Table of Contents

 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________________________________________
Form 10-Q
____________________________________________________  
x
Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended June 30, 2015
or
o
Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from                      to                     
Commission File Number: 1-6300
   ____________________________________________________
PENNSYLVANIA REAL ESTATE INVESTMENT TRUST
(Exact name of Registrant as specified in its charter)
   ____________________________________________________
Pennsylvania
 
23-6216339
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. Employer
Identification No.)
 
 
 
200 South Broad Street
Philadelphia, PA
 
19102
(Address of principal executive offices)
 
(Zip Code)
Registrant’s telephone number, including area code (215) 875-0700
____________________________________________________
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes   x     No   o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes   x     No   o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
x
 
Accelerated filer
o
Non-accelerated filer
o
(Do not check if a smaller reporting company)
Smaller reporting company
o
Indicate by check mark whether registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes   o    No   x
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
Common shares of beneficial interest, $1.00 par value per share, outstanding at July 29, 2015 : 69,168,395
 


Table of Contents


PENNSYLVANIA REAL ESTATE INVESTMENT TRUST

CONTENTS
 

 
 
Page
 
 
 
 
 
Item 1.
 
 
 
 
 

 
 
 
 

 
 
 
 

 
 
 
 

 
 
 
 

 
 
 
 

 
 
 
Item 2.

 
 
 
Item 3.

 
 
 
Item 4.

 
 
 
 
 
 
 
 
Item 1.

 
 
 
Item 1A.

 
 
 
Item 2.

 
 
 
Item 3.
Not Applicable
—

 
 
 
Item 4.
Not Applicable
—

 
 
 
Item 5.
Not Applicable
—

 
 
 
Item 6.

 
 
 
 


Except as the context otherwise requires, references in this Quarterly Report on Form 10-Q to “we,” “our,” “us,” the “Company” and “PREIT” refer to Pennsylvania Real Estate Investment Trust and its subsidiaries, including our operating partnership, PREIT Associates, L.P. References in this Quarterly Report on Form 10-Q to “PREIT Associates” or the “Operating Partnership” refer to PREIT Associates, L.P.


Table of Contents

Item 1. FINANCIAL STATEMENTS
PENNSYLVANIA REAL ESTATE INVESTMENT TRUST
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts)
June 30,
2015
 
December 31,
2014
 
(unaudited)
 
 
ASSETS:
 
 
 
INVESTMENTS IN REAL ESTATE, at cost:
 
 
 
Operating properties
$
3,552,091

 
$
3,216,231

Construction in progress
125,525

 
60,452

Land held for development
8,721

 
8,721

Total investments in real estate
3,686,337

 
3,285,404

Accumulated depreciation
(1,083,207
)
 
(1,061,051
)
Net investments in real estate
2,603,130

 
2,224,353

INVESTMENTS IN PARTNERSHIPS, at equity:
155,129

 
140,882

OTHER ASSETS:
 
 
 
Cash and cash equivalents
31,320

 
40,433

Tenant and other receivables (net of allowance for doubtful accounts of $12,744 and $11,929 at June 30, 2015 and December 31, 2014, respectively)
34,599

 
40,566

Intangible assets (net of accumulated amortization of $12,585 and $11,873 at June 30, 2015 and December 31, 2014, respectively)
24,123

 
6,452

Deferred costs and other assets
88,196

 
87,017

Assets held for sale
21,921

 
—

Total assets
$
2,958,418

 
$
2,539,703

LIABILITIES:
 
 
 
Mortgage loans payable
$
1,360,795

 
$
1,407,947

Term Loans
400,000

 
130,000

Revolving Facility
120,000

 
—

Tenants’ deposits and deferred rent
16,344

 
15,541

Distributions in excess of partnership investments
64,680

 
65,956

Fair value of derivative liabilities
3,463

 
2,490

Liabilities on assets held for sale
931

 
—

Accrued expenses and other liabilities
91,572

 
73,032

Total liabilities
2,057,785

 
1,694,966

COMMITMENTS AND CONTINGENCIES (Note 6):

 

EQUITY:
 
 
 
Series A Preferred Shares, $.01 par value per share; 25,000 preferred shares authorized; 4,600 shares of Series A Preferred Shares issued and outstanding at each of June 30, 2015 and December 31, 2014; liquidation preference of $115,000
46

 
46

Series B Preferred Shares, $.01 par value per share; 25,000 preferred shares authorized; 3,450 shares of Series B Preferred Shares issued and outstanding at each of June 30, 2015 and December 31, 2014; liquidation preference of $86,250
35

 
35

Shares of beneficial interest, $1.00 par value per share; 200,000 shares authorized; issued and outstanding 69,167 shares at June 30, 2015 and 68,801 shares at December 31, 2014
69,167

 
68,801

Capital contributed in excess of par
1,472,590

 
1,474,183

Accumulated other comprehensive loss
(5,857
)
 
(6,002
)
Distributions in excess of net income
(802,993
)
 
(721,605
)
Total equity—Pennsylvania Real Estate Investment Trust
732,988

 
815,458

Noncontrolling interest
167,645

 
29,279

Total equity
900,633

 
844,737

Total liabilities and equity
$
2,958,418

 
$
2,539,703


See accompanying notes to the unaudited consolidated financial statements.
1
Table of Contents

PENNSYLVANIA REAL ESTATE INVESTMENT TRUST
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

 
Three Months Ended 
 June 30,
 
Six Months Ended 
 June 30,
(in thousands of dollars)
2015
 
2014
 
2015
 
2014
REVENUE:
 
 
 
 
 
 
 
Real estate revenue:
 
 
 
 
 
 
 
Base rent
$
67,417

 
$
71,646

 
$
131,691

 
$
142,988

Expense reimbursements
30,541

 
30,879

 
62,050

 
65,230

Percentage rent
322

 
324

 
846

 
914

Lease termination revenue
25

 
154

 
467

 
254

Other real estate revenue
2,577

 
3,142

 
4,612

 
5,368

Total real estate revenue
100,882

 
106,145

 
199,666

 
214,754

Other income
811

 
680

 
2,084

 
1,458

Total revenue
101,693

 
106,825

 
201,750

 
216,212

EXPENSES:
 
 
 
 
 
 
 
Operating expenses:
 
 
 
 
 
 
 
 Property operating expenses:
 
 
 
 
 
 
 
CAM and real estate taxes
(33,263
)
 
(35,228
)
 
(67,069
)
 
(74,631
)
Utilities
(4,959
)
 
(5,841
)
 
(10,108
)
 
(14,051
)
Other property operating expenses
(3,792
)
 
(3,295
)
 
(7,988
)
 
(7,399
)
Total property operating expenses
(42,014
)
 
(44,364
)
 
(85,165
)
 
(96,081
)
 Depreciation and amortization
(36,641
)
 
(37,135
)
 
(69,830
)
 
(73,370
)
 General and administrative expenses
(9,126
)
 
(8,774
)
 
(18,070
)
 
(17,851
)
 Provision for employee separation expenses
—

 
(4,877
)
 
—

 
(4,877
)
 Acquisition costs and other expenses
(817
)
 
(960
)
 
(5,269
)
 
(2,606
)
Total operating expenses
(88,598
)
 
(96,110
)
 
(178,334
)
 
(194,785
)
Interest expense, net
(21,126
)
 
(21,550
)
 
(41,271
)
 
(41,720
)
Impairment of assets
(28,667
)
 
(16,098
)
 
(34,907
)
 
(17,398
)
Total expenses
(138,391
)
 
(133,758
)
 
(254,512
)
 
(253,903
)
Loss before equity in income of partnerships, gain on sale of interest in non operating real estate and gain on sale of interests in real estate
(36,698
)
 
(26,933
)
 
(52,762
)
 
(37,691
)
Equity in income of partnerships
2,032

 
2,784

 
4,114

 
5,186

Gain on sale of interest in non operating real estate
—

 
—

 
43

 
—

Gain on sale of interests in real estate
—

 
99

 
—

 
99

Net loss
(34,666
)
 
(24,050
)
 
(48,605
)
 
(32,406
)
Less: net loss attributable to noncontrolling interest
3,742

 
725

 
4,172

 
977

Net loss attributable to PREIT
(30,924
)
 
(23,325
)
 
(44,433
)
 
(31,429
)
Less: preferred share dividends
(3,962
)
 
(3,962
)
 
(7,924
)
 
(7,924
)
Net loss attributable to PREIT common shareholders
$
(34,886
)
 
$
(27,287
)
 
$
(52,357
)
 
$
(39,353
)


See accompanying notes to the unaudited consolidated financial statements.
2
Table of Contents

 
PENNSYLVANIA REAL ESTATE INVESTMENT TRUST
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

(in thousands of dollars, except per share amounts)
Three Months Ended 
 June 30,
 
Six Months Ended 
 June 30,
2015
 
2014
 
2015
 
2014
Net loss
$
(34,666
)
 
$
(24,050
)
 
$
(48,605
)
 
$
(32,406
)
Noncontrolling interest
3,742

 
725

 
4,172

 
977

Dividends on preferred shares
(3,962
)
 
(3,962
)
 
(7,924
)
 
(7,924
)
Dividends on unvested restricted shares
(79
)
 
(92
)
 
(165
)
 
(205
)
Net loss used to calculate loss per share—basic and diluted
$
(34,965
)
 
$
(27,379
)
 
$
(52,522
)
 
$
(39,558
)
 
 
 
 
 
 
 
 
Basic and diluted loss per share:
$
(0.51
)
 
$
(0.40
)
 
$
(0.76
)
 
$
(0.58
)
 
 
 
 
 
 
 
 
(in thousands of shares)
 
 
 
 
 
 
 
Weighted average shares outstanding—basic
68,753

 
68,236

 
68,660

 
68,091

Effect of common share equivalents  (1)  
—

 
—

 
—

 
—

Weighted average shares outstanding—diluted
68,753

 
68,236

 
68,660

 
68,091

_________________________
(1)  
The Company had net losses used to calculate earnings per share for all periods presented. Therefore, the effects of common share equivalents of 425 and 309 for the three months ended June 30, 2015 and 2014 , respectively, and 493 and 326 for the six months ended June 30, 2015 and 2014 , respectively, are excluded from the calculation of diluted loss per share for these periods because they would be antidilutive.



See accompanying notes to the unaudited consolidated financial statements.
3
Table of Contents


PENNSYLVANIA REAL ESTATE INVESTMENT TRUST
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited)
 
Three Months Ended 
 June 30,
 
Six Months Ended 
 June 30,
(in thousands of dollars)
2015
 
2014
 
2015
 
2014
Comprehensive loss:
 
 
 
 
 
 
 
Net loss
$
(34,666
)
 
$
(24,050
)
 
$
(48,605
)
 
$
(32,406
)
Unrealized gain (loss) on derivatives
1,165

 
(1,919
)
 
(846
)
 
(3,102
)
Amortization of losses on settled swaps, net of gains
238

 
1,544

 
1,010

 
1,837

Total comprehensive loss
(33,263
)
 
(24,425
)
 
(48,441
)
 
(33,671
)
Less: comprehensive loss attributable to noncontrolling interest
3,686

 
773

 
4,153

 
1,052

Comprehensive loss attributable to PREIT
$
(29,577
)
 
$
(23,652
)
 
$
(44,288
)
 
$
(32,619
)

See accompanying notes to the unaudited consolidated financial statements.
4
Table of Contents



PENNSYLVANIA REAL ESTATE INVESTMENT TRUST
CONSOLIDATED STATEMENTS OF EQUITY
Six Months Ended
June 30, 2015
(Unaudited)
 
 
 
 
PREIT Shareholders
 
 
(in thousands of dollars, except per share amounts)
Total
Equity
 
Series A
Preferred
Shares,
$.01 par
 
Series B
Preferred
Shares,
$.01 par
 
Shares of
Beneficial
Interest,
$1.00 Par
 
Capital
Contributed
in Excess of
Par
 
Accumulated
Other
Comprehensive
Income (Loss)
 
Distributions
in Excess of
Net Income
 
Non-
controlling
interest
Balance December 31, 2014
$
844,737

 
$
46

 
$
35

 
$
68,801

 
$
1,474,183

 
$
(6,002
)
 
$
(721,605
)
 
$
29,279

Net loss
(48,605
)
 
—

 
—

 
—

 
—

 
—

 
(44,433
)
 
(4,172
)
Other comprehensive income
164

 
—

 
—

 
—

 
—

 
145

 
—

 
19

Shares issued upon redemption of Operating Partnership units
—

 
—

 
—

 
23

 
472

 
—

 
—

 
(495
)
Shares issued under employee compensation plans, net of shares retired
(4,949
)
 
—

 
—

 
343

 
(5,292
)
 
—

 
—

 
—

Amortization of deferred compensation
3,227

 
—

 
—

 
—

 
3,227

 
—

 
—

 
—

Distributions paid to common shareholders ($0.42 per share)
(29,031
)
 
—

 
—

 
—

 
—

 
—

 
(29,031
)
 
—

Distributions paid to Series A preferred shareholders ($1.0312 per share)
(4,744
)
 
—

 
—

 
—

 
—

 
—

 
(4,744
)
 
—

Distributions paid to Series B preferred shareholders ($0.9218 per share)
(3,180
)
 
—

 
—

 
—

 
—

 
—

 
(3,180
)
 
—

Noncontrolling interests:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Distributions paid to Operating Partnership unit holders ($0.42 per unit)
(2,198
)
 
—

 
—

 
—

 
—

 
—

 
—

 
(2,198
)
Operating Partnership Units issued in connection with the purchase of Springfield Town Center
145,188

 
—

 
—

 
—

 
—

 
—

 
—

 
145,188

Other distributions to noncontrolling interests, net
24

 
—

 
—

 
—

 
—

 
—

 
—

 
24

Balance June 30, 2015
$
900,633

 
$
46

 
$
35

 
$
69,167

 
$
1,472,590

 
$
(5,857
)
 
$
(802,993
)
 
$
167,645



See accompanying notes to the unaudited consolidated financial statements.
5
Table of Contents

PENNSYLVANIA REAL ESTATE INVESTMENT TRUST
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
 
Six Months Ended 
 June 30,
(in thousands of dollars)
2015
 
2014
Cash flows from operating activities:
 
 
 
Net loss
$
(48,605
)
 
$
(32,406
)
Adjustments to reconcile net loss to net cash provided by operating activities:
 
 
 
Depreciation
65,517

 
68,415

Amortization
5,876

 
4,949

Straight-line rent adjustments
(740
)
 
(823
)
Provision for doubtful accounts
2,050

 
629

Amortization of deferred compensation
3,227

 
5,463

Loss on hedge ineffectiveness
512

 
1,238

Gains on sale of interest in real estate and non operating real estate
(43
)
 
(99
)
Equity in income of partnerships in excess of distributions
(2,212
)
 
(853
)
Impairment of assets and expensed project costs
35,145

 
17,659

Change in assets and liabilities:
 
 
 
Net change in other assets
8,069

 
14,739

Net change in other liabilities
(5,870
)
 
4,855

Net cash provided by operating activities
62,926

 
83,766

Cash flows from investing activities:
 
 
 
Investments in consolidated real estate acquisitions
(319,986
)
 
(20,000
)
Additions to construction in progress
(14,037
)
 
(17,493
)
Investments in real estate improvements
(16,867
)
 
(19,502
)
Cash proceeds from sales of real estate
—

 
23,600

Additions to leasehold improvements
(341
)
 
(736
)
Investments in partnerships
(16,194
)
 
(3,651
)
Capitalized leasing costs
(3,228
)
 
(2,829
)
Increase in cash escrows
(185
)
 
(211
)
Cash distributions from partnerships in excess of equity in income
2,926

 
1,482

Net cash used in investing activities
(367,912
)
 
(39,340
)
Cash flows from financing activities:
 
 
 
Borrowings from term loans
120,000

 
130,000

Net borrowings from (repayments of) revolving facility
270,000

 
(130,000
)
Proceeds from mortgage loans
102,044

 
—

Principal installments on mortgage loans
(10,059
)
 
(7,849
)
Repayments of mortgage loans
(139,137
)
 
—

Payment of deferred financing costs
(2,873
)
 
(1,882
)
Dividends paid to common shareholders
(29,031
)
 
(27,466
)
Dividends paid to preferred shareholders
(7,924
)
 
(7,924
)
Distributions paid to Operating Partnership unit holders and non controlling interest
(2,198
)
 
(852
)
Value of shares of beneficial interest issued
706

 
2,691

Value of shares retired under equity incentive plans, net of shares issued
(5,655
)
 
(4,633
)
Net cash provided by (used in) financing activities
295,873

 
(47,915
)
Net change in cash and cash equivalents
(9,113
)
 
(3,489
)
Cash and cash equivalents, beginning of period
40,433

 
34,230

Cash and cash equivalents, end of period
$
31,320

 
$
30,741


See accompanying notes to the unaudited consolidated financial statements.
6
Table of Contents

PENNSYLVANIA REAL ESTATE INVESTMENT TRUST
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2015

1. BASIS OF PRESENTATION

Nature of Operations

Pennsylvania Real Estate Investment Trust (“PREIT” or the “Company”) prepared the accompanying unaudited consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to such rules and regulations, although we believe that the included disclosures are adequate to make the information presented not misleading. Our unaudited consolidated financial statements should be read in conjunction with the audited financial statements and the notes thereto included in PREIT’s Annual Report on Form 10-K for the year ended December 31, 2014. In our opinion, all adjustments, consisting only of normal recurring adjustments, necessary to present fairly our consolidated financial position, the consolidated results of our operations, consolidated statements of other comprehensive income (loss), consolidated statements of equity and our consolidated statements of cash flows are included. The results of operations for the interim periods presented are not necessarily indicative of the results for the full year.

PREIT, a Pennsylvania business trust founded in 1960 and one of the first equity real estate investment trusts (“REITs”) in the United States, has a primary investment focus on retail shopping malls located in the eastern half of the United States, primarily in the Mid-Atlantic region. Our portfolio currently consists of a total of 41 properties in 12 states, including 31 operating shopping malls, three other retail properties, four development properties and three properties under redevelopment (The Gallery at Market East and two street retail properties). Two of the development properties are classified as “mixed use” (a combination of retail and other uses), one of the development properties is classified as “other retail” (outlet) and one of the development properties is classified as “other.” The above property counts do not include Uniontown Mall, in Uniontown, Pennsylvania, because that property has been classified as “held for sale,” and Springfield Park, in Springfield, Pennsylvania, because that property was sold effective July 2015, and these properties are no longer considered part of our operating portfolio.

We hold our interest in our portfolio of properties through our operating partnership, PREIT Associates, L.P. (“PREIT Associates” or the “Operating Partnership”). We are the sole general partner of the Operating Partnership and, as of June 30, 2015 , we held an 89.2% controlling interest in the Operating Partnership, and consolidated it for reporting purposes. The presentation of consolidated financial statements does not itself imply that the assets of any consolidated entity (including any special-purpose entity formed for a particular project) are available to pay the liabilities of any other consolidated entity, or that the liabilities of any consolidated entity (including any special-purpose entity formed for a particular project) are obligations of any other consolidated entity.

Pursuant to the terms of the partnership agreement of the Operating Partnership, each of the limited partners has the right to redeem such partner’s units of limited partnership interest in the Operating Partnership (“OP Units”) for cash or, at our election, we may acquire such OP Units in exchange for our common shares on a one-for-one basis, in some cases beginning one year following the respective issue dates of the OP Units and in other cases immediately. If all of the outstanding OP Units held by limited partners had been redeemed for cash as of June 30, 2015 , the total amount that would have been distributed would have been $178.2 million , which is calculated using our June 30, 2015 closing price on the New York Stock Exchange of $21.34 per share multiplied by the number of outstanding OP Units held by limited partners, which was 8,348,299 as of June 30, 2015 .

We provide management, leasing and real estate development services through two of our subsidiaries: PREIT Services, LLC (“PREIT Services”), which generally develops and manages properties that we consolidate for financial reporting purposes, and PREIT-RUBIN, Inc. (“PRI”), which generally develops and manages properties that we do not consolidate for financial reporting purposes, including properties owned by partnerships in which we own an interest and properties that are owned by third parties in which we do not have an interest. PREIT Services and PRI are consolidated. PRI is a taxable REIT subsidiary, as defined by federal tax laws, which means that it is able to offer an expanded menu of services to tenants without jeopardizing our continuing qualification as a REIT under federal tax law.

We evaluate operating results and allocate resources on a property-by-property basis, and do not distinguish or evaluate our consolidated operations on a geographic basis. Due to the nature of our operating properties, which involve retail shopping, we have concluded that our individual properties have similar economic characteristics and meet all other aggregation criteria.

7

Accordingly, we have aggregated our individual properties into one reportable segment. In addition, no single tenant accounts for 10% or more of consolidated revenue, and none of our properties are located outside the United States.

Fair Value

Fair value accounting applies to reported balances that are required or permitted to be measured at fair value under existing accounting pronouncements. Fair value measurements are determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, these accounting requirements establish a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy).

Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access.

Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs might include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates, foreign exchange rates, and yield curves that are observable at commonly quoted intervals.

Level 3 inputs are unobservable inputs for the asset or liability, and are typically based on an entity’s own assumptions, as there is little, if any, related market activity.

In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability. We utilize the fair value hierarchy in our accounting for derivatives (Level 2) and financial instruments (Level 2) and in our reviews for impairment of real estate assets (Level 3) and goodwill (Level 3).

New Accounting Developments

In May 2014, the Financial Accounting Standards Board issued “Revenue from Contracts with Customers.” The objective of this new standard is to establish a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. The core principle of this new standard is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration that the entity expects to receive in exchange for those goods or services. The new guidance is effective for annual reporting periods beginning after December 15, 2017 for public companies. Early adoption is not permitted. Entities have the option of using either a full retrospective or modified approach to adopt this standard. We are currently evaluating the new guidance and have not determined the impact this standard might have on our consolidated financial statements, nor have we decided upon the method of adoption.


2. REAL ESTATE ACTIVITIES

Investments in real estate as of June 30, 2015 and December 31, 2014 were comprised of the following:
 
(in thousands of dollars)
As of June 30,
2015
 
As of December 31,
2014
Buildings, improvements and construction in progress
$
3,127,504

 
$
2,843,326

Land, including land held for development
558,833

 
442,078

Total investments in real estate
3,686,337

 
3,285,404

Accumulated depreciation
(1,083,207
)
 
(1,061,051
)
Net investments in real estate
$
2,603,130

 
$
2,224,353



8

Capitalization of Costs

The following table summarizes our capitalized salaries, commissions, benefits, real estate taxes and interest for the three and six months ended June 30, 2015 and 2014 :
 
 
Three Months Ended 
 June 30,
 
Six Months Ended 
 June 30,
(in thousands of dollars)
2015
 
2014
 
2015
 
2014
Development/Redevelopment Activities:
 
 
 
 
 
 
 
Salaries and benefits
$
219

 
$
431

 
$
373

 
$
825

Real estate taxes
276

 
—

 
276

 
—

Interest
770

 
191

 
804

 
294

Leasing Activities:
 
 
 
 
 
 
 
Salaries, commissions and benefits
1,573

 
1,409

 
3,228

 
2,829


Acquisition

On March 31, 2015, we acquired Springfield Town Center in Springfield, Virginia for aggregate consideration of $486.6 million , consisting of the following components: (i) the assumption and immediate payoff of $263.8 million of indebtedness owed to affiliates of Vornado Realty L.P.; (ii) 6,250,000 OP Units valued at $145.2 million , (iii) liabilities relating to tenant improvements and allowances of $14.8 million , (iv) the estimated present value of the “Earnout” (as described below) of $7.7 million , and (v) the remainder in cash. The seller is potentially entitled to receive consideration (the “Earnout”) under the terms of the Contribution Agreement which will be calculated as of March 31, 2018. Our allocation of the purchase price is as follows :
(in thousands of dollars)
 
 
Land
 
 
$
119,912

Building
 
 
299,012

Common area improvements
 
16,776

Site improvements and tenant improvements
 
35,565

Intangible assets (liabilities):
 
 
 
In-place lease value
 
18,123

 
Above market lease value
 
260

 
Below market lease value
 
(393
)
 
Above market ground lease value (as lessor)
 
(5,882
)
Deferred and other assets
 
3,231

Total
 
$
486,604




Impairment of Assets

Gadsden Mall, New River Valley Mall and Wiregrass Commons Mall

In June 2015, we recorded an aggregate loss on impairment of assets on Gadsden Mall in Gadsden, Alabama, New River Valley Mall in Christiansburg, Virginia and Wiregrass Commons Mall in Dothan, Alabama of $27.3 million after signing a purchase and sale agreement with a prospective buyer of the properties. The negotiations with this prospective buyer of the properties are ongoing, and could result in additional changes to our underlying assumptions. As a result of these negotiations, we determined that the holding period for the properties was less than had been previously estimated, which we concluded was a triggering event, leading us to conduct an analysis of possible asset impairment at these properties. Based upon the purchase and sale agreement with the prospective buyer of the properties, we determined that the estimated aggregate undiscounted cash flows, net of estimated capital expenditures, for Gadsden Mall, New River Valley Mall and Wiregrass Commons Mall were less than the aggregate carrying value of the properties, and recorded a loss on impairment of assets.

9


Uniontown Mall

In March 2015, we recorded a loss on impairment of assets at Uniontown Mall in Uniontown, Pennsylvania (“Uniontown Mall”) of $6.2 million , and in June 2015, in connection with further negotiations with the prospective buyer of the property, we recorded an additional $1.3 million loss on impairment of assets. In connection with these negotiations, we had determined that the holding period for the property was less than had been previously estimated, which we concluded was a triggering event, leading us to conduct an analysis of possible asset impairment at this property. Based upon the original purchase and sale agreement with the prospective buyer of the property and subsequent further negotiations, we determined that the estimated undiscounted cash flows, net of estimated capital expenditures, for Uniontown Mall were less than the carrying value of the property, and recorded both an initial loss on impairment of assets and a subsequent additional loss on impairment of assets.

3. INVESTMENTS IN PARTNERSHIPS

The following table presents summarized financial information of the equity investments in our unconsolidated partnerships as of June 30, 2015 and December 31, 2014 :
 
(in thousands of dollars)
As of June 30, 2015
 
As of December 31, 2014
ASSETS:
 
 
 
Investments in real estate, at cost:
 
 
 
Operating properties
$
670,634

 
$
654,024

Construction in progress
86,569

 
41,919

Total investments in real estate
757,203

 
695,943

Accumulated depreciation
(193,353
)
 
(190,100
)
Net investments in real estate
563,850

 
505,843

Cash and cash equivalents
24,085

 
15,229

Deferred costs and other assets, net
40,625

 
37,274

Total assets
628,560

 
558,346

LIABILITIES AND PARTNERS’ INVESTMENT:
 
 
 
Mortgage loans payable
419,599

 
383,190

Other liabilities
36,666

 
34,314

Total liabilities
456,265

 
417,504

Net investment
172,295

 
140,842

Partners’ share
89,685

 
74,663

PREIT’s share
82,610

 
66,179

Excess investment  (1)
7,839

 
8,747

Net investments and advances
$
90,449

 
$
74,926

 
 
 
 
Investment in partnerships, at equity
$
155,129

 
$
140,882

Distributions in excess of partnership investments
(64,680
)
 
(65,956
)
Net investments and advances
$
90,449

 
$
74,926

_________________________
(1)  
Excess investment represents the unamortized difference between our investment and our share of the equity in the underlying net investment in the partnerships. The excess investment is amortized over the life of the properties, and the amortization is included in “Equity in income of partnerships.”

We record distributions from our equity investments as cash from operating activities up to an amount equal to the equity in income of partnerships. Amounts in excess of our share of the income in the equity investments are treated as a return of partnership capital and recorded as cash from investing activities.


10

The following table summarizes our share of equity in income of partnerships for the three and six months ended June 30, 2015 and 2014 :
 
 
Three Months Ended 
 June 30,
 
Six Months Ended 
 June 30,
(in thousands of dollars)
2015
 
2014
 
2015
 
2014
Real estate revenue
$
24,356

 
$
20,331

 
$
50,853

 
$
41,507

Operating expenses:
 
 
 
 
 
 
 
Property operating expenses
(9,290
)
 
(5,749
)
 
(20,052
)
 
(12,849
)
Interest expense
(5,146
)
 
(5,452
)
 
(10,441
)
 
(10,927
)
Depreciation and amortization
(5,932
)
 
(3,413
)
 
(12,303
)
 
(7,062
)
Total expenses
(20,368
)
 
(14,614
)
 
(42,796
)
 
(30,838
)
Net income
3,988

 
5,717

 
8,057

 
10,669

Less: Partners’ share
(1,981
)
 
(2,858
)
 
(4,017
)
 
(5,331
)
PREIT’s share
2,007

 
2,859

 
4,040

 
5,338

Amortization of excess investment
25

 
(75
)
 
74

 
(152
)
Equity in income of partnerships
$
2,032

 
$
2,784

 
$
4,114

 
$
5,186


Disposition

In July 2015, we sold our entire 50% interests in the Springfield Park shopping center in Springfield, Pennsylvania for $20.2 million , representing a capitalization rate of 7.0% , and recognized a gain of approximately $12.0 million that will be recorded in the third quarter of 2015. In connection with our interest in the property, we had an ongoing obligation to sublet approximately 10,100 square feet of space of a tenant at the property, which we transferred as part of the transaction. In connection with the sale, a mortgage loan of approximately $9.0 million , of which our share was 50% , was assumed by the buyer. For a limited term after the closing, we will provide limited property management services to the shopping center for nominal consideration. We divested $0.1 million of goodwill in connection with this transaction. We used the net proceeds from the transaction for general corporate purposes. See note 8 regarding the related party aspect of the transaction.

Lehigh Valley Mall

We have a 50% partnership interest in Lehigh Valley Associates LP, the owner of the substantial majority of Lehigh Valley Mall, which was considered to be a significant unconsolidated subsidiary as of December 31, 2014, and which is included in the amounts above. Summarized balance sheet information as of June 30, 2015 and December 31, 2014 and summarized statement of operations information for the six months ended June 30, 2015 and 2014 for this entity, which is accounted for using the equity method, is as follows:
 
 
As of
(in thousands of dollars)
 
June 30, 2015
 
December 31, 2014
Summarized balance sheet information
 
 
 
 
     Total assets
 
$
52,161

 
$
51,703

     Mortgage loan payable
 
130,272

 
131,394


 
 
Three Months Ended 
 June 30,
 
Six Months Ended 
 June 30,
(in thousands of dollars)
 
2015
 
2014
 
2015
 
2014
Summarized statement of operations information
 
 
 
 
 
 
 
 
     Revenue
 
$
8,960

 
$
9,061

 
$
17,904

 
$
18,096

     Property operating expenses
 
(2,537
)
 
(2,455
)
 
(5,017
)
 
(5,219
)
     Interest expense
 
(1,931
)
 
(1,964
)
 
(3,871
)
 
(3,935
)
     Net income
 
3,858

 
3,836

 
7,319

 
7,082

     PREIT’s share of equity in income of partnership
 
1,929

 
1,918

 
3,659

 
3,541


11


4. FINANCING ACTIVITY

Credit Agreements

We have entered into four credit agreements (collectively, the “Credit Agreements”), as further discussed and defined below: (1) the 2013 Revolving Facility, (2) the 2014 7-Year Term Loan, (3) the 2014 5-Year Term Loan, and (4) the 2015 5-Year Term Loan.

2013 Revolving Facility, as amended

In April 2013, PREIT, PREIT Associates, and PRI (collectively, the “Borrower” or “we”) entered into a credit agreement (as amended, the “2013 Revolving Facility”) with Wells Fargo Bank, National Association, and the other financial institutions signatory thereto, for a $400.0 million senior unsecured revolving credit facility. In December 2013, we amended the 2013 Revolving Facility to make certain terms of the 2013 Revolving Facility consistent with the terms of the 2014 Term Loans (discussed below). In June 2015, we further amended the 2013 Revolving Facility to lower the interest rates in the applicable pricing grid, modify one covenant and to extend the Termination Date to June 26, 2018. All capitalized terms used in this note 4 and not otherwise defined herein have the meanings ascribed to such terms in the 2013 Revolving Facility.

As of June 30, 2015 , $120.0 million was outstanding under our 2013 Revolving Facility, $7.9 million was pledged as collateral for letters of credit and the unused portion that was available to us was $272.1 million . Currently, $100.0 million is outstanding under our 2013 Revolving Facility, $7.9 million is pledged for a letter of credit and the unused portion that is available to us is $292.1 million .

Interest expense related to the 2013 Revolving Facility was $1.3 million and $0.3 million for the three months ended June 30, 2015 and 2014 , respectively, and $1.7 million and $0.8 million for the six months ended June 30, 2015 and 2014 , respectively. Deferred financing fee amortization associated with the 2013 Revolving Facility was $0.6 million (including $0.2 million of accelerated amortization resulting from the 2015 amendment) and $0.4 million for the three months ended June 30, 2015 and 2014 , respectively, and $1.0 million (including $0.2 million of accelerated amortization resulting from the 2015 amendment) and $0.7 million for the six months ended June 30, 2015 and 2014 , respectively.

Pursuant to the June 2015 amendment, the initial maturity of the 2013 Revolving Facility is now June 26, 2018 , and the Borrower has two options for one-year extensions of the initial maturity date, subject to certain conditions and to the payment of extension fees of 0.15% and 0.20% of the Facility Amount for the first and second options, respectively.

Subject to the terms of the Credit Agreements, the Borrower has the option to increase the maximum amount available under the 2013 Revolving Facility, through an accordion option, from $400.0 million to as much as $600.0 million , in increments of $5.0 million (with a minimum increase of $25.0 million ), based on Wells Fargo Bank’s ability to obtain increases in Revolving Commitments from the current lenders or Revolving Commitments from new lenders. No option to increase the maximum amount available under the 2013 Revolving Facility has been exercised by the Borrower.

After the June 2015 amendment, amounts borrowed under the 2013 Revolving Facility bear interest at a rate between 1.20% and 1.55% per annum, depending on PREIT’s leverage at the end of each quarter, in excess of LIBOR, as set forth in the table below. The rate that will be in effect following the reporting of our June 30, 2015 covenant compliance information will be 1.30% per annum in excess of LIBOR. In determining PREIT’s leverage (the ratio of Total Liabilities to Gross Asset Value), the capitalization rate used to calculate Gross Asset Value is (a) 6.50% for each Property having an average sales per square foot of more than $500 for the most recent period of 12 consecutive months, and (b) 7.50% for any other Property.
Level
Ratio of Total Liabilities to Gross Asset Value
Applicable Margin
1
Less than 0.450 to 1.00
1.20
%
2
Equal to or greater than 0.450 to 1.00 but less than 0.500 to 1.00
1.25
%
3
Equal to or greater than 0.500 to 1.00 but less than 0.550 to 1.00
1.30
%
4
Equal to or greater than 0.550 to 1.00
1.55
%

The 2013 Revolving Facility is subject to a facility fee which is currently 0.25% , depending on leverage, and is recorded in interest expense in the consolidated statements of operations. In the event that we seek and obtain an investment grade credit rating, alternative interest rates and facility fees would apply.


12

The 2013 Revolving Facility contains certain affirmative and negative covenants and other provisions which are identical to those contained in the other Credit Agreements and which are described in detail below in the section entitled “—Identical covenants and common provisions contained in the Credit Agreements.”

The Borrower may prepay the 2013 Revolving Facility at any time without premium or penalty, subject to reimbursement obligations for the lenders’ breakage costs for LIBOR borrowings. The Borrower must repay the entire principal amount outstanding under the 2013 Revolving Facility at the end of its term, as the term may be extended.

Term Loans

2015 5-Year Term Loan

In June 2015, the Borrower entered into a five year term loan agreement (the “2015 5-Year Term Loan”) with Wells Fargo Bank, National Association, PNC Bank, National Association and the other financial institutions signatory thereto, for a $150.0 million senior unsecured five year term loan facility. The maturity date of the 2015 5-Year Term Loan is June 26, 2020. At closing, the Borrower borrowed the entire $150.0 million under the 2015 5-Year Term Loan and used the proceeds to repay $150.0 million of the then outstanding balance under the Borrower’s 2013 Revolving Facility.

Amounts borrowed under the 2015 5-Year Term Loan bear interest at the rate specified below per annum, depending on PREIT’s leverage, in excess of LIBOR, unless and until the Borrower receives an investment grade credit rating and provides notice to the Administrative Agent (the “Rating Date”), after which alternative rates would apply. In determining PREIT’s leverage (the ratio of Total Liabilities to Gross Asset Value), the capitalization rate used to calculate Gross Asset Value is 6.50% for each Property having an average sales per square foot of more than $500 for the most recent period of 12 consecutive months and (b) 7.50% for any other Property.
Level
Ratio of Total Liabilities to Gross Asset Value
2015 5-Year Term
Loan
Applicable Margin
1
Less than 0.450 to 1.00
1.35%
2
Equal to or greater than 0.450 to 1.00 but less than 0.500 to 1.00
1.45%
3
Equal to or greater than 0.500 to 1.00 but less than 0.550 to 1.00
1.60%
4
Equal to or greater than 0.550 to 1.00
1.90%

The rate that will be in effect following the reporting of our June 30, 2015 covenant compliance information will be 1.60% per annum in excess of LIBOR.

The 2015 5-Year Term Loan also contains an additional covenant that prior to the Rating Date, if any, PREIT may not permit the amount of the Gross Asset Value attributable to assets directly owned by PREIT, PREIT Associates, PRI and the guarantors to be less than 95% of Gross Asset Value excluding assets owned by Excluded Subsidiaries or Unconsolidated Affiliates.

The Borrower may prepay the 2015 5-Year Term Loan at any time without premium or penalty, subject to reimbursement obligations for the lenders’ breakage costs for LIBOR borrowings.

The 2015 5-Year Term Loan contains certain affirmative and negative covenants and other provisions which are identical to those contained in the other Credit Agreements, and which are described in detail below in the section entitled “—Identical covenants and common provisions contained in the Credit Agreements.”

2014 Term Loans

In January 2014, the Borrower entered into two unsecured term loans in the initial aggregate amount of $250.0 million , comprised of:

(1) a five year term loan agreement (the “2014 5-Year Term Loan”) with Wells Fargo Bank, National Association, U.S. Bank National Association and the other financial institutions signatory thereto, for a $150.0 million senior unsecured five-year term loan facility; and


13

(2) a seven year term loan agreement (the “2014 7-Year Term Loan” and, together with the 2014 5-Year Term Loan, the “2014 Term Loans”) with Wells Fargo Bank, National Association, Capital One, National Association and the other financial institutions signatory thereto, for a $100.0 million senior unsecured seven year term loan facility.

In June 2015, the Borrower entered into an amendment to each of the 2014 Term Loans under which PREIT is required to maintain, on a consolidated basis, minimum Unencumbered Debt Yield of 11.0% , versus 12.0% previously, consistent with the amendment to the covenant in the 2013 Revolving Facility, and the provision of the 2015 5-Year Term Loan. The cross-default provisions in the 2014 Term Loans were also amended to add the new 2015 5-Year Term Loan.

Amounts borrowed under the 2014 Term Loans bear interest at the rate specified in the chart below per annum, depending on PREIT’s leverage at the end of each quarter, in excess of LIBOR. In determining PREIT’s leverage (the ratio of Total Liabilities to Gross Asset Value), the capitalization rate used to calculate Gross Asset Value is (a) 6.50% for each Property having an average sales per square foot of more than $500 for the most recent period of 12 consecutive months, and (b) 7.50% for any other Property.
Level


Ratio of Total Liabilities
to Gross Asset Value
2014 7-Year Term Loan
Applicable Margin
2014 5-Year Term Loan
Applicable Margin
1
Less than 0.450 to 1.00
1.80%
1.35%
2
Equal to or greater than 0.450 to 1.00 but less than 0.500 to 1.00
1.95%
1.45%
3
Equal to or greater than 0.500 to 1.00 but less than 0.550 to 1.00
2.15%
1.60%
4
Equal to or greater than 0.550 to 1.00
2.35%
1.90%

The rate that will be in effect following the reporting of our June 30, 2015 covenant compliance information will be 2.15% and 1.60% for the 7-Year Term Loan and 5-Year Term Loan, respectively, per annum in excess of LIBOR.

If PREIT seeks and obtains an investment grade credit rating and so notifies the lenders under the respective 2014 Term Loans, alternative interest rates would apply.

