently and without reliance upon the assigning
Lender, the Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement; (e) such
assignee represents and warrants that it is an Eligible Assignee; (f) such
assignee appoints and authorizes the Agent to take such action as agent on its
behalf and to exercise such powers under this Agreement and the other Loan
Documents as are delegated to the Agent by the terms hereof or thereof,
together with such powers as are reasonably incidental thereto; (g) such
assignee agrees that it will perform in accordance with their terms all of the
obligations that by the terms of this Agreement are required to be performed by
it as a Lender; (h) such assignee represents and warrants that it is legally
authorized to enter into such Assignment and Assumption; and (i) such assignee
acknowledges that it has made arrangements with the assigning Lender
satisfactory to such assignee with respect to its pro rata share of Letter of
Credit Fees in respect of outstanding Letters of Credit.

     §20.3. Register. The Agent shall maintain a copy of each
Assignment and Assumption delivered to it and a register or similar list (the
“Register”) for the recordation of the names and addresses of the Lenders and
the Commitment Percentages of, and principal amount of the Loans owing to, the
Lenders from time to time. The entries in the Register shall be conclusive, in
the absence of manifest error, and the Borrower, the Agent and the Lenders may
treat each Person whose name is recorded in

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the Register as a Lender hereunder
for all purposes of this Agreement. The Register shall be available for
inspection by the Borrower and the Lenders at any reasonable time and from time
to time upon reasonable prior notice. Upon each such recordation, the
assigning Lender agrees to pay to the Agent a registration fee in the sum of
$2,500 and all legal fees and expenses incurred by the Agent in connection with
such assignment.

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

 

     §20.5. Participations. Each Lender may sell participations to one
or more lending institutions or other entities in all or a portion of such
Lender’s rights and obligations under this Agreement and the other Loan
Documents; provided that (a) each such participation shall be in an
amount of not less than $5,000,000, (b) any such sale or participation shall
not affect the rights and duties of the selling Lender hereunder to the
Borrower and the Agent and the Lender shall continue to exercise all approvals,
disapprovals and other functions of a Lender, (c) the only rights granted to
the participant pursuant to such participation arrangements with respect to
waivers, amendments or modifications of, or approvals under, the Loan Documents
shall be the rights to approve waivers, amendments or modifications that would
reduce the principal of or the interest rate on any Loans, extend the term or
increase the amount of the Commitment of such Lender as it relates to such
participant, reduce the amount of any fees to which such participant is
entitled or extend any regularly scheduled payment date for principal or
interest, and (d) no participant shall have the right to grant further
participations or assign its rights, obligations or interests under such
participation to other Persons without the prior written consent of the Agent,
which consent shall not be unreasonably withheld.

     §20.6. Pledge by Lender. Notwithstanding any other provision of
this Agreement, any Lender at no cost to the Borrower may at any time pledge
all or any portion of its interest and rights under this Agreement (including
all or any portion of its

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Notes) to any of the twelve Federal Reserve Banks
organized under §4 of the Federal Reserve Act, 12 U.S.C. §341. No such pledge
or the enforcement thereof shall release the pledgor Lender from its
obligations hereunder or under any of the other Loan Documents.

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

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

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

     §21. NOTICES, ETC. Except as otherwise expressly provided in this
Agreement, all notices and other communications made or required to be given
pursuant to this Agreement or the Notes shall be in writing and shall be
delivered in hand, mailed by United States registered or certified first class
mail, postage prepaid, sent by overnight

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courier, or sent by facsimile and
confirmed by delivery via courier or postal service, addressed as follows:

          (a) if to the Borrower or the Trust, at 7200 Wisconsin Avenue, Suite 301,
Bethesda, Maryland 20814, attention Barry Bass, Chief Financial Officer
(facsimile: (301) 986-5554), with a copy to Eric L. Stern, Esq., Morgan Lewis,
1701 Market Street, Philadelphia, Pennsylvania 19103-2921, or to such other
address for notice as the Borrower or the Trust shall have last furnished in
writing to the Agent;

          (b) if to the Agent, to the Real Estate Finance Department at 100 Federal
Street, Boston, Massachusetts 02110, with a copy to Daniel L. Silbert,
Director, Fleet National Bank, 115 Perimeter Center Place, Suite 500, Atlanta,
Georgia 30346 (facsimile: (770)-390-8434), or such other address for notice as
the Agent shall have last furnished in writing to the Borrower, with a copy to
Pamela M. MacKenzie, Esq., Goulston & Storrs, 400 Atlantic Avenue, Boston,
Massachusetts 02110-3333 (facsimile: (617)-574-7615), or at such other address
for notice as the Agent shall last have furnished in writing to the Person
giving the notice; and

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

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

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

     §23. GOVERNING LAW; CONSENT TO JURISDICTION AND SERVICE. THIS
AGREEMENT AND EACH OF THE OTHER LOAN DOCUMENTS, EXCEPT AS OTHERWISE
SPECIFICALLY PROVIDED THEREIN, ARE CONTRACTS UNDER THE LAWS OF THE STATE OF NEW
YORK AND SHALL FOR ALL PURPOSES BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE

100

 

LAWS OF SUCH STATE (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF
LAW). EACH OF THE BORROWER AND ITS SUBSIDIARIES AGREES THAT ANY SUIT FOR THE
ENFORCEMENT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS MAY BE BROUGHT
IN THE COURTS OF THE COMMONWEALTH OF MASSACHUSETTS SITTING IN SUFFOLK COUNTY OR
ANY FEDERAL COURT SITTING IN THE EASTERN DISTRICT OF
MASSACHUSETTS OR IN ANY COURT IN THE STATE OF NEW YORK AND OF ANY FEDERAL COURT
LOCATED IN NEW YORK AND CONSENTS TO THE NON-EXCLUSIVE JURISDICTION OF SUCH
COURTS AND THE SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE UPON THE BORROWER
OR ITS SUBSIDIARIES BY MAIL AT THE ADDRESS SPECIFIED IN §21. THE BORROWER AND
ITS SUBSIDIARIES HEREBY WAIVE ANY OBJECTION THAT ANY OF THEM MAY NOW OR
HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH
SUIT IS BROUGHT IN AN INCONVENIENT COURT.

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

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

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

     §27. WAIVER OF JURY TRIAL AND CERTAIN DAMAGE CLAIMS. EXCEPT TO THE
EXTENT EXPRESSLY PROHIBITED BY LAW, THE BORROWER AND ITS SUBSIDIARIES HEREBY
WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR
CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT, THE NOTES
OR ANY OF THE OTHER LOAN DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR
THEREUNDER OR THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS. EXCEPT TO THE
EXTENT EXPRESSLY PROHIBITED BY LAW, THE BORROWER AND ITS SUBSIDIARIES HEREBY
WAIVE ANY RIGHT ANY OF THEM MAY HAVE TO CLAIM OR RECOVER IN ANY LITIGATION
REFERRED TO IN THE PRECEDING SENTENCE ANY SPECIAL, EXEMPLARY, PUNITIVE OR
CONSEQUENTIAL DAMAGES OR ANY

101

 

DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL
DAMAGES, INCLUDING ANY DAMAGES PURSUANT TO M.G.L. C. 93A ET SEQ. EACH OF THE
BORROWER AND ITS SUBSIDIARIES
(A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY LENDER OR THE
AGENT HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH LENDER OR THE AGENT
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS
AND (B) ACKNOWLEDGES THAT THE AGENT AND THE LENDERS HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS TO WHICH THEY ARE PARTIES BY,
AMONG OTHER THINGS, THE WAIVERS AND CERTIFICATIONS CONTAINED HEREIN.

     §28. CONSENTS, AMENDMENTS, WAIVERS, ETC. Except as otherwise
expressly provided in this Agreement, any consent or approval required or
permitted by this Agreement may be given, and any term of this Agreement or of
any of the other Loan Documents may be amended, and the performance or
observance by the Borrower or the Trust or any of their respective Subsidiaries
of any terms of this Agreement or the other Loan Documents or the continuance
of any Default or Event of Default may be waived (either generally or in a
particular instance and either retroactively or prospectively) with, but only
with, the written consent of the Majority Lenders.

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

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

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

            (iii) changes the date fixed for any payment of
principal of or interest on any Loan (including, without
limitation, any extension of the Maturity Date) or any fees
payable hereunder (including, without limitation, the
waiver of any monetary Event of Default); or

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

102

 

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

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

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

     Notwithstanding the foregoing, in the event that the Borrower requests any
consent, waiver or approval under this Agreement or any other Loan Document, or
an amendment or modification hereof or thereof, and one or more Lenders
determine not to consent or agree to such consent, waiver, approval, amendment
or modification, then the Lender then acting as Agent hereunder shall have the
right to purchase the Commitment of such non-consenting Lender(s) at a purchase
price equal to the then outstanding amount of principal, interest and fees then
owing to such Lender(s) by the Borrower hereunder, and such non-consenting
Lender(s) shall immediately upon request, sell and assign its Commitment and
all of its other right, title and interest in the Loans and other Obligations
to the Lender then acting as Agent pursuant to an Assignment and Assumption
(provided that the selling Lender(s) shall not be responsible to pay any
assignment fee in connection therewith).

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

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

(Remainder of page intentionally left blank)

103

 

[Signature page to Revolving Credit Agreement]

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

	 	 	 	 	 
	 	 	FLEET NATIONAL BANK,
	 	 	Individually and as Managing Administrative Agent
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	
 
	

	 	Name:	 	 
	

	 	Title:	 	 

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

	 	 	 	By:
	 	 	 	(SEAL)
	

	 	 	 	 	 	
 	 	 
	

	 	 	 	 	 	Name:	 	 
	

	 	 	 	 	 	Title:	 	 

	 	 	 	 	 	 	 
	 	 	FIRST POTOMAC REALTY TRUST, Guarantor
	 
	 	 	 	 	 	 
	

	 	By:
	 	 	 	(SEAL)
	

	 	 	 	
 	 	 
	

	 	 	 	Name:	 	 
	

	 	 	 	Title:	 	 

104

 

EXHIBIT A

REVOLVING CREDIT NOTE

	 	 	 
	$50,000,000

	 	Date: December ____, 2003

     FOR VALUE RECEIVED, the undersigned First Potomac Realty Investment
Limited Partnership, a Delaware limited partnership and each of the other
undersigned parties and other parties who are or from time to time become a
Borrower under (and as defined in) the Revolving Credit Agreement referred to
(and defined) below (hereinafter, together with their respective successors in
title and assigns, collectively called the “Borrower”), by this promissory note
(hereinafter, called “this Note”), absolutely and unconditionally, jointly and
severally promises to pay to the order of Fleet National Bank, individually in
its capacity as a Lender under the Revolving Credit Agreement (hereinafter,
together with its successors in title and assigns, called the “Bank”), the
principal sum of Fifty Million and 00/100 Dollars ($50,000,000), or so much
thereof as shall have been advanced by the Bank to the Borrower by way of Loans
under (and as defined in) the Revolving Credit Agreement and shall remain
outstanding, such payment to be made as hereinafter provided, and to pay
interest on the principal sum outstanding hereunder from time to time from and
after the date hereof until the said principal sum or the unpaid portion
thereof shall have become due and payable as hereinafter provided.

     Capitalized terms used herein without definition shall have the meanings
set forth in the Revolving Credit Agreement.

     The unpaid principal (not at the time overdue) under this Note shall bear
interest at the rate or rates from time to time in effect under the Revolving
Credit Agreement. Accrued interest on the unpaid principal under this Note
shall be payable on the dates specified in the Revolving Credit Agreement.