Subject to the terms of the Credit Agreements, the Borrower has the option to increase the maximum amount available under the 2014 5-Year Term Loan, through an accordion option (subject to certain conditions), from $150.0 million to as much as $300.0 million , in increments of $5.0 million (with a minimum increase of $25.0 million ), based on Wells Fargo Bank’s ability to obtain increases in commitments from the current lenders or from new lenders.

Subject to the terms of the Credit Agreements, the Borrower has the option to increase the maximum amount available under the 2014 7-Year Term Loan, through an accordion option (subject to certain conditions), from $100.0 million to as much as $200.0 million , in increments of $5.0 million (with a minimum increase of $25.0 million ), based on Wells Fargo Bank’s ability to obtain increases in commitments from the current lenders or from new lenders.

The 2014 Term Loans contain certain affirmative and negative covenants and other provisions which are identical to those contained in the other Credit Agreements, and which are described in detail below in the section entitled “—Identical covenants and common provisions contained in the Credit Agreements.”

The Borrower may prepay the 2014 Term Loans at any time without premium or penalty, subject to reimbursement obligations for the lenders’ breakage costs for LIBOR borrowings. The payment of the 2014 7-Year Term Loan prior to its maturity is subject to reimbursement obligations for the lenders’ breakage costs for LIBOR borrowings and a declining prepayment penalty ranging from 3% from closing to one year after closing, to 2% from one year after closing to two years after closing, to 1% from two years after closing to three years after closing, and without penalty thereafter.


14

The table set forth below presents the amounts outstanding, interest rate (inclusive of the LIBOR spread and excluding the impact of interest rate swap agreements on LIBOR-based debt) in effect and the maturity dates of the 2014 Term Loans and the 2015 Term Loan (collectively, the “Term Loans”) as of June 30, 2015 :
(in millions of dollars)
2014 7-Year Term Loan
 
2014 5-Year Term Loan
 
2015 5-Year Term Loan
 
Total facility
$
100.0

 
$
150.0

 
$
150.0

 
Amount outstanding
$
100.0

 
$
150.0

 
$
150.0

 
Interest rate
2.13
%
 
1.63
%
 
1.64
%
 
Maturity date
January 2021

 
January 2019

 
June 2020

 

Interest expense related to the Term Loans was $2.0 million and $1.2 million for the three months ended June 30, 2015 and 2014 , respectively, and $3.2 million and $2.2 million for the six months ended June 30, 2015 and 2014 , respectively. Deferred financing fee amortization associated with the Term Loans was $0.1 million and $0.1 million for the three months ended June 30, 2015 and 2014 , respectively, and $0.2 million and 0.1 million for the six months ended June 30, 2015 and 2014 , respectively.

Identical covenants and common provisions contained in the Credit Agreements

The Credit Agreements contain certain affirmative and negative covenants which are identical, including, without limitation, requirements that PREIT maintain, on a consolidated basis: (1) minimum Tangible Net Worth of not less than 75% of the Company’s tangible net worth on December 31, 2012, plus 75% of the Net Proceeds of all Equity Issuances effected at any time after December 31, 2012; (2) maximum ratio of Total Liabilities to Gross Asset Value of 0.60 : 1 , provided that it will not be a Default if the ratio exceeds 0.60 :1 but does not exceed 0.625 : 1 , for more than two consecutive quarters on more than two occasions during the term; (3) minimum ratio of Adjusted EBITDA to Fixed Charges of 1.50 :1 (4) minimum Unencumbered Debt Yield of 11.0% ; (5) minimum Unencumbered NOI to Unsecured Interest Expense of 1.75 : 1 ; (6) maximum ratio of Secured Indebtedness to Gross Asset Value of 0.60 : 1 ; (7) maximum Investments in unimproved real estate and predevelopment costs not in excess of 5.0% of Gross Asset Value; (8) maximum Investments in Persons other than Subsidiaries, Consolidated Affiliates and Unconsolidated Affiliates not in excess of 5.0% of Gross Asset Value; (9) maximum Mortgages in favor of the Borrower or any other Subsidiary not in excess of 5.0% of Gross Asset Value; (10) the aggregate value of the Investments and the other items subject to the preceding clauses (7) through (9) not in excess of 10.0% of Gross Asset Value; (11) maximum Investments in Consolidation Exempt Entities not in excess of 25.0% of Gross Asset Value; (12) maximum Projects Under Development not in excess of 15.0% of Gross Asset Value; (13) the aggregate value of the Investments and the other items subject to the preceding clauses (7) through (9) and (11) and (12) not in excess of 35.0% of Gross Asset Value; (14) Distributions may not exceed (A) with respect to our preferred shares, the amounts required by the terms of the preferred shares, and (B) with respect to our common shares, the greater of (i) 95.0% of Funds From Operations and (ii) 110% of REIT taxable income for a fiscal year; and (15) PREIT may not permit the amount of the Gross Asset Value attributable to assets directly owned by PREIT, PREIT Associates, PRI and the guarantors to be less than 95% of Gross Asset Value excluding assets owned by Excluded Subsidiaries or Unconsolidated Affiliates.

These covenants and restrictions limit PREIT’s ability to incur additional indebtedness, grant liens on assets and enter into negative pledge agreements, merge, consolidate or sell all or substantially all of its assets and enter into certain transactions with affiliates. The Credit Agreements are subject to customary events of default and are cross-defaulted with one another. As of June 30, 2015, the Borrower was in compliance with all such financial covenants.

PREIT and the subsidiaries of PREIT that either (1) account for more than 2.5% of adjusted Gross Asset Value (other than an Excluded Subsidiary), (2) own or lease an Unencumbered Property, (3) own, directly or indirectly, a subsidiary described in (2), or (4) with respect to the Term Loans, are guarantors under the 2013 Revolving Facility, as amended, will serve as guarantors for funds borrowed under the Credit Agreements. In the event that we seek and obtain an investment grade credit rating, if any, PREIT may request that a subsidiary guarantor be released, unless such guarantor becomes obligated in respect of the debt of the Borrower or another subsidiary or owns Unencumbered Property or incurs recourse debt.

Upon the expiration of any applicable cure period following an event of default, the lenders may declare all of the obligations in connection with the Credit Agreements immediately due and payable, and the Commitments of the lenders to make further loans under the 2013 Revolving Facility and the 2014 Term Loans will terminate. Upon the occurrence of a voluntary or involuntary bankruptcy proceeding of PREIT, PREIT Associates, PRI, any Material Subsidiary, any subsidiary that owns or leases an Unencumbered Property or certain other subsidiaries, all outstanding amounts will automatically become immediately due and payable and the Commitments of the lenders to make further loans will automatically terminate.

15


Mortgage Loans

The carrying values and estimated fair values of mortgage loans based on interest rates and market conditions at June 30, 2015 and December 31, 2014 were as follows:
 
June 30, 2015
 
December 31, 2014
(in millions of dollars)
Carrying Value
 
Fair Value
 
Carrying Value
 
Fair Value
Mortgage loans
$
1,360.8

 
$
1,358.5

 
$
1,407.9

 
$
1,415.5


The mortgage loans contain various customary default provisions. As of June 30, 2015 , we were not in default on any of the mortgage loans.

Mortgage Loan Activity

In June 2015, we entered into a $96.2 million mortgage loan secured by Patrick Henry Mall in Newport News, Virginia. The mortgage loan has a fixed interest rate of 4.35% per annum and a 10 year term. Payments are of principal and interest based on a 30 year amortization schedule with a balloon payment due in July 2025. In connection with the repayment, we repaid the existing $83.8 million mortgage loan plus accrued interest and incurred an $0.8 million prepayment penalty. The balance of the proceeds were used for general corporate purposes.

In April 2015, we repaid a $55.6 million mortgage loan plus accrued interest secured by Magnolia Mall in Florence, South Carolina using $40.0 million from our 2013 Revolving Facility and $15.6 million from available working capital.

In March 2015, we borrowed an additional $5.8 million under the mortgage loan secured by Francis Scott Key Mall in Frederick, Maryland.

Interest Rate Risk

We follow established risk management policies designed to limit our interest rate risk on our interest bearing liabilities, as further discussed in note 7 to our unaudited consolidated financial statements.


5. CASH FLOW INFORMATION

Cash paid for interest was $37.3 million (net of capitalized interest of $0.8 million ) and $36.6 million (net of capitalized interest of $0.3 million ) for the six months ended June 30, 2015 and 2014 , respectively.

In our statement of cash flows, we show cash flows on our revolving facility on a net basis. Aggregate borrowings on our 2013 Revolving Facility were $270.0 million and $90.0 million for the six months ended June 30, 2015 and 2014 , respectively. Aggregate paydowns were $150.0 million and $220.0 million for the six months ended June 30, 2015 and 2014 , respectively. The $150.0 million paydown in the six months ended June 30, 2015 was directly paid from the 2015 5-Year Term Loan initial borrowing, and is considered to be a non-cash transaction.

In connection with our acquisition of Springfield Town Center in March 2015, we issued 6,250,000 OP Units with a value of $145.2 million as partial consideration for the purchase.

6. COMMITMENTS AND CONTINGENCIES

Contractual Obligations

As of June 30, 2015 , we had unaccrued contractual and other commitments related to our capital improvement projects and development projects of $14.3 million in the form of tenant allowances and contracts with general service providers and other professional service providers.


16

7. DERIVATIVES

In the normal course of business, we are exposed to financial market risks, including interest rate risk on our interest bearing liabilities. We attempt to limit these risks by following established risk management policies, procedures and strategies, including the use of financial instruments such as derivatives. We do not use financial instruments for trading or speculative purposes.

Cash Flow Hedges of Interest Rate Risk

Our outstanding derivatives have been designated under applicable accounting authority as cash flow hedges. The effective portion of changes in the fair value of derivatives designated as, and that qualify as, cash flow hedges is recorded in “Accumulated other comprehensive income (loss)” and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. To the extent these instruments are ineffective as cash flow hedges, changes in the fair value of these instruments are recorded in “Interest expense, net.”

We recognize all derivatives at fair value as either assets or liabilities in the accompanying consolidated balance sheets. The carrying amount of the derivative assets is reflected in “Deferred costs and other assets,” the amount of the associated liabilities is reflected in “Accrued expenses and other liabilities” and the amount of the net unrealized income or loss is reflected in “Accumulated other comprehensive income (loss)” in the accompanying balance sheets.

Amounts reported in “Accumulated other comprehensive income (loss)” that are related to derivatives will be reclassified to “Interest expense, net” as interest payments are made on our corresponding debt. During the next 12 months, we estimate that $4.4 million will be reclassified as an increase to interest expense in connection with derivatives. The amortization of these amounts could be accelerated in the event that we repay amounts outstanding on the debt instruments and do not replace them with new borrowings.

Interest Rate Swaps

As of June 30, 2015 , we had entered into 16 interest rate swap agreements with a weighted average interest rate of 1.55% on a notional amount of $422.1 million maturing on various dates through January 2019 .

We entered into these interest rate swap agreements in order to hedge the interest payments associated with our issuances of variable interest rate long term debt. We have assessed the effectiveness of these interest rate swap agreements as hedges at inception and on a quarterly basis. As of June 30, 2015 , we considered these interest rate swap agreements to be highly effective as cash flow hedges. The interest rate swap agreements are net settled monthly.
Accumulated other comprehensive loss as of June 30, 2015 includes a net loss of $2.3 million relating to forward starting swaps that we cash settled in prior years that are being amortized over 10 year periods commencing on the closing dates of the debt instruments that are associated with these settled swaps.

In the six months ended June 30, 2015 , we recorded net loss on hedge ineffectiveness of $0.5 million . Following our July 2014 repayment of the $25.8 million mortgage loan secured by 801 Market Street, Philadelphia, Pennsylvania, we anticipated that we would not have sufficient 1-month LIBOR based interest payments to meet the entire swap notional amount related to two of our swaps, and we estimated that this condition would exist until approximately March 2015, when we planned to incur variable rate debt as part of the consideration for the acquisition of Springfield Town Center. These swaps, with an aggregate notional amount of $40.0 million , did not qualify for ongoing hedge accounting after July 2014 as a result of the unrealized forecasted transactions. We recognized mark-to-market interest expense on these two swaps of $0.5 million for the period from January 1, 2015 to March 31, 2015, the date the Springfield Town Center acquisition closed and variable rate debt was issued. These swaps are scheduled to expire by their terms in January 2019.


17

The following table summarizes the terms and estimated fair values of our interest rate swap derivative instruments at June 30, 2015 and December 31, 2014 . The notional values provide an indication of the extent of our involvement in these instruments, but do not represent exposure to credit, interest rate or market risks.
(in millions of dollars)
Notional Value
 
Fair Value at
June 30, 2015 (1)
 
Fair Value at
December 31, 2014 (1)
 
Interest
Rate
 
Maturity Date
Interest Rate Swaps
 
 
 
 
 
 
 
 
$25.0
 
$
(0.2
)
 
$
(0.2
)
 
1.10
%
 
July 31, 2016
28.1
 
(0.3
)
 
(0.4
)
 
1.38
%
 
January 2, 2017
33.4
 
(0.1
)
 
0.1

 
3.72
%
 
December 1, 2017
7.6
 
—

 
—

 
1.00
%
 
January 1, 2018
55.0
 
(0.2
)
 
—

 
1.12
%
 
January 1, 2018
48.0
 
(0.2
)
 
—

 
1.12
%
 
January 1, 2018
30.0
 
(0.5
)
 
(0.4
)
 
1.78
%
 
January 2, 2019
20.0
 
(0.4
)
 
(0.3
)
 
1.78
%
 
January 2, 2019
20.0
 
(0.4
)
 
(0.3
)
 
1.78
%
 
January 2, 2019
20.0
 
(0.4
)
 
(0.3
)
 
1.79
%
 
January 2, 2019
20.0
 
(0.4
)
 
(0.3
)
 
1.79
%
 
January 2, 2019
20.0
 
(0.4
)
 
(0.3
)
 
1.79
%
 
January 2, 2019
25.0
 
0.1

 
N/A

 
1.16
%
 
January 2, 2019
25.0
 
0.1

 
N/A

 
1.16
%
 
January 2, 2019
25.0
 
—

 
N/A

 
1.16
%
 
January 2, 2019
20.0
 
0.1

 
N/A

 
1.16
%
 
January 2, 2019
 
 
$
(3.2
)
 
$
(2.4
)
 
 
 
 
_________________________
(1)  
As of June 30, 2015 and December 31, 2014 , derivative valuations in their entirety were classified in Level 2 of the fair value hierarchy and we did not have any significant recurring fair value measurements related to derivative instruments using significant unobservable inputs (Level 3).

The table below presents the effect of derivative financial instruments on our consolidated statements of operations and on our share of our partnerships’ statements of operations for the three and six months ended June 30, 2015 and 2014 :
 
 
 
Three Months Ended 
 June 30,
 
Six Months Ended 
 June 30,
 
Consolidated
Statements of
Operations 
Location
(in millions of dollars)
 
2015
 
2014
 
2015
 
2014
 
Derivatives in cash flow hedging relationships:
 
 
 
 
 
 
 
 
 
 
Interest rate products
 
 
 
 
 
 
 
 
 
 
Loss recognized in Other Comprehensive Income (Loss) on derivatives
 
$
0.2

 
$
(0.3
)
 
$
(1.6
)
 
$
(2.2
)
 
N/A
Loss reclassified from Accumulated Other Comprehensive Income (Loss) into income (effective portion)
 
$
1.2

 
$
1.2

 
$
2.3

 
$
2.2

 
Interest expense
Loss recognized in income on derivatives (ineffective portion and amount excluded from effectiveness testing)
 
$
—

 
$
(1.2
)
 
$
(0.5
)
 
$
(1.2
)
 
Interest expense


18

Credit-Risk-Related Contingent Features

We have agreements with some of our derivative counterparties that contain a provision pursuant to which, if our entity that originated such derivative instruments defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then we could also be declared in default on our derivative obligations. As of June 30, 2015 , we were not in default on any of our derivative obligations.

We have an agreement with a derivative counterparty that incorporates the loan covenant provisions of our loan agreement with a lender affiliated with the derivative counterparty. Failure to comply with the loan covenant provisions would result in our being in default on any derivative instrument obligations covered by the agreement.

As of June 30, 2015 , the fair value of derivatives in a net liability position, which excludes accrued interest but includes any adjustment for nonperformance risk related to these agreements, was $3.2 million . If we had breached any of the default provisions in these agreements as of June 30, 2015 , we might have been required to settle our obligations under the agreements at their termination value (including accrued interest) of $3.7 million . We had not breached any of these provisions as of June 30, 2015 .

8. RELATED PARTY TRANSACTION

As disclosed in note 3, we sold our entire 50% interests in Springfield Park shopping center, in Springfield, Pennsylvania in July 2015. The buyer, Rubin Retail Acquisitions, L.P., is an entity controlled by Ronald Rubin, Executive Chairman and a Trustee of PREIT, and his brother, George Rubin, a former Vice Chairman and a former Trustee of PREIT. In accordance with PREIT’s Related Party Transactions Policy, a Special Committee consisting exclusively of independent members of PREIT’s Board of Trustees considered and approved the terms of the transaction. The disinterested members of PREIT’s Board of Trustees also approved the transaction.


19

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following analysis of our consolidated financial condition and results of operations should be read in conjunction with our unaudited consolidated financial statements and the notes thereto included elsewhere in this report.

OVERVIEW

Pennsylvania Real Estate Investment Trust, a Pennsylvania business trust founded in 1960 and one of the first equity real estate investment trusts (“REITs”) in the United States, has a primary investment focus on retail shopping malls located in the eastern half of the United States, primarily in the Mid-Atlantic region.

We currently own interests in 41 retail properties, of which 34 are operating properties, four are development properties, and three are under redevelopment (The Gallery at Market East and two street retail properties). The 34 operating properties include 31 shopping malls and three other retail properties, have a total of 27.4  million square feet and are located in 11 states. We and partnerships in which we own an interest own 20.4  million square feet at these properties (excluding space owned by anchors). The above property counts do not include Uniontown Mall, in Uniontown, Pennsylvania, because that property has been classified as “held for sale,” and Springfield Park, in Springfield, Pennsylvania, because that property was sold effective July 2015, and these properties are no longer considered part of our operating portfolio.

There are 29 operating retail properties in our portfolio that we consolidate for financial reporting purposes. These consolidated operating properties have a total of 23.7  million square feet, of which we own 18.0  million square feet. The five operating retail properties that are owned by unconsolidated partnerships with third parties have a total of 3.7 million square feet, of which 2.4 million square feet are owned by such partnerships.

The development portion of our portfolio contains four properties in three states, with two classified as “mixed use” (a combination of retail and other uses), one classified as “retail” (outlet) and one classified as “other.”

Our primary business is owning and operating retail shopping malls, which we primarily do through our operating partnership, PREIT Associates, L.P. (“PREIT Associates”). We provide management, leasing and real estate development services through PREIT Services, LLC (“PREIT Services”), which generally develops and manages properties that we consolidate for financial reporting purposes, and PREIT-RUBIN, Inc. (“PRI”), which generally develops and manages properties that we do not consolidate for financial reporting purposes, including properties in which we own interests through partnerships with third parties and properties that are owned by third parties in which we do not have an interest. PRI is a taxable REIT subsidiary, as defined by federal tax laws, which means that it is able to offer additional services to tenants without jeopardizing our continuing qualification as a REIT under federal tax law.

Net loss for the three months ended June 30, 2015 was $34.7 million , an increase of $10.6 million compared to net loss of $24.1 million for the three months ended June 30, 2014 . This increase was primarily due to the $28.7 million of impairment losses recorded in the three months ended June 30, 2015 compared to the $16.1 million of impairment losses recorded in the three months ended June 30, 2014.

Net loss for the six months ended June 30, 2015 was $48.6 million , an increase of $16.2 million compared to net loss of $32.4 million for the six months ended June 30, 2014 . This increase was primarily due to the $34.9 million of impairment losses recorded in the six months ended June 30, 2015 compared to $17.4 million of impairment losses recorded in the six months ended June 30, 2014. Our results were also affected by the dispositions of a 50% interest in The Gallery and another property, the sale of three other malls since June 30, 2014, and the Springfield Town Center acquisition (closed March 31, 2015). These effects were partially offset by increased Same Store NOI (as defined below) in the six months ended June 30, 2015.
 
We evaluate operating results and allocate resources on a property-by-property basis, and do not distinguish or evaluate our consolidated operations on a geographic basis. Due to the nature of our operating properties, which involve retail shopping, we have concluded that our individual properties have similar economic characteristics and meet all other aggregation criteria. Accordingly, we have aggregated our individual properties into one reportable segment. In addition, no single tenant accounts for 10% or more of consolidated revenue, and none of our properties are located outside the United States.

We hold our interests in our portfolio of properties through our operating partnership, PREIT Associates. We are the sole general partner of PREIT Associates and, as of June 30, 2015 , held an 89.2% controlling interest in PREIT Associates, and consolidated it for reporting purposes. We hold our investments in five of the 34 operating retail properties and two of the four development properties in our portfolio through unconsolidated partnerships with third parties in which we own a 25% to 50%

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interest. We hold a noncontrolling interest in each unconsolidated partnership, and account for such partnerships using the equity method of accounting. We do not control any of these equity method investees for the following reasons:

•
Except for two properties that we co-manage with our partner, all of the other entities are managed on a day-to-day basis by one of our other partners as the managing general partner in each of the respective partnerships. In the case of the co-managed properties, all decisions in the ordinary course of business are made jointly.
•
The managing general partner is responsible for establishing the operating and capital decisions of the partnership, including budgets, in the ordinary course of business.
•
All major decisions of each partnership, such as the sale, refinancing, expansion or rehabilitation of the property, require the approval of all partners.
•
Voting rights and the sharing of profits and losses are generally in proportion to the ownership percentages of each partner.

We record the earnings from the unconsolidated partnerships using the equity method of accounting under the statements of operations caption entitled “Equity in income of partnerships,” rather than consolidating the results of the unconsolidated partnerships with our results. Changes in our investments in these entities are recorded in the balance sheet caption entitled “Investment in partnerships, at equity.” In the case of deficit investment balances, such amounts are recorded in “Distributions in excess of partnership investments.”

We hold our interest in one of our unconsolidated partnerships through a tenancy in common arrangement. For this property, title is held by us and another person or persons, and each has an undivided interest in the property. With respect to this property, under the applicable agreements between us and the other persons with ownership interests, we and such other persons have joint control because decisions regarding matters such as the sale, refinancing, expansion or rehabilitation of the property require the approval of both us and the other person (or at least one of the other persons) owning an interest in the property. Hence, we account for this property using the equity method of accounting. The balance sheet items arising from this property appear under the caption “Investments in partnerships, at equity.” The statements of operations items arising from this property appear in “Equity in income of partnerships.”

For further information regarding our unconsolidated partnerships, see note 3 to our unaudited consolidated financial statements.

Current Economic Conditions and Our Near Term Capital Needs

The conditions in the economy have caused relatively slow job growth and have caused fluctuations and variations in retail sales, business and consumer confidence, and consumer spending on retail goods. As a result, the sales and profit performance of certain retailers has fluctuated, and in some cases, has led to bankruptcy filings by them. We continue to adjust our plans and actions to take into account the current environment as it evolves. In particular, we continue to contemplate ways to maintain or reduce our leverage through a variety of means available to us, subject to and in accordance with the terms of our Credit Agreements. These steps might include (i) obtaining capital from joint ventures or other partnerships or arrangements involving our contribution of assets with institutional investors, private equity investors or other REITs, or through sales of properties or interests in properties with values in excess of their mortgage loans and application of the excess proceeds to debt reduction, and (ii) obtaining equity capital, including through the issuance of common or preferred equity securities if market conditions are favorable, or through other actions.

Acquisitions and Dispositions

Springfield Town Center

On March 31, 2015, we acquired Springfield Town Center in Springfield, Virginia for aggregate consideration of $486.6 million, consisting of the following components: (i) the assumption and immediate payoff of $263.8 million of indebtedness owed to affiliates of Vornado Realty L.P.; (ii) 6,250,000 OP Units valued at $145.2 million, (iii) liabilities relating to tenant improvements and allowances of $14.8 million, (iv) the estimated present value of the “Earnout” (as described below) of $7.7 million, and (v) the remainder in cash. The seller is potentially entitled to receive consideration (the “Earnout”) under the terms of the Contribution Agreement which will be calculated as of March 31, 2018. The acquisition of Springfield Town Center will affect the comparability of our occupancy, real estate revenue, property operating expenses and depreciation and amortization to prior periods. In addition, the debt incurred to finance a portion of the purchase price will cause us to incur interest expense.

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The impact of the acquisition on our net income, net operating income and Funds From Operations will depend on rental rates, occupancy and the overall performance of the property.

Springfield Park

In July 2015, we sold our entire 50% interests in the Springfield Park shopping center for $20.2 million, representing a capitalization rate of 7.0%, and we recognized a gain of approximately $12.0 million that will be recorded in the third quarter of 2015. In connection with our interest in the property, we had an ongoing obligation to sublet approximately 10,100 square feet of space of a tenant at the property, which we transferred as part of the transaction. In connection with the sale, a mortgage loan of approximately $9.0 million, of which our share was 50%, was assumed by the buyer. For a limited term after the closing, we will provide limited property management services to the shopping center for nominal consideration. We divested $0.1 million of goodwill in connection with this transaction. We used the net proceeds from the transaction for general corporate purposes. See note 8 to our consolidated financial statements regarding the related party aspect of the transaction.

Capital Improvements, Redevelopment and Development Projects

At our operating properties, we might engage in various types of capital improvement projects. Such projects vary in cost and complexity, and can include building out new or existing space for individual tenants, upgrading common areas or exterior areas such as parking lots, or redeveloping the entire property, among other projects. Project costs are accumulated in “Construction in progress” on our consolidated balance sheet until the asset is placed into service, and amounted to $8.7 million as of June 30, 2015 .

On July 29, 2014, we entered into a 50/50 joint venture with The Macerich Company (“Macerich”) to redevelop The Gallery at Market East in Philadelphia, Pennsylvania (“The Gallery”). As we redevelop The Gallery, operating results in the short term, as measured by sales, occupancy, real estate revenue, property operating expenses, net operating income and depreciation, will likely be negatively affected until the newly constructed space is completed, leased and occupied.

We are also engaged in several types of development projects. However, we do not expect to make any significant investment in these projects in the short term.

CRITICAL ACCOUNTING POLICIES

Critical Accounting Policies are those that require the application of management’s most difficult, subjective or complex judgments, often because of the need to make estimates about the effect of matters that are inherently uncertain and that might change in subsequent periods. In preparing the unaudited consolidated financial statements, management has made estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting periods. In preparing the financial statements, management has utilized available information, including historical experience, industry standards and the current economic environment, among other factors, in forming its estimates and judgments, giving due consideration to materiality. Management has also considered events and changes in property, market and economic conditions, estimated future cash flows from property operations and the risk of loss on specific accounts or amounts in determining its estimates and judgments. Actual results may differ from these estimates. In addition, other companies may utilize different estimates, which may affect comparability of our results of operations to those of companies in similar businesses. The estimates and assumptions made by management in applying critical accounting policies have not changed materially during 2015 or 2014 except as otherwise noted, and none of these estimates or assumptions have proven to be materially incorrect or resulted in our recording any significant adjustments relating to prior periods. We will continue to monitor the key factors underlying our estimates and judgments, but no change is currently expected.
For additional information regarding our Critical Accounting Policies, see “Critical Accounting Policies” in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2014.
Asset Impairment
Real estate investments and related intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the property might not be recoverable. A property to be held and used is considered impaired only if management’s estimate of the aggregate future cash flows, less estimated capital expenditures, to be generated by the property, undiscounted and without interest charges, are less than the carrying value of the property. This estimate takes into consideration factors such as expected future operating income, trends and prospects, as well as the effects of demand, competition and other factors. In addition, these estimates may consider a probability weighted cash flow estimation approach

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when alternative courses of action to recover the carrying amount of a long-lived asset are under consideration or when a range of possible values is estimated.
The determination of undiscounted cash flows requires significant estimates by management, including the expected course of action at the balance sheet date that would lead to such cash flows. Subsequent changes in estimated undiscounted cash flows arising from changes in the anticipated action to be taken with respect to the property could impact the determination of whether an impairment exists and whether the effects could materially affect our net income. To the extent estimated undiscounted cash flows are less than the carrying value of the property, the loss will be measured as the excess of the carrying amount of the property over the estimated fair value of the property.
Assessment of our ability to recover certain lease related costs must be made when we have a reason to believe that the tenant might not be able to perform under the terms of the lease as originally expected. This requires us to make estimates as to the recoverability of such costs.

See “Results of Operations” for a description of the losses on impairment of assets relating to Uniontown Mall, Gadsden Mall, New River Valley Mall and Wiregrass Commons Mall that were recorded during the six months ended June 30, 2015 .


OFF BALANCE SHEET ARRANGEMENTS

We have no material off-balance sheet items other than the partnerships described in note 3 to the unaudited consolidated financial statements and in the “Overview” section above.


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RESULTS OF OPERATIONS

Occupancy

The table below sets forth certain occupancy statistics for our properties as of June 30, 2015 and 2014 :
 
 
Occupancy (1)  as of June 30,
 
Consolidated
Properties
 
Unconsolidated
Properties
 
Combined (2)
 
2015
 
2014
 
2015
 
2014
 
2015
 
2014
Retail portfolio weighted average:
 
 
 
 
 
 
 
 
 
 
 
Total excluding anchors
88.8
%
 
90.3
%
 
96.9
%
 
92.0
%
 
90.0
%
 
90.6
%
Total including anchors
92.9
%
 
94.4
%
 
97.6
%
 
89.0
%
 
93.4
%
 
93.5
%
Malls weighted average:
 
 
 
 
 
 
 
 
 
 
 
Total excluding anchors
88.8
%
 
90.2
%
 
92.9
%
 
89.3
%
 
89.1
%
 
90.1
%
Total including anchors
92.9
%
 
94.4
%
 
95.2
%
 
85.9
%
 
93.1
%
 
93.3
%
Other retail properties
92.5
%
 
99.5
%
 
99.8
%
 
95.6
%
 
99.5
%
 
95.8
%
_________________________
(1)  
Occupancy for both periods presented includes all tenants irrespective of the term of their agreements. Retail portfolio and mall occupancy as of June 30, 2015 excludes The Gallery because the property is under redevelopment, and Springfield Park, which was sold in July 2015.
(2)  
Combined occupancy is calculated by using occupied gross leasable area (“GLA”) for consolidated and unconsolidated properties and dividing by total GLA for consolidated and unconsolidated properties.



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Leasing Activity

The table below sets forth summary leasing activity information with respect to our consolidated and unconsolidated properties for the six months ended June 30, 2015 :
 
 
 
 
 
 
 
Average Gross Rent
psf
 
Increase in Gross Rent psf
 
Annualized
Tenant
Improvements
psf (2)
 
 
Number
 
GLA
 
Previous
 
New (1)
 
Dollar
 
Percentage
 
New Leases - non anchor tenants less than 10,000 square feet: (3)
1st Quarter
 
23

 
43,481

 
N/A

 
$
70.36

 
$
70.36

 
N/A

 
$
5.73

2nd Quarter
 
44

 
94,220

 
N/A

 
$
56.36

 
$
56.36

 
N/A

 
$
10.57

Total/Average
 
67

 
137,701

 
N/A

 
$
60.78

 
$
60.78

 
N/A

 
$
9.04

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
New Leases - non anchor tenants 10,000 square feet or greater: (3)
1st Quarter
 
1

 
13,000

 
N/A

 
$
22.49

 
$
22.49

 
N/A

 
$
12.64

2nd Quarter
 
2

 
23,785

 
N/A

 
$
15.41

 
$
15.41

 
N/A

 
$
1.44

Total/Average
 
3

 
36,785

 
N/A

 
$
17.91

 
$
17.91

 
N/A

 
$
5.40

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Renewal - non anchor tenants less than 10,000 square feet: (4)
1st Quarter
 
60

 
137,227

 
$
45.25

 
$
45.95

 
$
0.70

 
1.5
%
 
$
0.18

2nd Quarter
 
78

 
255,466

 
$
37.64

 
$
39.39

 
$
1.75

 
4.6
%
 
$
—

Total/Average
 
138

 
392,693

 
$
40.30

 
$
41.68

 
$
1.38

 
3.4
%
 
$
0.06

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Renewal - non anchor tenants 10,000 square feet or greater: (4)
1st Quarter
 
1

 
12,608

 
$
13.00

 
$
13.50

 
$
0.50

 
3.8
%
 
$
—

2nd Quarter
 
9

 
253,119

 
$
23.39

 
$
24.38

 
$
0.99

 
4.2
%
 
$
—

Total/Average
 
10

 
265,727

 
$
22.90

 
$
23.86

 
$
0.97

 
4.2
%
 
$
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
New Leases - Anchor Tenants:
1st Quarter
 
—

 
—

 
N/A

 
$
—

 
$
—

 
N/A

 
$
—

2nd Quarter
 
1

 
48,208

 
N/A

 
$
5.23

 
$
5.23

 
N/A

 
$
—

Total/Average
 
1

 
48,208

 
N/A

 
$
5.23

 
$
5.23

 
N/A

 
$
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Renewal Leases - Anchor Tenants: (4)
1st Quarter
 
—

 
—

 
$
—

 
$
—

 
$
—

 
—
%
 
$
—

2nd Quarter
 
8

 
963,256

 
$
4.59

 
$
4.59

 
$
—

 
—
%
 
$
—

Total/Average
 
8

 
963,256

 
$
4.59

 
$
4.59

 
$
—

 
—
%
 
$
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 _________________________
(1)  
New rent is the initial amount payable upon rent commencement. In certain cases, a lower rent may be payable until certain conditions in the lease are satisfied.
(2)  
These leasing costs are presented as annualized costs per square foot and are spread uniformly over the initial lease term.
(3)  
This category includes newly constructed and recommissioned space.
(4)  
This category includes leases for reconfigured spaces and lease extensions.

As of June 30, 2015 , for non-anchor leases, the average gross rent per square foot as of the expiration date was $36.13 for the renewing leases in “Holdover” status and $41.20 for leases expiring in 2015.

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Table of Contents

Overview

Net loss for the three months ended June 30, 2015 was $34.7 million , an increase of $10.6 million compared to net loss of $24.1 million for the three months ended June 30, 2014 . This increase was primarily due to the $28.7 million of impairment losses recorded in the three months ended June 30, 2015 compared to the $16.1 million of impairment losses recorded in the three months ended June 30, 2014.


Net loss for the six months ended June 30, 2015 was $48.6 million , an increase of $16.2 million compared to net loss of $32.4 million for the six months ended June 30, 2014 . This increase was primarily due to the $34.9 million of impairment losses recorded in the six months ended June 30, 2015 compared to $17.4 million of impairment losses recorded in the six months ended June 30, 2014. Our results were also affected by the dispositions of a 50% interest in The Gallery and another property, the sale of three other malls since June 30, 2014, and the Springfield Town Center acquisition (closed March 31, 2015). These effects were partially offset by increased Same Store NOI (as defined below) in the six months ended June 30, 2015.

The following table sets forth our results of operations for the three and six months ended June 30, 2015 and 2014 .
 
Three Months Ended 
 June 30,
 
% Change
2014 to
2015
 
Six Months Ended 
 June 30,
 
% Change
2014 to
2015
(in thousands of dollars)
2015
 
2014
 
 
2015
 
2014
 
Real estate revenue
$
100,882

 
$
106,145

 
(5
)%
 
199,666

 
214,754

 
(7
)%
Other income
811

 
680

 
19
 %
 
2,084

 
1,458

 
43
 %
Property operating expenses
(42,014
)
 
(44,364
)
 
(5
)%
 
(85,165
)
 
(96,081
)
 
(11
)%
Depreciation and amortization
(36,641
)
 
(37,135
)
 
(1
)%
 
(69,830
)
 
(73,370
)
 
(5
)%
General and administrative expenses
(9,126
)
 
(8,774
)
 
4
 %
 
(18,070
)
 
(17,851
)
 
1
 %
Provision for employee separation expense
—

 
(4,877
)
 
—
 %
 
—

 
(4,877
)
 
—
 %
Acquisition costs and other expenses
(817
)
 
(960
)
 
(15
)%
 
(5,269
)
 
(2,606
)
 
102
 %
Interest expense, net
(21,126
)
 
(21,550
)
 
(2
)%
 
(41,271
)
 
(41,720
)
 
(1
)%
Impairment of assets
(28,667
)
 
(16,098
)
 
78
 %
 
(34,907
)
 
(17,398
)
 
101
 %
Equity in income of partnerships
2,032

 
2,784

 
(27
)%
 
4,114

 
5,186

 
(21
)%
Gain on sale of interest in real estate
—

 
99

 
—
 %
 
—

 
99

 
—
 %
Gain on sales of interest in non operating real estate
—

 
—

 
N/A

 
43

 
—

 
N/A

Net loss
$
(34,666
)
 
$
(24,050
)
 
44
 %
 
(48,605
)
 
(32,406
)
 
50
 %

The amounts in the preceding table reflect our consolidated properties and our unconsolidated properties. Our unconsolidated properties are presented under the equity method of accounting in the line item “Equity in income of partnerships.”

Real Estate Revenue

Real estate revenue decreased by $ 5.3 million , or 5% , in the three months ended June 30, 2015 compared to the three months ended June 30, 2014 , primarily due to:

•
a net decrease of $5.2 million in real estate revenue related to properties sold in 2014, the July 2014 sale of a 50% partnership interest in The Gallery and the acquisition of Springfield Town Center in March 2015;

•
a $0.4 million decrease due to the business failure of an office tenant at Voorhees Town Center; partially offset by

•
an increase of $0.3 million in same store base rent due to increases of $1.4 million from new store openings and lease renewals with higher base rental amounts, with notable increases at Francis Scott Key Mall, Moorestown Mall and Viewmont Mall, partially offset by troubled tenant closings affecting 61 stores across our portfolio, including Deb Shops, Wet Seal, Body Central, Cache and Radio Shack, with an aggregate impact of $1.1 million; and

•
an increase of $0.3 million in same store real estate tax reimbursements, offset by a corresponding increase in real estate tax expense.

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Real estate revenue decreased by $15.1 million , or 7% , in the six months ended June 30, 2015 compared to the six months ended June 30, 2014 , primarily due to:

•
a net decrease of $16.4 million in real estate revenue related to properties sold in 2014, the July 2014 sale of a 50% partnership interest in The Gallery, and the March 2015 acquisition of Springfield Town Center; partially offset by

•
an increase of $0.7 million in same store real estate tax reimbursements, offset by a corresponding increase in real estate tax expense; and

•
an increase of $0.5 million in same store base rent due to increases of $2.2 million from new store openings and lease renewals with higher base rental amounts, with notable increases at Francis Scott Key Mall, Moorestown Mall and Viewmont Mall, partially offset by troubled tenant closings affecting 61 stores across our portfolio, including Deb Shops, Wet Seal, Body Central, Cache and Radio Shack, with an aggregate impact of $1.7 million.

Property Operating Expenses

Property operating expenses decreased by $ 2.4 million , or 5% , in the three months ended June 30, 2015 compared to the three months ended June 30, 2014 , primarily due to:

•
a net decrease of $2.9 million in property operating expenses related to properties sold in 2014, the July 2014 sale of a 50% partnership interest in The Gallery, and the March 2015 acquisition of Springfield Town Center; and


•
a decrease of $0.6 million in same store non-common area utility expense due to lower electric rates, particularly at our properties located in Pennsylvania; partially offset by


•
an increase of $0.9 million in same store bad debt expense. During the three months ended June 30, 2014, we decreased our estimated reserve related to straight line rent receivables, due to improved historical results in recent periods; and

•
an increase of $0.3 million in same store real estate tax expense, including a $0.1 million increase at one of our New Jersey properties, due to a combination of increases in the real estate tax assessment value and the real estate tax rate.

Property operating expenses decreased by $10.9 million , or 11% , in the six months ended June 30, 2015 compared to the six months ended June 30, 2014 , primarily due to:

•
a net decrease of $9.7 million in property operating expenses related to properties sold in 2014, the July 2014 sale of a 50% partnership interest in The Gallery and the March 2015 acquisition of Springfield Town Center;

•
a decrease of $2.4 million in same store non-common area utility expense. The three months ended March 31, 2014 saw a significant increase in electric rates at many of our properties. The extreme cold weather last winter, and the resulting natural gas supply constraints, led to an historic spike in wholesale electricity rates that particularly affected our properties located in Pennsylvania, New Jersey and Maryland; and

•
a decrease of $1.3 million in same store common area maintenance expense, including decreases of $0.7 million in common area utilities and $0.6 million in snow removal expense. Snow removal expense at our properties located in the Mid-Atlantic States, particularly Pennsylvania and New Jersey, was affected by a severe winter with numerous snowfalls during the three months ended March 31, 2014; partially offset by

•
an increase of $1.5 million in same store bad debt expense. The six months ended June 30, 2015 was affected by five tenant bankruptcies involving 45 stores and with associated bad debt expense of $0.4 million. Also, during the three months ended June 30, 2014, we decreased our estimated reserve related to straight line rent receivables due to improved historical results in recent periods, resulting in a $1.1 million reduction in bad debt expense; and

•
an increase of $0.7 million in real estate tax expense due to a combination of increases in the real estate tax assessment

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value and the real estate tax rate.


Net Operating Income (“NOI”)

NOI (a non-GAAP measure) is derived from real estate revenue (determined in accordance with generally accepted accounting principles, or GAAP, including lease termination revenue) minus property operating expenses (determined in accordance with GAAP), plus our share of revenue and property operating expense of our partnership investments. It does not represent cash generated from operating activities in accordance with GAAP and should not be considered to be an alternative to net income (determined in accordance with GAAP) as an indication of our financial performance or to be an alternative to cash flow from operating activities (determined in accordance with GAAP) as a measure of our liquidity. It is not indicative of funds available for our cash needs, including our ability to make cash distributions. We believe that NOI is helpful to management and investors as a measure of operating performance because it is an indicator of the return on property investment and provides a method of comparing property performance over time. We believe that net income is the most directly comparable GAAP measurement to NOI.

NOI excludes other income, general and administrative expense, provision for employee separation expenses, interest expense, depreciation and amortization, gain on sale of interest in non operating real estate, gain on sale of interest in real estate, impairment losses and acquisition costs and other expenses.

The following tables present NOI for the three and six months ended June 30, 2015 and 2014 . The results are presented using the “proportionate-consolidation method” (a non-GAAP measure), which includes our share of the results of our partnership investments. Under GAAP, we account for our partnership investments under the equity method of accounting. Operating results for retail properties that we owned for the full periods presented (“Same Store”) exclude properties acquired or disposed of or reclassified as held for sale during the periods presented. A reconciliation of NOI to net income (loss) determined in accordance with GAAP appears under the heading “Reconciliation of GAAP Net Income (Loss) to Non-GAAP Measures.”
 
 
Same Store
 
Non Same Store
 
Total
 
Three Months Ended 
 June 30,
 
Three Months Ended 
 June 30,
 
Three Months Ended 
 June 30,
(in thousands of dollars)
2015
 
2014
 
%
Change
 
2015
 
2014
 
%
Change
 
2015
 
2014
 
%
Change
Real estate revenue
$
103,665

 
$
103,159

 
0.5
 %
 
$
9,310

 
$
13,073

 
(28.8
)%
 
$
112,975

 
$
116,232

 
(2.8
)%
Property operating expenses
(40,824
)
 
(40,254
)
 
1.4
 %
 
(5,660
)
 
(6,971
)
 
(18.8
)%
 
(46,484
)
 
(47,225
)
 
(1.6
)%
Net Operating Income
$
62,841

 
$
62,905

 
(0.1
)%
 
$
3,650

 
$
6,102

 
(40.2
)%
 
$
66,491

 
$
69,007

 
(3.6
)%

Total NOI decreased by $2.5 million , or 3.6% , in the three months ended June 30, 2015 compared to the three months ended June 30, 2014 primarily due to a decrease of $2.5 million in NOI from Non Same Store properties. This decrease in NOI from Non Same Store properties was primarily due to properties sold in 2014 and the July 2014 sale of a 50% partnership interest in The Gallery. Non Same Store NOI was further affected by de-tenanting of The Gallery in preparation for the redevelopment of the property, losses incurred from the business failure of an office tenant at Voorhees Town Center, partially offset by the inclusion of Springfield Town Center, which was acquired effective March 31, 2015. See “—Real Estate Revenue” and “—Property Operating Expenses” above for further information about the factors affecting NOI from our consolidated properties. Same Store NOI includes lease termination revenue of $0.1 million and $0.2 million for the three months ended June 30, 2015 and 2014 , respectively.

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Same Store
 
Non Same Store
 
Total
 
Six Months Ended 
 June 30,
 
Six Months Ended 
 June 30,
 
Six Months Ended 
 June 30,
(in thousands of dollars)
2015
 
2014
 
%
Change
 
2015
 
2014
 
%
Change
 
2015
 
2014
 
%
Change
Real estate revenue
$
210,540

 
$
208,952

 
0.8
 %
 
$
14,382

 
$
26,398

 
(45.5
)%
 
$
224,922

 
$
235,350

 
(4.4
)%
Property operating expenses
(85,974
)
 
(87,827
)
 
(2.1
)%
 
(8,863
)
 
(14,650
)
 
(39.5
)%
 
(94,837
)
 
(102,477
)
 
(7.5
)%
Net Operating Income
$
124,566

 
$
121,125

 
2.8
 %
 
$
5,519

 
$
11,748

 
(53.0
)%
 
$
130,085

 
$
132,873

 
(2.1
)%

Total NOI decreased by $2.8 million , or 2.1% , in the six months ended June 30, 2015 compared to the six months ended June 30, 2014 primarily due to a decrease of $6.2 million in NOI from Non Same Store properties, partially offset by a $3.4 million increase in NOI from Same Store properties. The decrease in NOI from Non Same Store properties was primarily due to properties sold in 2014 and the July 2014 sale of a 50% partnership interest in The Gallery. Non Same Store NOI was further affected by de-tenanting of The Gallery in advance of the pending redevelopment of the property, losses incurred from the business failure of a office tenant at Voorhees Town Center, partially offset by the inclusion of Springfield Town Center, which was acquired effective March 31, 2015. See “—Real Estate Revenue” and “—Property Operating Expenses” above for further information about the factors affecting NOI from our consolidated properties. Same Store NOI includes lease termination revenue of $0.4 million and $0.3 million for the six months ended June 30, 2015 and 2014 , respectively.

Depreciation and Amortization

Depreciation and amortization expense decreased by $ 0.5 million , or 1% , in the three months ended June 30, 2015 compared to the three months ended June 30, 2014 , primarily due to:

•
a net decrease of $1.0 million related to properties sold in 2014, the July 2014 sale of a 50% partnership interest in The Gallery, and the March 2015 acquisition of Springfield Town Center; partially offset by

•
an increase of $0.5 million primarily due to a higher asset base resulting from capital improvements related to new tenants at our same store properties.


Depreciation and amortization expense decreased by $3.5 million , or 5% , in the six months ended June 30, 2015 compared to the six months ended June 30, 2014 , primarily due to:

•
a net decrease of $5.6 million related to properties sold in 2014, the July 2014 sale of a 50% partnership interest in The Gallery, and the March 2015 acquisition of Springfield Town Center; partially offset by

•
an increase of $2.1 million primarily due to a higher asset base resulting from capital improvements related to new tenants at our same store properties.


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Impairment of Assets

In June 2015, we recorded an aggregate loss on impairment of assets of Gadsden Mall in Gadsden, Alabama , New River Valley Mall in Christiansburg, Virginia and Wiregrass Commons Mall in Dothan, Alabama of $27.3 million after signing a purchase and sale agreement with a prospective buyer of the properties. The negotiations with this prospective buyer of the properties are ongoing and could result in additional changes to our underlying assumptions. As a result of these negotiations, we determined that the holding period for the properties was less than had been previously estimated, which we concluded was a triggering event, leading us to conduct an analysis of possible asset impairment at these properties. Based upon the purchase and sale agreement with the prospective buyer of the properties, we determined that the estimated aggregate undiscounted cash flows, net of estimated capital expenditures, for Gadsden Mall, New River Valley Mall and Wiregrass Mall were less than the aggregate carrying value of the properties, and recorded a loss on impairment of assets.

In March 2015, we recorded a loss on impairment of assets at Uniontown Mall in Uniontown, Pennsylvania of $6.2 million , and in June 2015, in connection with further negotiations with the prospective buyer, we recorded an additional $1.3 million loss on impairment of assets. In connection with these negotiations, we had determined that the holding period for the property was less than had been previously estimated, which we concluded was a triggering event, leading us to conduct an analysis of possible asset impairment at this property. Based upon the original purchase and sale agreement with the prospective buyer of the property and subsequent further negotiations, we determined that the estimated undiscounted cash flows, net of estimated capital expenditures, for Uniontown Mall were less than the carrying value of the property, and recorded an initial loss on impairment of assets and a subsequent additional loss on impairment of assets.

Acquisition Costs and Other Expenses

Acquisition costs and other expenses decreased by $0.1 million during the three months ended June 30, 2015 compared to the three months ended June 30, 2014 , primarily due to higher acquisition costs incurred in the three months ended June 30, 2014 related to our acquisition of Springfield Town Center that closed in March 2015, partially offset by higher other professional fee expenses in the three months ended June 30, 2015.

Acquisition costs and other expenses increased by $2.7 million during the six months ended June 30, 2015 compared to the six months ended June 30, 2014 , primarily due to acquisition costs related to our acquisition of Springfield Town Center in March 2015 and higher other professional fees incurred in 2015.

Interest Expense

Interest expense decreased by $0.4 million , or 2% , in the three months ended June 30, 2015 compared to the three months ended June 30, 2014 . Our weighted average effective borrowing rate was 4.69% for the three months ended June 30, 2015 compared to 4.99 % for the three months ended June 30, 2014 . Our weighted average debt balance was $ 1,868.0  million for the three months ended June 30, 2015 compared to $ 1,643.0 million for the three months ended June 30, 2014 , largely due to amounts borrowed to fund the cash portion of the purchase consideration for Springfield Town Center. Interest expense for the three months ended June 30, 2015 includes a prepayment penalty of $0.8 million in connection with the early repayment of the mortgage secured by Patrick Henry Mall and $0.2 million due to accelerated amortization of financing costs resulting from the June 2015 amendment to the 2013 Revolving Facility.

Interest expense decreased by $0.4 million , or 1% , in the six months ended June 30, 2015 compared to the six months ended June 30, 2014 . Our weighted average effective borrowing rate was 4.82% for the six months ended June 30, 2015 compared to 4.96% for the six months ended June 30, 2014 . Our weighted average debt balance was $1,725.8  million for the six months ended June 30, 2015 compared to $1,643.7 million for the six months ended June 30, 2014 . We also recorded a loss on hedge ineffectiveness of $0.5 million, a $0.8 million prepayment penalty and $0.2 million of accelerated amortization of financing costs in the six months ended June 30, 2015 . Interest expense for the six months ended June 30, 2014 included a loss on an amount related to hedge ineffectiveness of $1.2 million resulting from the July 2014 repayment of the mortgage loan secured by Logan Valley Mall and insufficient other variable rate debt.

Equity in Income of Partnerships

Equity in income of partnerships decreased by $0.8 million , or 27% , for the three months ended June 30, 2015 compared to the three months ended June 30, 2014 . This decrease was primarily due to a net loss from The Gallery, which became a 50% equity method investment as a result of the transaction with The Macerich Company in July 2014, due to the de-tenanting of the mall in anticipation of the construction phase of the redevelopment.

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Equity in income of partnerships decreased by $1.1 million , or 21% , for the six months ended June 30, 2015 compared to the six months ended June 30, 2014 . This decrease was primarily due to a net loss from The Gallery, which became a 50% equity method investment as a result of the transaction with The Macerich Company in July 2014, due to the de-tenanting of the mall in anticipation of the construction phase of the redevelopment.

Funds From Operations

The National Association of Real Estate Investment Trusts (“NAREIT”) defines Funds From Operations (“FFO”), which is a non-GAAP measure commonly used by REITs, as net income (computed in accordance with GAAP) excluding gains and losses on sales of operating properties, extraordinary items (computed in accordance with GAAP) and significant non-recurring events that materially distort the comparative measurement of company performance over time; plus real estate depreciation and amortization; and after adjustments for unconsolidated partnerships and joint ventures to reflect funds from operations on the same basis. We compute FFO in accordance with standards established by NAREIT, which may not be comparable to FFO reported by other REITs that do not define the term in accordance with the current NAREIT definition, or that interpret the current NAREIT definition differently than we do. NAREIT’s established guidance provides that excluding impairment write downs of depreciable real estate is consistent with the NAREIT definition.

FFO is a commonly used measure of operating performance and profitability among REITs. We use FFO and FFO per diluted share and unit of limited partnership interest in our operating partnership (“OP Unit”) in measuring our performance against our peers and as one of the performance measures for determining incentive compensation amounts earned under certain of our performance-based executive compensation programs.

FFO does not include gains and losses on sales of operating real estate assets or impairment write downs of depreciable real estate, which are included in the determination of net income in accordance with GAAP. Accordingly, FFO is not a comprehensive measure of our operating cash flows. In addition, since FFO does not include depreciation on real estate assets, FFO may not be a useful performance measure when comparing our operating performance to that of other non-real estate commercial enterprises. We compensate for these limitations by using FFO in conjunction with other GAAP financial performance measures, such as net income and net cash provided by operating activities, and other non-GAAP financial performance measures, such as NOI. FFO does not represent cash generated from operating activities in accordance with GAAP and should not be considered to be an alternative to net income (determined in accordance with GAAP) as an indication of our financial performance or to be an alternative to cash flow from operating activities (determined in accordance with GAAP) as a measure of our liquidity, nor is it indicative of funds available for our cash needs, including our ability to make cash distributions. We believe that net income is the most directly comparable GAAP measurement to FFO.

We also present Funds From Operations, as adjusted, and Funds From Operations per diluted share and OP Unit, as adjusted, which are non-GAAP measures, for the three and six months ended June 30, 2015 and 2014 to show the effect of mortgage prepayment penalty, accelerated amortization of financing costs, acquisition costs, loss on hedge ineffectiveness and provision for employee separation expense, which had a significant effect on our results of operations, but are not, in our opinion, indicative of our operating performance.

We believe that FFO is helpful to management and investors as a measure of operating performance because it excludes various items included in net income that do not relate to or are not indicative of operating performance, such as gains on sales of operating real estate and depreciation and amortization of real estate, among others. We believe that Funds From Operations, as adjusted, is helpful to management and investors as a measure of operating performance because it adjusts FFO to exclude items that management does not believe are indicative of our operating performance, including but not limited to acquisition costs and loss on hedge ineffectiveness.


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The following table presents FFO and FFO per diluted share and OP Unit, and FFO, as adjusted, and FFO per diluted share and OP Unit, as adjusted, for the three months ended June 30, 2015 and 2014 :  
(in thousands, except per share amounts)
Three Months Ended 
 June 30, 2015
 
% Change
2014 to 2015
 
Three Months Ended 
 June 30, 2014
Funds from operations
$
29,311

 
10.7%
 
$
26,477

Mortgage prepayment penalty and accelerated amortization of financing costs
1,030

 
 
 
—

Acquisition costs
138

 

 
554

Provision for employee separation expense
—

 

 
4,877

Loss on hedge ineffectiveness
—

 

 
1,238

Funds from operations, as adjusted
$
30,479

 
(8.0)%
 
$
33,146

Funds from operations per diluted share and OP Unit
$
0.38

 
2.7%
 
$
0.37

Funds from operations per diluted share and OP Unit, as adjusted
$
0.39

 
(17.0)%
 
$
0.47

 
 
 
 
 
 
Weighted average number of shares outstanding
68,753

 
 
 
68,236

Weighted average effect of full conversion of OP Units
8,357

 
 
 
2,129

Effect of common share equivalents
425

 
 
 
309

Total weighted average shares outstanding, including OP Units
77,535

 
 
 
70,674


FFO was $29.3 million for the three months ended June 30, 2015 , an increase of $2.8 million , or 10.7% , compared to $26.5 million for the three months ended June 30, 2014 . This increase is primarily due to the $4.9 million of employee separation expenses in 2014 that did not recur in 2015, partially offset by a decrease of $2.8 million in NOI resulting from properties and investments in partnerships sold in 2014.

FFO per diluted share and OP Unit increased by $0.01 to $0.38 per share for the three months ended June 30, 2015 , compared to $0.37 for the three months ended June 30, 2014 .

The following table presents FFO and FFO per diluted share and OP Unit, and FFO, as adjusted, and FFO per diluted share and OP Unit, as adjusted, for the six months ended June 30, 2015 and 2014 :  
(in thousands, except per share amounts)
Six Months Ended 
 June 30, 2015
 
% Change
2014 to 2015
 
Six Months Ended 
 June 30, 2014
Funds from operations
$
53,673

 
1.1%
 
$
53,092

Mortgage prepayment penalty and accelerated amortization of financing costs
1,030

 
 
 
—

Acquisition costs
3,468

 
 
 
1,941

Provision for employee separation expense
—

 
 
 
4,877

Loss on hedge ineffectiveness
512

 
 
 
1,238

Funds from operations, as adjusted
$
58,683

 
(4.0)%
 
$
61,148

Funds from operations per diluted share and OP Unit
$
0.72

 
(4.0)%
 
$
0.75

Funds from operations per diluted share and OP Unit, as adjusted
$
0.79

 
(9.2)%
 
$
0.87

 
 
 
 
 
 
Weighted average number of shares outstanding
68,660

 
 
 
68,091

Weighted average effect of full conversion of OP Units
5,291

 
 
 
2,129

Effect of common share equivalents
493

 
 
 
326

Total weighted average shares outstanding, including OP Units
74,444

 
 
 
70,546


FFO was $53.7 million for the six months ended June 30, 2015 , an increase of $0.6 million , or 1.1% , compared to $53.1 million for the six months ended June 30, 2014 . This increase is primarily due to the employee separation expenses in 2014 that

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did not recur in 2015, partially offset by a decrease in NOI resulting from properties and investments in partnerships sold in 2014.

FFO per diluted share and OP Unit decreased by $0.03 per share to $0.72 per share for the six months ended June 30, 2015 , compared to $0.75 for the six months ended June 30, 2014 . This decrease was primarily due to the weighted average effect of the 6,250,000 OP Units issued in connection with our acquisition of Springfield Town Center in March 2015.

Reconciliation of GAAP Net Income (Loss) to Non-GAAP Measures

The preceding discussion compares our unaudited Consolidated Statements of Operations results for different periods based on GAAP. Also, the non-GAAP measures of NOI and FFO have been discussed. We believe that NOI is helpful to management and investors as a measure of operating performance because it is an indicator of the return on property investment, and provides a method of comparing property performance over time. We believe that FFO is helpful to management and investors as a measure of operating performance because it excludes various items included in net income that do not relate to or are not indicative of operating performance, such as gains on sales of operating real estate and depreciation and amortization of real estate, among others. FFO is a commonly used measure of operating performance and profitability among REITs, and we use FFO and FFO per diluted share and OP Unit as supplemental non-GAAP measures to compare our performance for different periods to that of our industry peers.

The following information is provided to reconcile NOI and FFO, which are non-GAAP measures, to net loss, a GAAP measure:
 
Three Months Ended June 30, 2015
(in thousands of dollars)
Consolidated
 
Share of
Unconsolidated
Partnerships
 
Total
Real estate revenue
$
100,882

 
$
12,093

 
$
112,975

Property operating expenses
(42,014
)
 
(4,470
)
 
(46,484
)
     Net operating income (NOI)
58,868

 
7,623

 
66,491

General and administrative expenses
(9,126
)
 
—

 
(9,126
)
Other income
811

 
—

 
811

Acquisition costs and other expenses
(817
)
 
(14
)
 
(831
)
Interest expense, net
(21,126
)
 
(2,566
)
 
(23,692
)
Depreciation of non real estate assets
(380
)
 
—

 
(380
)
Preferred share dividends
(3,962
)
 
—

 
(3,962
)
     Funds from operations (FFO)
24,268

 
5,043

 
29,311

Depreciation of real estate assets
(36,261
)
 
(3,011
)
 
(39,272
)
Equity in income of partnerships
2,032

 
(2,032
)
 
—

Impairment of assets
(28,667
)
 
—

 
(28,667
)
Preferred share dividends
3,962

 
—

 
3,962

     Net loss
$
(34,666
)
 
$
—

 
$
(34,666
)
 


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Three Months Ended June 30, 2014
(in thousands of dollars)
Consolidated
 
Share of
Unconsolidated
Partnerships
 
Total
Real estate revenue
$
106,145

 
$
10,087

 
$
116,232

Property operating expenses
(44,364
)
 
(2,861
)
 
(47,225
)
     Net operating income (NOI)
61,781

 
7,226

 
69,007

General and administrative expenses
(8,774
)
 
—

 
(8,774
)
Provision for employee separation expense
(4,877
)
 
—

 
(4,877
)
Other income
680

 
—

 
680

Acquisition costs and other expenses
(960
)
 
—

 
(960
)
Interest expense, net
(21,550
)
 
(2,718
)
 
(24,268
)
Depreciation of non real estate assets
(369
)
 
—

 
(369
)
Preferred share dividends
(3,962
)
 
—

 
(3,962
)
     Funds from operations (FFO)
21,969

 
4,508

 
26,477

Depreciation of real estate assets
(36,766
)
 
(1,724
)
 
(38,490
)
Equity in income of partnerships
2,784

 
(2,784
)
 
—

Impairment of assets
(16,098
)
 
—

 
(16,098
)
Gain on sale of interest in real estate
99

 
—

 
99

Preferred share dividends
3,962

 
—

 
3,962

     Net loss
$
(24,050
)
 
$
—

 
$
(24,050
)

 
Six Months Ended June 30, 2015
(in thousands of dollars)
Consolidated
 
Share of
Unconsolidated
Partnerships
 
Total
Real estate revenue
$
199,666

 
$
25,256

 
$
224,922

Property operating expenses
(85,165
)
 
(9,672
)
 
(94,837
)
     Net operating income (NOI)
114,501

 
15,584

 
130,085

General and administrative expenses
(18,070
)
 
—

 
(18,070
)
Other income
2,084

 
—

 
2,084

Acquisition costs and other expenses
(5,269
)
 
(41
)
 
(5,310
)
Interest expense, net
(41,271
)
 
(5,206
)
 
(46,477
)
Depreciation of non real estate assets
(758
)
 
—

 
(758
)
Gain on sale of interest in non operating real estate
43

 
—

 
43

Preferred share dividends
(7,924
)
 
—

 
(7,924
)
     Funds from operations (FFO)
43,336

 
10,337

 
53,673

Depreciation of real estate assets
(69,072
)
 
(6,223
)
 
(75,295
)
Equity in income of partnerships
4,114

 
(4,114
)
 
—

Impairment of assets
(34,907
)
 
—

 
(34,907
)
Preferred share dividends
7,924

 
—

 
7,924

     Net loss
$
(48,605
)
 
$
—

 
$
(48,605
)


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Table of Contents

 
Six Months Ended June 30, 2014
(in thousands of dollars)
Consolidated
 
Share of
Unconsolidated
Partnerships
 
Total
Real estate revenue
$
214,754

 
$
20,596

 
$
235,350

Property operating expenses
(96,081
)
 
(6,396
)
 
(102,477
)
     Net operating income (NOI)
118,673

 
14,200

 
132,873

General and administrative expenses
(17,851
)
 
—

 
(17,851
)
Provision for employee separation expense
(4,877
)
 
—

 
(4,877
)
Other income
1,458

 
—

 
1,458

Acquisition costs and other expenses
(2,606
)
 
—

 
(2,606
)
Interest expense, net
(41,720
)
 
(5,448
)
 
(47,168
)
Depreciation of non real estate assets
(813
)
 
—

 
(813
)
Preferred share dividends
(7,924
)
 
—

 
(7,924
)
     Funds from operations (FFO)
44,340

 
8,752

 
53,092

Depreciation of real estate assets
(72,557
)
 
(3,566
)
 
(76,123
)
Equity in income of partnerships
5,186

 
(5,186
)
 
—

Impairment of assets
(17,398
)
 
—

 
(17,398
)
Gain on sale of interest in real estate
99

 
—

 
99

Preferred share dividends
7,924

 
—

 
7,924

     Net loss
$
(32,406
)
 
$
—

 
$
(32,406
)





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LIQUIDITY AND CAPITAL RESOURCES

This “Liquidity and Capital Resources” section contains certain “forward-looking statements” that relate to expectations and projections that are not historical facts. These forward-looking statements reflect our current views about our future liquidity and capital resources, and are subject to risks and uncertainties that might cause our actual liquidity and capital resources to differ materially from the forward-looking statements. Additional factors that might affect our liquidity and capital resources include those discussed herein and in the section entitled “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2014 filed with the Securities and Exchange Commission. We do not intend to update or revise any forward-looking statements about our liquidity and capital resources to reflect new information, future events or otherwise.

Capital Resources

We expect to meet our short-term liquidity requirements, including distributions to common and preferred shareholders, recurring capital expenditures, tenant improvements and leasing commissions, but excluding acquisitions and development and redevelopment projects, generally through our available working capital and net cash provided by operations, subject to the terms and conditions of our 2013 Revolving Facility and our 2014 Term Loans and 2015 Term Loan (collectively, the “Credit Agreements”). We believe that our net cash provided by operations will be sufficient to allow us to make any distributions necessary to enable us to continue to qualify as a REIT under the Internal Revenue Code of 1986, as amended. The aggregate distributions made to preferred shareholders, common shareholders and OP Unit holders for the six months ended June 30, 2015 were $39.2 million , based on distributions of $1.0312 per Series A Preferred Share, $0.9218 per Series B Preferred Share and $0.42 per common share and OP Unit. The following are some of the factors that could affect our cash flows and require the funding of future cash distributions, recurring capital expenditures, tenant improvements or leasing commissions with sources other than operating cash flows:

•
adverse changes or prolonged downturns in general, local or retail industry economic, financial, credit or capital market or competitive conditions, leading to a reduction in real estate revenue or cash flows or an increase in expenses;
•
deterioration in our tenants’ business operations and financial stability, including anchor or non anchor tenant bankruptcies, leasing delays or terminations, or lower sales, causing deferrals or declines in rent, percentage rent and cash flows;
•
inability to achieve targets for, or decreases in, property occupancy and rental rates, resulting in lower or delayed real estate revenue and operating income;
•
increases in operating costs, including increases that cannot be passed on to tenants, resulting in reduced operating income and cash flows; and
•
increases in interest rates resulting in higher borrowing costs.

We expect to meet certain of our longer-term requirements, such as obligations to fund redevelopment and development projects and certain capital requirements (including scheduled debt maturities), future property and portfolio acquisitions, renovations, expansions and other non-recurring capital improvements, through a variety of capital sources, subject to the terms and conditions of our Credit Agreements.
In December 2014, our universal shelf registration statement was filed with the SEC and became effective. We may use the availability under our shelf registration statement to offer and sell common shares of beneficial interest, preferred shares and various types of debt securities, among other types of securities, to the public.


Credit Agreements

We have entered into four credit agreements (collectively, the “Credit Agreements”), as further discussed and defined below: (1) the 2013 Revolving Facility, (2) the 2014 7-Year Term Loan , (3) the 2014 5-Year Term Loan, and (4) the 2015 5-Year Term Loan.

See note 4 in the notes to our unaudited consolidated financial statements for a description of the identical covenants and common provisions contained in the Credit Agreements.

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Table of Contents


2013 Revolving Facility, as amended

In April 2013, PREIT, PREIT Associates, and PRI (collectively, the “Borrower” or “we”) entered into a credit agreement (as amended, the “2013 Revolving Facility”) with Wells Fargo Bank, National Association, and the other financial institutions signatory thereto, for a $400.0 million senior unsecured revolving credit facility. In December 2013, we amended the 2013 Revolving Facility to make certain terms of the 2013 Revolving Facility consistent with the terms of the 2014 Term Loans (discussed below). In June 2015, we also amended the 2013 Revolving Facility to lower the interest rates in the applicable pricing grid, to modify one covenant and to extend the Termination Date to June 26, 2018. All capitalized terms used and not otherwise defined herein have the meanings ascribed to such terms in the 2013 Revolving Facility.

As of June 30, 2015 , $120.0 million was outstanding under our 2013 Revolving Facility, $7.9 million was pledged as collateral for letters of credit and the unused portion that was available to us was $272.1 million . Currently, $100.0 million is outstanding under our 2013 Revolving Facility, $7.9 million is pledged for a letter of credit and the unused portion that is available to us is $292.1 million .

Pursuant to the June 2015 amendment, the initial maturity of the 2013 Revolving Facility is now June 26, 2018 , and the Borrower has two options for one-year extensions of the initial maturity date, subject to certain conditions and to the payment of extension fees of 0.15% and 0.20% of the Facility Amount for the first and second options, respectively.

Subject to the terms of the Credit Agreements, the Borrower has the option to increase the maximum amount available under the 2013 Revolving Facility, through an accordion option, from $400.0 million to as much as $600.0 million , in increments of $5.0 million (with a minimum increase of $25.0 million ), based on Wells Fargo Bank’s ability to obtain increases in Revolving Commitments from the current lenders or Revolving Commitments from new lenders. No option to increase the maximum amount available under the 2013 Revolving Facility has been exercised by the Borrower.

After the June 2015 amendment, amounts borrowed under the 2013 Revolving Facility bear interest at a rate between 1.20% and 1.55% per annum, depending on PREIT’s leverage at the end of each quarter, in excess of LIBOR, as set forth in the table below. The rate that will be in effect following the reporting of our June 30, 2015 covenant compliance information will be 1.30% per annum in excess of LIBOR. In determining PREIT’s leverage (the ratio of Total Liabilities to Gross Asset Value), the capitalization rate used to calculate Gross Asset Value is (a) 6.50% for each Property having an average sales per square foot of more than $500 for the most recent period of 12 consecutive months, and (b) 7.50% for any other Property.

Level
Ratio of Total Liabilities to Gross Asset Value
Applicable Margin
1
Less than 0.450 to 1.00
1.20
%
2
Equal to or greater than 0.450 to 1.00 but less than 0.500 to 1.00
1.25
%
3
Equal to or greater than 0.500 to 1.00 but less than 0.550 to 1.00
1.30
%
4
Equal to or greater than 0.550 to 1.00
1.55
%

The 2013 Revolving Facility is subject to a facility fee which is currently 0.25% , depending on leverage, and is recorded in interest expense in the consolidated statements of operations. In the event that we seek and obtain an investment grade credit rating, alternative interest rates and facility fees would apply.

The Borrower may prepay the 2013 Revolving Facility at any time without premium or penalty, subject to reimbursement obligations for the lenders’ breakage costs for LIBOR borrowings. The Borrower must repay the entire principal amount outstanding under the 2013 Revolving Facility at the end of its term, as the term may be extended.

Term Loans

2015 5-Year Term Loan

In June 2015, the Borrower entered into a five-year term loan agreement (the “2015 5-Year Term Loan”) with Wells Fargo Bank, National Association, PNC Bank, National Association and the other financial institutions signatory thereto, for a $150.0 million senior unsecured five year term loan facility. The maturity date of the 2015 5-Year Term Loan is June 26, 2020. At closing, the Borrower borrowed the entire $150.0 million under the 2015 5-Year Term Loan and used the proceeds to repay $150.0 million of the then outstanding balance under the Borrower’s 2013 Revolving Facility.


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Table of Contents

Amounts borrowed under the 2015 5-Year Term Loan bear interest at the rate specified below per annum, depending on PREIT’s leverage, in excess of LIBOR, unless and until the Borrower receives an investment grade credit rating and provides notice to the Administrative Agent (the “Rating Date”), after which alternative rates would apply. In determining PREIT’s leverage (the ratio of Total Liabilities to Gross Asset Value), the capitalization rate used to calculate Gross Asset Value is 6.50% for each Property having an average sales per square foot of more than $500 for the most recent period of 12 consecutive months and (b) 7.50% for any other Property.
Level
Ratio of Total Liabilities to Gross Asset Value
Applicable Margin
1
Less than 0.450 to 1.00
1.35
%
2
Equal to or greater than 0.450 to 1.00 but less than 0.500 to 1.00
1.45
%
3
Equal to or greater than 0.500 to 1.00 but less than 0.550 to 1.00
1.60
%
4
Equal to or greater than 0.550 to 1.00
1.90
%

The rate that will be in effect following the reporting of our June 30, 2015 covenant compliance information will be 1.60% per annum in excess of LIBOR.

The 2015 5-Year Term Loan also contains an additional covenant that prior to the Rating Date, if any, PREIT may not permit the amount of the Gross Asset Value attributable to assets directly owned by PREIT, PREIT Associates, PRI and the guarantors to be less than 95% of Gross Asset Value excluding assets owned by Excluded Subsidiaries or Unconsolidated Affiliates.

The Borrower may prepay the 2015 5-Year Term Loan at any time without premium or penalty, subject to reimbursement obligations for the lenders’ breakage costs for LIBOR borrowings.

2014 Term Loans

In January 2014, the Borrower entered into two unsecured term loans in the aggregate amount of $250.0 million , comprised of:

(1) a 5 Year Term Loan Agreement (the “2014 5-Year Term Loan”) with Wells Fargo Bank, National Association, U.S. Bank National Association and the other financial institutions signatory thereto, for a $150.0 million senior unsecured five year term loan facility; and

(2) a 7 Year Term Loan Agreement (the “2014 7-Year Term Loan” and, together with the 2014 5-Year Term Loan, the “2014 Term Loans”) with Wells Fargo Bank, National Association, Capital One, National Association and the other financial institutions signatory thereto, for a $100.0 million senior unsecured seven-year term loan facility.

In June 2015, the Borrower entered into an amendment to each of the 2014 Term Loans. Under the amendment to each of the 2014 Term Loans, PREIT is required to maintain, on a consolidated basis, minimum Unencumbered Debt Yield of 11.0%, versus 12.0% previously, consistent with the amendment to the covenant in the 2013 Revolving Facility, and the provision of the 2015 5-Year Term Loan. The cross-default provisions in the 2014 Term Loans were also amended to add the new 2015 5-Year Term Loan.

Amounts borrowed under the 2014 Term Loans bear interest at the rate per annum specified in the chart below, depending on PREIT’s leverage at the end of each quarter, in excess of LIBOR. In determining PREIT’s leverage (the ratio of Total Liabilities to Gross Asset Value), the capitalization rate used to calculate Gross Asset Value is (a) 6.50% for each Property having an average sales per square foot of more than $500 for the most recent period of 12 consecutive months, and (b) 7.50% for any other Property.
Level


Ratio of Total Liabilities
 to Gross Asset Value
2014 7-Year Term Loan
Applicable Margin
2014 5-Year Term Loan
Applicable Margin
1
Less than 0.450 to 1.00
1.80%
1.35%
2
Equal to or greater than 0.450 to 1.00 but less than 0.500 to 1.00
1.95%
1.45%
3
Equal to or greater than 0.500 to 1.00 but less than 0.550 to 1.00
2.15%
1.60%
4
Equal to or greater than 0.550 to 1.00
2.35%
1.90%

The rate that will be in effect following the reporting of our June 30, 2015 covenant compliance information will be 2.15% and 1.60% for the 7-Year Term Loan and 5-Year Term Loan, respectively, per annum in excess of LIBOR.

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Table of Contents


If PREIT seeks and obtains an investment grade credit rating and so notifies the lenders under the respective 2014 Term Loans, alternative interest rates would apply.

Subject to the terms of the Credit Agreements, the Borrower has the option to increase the maximum amount available under the 2014 5-Year Term Loan, through an accordion option (subject to certain conditions), from $150.0 million to as much as $300.0 million , in increments of $5.0 million (with a minimum increase of $25.0 million ), based on Wells Fargo Bank’s ability to obtain increases in commitments from the current lenders or from new lenders.

Subject to the terms of the Credit Agreements, the Borrower has the option to increase the maximum amount available under the 2014 7-Year Term Loan, through an accordion option (subject to certain conditions), from $100.0 million to as much as $200.0 million , in increments of $5.0 million (with a minimum increase of $25.0 million ), based on Wells Fargo Bank’s ability to obtain increases in commitments from the current lenders or from new lenders.

The table set forth below presents the amounts outstanding, interest rate (inclusive of the LIBOR spread and excluding the impact of interest rate swap agreements on LIBOR-based debt) in effect and the maturity dates of the 2014 Term Loans and the 2015 Term Loan as of June 30, 2015 :
(in millions of dollars)
2014 7-Year Term Loan
 
2014 5-Year Term Loan
 
2014 5-Year Term Loan
 
Total facility
$
100.0

 
$
150.0

 
$
150.0

 
Amount outstanding
$
100.0

 
$
150.0

 
$
150.0

 
Interest rate
2.13
%
 
1.63
%
 
1.64
%
 
Maturity date
January 2021

 
January 2019

 
June 2020

 


Interest Rate Derivative Agreements

As of June 30, 2015 , we had entered into 16 interest rate swap agreements with a weighted average interest rate of 1.55% on a notional amount of $422.1 million maturing on various dates through January 2019 .

We entered into these interest rate swap agreements in order to hedge the interest payments associated with our issuances of variable interest rate long term debt. We have assessed the effectiveness of these interest rate swap agreements as hedges at inception and on a quarterly basis. As of June 30, 2015 , we considered these interest rate swap agreements to be highly effective as cash flow hedges. The interest rate swap agreements are net settled monthly.

Accumulated other comprehensive loss as of June 30, 2015 includes a net loss of $2.3 million relating to forward starting swaps that we cash settled in prior years that are being amortized over 10 year periods commencing on the closing dates of the debt instruments that are associated with these settled swaps.

In the six months ended June 30, 2015 , we recorded net loss on hedge ineffectiveness of $0.5 million . Following our July 2014 repayment of the $25.8 million mortgage loan secured by 801 Market Street, Philadelphia, Pennsylvania, we anticipated that we would not have sufficient 1-month LIBOR based interest payments to meet the entire swap notional amount related to two of our swaps, and we estimated that this condition would exist until approximately March 2015, when we planned to incur variable rate debt as part of the consideration for the acquisition of Springfield Town Center. These swaps, with an aggregate notional amount of $40.0 million , did not qualify for ongoing hedge accounting after July 2014 as a result of the unrealized forecasted transactions. We recognized mark-to-market interest expense on these two swaps of $0.5 million for the period from January 2015 to March 31, 2015, the date the Springfield Town Center acquisition closed and variable rate debt was issued. These swaps are scheduled to expire by their terms in January 2019.

As of June 30, 2015 , the fair value of derivatives in a net liability position, which excludes accrued interest but includes any adjustment for nonperformance risk related to these agreements, was $3.2 million . If we had breached any of the default provisions in these agreements as of June 30, 2015 , we might have been required to settle our obligations under the agreements at their termination value (including accrued interest) of $3.7 million . We had not breached any of these provisions as of June 30, 2015 .


39
Table of Contents

Mortgage Loan Activity

In June 2015, we entered into a $96.2 million mortgage loan secured by Patrick Henry Mall in Newport News, Virginia. The mortgage loan has a fixed interest rate of 4.35% and a 10 year term. Payments are of principal and interest based on a 30 year amortization schedule with a balloon payment due in July 2025. In connection with the repayment, we repaid the existing $83.8 million mortgage loan plus accrued interest and incurred a $0.8 million prepayment penalty. The balance of the proceeds were used for general corporate purposes.

In April 2015, we repaid a $55.6 million mortgage loan plus accrued interest secured by Magnolia Mall in Florence, South Carolina using $40.0 million from our 2013 Revolving Facility and $15.6 million from available working capital.

Mortgage Loans

As of June 30, 2015 , our mortgage loans, which are secured by 15 of our consolidated properties, are due in installments over various terms extending to July 2025 . Eleven of these mortgage loans bear interest at fixed interest rates that range from 3.90% to 5.95% and had a weighted average interest rate of 4.88% at June 30, 2015 . Four of our mortgage loans bear interest at variable rates and had a weighted average interest rate of 2.88% at June 30, 2015 . The weighted average interest rate of all consolidated mortgage loans was 4.62% at June 30, 2015 . Mortgage loans for properties owned by unconsolidated partnerships are accounted for in “Investments in partnerships, at equity” and “Distributions in excess of partnership investments” on the consolidated balance sheets and are not included in the table below.