     On the Maturity Date there shall become absolutely due and payable by the
Borrower hereunder, and the Borrower hereby jointly and severally promises to
pay to the Bank, the balance (if any) of the principal hereof then remaining
unpaid, all of the unpaid interest accrued hereon and all (if any) other
amounts payable on or in respect of this Note or the indebtedness evidenced
hereby or otherwise due under or in connection with the Revolving Credit
Agreement.

     Each overdue amount (whether of principal, interest or otherwise) payable
hereunder shall (to the extent permitted by applicable law) bear interest at
the rates and on the terms provided in the Revolving Credit Agreement. The
unpaid interest accrued on each overdue amount in accordance with the foregoing
terms of this paragraph shall become and be absolutely due and payable by the
Borrower to Bank on demand by the

105

 

Agent. Interest on each overdue amount will continue to accrue as provided by
the foregoing terms of this paragraph, and will (to the extent permitted by
applicable law) be compounded daily until the obligations of the Borrower in
respect of the payment of such overdue amount shall be discharged (whether
before or after judgment).

     Each payment of principal, interest or other sum payable on or in respect
of this Note or the indebtedness evidenced hereby shall be made by the Borrower
directly to the Agent in Dollars, for the account of the Bank, at the Agent’s
Head Office, on the due date of such payment, and in immediately available and
freely transferable funds. All payments on or in respect of this Note or the
indebtedness evidenced hereby shall be made without set-off or counterclaim and
free and clear of and without any deductions, withholdings, restrictions or
conditions of any nature.

     This Note is made and delivered by the Borrower to the Bank pursuant to
that certain Revolving Credit Agreement of even date herewith among (i) the
Borrower, (ii) the Lenders party thereto from time to time (including the Bank)
and (iii) the Agent (hereinafter, as originally executed and as may be amended,
varied, supplemented, and/or restated from time to time, called the “Revolving
Credit Agreement”). This Note evidences the obligations of the Borrower (a) to
repay the principal amount of the Bank’s Commitment Percentage of the Revolving
Credit Loans made by the Bank to the Borrower pursuant to the Revolving Credit
Agreement; (b) to pay interest, as herein provided, on the principal amount
hereof remaining unpaid from time to time; and (c) to pay other amounts
(including all Obligations) which may become due and payable hereunder or
thereunder. The payment of the principal of and the interest on this Note and
the payment of all Obligations have been guaranteed. Reference is hereby made
to the Revolving Credit Agreement (including the Schedules and Exhibits annexed
thereto and the Guaranty) for a complete statement of the terms thereof.

     The Borrower has the right to prepay the unpaid principal of this Note in
full or in part upon the terms contained in the Revolving Credit Agreement.
The Borrower has an obligation to prepay principal of this Note from time to
time if and to the extent required under, and upon the terms contained in, the
Revolving Credit Agreement. Any partial payment of the indebtedness evidenced
by this Note shall be applied in accordance with the terms of the Revolving
Credit Agreement.

     Pursuant to and upon the terms contained in Section 14 of the Revolving
Credit Agreement, the entire unpaid principal of this Note, all of the interest
accrued on the unpaid principal of this Note and all (if any) other amounts
payable on or in respect of this Note or the indebtedness evidenced hereby may
be declared to be immediately due and payable, whereupon the entire unpaid
principal of this Note, all of the interest accrued on the unpaid principal of
this Note and all (if any) other amounts payable on or in respect of this Note
or the indebtedness evidenced hereby shall (if not already due and payable)
forthwith become and be due and payable to the Bank without presentment,

106

 

demand, protest or any other formalities of any kind, all of which are hereby
expressly and irrevocably waived by the Borrower.

     All computations of interest payable as provided in this Note shall be
made by the Agent on the basis set forth therefor in the Revolving Credit
Agreement. The interest rate in effect from time to time shall be determined
in accordance with the terms of the Revolving Credit Agreement.

     Should all or any part of the indebtedness represented by this Note be
collected by action at law, or in bankruptcy, insolvency, receivership or other
court proceedings, or should this Note be placed in the hands of attorneys for
collection after default, the Borrower hereby promises to pay to the holder of
this Note, upon demand by the holder hereof at any time, in addition to
principal, interest and all (if any) other amounts payable on or in respect of
this Note or the indebtedness evidenced hereby, all court costs and attorneys’
fees and all other collection charges and expenses reasonably incurred or
sustained by the holder of this Note.

     The Borrower hereby irrevocably waives notice of acceptance, presentment,
notice of nonpayment, protest, notice of protest, suit and all other conditions
precedent in connection with the delivery, acceptance, collection and/or
enforcement of this Note. The Borrower hereby absolutely and irrevocably
consents and submits to the jurisdiction of the courts of the Commonwealth of
Massachusetts sitting in Suffolk County and of any federal court located in the
Eastern District of Massachusetts in connection with any actions or proceedings
brought against the Borrower by the holder hereof arising out of or relating to
this Note. This Note may be executed in any number of counterparts and by each
party on a separate counterpart, each of which when so executed and delivered
shall be an original, and all of which together shall constitute one
instrument.

     This Note is intended to take effect as a sealed instrument. This Note
and the obligations of the Borrower hereunder shall be governed by and
interpreted and determined in accordance with the laws of the State of New
York.

     Each Borrower shall be jointly and severally liable for the full amount
owing under this Note.

[Remainder of page intentionally left blank]

107

 

[Signature page to Revolving Credit Note]

     IN WITNESS WHEREOF, this REVOLVING CREDIT NOTE has been duly executed by
the undersigned on the day and in the year first above written.

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

	 	 	 	By:	 	 
	

	 	 	 	 	 	
 
	

	 	 	 	Its:	 	 

108

 

EXHIBIT B

Completed Loan Request

[to be inserted prior to initial funding]

109

 

EXHIBIT C

Compliance Certificate

[to be inserted prior to initial funding]

110

 

EXHIBIT D

Collateral Property Conditions

	1.	 	Evidence satisfactory to the Agent and the Majority Lenders in their sole
discretion of the satisfaction of the conditions contained in Section 12
of the Agreement with respect to the proposed New Collateral Property,
treating all references therein to the “Initial Collateral Properties” as
references to the proposed New Collateral Property and all references
therein to the “Closing Date” as references to the date of inclusion of
the proposed New Collateral Property as part of the Collateral.
	 
	2.	 	Such other information, documentation or further assurances as the Agent
or Majority Lenders may reasonably request.
	 
	3.	 	Evidence satisfactory to the Agent of payments made by Borrower as
necessary to satisfy the foregoing Collateral Property Conditions and the
reimbursement obligations contained in Section 11.4 of the Agreement.
	 
	4.	 	New Security Documents and/or amendments to any existing Loan Documents
necessary to effectuate the addition of the New Collateral Property and
the perfection and priority of the Agent’s lien therein.

111

 

EXHIBIT E

Assignment and Assumption Agreement

[to be inserted prior to initial funding]

112

 

EXHIBIT F

JOINDER AGREEMENT

December __, 2003

     Reference is made to the Revolving Credit Agreement, dated as of December
____, 2003 (as from time to time amended and in effect, the “Loan Agreement”),
among First Potomac Realty Investment Limited Partnership (“FPLP”) and each
other Borrower (collectively, the “Borrower”) which from time to time is a
party to the Loan Agreement, Fleet National Bank (“Fleet”) and the other
lending institutions referred to in the Loan Agreement as Lenders
(collectively, the “Lenders”), and Fleet, as managing administrative agent for
itself and each other Lender (the “Agent”). Capitalized terms used herein and
not otherwise defined shall have the meanings assigned to such in the
Agreement.

     In consideration of and as an inducement to the inclusion by the Lenders
of each of the Real Estate Asset(s) identified on Exhibit A hereto as a
[Collateral Property(ies)] pursuant to the Loan Agreement,
___, a
___ (the “Additional Borrower”), which is a Wholly-owned Subsidiary
of FPLP, hereby acknowledges and agrees to the terms and conditions of the Loan
Agreement, the Revolving Credit Notes and the other Loan Documents to which any
Borrower is a party, joins in the agreements of the Borrower under the Loan
Agreement, the Revolving Credit Notes and the other Loan Documents to which any
Borrower is a party and agrees that all Obligations of the Borrower under the
Loan Agreement, the Revolving Credit Notes and the other Loan Documents to
which any Borrower is a party shall be the obligations, jointly and severally,
of the Additional Borrower and the Borrower with the same force and effect as
if the Additional Borrower was originally a Borrower under the Loan Agreement
and an original signatory to the Loan Agreement, the Revolving Credit Notes and
the other Loan Documents to which any Borrower is a party.

     The Additional Borrower further agrees that its liability hereunder is
direct and primary and may be enforced by the Lenders and the Agent before or
after proceeding against any other Borrower.

     At
least ____ Business Days prior to this Joinder Agreement becoming
effective and each of the Real Estate Asset(s) identified in Exhibit A
hereto becoming a Collateral Property pursuant to the Loan Agreement, the
Additional Borrower shall have delivered to the Agent (with copies to the Agent
for each Lender) the documents and other items required to be delivered
pursuant to Section ____ of the Loan Agreement, in each case in form and
substance satisfactory to the Agent. Without in any
way limiting

113

 

the other rights of the Agent under the Loan Agreement, the
Additional Borrower agrees that the Agent shall have the right to visit and
inspect such Collateral Property at the Borrower’s sole cost and expense.

     The undersigned represents and warrants to the Agent and the Lenders that
it has the complete right, power and authority to execute and deliver this
Joinder Agreement and to perform all of the obligations hereunder and the
Obligations under the Loan Agreement, the Revolving Credit Notes and the other
Loan Documents to which any Borrower is a party. This Joinder Agreement shall
be binding upon the undersigned and its successors and assigns and shall inure
to the benefit of the Lenders, the Agent and their respective successors and
assigns.

     Executed
as a sealed instrument as of the ____ day of ____,
200_.

[ADDITIONAL BORROWER]

114

 

Acknowledged and Agreed:

	 	 	 
	FIRST POTOMAC
REALTY
INVESTMENT LIMITED 
PARTNERSHIP, for itself and as agent
for
each other Borrower
	 
	 	 
	By: First Potomac
Realty Trust, its
sole general partner
	 
	 	 
	By:
	 	 
	

	 	
 
	

	 	Title:

115

 

Exhibit A to Joinder Agreement

[Collateral Property]

     [Insert Property Address]

116

 

EXHIBIT G

Environmental Assessments

None.

117

 

Schedule 1

Borrowers

NONE

-1-

 

Schedule 2

Lender’s Commitments

Three-year, Fifty Million Dollar ($50,000,000.00) secured revolving credit
facility, with the option to increase the revolving credit facility by Fifty
Million Dollars ($50,000,000.00).

-2-

 

Schedule 7.1(b)

Capitalization

[To Be Provided]

-3-

 

Schedule 7.3(c)

Partially-Owned Entities

FPM Management, LLC

-4-

 

Schedule 7.7

Litigation

NONE

-5-

 

Schedule 7.13

Legal Name; Jurisdiction

First Potomac Realty Investment Limited Partnership, a Delaware limited
partnership

First Potomac Realty Trust, a Maryland real estate investment trust

-6-

 

Schedule 7.14

Standard Form of Lease

DEED OF LEASE

DATED as on the _____ day of _______________

LANDLORD:

a Delaware Limited Liability Company

TENANT:

     In consideration of the mutual covenants hereinafter set forth, and of
other good and valuable consideration, Landlord and Tenant do hereby enter into
this Deed of Lease and do agree as follows:

1.00 DEFINED TERMS AND DEFINITIONS

     1.01 “Base Rent” means an annual amount payable by Tenant for the Premises
in equal monthly installments in accordance with the following schedule:

	 	 	 	 	 	 	 
	

	 	 	 	 	 	Rentable Square
	Period

	 	Annual Base Rent

	 	Monthly Base Rent

	 	Foot Rate

     1.02 “Building” means the building known as
______, located within the Project.

     1.03 “Common Areas” means those areas within the Building and the Project
not reserved to individual occupants of premises, but from time to time
available and designated by Landlord to benefit or serve the Project. Without
limitation, Common Areas may include roofs, foundations, exterior walls, sign
canopies, parking and landscaped areas, sidewalks, access roads, general signs,
machinery, equipment, and the mechanical, electrical and other systems and
installations serving the Project as a whole (whether or not located within the
Project), as same may be expanded, reduced or otherwise altered from time to
time in Landlord’s sole discretion. Landlord may, in its sole and absolute
discretion, from time to time change the location, layout and arrangement of
the Common Areas and/or reduce the size of the Common Areas by erecting thereon
store buildings or other structures or improvements of any kind.

     1.04 “Exhibits” means the following exhibits which are attached to this
Lease and made a part hereof, and any other exhibit which may in the future be
attached hereto by the prior written consent of the parties:

	 	 	 	 	 	 	 
	 

	 	Exhibit “A”
	 	-
	 	Project

	

	 	Exhibit “A-1”
	 	 	 	Premises

-7-

 

	 	 	 	 	 	 	 
	

	 	Exhibit “B”
	 	-
	 	Intentionally Omitted

	

	 	Exhibit “C”
	 	-
	 	Intentionally Omitted

	

	 	Exhibit “D” 
	 	-
	 	Rules and Regulations

	

	 	Exhibit “E”
	 	 	 	Parking Plan

     1.05 “Landlord’s Address for Notice” means
___________ , c/o First
Potomac Management, Inc., Attn.: Skip Dawson, 7200 Wisconsin Avenue, Suite 310,
Bethesda, Maryland 20814.

1.06 Intentionally Omitted.

     1.07 “Operating Expenses” means, without limitation, the sum of all
expenses, costs and disbursements of every kind and nature that Landlord pays
or becomes obligated to pay in connection with owning, operating, managing,
maintaining, insuring, repairing, policing, and securing the Building, the
Project, the parking facilities, and the land upon which the Project is
situated (the “Land”), including but not limited to: all management office
expenses; all costs and expenses of operating, maintaining, managing,
repairing, lighting, signing, cleaning, painting, striping, policing and
securing the Common Areas (including the cost of uniforms, equipment and
employment taxes); alarm and life safety systems; all applicable sales and use
taxes; expenses incurred for heat, cooling and other utilities; the cost of
insuring the Project (including, but not limited to, liability insurance for
personal injury, death and property damage, insurance against fire, all-risk
coverage including earthquake and flood, theft or other casualties, worker’s
compensation insurance or similar insurance covering personnel, fidelity bonds
for personnel, insurance against liability for defamation and claims of false
arrest occurring on or about the Project, structural insurance, plate glass
insurance and rent-loss insurance); the cost of cleaning all exterior glass;
removal of water, snow, ice, trash and debris; regulation of traffic; the cost
of landscaping; the cost of janitorial and cleaning service, trash collection
and recycling services, pest control; concierge, lobby, or security service (if
any); salaries, wages and other personnel costs of engineers, superintendents,
watchpersons, and all other employees of the Building, including any sales tax
imposed upon their service; charges under maintenance and service contracts for
elevators, chillers, boilers and controls; window cleaning; building and
grounds maintenance; parking lot maintenance; management fees; permits and
licenses; all maintenance, replacement and repair expenses and supplies
including replacement maintenance and repair of awnings, paving, curbs,
walkways, drainage, landscaping, pipes, ducts, conduits and similar items,
signage for the Project, and lighting facilities; costs and expenses of
planting, replanting and replacing flowers, shrubbery and planters; the cost of
water services, if any, furnished by Landlord for the non-exclusive use of all
tenants; costs (including finance charges) of improvements to the Building,
equipment or capital items that are designed to increase safety, improve energy
efficiency or expand telecommunications service; the cost of replacing existing
equipment or systems or other costs incurred for the purpose of complying with
the directives of a public or quasi public entity or authority; costs of
complying with all governmental regulations, including, without limitation, the
disposal of chlorofluorocarbons and compliance with Title III of the Americans
With Disabilities Act of 1990 (“ADA”) or any other
________________ statute regarding
barriers; costs of independent contractors; fees; owner’s association
assessments; Landlord’s share of expenses under any declaration, covenant, or
other agreement recorded among the Land Records of ______________ County and applicable
to the Project; and all other costs and expenses properly incurred in the
operation and maintenance of the Project, and the amortized portion of any
capital expenditures or improvements and interest thereon.

     1.08 “Permitted Use” means as a business office, and no other use
whatsoever.

-8-

 

     1.09 “Premises” means the
___________ rentable square foot area commonly
referred to as Suite _______, and shown outlined on Exhibit “A-1”, located within
the Building, as such Premises may be relocated within the Project from time to
time in Landlord’s sole discretion.

     1.10 “Project” means the
______-building industrial center commonly known as
_____, located in
_____, which Project is more particularly described in
Exhibit “A” attached hereto.

     1.11 “Real Estate Taxes” means all general and special real property taxes
and assessments, any Federal, state or local business personal property tax,
and any other ad valorem taxes, levies and assessments from time to time
imposed in respect of the land and/or buildings in the Project or the rents
therefrom, and any other tax from time to time imposed in substitution for or
in addition to any such taxes. Real Estate Taxes shall include, but shall not
be limited to, [Columbia Parks and Recreation Association charges], general and
special assessments, real estate rental, receipt or gross receipt tax or any
other tax on Landlord (excluding Landlord’s income taxes), and any metropolitan
district water and sewer charges and other governmental charges which
customarily are part of the real estate tax bill issued by the governmental
authorities charged with such responsibility. Real Estate Taxes shall also
include all expenses incurred in appealing assessments, including attorneys’
fees, but the net amount of any refund obtained shall be credited against Real
Estate Taxes.

1.12 Intentionally Omitted.

     1.13 “Security Deposit” means an amount equal to
______ dollars (       ), which amount
[Landlord is currently holding pursuant to the terms of a lease by and between
Landlord’s predecessor-in-interest, and Tenant dated, as amended (collectively,
the “Prior Lease”) and which amount] Landlord shall [continue to] hold in
accordance with the terms of Section 3.05.

     1.14 “Tenant’s Address for Notice” means
______.

     1.15 “Tenant’s Share” means
______ being
based on the ratio of the rentable area of the Premises to the rentable area of
all premises in the Project.

     1.16 “Tenant’s Trade Name”
____.

     1.17 “Term” means the period of approximately
_____ years commencing on
_____ (the “Commencement Date”) and expiring at . on
_____ (the
“Expiration Date), unless earlier terminated pursuant to the Lease.

2.00 GRANT OF PREMISES

     2.01 Tenant’s Possession, Use and Surrender of Premises. Landlord leases
the Premises to Tenant, and Tenant leases the Premises from Landlord, for the
Term, together with a nonexclusive, nontransferable license to use the Common
Areas. Tenant shall use the Premises for the Permitted Use, under Tenant’s
Trade Name, and for no other purpose and under no other name. Tenant shall
comply with all governmental laws, rules, regulations and the like from time to
time applicable to the Premises and the conduct of its business, and with
Landlord’s rules from time to time applicable to the Premises

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and the Common Areas. The current Rules and Regulations are attached hereto as
Exhibit “D”. Subject to this Lease and so long as Tenant is not in default
hereunder, Tenant shall have the quiet enjoyment of the Premises without
hindrance on the part of Landlord. On the Expiration Date Tenant shall remove
from the Premises all of its furniture, fixtures, equipment and other personal
property, and such of any alterations installed by or on behalf of Tenant as
Landlord may require, repair any damage caused by their installation or
removal, and surrender vacant possession of the Premises, clean, broom-swept
and in their original condition, subject to ordinary wear and tear and
unavoidable casualty. If Tenant remains in possession of the Premises after the
Expiration Date, such occupancy shall be deemed to be a tenancy from
month-to-month, on all of the terms, covenants, conditions and rentals of the
Lease insofar as they are applicable to a monthly tenancy, except that the
Monthly Base Rent shall be increased to an amount equal to the greater of (i)
two hundred percent (200%) of the then fair market value of the Premises or
(ii) two hundred percent (200%) of the Monthly Base Rent applicable in the last
month of the Term, and Tenant shall be liable for all losses suffered by
Landlord as a result of Tenant’s failure to timely vacate.

     2.02 Landlord to have access to the Premises. Landlord shall have the
right, but not the obligation, to enter the Premises from time to time during
business hours (or at any time and by forcible means in an emergency or when
Tenant is unavailable during business hours) without unreasonably interfering
with Tenant’s business, to inspect same, to make repairs to the Premises or
adjacent property, to install and maintain plumbing, utility, and other systems
to serve the Premises or adjacent property, and to show the Premises to
prospective purchasers, tenants, and lenders, without any such entry
constituting a breach of Landlord’s covenant for quiet enjoyment. Landlord
shall have the right to place “For Sale” signs, and during the last twelve (12)
months of the Term, “For Rent” signs, on the Premises.

     2.03 Delivery of Premises. Landlord shall deliver the Premises, and
Tenant shall accept same in their as-is condition, on the Commencement Date set
forth in Section 1.17 or so soon thereafter as Landlord is able to deliver the
same. [Landlord and Tenant acknowledge that Tenant is currently occupying the
Premises pursuant to the terms of the Prior Lease and that Landlord shall be
conclusively deemed to have delivered the Premises on the Commencement Date.]

     2.04 Relocation. Landlord shall have the absolute right to require Tenant
on sixty (60) days prior written notice to relocate to another location (the
“Relocated Premises”) in an existing or future building within the Project. The
location, size and configuration of the Relocated Premises shall be in
Landlord’s sole discretion. On the date of the relocation the Base Rent and
Tenant’s Share shall be adjusted based on the size of the Relocated Premises,
and all references in this Lease to “Premises” shall be taken to refer to the
Relocated Premises. Landlord shall reimburse Tenant for its reasonable out-of
pocket relocation expenses. Tenant’s failure to deliver possession of the
Premises as required shall constitute an immediate and material default
hereunder.

3.00 RENT

     3.01 Payment of Base Rent. Beginning on the Commencement Date, Tenant
shall pay to Landlord all installments of Base Rent due under this Lease in
accordance with the following terms and conditions. Installments of Base Rent
shall be paid monthly, in advance, without demand, notice, deduction, offset or
counterclaim, on the first day of each month without prior demand. All such
installments for any partial month shall be prorated on a per diem basis.

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     3.02 Payment of Operating Expenses. Tenant shall be responsible for the
payment of Tenant’s Share of Operating Expenses. Prior to the Commencement
Date, and then at the beginning of each year (which may be a calendar year or
other twelve-month period selected by Landlord from time to time) Landlord
shall furnish Tenant with Landlord’s reasonable estimation of Tenant’s Share of
Operating Expenses for the forthcoming year, and Tenant shall pay same in equal
monthly installments, in advance and without prior demand, together with Base
Rent. After the end of each year a reconciliation and adjustment shall be made
based on the actual cost incurred by Landlord for Operating Expenses in respect
of such year.