The following table outlines the timing of principal payments related to our consolidated mortgage loans as of June 30, 2015 :
 
(in thousands of dollars)
Total
 
Remainder of 2015
 
2016-2017
 
2018-2019
 
Thereafter
Principal payments
$
114,474

 
$
10,507

 
$
28,410

 
$
28,020

 
$
47,537

Balloon payments
1,246,321

 
132,624

 
369,480

 
175,426

 
568,791

Total
$
1,360,795

 
$
143,131

 
$
397,890

 
$
203,446

 
$
616,328


Contractual Obligations

The following table presents our aggregate contractual obligations as of June 30, 2015 for the periods presented:
(in thousands of dollars)
Total
 
Remainder  of
2015
 
2016-2017
 
2018-2019
 
Thereafter
Mortgage loans
$
1,360,795

 
$
143,131

 
$
397,890

 
$
203,446

 
$
616,328

Term Loans
400,000

 
—

 
—

 
150,000

 
250,000

2013 Revolving Facility
120,000

 
—

 
—

 
120,000

 
—

Interest on indebtedness (1)
308,721

 
37,511

 
108,121

 
74,973

 
88,116

Operating leases
7,959

 
1,108

 
3,893

 
2,954

 
4

Ground leases
2,984

 
363

 
894

 
229

 
1,498

Development and redevelopment commitments (2)
14,323

 
14,323

 
—

 
—

 
—

Total
$
2,214,782

 
$
196,436

 
$
510,798

 
$
551,602

 
$
955,946

_________________________
(1) Includes payments expected to be made in connection with interest rate swaps and forward starting interest rate swap agreements.
(2) The timing of the payments of these amounts is uncertain. We expect that the majority of such payments will be made prior to December 31, 2015, but cannot provide any assurance that changed circumstances at these projects will not delay the settlement of these obligations.

Preferred Share Dividends

Annual dividends on our 4,600,000 8.25% Series A Preferred Shares ($25.00 liquidation preference) and our 3,450,000 7.375%

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Table of Contents

Series B Preferred Shares ($25.00 liquidation preference) are expected to be $9.5 million and $6.4 million, respectively.

CASH FLOWS

Net cash provided by operating activities totaled $62.9 million for the six months ended June 30, 2015 compared to $83.8 million for the six months ended June 30, 2014 . This decrease in cash from operating activities is primarily due to properties sold since January 1, 2014 and other working capital changes.

Cash flows used in investing activities were $367.9 million for the six months ended June 30, 2015 compared to cash flows used in investing activities of $39.3 million for the six months ended June 30, 2014 . Cash flows used in investing activities for the six months ended June 30, 2015 included $320.0 million used in acquiring Springfield Town Center in Springfield, Virginia, investment in construction in progress of $14.0 million and real estate improvements of $16.9 million , primarily related to ongoing improvements at our properties. Investing activities for the first six months of 2014 included $20.0 million used in acquiring street retail properties in Philadelphia, Pennsylvania, investment in construction in progress of $17.5 million and real estate improvements of $19.5 million , primarily related to ongoing improvements at our properties.

Cash flows provided by financing activities were $295.9 million for the six months ended June 30, 2015 compared to cash flows used in financing activities of $47.9 million for the six months ended June 30, 2014 . Cash flows provided by financing activities for the first six months of 2015 included $270.0 million of 2013 Revolving Facility borrowings, $120.0 million of Term Loan borrowings, a $96.2 million mortgage loan secured by Patrick Henry Mall and $5.8 million of additional borrowing from the mortgage loan secured by Francis Scott Key Mall, offset by cash flows used by financing activities of $83.8 million used to repay the prior mortgage loan secured by Patrick Henry Mall, $55.3 million used to repay the mortgage loan secured by Magnolia Mall, dividends and distributions of $39.2 million and principal installments on mortgage loans of $10.1 million . Financing activities also included a non-cash transaction consisting of a $150.0 million borrowing on our 2015 5-Year Term
Loan, which was used to pay down amounts then outstanding on our 2013 Revolving Facility. Cash flows used in financing activities for the six months ended June 30, 2014 included $130.0 million of net repayments of the 2013 Revolving Facility, dividends and distributions of $36.2 million , and principal installment payments of $7.8 million , offset by $130.0 million in net borrowings from the Term Loans.

ENVIRONMENTAL

We are aware of certain environmental matters at some of our properties. We have, in the past, performed remediation of such environmental matters, and we are not aware of any significant remaining potential liability relating to these environmental matters or of any obligation to satisfy requirements for further remediation. We may be required in the future to perform testing relating to these matters. We have insurance coverage for certain environmental claims up to $25.0 million per occurrence and up to $25.0 million in the aggregate. See our Annual Report on Form 10-K for the year ended December 31, 2014, in the section entitled “Item 1A. Risk Factors —We might incur costs to comply with environmental laws, which could have an adverse effect on our results of operations.”


COMPETITION AND TENANT CREDIT RISK

Competition in the retail real estate market is intense. We compete with other public and private retail real estate companies, including companies that own or manage malls, power centers, strip centers, lifestyle centers, factory outlet centers, theme/festival centers and community centers, as well as other commercial real estate developers and real estate owners, particularly those with properties near our properties, on the basis of several factors, including location and rent charged. We compete with these companies to attract customers to our properties, as well as to attract anchor and in-line stores and other tenants. We also compete to acquire land for new site development or to acquire parcels or properties to add to our existing properties. Our malls and our other retail properties face competition from similar retail centers, including more recently developed or renovated centers that are near our retail properties. We also face competition from a variety of different retail formats, including internet retailers, discount or value retailers, home shopping networks, mail order operators, catalogs, and telemarketers. Our tenants face competition from companies at the same and other properties and from other retail channels or formats as well, including internet retailers. This competition could have a material adverse effect on our ability to lease space and on the amount of rent and expense reimbursements that we receive.


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Table of Contents

The existence or development of competing retail properties and the related increased competition for tenants might, subject to the terms and conditions of our Credit Agreements, lead us to make capital improvements to properties that we would have deferred or would not have otherwise planned to make and might affect occupancy and net operating income of such properties.
Any such capital improvements, undertaken individually or collectively, would involve costs and expenses that could adversely affect our results of operations.

We compete with many other entities engaged in real estate investment activities for acquisitions of malls, other retail properties and prime development sites or sites adjacent to our properties, including institutional pension funds, other REITs and other owner-operators of retail properties. When we seek to make acquisitions, competitors might drive up the price we must pay for properties, parcels, other assets or other companies or might themselves succeed in acquiring those properties, parcels, assets or companies. In addition, our potential acquisition targets might find our competitors to be more attractive suitors if they have greater resources, are willing to pay more, or have a more compatible operating philosophy. In particular, larger REITs might enjoy significant competitive advantages that result from, among other things, a lower cost of capital, a better ability to raise capital, a better ability to finance an acquisition, better cash flow and enhanced operating efficiencies. We might not succeed in acquiring retail properties or development sites that we seek, or, if we pay a higher price for a property or site, or generate lower cash flow from an acquired property or site than we expect, our investment returns will be reduced, which will adversely affect the value of our securities.

We receive a substantial portion of our operating income as rent under leases with tenants. At any time, any tenant having space in one or more of our properties could experience a downturn in its business that might weaken its financial condition. There are also a number of tenants that are based outside the U.S., and these tenants are affected by economic conditions in the country where their headquarters are located and internationally. Any of such tenants might enter into or renew leases with relatively shorter terms. Such tenants might also defer or fail to make rental payments when due, delay or defer lease commencement, voluntarily vacate the premises or declare bankruptcy, which could result in the termination of the tenant’s lease, or preclude the collection of rent in connection with the space for a period of time, and could result in material losses to us and harm to our results of operations. Also, it might take time to terminate leases of underperforming or nonperforming tenants, and we might incur costs to remove such tenants. Some of our tenants occupy stores at multiple locations in our portfolio, and so the effect of any bankruptcy or store closing of those tenants might be more significant to us than the bankruptcy or store closings of other tenants. In addition, under many of our leases, our tenants pay rent based, in whole or in part, on a percentage of their sales. Accordingly, declines in these tenants’ sales directly affect our results of operations. Also, if tenants are unable to comply with the terms of our leases, or otherwise seek changes to the terms, including changes to the amount of rent, we might modify lease terms in ways that are less favorable to us.

SEASONALITY

There is seasonality in the retail real estate industry. Retail property leases often provide for the payment of all or a portion of rent based on a percentage of a tenant’s sales revenue, or sales revenue over certain levels. Income from such rent is recorded only after the minimum sales levels have been met. The sales levels are often met in the fourth quarter, during the December holiday season. Also, many new and temporary leases are entered into later in the year in anticipation of the holiday season and a higher number of tenants vacate their space early in the year. As a result, our occupancy and cash flows are generally higher in the fourth quarter and lower in the first and second quarters. Our concentration in the retail sector increases our exposure to seasonality and has resulted, and is expected to continue to result, in a greater percentage of our cash flows being received in the fourth quarter.

INFLATION

Inflation can have many effects on financial performance. Retail property leases often provide for the payment of rent based on a percentage of sales, which might increase with inflation. Leases may also provide for tenants to bear all or a portion of operating expenses, which might reduce the impact of such increases on us. However, rent increases might not keep up with inflation, or if we recover a smaller proportion of property operating expenses, we might bear more costs if such expenses increase because of inflation.


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FORWARD LOOKING STATEMENTS

This Quarterly Report on Form 10-Q for the quarter ended June 30, 2015 , together with other statements and information publicly disseminated by us, contain certain “forward-looking statements” within the meaning of the federal securities laws. Forward-looking statements relate to expectations, beliefs, projections, future plans, strategies, anticipated events, trends and other matters that are not historical facts. These forward-looking statements reflect our current views about future events, achievements or results and are subject to risks, uncertainties and changes in circumstances that might cause future events, achievements or results to differ materially from those expressed or implied by the forward-looking statements. In particular, our business might be materially and adversely affected by uncertainties affecting real estate businesses generally as well as the following, among other factors:

•
our substantial debt and stated value of preferred shares and our high leverage ratio;
•
constraining leverage, unencumbered debt yield, interest and tangible net worth covenants under our Credit Agreements;
•
potential losses on impairment of certain long-lived assets, such as real estate, or of intangible assets, such as goodwill, including such losses that we might be required to record in connection with any dispositions of assets;
•
changes in the retail industry, including consolidation and store closings, particularly among anchor tenants;
•
our ability to sell properties that we seek to dispose of or our ability to obtain estimated sale prices;
•
the effects of online shopping and other uses of technology on our retail tenants;
•
risks relating to development and redevelopment activities;
•
current economic conditions and the state of employment growth and consumer confidence and spending, and the corresponding effects on tenant business performance, prospects, solvency and leasing decisions and on our cash flows, and the value and potential impairment of our properties;
•
our ability to refinance our existing indebtedness when it matures, on favorable terms or at all;
•
our ability to raise capital, including through the issuance of equity or equity-related securities if market conditions are favorable, through joint ventures or other partnerships, through sales of properties or interests in properties, or through other actions;
•
our ability to identify and execute on suitable acquisition opportunities and to integrate acquired properties into our
portfolio;
•
our partnerships and joint ventures with third parties to acquire or develop properties;
•
our short and long-term liquidity position;
•
general economic, financial and political conditions, including credit and capital market conditions, changes in interest rates or unemployment;
•
our ability to maintain and increase property occupancy, sales and rental rates, in light of the relatively high number of leases that have expired or are expiring in the next two years;
•
acts of violence at malls, including our properties, or at other similar spaces, and the potential effect on traffic and
sales;
•
changes to our corporate management team and any resulting modifications to our business strategies;
•
increases in operating costs that cannot be passed on to tenants;
•
concentration of our properties in the Mid-Atlantic region;
•
changes in local market conditions, such as the supply of or demand for retail space, or other competitive factors; and
•
potential dilution from any capital raising transactions or other equity issuances.


Additional factors that might cause future events, achievements or results to differ materially from those expressed or implied by our forward-looking statements include those discussed herein and in our Annual Report on Form 10-K for the year ended December 31, 2014 in the section entitled “Item 1A. Risk Factors.” We do not intend to update or revise any forward-looking statements to reflect new information, future events or otherwise.


43
Table of Contents

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

The analysis below presents the sensitivity of the market value of our financial instruments to selected changes in market interest rates. As of June 30, 2015 , our consolidated debt portfolio consisted primarily of $1,360.8 million of fixed and variable rate mortgage loans, $120.0 million borrowed under our 2013 Revolving Facility which bore interest at a rate of 1.43% , $150.0 million borrowed under our 2014 5-Year Term Loan which bore interest at a rate of 1.63% , $150.0 million borrowed under our 2015 5-Year Term Loan which bore interest at a rate of 1.64% and $100.0 million borrowed under our 2014 7-Year Term Loan which bore interest at a rate of 2.13% .

Our mortgage loans, which are secured by 15 of our consolidated properties, are due in installments over various terms extending to July 2025 . Eleven of these mortgage loans bear interest at fixed interest rates that range from 3.90% to 5.95% and had a weighted average interest rate of 4.88% at June 30, 2015 . Four of our mortgage loans bear interest at variable rates and had a weighted average interest rate of 2.88% at June 30, 2015 . The weighted average interest rate of all consolidated mortgage loans was 4.62% at June 30, 2015 . Mortgage loans for properties owned by unconsolidated partnerships are accounted for in “Investments in partnerships, at equity” and “Distributions in excess of partnership investments” on the consolidated balance sheets and are not included in the table below.

Our interest rate risk is monitored using a variety of techniques. The table below presents the principal amounts of the expected annual maturities due in the respective years and the weighted average interest rates for the principal payments in the specified periods:
 
 
Fixed Rate Debt
 
Variable Rate Debt
(in thousands of dollars)
For the Year Ending December 31,
Principal
Payments
 
Weighted
Average
Interest Rate  (1)
 
Principal
Payments
 
Weighted
Average
Interest Rate  (1)
2015
$
142,665

 
5.59
%
 
$
466

 
2.93
%
2016
232,888

 
5.36
%
 
960

 
2.93
%
2017
163,040

 
5.34
%
 
1,002

 
2.93
%
2018
13,622

 
4.34
%
 
267,543

(2)  
2.17
%
2019 and thereafter
630,559

 
4.35
%
 
428,050

(3)  
1.88
%
_________________________
(1)  
Based on the weighted average interest rates in effect as of June 30, 2015 .
(2)  
Includes 2013 Revolving Facility borrowings of $ 120.0 million with an interest rate of 1.43% as of June 30, 2015 .
(3)  
Includes Term Loan borrowings of $ 400.0 million with a weighted average interest rate of 1.76% as of June 30, 2015 .

As of June 30, 2015 , we had $698.0 million of variable rate debt. Also, as of June 30, 2015 , we had entered into 16 interest rate swap agreements with an aggregate weighted average interest rate of 1.55% on a notional amount of $422.1 million maturing on various dates through January 2019. We entered into these interest rate swap agreements in order to hedge the interest payments associated with our issuances of variable interest rate long-term debt.

Changes in market interest rates have different effects on the fixed and variable rate portions of our debt portfolio. A change in market interest rates applicable to the fixed portion of the debt portfolio affects the fair value, but it has no effect on interest incurred or cash flows. A change in market interest rates applicable to the variable portion of the debt portfolio affects the interest incurred and cash flows, but does not affect the fair value. The following sensitivity analysis related to our debt portfolio, which includes the effects of our interest rate swap agreements, assumes an immediate 100 basis point change in interest rates from their actual June 30, 2015 levels, with all other variables held constant.

A 100 basis point increase in market interest rates would have resulted in a decrease in our net financial instrument position of $55.7 million at June 30, 2015 . A 100 basis point decrease in market interest rates would have resulted in an increase in our net financial instrument position of $58.1 million at June 30, 2015 . Based on the variable rate debt included in our debt
portfolio at March 31, 2015, a 100 basis point increase in interest rates would have resulted in an additional $2.8 million million in interest expense annually. A 100 basis point decrease would have reduced interest incurred by $2.8 million annually.

To manage interest rate risk and limit overall interest cost, we may employ interest rate swaps, options, forwards, caps and floors, or a combination thereof, depending on the underlying exposure. Interest rate differentials that arise under swap contracts are recognized in interest expense over the life of the contracts. If interest rates rise, the resulting cost of funds is expected to be lower than that which would have been available if debt with matching characteristics was issued

44
Table of Contents

directly. Conversely, if interest rates fall, the resulting costs would be expected to be, and in some cases have been, higher. We may also employ forwards or purchased options to hedge qualifying anticipated transactions. Gains and losses are deferred and recognized in net income in the same period that the underlying transaction occurs, expires or is otherwise terminated. See note 7 of the notes to our unaudited consolidated financial statements.

Because the information presented above includes only those exposures that existed as of June 30, 2015 , it does not consider changes, exposures or positions which have arisen or could arise after that date. The information presented herein has limited predictive value. As a result, the ultimate realized gain or loss or expense with respect to interest rate fluctuations will depend on the exposures that arise during the period, our hedging strategies at the time and interest rates.

ITEM 4. CONTROLS AND PROCEDURES.

We are committed to providing accurate and timely disclosure in satisfaction of our SEC reporting obligations. In 2002, we established a Disclosure Committee to formalize our disclosure controls and procedures. Our Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2015 , and have concluded as follows:

•
Our disclosure controls and procedures are designed to ensure that the information that we are required to disclose in our reports under the Securities Exchange Act of 1934 (the “Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.
•
Our disclosure controls and procedures are effective to ensure that information that we are required to disclose in our Exchange Act reports is accumulated and communicated to management, including our principal executive and principal financial officers, as appropriate, to allow timely decisions regarding required disclosure.

There was no change in our internal controls over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.


45
Table of Contents

PART II—OTHER INFORMATION
 
ITEM 1. LEGAL PROCEEDINGS.

In the normal course of business, we have become and might in the future become involved in legal actions relating to the ownership and operation of our properties and the properties that we manage for third parties. In management’s opinion, the resolution of any such pending legal actions is not expected to have a material adverse effect on our consolidated financial position or results of operations.

ITEM 1A. RISK FACTORS.

In addition to the other information set forth in this report, you should carefully consider the risks that could materially affect our business, financial condition or results of operations, which are discussed under the caption “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2014.



ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

Issuer Purchases of Equity Securities

The following table shows the total number of shares that we acquired in the three months ended June 30, 2015 and the average price paid per share.
 
Period
Total Number
of Shares
Purchased
 
Average Price
Paid  per
Share
 
Total Number of
Shares  Purchased
as part of Publicly
Announced Plans
or Programs
 
Maximum Number
(or  Approximate Dollar
Value) of Shares that
May Yet Be Purchased
Under the Plans or
Programs
April 1—April 30, 2015
—

 
$
—

 
—

 
$
—

May 1—May 31, 2015
—

 
—

 
—

 
—

June 1—June 31, 2015
16,193

 
22.37

 
—

 
—

Total
16,193

 
$
22.37

 
—

 
$
—




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Table of Contents

ITEM 6.   EXHIBITS.

 
 
2.1*
Purchase and Sale Agreement dated as of April 29, 2015 by and between PREIT Associates, L.P. and PR Springfield Associates, L.P. and Rubin Retail Acquisition, L.P.
 
 
10.1
Second Amendment to Credit Agreement dated as of June 26, 2015 by and among PREIT Associates, L.P., PREIT-RUBIN, Inc., PREIT and the financial institutions party thereto.
 
 
10.2
Third Amendment to Five-Year Term Loan Agreement dated as of June 26, 2015 by and among PREIT Associates, L.P., PREIT-RUBIN, Inc., PREIT and the financial institutions party thereto.
 
 
10.3
Third Amendment to Seven-Year Term Loan Agreement dated as of June 26, 2015 by and among PREIT Associates, L.P., PREIT-RUBIN, Inc., PREIT and the financial institutions party thereto.
 
 
10.4
Five Year Term Loan Agreement dated as of June 26, 2015 by and among PREIT Associates, L.P., PREIT-RUBIN, Inc., PREIT and the financial institutions party thereto.
 
 
10.5
Five Year Term Loan Guaranty dated as of June 26, 2015 in favor of Wells Fargo Bank, National Association, executed by certain direct and indirect subsidiaries of PREIT Associates, L.P.
 
 
31.1
Certification pursuant to Exchange Act Rules 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
 
 
31.2
Certification pursuant to Exchange Act Rules 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
 
 
32.1
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 
32.2
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 
101
Pursuant to Rule 405 of Regulation S-T, the following financial information from the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2015 is formatted in XBRL interactive data files: (i) Consolidated Statements of Operations for the three and six months ended June 30, 2015 and 2014; (ii) Consolidated Statements of Comprehensive Income (Loss) for the three and six months ended June 30, 2015 and 2014; (iii) Consolidated Balance Sheets as of June 30, 2015 and December 31, 2014; (iv) Consolidated Statements of Equity for the six months ended June 30, 2015; (v) Consolidated Statements of Cash Flows for the three months ended June 30, 2015 and 2014; and (vi) Notes to Unaudited Consolidated Financial Statements.

______________________

*
The Company agrees to furnish supplementally a copy of any omitted schedule and exhibit to the Securities and Exchange Commission upon request.


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Table of Contents

SIGNATURE OF REGISTRANT

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
 
 
PENNSYLVANIA REAL ESTATE INVESTMENT TRUST
Date:
August 3, 2015
 
 
 
 
By:
/s/ Joseph F. Coradino
 
 
 
Joseph F. Coradino
 
 
 
Chief Executive Officer
 
 
 
 
 
 
By:
/s/ Robert F. McCadden
 
 
 
Robert F. McCadden
 
 
 
Executive Vice President and Chief Financial Officer
 
 
 
 
 
 
By:
/s/ Jonathen Bell
 
 
 
Jonathen Bell
 
 
 
Senior Vice President and Chief Accounting Officer
 
 
 
(Principal Accounting Officer)


48
Table of Contents

Exhibit Index
 
 
 
2.1*+
Purchase and Sale Agreement dated as of April 29, 2015 by and between PREIT Associates, L.P. and PR Springfield Associates, L.P. and Rubin Retail Acquisition, L.P.
 
 
10.1*
Second Amendment to Credit Agreement dated as of June 26, 2015 by and among PREIT Associates, L.P., PREIT-RUBIN, Inc., PREIT and the financial institutions party thereto.
 
 
10.2*
Third Amendment to Five-Year Term Loan Agreement dated as of June 26, 2015 by and among PREIT Associates, L.P., PREIT-RUBIN, Inc., PREIT and the financial institutions party thereto.
 
 
10.3*
Third Amendment to Seven-Year Term Loan Agreement dated as of June 26, 2015 by and among PREIT Associates, L.P., PREIT-RUBIN, Inc., PREIT and the financial institutions party thereto.
 
 
10.4*
Five Year Term Loan Agreement dated as of June 26, 2015 by and among PREIT Associates, L.P., PREIT-RUBIN, Inc., PREIT and the financial institutions party thereto.
 
 
10.5*
Five Year Term Loan Guaranty dated as of June 26, 2015 in favor of Wells Fargo Bank, National Association, executed by certain direct and indirect subsidiaries of PREIT Associates, L.P.
 
 
31.1*
Certification pursuant to Exchange Act Rules 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
 
 
31.2*
Certification pursuant to Exchange Act Rules 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
 
 
32.1**
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 
32.2**
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 
101*
Pursuant to Rule 405 of Regulation S-T, the following financial information from the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2015 is formatted in XBRL interactive data files: (i) Consolidated Statements of Operations for the three and six months ended June 30, 2015 and 2014; (ii) Consolidated Statements of Comprehensive Income (Loss) for the three and six months ended June 30, 2015 and 2014; (iii) Consolidated Balance Sheets as of June 30, 2015 and December 31, 2014; (iv) Consolidated Statements of Equity for the six months ended June 30, 2015; (v) Consolidated Statements of Cash Flows for the three months ended June 30, 2015 and 2014; and (vi) Notes to Unaudited Consolidated Financial Statements.

_______________________
*
filed herewith
**
furnished herewith
+
The Company agrees to furnish supplementally a copy of any omitted schedule and exhibit to the Securities and Exchange Commission upon request.


49
Exhibit 2.1







PURCHASE AND SALE AGREEMENT

between

PREIT ASSOCIATES, L.P. AND PR SPRINGFIELD ASSOCIATES L.P.

Seller

and

RUBIN SIX PENN CENTER LLC

Purchaser



Dated: June 29, 2015




1
Exhibit 2.1

INDEX TO PURCHASE AND SALE AGREEMENT


 
 
 
Page
1
Definitions
2
2
Subject of Sale.
7
3
Purchase Price
7
4
Deposit Provisions.
7
5
“As-Is”. “Where-Is”.
9
6
Representations
10
 
6.1
PREIT’s Representations
10
 
6.2
PR Springfield’s Representations
10
 
6.3
Seller’s Representations
11
 
6.4
Knowledge
13
 
6.5
Survival
13
 
6.6
Purchaser’s Representations
13
7
Ongoing Operations.
15
 
7.1
Leasing Practice
15
 
7.2
Personal Property and Equipment
16
 
7.3
Employees
16
 
7.4
Development Rights
16
 
7.5
Operation and Maintenance
16
8
Taxes
16
9
Indemnification
17
 
9.1
Indemnification By Sellers
17
 
9.2
Indemnification by Purchaser
18
 
9.3
Procedures
18
 
9.4
Survival
18
10
Title.
 
18
11
Financing Contingency
19
12
Conditions Precedent.
20
13
Closing.
21
 
13.1
Closing Date and Location
21
 
13.2
Closing Expenses
21
 
13.3
Closing Deliveries
22
 
13.4
24
14
Default
27
 
14.1
Purchaser’s Default
27
 
14.2
Seller’s Default
27

2
Exhibit 2.1

15
Risk of Loss
27
 
15.1
Condemnation.
27
 
15.2
Destruction or Damage
28
16
Purchaser’s Review Period.
28
17
Miscellaneous.
29
 
17.1
Bulk Sales
29
 
17.2
Broker
29
 
17.3
Assignment of this Agreement
29
 
17.4
Attorneys’ Fees
29
 
17.5
Notices
30
 
17.6
Further Assurances
31
 
17.7
Survival
31
 
17.8
Confidentiality.
31
 
17.9
Joint and Several Liability
32
 
17.1
Recording
32
 
17.11
Successors and Assigns
32
 
17.12
Entire Agreement
32
 
17.13
Waiver and Modifications
33
 
17.14
Captions and Titles
33
 
17.15
Construction
33
 
17.16
Non-Business Days
33
 
17.17
Governing Law and Jurisdiction
33
 
17.18
Counterparts
33
 
17.19
No Third Party Benefits
33
 
17.2
Severability
33
 
17.21
No Marketing
32



























-ii-

3
Exhibit 2.1

EXHIBITS
 
 
Exhibit A:
Legal Description of Springfield Park Property
Exhibit B:
Legal Description of Springfield East Property
Exhibit C:
Assignment of Limited Partnership Interest
Exhibit D:
Assignment of Membership Interest
Exhibit E:
Deed to PR Springfield East Interest
Exhibit F-1:
Form of Estoppel Certificate
Exhibit F-2:
Form of Seller Estoppel Certificate
Exhibit G:
Estoppel and Consent Certificate by PRDB General Partners and Paul de Botton
Exhibit H:
Waiver of Right of First Refusal by Target Corporation and Target Estoppel
Exhibit I:
Estoppel and Consent Certificate by Springfield East Property Tenants in Common
Exhibit J:
Intentionally Deleted
Exhibit K:
Estoppel and Consent Certificate by Board of Springfield East Condominium
Exhibit L:
Assignment and Assumption Agreement Respecting Bed, Bath and Beyond Sublease
Exhibit M:
Estoppel Certificate from Bed, Bath and Beyond re Sublease
 
 
 
 
SCHEDULES
 
 
Schedule 1:
PRDB Partnership Agreement
Schedule 2:
PRDB General Partner LLC Agreement
Schedule 3:
Springfield East Tenants in Common Agreement
Schedule 4:
Existing Space Tenants and Rent Roll
Schedule 5:
Pending Litigation
Schedule 6:
Insurance Certificates
Schedule 7:
Existing Environmental Reports
Schedule 8:
Financial Statements
























-iii-

4
Exhibit 2.1

PURCHASE AND SALE AGREEMENT

THIS PURCHASE AND SALE AGREEMENT (this “ Agreement ”) is made effective as of June 29, 2015 (the “ Effective Date ”), by and between PREIT ASSOCIATES, L.P. , a Delaware limited partnership (“ PREIT ”), PR SPRINGFIELD ASSOCIATES, L.P. , a Pennsylvania limited partnership (“ PR Springfield ”) ( PREIT and PR Springfield are hereinafter collectively referred to as “ Seller ”), and RUBIN SIX PENN CENTER LLC , a Delaware limited liability company (hereinafter referred to as “ Purchaser ”).
THE BACKGROUND OF THIS AGREEMENT IS AS FOLLOWS:
A.      PREIT is the owner of a 49.5% limited partnership interest in PRDB Springfield Limited Partnership, a Pennsylvania limited partnership (“PRDB”), and PREIT is also the owner of a 50% membership interest in PRDB Springfield LLC, a Pennsylvania limited liability company (“ PRDB General Partner ”) that is the sole general partner of PRDB and owns a 1% general partnership interest in PRDB (PREIT’s aforesaid limited partnership interest in PRDB and membership interest in PRDB General Partner are hereinafter collectively referred to as the “ PREIT Springfield Park Interests ”);
B.      PRDB is the owner of that certain parcel of land and the retail shopping center and other improvements thereon situate in Springfield Township, Delaware County, Pennsylvania, which is generally known as “ Springfield Park ” and is described by metes and bounds on Exhibit A attached hereto (together with its Appurtenant Rights, the “ Springfield Park Property ”);
C.      PR Springfield is the owner of a 50% tenancy in common interest in that certain condominium unit known as Unit R in Springfield Square East Condominium located in Springfield Township, Delaware County, Pennsylvania, which condominium unit is more particularly described on Exhibit B attached hereto (said Unit R is hereinafter referred to, together with its Appurtenant Rights, as the “ Springfield East Property ”, and PR Springfield’s 50% tenancy in common interest in the Springfield East Property is hereinafter referred to as the “ PR Springfield East Interest ”);
D.      Lawrence Park Partnership, a Pennsylvania general partnership (“ Lawrence Park ”), Darlington Square Shopping Center Ltd., a Pennsylvania limited partnership (“ Darlington ”) and Joyfor Joint Venture (“Joyfor”), a Pennsylvania general partnership, collectively own a 50% tenancy in common interest in the Springfield East Property (the said Lawrence Park, Darlington and Joyfor, together with PR Springfield, in their capacities as owners of tenancy in common interests in the Springfield East Property, are hereinafter collectively referred to as the “ Springfield East Property Tenants in Common ”) (PRDB and the Springfield East Property Tenants in Common are sometimes hereinafter collectively referred to as the “ Fee Owners ”) (the Springfield Park Property and the Springfield East Property are collectivly referred to as the “Property”); and
E.      Seller desires to sell and convey the PREIT Springfield Park Interests and the PR Springfield East Interest (hereinafter collectively referred to as the “ Interests ”) to Purchaser,

1
Exhibit 2.1

and Purchaser desires to purchase the same, all in accordance with and subject to the terms and conditions hereinafter provided in this Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound hereby, the parties hereto hereby agree as follows:
1.      Definitions.
The terms defined in this Article shall for all purposes of this Contract have the meanings herein specified unless the context requires otherwise.
1.1      “Agreement” shall have the meaning ascribed to it in the introductory paragraph.
1.2      “Anti-Money Laundering Laws” shall have the meaning ascribed to it in Section 6.6(e).
1.3      “Appurtenant Rights” shall mean as to real property, the owner’s right, title and interest, if any, in and to (a) any land lying in the bed of any street, road or avenue opened or proposed, adjacent to such real property, to the center line thereof; (b) fixtures, equipment any other personal property attached to or beneath the real property (including without limitation underground or above ground storage tanks, if any) and not owned by the Space Tenants or a governmental entity, if any, but no part of the Purchase Price shall be deemed to be paid for such fixtures, equipment or personal property; (c) rights of way, appurtenances, easements, sidewalks, alleys, gores or strips of land adjoining or appurtenant to such real property and used in connection therewith; and (d) the interest of the landlord under the Space Leases.
1.4      “Bed Bath & Beyond Sublease” shall mean that certain Sublease dated August 3, 2001, by and between Bed Bath & Beyond, Inc., as Sub-Landlord, and Pennsylvania Real Estate Investment Trust, as Sub-Tenant.
1.5      “Business Day” shall mean any day other than a Saturday, Sunday or day on which the banks in Philadelphia, Pennsylvania, are authorized or permitted to be closed.
1.6      “Casualty” shall have the meaning ascribed to it in Section 15.2.
1.7      “Casualty Termination Event” shall have the meaning ascribed to it in Section 15.2.
1.8      “Closing” shall have the meaning ascribed to it in Section 13.1.

2
Exhibit 2.1


1.9      “Closing Date” shall have the meaning ascribed to it in Section 13.1.
1.10      “Code” shall mean the Internal Revenue Code of 1986, as amended.
1.11      “Deposit” shall have the meaning ascribed to it in Section 3.1.
1.12      “Effective Date” shall have the meaning ascribed to it in the introductory paragraph.
1.13      “Environmental Laws” shall mean all federal, state and local statutes, ordinances, guidance having the effect of law, common law, rules, and regulations, all court orders and decrees, now or hereafter in effect, which pertain to environmental matters, pollution, or contamination of any type whatsoever. Environmental Laws shall mean, without limitation, those laws relating to manufacture, processing, use, distribution, treatment, storage, exposure, disposal, generation or transportation of hazardous substances or materials; air, soil, surface or groundwater or noise pollution; releases or threatened releases; protection of wildlife, endangered species, wetlands, or natural resources; health and safety of employees and other persons, and notifications relating to the foregoing.
1.14      “Escrowee” shall have the meaning ascribed to it in Section 3.1.
1.15      “Estoppel Certificate(s)” shall have the meaning ascribed to it in Section 13.3(a)(vii).
1.16      “Evaluation Material” shall have the meaning ascribed to it in Section 17.8(a).
1.17      “Existing Space Leases” shall have the meaning ascribed to it in Section 6.3(g).
1.18      “Existing Space Tenants” shall have the meaning ascribed to it in Section 6.3(g).
1.19      “Fee Owners” shall have the meaning ascribed to it in Paragraph D of the Background to this Agreement.
1.20      “First Mortgage Loan Documents” shall mean that certain Mortgage Loan Note dated April 28, 2010, in the original principal amount of $10,000,000 (the “ Note ”) given by Fee Owners to Capital One, N.A. (“ Lender ”), together with that certain Open-End Mortgage and Security Agreement and Fixture Filing of even date therewith given by Fee Owners to Lender

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Exhibit 2.1

to secure the Note, and all other documents and interests evidencing and securing the loan which is evidenced by the Note.
1.21      “LA Fitness” shall mean Fitness International, LLC (formerly known as L.A. Fitness International LLC), a California limited liability company.
1.22      “Hazardous Materials” shall mean pollutants, contaminants, pesticides, petroleum or petroleum substances, petroleum products, radioactive substances, asbestos and asbestos containing materials, solid, gaseous or liquid waste or hazardous substances, or extremely hazardous, special, industrial, toxic or otherwise dangerous wastes, chemicals covered under any Environmental Laws, excluding materials used in the ordinary course of the operation of the Property in compliance with all Environmental Laws.
1.23      “Law” shall mean all federal, state and local statutes, ordinances, guidance having the effect of law, common law, rules, and regulations, all court orders and decrees, now or hereafter in effect.
1.24      “Losses” shall mean any and all damages, losses, liabilities, obligations, penalties, claims, sums paid in settlement of claims, litigation, demands, defenses, judgments, suits, proceedings, costs, disbursements, fines and expenses of any kind or nature (including attorneys’ fees and costs).
1.25      “Major Tenants” shall mean Bed Bath & Beyond, Inc., and LA Fitness.
1.26      “Monetary Objection” or “Monetary Objections” shall mean an objection to (a) any mortgage, deed to secure debt, deed of trust or similar security instrument or judgment encumbering fee title to all or any part of the Property, (b) any mechanic’s, materialman’s or similar lien (unless resulting from any act or omission of Purchaser or any of its agents, contractors, representatives or employees), (c) the lien of ad valorem real or personal property taxes, assessments and governmental charges affecting all or any portion of the Property which are delinquent, and (d) any other lien or encumbrance created by or imposed upon Seller on or after the Effective Date.
1.27      “New Lease(s)” shall have the meaning ascribed to it in Section 7.1(a).

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Exhibit 2.1


1.28      “OFAC” means the U.S. Treasury Department’s Office of Foreign Assets Control.
1.29      “Person” shall mean any individual or any partnership, corporation, estate trust, limited liability company or other entity.
1.30      “Permitted Encumbrances” shall have the meaning ascribed to it in Section 10.2(a).
1.31      “PREIT Springfield Park Interests” shall have the meaning ascribed to it in Paragraph A of the Background to this Agreement.
1.32      “PR Springfield East Interest” shall have the meaning ascribed to it in Paragraph C of the Background to this Agreement.
1.33      “Preliminary Proration Statement” shall have the meaning ascribed to it in Section 13.4(a)(i).
1.34      “Prohibited Persons” shall have the meaning ascribed to it in Section 6.6(e)(i).
1.35      “Property” shall have the meaning ascribed to it in Paragraph D of the Background to this Agreement.
1.36      “Purchase Price” shall have the meaning ascribed to it in Section 3.
1.37      “Purchaser” shall have the meaning ascribed to it in the introductory paragraph.
1.38      “Related Parties” shall have the meaning ascribed to it in
Section 17.8(b).
1.39      “Reimbursable Lease Expenses” shall mean, collectively, any and all reasonable and customary costs, expenses and fees paid or incurred by Fee Owners prior to Closing arising out of or in connection with (a) any extensions, renewals or expansions of existing Space Leases which are exercised or entered into between the Effective Date and the Closing Date, provided that Purchaser has approved in writing the terms thereof, in Purchaser’s reasonable discretion, unless any such extension, renewal or expansion is as a matter of right under the terms of an existing Space Lease, and (b) any New Leases which are entered into between the Effective Date and the Closing Date provided that Purchaser has approved in writing the terms thereof, in Purchaser’s reasonable discretion. Reimbursable Lease Expenses shall include, without limitation, (i) brokerage commissions and fees to effect any such leasing transaction, (ii) reasonable and customary expenses incurred for repairs, improvements, equipment, painting, decorating, partitioning and other items to satisfy the tenant’s requirements with regard to such leasing transaction, (iii) legal fees

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Exhibit 2.1

for services in connection with the preparation of documents and other services rendered in connection with the effectuation of the leasing transaction, (iv) if there are any rent concessions (i.e., free rent) covering any period that the tenant has the right to be in possession of the demised space, the unamortized amount of the rents that would have accrued during the period of such concession prior to the Closing Date as if such concession were amortized over (A) with respect to any extension or renewal, the term of such extension or renewal, (B) with respect to any expansion, that portion of the term remaining under the applicable existing Space Lease after the date of such expansion but only for the applicable expansion space, or (C) with respect to any New Lease, the entire initial term of any such New Lease, and (v) expenses incurred for the purpose of satisfying or terminating the obligations of a tenant under a New Lease to the landlord under another lease (whether or not such other lease covers space in the Property).
1.40      “Seller” shall have the meaning ascribed to it in the introductory paragraph.
1.41      “Space Leases” shall have the meaning ascribed to it in Section 7.1(a).
1.42      “Space Tenants” shall have the meaning ascribed to it in Section 7.1(a).
1.43      “Substantial Portion” shall have the meaning ascribed to it in Section 15.1(b).
1.44      “Springfield East Property Tenants in Common” shall have the meaning ascribed to it in Paragraph D of the Background to this Agreement.
1.45      “Survey” shall have the meaning ascribed to it in Section 10.1.
1.46      “Taking” shall have the meaning ascribed to it in Section 15.1(a).
1.47      “Target” shall mean Target Corporation, a Minnesota corporation.
1.48      “Title Commitment” shall have the meaning ascribed to it in Section 10.1.
1.49      “Title Company” shall mean Walnut Street Abstract, L.P.
        