     3.03 Utilities. Tenant shall be solely responsible for contracting with
the appropriate utility companies for utility services rendered or furnished to
the Premises throughout the Term, including, without limitation: (i) heating
and air conditioning; (ii) electricity; (iii) lighting within the Premises;
(iv) janitorial services; (v) trash removal; and (vi) gas. The cost of all
such utility services, together with all taxes, levies and other charges on
such utilities, shall be borne by Tenant. Notwithstanding the foregoing,
Landlord shall furnish to the Premises throughout the Term: (i) hot and cold
water from points of supply; and (ii) restrooms as required by applicable code.
The cost of all services provided by Landlord hereunder shall be included
within Operating Expenses unless charged directly (and not as part of Operating
Expenses) to Tenant or another tenant of the Project. Landlord agrees to
furnish landscaping and grounds maintenance and snow clearing for the areas
used in common by the tenants of the Project. The foregoing services shall be
furnished by Landlord and reimbursed by Tenant as part of Operating Expenses;
provided, however, that Landlord shall be under no responsibility or liability
for failure or interruption in such services caused by breakage, accident,
strikes, repairs or for any other cause or causes beyond the control of
Landlord, nor in any event for any indirect or consequential damages; and
failure or omission on the part of Landlord to furnish such service shall not
be construed as an eviction of Tenant, nor work an abatement of Rent, nor
render Landlord liable in damages, nor release Tenant from prompt fulfillment
of any of the covenants under this Lease.

     3.04 Payment of Real Estate Taxes. Tenant shall be responsible for the
payment of Tenant’s Share of Real Estate Taxes. Prior to the Commencement
Date, and then at the beginning of each year (which may be a calendar year or
other twelve-month period selected by Landlord from time to time) Landlord
shall furnish Tenant with Landlord’s reasonable estimation of Tenant’s Share of
Real Estate Taxes for the forthcoming year, and Tenant shall pay same in equal
monthly installments, in advance and without prior demand, together with Base
Rent. After the end of each year a reconciliation and adjustment shall be made
based on the actual cost incurred by Landlord for Real Estate Taxes in respect
of such year.

     3.05 Security Deposit. [Landlord is currently holding a security deposit
in the amount of $______ pursuant to the terms of the Prior Lease. The
parties agree that the $______ currently held by Landlord under the terms of
the Prior Lease shall constitute the Security Deposit under this Lease.] Upon
execution of this Lease by Tenant, the Security Deposit shall immediately
become the property of Landlord. If Tenant timely and faithfully performs all
of its obligations hereunder, Landlord shall refund the Security Deposit to
Tenant, without interest and less any sums expended by Landlord to cure any
default of Tenant, within sixty (60) days after the expiration or sooner
termination of this Lease. If Landlord uses any portion of the Security
Deposit, Tenant shall reimburse Landlord for the amount so used within ten (10)
days of demand. If Tenant is more than thirty (30) days late in any rent
payment then, in addition to all other rights and remedies, Landlord shall have
the right to require Tenant to deposit with

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Landlord such additional sums as Landlord may deem appropriate to supplement
the Security Deposit, not to exceed an amount equal to six (6) months of the
then current Base Rent.

     3.06 Partial Occupancy. If the Building is not fully occupied during any
year, (or if any tenant provides itself with any service or Utilities which
Landlord provides as a part of Operating Expenses, or is separately assessed
for Real Estate Taxes) Operating Expenses, Real Estate Taxes and Utilities for
such year may be grossed up to reflect ninety -five percent (95%) occupancy,
using sound accounting and management principles consistently applied.

     3.07 Payments Generally. All rentals and other charges hereunder shall
commence to accrue and become payable in accordance with the terms hereof on
the Commencement Date. All payments required to be made by Tenant under this
Lease shall be deemed to be rent and shall be collectible as such, shall be in
lawful money of the United States, and shall be timely delivered to Landlord’s
Address for Notice, with no deduction, offset, abatement, credit or the like,
except as expressly be provided herein. Each late payment shall incur a late
charge fee in the amount of five percent (5%) of such payment to cover extra
tracking and handling expenses. All amounts owed by Tenant to Landlord under
this Lease which are overdue shall bear interest at the rate of 12% per annum
from the date due until paid. The tender by Tenant of a lesser amount than due
shall be treated as a payment on account notwithstanding any endorsement or
statement to the contrary on the payment or in any cover letter, and Landlord’s
acceptance of such lesser amount shall not constitute a waiver of any other
available right or remedy.

4.00 MAINTENANCE AND REPAIRS

     4.01. Tenant’s Repairs. Subject to the provisions of this Lease with
regard to damage by fire or other casualty, Tenant agrees to maintain the
Premises in good order and repair during the Term of this Lease. Tenant will
make all repairs, maintenance and replacements to the Premises and any
improvements, equipment and fixtures therein, including, but not limited to:
all interior and exterior doors, door jambs and frames, drive-in doors, dock
doors, dock collars and levelers, locks and hardware, and all interior and
exterior windows, window casings and sills; all interior walls, floors,
coverings and ceilings, all interior painting and decorating of the Premises,
replacement of approved signs, repairs, maintenance and replacements of all
electrical, plumbing, interior and exterior heating, ventilating, and air
conditioning equipment, lighting and other fixtures and equipment inside the
Premises whether or not they were initially installed at Landlord’s expense.
All repairs, maintenance and/or replacements made by Tenant shall be subject to
Landlord’s prior written approval, which will not be unreasonably withheld
provided that the same are at least equal in quality and class to the original
work and/or fixtures and equipment. All repairs, maintenance and replacements
will be made at Tenant’s sole expense. Tenant will not overload the electrical
wiring. In furtherance of the above, Tenant covenants and agrees to obtain a
maintenance, repair and service contract on the HVAC system of the Premises,
said contract to be on such terms and with such company as shall be approved by
Landlord.

     4.02. Failure to Make Repairs. If Tenant fails to make any such repairs,
after three (3) days prior written notice, Landlord may, but shall not be
obligated to, make them for the account of Tenant and Landlord’s costs in so
doing will be additional rent which will be payable by Tenant to Landlord with
the next monthly installment of Base Rent due hereunder. Landlord reserves the
right to interrupt the supply of electricity, water, sewer, heat, air
conditioning, gas and other utilities to the Premises, and also to suspend the
operation of the air conditioning or heating system until repairs, alterations
or improvements

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have been completed. Landlord will pursue all work with reasonable
dispatch and will use reasonable efforts to minimize any disruption. There
will be no abatement in Rent, nor shall Landlord in any way be liable to Tenant
because of any such interruption or suspension.

     4.03. Landlord’s Repairs. Landlord will maintain and repair the
foundations, roof and exterior walls (excluding store fronts, plate glass
windows and window frames, doors and door frames, docks, dock doors and dock
levelers, and the interior of walls, all of which shall be the sole
responsibility of Tenant) of the Building and the common areas and facilities
for the furnishing of various utilities (except to the extent that the same are
the obligation of any public utility company or of any tenant in the Project,
including Tenant); but Landlord will not be required to make any repair
necessitated by reason of any act or omission of Tenant, or its employees,
contractors, agents, licensees, invitees, or anyone claiming under Tenant or
caused by any alteration, addition or improvement made by Tenant or anyone
claiming under Tenant and if Landlord does make any such repairs, Tenant will
reimburse to Landlord the cost incurred by Landlord in so doing as additional
rent with the monthly installment of Base Rent first due after Landlord bills
Tenant for such costs. Landlord shall replace, at the expense of Tenant, any
and all plate and other glass damaged or broken from any cause whatsoever in or
about the Premises other than to the extent to which Landlord shall be entitled
and shall in fact receive payment therefor under any insurance maintained by
Landlord from time to time. Landlord will have no liability to Tenant for
failure to make repairs unless and until Tenant has given written notice to
Landlord of the need for such repairs and Landlord has failed to commence and
complete such repairs within a reasonable period of time thereafter.

     4.04 Initial Improvements. On the Commencement Date Tenant shall accept
possession of the Premises in their “as-is” condition, and Landlord shall not
be required to perform any improvements whatsoever to the Premises. All work
necessary to improve, furnish, fixture, equip, stock, and decorate the Premises
for Tenant’s Permitted Use shall be performed by Tenant, at its sole cost and
expense, in accordance with Section 4.05 below. Tenant represents that it has
thoroughly examined the Project (including without limitation the Premises and
the Building) and is aware of, and accepts, the existing condition thereof.

     4.05 Tenant Alterations. Tenant shall not make any installations,
alterations, improvements, or the like to the Premises without in each case
first obtaining Landlords written consent. Landlord may grant or withhold its
consent in its sole and absolute discretion in the case of any proposed
installation, alteration, improvements, or the like which (i) may affect the
structure of the Premises, or (ii) are on the exterior of the Premises, or
(iii) require cutting or drilling into the Premises, or securing of any item to
any part of the Premises, or penetrating the roof. If Landlord elects to
require that alterations, installations, changes, replacements, additions or
improvements made by Tenant to the Premises be removed at the termination of
this Lease, then Tenant hereby agrees to cause the same to be removed at its
sole cost and expense. If Tenant fails to remove the same, then Landlord may
cause them to be removed at Tenant’s expense, and Tenant hereby agrees to
reimburse Landlord for the cost of such removal, together with any and all
damages which Landlord may suffer and sustain by reason of Tenant’s failure to
remove the same. Alternatively, Landlord may elect that any or all of the
alterations, installations, changes, replacements, additions to or improvements
made by Tenant to the Premises shall remain at the termination of this Lease
and not be removed. Tenant shall immediately discharge any lien which is filed
against the Premises or the Project as a result of work performed by or on
behalf of Tenant. Tenant shall not, without first obtaining Landlord’s prior
written consent as to the size, design, location, type of composition or
material and lighting thereof, display any sign, logo, lettering, or the like
on the

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outside of the Premises, the Building or the Project, or on the inside of
the Premises in such a manner as to be visible from the outside. Tenant shall
maintain any sign, logo, lettering, or the like in good condition and repair at
all times, and shall pay any taxes imposed thereon. Notwithstanding the
foregoing, Building standard signage shall be available to Tenant at Tenant’s
expense.

     4.06 Restoration after Damage by Casualty. If this Lease is not
terminated in accordance with Section 4.07 below, and subject to Landlord’s
ability to obtain the necessary permits, if the Premises are damaged or
destroyed by fire or other casualty insured against by Landlord (“Casualty”)
and not caused by the negligence of Tenant or those over whom it exercises
control, Landlord shall diligently commence to settle its insurance claims and
restore the Premises, but shall not be obligated to expend an amount in excess
of the insurance proceeds recovered. However, Landlord shall not be obligated
to restore any improvements, furniture, fixture, equipment or other property
that is not Landlord’s property. Upon notification that Landlord’s restoration
work is substantially complete Tenant shall forthwith complete the restoration
of its improvements (but shall not be entitled to any allowance, abatement, or
other inducement or concession that may have been available in connection with
the original construction of the Premises) and shall reopen in the whole of the
Premises fully fixtured, stocked, and staffed within thirty (30) days of
Landlord’s notice. If the Premises are damaged by a Casualty to the extent of
complete or partial untenantability, all rents (except for Utilities) shall
abate proportionately from the date of the Casualty until the Premises are
substantially restored to the extent required of Landlord.

     4.07 Termination. Landlord shall have the right to terminate this Lease
on notice to Tenant given within ninety (90) days of a Casualty if (i)
insurance proceeds are unavailable or insufficient to restore the Premises as
required of Landlord, or if Landlord’s mortgagee does not make them available
for such restoration, or (ii) more than forty (40%) of the Premises are
damaged, or the Premises and/or the Building and/or the Project are damaged to
such an extent as to make restoration uneconomical, and in such event the
parties shall be relieved of any further obligation hereunder accruing after
the termination date.

     4.08 Condemnation. If any of the Premises is taken or condemned to an
extent that Tenant is unable to continue to use the Premises in the manner and
for the purpose for which they were leased, either party shall have the option
to terminate the Lease as to such Premises only, on notice given to the other
within thirty (30) of notification of such taking, and such termination shall
be effective on the date on which Tenant is obligated to yield possession. All
compensation awarded for such taking of the fee and the leasehold shall belong
to the Landlord, but Landlord shall not be entitled to any portion of any award
made separately to Tenant for the cost of removing its fixtures and inventory.

5.00 INSURANCE

     5.01 Tenant’s Insurance. Tenant will provide and keep in force during the
Term of this Lease, for the benefit of Landlord, its mortgagees, Agent and
Tenant general liability insurance coverage with an insurance company licensed
to do business in the jurisdiction in which the Property is located, in the
amount of at least One Million Dollars ($1,000,000.00) with respect of injuries
to any one person, Three Million Dollars ($3,000,000.00) with respect to any
one accident, and Five Hundred Thousand Dollars ($500,000.00) with respect to
property damage (or in such higher amounts as Landlord may from time to time
reasonably require), in which Landlord, its mortgagees and Agent are named as
additional parties insured, as their interests may appear. Tenant will
maintain fire and extended coverage insurance (including, but not limited to,
theft and mysterious disappearance and sprinkler damage) in an amount

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equal at all times to the full replacement cost of all property, improvement,
fixtures and equipment in the Premises owned, leased or paid for by Tenant,
irrespective of whether such property , improvement, fixtures or equipment are
attached in any manner to the real estate; with Tenant as the party insured,
and with a waiver by the insurance company of all its rights to subrogation
against Landlord and Landlord’s agents and employees. During the course of any
construction work by or on behalf of Tenant on or about the Premises, Tenant
will provide and keep in force builders “all-risk” insurance with extended
coverage in completed value, non-reporting form, and (if required by Landlord)
performance bonds to ensure completion of such work. In addition, Tenant shall
be responsible for obtaining and maintaining such other insurance coverages,
limits and/or endorsements as Landlord or any mortgagee of the Project may
reasonably require from time to time. All such policies shall be primary and
non-contributing with any coverage that Landlord may carry, shall name Landlord
(and/or Landlord’s mortgagees and/or managing agent, if requested) as loss
payee or as additional insured (as the case may be), and shall contain a
long-form lender’s loss payable endorsement providing for Landlord to receive
written notice at least thirty (30) days prior to any alteration or
cancellation. Such insurance may be carried under a blanket policy or policies
provided that the proceeds from such policies shall not be less than would have
been available if the insurance had been obtained under separate or non-blanket
policies had been obtained under separate or non-blanket policies.

     5.02 Waivers. Tenant hereby waives any right of recovery it may from time
to time have against Landlord with respect to liability for damage to property
covered by the insurance required to be carried by Tenant hereunder. Tenant
shall require its fire and extended coverage insurers from time to time to
include an express waiver of any right of subrogation which the insurer may
have against Landlord. Tenant shall furnish to Landlord from time to time upon
ten (10) days request a current duplicate original insurance policy, or
Evidence of Insurance in form ACORD 25-S or ACORD 27 (whichever is applicable),
evidencing the coverages and endorsements above required, failing which
Landlord shall have the right, but not the obligation, to purchase the required
insurance on Tenant’s behalf and one hundred fifteen percent (115%) of the
amount incurred shall be due from Tenant as additional rent.

     5.03 Tenant Not to Create Extra Insurance Hazards. Tenant shall not keep
or do anything on the Premises or the Project which is prohibited by Landlord’s
insurance policies or which will prevent Landlord from procuring such policies
in acceptable companies. If any act or omission of Tenant within the Project
causes an increase in Landlord’s insurance premiums with acceptable insurers,
or in the coverages or endorsements Landlord is required to carry, Tenant shall
be responsible for the payment of any such increase as additional rent upon
demand.

     5.04 Indemnification by Tenant. Tenant shall indemnify, save harmless
and defend Landlord and its agents from and against all claims, costs,
liabilities, losses and the like (including without limitation reasonable legal
fees, court costs and the like) incurred in connection with loss of life,
bodily injury and damage to property (including without limitation the property
and person of Tenant and its agents) arising from or relating to (i) any
occurrence in, on or about the Premises, and any loading platform or other area
outside of the Premises exclusively allocated to Tenant’s use, except to the
extent caused by the gross negligence of Landlord or its agents, (ii) Tenant’s
use or occupancy of the Premises, or (iii) the negligence of Tenant, its agents
and invitees, or attributable to property of Tenant on the Common Areas.

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     5.05 Landlord’s Liability Excluded. Notwithstanding anything to the
contrary herein, Landlord shall have no liability whatsoever for any injury or
death to persons or loss or damage to property caused by (i) fire, smoke,
explosion, falling plaster, falling ceiling tiles, falling stucco, falling
fixtures, steam, gas, fumes, vapors, electricity, water, rain, flood, snow,
sleet, ice, dampness, sewer or down spout backups, or leaks, including without
limitation from pipes, sprinklers, appliances, wiring, plumbing, roofs,
windows, subfloors or ceilings, (ii) any third party including without
limitation occupants of adjacent premises or property, or by any private,
public or quasi-public work, or (iii) the failure or interruption of any
utility, trash removal or other service, whether provided directly by a third
party or through Landlord, in each case unless caused solely by the negligence
of Landlord. Landlord shall have no liability for consequential, indirect or
punitive damages, and Tenant waives any right it may have to claim same. It
is understood and agreed that the liability of Landlord shall be limited solely
to the assets and property of the Project, that no general partner of Landlord,
nor any officer, director, agent or employee of Landlord shall be personally
liable with respect to any claim arising out of or related to this Lease, and
that a deficit capital account of a partner of Landlord shall not be deemed an
asset or property of the Project.

6.00 TENANT’S CARE OF PREMISES

     6.01 Flammable, Explosive or Toxic Substances. Tenant will not use or
permit in the Premises or the Building any flammable or explosive material,
toxic substances, environmentally hazardous materials (as defined below) or
other items hazardous to persons or property. Tenant will not use the Premises
in a manner that (a) invalidates or is in conflict with fire, insurance, life
safety or other policies covering the Building or the Premises, or (b)
increases the rate of fire or other insurance on the Building or the Premises.
If any insurance premium is higher than it otherwise would be due to Tenant’s
failure to comply with this section, Tenant shall reimburse Landlord as
Additional Rent, that part of Landlord’s insurance premiums that are charged
because of Tenant’s failure to comply with this provision.

     6.02 Hazardous Materials Defined. “Hazardous Materials” means: (a) any
“hazardous waste” as defined by the Resource Conservation and Recovery Act of
1976 (42 U.S.C. ’6901 et. seq.) (“RCRA”), as amended from time to time, and
regulations promulgated thereunder; (b) any “hazardous substance” being
“released” in “reportable quantity” as such terms are defined by the
Comprehensive Environmental Response, Compensation and Liability Act of 1980
(42 U.S.C. ’9601 et. seq.) (“CERCLA”), as amended from time to time, and
regulations promulgated thereunder; (c) asbestos; (d) polychlorinated
biphenyls; (e) urea formaldehyde insulation; (f) “hazardous chemicals” or
“extremely hazardous substances”, in quantities sufficient to require
reporting, registration, notification or special treatment or handling under
the Emergency Planning and Community Right to Know Act of 1986 (42 U.S.C.
”11001, et. seq.) (“EPCRA”), as amended from time to time and regulations
promulgated thereunder; (g) any “hazardous chemicals” in levels that would
result in exposures greater than those allowed by permissible exposure limits
established pursuant to the Occupational Safety and Health Act of 1970 (29
U.S.C. ’651 et. seq.) (“OSHA”), as amended from time to time and regulations
promulgated thereunder; (h) any substance which requires reporting,
registration, notification, removal, abatement or special treatment, storage,
handling or disposal under Section 6, 7 or 8 of the Toxic Substances Control
Act (15 U.S.C. ”2601 et. seq.) (“TSCA”) as amended from time to time and
regulations promulgated thereunder; (i) any toxic or hazardous chemicals
described in the Occupational Safety and Health Standards (29 C.F.R. 1910.1000
1047) in levels which would result in exposures greater than those allowed by
the permissible exposure limits pursuant to such regulations; (j) the contents
of any storage tanks, whether above or below ground; (k) medical wastes; (l)
materials related to those described in

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subparagraphs (a) through (k) hereof; and (m) anything defined as
hazardous or toxic under any now existing or hereinafter enacted statute.

     6.03 Environmental Compliance. Tenant will not use or permit the Premises
to be used in violation of any Environmental Regulations (as defined below).
Tenant assumes sole and full responsibility for, and will remedy at its cost,
all such violations, provided that Tenant must first obtain Landlord’s written
approval of any remedial actions, which approval Landlord may not unreasonably
withhold. Tenant will not use, generate, release, store, treat, dispose of, or
otherwise deposit, in, on, under or about the Premises, any Hazardous
Materials, nor will Tenant permit or allow any third party to do so, without
Landlord’s prior written consent. Landlord’s election to conduct inspections
of the Premises is not approval of Tenant’s use of the Premises or any
activities conducted thereon, and is not an assumption by Landlord of any
responsibility regarding Tenant’s use of the Premises or Hazardous Materials.
Tenant’s compliance with the terms of this Section 6.03 and with all
Environmental Regulations is at Tenant’s sole cost. Tenant will pay or
reimburse Landlord for any costs or expenses incurred by Landlord, including
reasonable attorney’s, engineers’, consultants’ and other experts’ fees and
disbursements incurred or payable to determine, review, approve, consent to or
monitor the requirements for compliance with Environmental Regulations,
including, without limitation, above and below ground testing. Landlord and
Landlord’s Agents are hereby authorized to enter upon the Premises for such
purposes. Tenant will supply Landlord with historical and operational
information regarding the Premises, including without limitation, all reports
required to be filed with governmental agencies, as may be reasonably requested
by Landlord to facilitate site assessment, and will make available for meetings
with Landlord or Landlord’s Agents, appropriate personnel having knowledge of
such matters. If Tenant fails to comply with the provisions of this Section
6.03, or if Landlord receives notice or information asserting the existence of
any Hazardous Materials, Landlord has the right, but not the obligation,
without in any way limiting Landlord’s other rights and remedies, to enter upon
the Premises or to take such other actions Landlord deems necessary or
advisable to clean up, remove, resolve, or minimize the impact of any Hazardous
Materials on or affecting the Premises. Tenant shall pay to Landlord on demand
as Additional Rent all reasonable costs and expenses paid or incurred by
Landlord in the exercise of any such rights. Tenant will notify Landlord in
writing, immediately upon the discovery, notice (from a governmental authority
or other entity) or reasonable grounds to suspect, by Tenant, Tenant’s Agents,
its successors or assigns the presence in the Premises or the Building of any
Hazardous Materials or conditions that result in a violation of or could
reasonably be expected to violate this Section 6.03, together with a full
description thereof. “Environmental Regulations” means any law, statute,
regulation, order or rule now or hereafter promulgated by any Governmental
Authority, whether local, state or federal, relating to air pollution, water
pollution, noise control or transporting, storing, handling, discharge,
disposal or recovery of on site or off site hazardous substances or materials,
as same may be amended from time to time. Tenant’s obligations pursuant to
this Section 6.03 shall survive the expiration or earlier termination of the
Lease.

     6.04 ADA Compliance. Nothing contained in this Lease is intended to
prevent or prohibit compliance by either party with ADA nor is any provision of
this Lease intended to violate ADA, and any provision that does so is hereby
modified to allow compliance or deleted as necessary. Tenant indemnifies
Landlord, Landlord’s Agents, its affiliates, agents, officers, employees and
contractors, for all costs, liabilities and causes of action occurring or
arising as a result of Tenant’s failure to comply with ADA or as a result of
any violation of ADA by Tenant or Tenant’s Agents, and, at Landlord’s option,
Tenant will defend Landlord, Landlord’s Agents, its affiliates, agents,
officers, employees and contractors, against all such costs, liabilities and
causes of action. Breach of this Section 6.04 is a Default under this

-17-

 

Lease. Tenant’s obligations pursuant to this Section 6.04 shall survive
the expiration or earlier termination of this Lease.