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Exhibit 2.1

1.50      “USA PATRIOT Act” shall have the meaning ascribed to it in Section 6.6(e)(iii).
2.      Subject of Sale.
2.1      At the Closing, Seller agrees to sell and convey to Purchaser and Purchaser agrees to purchase from Seller, the Interests, in accordance with, and subject to, the terms and conditions contained in this Agreement.
3.      Purchase Price.     
The purchase price (the “ Purchase Price ”) for the Interests is the sum of Twenty Million Two Hundred Thousand Dollars ($20,200,000.00), payable by Purchaser to Seller as follows:
3.1      Within two Business Days following the signing of this Agreement, Purchaser shall either: (a) deliver the sum of Eight Hundred Thousand Dollars ($800,000.00) (the “ Deposit ”) by electronic wire transfer of immediately available federal funds to an account designated by Land Services USA, Inc., Attention: Michael G. Moyer (“ Escrowee ”) or by certified check of Purchaser or bank teller’s check to the order of Escrowee; or (b) deliver to Escrowee a clean irrevocable letter of credit in the amount of Eight Hundred Thousand Dollars ($800,000.00) drawn upon M&T Bank or another bank reasonably satisfactory to Seller, which letter of credit shall be payable to Escrowee and shall have an expiration date no earlier than the anniversary of the Effective Date (the “ Letter of Credit ”).
3.2      On the Closing Date, Purchaser shall receive a credit against the Purchase Price in an amount equal to one-half (1/2) of the outstanding balance of the indebtedness secured by the First Mortgage Loan Documents immediately prior to the consummation of Closing.
3.3      On the Closing Date, Purchaser shall receive a credit against the Purchase Price in an amount equal to One Million Six Hundred Ninety Thousand Dollars ($1,690,000.00) which represents the agreed upon present value of the obligation under the Bed Bath & Beyond Sublease being assumed by Purchaser hereunder.
3.4      On the Closing Date, the balance of the Purchase Price, subject to adjustment and proration pursuant to Section 9.4 below, shall be paid by electronic wire transfer of immediately available federal funds pursuant to wiring instructions to be given by Escrowee or as Escrowee may direct to Purchaser prior to the Closing.
3.5      The Purchase Price shall be allocated as follows: $12,544,200.00 to the PREIT Springfield Park Interests and $ 7,655,800.00 to the PR Springfield East Interest (prior to reduction for the credit referenced in Section 3.3 above to the PR Springfield East Interest).
4.      Deposit Provisions.

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Exhibit 2.1

4.1      If Purchaser has delivered the Letter of Credit to Escrowee, and the Letter of Credit (as the same may be from time to time extended) will expire in less than ten (10) days, or if Escrowee desires to deposit the proceeds of the Letter of Credit in court pursuant to Section 4.6 hereof, Escrowee shall draw upon the Letter of Credit and hold the proceeds thereof or deposit the same in Court in accordance with the terms of this Agreement.
4.2      Upon the consummation of Closing, Escrowee is authorized and directed to pay the Deposit to Seller (or as Seller may direct), or if Purchaser has delivered the Letter of Credit or the proceeds thereof to Escrowee, to pay the proceeds thereof to Seller (or as Seller may direct) and then to return the Letter of Credit to Purchaser.
4.3      Subject to the provisions of Section 4.7, in the event Purchaser should default beyond any applicable notice and cure period under this Agreement, Escrowee shall pay the Deposit to Seller (or if Purchaser has delivered the Letter of Credit to Escrowee, Escrowee shall draw upon the Letter of Credit and pay the proceeds thereof to Seller), who shall retain the Deposit (or proceeds of the Letter of Credit) in accordance with Section 10.1 below.
4.4      Subject to the provisions of Section 4.7, in the event this Agreement is terminated by reason other than Purchaser’s default, Escrowee shall pay the Deposit to Purchaser, or if Purchaser has delivered the Letter of Credit to Escrowee, Escrowee shall return the Letter of Credit or proceeds thereof to Purchaser.
4.5      Escrowee shall invest and reinvest the Deposit (or the proceeds of the Letter of Credit), and any interest earned thereon, in United States Government Treasury bills or certificate(s) of deposit or bank money market account(s) as Seller shall direct. The party entitled to receive the interest earned on the Deposit shall pay all income taxes owed in connection therewith. The employer identification numbers of Seller and Purchaser are respectively set forth on the signature page hereof.
4.6      Escrowee, by signing this Agreement at the end hereof where indicated, signifies its agreement to hold the Deposit and the Letter of Credit and the proceeds thereof as provided in this Agreement. In the event of any dispute, Escrowee shall have the right to deposit the Deposit or the proceeds of the Letter of Credit with a court of competent jurisdiction to await the resolution of such dispute. Escrowee shall not incur any liability by reason of any action or non action taken by it in good faith or pursuant to the judgment or order of a court of competent jurisdiction. Escrowee shall have the right to rely upon the genuineness of all certificates, notices and instruments delivered to it pursuant hereto, and all the signatures thereto or to any other writing received by Escrowee purporting to be signed by any party hereto, and upon the truth of the contents thereof.
4.7      Notwithstanding anything to the contrary in this Agreement or elsewhere, but subject to the provisions of Section 4.1 hereof, Escrowee shall not pay or deliver the Deposit or the Letter of Credit (or the proceeds of the Letter of Credit) to any party unless written demand is made therefor and a copy of such written demand is delivered to the other party. If Escrowee does not receive a written objection from the other party to the proposed payment or delivery within ten (10) Business Days after such demand is received by such party in accordance with the provisions of Section 17.5 hereof, Escrowee is hereby authorized and directed to make such payment or delivery. If Escrowee does receive such written objection within such ten (10) Business Day period or if for any other reason Escrowee in good faith shall elect not to make such payment or delivery, Escrowee shall forward a copy of the objections, if any, to the other party or parties, and continue to hold the Deposit (or the Letter of Credit or the proceeds thereof) unless otherwise directed by written instructions from the parties to this Agreement or by a judgment of a court of competent jurisdiction. In any event, subject to the

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Exhibit 2.1

provisions of Section 4.1 hereof, Escrowee shall have the right to refrain from taking any further action with respect to the subject matter of the escrow until it is reasonably satisfied that such dispute is resolved or action by Escrowee is required by an order or judgment of a court of competent jurisdiction.
4.8      Escrowee shall be entitled to consult with counsel in connection with its duties hereunder. Seller and Purchaser, jointly and severally, agree to reimburse Escrowee, upon demand, for the reasonable costs and expenses including attorneys’ fees incurred by Escrowee in connection with its acting in its capacity as Escrowee. In the event of litigation relating to the subject matter of the escrow, whichever of Seller or Purchaser is not the prevailing party shall reimburse the prevailing party for any costs and fees paid by the prevailing party or paid from the escrowed funds to Escrowee.
5.      “As-Is”. “Where-Is”.
5.1      Purchaser acknowledges and agrees that (a) Purchaser independently examined, inspected, and investigated, to the full satisfaction of Purchaser, the physical nature and condition of the Property, including, without limitation, its environmental condition, and the income, operating expenses and carrying charges affecting the Property, (b) except as expressly set forth in this Agreement, neither Seller nor any agent, member, officer, partner, employee, representative, broker or third party consultant of Seller (collectively, “Seller Parties”) has made any representation whatsoever (whether express, implied, statutory or otherwise) regarding the subject matter of this Agreement or any part thereof, including (without limiting the generality of the foregoing) representations as to the operation of the Property, the physical nature or environmental condition of the Property, the existence or non-existence of petroleum, asbestos, lead paint, fungi, including mold, or other microbial contamination, hazardous substances or wastes, underground or above ground storage tanks or any other environmental hazards on, under or about the Property, the Space Leases, operating expenses or carrying charges affecting the Property, the compliance of the Property or its operation with any laws, rules, ordinances or regulations of any applicable governmental or quasi-governmental authority or the habitability, merchantability, marketability, profitability, fitness or development of the Property for any purpose and (c) except as expressly set forth in this Agreement, Purchaser, in executing, delivering and performing this Agreement, does not rely upon any statement, offering material, operating statement, historical budget, engineering structural report, any environmental reports, information, or representation to whomsoever made or given by any of the Seller Parties, whether to Purchaser or others, and whether directly or indirectly, orally or in writing, except as expressly set forth in this Agreement, and Purchaser acknowledges that any such statement, information, offering material, operating statement, historical budget, report or representation, if any, does not represent or guarantee future performance of the Property. Without limiting the

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Exhibit 2.1

foregoing, except as otherwise expressly set forth in this Agreement, Seller shall deliver, and Purchaser shall take, the Interests and the Property in its “as is” “where is” condition and with all faults on the Closing Date and with no right of setoff or reduction in the Purchase Price. The provisions of this Section shall survive the Closing or the earlier termination of this Agreement.
6.      Representations.
6.1      PREIT’s Representations. PREIT represents that as of the Effective Date the following are and shall as of the Closing Date be true and correct in all material respects:
(a)      PREIT is a limited partnership duly formed, validly existing and in good standing under the laws of the State of Delaware. PREIT has the right, power and authority to make and perform its obligations under this Agreement without the need for governmental approval, consent or filing.
(b)      The execution, delivery and performance of this Agreement in accordance with its terms do not violate any contract, agreement, commitment, order, judgment or decree to which PREIT is a party or by which it is bound.
(c)      PREIT has the right, power and authority to make and perform its obligations under this Agreement.
(d)      This Agreement is a valid and binding obligation of PREIT enforceable against PREIT in accordance with its terms.
(e)      PREIT has good and valid title to the PREIT Springfield Park Interests, free and clear of any liens, charges, encumbrances, pledges or security interests, (ii) the PREIT Springfield Park Interests are not subject to any restriction with respect to the transferability thereof or preemptive rights (except such as are waived by documents delivered by Seller at Closing) and (iii) the PREIT Springfield Park Interests are not subject to any written agreements or understandings among any persons with respect to the voting or transfer thereof (other than in connection with the First Mortgage Loan).
6.2      PR Springfield’s Representations. PR Springfield represents that the following are as of the Effective Date and shall as of the Closing Date be true and correct in all material respects:
(a)      PR Springfield is a limited partnership duly formed, validly existing and in good standing under the laws of the Commonwealth of Pennsylvania. PR Springfield has the right, power and authority to make and perform its obligations under this Agreement without the need for governmental approval, consent or filing.
(b)      The execution, delivery and performance of this Agreement in accordance with its terms do not violate any contract, agreement, commitment, order, judgment or decree to which PR Springfield is a party or by which it is bound.
            

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Exhibit 2.1

(c)      PR Springfield has the right, power and authority to make and perform its obligations under this Agreement.
(d)      This Agreement is a valid and binding obligation of PR Springfield enforceable against PR Springfield in accordance with its terms.
6.3      Seller’s Representations. Seller represents that the following are as of the Effective Date true and correct in all material respects:
(a)      PRDB is a limited partnership duly formed, validly existing and in good standing under the laws of the Commonwealth of Pennsylvania. PRDB General Partner is a limited liability company duly formed, validly existing and in good standing under the laws of the Commonwealth of Pennsylvania. The sole partners of PRDB are PREIT, PRDB General Partner and Paul de Botton. The sole members of PRDB General Partner are PREIT and Paul de Button.
(b)      True, correct and complete copies of the currently effective Agreement of Limited Partnership of PRDB and Certificate of Limited Partnership of PRDB (collectively, the “ PRDB Partnership Agreement ”), including all amendments thereto, are attached hereto as Schedule 1 . The PRDB Partnership Agreement is in full force and effect. True, correct and complete copies of the currently effective Limited Liability Company Operating Agreement of PRDB General Partner and its certificate of formation (collectively, the “ PRDB General Partner LLC Agreement ”), including all amendments thereto, are attached hereto as Schedule 2 . The PRDB General Partner LLC Agreement is in full force and effect.
(c)      A true, correct and complete copy of the currently effective Tenants in Common Agreement respecting Springfield East (the “ Springfield East Tenants in Common Agreemen t”), including all amendments thereto, is attached hereto as Schedule 3 . The Springfield East Tenants in Common Agreement is in full force and effect.
(d)      There is no management agreement or similar agreement respecting any portion of the Property, other than any management provisions set forth in the PRDB Partnership Agreement, the PRDB General Partner LLC Agreement and the Springfield East Tenants in Common Agreement.
(e)      Provided that all parties thereto have consented, the execution, delivery and performance of this Agreement in accordance with its terms do not violate the PRDB Partnership Agreement, the PRDB General Partner LLC Agreement or the Springfield East Tenants in Common Agreement or to the actual knowledge of Seller, any contract, agreement, commitment, order, judgment or decree to which PRDB or the PRDB General Partner is a party or by which it is bound.
(f)      Neither Seller, nor PR Springfield, nor PRDB, nor PRDB General Partner is a “foreign person” within the meaning of Section 1445 of the Internal Revenue Code of 1986, as amended.
            

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Exhibit 2.1

(g)      The tenants listed on Schedule 4 annexed hereto are tenants under leases (such leases are herein called the “ Existing Space Leases ” and the lessees thereunder are herein called the “Existing Space Tenants”), true, correct and complete copies of which have been delivered or made available to Purchaser, which constitute the only leases, licenses or other written agreements for the use or occupancy of the Property and which will be binding on Purchaser following the Closing.
(h)      The information on the rent roll attached hereto as Schedule 4 is true and correct in all material respects.
(i)      Except as may be set forth on Schedule 4 , no Existing Space Tenant has made payments of rent in advance for more than one (1) month (exclusive of security deposits), or if such payments have been made more than one (1) month in advance (exclusive of security deposits), Seller will credit Purchaser such amounts at Closing.
(j)      There are no persons employed by PRDB or the Tenants in Common in connection with the operation or maintenance of the Property whose employment agreements will be binding upon PRDB, the PRDB General Partner or the Tenants in Common after the Closing.
(k)      Seller is not aware of any written notice of any pending condemnation proceeding against the Property or any portion thereof.
(l)      Except as set forth on Schedule 5 annexed hereto, or matters fully covered (excluding deductibles) by one or more insurance policies, there is no litigation pending or threatened in writing with respect to the Property or against PRDB or the Tenants in Common.
(m)      Seller has no knowledge that either of the Fee Owners have received any written notice from a governmental authority of a violation of any applicable Law with respect to the Property, except for violations that have been fully cured.
(n)      Attached hereto as Schedule 6 are copies of the certificates of insurance that has been in effect with respect to the Property for the past three (3) years.
(o)      No partnership interests in PRDB have been sold, transferred or conveyed during the three (3) year period preceding the Effective Date.
(p)      The environmental reports listed on Schedule 7 (the “Environmental Reports”), true, correct and complete copies of which have been delivered to Purchaser, are all of the reports and studies in Seller’s possession relating to the presence or absence of Hazardous Materials on the Property or the compliance or non-compliance of the Property with Environmental Laws. To Seller’s knowledge, other than as disclosed in the Environmental Reports, Hazardous Materials have not been used, generated, transported, treated, stored, released, discharged or disposed of in, onto, under or from the Property by Seller, or by any predecessor in title or agent of Seller, by any tenant or by any other person or entity at any time. Except as set forth in the Environmental Reports, to Seller’s actual knowledge, (i) no

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Exhibit 2.1

written notification of release of a Hazardous Material has been issued as to the Property; (ii) Seller has not received a written notice from any governmental authority having jurisdiction over the Property asserting any uncured violation of Environmental Laws; and (iii) there are no above-ground or underground tanks or any other underground storage facilities located on the Property.
(q)      Attached hereto as Schedule 8 are true, correct and complete copies of the financial statements of Springfield Park and Springfield East Property for the 2014 calendar year as well as a year-to-date statement dated as of March 31, 2015, all as prepared on an accrual basis consistently applied throughout the periods indicated (collectively, the “ Financial Statements ”). The Financial Statements are true and correct in all material respects
and accurately reflect the financial positions of Springfield Park and Springfield East Property in all material respects as of the dates of such statements. As of the Effective Date, PRDB, PRDB General Partner and PR Springfield have no known material liabilities or obligations, except: (1) as set forth in or as they relate to the Permitted Encumbrances, service contracts or the Space Leases, (ii) liabilities disclosed in this Agreement, including, without limitation, the Financial Statements, or (iii) incurred since the date of the Financial Statements in the ordinary course of business. PRDB, PRDB General Partner and PR Springfield have no other assets other than their interests in Springfield Park and Springfield East Property.
6.4      Knowledge. The representations of Seller set forth in Section 6.3 are made to the actual present knowledge of Mario C. Ventresca, Jr.
6.5      Survival. The representations made by Seller in Section 6.3 shall survive the Closing for one (1) year. In any event, Seller’s maximum liability after Closing for the breach of any representations made by Seller in Section 6.3 shall not exceed, in the aggregate, an amount equal to Seven Hundred Fifty Thousand Dollars ($750,000), provided that with respect to the foregoing, Seller shall have no liability, and Purchaser shall make no claim against Seller, if the obligations or liabilities in question result from a condition, state of facts or other matter as to which Purchaser has actual knowledge prior to Closing. The preceding sentence of this Section 6.3 shall survive Closing.
6.6      Purchaser’s Representations. Purchaser represents that the following are as of the Effective Date and shall be as of the Closing Date true and correct in all material respects:
(a)      Purchaser is a limited partnership duly formed, validly existing and in good standing under the laws of the Commonwealth of Pennsylvania. Rubin Retail Acquisition GP, LLC is a limited liability company duly formed, validly existing and in good standing under the laws of the Commonwealth of Pennsylvania. Rubin Retail Acquisition GP, LLC is the sole general partner of Purchaser.
(b)      The execution, delivery and performance of this Agreement in accordance with its terms, do not violate any contract, agreement, commitment, order, judgment or decree to which Purchaser is a party or by which it is bound;

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Exhibit 2.1

(c)      Purchaser has the right, power and authority to make and perform its obligations under this Agreement;
(d)      This Agreement is a valid and binding obligation of Purchaser enforceable against Purchaser in accordance with its terms.
(e)      USA PATRIOT Act/OFAC Representations.     
(i)      Purchaser understands and agrees that Seller prohibits the receipt of funds from any persons or entities that are acting, directly or indirectly, (A) in contravention of any U.S. or international laws and regulations, including anti-money laundering regulations or conventions, (B) on behalf of terrorists or terrorist organizations, including those persons or entities that are included on the List of Specially Designated Nationals and Blocked
Persons maintained by OFAC, as such list may be amended from time to time, (C) for a “senior foreign political figure”, any member of a senior foreign political figure’s immediate family or any close associate of a senior foreign political figure, unless the Seller, after being specifically notified by the Purchaser in writing that it, or any beneficial or indirect owner of the Purchaser, is such a person, and determines in its sole discretion that such receipt of funds shall be permitted, or (D) for a foreign shell bank (such persons or entities in (A) - (D) are collectively referred to as “ Prohibited Persons ”). Senior foreign political figure shall have the meaning set forth in 31 CFR 103.175(r). “Foreign shell bank” and a “regulated affiliate” thereof shall have the meaning set forth in 31 CFR 103.175(j) and 31 CFR 103.175(p), respectively.
(ii)      Purchaser represents, warrants and covenants that: (A) it is not, nor is any person or entity controlling, controlled by or under common control with the Purchaser, a Prohibited Person, and (B) to the extent the Purchaser has any beneficial or indirect owners, (1) it has carried out thorough due diligence to establish the identities of such beneficial or indirect owners, (2) based on such due diligence, the Purchaser reasonably believes that no such beneficial or indirect owners are Prohibited Persons, (3) it holds the evidence of such identities and status and will maintain all such evidence for at least five years from the date of the beneficial or indirect owners’ complete withdrawal from the Purchaser, and (4) it will make available such information and any additional information that the Seller may require upon request.
(iii)      To the extent applicable, neither Purchaser, nor any of its general or limited partners, shareholders, members, parent or subsidiary entities: (i) is under investigation by any governmental authority for, or has been charged with, or convicted of, money laundering, drug trafficking, terrorist related activities, any crime which in the United States would be a predicate crime to money laundering, or a violation of any Anti-Money Laundering Laws (as defined herein); (ii) has been assessed a civil or criminal penalty under any Anti-Money Laundering Laws; or (iii) has had any of its funds seized or forfeited in any action under any Anti-Money Laundering Laws. As used in this Agreement, the term “ Anti-Money Laundering Laws ” shall mean all U.S. laws, regulations and sanctions, state and federal, criminal and civil, that (1) limit the use of, and/or seek the forfeiture of proceeds from illegal transactions; (2) limit commercial transactions with designated countries, or individuals believed to be terrorists, narcotics dealers, or otherwise engaged in activities contrary to the interests of

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Exhibit 2.1

the United States; (3) require identification and documentation of the parties with whom a Financial Institution (as defined in the relevant statute) conducts business; or (4) are designed to disrupt the flow of funds to terrorist organizations. Such laws, regulations, and sanctions shall be deemed to include, without limitation, the Bank Secrecy Act, 31 U.S.C. Section 5311 et. seq., as amended by the USA PATRIOT Act of 2001, Pub. L. No. 107-56 (the “USA PATRIOT Act”), as amended, and the regulations promulgated thereto; as well as 18 U.S.C. Sections 1956, 1957 and 1960.
7.      Ongoing Operations.
7.1      Leasing Practice.
(a)      The Existing Space Leases, together with any modifications, renewals and new leases made after the Effective Date hereof in accordance with this Section 7.1
hereof are herein called the “ Space Leases ” and the tenants thereunder are herein called the “ Space Tenants ”. During the period between the Effective Date and the Closing Date, to the extent permitted under the applicable organizational or governing documents of the Fee Owners, Seller shall not allow either of the Fee Owners to enter into new leases, terminate, renew and/or make modifications to the Space Leases (collectively, “ New Lease(s) ”) without the approval of Purchaser, which approval shall not be unreasonably withheld, conditioned or delayed. Purchaser agrees to grant or deny consent in writing (and provide, in reasonable detail, the reasons for any denial) within five (5) Business Days after Purchaser’s receipt of Seller’s request, which request shall contain copies of all material information related to such request and a summary of the material terms of the proposed New Lease. Purchaser’s failure to timely respond in writing to Seller’s request shall be deemed a consent to the proposed New Lease. Seller shall, from time to time, inform (orally or in writing) Purchaser of any new lease negotiations and promptly give notice to Purchaser of any New Lease and a copy of any instruments executed and any material information delivered in connection with any New Lease.
(b)      Between the Effective Date and the Closing Date, if the Fee Owners are not obligated to grant consent or approval to a request made by a Space Tenant, then to the extent permitted under the applicable organizational or governing documents of the Fee Owners, Seller shall not allow either of the Fee Owners to grant such consent or approval unless prior to granting such consent or approval, Seller shall notify Purchaser of the request made by a Space Tenant, which notice shall contain copies of all documents, if any, submitted by such Space Tenant in connection with the request. Purchaser agrees to advise Seller in writing, within five (5) Business Days after Purchaser’s receipt of Seller’s notice, whether Purchaser elects that the Space Tenant’s request be granted or denied (and provide, in reasonable detail, the reasons for any denial), which election shall be made in Purchaser’s reasonable judgment. Purchaser’s failure to timely respond in writing to Seller’s notice shall be deemed an election to consent to the proposed request.
(c)      Between the Effective Date and the Closing Date, to the extent permitted under the applicable organizational or governing documents of the Fee Owners, Seller shall not allow the Fee Owners to terminate any Space Lease without the prior consent of Purchaser, which consent shall not be unreasonably withheld, conditioned or delayed. Purchaser

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Exhibit 2.1

agrees to grant or deny consent in writing (and provide, in reasonable detail, the reasons for any denial) within said five (5) Business Days after Purchaser’s receipt of Seller’s request, which request shall contain copies of all material information related to such termination. In the event that Purchaser fails to respond within five (5) Business Days after Purchaser’s receipt of Seller’s request, Seller shall provide Purchaser and its counsel with a second request, and if Purchaser fails to respond in writing to Seller’s second request within five (5) Business Days of receipt of the second request, Purchaser shall be deemed to have consented to the proposed termination.
7.2      Personal Property and Equipment. Between the Effective Date and the Closing Date, Seller shall not allow the Fee Owners to transfer to any third party or remove any personal property or equipment owned by the Fee Owners and material to the operation or maintenance of the Property unless such personal property or equipment is obsolete and replaced with a substantially similar item.
7.3      Employees. Between the Effective Date and the Closing Date, Seller shall not allow the Fee Owners to hire any employees for whom Fee Owners will have liability following the Closing.
7.4      Development Rights. Between the Effective Date and the Closing Date, Seller shall not allow the Fee Owners to sell, lease, transfer or otherwise encumber any development rights appurtenant to the Property.
7.5      Operation and Maintenance. Between the Effective Date and the Closing Date, Seller shall cause the Fee Owners to operate and maintain the Property in good order and repair, consistent with past practices, excepting normal wear and tear and loss or Casualty.
8.      Taxes.
8.1      Seller hereby represents and warrants to Purchaser, and covenants with Purchaser, that (i) each of PRDB, PRDB General Partner and PR Springfield (collectively, “Taxpayers”) has prepared and timely filed (or will prepare and timely file) all Tax Returns (as defined below) required to be filed for all taxable periods through the Closing Date; (ii) all such Tax Returns are or will be true, complete, correct and accurate in all material respects; (iii) all Taxes (as defined below) payable by Taxpayers and/or with respect to the Property for the period through the Closing Date (whether or not showing on any Tax Returns) have been timely paid, withheld or collected (or will be timely paid, withheld or collected) when due, and there are and will be no liens on the Property or assets of the Taxpayers relating to or attributable to Taxes (other than liens for real property taxes not yet due or payable).
8.2      There are as of the Effective Date and will be as of the Closing Date no claims, audits, examinations or investigations by any governmental authority pending or, to Seller’s knowledge, threatened in writing against or with respect to the Taxpayers or the Property with respect to any Taxes or Tax Returns, and no governmental authority has as of the Effective Date or will have as of the Closing Date given written notice of any intention to assert any deficiency or claim for additional Taxes with respect to the Taxpayers or the Property.
        

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Exhibit 2.1

8.3      Taxpayers have not as of the Effective Date and shall not have as of the Closing Date executed or entered into (i) a closing agreement pursuant to Section 7121 of the Code or other similar provision of any Law, or (ii) any Tax sharing, indemnification or allocation agreement with any Person.
8.4      Sellers have delivered or made available to the Purchaser, complete and accurate copies of all federal, state and local income tax returns that the Taxpayers were required to prepare and/or file for the 2011, 2012 and 2013 tax years.
8.5      The Taxpayers have not as of the Effective Date and shall not have as of the Closing Date applied for, been granted, or agreed in writing to any accounting method change for which it will be required to take into account any adjustment under Section 481 of the Code or any similar provision of the Code or corresponding laws of any state or locality.
8.6      The Taxpayers have not as of the Effective Date and shall not have as of the Closing Date granted any waiver of any statute of limitation in respect of Taxes or agreed to any extension of time with respect to a Tax assessment or deficiency, which waiver or agreement is currently in effect.
8.7      For purposes of this Section 8:
(a)      “ Tax ” or “ Taxes ” shall mean any and all federal, state, local, county and foreign taxes, levies, fees, imposts, duties, and similar governmental charges, together with any interest, penalties (civil and criminal) and additions thereto imposed by any governmental authority, whether disputed or not, including, without limitation, (x) taxes based upon or measured by gross receipts, income, or profits, and (y) sales, use and occupation, value added, ad valorem, transfer, franchise, withholding, payroll, employment, excise, goods and services, capital stock, license, branch, social security (or similar), unemployment, compensation, utility, severance, production, stamp, occupation, premium, windfall profits, transfer and gains and real and personal property taxes, and customs duties together with all interest, fines, assessments, penalties and additions imposed with respect to such amounts. “Tax” or “Taxes” shall also include any liability for the payment of any amounts of the type described in the preceding sentence as a result of being a transferee of or successor to any Person.
(b)      “ Tax Return ” shall mean all federal, state, local, and foreign returns, reports, claims for refund, information returns or other documents (including any related or supporting schedules, statements or information, and any amendment thereto) filed or required to be filed in connection with the determination, assessment or collection of Taxes of any person or entity.
9.      Indemnification.
9.1      Indemnification By Seller. Notwithstanding anything to the contrary contained in this Agreement or any other document executed or delivered in connection with this Agreement, Seller hereby agrees to indemnify, protect, defend and hold Purchaser and its partners and any of the respective successors and assigns of the foregoing harmless from and against any Losses arising out of or in connection with (i) subject to the liability limitations set

17
Exhibit 2.1

forth in Section 6.5 hereof, the breach of any of the Seller’s representations, warranties or covenants set forth in this Agreement; and (ii) obligations or liabilities of any of the Fee Owners or PRDB General Partner to third parties arising from events occurring prior to the Closing Date, provided that such indemnity shall not extend to (a) obligations or liabilities to the extent that Purchaser received a credit for such obligation or liability through a specific adjustment or apportionment made at Closing, or (b) obligations or liabilities arising out of the physical condition of the Property or its non-compliance with Laws or Environmental Laws, except to the extent such physical condition or non-compliance would constitute a breach of the representations or warranties of Seller expressly set forth in this Agreement or in any other document executed by Seller in connection with this Agreement, or (c) obligations or liabilities arising out of any Space Lease with respect to which the Space Tenant has executed an Estoppel Certificate satisfying the requirements of Section 13.3(a)(vii) hereof.
9.2      Indemnification by Purchaser. Notwithstanding anything to the contrary contained in this Agreement, from and after the Closing, Purchaser hereby agrees to indemnify, protect, defend and hold Seller and its partners and any of the respective successors and assigns of the foregoing, harmless from and against any Losses arising out of or in connection with: (i) the breach of any of the Purchaser’s representations or warranties set forth in this Agreement, or (ii) obligations or liabilities of any of the Fee Owners or PRDB General Partner to third parties arising from events occurring after the Closing Date.
9.3      Procedures. In the event that any party hereto reasonably believes that such party has Losses hereunder for which it will seek indemnity pursuant to this Section 9 , such party (the “ Indemnified Party ”) shall give written notice thereof (a “ Claim Notice ”) to the indemnifying party (the “ Indemnifying Party ”) within ninety (90) days after obtaining knowledge thereof, stating the nature and basis of such Claim for indemnification and the amount thereof, in reasonable detail. Failure to provide such Claim Notice within such ninety (90) day period shall not act as a waiver of the indemnified party’s rights with respect to such Losses for indemnification unless, and only to the extent that, such failure directly and materially adversely affects the Indemnifying Party’s ability to defend against such Loss, in which case the Indemnifying Party’s indemnity obligations shall be correspondingly reduced or eliminated.
9.4      Survival. The provisions of this Section 9 shall survive the Closing.
10.      Title.
10.1      Title Commitment. Purchaser shall obtain, at Purchaser’s expense, a commitment for an owner's policy of title insurance issued by the Title Company, certifying to Purchaser the then status of title to the Property and setting forth all objections or exceptions to title affecting the same (the “ Title Commitment ”) and Purchaser may obtain a current survey of the Property (the " Survey ") prepared by a duly licensed surveyor.
10.2      (a)      On or before twenty (20) days after the Effective Date, Purchaser shall deliver to Seller a true and complete copy of the Title Commitment (including, to the extent then available to Purchaser, a copy of each instrument shown as an exception therein) and the Survey, if any, and may notify Seller of any objections to the status of title to the

18
Exhibit 2.1

Property and survey matters (“ Title Objections ”). All matters set forth on the Title Commitment and Survey as to which Purchaser does not object or fails to object within said twenty (20) day period shall be deemed approved and shall be deemed “Permitted Encumbrances”.
(b)      Except as to Monetary Objections, Seller shall be under no obligation to cure any title or survey objection(s), other than Monetary Objections. Seller may, within five (5) Business Days after receipt of Purchaser’s notice of Title Objections (“Objection Notice”), deliver to Purchaser written notice (“ Cure Notice ”) setting forth which of Purchaser’s Title Objections (excluding Monetary Objections), if any, Seller will endeavor to cure. If Seller has not given a Cure Notice within five (5) Business Days after receipt of Purchaser’s Objection Notice, Seller shall be deemed to have given notice that it declines to cure Purchaser’s Title Objections. If Seller declines, or is deemed to have declined, to cure all of Purchaser’s Title Objections (other than Monetary Objections), Purchaser may, as its sole and exclusive remedy,
on or before the date that is ten (10) Business Days after Seller’s receipt of Purchaser’s Objection Notice, elect to terminate this Agreement by delivering written notice thereof to Seller, whereupon, the Deposit (or Letter of Credit or the proceeds thereof) shall be returned to Purchaser and except with respect to those matters expressly stated to survive termination of this Agreement, neither party shall have any further liability hereunder. If Purchaser fails to notify Seller that Purchaser has elected to terminate this Agreement within the time periods hereinabove provided, Purchaser’s right to terminate this Agreement pursuant to this Section 10.2(b) on account of Title Objections other than Monetary Objections shall be deemed waived. Notwithstanding anything to the contrary contained herein or elsewhere in this Agreement, Seller shall be obligated to cure, satisfy and/or have removed from title to the Property at or before Closing all Monetary Objections, and may use the cash proceeds of the Purchase Price to do so at the Closing.
(c)      If Purchaser’s Title Objections which Seller has agreed to cure in Seller’s Cure Notice are not cured by the Date of Closing, Purchaser may, at any time prior to Seller curing such Title Objection: (i) terminate this Agreement, whereupon Purchaser shall also receive a full refund of the Deposit (or Letter of Credit or proceeds thereof), and except with respect to those matters expressly stated to survive termination of this Agreement, neither party shall have any further liability to the other hereunder, or (ii) waive such objections and proceed to consummate the transaction contemplated by this Agreement notwithstanding any such Title Objections, without reduction of the Purchase Price except for Monetary Objections which Seller has failed to cure.
11.      Financing Contingency.
11.1      Purchaser intends to seek to obtain a commitment from an institutional lender for a loan (the “ Acquisition Loan ”) in a principal amount of not less than Twenty Seven Million Dollars ($27,000,000), the proceeds of which shall be used to refinance and pay off the indebtedness secured by the First Mortgage), for a term of not more than ten (10) years, and otherwise on terms and conditions satisfactory to Purchaser, to finance Purchaser’s acquisition of the Interests. In the event that Purchaser has not obtained the Loan Commitment by the date which is thirty (30) days after the Effective Date, Purchaser may, by written notice to Seller given on or before the thirty-second (32nd) day after the Effective Date, elect to terminate

19
Exhibit 2.1

this Agreement, whereupon Purchaser shall receive a full refund of the Deposit (or the Letter of Credit or the proceeds thereof) and neither party shall have any further liability to the other hereunder except for those provisions which by their express terms survive the termination of this Agreement. If Purchaser fails to give Seller written notice of Purchaser’s election to terminate this Agreement pursuant to this Section 11 on or before the thirty-second (32nd) day after the Effective Date, Purchaser shall be deemed to have waived its right to terminate pursuant to this Section 11 .
12.      Conditions Precedent.
12.1      As conditions precedent to Purchaser’s obligation to purchase the Interests, (i) Seller shall tender title to the PREIT Springfield Park Interests, free and clear of all liens, charges, encumbrances, pledges and security interests; (ii) the Title Company shall be unconditionally (except as expressly set forth herein) prepared to issue to PRDB upon completion of the Closing an owner's policy of title insurance with respect to the Springfield
Park Property in customary Pennsylvania form in an approximate amount equal to two hundred percent (200%) of the portion of the Purchase Price allocable to the PREIT Springfield Park Interests, subject only to the Permitted Encumbrances and the satisfaction of all customary requirements of the Title Company in connection with the issuance of an owner’s title insurance policy, (iii) the Title Company shall be unconditionally (except as expressly set forth herein) prepared to issue to Purchaser upon the completion of Closing an owner’s policy of title insurance with respect to the Springfield East Property in customary Pennsylvania form in an amount equal to such amount as shall be reasonably satisfactory to Purchaser, subject only to the Permitted Encumbrances and the satisfaction of all customary requirements of the Title Company in connection with the issuance of an owner’s title insurance policy, (iv) all representations made by Seller in this Agreement shall be true and correct in all material respects as of the date or dates as to which such representations are made; (v) in addition to those representations that are expressly provided to be effective as of the Closing Date, the representations made by Seller in Sections 6.3(a), (b), (c), (d), (e), (f), (g) and (h) (subject to the provisions of Sections 7.1), (j), (l), (n), (p) and (q) of this Agreement shall be true and correct in all material respects as of the Closing Date; (vi) Seller shall have complied in all material respects with its covenants as set forth in this Agreement; (vii) Seller shall have delivered to Purchaser all material documents and items to be delivered to Purchaser pursuant to this Agreement, including, but not limited to, the required Estoppel Certificates; (viii) except as otherwise expressly set forth herein, no Space Lease of any Major Tenant shall have been terminated for any reason, none of the Major Tenants shall have filed a petition in bankruptcy (or similar state court filing), or have an involuntary bankruptcy filed against it, and no Major Tenant shall have given any written notice to Seller exercising any cancellation right under its Space Lease; (ix) no Major Tenant nor Target shall have ceased operating at the Property; (x) Purchaser shall have closed the Acquisition Loan in accordance with the Loan Commitment; (xi) Purchaser shall have entered into an amended and restated limited partnership for PRDB and an amended and restated operating agreement for PRDB General Partner; and (xii) Purchaser shall have obtained (A) an Estoppel and Consent Certificate duly executed by all Springfield East Property Tenants in Common in the form attached as Exhibit I hereto and (B) an Estoppel and Consent Certificate duly executed by the Board of the Springfield East Condominium in the form attached as Exhibit K _ hereto. In the event that the conditions precedent set forth in this Section

20
Exhibit 2.1

12.1 have not been satisfied on or before the Date of Closing (or such earlier date as may be expressly provided in this Agreement), Purchaser may, by written notice to Seller, on or before the Closing Date, elect to extend the Closing Date for a period not to exceed sixty (60) days and, thereafter, if any conditions precedent remain unsatisfied following such extension period, Purchaser may, by written notice to Seller, terminate this Agreement, whereupon Purchaser shall receive a full refund of the Deposit (or the Letter of Credit or the proceeds thereof) and neither party shall have any further liability to the other hereunder except for those provisions of this Agreement which by their express terms survive the termination of this Agreement. If Purchaser fails to give Seller written notice of Purchaser’s election to terminate this Agreement pursuant to this Section 12.1 on or before the Closing Date, Purchaser shall be deemed to have waived its right to terminate pursuant to this Section 12.1 .
12.2      As conditions precedent to Seller’s obligation to convey the Interests to Purchaser: (i) Purchaser shall not be in material default in the performance of any covenant or agreement to be performed by Purchaser under this Agreement as of the Closing Date; and (ii) all representations and covenants made by Purchaser in this Agreement shall be
true and correct in all material respects as of the date or dates as to which such representations are made. In the event that the condition precedents set forth in this Section 12.2 have not been satisfied by Purchaser on or before the Closing Date, Seller may, by written notice to Purchaser, on or before the Closing Date, elect to terminate this Agreement, whereupon, Seller shall be entitled to retain the Deposit (or the Letter of Credit or the proceeds thereof) as its sole and exclusive remedy for Purchaser’s default. If Seller fails to give Purchaser written notice of Seller’s election to terminate this Agreement pursuant to this Section 12.2 prior to Closing, Seller shall be deemed to have waived its right to terminate pursuant to this Section 12.2 .
13.      Closing.
13.1      Closing Date and Location. Subject to any adjournments expressly allowed elsewhere in this Agreement, the closing of title (the “ Closing ”) shall take place, time being of the essence, on or before July 31, 2015. The Closing shall take place at the offices of Blank Rome LLP, attorneys for Purchaser, One Logan Square, Philadelphia, Pennsylvania 19103, commencing at 9:30 A.M. Eastern Time or, if otherwise agreed to by Seller and Purchaser, by escrow deliveries to the Escrowee (the actual date of Closing is herein referred to as the “ Closing Date ”).
13.2      Closing Expenses.
(a)      Seller’s Expenses. Seller shall pay (i) one-half (1/2) of any reasonable escrow or closing charge of the Title Company; and (ii) one-half (1/2) of all state and local realty transfer taxes imposed by reason of the transfer of the PR Springfield East Interest pursuant to this Agreement.
(b)      Purchaser’s Expenses. Purchaser shall pay (i) one-half (1/2) of any reasonable escrow or closing charge of the Title Company; (ii) one-half (1/2) of all state and local realty transfer taxes imposed by reason of the transfer of the PREIT Springfield East Interest pursuant to this Agreement; (iii) all expenses relating to its inspection of the Property