7.00 SUBLETTING AND ASSIGNING

     7.01 Transfer of Premises. Tenant shall not assign this Lease or sublease,
or grant a license or concession, or otherwise transfer the whole or any part
of any Premises without the prior written consent of Landlord in each case,
which consent may be withheld in the Landlord’s sole and absolute discretion.
Any request to transfer this Lease or any portion of the Premises shall be
accompanied by a check in the amount of one thousand dollars ($1,000.00) to
help defray the cost of reviewing same. Landlord shall withhold consent if (i)
Tenant is in default of the Lease, (ii) the proposed transfer would violate a
provision of another lease or agreement, (iii) the proposed use would be
incompatible with the other uses in the Project or would increase parking or
utility requirements, (iv) the proposed transferee is not sufficiently
creditworthy or experienced; (v) Landlord’s lender or Tenant’s guarantor (if
any) refuses to consent, or (vi) any other factor exists which would make
Landlord’s refusal reasonable under the circumstances. Tenant’s request for
consent shall be accompanied by sufficient documentation to allow Landlord to
make a decision based on the foregoing factors. Landlord shall have the right
to recapture the Premises proposed for transfer by written notice to Tenant
given within thirty (30) days of the request for consent, but Landlord’s
failure to exercise this right shall not constitute a consent to the transfer.
In the case of each transfer, Tenant shall cure any outstanding defaults prior
to the transfer date, and remain jointly and severally liable with the
transferee for the full and timely performance of each and every term, covenant
and condition of Tenant under the Lease. All cash or other proceeds whatsoever
payable by or on behalf of a transferee of this Lease or the Premises,
whensoever same may be payable, shall be deemed to be rent , and any such rent
in excess of the rentals payable by Tenant hereunder shall promptly be paid to
Landlord.

     7.02 Transfer Defined. The term “transfer” in Section 7.01 above shall
include (i) if Tenant is a partnership or limited liability company, a
withdrawal or change (voluntary, involuntary, or by operation of law, whether
accomplished by a single transaction or a series of transactions) of any
partner or member owning twenty percent (20%) or more of the partnership or
company, or a dissolution or liquidation of the partnership or company, (ii) if
Tenant is a corporation, any dissolution, merger, consolidation or other
reorganization of Tenant, or the transfer of a controlling interest of the
capital stock of Tenant (whether accomplished by a single transaction or a
series of transactions), or (iii) any management arrangement by which
operational control is transferred to a person other than Tenant.

     7.03 Subordination/Estoppel Certificates. This Lease is and shall be
subordinate to all ground leases, mortgages, trust deeds or other financing
or, refinancing instruments that may now or in the future be placed on the
Project, and to all renewals, replacements, and extensions of same and Tenant
shall attorn to any purchaser, to the purchaser at any foreclosure, or to the
grantee of a deed in lieu of foreclosure, and recognize such purchaser or
grantee as Landlord under the Lease. Such subordination is self-operative, and
no further instruments shall be required to effect same. However, if requested
by Landlord, Tenant shall promptly from time to time within ten (10) days of
request execute a confirmation of such subordination in the form required by
Landlord. If any ground lessor, mortgagee or trustee notifies Tenant that it
elects to have the Lease be a prior lien, then this Lease shall be deemed to be
prior in lien to such ground lease, mortgage or trust deed. Tenant shall within
ten (10) days of request deliver to Landlord, or to any party providing
financing to Landlord, or to a prospective purchaser, information reasonably
required by such party, including without limitation current financial
statements and estoppel

-18-

 

certificates in a form satisfactory to such party, failing which Tenant shall
be in default of this Lease without further notice or cure period. If Tenant
does not deliver any subordination or estoppel certificate within the time
limited herein, then in addition to any other right or remedy of Landlord,
Tenant hereby appoints Landlord as its attorney-in-fact to execute and deliver
any such subordination or estoppel certificate on Tenant’s behalf.

8.00 DEFAULT

     8.01 Default. Tenant shall be in “default” of this Lease whenever (i)
Tenant fails to pay any amount when due and such failure continues for five (5)
days; or (ii)Tenant fails to comply with any other term, covenant or conditions
of the Lease and such failure continues for thirty (30) days after notice, or
(iii) Tenant fails to timely deliver any required subordination, estoppel
certificate, or financial statements within the time limited by this Lease, or
(iv) Tenant abandons the Premises, or (v) a petition is filed by or against
Tenant in bankruptcy, insolvency, for the appointment of a receiver or
custodian, or an attachment or other judicial seizure is instituted against
Tenant, or other act of bankruptcy or insolvency occurs involving the Tenant,
or any steps are taken for the dissolution, winding up or liquidation of
Tenant. Tenant hereby waives any present or future law requiring any notice to
quit or of Landlord’s intention to re-enter.

     8.02 Consequences of Default. If a default occurs, Landlord may at its
option reenter the Premises without terminating the Lease, relet the Premises
on Tenant’s behalf, and Tenant shall be responsible for the payment of any
deficiency in the rent received by Landlord in accordance with the Lease, as
well as all costs relating to recovery and reletting the Premises, including
all leasing commissions, legal fees and costs plus all actual and consequential
damages, but if Landlord does not relet the Premises Tenant shall continue to
be responsible for the full payment of rentals in accordance with the Lease.
Landlord shall not be required to serve further notice or resort to legal
process prior to exercising its right of re-entry, and Tenant waives any
available rights of redemption. Landlord shall also have the right to terminate
this Lease and recover damages, even if Landlord has previously exercised its
right of re-entry. If Landlord elects to terminate, Landlord shall be entitled
to liquidated damages in an amount equal to (i) all sums owing hereunder up to
the date of termination, and (ii) accelerated rent discounted to present value
using an interest rate of five percent (5%), provided that Landlord will
forward to Tenant any net rentals received on reletting the Premises as they
are received, provided that Landlord shall incur no liability, and Tenant’s
obligations hereunder shall not be diminished, by virtue of Landlord’s failure
to relet. The foregoing remedies are in addition to any other remedies
available hereunder or at law.

     8.03 Self-Help. Landlord shall also have the right, but not the
obligation and without prejudice to any other right or remedy, to cure any
default of Tenant on Tenant’s behalf, and one hundred fifteen percent (115%) of
the cost incurred shall be payable by Tenant on demand as additional rent. The
failure to pay such amount when due shall constitute a monetary default.

     8.04 No Implied Waivers. No waiver of any breach of a term, covenant or
condition by either party shall be construed as a waiver of a subsequent breach
of the same term, covenant or condition, or as a waiver of the term, covenant
or condition itself. The consent or approval by either party to, or of, any act
requiring such party’s consent or approval shall not be deemed to waive or
render

-19-

 

unnecessary the consent or approval of such party to, or of, any subsequent
similar act. All rights and remedies set forth in this Lease are cumulative and
in addition to any other available rights and remedies.

9.00 MISCELLANEOUS

     9.01 Notices. All notices under this Lease shall be in writing and sent by
registered or certified mail, return receipt requested, or by a commercial
delivery service regularly retaining delivery receipts. Notices to Landlord
shall be addressed to Landlord’s Address for Notice, and notices to Tenant
shall be addressed to Tenant’s Address for Notice, in each case as set forth
above. A notice shall be deemed to have been received on the date marked on the
receipt as having been delivered or refused by the party addressed. A party may
change its address for notice by a notice given in accordance with this Section
9.01, such change to become effective on the tenth (10th) day following
delivery.

     9.02 Successors and Assigns. This Lease shall bind the administrators,
executors, successors and assigns of the parties in accordance with the terms
hereof.

     9.03 No Offer. The submission of this Lease for examination does not
constitute a reservation of, or option for, the Premises, and this Lease shall
become effective only upon execution and delivery by and to all parties hereto.

     9.04 Attorney’s Fees. In the event of the employment of an attorney by
the Landlord because of the violation by the Tenant of any term or provision of
this Lease, including non-payment of rent as due, the Tenant shall pay and
hereby agrees to pay reasonable attorney’s fees and all other costs incurred
therein by the Landlord.

     9.05 Interpretation. This Lease shall be construed in accordance with the
laws of the state or commonwealth in which the Project is located, without
reference to its conflict of laws provisions. To the extent required under
applicable law to make this Lease legally effective, this Lease shall
constitute a Deed of Lease executed under seal. The section headings contained
in this Lease are for convenience only and shall not enlarge or limit the scope
or meaning of the various and several sections hereof. Words of any gender
used in this Lease shall include any other gender, and words in the singular
number shall be held to include the plural, unless the context otherwise
requires. Every agreement contained in this Lease is, and shall be construed
as, a separate and independent agreement. If any term of this Lease or the
application thereof to any person or circumstances shall be invalid and
unenforceable, the remainder of this Lease, or the application of such term to
persons or circumstances other than those as to which it is invalid or
unenforceable, shall not be affected. The parties acknowledge and agree that
neither this Lease nor any of its provisions shall be interpreted against a
party by virtue of such party having drafted the Lease or the provision. Time
shall be of the essence of this Lease.

     9.06 Amendments. This Lease and its exhibits may be amended or modified
only by a written instrument duly executed by each of the parties hereto prior
to or as of the effective date of any such amendment or modification. If
Landlord’s mortgagee shall at any time require modifications to this Lease,
Tenant shall execute and deliver to Landlord the documents required to give
effect thereto.

     9.07 Brokerage. Each of the parties hereto represents and warrants that
there are no brokerage commissions or finder’s fees of any kind due to anyone
other than First Potomac Management, Inc. and _____ pursuant to separate
agreements with Landlord, and both parties agree to defend

-20-

 

and indemnify the other against, and hold it harmless from, all liabilities
arising from any such claim including, without limitation, the cost of counsel
fees in connection therewith.

     9.08 Entire Agreement. This Lease and its exhibits contains the entire
and final agreement of and between the parties, and they shall not be bound by
any statements, conditions, representations, inducements or warranties, oral or
written, not herein contained.

     9.09 Force Majeure. If Landlord is unable to fulfill any obligation
hereunder, or is delayed in so doing, by reason of war, civil unrest, strike,
labor troubles, inability to procure services, materials, permits or licenses,
unusually inclement weather, governmental delays, acts of God, or any other
cause beyond the reasonable control of Landlord, the time within which Landlord
would otherwise have been obligated to fulfill such obligation shall be
extended for a period equal to the period of such delay.

     9.10 Authority. The parties hereby each represent that each is a
[corporation] in good standing and duly organized under the laws of each state
or commonwealth in which this Lease will be performed, or if chartered in
another state or commonwealth, is a corporation in good standing and duly
organized under the laws of such state or commonwealth and is authorized to do
business in each state or commonwealth in which this Agreement will be
performed. Each of the undersigned represents and warrants that he/she has the
power, authority and legal right to bind the corporation he/she purports to
represent to the terms of this Lease by his/her signature hereto.

     9.11 Mortgagees’ Approval. If Landlord’s mortgagee shall require
modifications of the terms and provisions of this Lease, Tenant agrees to
execute and deliver to Landlord the agreements required to effect such Lease
modifications within thirty (30) dates after Landlord’s request therefor. In
no event, however, shall Tenant be required to agree to materially modify any
provision of this Lease relating to the amount of Rent, Additional Rent or
other charges reserved herein, the size and/or general location of the
Premises, or the Lease Term.

     9.12 Parking. Tenant shall have the right to park in the Building and/or
Project parking facilities in common with other tenants of the Building and/or
Project upon such terms and conditions as established by Landlord. In
addition, provided Tenant complies with all present and future laws,
ordinances, regulations, orders or other legal requirements of the United
States of America, the State of ____ and any other public or quasi-public
authority having jurisdiction over the Premises, the Building or the Project
and all insurance requirements relating to or affecting the Premises, the
Building or the Project, Tenant shall have the right to store and/or park not
more than ______ (___) vehicles in the location set forth in the parking plan,
attached hereto as Exhibit “E” and incorporated herein by this reference.
Tenant shall furnish Landlord with license plate numbers of Tenant’s cars and
cars used by Tenant’s employees within five days after the Commencement Date
and shall thereafter notify Landlord of any changes in such information within
five (5) days after such changes occur. Tenant agrees to cooperate with
Landlord and other tenants in use of the parking facilities. Landlord reserves
the right in its absolute and sole discretion to determine whether the parking
facilities are properly used or are becoming overburdened and to allocate and
assign parking spaces among Tenant and other tenants, and to reconfigure the
parking area and modify the existing ingress and egress from the parking areas
as Landlord shall deem appropriate. If Tenant or its employees shall fail to
park their cars in the designated parking areas, then, without limiting any
other remedy which Landlord may pursue, Landlord shall have the right to charge
Tenant, as additional rent, the sum of Twenty-Five Dollars ($25.00) per day per
car parked in violation of the provisions of this Section 9.12.

-21-

 

9.13 Waiver of Jury Trial. The parties hereby waive trial by jury in any
action, proceeding or counterclaim brought by either of them against the other
on any matters relating to this Lease, the relationship of Landlord and Tenant,
or any other related matters.

[Signature Page Follows]

-22-

 

     IN WITNESS WHEREOF the said parties have hereunto signed their names and
affixed their seals on the day and year hereinbefore written.

	 	 	 	 	 	 	 
	ATTEST/WITNESS:

	 	LANDLORD	 	 
	 
	 	 	 	 	 	 
	

	 	By
	 	 	 	Its Member
	

	 	 	 	
	 	 
	

	 	Name:
	 	 	 	 
	

	 	 	 	
	 	 
	

	 	Title:
	 	 	 	 
	

	 	 	 	
	 	 
	 
	 	 	 	 	 	 
	ATTEST/WITNESS

	 	TENANT	 	 
	 
	 	 	 	 	 	 
	

	 	By
	 	 	 	 
	

	 	 	 	
	 	 
	

	 	Name:
	 	 	 	 
	

	 	 	 	
	 	 
	

	 	Title:
	 	 	 	 
	

	 	 	 	
	 	 

-23-

 

EXHIBIT “A”

PROJECT

 

 

EXHIBIT “A-1"

PREMISES

 

 

EXHIBIT “B”

INTENTIONALLY OMITTED

 

 

EXHIBIT “C”

INTENTIONALLY OMITTED

 

 

EXHIBIT “D”

RULES AND REGULATIONS

Tenant agrees as follows:

     (1) Tenant shall not obstruct in any way the sidewalks or parking areas in
the front, side, or rear of the Building nor do anything directly or indirectly
that will limit any of the ingress or egress or the light of any other tenant
or of Landlord.

     (2) Tenant shall not attach awnings, antennas, pipes, wiring or other
projections to the roof or outside walls of the Building. No curtains, blinds,
shades or screens shall be attached to, or hung in, or used in connection with
any window or door of the Premises without the prior written consent of
Landlord.

     (3) No additional lock or locks shall be placed by Tenant on any door in
the Building without the prior written consent of Landlord. All keys to doors
shall be returned to Landlord at the termination of the tenancy. At Tenant’s
request, locks may be changed by Landlord and the cost of such change shall be
charged to and paid for by Tenant, and Tenant agrees to pay the same promptly
upon demand.

     (4) Dumpsters or other trash containers shall not be allowed on the
outside of the Building without Landlord’s prior written consent. If such
consent be given by Landlord, the type, size, and location of such containers
shall be only as approved by Landlord and shall be maintained by Tenant in a
clean sanitary manner, and in good repair at all times.

     (5) All loading and unloading of goods shall be done only at such times,
and through the entrances, designated for such purposes by Landlord.

     (6) The delivery or shipping of merchandise, supplies and fixtures to and
from the Premises shall be subject to such rules and regulations as in the
judgment of Landlord are necessary for the proper operation of the Project.

     (7) No radio or television or other similar device shall be installed
without first obtaining in each instance Landlord’s consent in writing. No
aerial shall be erected on the roof or exterior walls of the Premises, or on
the grounds, without in each instance, the written consent of Landlord. Any
aerial so installed without such written consent shall be subject to removal
without notice at any time.

     (8) No loud speakers, televisions, phonographs, radios or other devices
shall be used in a manner so as to be heard or seen outside of the Premises
without the prior written consent of Landlord.

     (9) If the Premises are equipped with heating facilities separate from
those in the remainder of the Building, Tenant shall keep the Premises at a
temperature sufficiently high to prevent freezing of water in pipes and
fixtures.

     (10) The plumbing facilities shall not be used for any other purpose than
that for which they are constructed, and no foreign substance of any kind shall
be thrown therein, and the

 

 

expense of any breakage, stoppage, or damage resulting from a violation of
this provision shall be borne by the tenant, who shall, or whose employees,
agents or invitees shall have caused it.

     (11) Tenant shall use at Tenant’s cost such pest extermination contractor
and at such reasonable intervals as Landlord may require.

     (12) Tenant shall not burn any trash or garbage of any kind in or about
the Premises, or the tract or areas adjacent thereto.

     (13) Not commit any waste upon the Premise nor create a nuisance nor cause
or permit objectionable odors to emanate or be dispelled from the Premises

     (14) Not solicit business in the common areas or distribute hand bills or
other advertising material in the common areas, and if this provision is
violated, in addition to other remedies of Landlord, Tenant shall pay Landlord
the cost of collecting same for trash disposal.

     (15) Use, maintain and occupy the Premises and appurtenances thereto in
clean, orderly, careful, safe, proper and lawful manner.

     (16) Tenant shall not permit, cause or allow the leakage, spillage,
storage, collection, transfer, or disposal of Hazardous Materials (as defined
in the Lease) on or about the Premises, the Building or the Project.

     (17) Tenant, its officers, employees, agents, contractors and invitees
shall park their vehicles only in those portions of the parking area marked for
such purposes by Landlord. Any vehicle parked in any other location on the
Project or within public road right-of-way way be towed without notice at the
expense of the tenant responsible therefore.

     (18) Tenant, upon written notice thereof, shall comply with all changes,
modifications or amendments to these Rules and Regulations.

	 	 	 	 	 	 	 
	 

	 	Initial:
	 	 	 	(Landlord)
	 

	 	 	 	

	 	 
	 
	 	 	 	 	 	 
	 

	 	Initial:
	 	 	 	(Tenant)
	 

	 	 	 	

	 	 

 

 

EXHIBIT “E”

PARKING PLAN

 

 

Schedule 7.15

Affiliate Transactions

1. Management Agreement between First Potomac Management, Inc. and GTC II
First, LLC dated October, 2002, as assigned to FPM Management, LLC by
Assignment of Management Agreement dated September 30, 2003.

2. Management Agreement between First Potomac Management, Inc. and Snowden
First, LLC dated October, 2002, as assigned to FPM Management, LLC by
Assignment of Management Agreement dated September 30, 2003.

3. Management Agreement between First Potomac Management, Inc. and 4212
Techcourt, LLC dated October, 1998, as assigned to FPM Management, LLC by
Assignment of Management Agreement dated September 30, 2003.

4. Management Agreement between First Potomac Management, Inc. and Rumsey
First, LLC dated October, 2002, as assigned to FPM Management, LLC by
Assignment of Management Agreement dated September 30, 2003.

5. Management Agreement between First Potomac Management, Inc. and Norfolk
First, LLC dated October, 2002, as assigned to FPM Management, LLC by
Assignment of Management Agreement dated September 30, 2003.

6. Management Agreement between First Potomac Management, Inc. and Plaza 500
dated December, 1999, as assigned to FPM Management, LLC by Assignment of
Management Agreement dated September 30, 2003.

7. Management Agreement between First Potomac Management, Inc. and FPR
Holdings, LP dated December, 1997, as assigned to FPM Management, LLC by
Assignment of Management Agreement dated September 30, 2003.

8. Management Agreement between First Potomac Management, Inc. and Savage dated
December, 1997, as assigned to FPM Management, LLC by Assignment of Management
Agreement dated September 30, 2003.

9. Management Agreement between First Potomac Management, Inc. and Newington
dated December, 1999, as assigned to FPM Management, LLC by Assignment of
Management Agreement dated September 30, 2003.

10. Management Agreement between First Potomac Management, Inc. and Crossways
Associates dated December, 1999, as assigned to FPM Management, LLC by
Assignment of Management Agreement dated September 30, 2003.

 

 

Schedule 7.16

Employee Benefit Plans

Retirement Savings Plan under Section 401(k) of the Internal Revenue Code, as
more fully described in the SEC Filings.

 

 

Schedule 7.19

Subsidiaries

	 
	First Rumsey LLC

	First Snowden LLC

	Rumsey Snowden Holding, LLC

	Rumsey First LLC

	Snowden First LLC

	Columbia Holdings Associates LLC

	Rumsey Snowden Investment LLC

	FPM Management, LLC

	Interstate Plaza Operating LLC

	Interstate Plaza Holding LLC

	Techcourt LLC

	4212 Techcourt LLC

	Crossways Associates LLC

	FPR Initial Portfolio, LLC

	FPR Realty, LLC

	Greenbrier Holding Associates

	Greenbrier /Norfolk Holding LLC

	Greenbrier/Norfolk Investments LLC

	GTC II First LLC

	Norfolk First LLC

	Kristina Way Investments LLC

	Newington Terminal Associates LLC

	Newington Terminal LLC

	FPR-GP Holdings Inc.

	FPR-GP Realty Inc.

	FPR Holdings Limited Partnership

 

 

Schedule 7.23(c)

Independent Building

NONE

 

 

Schedule 7.23(d)

Conditions of Building; Asbestos

NONE

 

 

Schedule 7.23(j)

Historic Status

NONE

 

 

Schedule 7.23(l)

Rent Roll

[See Attached]

 

 

Schedule 7.23(m)

Service Agreements

1. Exclusive Right to Lease Agreement dated January 21, 2003 between First
Potomac Management Inc. and Manekin LLC.

2. Management Agreement dated as of November 25, 2002 between Manekin, L.L.C.
and Rumsey First LLC and Snowden First LLC.

 

 

Schedule 8.19

Employee Benefit Plans

Retirement Savings Plan under Section 401(k) of the Internal Revenue Code, as
more fully described in the SEC Filings.

 

 

Schedule 9.1

Indebtedness

1. Note and Deed of Trust Assumption Agreement dated as of November 26, 2003
among Wells Fargo Bank Minnesota, N.A., a National Banking Association, as
Trustee for the Registered Holders of J.P. Morgan Chase Commercial Mortgage
Securities Corp., Commercial Mortgage Pass-Through Certificates, Series
2002-CIBC4 and Interstate Plaza Holding LLC, a Delaware limited liability
company, in the original principal amount of $8,700,000.00, as guaranteed by
that certain Indemnity and Guaranty Agreement dated as of November 26, 2003 by
First Potomac Realty Trust, a Maryland real estate investment trust and by
First Potomac Realty Investment, LP, a Delaware limited partnership, in favor
of Wells Fargo Bank Minnesota, N.A., a National Banking Association, as Trustee
for the Registered Holders of J.P. Morgan Chase Commercial Mortgage Securities
Corp., Commercial Mortgage Pass-Through Certificates, Series 2002-CIBC4.