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Exhibit 2.1

including, but not limited to, engineering, environmental and property surveys and the Survey whether or not Purchaser closes title to the Property; (iv) the premium for all title insurance policies and endorsements that Purchaser or its lender obtains; and (v) any cost incurred in connection with any financing obtained by Purchaser (including, without limitation, mortgage recording fees and title insurance premiums).
(c)      The provisions of this Section 13.2 shall survive the Closing or earlier termination of this Agreement.
13.3      Closing Deliveries.
(a)      At Closing, Seller shall deliver to Purchaser or Escrowee:
(i)      an Assignment of Limited Partnership Interest (respecting PREIT’s limited partnership interest in PRDB) executed by PREIT in the form attached as Exhibit C );
(ii)      an Assignment of Membership Interest (respecting PREIT’s membership interest in PRDB General Partner executed by PREIT in the form annexed hereto as Exhibit D );
(iii)      a special warranty deed to the PR Springfield East Interest duly executed by PR Springfield in the form attached hereto as Exhibit D ;
(iv)      originals, or if originals are not available, copies of the Space Leases;
(v)      a duly executed certificate of Seller in the applicable form set forth in Treasury Regulations §1.1445-2(b)(2);
(vi)      realty transfer tax return(s) executed by Seller;
(vii)      estoppel certificates (each an “ Estoppel Certificate ” and collectively the “ Estoppel Certificates ”) from: (A) Target (as to the REA) in form and substance which do not vary materially from the form attached hereto as Exhibit H , (B) from the Major Tenants and three (3) of the remaining five (5) other Space Tenants of the Property (unless the lender under the Acquisition Loan shall require as a condition for the Acquisition Loan a greater number of estoppels in which event Seller shall provide the required number of estoppels said lender shall require) (collectively “ Estoppel Tenants ”), in form and substance which do not vary materially from the form annexed hereto as Exhibit F , or as to any Space Tenant whose Space Lease provides for a different form of estoppel certificate, the form provided for by such Space Lease, and from Bed, Bath and Beyond in connection with the Bed, Bath and Beyond Sublease, in form and substance which does not vary materially from the form attached hereto as Exhibit M . Notwithstanding the foregoing to the contrary, if the required Estoppel Certificates cannot be timely delivered, Seller may, but shall not be obligated to, adjourn the Closing for a period not to exceed thirty (30) days, to obtain the required Estoppel Certificates. If Seller, after exercising or waiving in writing its adjournment right set forth in this Section 13.3 (a)(vii) ,

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Exhibit 2.1

does not or cannot deliver the required Estoppel Certificates, Purchaser’s sole remedy shall be to terminate this Agreement and receive the return of the Deposit (or Letter of Credit or proceeds thereof) or to close notwithstanding the lack of the Estoppel Certificate(s) without any reduction of the Purchase Price and without any liability of Seller relative thereto. Notwithstanding anything contained herein to the contrary, Purchaser shall notify Seller upon the date which is three (3) Business Days following Purchaser’s receipt of executed Estoppel Certificates of Purchaser’s permitted objections to any such Estoppel Certificates. Purchaser’s failure to timely respond to Seller in accordance with the preceding sentence shall be deemed its approval of the Estoppel Certificate;
(viii)      standard seller’s affidavits to the Title Company in such form as may be reasonably required by the Title Company;
(ix)      a Waiver of Right of First Refusal with respect to the sale of the PR Springfield East Interest duly executed by Target in the form attached as Exhibit H hereto;
(x)      An Assignment and Assumption Agreement (respecting the Bed Bath & Beyond Sublease) duly executed by Pennsylvania Real Estate Investment Trust in the form of that attached as Exhibit L _ hereto; and
(xi)      Reasonable evidence of Seller’s organizational authority.
(xii)      An updated rent roll listing all Space Tenants as of the Closing Date.
(b)      At Closing Purchaser shall deliver to Seller or Escrowee:
(i)      the balance of the Purchase Price as provided in Section 3 hereof;
(ii)      an Assignment of Limited Partnership Interest (respecting PREIT’s limited partnership interest in PRDB) executed by Purchaser in the form of that attached as Exhibit C hereto;
(iii)      an Assignment of Membership Interest (respecting PREIT’s membership interest in PRDB General Partner) executed by Purchaser in the form annexed hereto as Exhibit D ;
(iv)      standard buyer’s affidavits to the Title Company in such form as may be reasonably required by the Title Company;
(v)      an Assignment and Assumption Agreement (respecting the Bed Bath & Beyond Sublease) duly executed by Purchaser in the form of that attached as Exhibit L hereto;

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Exhibit 2.1

(vi)      realty transfer tax return(s) executed by Purchaser, if required; and
(vii)      reasonable evidence of Purchaser’s organizational authority.
13.4      Apportionments and Reimbursements. The following adjustments shall be made with respect to the Premises, and the following procedures shall be followed:
(a)      Preparation of Prorations. At least five (5) Business Days before the Closing Date, Seller shall prepare and deliver to Purchaser unaudited statements on an accrual basis for PRDB and for the Springfield East Property as operated by the Tenants in Common (the “Preliminary Proration Statement”) showing prorations for the items set forth below, calculated as of 11:59 p.m. on the day preceding the Closing Date, on the basis of a 365-day year. Purchaser and its representatives shall be afforded reasonable access to the books and records of PRDB and the Tenants in Common with respect to the Property. Purchaser and Seller shall agree upon any adjustments to be made to the Preliminary Proration Statement before the Closing. All expenses and liabilities, determined on an accrual basis, of PRDB and the
Springfield East Property as operated by Tenants in Common shall be apportioned as aforesaid such that all such expenses and liabilities accruing prior to the Closing Date shall be borne by the PRDB as constituted prior to Closing (“ Existing PRDB ”) and Springfield East Property Tenants in Common as constituted prior to Closing (“ Existing Springfield East TIC ”), and all such expenses and liabilities accruing from after the Closing Date shall be borne by PRDB as constituted following Closing (“ New PRDB ”) and the Springfield East Property Tenants in Common as constituted following Closing (“ New Springfield East TIC ”). Any errors in the apportionments pursuant to this Section 13.4 shall be corrected by appropriate re-adjustment post-Closing, provided that notice of any such error, with supporting calculations, shall be given no later than one (1) year after the Closing Date. The provisions of this Section 6.1 shall survive the Closing. The items to be apportioned include, without limitation, the following:
(i)      Rent. Rent (including any additional rent and percentage rents) under the Space Leases collected prior to the Closing Date. Promptly following the end of the lease year in which the Closing occurs, Seller and the Purchaser shall re-prorate such percentage rent as and when complete and accurate information becomes available with respect to actual percentage rent paid for such lease year. Subject to the prior sentence with respect to percentage rent, if at the Closing Date any past due rentals are owing by Space Tenants, the parties hereto agree that the first rent and other remittances received (including judgments on past-due amounts) after the Closing Date from such Space Tenants shall be held and disbursed as follows: (1) first, to New PRDB and New Springfield East TIC an amount equal to the rentals, fees and damages accrued and due from such Space Tenants from and after the Closing Date; (2) next, to Existing PRDB and Existing Springfield East TIC an amount equal to the rentals, fees and damages accrued and due from such Space Tenants for the period prior to the Closing Date; and (3) in the event of an overpayment, the balance to New PRDB and New Springfield East TIC.
                

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Exhibit 2.1

(ii)      Real Estate Taxes; Other Taxes. Current real property and personal property taxes, sewer rents, water charges and charges and other state, county and municipal taxes, charges and assessments affecting the Property, or any portion thereof, on the basis of the applicable fiscal year for which the same are levied or assessed. If the rate of any such taxes, rents, charges or assessments shall not be fixed prior to the Closing Date, there shall be an adjustment made on the Closing Date on the basis of 100% of such taxes, charges, assessments or rents for the preceding fiscal year, and the same shall be further adjusted when the rate for the current fiscal year is fixed. Any such taxes, rents, charges or assessments which are not yet due and payable on the Closing Date because the same are paid in arrears shall be adjusted on the Closing Date.
(iii)      Utilities. Charges for water, electricity, gas, telephone and all other utilities. If the consumption of any of the foregoing is measured by meters, Sellers shall furnish a current reading of each meter at the Closing Date, if reasonably obtainable. If there is no such meter or if the bills for any of the foregoing have not been issued prior to the Closing Date, the charges therefore shall be adjusted on the Closing Date on the basis of the charges for the prior period for which bills were issued and shall be further adjusted when the bills for the current period are issued.
(iv)      Contracts. Charges payable and credits or payments receivable under any service contracts which are to remain in effect after Closing attributable to the Property.
(v)      Security Deposits and Other Deposits. At the Closing, Seller shall cause all security deposits (including, without limitation, all letters of credit) held and retained by the Fee Owners to be deposited (or held, as applicable) in the applicable accounts of New PRDB and New Springfield East TIC.
(vi)      Assessments. If on the Closing Date the Property shall be affected by an assessment or assessments which are payable in installments or a lump sum, Existing PRDB and Existing Springfield East TIC shall be responsible for any installments which are liens or which are otherwise due and payable as of the Closing Date and New PRDB and New Springfield East TIC shall be responsible for all other installments of any such assessment.
(vii)      Leasing Commissions; Tenant Improvement Allowances. Except as otherwise expressly set forth herein, including, without limitation, with regard to Reimbursable Lease Expenses, on or before the Closing Date, Seller shall cause Existing PRDB and Existing Springfield East TIC to pay in full (i) all leasing commissions and locator’s and finder’s fees due to leasing or other agents for each Space Lease entered into prior to the Effective Date (other than leasing brokerage commissions due with respect to renewals, extensions or expansions by Space Tenants pursuant to such Space Leases which occur after the Closing Date, to the extent not due and payable prior to the Closing Date), and (ii) all tenant improvement allowances for each Space Lease entered into prior to the Effective Date due to Space Tenants under their Space Leases.

25
Exhibit 2.1

(viii)      Reimbursable Lease Expenses. On the Closing Date, Purchaser shall cause New PRDB and New Springfield East TIC to reimburse Existing PRDB and Existing Springfield Park TIC for any and all Reimbursable Lease Expenses to the extent that the same have been paid by Fee Owners prior to Closing. In addition, at Closing, Purchaser shall cause New PRDB and New Springfield East TIC to assume the obligations of Existing PRDB and Existing Springfield Park TIC to pay, when due any Reimbursable Lease Expenses unpaid as of the Closing. Purchaser shall indemnify and hold harmless Seller from and against any and all costs, expenses, (including reasonable attorneys’ fees and expenses) with respect to Seller’s portion of any such Reimbursable Lease Expenses which remain unpaid for any reason at the time of Closing, which obligations of Purchaser shall survive the Closing. Each party shall make available to the other all records, bills, vouchers and other data in such party’s possession verifying Reimbursable Lease Expenses and the payment thereof.
(ix)      Recoveries of Tenant-Reimbursable Expenses. As used herein, “Recoveries” means all common area maintenance charges, real estate tax reimbursements, expenses and charges payable by or to the Fee Owners under or in connection with any Space Lease or reciprocal easement agreements (or the like) binding on the Property. Following the Closing, Purchaser shall be responsible to cause the Fee Owners to calculate, adjust, reconcile, bill and pay Recoveries collectible or payable for the year of (or the period including, as applicable) Closing. Purchaser shall be liable to cause the Fee Owners to pay
(which shall in all events occur within one year following the Closing Date) to Seller for fifty percent (50%) of any net Recoveries actually collected for the year of (or the period including, as applicable) the Closing with respect to underpayments of Recoveries made by Space Tenants relating to any period prior to the Closing, to the extent not collected as of the close of business on the day before the Closing Date and not apportioned under this Section 13.4. Seller shall be liable to pay (which shall in all events occur within one year following the Closing Date) to Purchaser fifty percent (50%) of any refunds or credits which may be due to Space Tenants with respect to overpayments of Recoveries made by such Space Tenants relating to any period prior to the Closing, to the extent not apportioned under this Section 13.4
(x)      Cash on Hand. All cash held by the Fee Owners on the Closing Date shall belong to Existing PRDB and Existing Springfield East TIC and shall either be distributed to them at Closing or Existing PRDB and Existing Springfield East TIC shall receive a credit for same.
(b)      Post-Closing Reconciliation. All prorations shall be subject to adjustment in cash after the Closing outside of escrow, as and when complete and accurate information becomes available. Seller and Purchaser each shall reasonably cooperate with the other to provide such information as may be reasonably requested by each such party or as may be required under the Space Leases to complete such reconciliation.
(c)      Survival. The obligations of Seller and Purchaser under this Section 13.4 shall survive the Closing.
14.      Default.
        

26
Exhibit 2.1

14.1      Purchaser’s Default. If Purchaser should commit a material default under this Agreement, and such default remains uncured for five (5) Business Days after Purchaser’s receipt of notice thereof from Seller, Seller may elect to cancel this Agreement by giving notice to Purchaser and Escrowee. The parties hereto agree that the damages that Seller will sustain as a result of such default will be substantial but will be difficult to ascertain. Accordingly, the parties agree that in the event that Seller shall elect to terminate this Agreement as a result of such default, Escrowee is hereby directed to pay the Deposit (or the proceeds of the Letter of Credit) to Seller who shall retain the Deposit (or the proceeds of the Letter of Credit) as and for its liquidated damages and sole remedy hereunder, in which event this Agreement shall be null and void and of no further force or effect except for those provisions expressly stated to survive the termination of this Agreement.
14.2      Seller’s Default. If Seller should commit a material default under this Agreement prior to Closing, and such default remains uncured for five (5) Business Days after Seller’s receipt of written notice thereof from Purchaser, Purchaser’s sole remedy for such Seller’s default shall be to elect either to (i) cause the refund of the Deposit (or Letter of Credit or proceeds thereof) to be delivered to Purchaser and receive from Seller up to a maximum of Seventy Five Thousand Dollars ($75,000.00) to reimburse Purchaser for its out-of-pocket expenses in connection with attempting to consummate the transaction which is the subject of this Agreement, and upon the making of such refund and the receipt of such payment from Seller, this Agreement shall be null and void and of no further force or effect except for those provisions expressly stated to survive the termination of this Agreement, or (ii) commence an action for specific performance.
15.      Risk of Loss.
15.1      Condemnation.
(a)      If, at any time prior to the Closing Date, all or a Substantial Portion of the Property shall be taken in the exercise of the power of condemnation or eminent domain by any sovereign, municipality or other public or private authority or shall be the subject of a duly noticed hearing held by any such authority relating to a pending taking in the exercise of the power of condemnation or eminent domain (a “ Taking ”), then Purchaser may cancel this Agreement by written notice given to Seller within ten (10) Business Days after receipt of notice from Seller of such Taking, in which event this Agreement shall be deemed cancelled and of no force and effect and neither party shall have any further obligations or liabilities against or to the other, except that Seller shall cause the return of the Deposit (or the Letter of Credit or the proceeds thereof) to Purchaser. In the case of a Taking of less than a Substantial Portion of the Property or if Purchaser does not elect to terminate this Agreement in the case of a Taking of all or a Substantial Portion of the Property, as provided for above, then this Agreement shall remain in full force and effect and on the Closing either (A) Fee Owners shall continue to be entitled to any condemnation award to be granted and Seller shall assign all of its right, title and interest to such award to Fee Owners, or (B) if such award shall have been paid to Seller or the Fee Owners, the Purchase Price shall be reduced by one half (1/2) of (x) the amount thereof, less (y) such sums, if any, actually and reasonably expended by Seller or the Fee Owners to prosecute

27
Exhibit 2.1

such claim and restore the Property. Seller agrees to deliver promptly after receipt thereof any and all written notices of a Taking received by Seller after the date hereof.
(b)      As used herein, a Taking of a “ Substantial Portion ” of the Property shall mean a Taking which (i) materially and adversely affects access to or from the Property for more than one hundred eighty (180) days or (ii) will entitle any Space Tenant to terminate any Space Lease.
15.2      Destruction or Damage. In the event that the Property, or any part thereof, shall be damaged or destroyed by fire or any other casualty (“ Casualty ”) prior to the Closing Date, Seller shall give Purchaser prompt written notice of such event together with an estimate of the cost and time to restore prepared by an independent insurance examiner or engineer selected by Seller. If the Casualty will (a) require more than Two Hundred Fifty Thousand Dollars ($250,000) to repair, or (b) entitle any Major Tenant to terminate any Space Lease (each event described in (a) or (b) herein called a “ Casualty Termination Event ”), Purchaser may cancel this Agreement by notice to Seller within ten (10) Business Days after receipt of notice from Seller specifying the Casualty Termination Event, in which event this Agreement shall be deemed terminated and of no force and effect and neither party shall have any further rights or liabilities against or to the other except for those provisions expressly stated to survive the termination of this Agreement and Seller shall cause the return of the Deposit (or the Letter of Credit or the proceeds thereof) to Purchaser. If there is no Casualty Termination Event or if Purchaser does not timely elect to cancel this Agreement in the event of a Casualty Termination Event, this Agreement shall remain in full force and effect and any insurance
proceeds paid or payable to Fee Owners on account of such Casualty, less such sums, if any, as shall have been actually and reasonably incurred by Fee Owners in connection with the repair or restoration of such Casualty or the prosecution of such claim, shall be retained by Fee Owners so that the same may be employed after Closing to repair or restore such casualty or to be otherwise used or distributed as Fee Owners shall elect.
16.      Purchaser’s Review Period.
16.1      Between the Effective Date and the Closing Date, Purchaser may perform inspections of the Property at reasonable times (and upon at least two (2) Business Days prior written notice to Seller), subject to the rights of the Space Tenants. After making such inspections, Purchaser, at Purchaser’s sole expense, shall restore the Property to its condition prior to such inspections. Purchaser may not conduct any intrusive inspections or borings without the prior written approval of Seller, which approval shall not be unreasonably withheld, delayed or conditioned. Purchaser shall indemnify and hold Seller and the Fee Owners free and harmless from and against any and all costs, expenses, claims, losses or damages, liabilities and judgments (including reasonable attorneys’ fees and disbursements) arising out of Purchaser’s inspection of the Property, whether caused by Purchaser or its contractors, agents or employees or anyone acting by, through, under, or at the direction, of the foregoing. Without limiting the generality of the foregoing indemnity, Purchaser shall remove any mechanics’ or other lien which may be recorded against the Property by any party providing labor, materials or services at the request of Purchaser. The provisions of this Section 16 shall survive any termination of this Agreement.
    

28
Exhibit 2.1

17.      Miscellaneous.
17.1      Bulk Sales. To the extent applicable, Purchaser hereby waives any requirement for obtaining a tax clearance certificates in connection with bulk sales and transfers (a “Tax Clearance Certificate”), provided that Seller shall indemnify, and hold harmless Purchaser from and against any and all damages, claims or liens arising from Seller’s failure to obtain such Tax Clearance Certificate. The provisions of this Section 17.1 shall survive the Closing.
17.2      Broker. Seller and Purchaser represent to each other that neither party has dealt with any broker or finder in connection with the transaction contemplated by this Agreement. Seller and Purchaser shall indemnify and hold the other free and harmless from and against any liabilities, damages, costs or expenses (including, but not limited to, reasonable attorneys’ fees and disbursements) suffered by the indemnified party arising from a misrepresentation or a breach of any covenant made by the indemnifying party pursuant to this Section. The provisions of this Section shall survive the Closing or termination of this Agreement.
17.3      Assignment of this Agreement. This Agreement may not be assigned by Purchaser without the consent of Seller. Notwithstanding the foregoing, Purchaser may assign its rights under this Agreement, without the consent of Seller, to a corporation, partnership, limited liability company or other entity in which Ronald Rubin and/or George Rubin have a direct or indirect ownership interest, provided such assignee assumes in writing all of the obligations of Purchaser to be performed under this Agreement and an original of such fully executed assignment and assumption agreement is delivered to Seller at least two (2) Business Days prior to the Closing. No assignment of this Agreement shall relieve Purchaser from any of its obligations set forth herein arising prior to or after the effective date of the assignment. In the event Purchaser assigns its interests under this Agreement, Purchaser shall be solely liable for any real estate transfer taxes imposed upon such assignment and shall indemnify and hold harmless Seller from and against any and all liability arising from the imposition of any realty transfer taxes upon such assignment by Purchaser. The provisions of this Section shall survive the Closing or termination of this Agreement.
17.4      Attorneys’ Fees. If either party institutes a legal proceeding against the other party in connection with this Agreement, the losing party in such proceeding shall reimburse the prevailing party all reasonable attorneys’ fees paid by the prevailing party in connection with such proceeding. The provisions of this Section shall survive the Closing or termination of this Agreement.
17.5      Notices. All notices hereunder to Seller, Purchaser, Escrowee or the Title Company shall be sent by Federal Express or other overnight courier which obtains a signature upon delivery, or may be sent via facsimile, or may be delivered by hand delivery addressed to such party at the address of such party set forth below or at such other address as such party shall designate from time to time by notice in accordance with this Section 17.5 :

29
Exhibit 2.1

SELLER:
PREIT Associates, L.P.
PR Springfield Associates, L.P.
c/o Pennsylvania Real Estate Investment Trust
200 South Broad Street, 3rd Floor
Philadelphia, PA 19102-3803
Attention: Mario C. Ventresca, Jr.
Senior Vice President
Acquisitions and Asset Management
Facsimile: 215-546-1271

with a copy to:     

Pennsylvania Real Estate Investment Trust
200 South Broad Street, 3rd Floor
Philadelphia, PA 19102-3803
Attention: Bruce Goldman
Executive Vice President and General Counsel
Facsimile:

PURCHASER:

Rubin Retail Acquisition, L.P.
200 South Broad Street, 3rd Fl.
Philadelphia, PA 19072
Attention: Ronald Rubin and George Rubin
Facsimile: (215) 546-1271

with a copy to:

Blank Rome LLP
One Logan Square
130 N. 18th Street
Philadelphia, PA 19103
Attention: G. Craig Lord and Peter J. Soloff
Facsimile: (215) 832-5680

ESCROWEE/TITLE COMPANY:
Land Services USA, Inc.
1835 Market Street, Suite 420
Philadelphia, PA 19103
Attention: Michael G. Moyer
Facsimile: (215) 568-8219

30
Exhibit 2.1

Notices shall be deemed served in the case of overnight courier or hand delivery, on the date actually delivered to or rejected by the intended recipient, and in the case of facsimile, upon the sender’s receipt of confirmation of transmission of such facsimile notice produced by the sender’s facsimile machine, provided a copy of such transmission and the confirmation receipt thereof is deposited with an overnight courier for next day delivery properly addressed and paid for, except for notice(s) which advise the other party of a change of address of the party sending such notice or of such party’s attorney, which notice shall not be deemed served until actually received by the party to whom such notice is addressed or delivery is refused by such party. Notices on behalf of the respective parties may be given by their attorneys and such notices shall have the same effect as if in fact subscribed by the party on whose behalf it is given. Notwithstanding the foregoing provisions of this Section (a) notices served by hand delivery shall be deemed served on the date of delivery if delivered at or prior to 5:00 P.M. Eastern Time on a Business Day and on the next Business Day if delivered after 5:00 P.M. Eastern Time on a Business Day or at any time on a non-Business Day and (b) notices served by facsimile shall be deemed served on the date of transmission if the sender receives confirmation of transmission in the manner set forth above at or prior to 5:00 P.M. Eastern Time on a Business Day and on the next Business Day if the sender receives confirmation of transmission in the manner set forth above after 5:00 P.M. Eastern Time on a Business Day or at any time on a non-Business Day.
17.6      Further Assurances. The parties each agree to do such other and further acts and things, and to execute and deliver such instruments and documents (not creating any obligations additional to those otherwise imposed by this Agreement), as either may reasonably request from time to time, whether at or after the Closing, in furtherance of the purposes of this Agreement. The provisions of this Section shall survive the Closing for one (1) year.
17.7      Survival. Unless otherwise expressly provided herein, all representations of the parties shall survive the Closing.
17.8      Confidentiality.
(a)      Purchaser agrees that all documentation made available to Purchaser by Seller (or its representatives) concerning the Property, including, without limitation, the Space Leases, development plans, proformas and rent rolls (all of the aforementioned information is collectively referred to as “ Evaluation Material ”) shall be treated confidentially as hereinafter provided.
(b)      All Evaluation Material shall not be used by Purchaser for any purpose other than evaluating a possible purchase as contemplated by this Agreement. Purchaser agrees to keep all Evaluation Material (other than information which is a matter of public record or is provided in other sources readily available to the public other than as a result of disclosure thereof by Purchaser or Related Parties) confidential; provided, however, that the Evaluation Material may be disclosed to the directors, officers, employees, owners, members and partners of Purchaser, and to Purchaser’s prospective lenders, attorneys, accountants and consultants (all of whom are collectively referred to as “ Related Parties ”) for the purpose of evaluating a possible purchase as aforesaid. The Related Parties shall be informed of the confidential nature of the

31
Exhibit 2.1

Evaluation Material and shall be directed to keep all such information in confidence and use such information only for the purpose of evaluating a possible purchase by Purchaser. Purchaser will promptly, upon request of Seller following the termination of this Agreement, deliver to Seller all Evaluation Material furnished by Seller, whether furnished before or after the date hereof, without retaining copies thereof. Purchaser will direct Related Parties to whom Evaluation Material is made available not to make similar disclosures and any such disclosure shall be deemed made by and be the responsibility of Purchaser.
(c)      Prior to the Closing, Purchaser shall keep confidential and shall cause the Related Parties to keep confidential the provisions of this Agreement and the transactions contemplated thereunder. After the Closing, Purchaser shall not make any public disclosures and shall cause the Related Parties not to make any public disclosures mentioning Seller regarding the provisions of this Agreement or the transactions accomplished at the Closing without the prior written consent of Seller, which consent shall not be unreasonably withheld, delayed or conditioned by Seller.
(d)      The provisions of this Section 17.8 shall survive the Closing or termination of this Agreement.
17.9      Joint and Several Liability. The liability of PREIT and PR Springfield for all obligations of the Seller pursuant to this Agreement shall be joint and several.
17.10      Recording. Purchaser shall not record this Agreement or any memorandum thereof and any such recording shall be null and void and shall constitute a default hereunder.
17.11      Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective heirs, executors, administrators, successors and permitted assigns, if any, but nothing contained herein shall be deemed a waiver of the provisions of Section 17.3 hereof.
17.12      Entire Agreement. This Agreement and the Schedules and Exhibits annexed hereto constitute the entire agreement between the parties hereto with respect to the subject matter hereof, and all understandings and agreements heretofore or simultaneously had between the parties hereto are merged in and are contained in this Agreement and said Schedules and Exhibits.
17.13      Waiver and Modifications. The provisions of this Agreement may not be waived, changed, modified or discharged orally, but only by an agreement in writing signed by the party against which any waiver, change, modification or discharge is sought.
17.14      Captions and Titles. The captions or section titles contained in this Agreement and the Index, if any, are for convenience and reference only and shall not be deemed a part of the text of this Agreement.
17.15      Construction. The terms “hereof,” “herein,” and “hereunder,” and words of similar import, shall be construed to refer to this Agreement as a whole, and not to any

32
Exhibit 2.1

particular article or provision, unless expressly so stated. All words or terms used in this Agreement, regardless of the number or gender in which they are used, shall be deemed to include any other number and any other gender as the context may require.
17.16      Non-Business Days. If a party is required to perform an act or give a notice on a date that is a Saturday, Sunday or national holiday, the date such performance or notice is due shall be deemed to be the next Business Day.
17.17      Governing Law and Jurisdiction. This Contract is to be governed and construed in accordance with the laws of the Commonwealth of Pennsylvania, without giving effect to principles of conflicts of law. Purchaser and Seller hereby submit to the jurisdiction of the State and United States District courts located within the Commonwealth of Pennsylvania in respect of any suit or other proceeding brought in connection with or arising out of this Agreement. The provisions of this subsection shall survive the Closing or earlier termination of this Agreement.
17.18      Counterparts; Facsimile Signatures. This Agreement may be executed in two or more counterparts and each of such counterparts, for all purposes, shall be deemed to be an original but all of such counterparts together shall constitute but one and the same instrument, binding upon all parties hereto, notwithstanding that all of such parties may not have executed the same counterpart. The exchange of counterparts of this Agreement by means of facsimile transmission or by electronic mail transmission which shall constitute authentic reproductions of signatures shall constitute a valid exchange of this Agreement and shall be binding upon the parties hereto.
17.19      No Third Party Benefits. This Agreement is made for the sole benefit of Seller and Purchaser and their respective successors and assigns (subject to Section 13.2 above) and no other person shall have any right, remedy or legal interest of any kind by reason of this Agreement.
17.20      Severability. If any provision of this Agreement is determined by a court of competent jurisdiction to be invalid or unenforceable, such determination will not affect the remaining provisions of this Agreement, all of which will remain in full force and effect.
17.21      No Marketing. So long as this Agreement remains in effect, Seller shall not market the Property for sale or disposition or enter into discussions with other parties for same. The provisions of this Section 17.21 shall survive any termination of this Agreement.

[SIGNATURE PAGE TO FOLLOW]
 


33
Exhibit 2.1

IN WITNESS WHEREOF , the parties hereto have duly executed this Agreement the day and year first above written.
 
SELLER:

PREIT ASSOCIATES, L.P. , a Delaware limited partnership

By: Pennsylvania Real Estate Investment Trust, a Pennsylvania business trust, its general partner

        By: /s/ Bruce Goldman
        Print Name: Bruce Goldman
        Title: Executive Vice President - General Counsel and Secretary

Employer ID Number:______________________


PR SPRINGFIELD ASSOCIATES, L.P. , a Pennsylvania limited partnership

By: PR Springfield Trust, a Pennsylvania unincorporated association in business trust, its general partner

        By: /s/ Bruce Goldman
        Print Name: Bruce Goldman
        Title: Executive Vice President - General Counsel and Secretary

Employer ID Number:______________________


PURCHASER:

RUBIN SIX PENN CENTER LLC,  a Delaware limited liability company

        By: /s/ Ronald Rubin
             Ronald Rubin, Authorized Signatory


Employer ID Number:______________________



34
Exhibit 2.1



SPRINGFIELD RUBIN TIC LLC, a Pennsylvania limited liability company

By: Rubin Six Penn Center LLC, a Delaware limited liability company, its sole member


                                 By: /s/ Ronald Rubin
                                 Ronald Rubin, Authorized Signatory

Employer ID Number:______________________







LAND SERVICES USA, INC. , Escrowee
By: /s/ Jennifer I. Stiectman
Print Name: Jennifer I. Stiectman
Title: Title Company

 
 


35
Exhibit 10.1

Loan Number: 1009394

SECOND AMENDMENT TO CREDIT AGREEMENT

This sECOND AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is dated as of June 26, 2015, by and among PREIT Associates, L.P., a Delaware limited partnership (“PREIT”), PREIT-RUBIN, INC., a Pennsylvania corporation (“PREIT-RUBIN”; together with PREIT, each individually, a “Borrower” and collectively, the “Borrower”), PENNSYLVANIA REAL ESTATE INVESTMENT TRUST, a Pennsylvania business trust (the “Parent”), each of the LENDERS (as defined below) and WELLS FARGO BANK, NATIONAL ASSOCIATION (the “Administrative Agent”).

WHEREAS, the Borrower, the Parent, each of the financial institutions initially a signatory thereto together with their assignees pursuant to Section 11.6.(b) (the “Lenders”), and the Administrative Agent have entered into that certain Credit Agreement dated as of April 17, 2013 (as amended and in effect immediately prior to the date hereof, the “Credit Agreement”); and

WHEREAS, the Borrower, the Parent, the Lenders and the Administrative Agent desire to amend certain provisions of the Credit Agreement on the terms and conditions contained herein.

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

Section 1.      Definitions . Capitalized terms used in this Amendment and not otherwise defined herein shall have the respective meanings given such terms in the Credit Agreement.

Section 2.      Specific Amendments to Credit Agreement . Upon the effectiveness of this Amendment, the parties hereto agree that the Credit Agreement shall be amended as follows:

(a)      The Credit Agreement is amended by adding the following sentence at the end of the definition of “ LIBOR ”:

If LIBOR determined as provided above would be less than zero, LIBOR shall be deemed to be zero for each LIBOR Loan that has not been identified by the Borrower in accordance with the terms of this Agreement as being subject to a Specified Derivative Contract that provides a hedge against interest rate risk.

(b)      The Credit Agreement is further amended by restating the following definitions contained in Section 1.1. thereof in their entireties as follows:

“ Applicable Facility Fee ” means:

(a)      Prior to the Investment Grade Rating Date, the percentage set forth in the table below corresponding to the Level at which the “Applicable Margin” is determined in accordance with the definition thereof:


- 1 -
Exhibit 10.1

Level
Facility Fee
1
0.20%
2
0.25%
3
0.30%
4
0.35%

(b)      On, and at all times after, the Investment Grade Rating Date, the percentage set forth in the table below corresponding to the Level at which the “Applicable Margin” is determined in accordance with the definition thereof.

Level
Facility Fee
1
0.15%
2
0.20%
3
0.25%
4
0.30%

Any change in the applicable Level at which the Applicable Margin is determined shall result in a corresponding and simultaneous change in the Applicable Facility Fee. The provisions of this definition shall be subject to Section 2.4.(c).

“ Applicable Margin ” means:

(a) Prior to the Investment Grade Rating Date, the Applicable Margin shall be determined pursuant to this clause (a) from time to time based on the percentage rate set forth in the table below corresponding to the level (each, a “Level”) in which the ratio of Total Liabilities to Gross Asset Value as determined from time to time in accordance with Section 8.1.(b) in effect at such time falls:
    
Level
Ratio of Total Liabilities to Gross Asset Value
Applicable Margin for LIBOR Loans
Applicable Margin for Base Rate Loans
1
Less than 0.450 to 1.00
1.20%
1.20%
2
Equal to or greater than 0.450 to 1.00 but less than 0.500 to 1.00
1.25%
1.25%
3
Equal to or greater than 0.500 to 1.00 but less than 0.550 to 1.00
1.30%
1.30%
4
Equal to or greater than 0.550
1.55%
1.55%

The Applicable Margin shall be determined by the Administrative Agent from time to time, based on the ratio of Total Liabilities to Gross Asset Value as set forth in the Compliance Certificate most recently delivered by the Parent pursuant to Section 7.1.(a)(iii). Any adjustment to the Applicable Margin shall be effective as of the first day of the calendar month immediately following the month during which the Parent delivers to the Administrative Agent the applicable Compliance Certificate pursuant to Section 7.1.(a)(iii). If the Parent fails to deliver a Compliance Certificate pursuant to Section 7.1.(a)(iii), the Applicable Margin shall equal the percentage corresponding to

- 2 -
Exhibit 10.1

Level 4 until the first day of the calendar month immediately following the month that the required Compliance Certificate is delivered. Notwithstanding the foregoing, for the period from the Second Amendment Effective Date through but excluding the date on which the Administrative Agent first determines the Applicable Margin as set forth above, the Applicable Margin shall be determined based on Level 2. Thereafter, until the Investment Grade Rating Date, such Applicable Margin shall be adjusted from time to time as set forth in this clause (a).

(b)      On, and at all times after, the Investment Grade Rating Date, the Applicable Margin shall be determined pursuant to this clause (b) based on the percentage rate set forth in the table below corresponding to the Level in which the Parent’s Credit Rating falls. During any period that the Parent has received Credit Ratings from each of S&P, Fitch and Moody’s that are not equivalent and the difference between the highest and lowest of such Credit Ratings is (i) one Level, then the Applicable Margin shall be determined based on the highest of such Credit Ratings or (ii) two or more Levels, then the Applicable Margin shall be determined based on the average of the two highest Credit Ratings (unless the average is not a recognized Level, in which case the Applicable Margin shall be determined based on the second highest Credit Rating). During any period that the Parent has received only two Credit Ratings from any of S&P, Fitch and Moody’s that are not equivalent and the difference between such Credit Ratings is (x) one Level, then the Applicable Margin shall be determined based on the higher of such Credit Ratings or (y) two or more Levels, then the Applicable Margin shall be determined based on the average of both such Credit Ratings (unless the average is not a recognized Level, in which case the Applicable Margin shall be determined based on the Credit Rating one Level below the Level corresponding to the higher Credit Rating). During any period that the Parent has only received a Credit Rating from Moody’s or S&P, then the Applicable Margin shall be based upon such Credit Rating. During any period after the Investment Grade Rating Date that the Parent has (A) not received a Credit Rating from any Rating Agency or (B) only received a Credit Rating from a Rating Agency that is neither S&P nor Moody’s, then the Applicable Margin shall be determined based on Level 4 in the table below. Any change in the Parent’s Credit Rating which would cause it to move to a different Level shall be effective as of the first day of the first calendar month immediately following such change.

Level
Credit Rating (S&P/Fitch/Moody’s)
Applicable Margin for LIBOR Loans
Applicable Margin for Base Rate Loans
1
BBB+/Baa1 or better
0.925%
0.925%
2
BBB/Baa2
1.000%
1.000%
3
BBB-/Baa3
1.200%
1.200%
4
Lower than BBB-/Baa3 or not rated
1.550%
1.550%

(c)      The provisions of this definition shall be subject to Section 2.4.(c).

- 3 -
Exhibit 10.1



“ Termination Date ” means June 26, 2018, or such later date to which such date may be extended in accordance with Section 2.13.

(c)      The Credit Agreement is further amended by restating the last sentence in the definition of “Unencumbered Property” in its entirety as follows:

Notwithstanding anything to the contrary in this definition, if a Property listed on Schedule 1.1(B) at any time after the Effective Date fails to satisfy any requirements in clause (b) of this definition (other than those, if any, it failed to satisfy on the Effective Date), such Property shall no longer be an Unencumbered Property until such time as it satisfies at least all of the requirements in such clause (b) that it satisfied on the Effective Date.

(d)      The Credit Agreement is further amended by adding the following definitions to Section 1.1. thereof in the appropriate alphabetical order:

“ Anti-Corruption Laws ” means all Applicable Laws of any jurisdiction concerning or relating to bribery, corruption or money laundering, including without limitation, the Foreign Corrupt Practices Act of 1977, as amended.

“ Second Amendment Effective Date ” means June 26, 2015.

“ 2015 Five-Year Term Loan Agreement ” means that certain Five -Year Term Loan Agreement dated as of June 26, 2015 by and among PREIT, PREIT-RUBIN, the Parent, the financial institutions party thereto as “Lenders”, Wells Fargo, as Administrative Agent, and the other parties thereto.

(e)      The Credit Agreement is further amended by restating the second sentence of Section 2.1.(b) thereof in its entirety as follows

Each Notice of Revolving Loan Borrowing shall specify the aggregate principal amount of the Revolving Loans to be borrowed, the date such Revolving Loans are to be borrowed (which must be a Business Day), the use of the proceeds of such Revolving Loans, the Type of the requested Revolving Loans, and if such Revolving Loans are to be LIBOR Loans, the initial Interest Period for such Revolving Loans and the principal amount of such Revolving Loans, if any, that the Borrower has elected to have subject to a Specified Derivatives Contract that provides a hedge against interest rate risk and the Specified Derivatives Contract(s) to which such amount is subject.

(f)      The Credit Agreement is further amended by restating Section 2.2.(a) in its entirety to read as follows:

(a)      Swingline Loans . Subject to the terms and conditions hereof, including without limitation Section 2.17., the Swingline Lender agrees to make Swingline Loans to the Borrower, during the period from the Second Amendment Effective Date to but excluding the Swingline Maturity Date, in an aggregate principal amount at any one time outstanding up to, but not exceeding, $50,000,000, as such amount may be reduced from time to time in accordance with the terms hereof; provided , that the Swingline Lender shall

- 4 -
Exhibit 10.1

not be obligated to make a Swingline Loan if after giving effect to the making of such Swingline Loan, the aggregate principal amount of outstanding Revolving Loans made by it in its capacity as a Lender plus the aggregate principal amount of outstanding Swingline Loans made by it in its capacity as a Swingline Lender would exceed the Commitment of the Swingline Lender in its capacity as a Lender. If at any time the aggregate principal amount of the Swingline Loans outstanding at such time exceeds the Swingline Commitment in effect at such time, or if at any time the aggregate principal amount of the outstanding Swingline Loans and outstanding Revolving Loans made by the Swingline Lender in its capacity as a Lender exceeds the Commitment of the Swingline Lender in its capacity as a Lender in effect at such time, the Borrower shall immediately pay the Administrative Agent for the account of the Swingline Lender the amount of such excess. Subject to the terms and conditions of this Agreement, the Borrower may borrow, repay and reborrow Swingline Loans hereunder.

(g)      The Credit Agreement is further amended by restating clauses (i) and (ii) of Section 2.4.(a) in its entirety as follows:

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

(ii)      during such periods as such Loan is a LIBOR Loan, at LIBOR for such Loan for the Interest Period therefor (from the first day to, but excluding, the last day of such Interest Period), plus the Applicable Margin for LIBOR Loans.