 

 

Schedule 9.1(h)

Contingent Liabilities

NONE

 

 

FIRST AMENDMENT TO REVOLVING CREDIT AGREEMENT

     This First Amendment to Revolving Credit Agreement (this “First
Amendment”) amends that certain Revolving Credit Agreement (as amended hereby,
the “Credit Agreement”) dated as of December 31, 2003, and is made and entered
into as of the _____ day of February, 2004 by and among FIRST POTOMAC REALTY
INVESTMENT LIMITED PARTNERSHIP (“FPLP” or the “Borrower”), FLEET NATIONAL BANK
(“Fleet”), a national banking association, having its principal place of
business at 100 Federal Street, Boston, Massachusetts 02109 and KEYBANK
NATIONAL ASSOCIATION (collectively with Fleet, the “Banks”) and FLEET NATIONAL
BANK, as managing administrative agent for itself and each other Bank.

     WHEREAS, the Banks and the Borrower have determined to make certain
amendments to the Credit Agreement, as set forth herein.

     NOW, THEREFORE, in consideration of One Dollar ($1.00) and other good and
valuable consideration by each of the parties hereto, the receipt and
sufficiency of which are hereby acknowledged, it is agreed as follows:

	1.	 	Capitalized terms used but not defined herein shall have the
respective meanings assigned to such terms in the Credit Agreement.
	 
	2.	 	The definition of “Assignment of Contracts” contained in
Section 1 of the Credit Agreement is amended by inserting the word
“in” immediately following the reference to “Borrower’s interest”
contained therein.
	 
	3.	 	The definition of “Borrowing Base Availability” contained in
Section 1 of the Credit Agreement is amended to read in its entirety
as follows:

	 	 	“Borrowing Base Availability. As of the date that
any Loan is to be made hereunder, an amount equal to the
lesser of (i) 70 % (the “Advance Rate”) of the Collateral
Property Value at such time, provided that the
Advance Rate shall be automatically and permanently
decreased to 65% at such time as the Collateral Property
Value multiplied by 65% would be at least
equal to $50,000,000, and (ii) the Collateral Debt Service
Coverage Amount at such time, and provided,
further, that at no time may the Borrowing Base
Availability otherwise attributable to the Collateral
Properties exceed 85% of the Appraised Value of Collateral
Properties as set forth in the most recent MAI Appraisals
provided to and approved by the Administrative Agent (it
being acknowledged and agreed that if the Borrowing Base
Availability attributable to the Collateral Properties
would exceed 85% of the 

-1-

 

	 	 	Appraised Value of Collateral Properties, the Borrower may request that a new
MAI Appraisal be obtained for one or more Collateral
Properties, at the Borrower’s sole cost and expense, and
the appraised value determined by such new MAI Appraisal(s)
shall then be the effective appraised value for the
applicable Collateral Properties for purposes of this
definition. The amount available to be drawn at any time
shall be the Borrowing Base Availability less the Maximum
Drawing Amount and all outstanding Loans at such time.”

	4.	 	The definition of “Eligible Assignee” contained in Section 1
of the Credit Agreement is amended by inserting, at the end thereof,
the following new sentence:

	 	 	“In no event shall the Borrower or any Affiliate of the
Borrower be an Eligible Assignee.”

	5.	 	Clause (c) of the definition of “Increase Conditions”
contained in Section 1 of the Credit Agreement is amended by
inserting the words “an Eligible Assignee and” immediately following
the words “such financial institution shall be” contained therein.
	 
	6.	 	The definition of “Tenant Estoppel” contained in Section 1 of
the Credit Agreement is amended by deleting each reference to the
word “Major” contained therein and replacing it with the following:
“Collateral Property”.
	 
	7.	 	Clause (c) of Section 2.3 of the Credit Agreement is amended
by inserting the word “and” immediately following the first
reference to “Applicable Base Rate Margin” contained therein.
	 
	8.	 	Clause (v) of Section 2.4 of the Credit Agreement is amended
to read in its entirety as follows:

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

	9.	 	Section 2.8 of the Credit Agreement is amended by deleting
the reference to “$20,000,000” contained therein; and by inserting
in place thereof the following: “$50,000,000.”

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	10.	 	Clauses (c) and (d) contained in Section 8.4 of the Credit
Agreement are each amended by deleting therefrom the words: “Upon
the request of the Agent and”.
	 
	11.	 	Clause (a) contained in Section 11.4 of the Credit Agreement
is amended by inserting a comma immediately following the word
“creation” contained therein.
	 
	12.	 	Section 12.9 of the Credit Agreement is amended: (i) by
deleting the reference to “Estoppel Agreements” contained in clause
(b) thereof and replacing it with the words “Tenant Estoppels; and
(ii) by inserting the following at the end thereof: “, in each case
except to the extent waived by the Agent with respect to tenants who
are not tenants under Major Leases”.
	 
	13.	 	The parenthetical contained in Section 12.14 of the Credit
Agreement is amended by deleting the reference to “Appraisal
Determination Process” contained therein; and by inserting in place
thereof the following words: “the definition thereof”.
	 
	14.	 	Clause (n) contained in Section 14.1 of the Credit Agreement
is amended by inserting at the end thereof the following:

	 	 	”; or during any twelve-month period on or after the
Closing Date, individuals who at the beginning of such
period constituted the Board of Trustees of the Trust
(together with any new directors whose election by the
Board of Trustees or whose nomination for election by the
shareholders of the Trust was approved by a vote of at
least a majority of the members of the Board of Trustees
then in office who either were members of the Board of
Trustees at the beginning of such period or whose election
or nomination for election was previously so approved)
ceased for any reason to constitute a majority of the
members of the Board of Trustees of the Trust then in
office.”

	15.	 	The second and third sentences contained in Section 14.2 of
the Credit Agreement are amended to read in their entirety as
follows:

	 	 	“If any other Event of Default shall have occurred and be
continuing, the Agent may, and upon the request of the
Majority Lenders shall, terminate the unused portion of the
Commitments or other commitment to extend credit hereunder.
No such termination of the Commitments or other commitment
to extend credit hereunder shall relieve the Borrower of
any of the Obligations or

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	 	 	any of its existing obligations to the Agent or the Lenders
arising under other agreements or instruments.”

	16.	 	The seventh sentence contained in Section 16.10(b) of the
Credit Agreement is amended by inserting the following proviso at
the end thereof:

	 	 	”, provided, however, that the Agent may not
implement the proposed workout plan without the Majority
Lenders’ approval if the number of Lenders hereunder is
three or less.”

	17.	 	The first sentence contained in Section 16.11 of the Credit
Agreement is amended by inserting at the end thereof the following:

	 	 	“and, at the request of the Majority Lenders, the Agent
will resign if its Commitment is no longer at least equal
to that of the largest Commitment of any Lender, unless
such circumstance is a result of the merger or
consolidation of any of the other Lenders or a result of
events other than the sale by the Agent of any portion of
its Commitment”.

	18.	 	Section 16.11 of the Credit Agreement is further amended by
inserting at the end thereof the following new sentence:

	 	 	“The Agent may be removed at the direction of the Majority
Lenders in the event of a final judicial determination (in
which the Agent had an opportunity to be heard) that the
Agent had acted in a grossly negligent manner or in willful
misconduct.”

	19.	 	The third sentence contained in Section 18 of the Credit
Agreement is amended to add the following at the end thereof:

	 	 	”, provided that such consent shall not be required
at any time that an Event of Default has occurred and is
continuing.”

	20.	 	Schedule 2 to the Credit Agreement is amended to read in its
entirety as set forth on Annex 1 attached hereto.
	 
	21.	 	The Borrower hereby represents and warrants as follows:

(a) Representations in Credit Agreement. Both before and
after giving effect to this First Amendment, each of the
representations and warranties made by or on behalf of the
Borrower, the Trust or any of their respective Subsidiaries
contained in the Credit Agreement or any of the other Loan Documents, was true when made and is true on and as of
the date hereof

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 with the same full force and effect as if each of
such representations and warranties had been made on the date
hereof and in this First Amendment, except to the extent that such
representations and warranties relate expressly to an earlier
date.

(b) No Events of Default. No Default or Event of Default
exists on the date hereof (both before and after giving effect to
this First Amendment).

(c) Binding Effect of Documents. This First Amendment has
been duly executed and delivered by the Borrower and is in full
force and effect as of the date hereof, and the agreements and
obligations of the Borrower contained herein constitute legal,
valid and binding obligations of the Borrower enforceable against
the Borrower in accordance with their respective terms.

	22.	 	Provisions of General Application.

(a) No Other Changes. Except as otherwise expressly
provided by this First Amendment, all of the terms, conditions and
provisions of the Credit Agreement and each of the other Loan
Documents remain unaltered. The Credit Agreement and this First
Amendment shall be read and construed as one agreement.

(b) Governing Law. This First Amendment is intended to
take effect as a sealed instrument and shall be deemed to be a
contract under the laws of the State of New York. This First
Amendment and the rights and obligations of each of the parties
hereto shall be governed by and interpreted and determined in
accordance with the laws of the State of New York (without regard
to conflicts of laws provisions).

(c) Binding Effect; Assignment. This First Amendment
shall be binding upon and inure to the benefit of each of the
parties hereto and their respective successors in title and
assigns.

(d) Counterparts. This First Amendment may be executed in
any number of counterparts, but all such counterparts shall
together constitute but one and the same agreement. In making
proof of this First Amendment, it shall not be necessary to
produce or account for more than one counterpart thereof signed by
each of the parties hereto.

(e) Conflict with Other Agreements. If any of the terms
of this First Amendment shall conflict in any respect with any of
the terms of any of the Credit Agreement or any other Loan Document, the terms of
this First Amendment shall be controlling.

-5-

 

(f) Condition Precedent. The effectiveness of this First
Amendment is subject to the condition precedent that the Agent
shall have received, in form and substance satisfactory to it, an
executed original of this First Amendment from the Borrower, the
Trust and each of the Lenders.

     WITNESS the execution hereof, under seal, as of the day and year first
written above.

	 	 	 	 	 	 	 
	 	 	FLEET NATIONAL BANK,
	 	 	individually and as Managing Administrative Agent
	 
	 	 	 	 	 	 
	

	 	By:	 	 	 	 
	

	 	 	 	
	 	 
	

	 	Name:	 	 
	

	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	KEYBANK NATIONAL ASSOCIATION,
	 	 	Individually
	 
	 	 	 	 	 	 
	

	 	By:	 	 	 	 
	

	 	 	 	
	 	 
	

	 	Name:	 	 
	

	 	Title:	 	 

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

	 	 
	 	By: 
	 	 	(SEAL)	 	 
	

	 	 
	 	 	

	 	 	 	 
	

	 	 	 	 	 	Name:	 	 
	

	 	 	 	 	 	Title:	 	 

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	ACCEPTED AND AGREED:
	 	 
	 
	FIRST POTOMAC REALTY TRUST, Guarantor
	 	 
	 
	 	 	 	 
	By: 

	 	 	(SEAL)
	 	

	 	 
	

	 	Name:	 	 
	

	 	Title:	 	 

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ANNEX 1

SCHEDULE 2

	 	 	 	 	 	 	 	 	 
	Bank
	 	Commitment Amount
	 	Commitment Percentage

	Fleet
National Bank

One Federal Street

Boston, MA 02109
	 	$	30,00,000	 	 	 	60	%
	KeyBank National Association
	 	$	20,000,000	 	 	 	40	%
	TOTAL
	 	$	50,000,000	 	 	 	100	%

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