(h)      The Credit Agreement is further amended by restating the fifth sentence of Section 2.9. thereof in its entirety as follows:

Such notice of a Continuation shall be by telephone (confirmed immediately in writing), telecopy, electronic mail or other similar form of communication, confirmed immediately in writing if by telephone, in the form of a Notice of Continuation, specifying (a) the proposed date of such Continuation, (b) the LIBOR Loan and portion thereof subject to such Continuation, (c) the duration of the selected Interest Period, all of which of the foregoing (a), (b) and (c) shall be specified in such manner as is necessary to comply with all limitations on Loans outstanding hereunder, and (d) the amount of such LIBOR Loan, or portion thereof, that the Borrower has elected to have subject to a Specified Derivatives Contract that provides a hedge against interest rate risk and the Specified Derivatives Contract(s) to which such amount is subject.

(i)      The Credit Agreement is further amended by restating the sixth sentence of Section 2.10. thereof in its entirety as follows:

Subject to the restrictions specified above, each Notice of Conversion shall be by telephone (confirmed immediately in writing), telecopy, electronic mail or other similar form of communication in the form of a Notice of Conversion specifying (a) the requested date of such Conversion, (b) the Type of Loan to be Converted, (c) the portion of such Type of Loan to be Converted, (d) the Type of Loan such Loan is to be

- 5 -
Exhibit 10.1

Converted into, and (e) if such Conversion is into a LIBOR Loan, the requested duration of the Interest Period of such Loan and the amount of such LIBOR Loan, if any, that the Borrower has elected to have subject to a Specified Derivatives Contract that provides a hedge against interest rate risk and the Specified Derivatives Contract(s) to which such amount is subject.

(j)      The Credit Agreement is further amended by restating Section 3.5.(b) in its entirety as follows:

(b)      Facility Fees . During the period from the Second Amendment Effective Date to but excluding the Termination Date, the Borrower agrees to pay to the Administrative Agent for the account of the Lenders a facility fee equal to the daily aggregate amount of the Commitments (whether or not utilized) times a rate per annum equal to the Applicable Facility Fee. Such fee shall be payable quarterly in arrears on the first day of each January, April, July and October during the term of this Agreement and on the Termination Date or any earlier date of termination of the Commitments or reduction of the Revolving Commitments to zero. The Borrower acknowledges that the fee payable hereunder is a bona fide commitment fee and is intended as reasonable compensation to the Lenders for committing to make funds available to the Borrower as described herein and for no other purposes.

(k)      The Credit Agreement is further amended by adding the phrase “or in any manner that would directly or indirectly violate Anti-Corruption Laws” after the word “person” and before the period at the end of Section 6.1.

(l)      The Credit Agreement is further amended by adding the following subsection (y) immediately following subsection (x) of Section 6.1. thereof.

(y)      LIBOR Loans Subject to Specified Derivatives Contracts . Schedule 6.1.(y) is, as of the Second Amendment Effective Date, a true, correct and complete listing of all Specified Derivatives Contracts outstanding as of such date that provide a hedge against interest rate risk, specifying with respect to each such Specified Derivatives Contract, the amount, if any, of LIBOR Loans outstanding on the Second Amendment Effective Date that the Borrower has elected to have subject to such Specified Derivatives Contract.

(m)      The Credit Agreement is further amended by restating the first sentence of Section 7.16. in its entirety as follows:

PREIT-RUBIN may request in writing that the Administrative Agent release it as a Borrower (but not as a Guarantor unless otherwise permitted by Section 7.15.(d)), so long as (a) the Parent delivers a certificate signed by the chief financial officer of the Parent certifying that no Event of Default then exists or would occur as a result of such release and (b) effective upon its release as a Borrower, PREIT-RUBIN will be released as a “Borrower” under the Five-Year Term Loan Agreement, the Seven-Year Term Loan Agreement, and the 2015 Five-Year Term Loan Agreement.

- 6 -
Exhibit 10.1


(n)      The Credit Agreement is further amended by restating Section 8.1(d) in its entirety as follows:

(d)      Unencumbered Debt Yield . The Parent shall not permit the Unencumbered Debt Yield to be less than 11.0% at any time.

(o)      The Credit Agreement is further amended by adding the following new clause (vi) to the end of Section 9.1.(d) thereof and changing the period at the end of clause (v) of such Section to “; or”:

(vi)      An Event of Default under and as defined in the 2015 Five-Year Term Loan Agreement shall occur.

(p)      The Credit Agreement is further amended by restating the address for communications to the Administrative Agent in Section 11.1. thereof as follows:

If to the Administrative Agent:

Wells Fargo Bank, National Association, as Administrative Agent
550 South Tryon Street, 6th Floor
MAC D1086-061
Charlotte, North Carolina 28202
Attention: D. Bryan Gregory
Telephone:      (704) 410‑1776
Telecopy:      (704) 410-0329

with copies to:

Wells Fargo Bank, National Association, as Administrative Agent
608 Second Avenue, 11 th Floor
MAC N9303-110
Minneapolis, Minnesota 55402
Attention: Anthony J. Gangelhoff
Telephone:      (612) 316-0109
Telecopy:      (877) 410-5023

and:

Wells Fargo Bank, National Association, as Administrative Agent
1750 H Street, NW Suite 400
Washington, D.C. 20006
Attention: Loan Administration Manager
Telephone:      (202) 303-3000
Telecopy:      (202) 429-2985


- 7 -
Exhibit 10.1

(q)      The Credit Agreement is further amended by deleting the word “and” before clause (f) of Section 11.9. thereof, replacing the period at the end of clause (f) of Section 11.9 thereof with a semicolon, and adding the following clauses (g) and (h) after clause (f) of Section 11.9. thereof:

(g) to the extent requested by, or required to be disclosed to, any nationally recognized rating agency or regulator or similar authority (including any self-regulatory authority, such as the National Association of Insurance Commissioners) having or purporting to have jurisdiction over it; and (h) with the consent of the Parent or PREIT.

(r)      The Credit Agreement is further amended by deleting Schedule I attached thereto and replacing it with Schedule I attached hereto.

(s)      The Credit Agreement is further amended by attaching thereto Schedule 6.1.(y) attached hereto.

(t)      The Credit Agreement is further amended by deleting Exhibits C, D and E in their entireties and substituting in lieu thereof the Exhibits C, D and E attached hereto.

Section 3.      Conditions Precedent . The effectiveness of this Amendment is subject to receipt by the Administrative Agent of each of the following, each in form and substance satisfactory to the Administrative Agent:

(a)      a counterpart of this Amendment duly executed by the Borrower, the Parent, the Administrative Agent and each of the Lenders;

(b)      delivery of new Revolving Notes to any Lender which has a new commitment or a Commitment that is changing in connection with the execution of this Amendment, unless, in either case, such Lender notifies the Administrative Agent that it does not desire to obtain a new Revolving Note;

(c)      a Guarantor Acknowledgement substantially in the form of Annex A attached hereto, executed by each Guarantor;

(d)      an opinion of counsel to the Borrower and the other Loan Parties addressed to the Administrative Agent and the Lenders;

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

(f)      the certificate or articles of incorporation, articles of organization, certificate of limited partnership, declaration of trust or other comparable organizational instrument (if any) of the Borrower and each other Loan Party, certified as of a recent date by the Secretary of State of the State of formation of such Loan Party, or in the case of any Loan Party that has not altered its organizational instrument since the date such Loan Party became a party to the Existing Credit Agreement, a certificate from the Secretary or Assistant Secretary (or other individual performing similar functions) of such Loan Party

- 8 -
Exhibit 10.1

certifying that there have been no changes to the organizational instrument delivered by such Loan Party in connection with the Existing Credit Agreement;

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

(h)      copies certified by the Secretary or Assistant Secretary (or other individual performing similar functions) of the Borrower and each other Loan Party of the by-laws of such Person, if a corporation, the operating agreement, if a limited liability company, the partnership agreement, if a limited or general partnership, or other comparable document in the case of any other form of legal entity, or in the case of any Loan Party that has not altered its by-laws, operating agreement, partnership agreement or other comparable document since the date such Loan Party became a party to the Existing Credit Agreement, a certificate from the Secretary or Assistant Secretary (or other individual performing similar functions) of such Loan Party certifying that there have been no changes to the by-laws, operating agreement, partnership agreement or other comparable document delivered by such Loan Party in connection with the Credit Agreement;

(i)      copies certified by the Secretary or Assistant Secretary (or other individual performing similar functions) of the Borrower and each other Loan Party of all corporate, partnership, member or other necessary action taken by each such Loan Party to authorize the execution, delivery and performance of the this Amendment and the Loan Documents to which it is a party;

(j)      a Compliance Certificate as of the Parent’s fiscal quarter ended March 31, 2015, calculated on a pro forma basis;

(k)      Schedule 6.1.(y);

(l)      evidence that all fees payable by the Borrower to the Administrative Agent and the Lenders in connection with this Amendment have been paid; and

(l)      such other documents, instruments and agreements as the Administrative Agent may reasonably request.

Section 4.      Representations . Each Borrower and the Parent represent and warrant to the Administrative Agent and the Lenders that:

(a)      Authorization . The Parent and each Borrower has the right and power, and has taken all necessary action to authorize it, to execute and deliver this Amendment and to perform its obligations hereunder and under the Credit Agreement, as amended by this Amendment, in accordance with their respective terms. This Amendment has been duly executed and delivered by a duly authorized signatory of the Parent and each Borrower or a general partner of such Borrower, as applicable, and both this Amendment and the Credit Agreement, as amended by this Amendment, are legal, valid and binding obligations of the Parent and each Borrower and are enforceable against such Persons in accordance with their respective terms, except as the same may be limited by bankruptcy, insolvency, fraudulent

- 9 -
Exhibit 10.1

conveyance and other similar laws affecting the rights of creditors generally and the availability of equitable remedies for the enforcement of certain obligations (other than the payment of principal) contained herein or in the Credit Agreement may be limited by equitable principles generally.

(b)      Compliance with Laws, etc . The execution and delivery by the Parent and each Borrower of this Amendment and the performance by the Parent and each Borrower of this Amendment and the Credit Agreement, as amended by this Amendment, in accordance with their respective terms, do not and will not, by the passage of time, the giving of notice, or both: (i) require any Governmental Approval or violate any Applicable Law (including all Environmental Laws) relating to any Loan Party or any other Subsidiary; (ii)  result in a breach of or constitute a default under the declaration of trust, certificate or articles of incorporation, bylaws, partnership agreement or other organizational documents of any Loan Party or any other Subsidiary, or any indenture, agreement or other instrument to which any Loan Party or any other Subsidiary is a party or by which it or any of its respective properties may be bound; or (iii) result in or require the creation or imposition of any Lien upon or with respect to any property now owned or hereafter acquired by any Loan Party or any other Subsidiary other than in favor of the Administrative Agent for the benefit of the Lenders.

(c)      No Default . No Default or Event of Default has occurred and is continuing as of the date hereof, nor will exist immediately after giving effect to this Amendment.

Section 5.      Reaffirmation of Representations . The Parent and each Borrower hereby repeats and reaffirms all representations and warranties made by the Parent and the Borrower to the Administrative Agent and the Lenders in the Credit Agreement and the other Loan Documents to which it is a party on and as of the date hereof with the same force and effect as if such representations and warranties were set forth in this Amendment in full.

Section 6.      Commitment Adjustments .

(a)      Allocations . The Administrative Agent, the Borrower and each Lender confirms the amount of each such Lender’s Commitment is as set forth on Schedule I attached hereto. The Administrative Agent, the Borrower and each Lender agree that upon the effectiveness of this Amendment (the date of such effectiveness, the “Amendment Effective Date”), the outstanding Revolving Loans and the participation interests of the Lenders in any outstanding Letters of Credit and Swingline Loans shall be allocated among the Lenders in accordance with their respective Commitment Percentages calculated based on the Commitments of the Lenders set forth on Schedule I attached hereto (the “Post-Amendment Commitment Percentage”). To effect such allocations, each Lender whose Post-Amendment Commitment Percentage exceeds the amount of such Lender’s Commitment Percentage immediately prior to the effectiveness of this Amendment shall make a Revolving Loan in such amount as is necessary so that the aggregate principal amount of Revolving Loans held by such Lender shall equal such Lender’s Post-Amendment Commitment Percentage of the aggregate outstanding principal amount of the Revolving Loans as of the Amendment Effective Date. The Administrative Agent shall make such amounts of the proceeds of such Revolving Loans available (a) to each Lender whose Post-Amendment Commitment Percentage is less than the amount of such Lender’s Commitment Percentage immediately prior to the effectiveness of this Amendment as is necessary so that the aggregate principal amount of Revolving Loans held by such Lender shall equal such Lender’s Post-Amendment Commitment Percentage of the aggregate outstanding principal amount of the Revolving Loans as of the Amendment Effective Date and (b) to the Exiting Lenders (as defined below) as is necessary to repay in full the Revolving Loans owing to such Exiting Revolving Lenders. Except for any Revolving Notes to

- 10 -
Exhibit 10.1

be provided to the Revolving Lenders increasing their respective Revolving Commitments , no other documents, instruments or fees shall be, or shall be required to be, executed or paid in connection with such reallocations (all of which are hereby waived, as necessary).

(b)      Exiting Lenders . On the Amendment Effective Date, the Commitments of each of Bank of America, N.A., Deutsche Bank AG New York Branch, and Santander Bank, N.A. (f/k/a Sovereign Bank, N.A.) (each, an “Exiting Lender”) shall be terminated, and each Exiting Lender shall cease to be a Lender under the Credit Agreement.

(c)      Titled Agents . On the Amendment Effective Date, each of Bank of America, N.A. and Manufacturers and Traders Trust Company shall cease to be a Documentation Agent, and each of Capital One, National Association and PNC Bank, National Association shall be awarded the title of a “Documentation Agent”. By their respective signatures to this Amendment, each of Capital One, National Association and PNC Bank, National Association acknowledges that it has been awarded the title of “Documentation Agent”. U.S. Bank, National Association shall continue to have the title of “Syndication Agent”, JPMorgan Chase Bank, N.A. shall continue to have the title of a “Documentation Agent”, and Well Fargo Bank, National Association shall continue as the “Administrative Agent”.

Section 7.      Certain References . Each reference to the Credit Agreement in any of the Loan Documents shall be deemed to be a reference to the Credit Agreement as amended by this Amendment. This Amendment is a Loan Document.
 
Section 8.      Expenses . The Borrower agrees to pay or reimburse the Administrative Agent for all of its reasonable out-of-pocket costs and expenses (including the reasonable fees and disbursements of counsel to the Administrative Agent) incurred in connection with the preparation, negotiation and execution of this Amendment and the other agreements and documents executed and delivered in connection herewith.

Section 9.      Benefits . This Amendment shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns.

Section 10.      GOVERNING LAW . THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH COMMONWEALTH.

Section 11.      Effect . Except as expressly herein amended, the terms and conditions of the Credit Agreement and the other Loan Documents remain in full force and effect. The amendments contained in Section 2 hereof shall be deemed to have prospective application only. The Credit Agreement is hereby ratified and confirmed in all respects. Nothing in this Amendment shall limit, impair or constitute a waiver of the rights, powers or remedies available to the Administrative Agent or the Lenders under the Credit Agreement or any other Loan Document.

Section 12.      Counterparts . This Amendment may be executed in any number of counterparts, each of which shall be deemed to be an original and shall be binding upon all parties, their successors and assigns.

[Signatures commence on next page]


- 11 -
Exhibit 10.1







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



PREIT Associates, L.P.

By:      Pennsylvania Real Estate Investment Trust,
its general partner


By: /s/ Andrew Ioannou
Name: Andrew Ioannou
Title: Executive Vice President - Finance & Acquisitions and Treasurer


PREIT-RUBIN, INC.


By: /s/ Andrew Ioannou
Name: Andrew Ioannou
Title: Executive Vice President - Finance & Acquisitions and Treasurer


PENNSYLVANIA REAL ESTATE INVESTMENT TRUST


By: /s/ Andrew Ioannou
Name: Andrew Ioannou
Title: Executive Vice President - Finance & Acquisitions and Treasurer














[Signatures Continued on Next Page]


Exhibit 10.1


[Signature Page to Second Amendment to Credit Agreement
with PREIT Associates, L.P. et al.]


Wells Fargo Bank, National Association, as Administrative Agent, as Issuing Bank, as Swingline Lender and as a Lender


By: /s/ D. Bryan Gregory
Name: D. Bryan Gregory
Title: Director
































[Signatures Continued on Next Page]


Exhibit 10.1




[Signature Page to Second Amendment to Credit Agreement
with PREIT Associates, L.P. et al.]


U.S. BANK NATIONAL ASSOCIATION


By: /s/ Renee Lewis
Name: Renee Lewis
Title: Senior Vice President
































[Signatures Continued on Next Page]









Exhibit 10.1

[Signature Page to Second Amendment to Credit Agreement
with PREIT Associates, L.P. et al.]


CAPITAL ONE, NATIONAL ASSOCIATION


By: /s/ Michael J. Vergura, Jr.
Name: Michael J. Vergura, Jr.
Title: Vice President
































[Signatures Continued on Next Page]







Exhibit 10.1

[Signature Page to Second Amendment to Credit Agreement
with PREIT Associates, L.P. et al.]


JPMORGAN CHASE BANK, N.A.


By: /s/ Elizabeth Johnson
Name: Elizabeth Johnson
Title: Executive Director
































[Signatures Continued on Next Page]


Exhibit 10.1

[Signature Page to Second Amendment to Credit Agreement
with PREIT Associates, L.P. et al.]


PNC BANK, NATIONAL ASSOCIATION


By: /s/ Sharon L. Schmidt
Name: Sharon L. Schmidt
Title: Vice President
































[Signatures Continued on Next Page]




Exhibit 10.1

[Signature Page to Second Amendment to Credit Agreement
with PREIT Associates, L.P. et al.]


CITIBANK, N.A.


By: /s/ Michael Chlopak
Name: Michael Chlopak
Title: Vice President
































[Signatures Continued on Next Page]



1
LEGAL02/34062072v1




Exhibit 10.1

[Signature Page to Second Amendment to Credit Agreement
with PREIT Associates, L.P. et al.]


CITIZENS BANK OF PENNSYLVANIA


By: /s/ Samuel A. Bluso
Name: Samuel A. Bluso
Title: Senior Vice President
































[Signatures Continued on Next Page]






Exhibit 10.1

[Signature Page to Second Amendment to Credit Agreement
with PREIT Associates, L.P. et al.]


MANUFACTURERS AND TRADERS TRUST COMPANY


By: /s/ Michael J. DiSanto
Name: Michael J. DiSanto
Title: Vice President
































[Signatures Continued on Next Page]




1
LEGAL02/34062072v1





Exhibit 10.1

[Signature Page to Second Amendment to Credit Agreement
with PREIT Associates, L.P. et al.]


MUFG UNION BANK, N.A. (formerly known as Union Bank, N.A.)


By: /s/ Donald Wattson
Name: Donald Wattson
Title: Vice President
































[Signatures Continued on Next Page]









Exhibit 10.1

[Signature Page to Second Amendment to Credit Agreement
with PREIT Associates, L.P. et al.]


SUSQUEHANNA BANK


By: /s/ Meredith Roark
Name: Meredith Roark
Title: Vice President
































[Signatures Continued on Next Page]


Exhibit 10.1


[Signature Page to Second Amendment to Credit Agreement
with PREIT Associates, L.P. et al.]


TD BANK, N.A.


By: /s/ William Hutchinson
Name: William Hutchinson
Title: Vice President




Exhibit 10.1

ANNEX A

FORM OF GUARANTOR ACKNOWLEDGEMENT

THIS GUARANTOR ACKNOWLEDGEMENT dated as of June 26, 2015 (this “Acknowledgement”) executed by each of the undersigned (the “Guarantors”) in favor of Wells Fargo Bank, National Association, as Administrative Agent (the “Administrative Agent”), and each “Lender” a party to the Credit Agreement referred to below (the “Lenders”).

WHEREAS, PREIT Associates, L.P., a Delaware limited partnership (“PREIT”), PREIT-RUBIN, INC., a Pennsylvania corporation (“PREIT-RUBIN”; together with PREIT, each individually, a “Borrower” and collectively, the “Borrower”), PENNSYLVANIA REAL ESTATE INVESTMENT TRUST, a Pennsylvania business trust (the “Parent”), the Lenders, the Administrative Agent and certain other parties have entered into that certain Credit Agreement dated as of April 17, 2013 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”);

WHEREAS, each of the Guarantors is a party to that certain Guaranty dated as of April 17, 2013 (as amended, restated, supplemented or otherwise modified from time to time, the “Guaranty”) pursuant to which they guarantied, among other things, the Borrower’s obligations under the Credit Agreement on the terms and conditions contained in the Guaranty;

WHEREAS, the Borrower, the Parent, the Administrative Agent and the Lenders are to enter into a Second Amendment to Credit Agreement dated as of the date hereof (the “Amendment”), to amend the terms of the Credit Agreement on the terms and conditions contained therein; and

WHEREAS, it is a condition precedent to the effectiveness of the Amendment that the Guarantors execute and deliver this Acknowledgement.

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

Section 1. Reaffirmation . Each Guarantor hereby reaffirms its continuing obligations to the Administrative Agent and the Lenders under the Guaranty and agrees that the transactions contemplated by the Amendment shall not in any way affect the validity and enforceability of the Guaranty, or reduce, impair or discharge the obligations of such Guarantor thereunder.

Section 2. Governing Law . THIS ACKNOWLEDGEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH COMMONWEALTH.

Section 3. Counterparts . This Acknowledgement may be executed in any number of counterparts, each of which shall be deemed to be an original and shall be binding upon all parties, their successors and assigns.


[Signatures on Next Page]
    


Exhibit 10.1

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

THE GUARANTORS:

[GUARANTOR]


By:     
Name:     
Title:     


Address for Notices for all Guarantors:

c/o PREIT Associates, L.P.
200 South Broad Street
Philadelphia, PA 19102
Attention: Andrew Ioannou
Telephone: (215) 875-0700
Telecopy: (215) 546-7311






Exhibit 10.1

SCHEDULE I

Commitments


Lender
Commitment Amount
Wells Fargo Bank, National Association
$70,000,000
U.S. Bank National Association
$57,500,000
Capital One, National Association
$37,500,000
JPMorgan Chase Bank, N.A.
$37,500,000
PNC Bank, National Association
$37,500,000
Citibank, N.A.
$32,500,000
Citizens Bank of Pennsylvania
$32,500,000
Manufacturers and Traders Trust Company
$32,500,000
MUFG Union Bank, N.A.
$32,500,000
Susquehanna Bank
$15,000,000
TD Bank, N.A.
$15,000,000
TOTAL
$400,000,000


C-3
        

        



Exhibit 10.1

EXHIBIT C

FORM OF NOTICE OF CONTINUATION

____________, 20__


Wells Fargo Bank, National Association,
as Administrative Agent
550 South Tryon Street, 6th Floor
MAC D1086-061
Charlotte, North Carolina 28202
Attention: D. Bryan Gregory

Ladies and Gentlemen:

Reference is made to that certain Credit Agreement dated as of April 17, 2013 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), by and among PREIT Associates, L.P. (“PREIT”), PREIT-Rubin, Inc. (“PREIT-Rubin”), Pennsylvania Real Estate Investment Trust (the “Parent”; together with PREIT and PREIT-Rubin, each individually, a “Borrower” and collectively, the “Borrower”), the financial institutions party thereto and their assignees under Section 11.6.(b) thereof (the “Lenders”), Wells Fargo Bank, National Association, as Administrative Agent (the “Administrative Agent”), and the other parties thereto. Capitalized terms used herein, and not otherwise defined herein, have their respective meanings given them in the Credit Agreement.

Pursuant to Section 2.9. of the Credit Agreement, the Borrower hereby requests a Continuation of a LIBOR Loan under the Credit Agreement, and in that connection sets forth below the information relating to such Continuation as required by such Section of the Credit Agreement:

1.
The requested date of such Continuation is ____________, 20__.

2.
The LIBOR Loan to be continued pursuant hereto is a Revolving Loan in the aggregate principal amount of $________________.

3.
The portion of the principal amount of such LIBOR Loan subject to the requested Continuation is $__________________________.

3.
The current Interest Period of such LIBOR Loan subject to such Continuation ends on ________________, 20__.

4.
The duration of the Interest Period for such LIBOR Loan or portion thereof subject to such Continuation is:

[Check one box only]

¨      one month
¨      three months
¨      six months





C-1


Exhibit 10.1

5.
The amount of any such LIBOR Loan, or portion thereof, so Continued that the Borrower has elected to have subject to a Specified Derivatives Contract that provides a hedge against interest rate risk is $_____________, and the Specified Derivatives Contract(s) to which such amount is subject is (are) as follows: ___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________.

The Borrower hereby certifies to the Administrative Agent and the Lenders that as of the date hereof, as of the proposed date of the requested Continuation, and after giving effect to such Continuation, no Default or Event of Default shall have occurred and be continuing.

If notice of the requested Continuation was given previously by telephone, this Notice of Continuation is to be considered written confirmation of such telephone notice required by Section 2.9. of the Credit Agreement.


[Remainder of Page Intentionally Left Blank]




































C-2


Exhibit 10.1

IN WITNESS WHEREOF, the undersigned has duly executed and delivered this Notice of Continuation as of the date first written above.


PREIT Associates, L.P.

By:      Pennsylvania Real Estate Investment Trust,
its general partner


By:     
Name:     
Title:     

PREIT-RUBIN, INC.


By:     
Name:     
Title:     


PENNSYLVANIA REAL ESTATE INVESTMENT TRUST


By:     
Name:     
Title:     







C-3



Exhibit 10.1


EXHIBIT D

FORM OF NOTICE OF CONVERSION

____________, 20__


Wells Fargo Bank, National Association,
as Administrative Agent
550 South Tryon Street, 6th Floor
MAC D1086-061
Charlotte, North Carolina 28202
Attention: D. Bryan Gregory

Ladies and Gentlemen:

Reference is made to that certain Credit Agreement dated as of April 17, 2013 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), by and among PREIT Associates, L.P. (“PREIT”), PREIT-Rubin, Inc. (“PREIT-Rubin”), Pennsylvania Real Estate Investment Trust (the “Parent”; together with PREIT and PREIT-Rubin, each individually, a “Borrower” and collectively, the “Borrower”), the financial institutions party thereto and their assignees under Section 11.6.(b) thereof (the “Lenders”), Wells Fargo Bank, National Association, as Administrative Agent (the “Administrative Agent”), and the other parties thereto. Capitalized terms used herein, and not otherwise defined herein, have their respective meanings given them in the Credit Agreement.

Pursuant to Section 2.10. of the Credit Agreement, the Borrower hereby requests a Conversion of a Loan of one Type into a Loan of another Type under the Credit Agreement, and in that connection sets forth below the information relating to such Conversion as required by such Section of the Credit Agreement:

1.
The requested date of such Conversion is ______________, 20__.

2.
The Type of Revolving Loan to be Converted pursuant hereto is currently:

[Check one box only]

¨
Base Rate Loan
¨
LIBOR Loan

3.
The aggregate principal amount of the Loans subject to the requested Conversion is $_____________________ and the portion of such principal amount subject to such Conversion is $___________________.








D-1

Exhibit 10.1

4.
The amount of such Loan to be so Converted is to be converted into Loan of the following Type:

[Check one box only]     

Base Rate Loan
LIBOR Loan, with an initial Interest Period for a duration of:

[Check one box only]

¨      one month
¨      three months
¨      six months


5.
The amount of any such Loan, or portion thereof, so Converted to a LIBOR Loan that the Borrower has elected to have subject to a Specified Derivatives Contract that provides a hedge against interest rate risk is $_____________, and the Specified Derivatives Contract(s) to which such amount is subject is (are) as follows: ___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________.

The Borrower hereby certifies to the Administrative Agent and the Lenders that as of the date hereof, as of the proposed date of the requested Conversion, and after giving effect to such Conversion, no Default or Event of Default shall have occurred and be continuing (provided the certification under this clause (a) shall not be made in connection with a Conversion of a Loan into a Base Rate Loan), and (b) the representations and warranties made or deemed made by the Borrower and each other Loan Party in the Loan Documents to which any of them is a party, are and shall be true and correct with the same force and effect as if made on and as of such date except to the extent that such representations and warranties expressly relate solely to an earlier date (in which case such representations and warranties shall have been true and correct on and as of such earlier date) and except for changes in factual circumstances not prohibited under the Loan Documents.

If notice of the requested Conversion was given previously by telephone, this Notice of Conversion is to be considered the written confirmation of such telephone notice required by Section 2.10. of the Credit Agreement.


[Remainder of Page Intentionally Left Blank]











D-2

Exhibit 10.1

IN WITNESS WHEREOF, the undersigned has duly executed and delivered this Notice of Conversion as of the date first written above.

PREIT Associates, L.P.

By:      Pennsylvania Real Estate Investment Trust,
its general partner


By:     
Name:     
Title:     


PREIT-RUBIN, INC.


By:     
Name:     
Title:     


PENNSYLVANIA REAL ESTATE INVESTMENT TRUST


By:     
Name :     
Title:     


























D-3


Exhibit 10.1

EXHIBIT E

FORM OF NOTICE OF REVOLVING LOAN BORROWING

____________, 20__


Wells Fargo Bank, National Association,
as Administrative Agent
550 South Tryon Street, 6th Floor
MAC D1086-061
Charlotte, North Carolina 28202
Attention: D. Bryan Gregory

Ladies and Gentlemen:

Reference is made to that certain Credit Agreement dated as of April 17, 2013 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), by and among PREIT Associates, L.P. (“PREIT”), PREIT-Rubin, Inc. (“PREIT-Rubin”), Pennsylvania Real Estate Investment Trust (the “Parent”; together with PREIT and PREIT-Rubin, each individually, a “Borrower” and collectively, the “Borrower”), the financial institutions party thereto and their assignees under Section 11.6.(b) thereof (the “Lenders”), Wells Fargo Bank, National Association, as Administrative Agent (the “Administrative Agent”), and the other parties thereto. Capitalized terms used herein, and not otherwise defined herein, have their respective meanings given them in the Credit Agreement.

1.
Pursuant to Section 2.1.(b) of the Credit Agreement, the Borrower hereby requests that the Lenders make Revolving Loans to the Borrower in an aggregate amount equal to $___________________.

2.
The Borrower requests that the Revolving Loans be made available to the Borrower on ____________, 20__.

3.
The Borrower hereby requests that the requested Revolving Loans be of the following Type:

[Check one box only]     
¨      Base Rate Loan
¨      LIBOR Loan, with an initial Interest Period for a duration of:

[Check one box only]
¨      one month
¨      three months
¨      six months

4.      The proceeds of the Revolving Loans will be used for the following purpose: ___________________________________________________________________________________________________________________________________________________________.

5.      The Borrower requests that the proceeds of this borrowing of Revolving Loans be made available to the Borrower by _________________________________________________.
E-1


Exhibit 10.1


6.      The principal amount of such Revolving Loans that the Borrower has elected to have subject to a Specified Derivatives Contract that provides a hedge against interest rate risk is $______________, and the Specified Derivatives Contract(s) to which such amount is subject is (are) as follows: ___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________.

The Borrower hereby certifies to the Administrative Agent and the Lenders that as of the date hereof, as of the date of the making of the requested Revolving Loans, and after making such Revolving Loans, (a) no Default or Event of Default shall have occurred and be continuing; and (b) the representations and warranties of the Borrower and the Guarantors contained in the Credit Agreement and in the other Loan Documents to which any of them is a party, are and shall be true and correct with the same force and effect as if made on and as of such date except to the extent that such representations and warranties expressly relate solely to an earlier date (in which case such representations and warranties shall have been true and correct on and as of such earlier date) and except for changes in factual circumstances not prohibited under the Loan Documents. In addition, the Borrower certifies to the Administrative Agent and the Lenders that all conditions to the making of the requested Loans contained in Article V. of the Credit Agreement will have been satisfied at the time such Loans are made.


[Remainder of Page Intentionally Left Blank]























E-2


Exhibit 10.1

IN WITNESS WHEREOF, the undersigned has duly executed and delivered this Notice of Revolving Loan Borrowing as of the date first written above.

PREIT Associates, L.P.

By:      Pennsylvania Real Estate Investment Trust,
its general partner


By:     
Name:     
Title:     


PREIT-RUBIN, INC.


By:
    
Name:     
Title:     


PENNSYLVANIA REAL ESTATE INVESTMENT TRUST


By:     
Name:     
Title:     























E-3




Exhibit 10.1

Schedule 6.1.(y)
Specified Derivatives Contracts

Chatham Financial Ref #
Amount
Effective Date
None
 
 
 
 
 
 
 
 


















[Credit Facility]



Exhibit 10.2

Loan Number: 1011173-0

THIRD AMENDMENT TO FIVE-YEAR TERM LOAN AGREEMENT

This THIRD AMENDMENT TO FIVE-YEAR TERM LOAN AGREEMENT (this “Amendment”) is dated as of June 26, 2015, by and among PREIT Associates, L.P., a Delaware limited partnership (“PREIT”), PREIT-RUBIN, INC., a Pennsylvania corporation (“PREIT-RUBIN”; together with PREIT, each individually, a “Borrower” and collectively, the “Borrower”), PENNSYLVANIA REAL ESTATE INVESTMENT TRUST, a Pennsylvania business trust (the “Parent”), each of the LENDERS (as defined below) and WELLS FARGO BANK, NATIONAL ASSOCIATION (the “Administrative Agent”).

WHEREAS, the Borrower, the Parent, each of the financial institutions initially a signatory thereto together with their assignees pursuant to Section 11.6.(b) (the “Lenders”), and the Administrative Agent have entered into that certain Five-Year Term Loan Agreement dated as of January 8, 2014 (as amended and in effect immediately prior to the date hereof, the “Term Loan Agreement”); and

WHEREAS, the Borrower, the Parent, the Lenders and the Administrative Agent desire to amend certain provisions of the Term Loan Agreement on the terms and conditions contained herein.

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

Section 1.      Definitions . Capitalized terms used in this Amendment and not otherwise defined herein shall have the respective meanings given such terms in the Term Loan Agreement.

Section 2.      Specific Amendments to Term Loan Agreement . Upon the effectiveness of this Amendment, the parties hereto agree that the Term Loan Agreement shall be amended as follows:

(a)      The Term Loan Agreement is amended by adding the following sentence at the end of the definition of “ LIBOR ”:

If LIBOR determined as provided above would be less than zero, LIBOR shall be deemed to be zero for each LIBOR Loan that has not been identified by the Borrower in accordance with the terms of this Agreement as being subject to a Specified Derivative Contract that provides a hedge against interest rate risk.

(b)      The Term Loan Agreement is further amended by restating the last sentence in the definition of “ Unencumbered Property ” in its entirety as follows:

Notwithstanding anything to the contrary in this definition, if a Property listed on Schedule 1.1(B) at any time after the Effective Date fails to satisfy any requirements in clause (b) of this definition (other than those, if any, it failed to satisfy on the Effective Date), such Property shall no longer be an Unencumbered Property until such time as it satisfies at least all of the requirements in such clause (b) that it satisfied on the Effective Date.
(c)      The Term Loan Agreement is further amended by adding the following definitions to Section 1.1. thereof in the appropriate alphabetical order:

“ Anti-Corruption Laws ” means all Applicable Laws of any jurisdiction concerning or relating to bribery, corruption or money laundering, including without limitation, the Foreign Corrupt Practices Act of 1977, as amended.

“ Third Amendment Effective Date ” means June 26, 2015.


Exhibit 10.2

“ 2015 Five-Year Term Loan Agreement ” means that certain Five -Year Term Loan Agreement dated as of June 26, 2015 by and among PREIT, PREIT-RUBIN, the Parent, the financial institutions party thereto as “Lenders”, Wells Fargo, as Administrative Agent, and the other parties thereto.

(d)      The Term Loan Agreement is further amended by restating the fifth sentence of Section 2.9. thereof in its entirety as follows:

Such notice of a Continuation shall be by telephone (confirmed immediately in writing), telecopy, electronic mail or other similar form of communication, confirmed immediately in writing if by telephone, in the form of a Notice of Continuation, specifying (a) the proposed date of such Continuation, (b) the LIBOR Loan and portion thereof subject to such Continuation, (c) the duration of the selected Interest Period, all of which of the foregoing (a), (b) and (c) shall be specified in such manner as is necessary to comply with all limitations on Loans outstanding hereunder, and (d) the amount of such LIBOR Loan, or portion thereof, that the Borrower has elected to have subject to a Specified Derivatives Contract that provides a hedge against interest rate risk and the Specified Derivatives Contract(s) to which such amount is subject.

(e)      The Term Loan Agreement is further amended by restating the sixth sentence of Section 2.10. thereof in its entirety as follows:

Subject to the restrictions specified above, each Notice of Conversion shall be by telephone (confirmed immediately in writing), telecopy, electronic mail or other similar form of communication in the form of a Notice of Conversion specifying (a) the requested date of such Conversion, (b) the Type of Loan to be Converted, (c) the portion of such Type of Loan to be Converted, (d) the Type of Loan such Loan is to be Converted into, and (e) if such Conversion is into a LIBOR Loan, the requested duration of the Interest Period of such Loan and the amount of such LIBOR Loan, if any, that the Borrower has elected to have subject to a Specified Derivatives Contract that provides a hedge against interest rate risk and the Specified Derivatives Contract(s) to which such amount is subject.

(f)      The Term Loan Agreement is further amended by adding the following subsection (y) immediately following subsection (x) of Section 6.1. thereof.

(y)      LIBOR Loans Subject to Specified Derivatives Contracts . Schedule 6.1.(y) is, as of the Third Amendment Effective Date, a true, correct and complete listing of all Specified Derivatives Contracts outstanding as of such date that provide a hedge against interest rate risk, specifying with respect to each such Specified Derivatives Contract, the amount, if any, of LIBOR Loans outstanding on the Second Amendment Effective Date that the Borrower has elected to have subject to such Specified Derivatives Contract.

(g)      The Term Loan Agreement is further amended by adding the phrase “or in any manner that would directly or indirectly violate Anti-Corruption Laws” after the word “person” and before the period at the end of Section 6.1.

(h)      The Term Loan Agreement is further amended by restating the first sentence of Section 7.16. in its entirety as follows:

PREIT-RUBIN may request in writing that the Administrative Agent release it as a Borrower (but not as a Guarantor unless otherwise permitted by Section 7.15.(d)), so long as (a) the Parent delivers a certificate signed by the chief financial officer of the Parent certifying that no Event of Default then exists or would occur as a result of such release and (b) effective upon its release as a Borrower, PREIT-RUBIN will be released as a “Borrower” under the Existing Credit Agreement, Seven-Year Term Loan Agreement, and the 2015 Five-Year Term Loan Agreement.
  

2
Exhibit 10.2

(i)      The Term Loan Agreement is further amended by restating Section 8.1(d) in its entirety as follows:

(d)      Unencumbered Debt Yield . The Parent shall not permit the Unencumbered Debt Yield to be less than 11.0% at any time.

(j)      The Term Loan Agreement is further amended by adding the following new clause (vi) to the end of Section 9.1.(d) thereof and changing the period at the end of clause (v) of such Section to “; or”:

(vi)      An Event of Default under and as defined in the 2015 Five-Year Term Loan Agreement shall occur.

(k)      The Term Loan Agreement is further amended by restating the address for communications to the Administrative Agent in Section 11.1. thereof as follows:

If to the Administrative Agent:

Wells Fargo Bank, National Association, as Administrative Agent
550 South Tryon Street, 6th Floor
MAC D1086-061
Charlotte, North Carolina 28202
Attention: D. Bryan Gregory
Telephone:      (704) 410‑1776
Telecopy:      (704) 410-0329

with copies to:

Wells Fargo Bank, National Association, as Administrative Agent
608 Second Avenue, 11 th Floor
MAC N9303-110
Minneapolis, Minnesota 55402
Attention: Anthony J. Gangelhoff
Telephone:      (612) 316-0109
Telecopy:      (877) 410-5023

and:

Wells Fargo Bank, National Association, as Administrative Agent
1750 H Street, NW Suite 400
Washington, D.C. 20006
Attention: Loan Administration Manager
Telephone:      (202) 303-3000
Telecopy:      (202) 429-2985

(l)      The Term Loan Agreement is further amended by attaching thereto Schedule 6.1.(y) attached hereto.

(m)      The Term Loan Agreement is further amended by deleting the word “and” before clause (f) of Section 11.9. thereof, replacing the period at the end of clause (f) of Section 11.9 thereof with a semicolon, and adding the following clauses (g) and (h) after clause (f) of Section 11.9. thereof:

(g) to the extent requested by, or required to be disclosed to, any nationally recognized rating agency or regulator or similar authority (including any self-regulatory authority, such as the National

3
Exhibit 10.2

Association of Insurance Commissioners) having or purporting to have jurisdiction over it; and (h) with the consent of the Parent or PREIT.

(n)      The Term Loan Agreement is further amended by deleting Exhibits C and D in their entireties and substituting in lieu thereof the Exhibits C and D attached hereto.

Section 3.      Conditions Precedent . The effectiveness of this Amendment is subject to receipt by the Administrative Agent of each of the following, each in form and substance satisfactory to the Administrative Agent:

(a)      a counterpart of this Amendment duly executed by the Borrower, the Parent, the Administrative Agent and each of the Lenders;

(b)      a Guarantor Acknowledgement substantially in the form of Annex A attached hereto, executed by each Guarantor; and

(c)      such other documents, instruments and agreements as the Administrative Agent may reasonably request.

Section 5.      Representations . Each Borrower and the Parent represent and warrant to the Administrative Agent and the Lenders that:

(a)      Authorization . The Parent and each Borrower has the right and power, and has taken all necessary action to authorize it, to execute and deliver this Amendment and to perform its obligations hereunder and under the Term Loan Agreement, as amended by this Amendment, in accordance with their respective terms. This Amendment has been duly executed and delivered by a duly authorized signatory of the Parent and each Borrower or a general partner of such Borrower, as applicable, and both this Amendment and the Term Loan Agreement, as amended by this Amendment, are legal, valid and binding obligations of the Parent and each Borrower and are enforceable against such Persons in accordance with their respective terms, except as the same may be limited by bankruptcy, insolvency, fraudulent conveyance and other similar laws affecting the rights of creditors generally and the availability of equitable remedies for the enforcement of certain obligations (other than the payment of principal) contained herein or in the Term Loan Agreement may be limited by equitable principles generally.

(b)      Compliance with Laws, etc . The execution and delivery by the Parent and each Borrower of this Amendment and the performance by the Parent and each Borrower of this Amendment and the Term Loan Agreement, as amended by this Amendment, in accordance with their respective terms, do not and will not, by the passage of time, the giving of notice, or both: (i) require any Governmental Approval or violate any Applicable Law (including all Environmental Laws) relating to any Loan Party or any other Subsidiary; (ii)  result in a breach of or constitute a default under the declaration of trust, certificate or articles of incorporation, bylaws, partnership agreement or other organizational documents of any Loan Party or any other Subsidiary, or any indenture, agreement or other instrument to which any Loan Party or any other Subsidiary is a party or by which it or any of its respective properties may be bound; or (iii) result in or require the creation or imposition of any Lien upon or with respect to any property now owned or hereafter acquired by any Loan Party or any other Subsidiary other than in favor of the Administrative Agent for the benefit of the Lenders.

(c)      No Default . No Default or Event of Default has occurred and is continuing as of the date hereof, nor will exist immediately after giving effect to this Amendment.

Section 6.      Reaffirmation of Representations . The Parent and each Borrower hereby certify that as of the date hereof the representations and warranties made or deemed made by the Parent and each Borrower to the Administrative Agent and the Lenders in the Term Loan Agreement and the other Loan Documents to the Parent or Borrower is a party are true and correct in all material respects (except in the case of a representation or warranty qualified by materiality, in which case such representation and warranty is true and correct in all respects) except to the extent that such representations and warranties expressly relate solely to an earlier date (in which case such representations and warranties were true and correct in all material respects (except in the case of a representation or

4
Exhibit 10.2

warranty qualified by materiality, in which case, such representation or warranty was true and correct in all respects) on and as of such earlier date) and except for changes in factual circumstances not prohibited under the Loan Documents.

Section 7.      Certain References . Each reference to the Term Loan Agreement in any of the Loan Documents shall be deemed to be a reference to the Term Loan Agreement as amended by this Amendment. This Amendment is a Loan Document.
 
Section 8.      Expenses . The Borrower agrees to pay or reimburse the Administrative Agent for all of its reasonable out-of-pocket costs and expenses (including the reasonable fees and disbursements of counsel to the Administrative Agent) incurred in connection with the preparation, negotiation and execution of this Amendment and the other agreements and documents executed and delivered in connection herewith.

Section 9.      Benefits . This Amendment shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns.

Section 10.      GOVERNING LAW . THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH COMMONWEALTH.

Section 11.      Effect . Except as expressly herein amended, the terms and conditions of the Term Loan Agreement and the other Loan Documents remain in full force and effect. The amendments contained in Section 2 hereof shall be deemed to have prospective application only. The Term Loan Agreement is hereby ratified and confirmed in all respects. Nothing in this Amendment shall limit, impair or constitute a waiver of the rights, powers or remedies available to the Administrative Agent or the Lenders under the Term Loan Agreement or any other Loan Document.

Section 12.      Counterparts . This Amendment may be executed in any number of counterparts, each of which shall be deemed to be an original and shall be binding upon all parties, their successors and assigns.

[Signatures commence on next page]







    


5
Exhibit 10.2

IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment to Five-Year Term Loan Agreement to be executed by their authorized officers all as of the day and year first above written.


PREIT Associates, L.P.

By:      Pennsylvania Real Estate Investment Trust,
its general partner


By: /s/ Andrew Ioannou
Name: Andrew Ioannou
Title: Executive Vice President - Finance & Acquisitions and Treasurer


PREIT-RUBIN, INC.


By: /s/ Andrew Ioannou
Name: Andrew Ioannou
Title: Executive Vice President - Finance & Acquisitions and Treasurer


PENNSYLVANIA REAL ESTATE INVESTMENT TRUST


By: /s/ Andrew Ioannou
Name: Andrew Ioannou
Title: Executive Vice President - Finance & Acquisitions and Treasurer














[Signatures Continued on Next Page]

Exhibit 10.2

[Signature Page to Third Amendment to Five-Year Term Loan Agreement
with PREIT Associates, L.P. et al.]


Wells Fargo Bank, National Association, as Administrative Agent and as a Lender


By: /s/ D. Bryan Gregory
Name: D. Bryan Gregory
     Title: Director
































[Signatures Continued on Next Page]






Exhibit 10.2

[Signature Page to Third Amendment to Five-Year Term Loan Agreement
with PREIT Associates, L.P. et al.]


U.S. BANK NATIONAL ASSOCIATION


By: /s/ Renee Lewis
Name: Renee Lewis
Title: Senior Vice President














Exhibit 10.2

[Signature Page to Third Amendment to Five-Year Term Loan Agreement
with PREIT Associates, L.P. et al.]


BANK OF AMERICA, N.A.




By:     
Name:     
Title:     
































[Signatures Continued on Next Page]

Exhibit 10.2

[Signature Page to Third Amendment to Five-Year Term Loan Agreement
with PREIT Associates, L.P. et al.]


CITIBANK, N.A.



By: /s/ John Rowland
Name: John Rowland
Title: Vice President


































[Signatures Continued on Next Page]




Exhibit 10.2

[Signature Page to Third Amendment to Five-Year Term Loan Agreement
with PREIT Associates, L.P. et al.]


JPMORGAN CHASE BANK, N.A.


By: /s/ Elizabeth Johnson
Name: Elizabeth Johnson
Title: Executive Director
































[Signatures Continued on Next Page]


Exhibit 10.2

[Signature Page to Third Amendment to Five-Year Term Loan Agreement
with PREIT Associates, L.P. et al.]


PNC BANK, NATIONAL ASSOCIATION


By: /s/ Sharon L. Schmidt
Name: Sharon L. Schmidt
Title: Vice President

































[Signatures Continued on Next Page]

Exhibit 10.2

[Signature Page to Third Amendment to Five-Year Term Loan Agreement
with PREIT Associates, L.P. et al.]


MUFG UNION BANK, N.A. (formerly known as Union Bank, N.A.)


By: /s/ Donald Wattson
Name: Donald Wattson
Title: Vice President


Exhibit 10.2

Schedule 6.1.(y)
Specified Derivatives Contracts

Chatham Financial Ref #
Amount
Effective Date
CFPREIT2012041201
$25,000,000
03/12/2013
CFPREIT2014010802
$20,000,000
02/03/2014
CFPREIT2014010803
$20,000,000
02/03/2014
CFPREIT2014010804
$20,000,000
02/03/2014
CFPREIT2014010805
$20,000,000
02/03/2014
CFPREIT2014010806
$20,000,000
02/03/2014
CFPREIT2015040801
$25,000,000
05/01/2015





Exhibit 10.2

ANNEX A

FORM OF GUARANTOR ACKNOWLEDGEMENT

THIS GUARANTOR ACKNOWLEDGEMENT dated as of June __, 2015 (this “Acknowledgement”) executed by each of the undersigned (the “Guarantors”) in favor of Wells Fargo Bank, National Association, as Administrative Agent (the “Administrative Agent”), and each “Lender” a party to the Term Loan Agreement referred to below (the “Lenders”).

WHEREAS, PREIT Associates, L.P., a Delaware limited partnership (“PREIT”), PREIT-RUBIN, INC., a Pennsylvania corporation (“PREIT-RUBIN”; together with PREIT, each individually, a “Borrower” and collectively, the “Borrower”), PENNSYLVANIA REAL ESTATE INVESTMENT TRUST, a Pennsylvania business trust (the “Parent”), the Lenders, the Administrative Agent and certain other parties have entered into that certain Five-Year Term Loan Agreement dated as of January 8, 2014 (as amended, restated, supplemented or otherwise modified from time to time, the “Term Loan Agreement”);

WHEREAS, each of the Guarantors is a party to that certain Guaranty dated as of January 8, 2014 (as amended, restated, supplemented or otherwise modified from time to time, the “Guaranty”) pursuant to which they guarantied, among other things, the Borrower’s obligations under the Term Loan Agreement on the terms and conditions contained in the Guaranty;

WHEREAS, the Borrower, the Parent, the Administrative Agent and the Lenders are to enter into a Third Amendment to Term Loan Agreement dated as of the date hereof (the “Amendment”), to amend the terms of the Term Loan Agreement on the terms and conditions contained therein; and

WHEREAS, it is a condition precedent to the effectiveness of the Amendment that the Guarantors execute and deliver this Acknowledgement.

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

Section 1. Reaffirmation . Each Guarantor hereby reaffirms its continuing obligations to the Administrative Agent and the Lenders under the Guaranty and agrees that the transactions contemplated by the Amendment shall not in any way affect the validity and enforceability of the Guaranty, or reduce, impair or discharge the obligations of such Guarantor thereunder.

Section 2. Governing Law . THIS ACKNOWLEDGEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH COMMONWEALTH.

Section 3. Counterparts . This Acknowledgement may be executed in any number of counterparts, each of which shall be deemed to be an original and shall be binding upon all parties, their successors and assigns.


[Signatures on Next Page]
    

Exhibit 10.2

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

THE GUARANTORS:

[GUARANTOR]


By:
    
Name:     
Title:     


Address for Notices for all Guarantors:

c/o PREIT Associates, L.P.
200 South Broad Street
Philadelphia, PA 19102
Attention: Andrew Ioannou
Telephone: (215) 875-0700
Telecopy: (215) 546-7311





Exhibit 10.2

EXHIBIT C

FORM OF NOTICE OF CONTINUATION

____________, 20__


Wells Fargo Bank, National Association,
as Administrative Agent
550 South Tryon Street, 6th Floor
MAC D1086-061
Charlotte, North Carolina 28202
Attention: D. Bryan Gregory

Ladies and Gentlemen:

Reference is made to that certain Five-Year Term Loan Agreement dated as of January 8, 2014 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), by and among PREIT Associates, L.P. (“PREIT”), PREIT-Rubin, Inc. (“PREIT-Rubin”), Pennsylvania Real Estate Investment Trust (the “Parent”; together with PREIT and PREIT-Rubin, each individually, a “Borrower” and collectively, the “Borrower”), the financial institutions party thereto and their assignees under Section 11.6.(b) thereof (the “Lenders”), Wells Fargo Bank, National Association, as Administrative Agent (the “Administrative Agent”), and the other parties thereto. Capitalized terms used herein, and not otherwise defined herein, have their respective meanings given them in the Credit Agreement.

Pursuant to Section 2.9. of the Credit Agreement, the Borrower hereby requests a Continuation of a LIBOR Loan under the Credit Agreement, and in that connection sets forth below the information relating to such Continuation as required by such Section of the Credit Agreement:

1.
The requested date of such Continuation is ____________, 20__.

2.
The LIBOR Loan to be continued pursuant hereto is a Loan in the aggregate principal amount of $________________.

3.
The portion of the principal amount of such LIBOR Loan subject to the requested Continuation is $__________________________.

3.
The current Interest Period of such LIBOR Loan subject to such Continuation ends on ________________, 20__.

4.
The duration of the Interest Period for such LIBOR Loan or portion thereof subject to such Continuation is:

[Check one box only]

¨      one month
¨      three months
¨      six months


Exhibit 10.2

5.
The amount of any such LIBOR Loan, or portion thereof, so Continued that the Borrower has elected to have subject to a Specified Derivatives Contract that provides a hedge against interest rate risk is $_____________, and the Specified Derivatives Contract(s) to which such amount is subject is (are) as follows: ___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________.

The Borrower hereby certifies to the Administrative Agent and the Lenders that as of the date hereof, as of the proposed date of the requested Continuation, and after giving effect to such Continuation, (a) no Default or Event of Default shall have occurred and be continuing, and (b) the representations and warranties made or deemed made by the Borrower and each other Loan Party in the Loan Documents to which any of them is a party, are and shall be true and correct in all material respects (except in the case of a representation or warranty qualified by materiality, in which case such representation or warranty shall be true and correct in all respects) with the same force and effect as if made on and as of such date except to the extent that such representations and warranties expressly relate solely to an earlier date (in which case such representations and warranties shall have been true and correct in all material respects (except in the case of a representation or warranty qualified by materiality, in which case such representation or warranty shall be true and correct in all respects) on and as of such earlier date) and except for changes in factual circumstances not prohibited under the Loan Documents.

If notice of the requested Continuation was given previously by telephone, this Notice of Continuation is to be considered written confirmation of such telephone notice required by Section 2.9. of the Credit Agreement.


[Remainder of Page Intentionally Left Blank]


Exhibit 10.2

IN WITNESS WHEREOF, the undersigned has duly executed and delivered this Notice of Continuation as of the date first written above.


PREIT Associates, L.P.

By:      Pennsylvania Real Estate Investment Trust,
its general partner


By:     
Name:     
Title:     


PREIT-RUBIN, INC.


By:     
Name:     
Title:     


PENNSYLVANIA REAL ESTATE INVESTMENT TRUST


By:     
Name:     
Title:     








Exhibit 10.2

EXHIBIT D

FORM OF NOTICE OF CONVERSION

____________, 20__


Wells Fargo Bank, National Association,
as Administrative Agent
550 South Tryon Street, 6th Floor
MAC D1086-061
Charlotte, North Carolina 28202
Attention: D. Bryan Gregory

Ladies and Gentlemen:

Reference is made to that certain Five-Year Term Loan Agreement dated as of January 8, 2014 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), by and among PREIT Associates, L.P. (“PREIT”), PREIT-Rubin, Inc. (“PREIT-Rubin”), Pennsylvania Real Estate Investment Trust (the “Parent”; together with PREIT and PREIT-Rubin, each individually, a “Borrower” and collectively, the “Borrower”), the financial institutions party thereto and their assignees under Section 11.6.(b) thereof (the “Lenders”), Wells Fargo Bank, National Association, as Administrative Agent (the “Administrative Agent”), and the other parties thereto. Capitalized terms used herein, and not otherwise defined herein, have their respective meanings given them in the Credit Agreement.

Pursuant to Section 2.10. of the Credit Agreement, the Borrower hereby requests a Conversion of a Loan of one Type into a Loan of another Type under the Credit Agreement, and in that connection sets forth below the information relating to such Conversion as required by such Section of the Credit Agreement:

1.
The requested date of such Conversion is ______________, 20__.

2.
The Type of Loan to be Converted pursuant hereto is currently:

[Check one box only]

¨
Base Rate Loan
¨
LIBOR Loan

3.
The aggregate principal amount of the Loans subject to the requested Conversion is $_____________________ and the portion of such principal amount subject to such Conversion is $___________________.
4.
The amount of such Loan to be so Converted is to be converted into Loan of the following Type:

[Check one box only]     

Base Rate Loan
LIBOR Loan, with an initial Interest Period for a duration of:

[Check one box only]

¨
one month
¨
three months
¨
six months


Exhibit 10.2


5.
The amount of any such Loan, or portion thereof, so Converted to a LIBOR Loan that the Borrower has elected to have subject to a Specified Derivatives Contract that provides a hedge against interest rate risk is $_____________, and the Specified Derivatives Contract(s) to which such amount is subject is (are) as follows: ___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________.

The Borrower hereby certifies to the Administrative Agent and the Lenders that as of the date hereof, as of the proposed date of the requested Conversion, and after giving effect to such Conversion, (a) no Default or Event of Default shall have occurred and be continuing (provided the certification under this clause (a) shall not be made in connection with a Conversion of a Loan into a Base Rate Loan), and (b) the representations and warranties made or deemed made by the Borrower and each other Loan Party in the Loan Documents to which any of them is a party, are and shall be true and correct in all material respects (except in the case of a representation or warranty qualified by materiality, in which case such representation or warranty shall be true and correct in all respects) with the same force and effect as if made on and as of such date except to the extent that such representations and warranties expressly relate solely to an earlier date (in which case such representations and warranties shall have been true and correct in all material respects (except in the case of a representation or warranty qualified by materiality, in which case such representation or warranty shall be true and correct in all respects) on and as of such earlier date) and except for changes in factual circumstances not prohibited under the Loan Documents.

If notice of the requested Conversion was given previously by telephone, this Notice of Conversion is to be considered the written confirmation of such telephone notice required by Section 2.10. of the Credit Agreement.


[Remainder of Page Intentionally Left Blank]


Exhibit 10.2

IN WITNESS WHEREOF, the undersigned has duly executed and delivered this Notice of Conversion as of the date first written above.

PREIT Associates, L.P.

By:      Pennsylvania Real Estate Investment Trust,
its general partner


By:________________     
Name:     
Title:     


PREIT-RUBIN, INC.


By:________________     
Name:
    
Title:
    


PENNSYLVANIA REAL ESTATE INVESTMENT TRUST


By:________________     
Name:
    
Title:
    



Exhibit 10.3

Loan Number: 1011175-0

THIRD AMENDMENT TO SEVEN-YEAR TERM LOAN AGREEMENT

This THIRD AMENDMENT TO SEVEN-YEAR TERM LOAN AGREEMENT (this “Amendment”) is dated as of June 26, 2015, by and among PREIT Associates, L.P., a Delaware limited partnership (“PREIT”), PREIT-RUBIN, INC., a Pennsylvania corporation (“PREIT-RUBIN”; together with PREIT, each individually, a “Borrower” and collectively, the “Borrower”), PENNSYLVANIA REAL ESTATE INVESTMENT TRUST, a Pennsylvania business trust (the “Parent”), each of the LENDERS (as defined below) and WELLS FARGO BANK, NATIONAL ASSOCIATION (the “Administrative Agent”).

WHEREAS, the Borrower, the Parent, each of the financial institutions initially a signatory thereto together with their assignees pursuant to Section 11.6.(b) (the “Lenders”), and the Administrative Agent have entered into that certain Seven-Year Term Loan Agreement dated as of January 8, 2014 (as amended and in effect immediately prior to the date hereof, the “Term Loan Agreement”); and

WHEREAS, the Borrower, the Parent, the Lenders and the Administrative Agent desire to amend certain provisions of the Term Loan Agreement on the terms and conditions contained herein.

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

Section 1.      Definitions . Capitalized terms used in this Amendment and not otherwise defined herein shall have the respective meanings given such terms in the Term Loan Agreement.

Section 2.      Specific Amendments to Term Loan Agreement . Upon the effectiveness of this Amendment, the parties hereto agree that the Term Loan Agreement shall be amended as follows:

(a)      The Term Loan Agreement is amended by adding the following sentence at the end of the definition of “ LIBOR ”:

If LIBOR determined as provided above would be less than zero, LIBOR shall be deemed to be zero for each LIBOR Loan that has not been identified by the Borrower in accordance with the terms of this Agreement as being subject to a Specified Derivative Contract that provides a hedge against interest rate risk.

(b)      The Term Loan Agreement is further amended by restating the last sentence in the definition of “ Unencumbered Property ” in its entirety as follows:

Notwithstanding anything to the contrary in this definition, if a Property listed on Schedule 1.1(B) at any time after the Effective Date fails to satisfy any requirements in clause (b) of this definition (other than those, if any, it failed to satisfy on the Effective Date), such Property shall no longer be an Unencumbered Property until such time as it satisfies at least all of the requirements in such clause (b) that it satisfied on the Effective Date.
(c)      The Term Loan Agreement is further amended by adding the following definitions to Section 1.1. thereof in the appropriate alphabetical order:


Exhibit 10.3




“ Anti-Corruption Laws ” means all Applicable Laws of any jurisdiction concerning or relating to bribery, corruption or money laundering, including without limitation, the Foreign Corrupt Practices Act of 1977, as amended.

“ Third Amendment Effective Date ” means June 26, 2015.

“ 2015 Five-Year Term Loan Agreement ” means that certain Five -Year Term Loan Agreement dated as of June 26, 2015 by and among PREIT, PREIT-RUBIN, the Parent, the financial institutions party thereto as “Lenders”, Wells Fargo, as Administrative Agent, and the other parties thereto.

(d)      The Term Loan Agreement is further amended by restating the fifth sentence of Section 2.9. thereof in its entirety as follows:

Such notice of a Continuation shall be by telephone (confirmed immediately in writing), telecopy, electronic mail or other similar form of communication, confirmed immediately in writing if by telephone, in the form of a Notice of Continuation, specifying (a) the proposed date of such Continuation, (b) the LIBOR Loan and portion thereof subject to such Continuation, (c) the duration of the selected Interest Period, all of which of the foregoing (a), (b) and (c) shall be specified in such manner as is necessary to comply with all limitations on Loans outstanding hereunder, and (d) the amount of such LIBOR Loan, or portion thereof, that the Borrower has elected to have subject to a Specified Derivatives Contract that provides a hedge against interest rate risk and the Specified Derivatives Contract(s) to which such amount is subject.

(e)      The Term Loan Agreement is further amended by restating the sixth sentence of Section 2.10. thereof in its entirety as follows:

Subject to the restrictions specified above, each Notice of Conversion shall be by telephone (confirmed immediately in writing), telecopy, electronic mail or other similar form of communication in the form of a Notice of Conversion specifying (a) the requested date of such Conversion, (b) the Type of Loan to be Converted, (c) the portion of such Type of Loan to be Converted, (d) the Type of Loan such Loan is to be Converted into, and (e) if such Conversion is into a LIBOR Loan, the requested duration of the Interest Period of such Loan and the amount of such LIBOR Loan, if any, that the Borrower has elected to have subject to a Specified Derivatives Contract that provides a hedge against interest rate risk and the Specified Derivatives Contract(s) to which such amount is subject.

(f)      The Term Loan Agreement is further amended by adding the following subsection (y) immediately following subsection (x) of Section 6.1. thereof.

(y)      LIBOR Loans Subject to Specified Derivatives Contracts . Schedule 6.1.(y) is, as of the Third Amendment Effective Date, a true, correct and complete listing of all Specified Derivatives Contracts outstanding as of such date that provide a hedge against interest rate risk, specifying with respect to each such Specified Derivatives Contract, the amount, if any, of LIBOR Loans outstanding on the Second Amendment

- 2 -
Exhibit 10.3

Effective Date that the Borrower has elected to have subject to such Specified Derivatives Contract.

(g)      The Term Loan Agreement is further amended by adding the phrase “or in any manner that would directly or indirectly violate Anti-Corruption Laws” after the word “person” and before the period at the end of Section 6.1.

(h)      The Term Loan Agreement is further amended by restating the first sentence of Section 7.16. in its entirety as follows:

PREIT-RUBIN may request in writing that the Administrative Agent release it as a Borrower (but not as a Guarantor unless otherwise permitted by Section 7.15.(d)), so long as (a) the Parent delivers a certificate signed by the chief financial officer of the Parent certifying that no Event of Default then exists or would occur as a result of such release and (b) effective upon its release as a Borrower, PREIT-RUBIN will be released as a “Borrower” under the Existing Credit Agreement, Five-Year Term Loan Agreement, and the 2015 Five-Year Term Loan Agreement.
  
(i)      The Term Loan Agreement is further amended by restating Section 8.1(d) in its entirety as follows:

(d)      Unencumbered Debt Yield . The Parent shall not permit the Unencumbered Debt Yield to be less than 11.0% at any time.

(j)      The Term Loan Agreement is further amended by adding the following new clause (vi) to the end of Section 9.1.(d) thereof and changing the period at the end of clause (v) of such Section to “; or”:

(vi)      An Event of Default under and as defined in the 2015 Five-Year Term Loan Agreement shall occur.

(k)      The Term Loan Agreement is further amended by restating the address for communications to the Administrative Agent in Section 11.1. thereof as follows:

If to the Administrative Agent:

Wells Fargo Bank, National Association, as Administrative Agent
550 South Tryon Street, 6th Floor
MAC D1086-061
Charlotte, North Carolina 28202
Attention: D. Bryan Gregory
Telephone:      (704) 410‑1776
Telecopy:      (704) 410-0329


- 3 -
Exhibit 10.3

with copies to:

Wells Fargo Bank, National Association, as Administrative Agent
608 Second Avenue, 11 th Floor
MAC N9303-110
Minneapolis, Minnesota 55402
Attention: Anthony J. Gangelhoff
Telephone:      (612) 316-0109
Telecopy:      (877) 410-5023

and:

Wells Fargo Bank, National Association, as Administrative Agent
1750 H Street, NW Suite 400
Washington, D.C. 20006
Attention: Loan Administration Manager
Telephone:      (202) 303-3000
Telecopy:      (202) 429-2985

(l)      The Term Loan Agreement is further amended by attaching thereto Schedule 6.1.(y) attached hereto.

(m)      The Term Loan Agreement is further amended by deleting the word “and” before clause (f) of Section 11.9. thereof, replacing the period at the end of clause (f) of Section 11.9 thereof with a semicolon, and adding the following clauses (g) and (h) after clause (f) of Section 11.9. thereof:

(g) to the extent requested by, or required to be disclosed to, any nationally recognized rating agency or regulator or similar authority (including any self-regulatory authority, such as the National Association of Insurance Commissioners) having or purporting to have jurisdiction over it; and (h) with the consent of the Parent or PREIT.

(n)      The Term Loan Agreement is further amended by deleting Exhibits C and D in their entireties and substituting in lieu thereof the Exhibits C and D attached hereto.

Section 3.      Conditions Precedent . The effectiveness of this Amendment is subject to receipt by the Administrative Agent of each of the following, each in form and substance satisfactory to the Administrative Agent:

(a)      a counterpart of this Amendment duly executed by the Borrower, the Parent, the Administrative Agent and each of the Lenders;

(b)      a Guarantor Acknowledgement substantially in the form of Annex A attached hereto, executed by each Guarantor; and

(c)      such other documents, instruments and agreements as the Administrative Agent may reasonably request.


- 4 -
Exhibit 10.3

Section 5.      Representations . Each Borrower and the Parent represent and warrant to the Administrative Agent and the Lenders that:

(a)      Authorization . The Parent and each Borrower has the right and power, and has taken all necessary action to authorize it, to execute and deliver this Amendment and to perform its obligations hereunder and under the Term Loan Agreement, as amended by this Amendment, in accordance with their respective terms. This Amendment has been duly executed and delivered by a duly authorized signatory of the Parent and each Borrower or a general partner of such Borrower, as applicable, and both this Amendment and the Term Loan Agreement, as amended by this Amendment, are legal, valid and binding obligations of the Parent and each Borrower and are enforceable against such Persons in accordance with their respective terms, except as the same may be limited by bankruptcy, insolvency, fraudulent conveyance and other similar laws affecting the rights of creditors generally and the availability of equitable remedies for the enforcement of certain obligations (other than the payment of principal) contained herein or in the Term Loan Agreement may be limited by equitable principles generally.

(b)      Compliance with Laws, etc . The execution and delivery by the Parent and each Borrower of this Amendment and the performance by the Parent and each Borrower of this Amendment and the Term Loan Agreement, as amended by this Amendment, in accordance with their respective terms, do not and will not, by the passage of time, the giving of notice, or both: (i) require any Governmental Approval or violate any Applicable Law (including all Environmental Laws) relating to any Loan Party or any other Subsidiary; (ii)  result in a breach of or constitute a default under the declaration of trust, certificate or articles of incorporation, bylaws, partnership agreement or other organizational documents of any Loan Party or any other Subsidiary, or any indenture, agreement or other instrument to which any Loan Party or any other Subsidiary is a party or by which it or any of its respective properties may be bound; or (iii) result in or require the creation or imposition of any Lien upon or with respect to any property now owned or hereafter acquired by any Loan Party or any other Subsidiary other than in favor of the Administrative Agent for the benefit of the Lenders.

(c)      No Default . No Default or Event of Default has occurred and is continuing as of the date hereof, nor will exist immediately after giving effect to this Amendment.

Section 6.      Reaffirmation of Representations . The Parent and each Borrower hereby certify that as of the date hereof the representations and warranties made or deemed made by the Parent and each Borrower to the Administrative Agent and the Lenders in the Term Loan Agreement and the other Loan Documents to the Parent or Borrower is a party are true and correct in all material respects (except in the case of a representation or warranty qualified by materiality, in which case such representation and warranty is true and correct in all respects) except to the extent that such representations and warranties expressly relate solely to an earlier date (in which case such representations and warranties were true and correct in all material respects (except in the case of a representation or warranty qualified by materiality, in which case, such representation or warranty was true and correct in all respects) on and as of such earlier date) and except for changes in factual circumstances not prohibited under the Loan Documents.

Section 7.      Certain References . Each reference to the Term Loan Agreement in any of the Loan Documents shall be deemed to be a reference to the Term Loan Agreement as amended by this Amendment. This Amendment is a Loan Document.
 

- 5 -
Exhibit 10.3

Section 8.      Expenses . The Borrower agrees to pay or reimburse the Administrative Agent for all of its reasonable out-of-pocket costs and expenses (including the reasonable fees and disbursements of counsel to the Administrative Agent) incurred in connection with the preparation, negotiation and execution of this Amendment and the other agreements and documents executed and delivered in connection herewith.

Section 9.      Benefits . This Amendment shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns.

Section 10.      GOVERNING LAW . THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH COMMONWEALTH.

Section 11.      Effect . Except as expressly herein amended, the terms and conditions of the Term Loan Agreement and the other Loan Documents remain in full force and effect. The amendments contained in Section 2 hereof shall be deemed to have prospective application only. The Term Loan Agreement is hereby ratified and confirmed in all respects. Nothing in this Amendment shall limit, impair or constitute a waiver of the rights, powers or remedies available to the Administrative Agent or the Lenders under the Term Loan Agreement or any other Loan Document.

Section 12.      Counterparts . This Amendment may be executed in any number of counterparts, each of which shall be deemed to be an original and shall be binding upon all parties, their successors and assigns.

[Signatures commence on next page]



- 6 -
Exhibit 10.3







IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment to Seven-Year Term Loan Agreement to be executed by their authorized officers all as of the day and year first above written.


PREIT Associates, L.P.

By:      Pennsylvania Real Estate Investment Trust,
its general partner


By: /s/ Andrew Ioannou
Name: Andrew Ioannou
Title: Executive Vice President - Finance & Acquisitions and Treasurer


PREIT-RUBIN, INC.


By: /s/ Andrew Ioannou
Name: Andrew Ioannou
Title: Executive Vice President - Finance & Acquisitions and Treasurer


PENNSYLVANIA REAL ESTATE INVESTMENT TRUST


By: /s/ Andrew Ioannou
Name: Andrew Ioannou
Title: Executive Vice President - Finance & Acquisitions and Treasurer














[Signatures Continued on Next Page]


Exhibit 10.3

[Signature Page to Third Amendment to Seven-Year Term Loan Agreement
with PREIT Associates, L.P. et al.]


Wells Fargo Bank, National Association, as Administrative Agent and as a Lender


By: /s/ D. Bryan Gregory
Name: D. Bryan Gregory
     Title: Director






























[Signatures Continued on Next Page]




1





Exhibit 10.3

[Signature Page to Third Amendment to Seven-Year Term Loan Agreement
with PREIT Associates, L.P. et al.]


CAPITAL ONE, NATIONAL ASSOCIATION


By: /s/ Michael J. Vergura, Jr.
Name: Michael J. Vergura, Jr.
Title: Vice President















Exhibit 10.3

[Signature Page to Third Amendment to Seven-Year Term Loan Agreement
with PREIT Associates, L.P. et al.]


MUFG Union Bank, N.A. (formerly known as Union Bank,
N.A.)


By: /s/ Donald Wattson
Name: Donald Wattson
Title: Vice President
































[Signatures Continued on Next Page]


Exhibit 10.3

[Signature Page to Third Amendment to Seven-Year Term Loan Agreement
with PREIT Associates, L.P. et al.]


MANUFACTURERS AND TRADERS TRUST COMPANY


By: /s/ Michael J. DiSanto
Name: Michael J. DiSanto
Title: Vice President





Exhibit 10.3

ANNEX A

FORM OF GUARANTOR ACKNOWLEDGEMENT

THIS GUARANTOR ACKNOWLEDGEMENT dated as of June __, 2015 (this “Acknowledgement”) executed by each of the undersigned (the “Guarantors”) in favor of Wells Fargo Bank, National Association, as Administrative Agent (the “Administrative Agent”), and each “Lender” a party to the Term Loan Agreement referred to below (the “Lenders”).

WHEREAS, PREIT Associates, L.P., a Delaware limited partnership (“PREIT”), PREIT-RUBIN, INC., a Pennsylvania corporation (“PREIT-RUBIN”; together with PREIT, each individually, a “Borrower” and collectively, the “Borrower”), PENNSYLVANIA REAL ESTATE INVESTMENT TRUST, a Pennsylvania business trust (the “Parent”), the Lenders, the Administrative Agent and certain other parties have entered into that certain Seven-Year Term Loan Agreement dated as of January 8, 2014 (as amended, restated, supplemented or otherwise modified from time to time, the “Term Loan Agreement”);

WHEREAS, each of the Guarantors is a party to that certain Guaranty dated as of January 8, 2014 (as amended, restated, supplemented or otherwise modified from time to time, the “Guaranty”) pursuant to which they guarantied, among other things, the Borrower’s obligations under the Term Loan Agreement on the terms and conditions contained in the Guaranty;

WHEREAS, the Borrower, the Parent, the Administrative Agent and the Lenders are to enter into a Third Amendment to Term Loan Agreement dated as of the date hereof (the “Amendment”), to amend the terms of the Term Loan Agreement on the terms and conditions contained therein; and

WHEREAS, it is a condition precedent to the effectiveness of the Amendment that the Guarantors execute and deliver this Acknowledgement.

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

Section 1. Reaffirmation . Each Guarantor hereby reaffirms its continuing obligations to the Administrative Agent and the Lenders under the Guaranty and agrees that the transactions contemplated by the Amendment shall not in any way affect the validity and enforceability of the Guaranty, or reduce, impair or discharge the obligations of such Guarantor thereunder.

Section 2. Governing Law . THIS ACKNOWLEDGEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH COMMONWEALTH.

Section 3. Counterparts . This Acknowledgement may be executed in any number of counterparts, each of which shall be deemed to be an original and shall be binding upon all parties, their successors and assigns.


[Signatures on Next Page]
    






Exhibit 10.3

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

THE GUARANTORS:

[GUARANTOR]


By:     
Name:     
Title:     


Address for Notices for all Guarantors:

c/o PREIT Associates, L.P.
200 South Broad Street
Philadelphia, PA 19102
Attention: Andrew Ioannou
Telephone: (215) 875-0700
Telecopy: (215) 546-7311



Exhibit 10.3

EXHIBIT C

FORM OF NOTICE OF CONTINUATION

____________, 20__


Wells Fargo Bank, National Association,
as Administrative Agent
550 South Tryon Street, 6th Floor
MAC D1086-061
Charlotte, North Carolina 28202
Attention: D. Bryan Gregory

Ladies and Gentlemen:

Reference is made to that certain Seven-Year Term Loan Agreement dated as of January 8, 2014 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), by and among PREIT Associates, L.P. (“PREIT”), PREIT-Rubin, Inc. (“PREIT-Rubin”), Pennsylvania Real Estate Investment Trust (the “Parent”; together with PREIT and PREIT-Rubin, each individually, a “Borrower” and collectively, the “Borrower”), the financial institutions party thereto and their assignees under Section 11.6.(b) thereof (the “Lenders”), Wells Fargo Bank, National Association, as Administrative Agent (the “Administrative Agent”), and the other parties thereto. Capitalized terms used herein, and not otherwise defined herein, have their respective meanings given them in the Credit Agreement.

Pursuant to Section 2.9. of the Credit Agreement, the Borrower hereby requests a Continuation of a LIBOR Loan under the Credit Agreement, and in that connection sets forth below the information relating to such Continuation as required by such Section of the Credit Agreement:

1.
The requested date of such Continuation is ____________, 20__.

2.
The LIBOR Loan to be continued pursuant hereto is a Loan in the aggregate principal amount of $________________.

3.
The portion of the principal amount of such LIBOR Loan subject to the requested Continuation is $__________________________.

3.
The current Interest Period of such LIBOR Loan subject to such Continuation ends on ________________, 20__.

4.
The duration of the Interest Period for such LIBOR Loan or portion thereof subject to such Continuation is:

[Check one box only]

¨      one month
¨      three months
¨      six months



Exhibit 10.3

5.
The amount of any such LIBOR Loan, or portion thereof, so Continued that the Borrower has elected to have subject to a Specified Derivatives Contract that provides a hedge against interest rate risk is $_____________, and the Specified Derivatives Contract(s) to which such amount is subject is (are) as follows: ___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________.

The Borrower hereby certifies to the Administrative Agent and the Lenders that as of the date hereof, as of the proposed date of the requested Continuation, and after giving effect to such Continuation, (a) no Default or Event of Default shall have occurred and be continuing, and (b) the representations and warranties made or deemed made by the Borrower and each other Loan Party in the Loan Documents to which any of them is a party, are and shall be true and correct in all material respects (except in the case of a representation or warranty qualified by materiality, in which case such representation or warranty shall be true and correct in all respects) with the same force and effect as if made on and as of such date except to the extent that such representations and warranties expressly relate solely to an earlier date (in which case such representations and warranties shall have been true and correct in all material respects (except in the case of a representation or warranty qualified by materiality, in which case such representation or warranty shall be true and correct in all respects) on and as of such earlier date) and except for changes in factual circumstances not prohibited under the Loan Documents.

If notice of the requested Continuation was given previously by telephone, this Notice of Continuation is to be considered written confirmation of such telephone notice required by Section 2.9. of the Credit Agreement.


[Remainder of Page Intentionally Left Blank]



Exhibit 10.3

IN WITNESS WHEREOF, the undersigned has duly executed and delivered this Notice of Continuation as of the date first written above.


PREIT Associates, L.P.

By:      Pennsylvania Real Estate Investment Trust,
its general partner


By:     
    
Name:          
Title:     
    


PREIT-RUBIN, INC.


By:     
Name:          
Title:     
    


PENNSYLVANIA REAL ESTATE INVESTMENT TRUST


By:     
    
Name:          
Title:     
    






Exhibit 10.3

EXHIBIT D

FORM OF NOTICE OF CONVERSION

____________, 20__


Wells Fargo Bank, National Association,
as Administrative Agent
550 South Tryon Street, 6th Floor
MAC D1086-061
Charlotte, North Carolina 28202
Attention: D. Bryan Gregory

Ladies and Gentlemen:

Reference is made to that certain Seven-Year Term Loan Agreement dated as of January 8, 2014 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), by and among PREIT Associates, L.P. (“PREIT”), PREIT-Rubin, Inc. (“PREIT-Rubin”), Pennsylvania Real Estate Investment Trust (the “Parent”; together with PREIT and PREIT-Rubin, each individually, a “Borrower” and collectively, the “Borrower”), the financial institutions party thereto and their assignees under Section 11.6.(b) thereof (the “Lenders”), Wells Fargo Bank, National Association, as Administrative Agent (the “Administrative Agent”), and the other parties thereto. Capitalized terms used herein, and not otherwise defined herein, have their respective meanings given them in the Credit Agreement.

Pursuant to Section 2.10. of the Credit Agreement, the Borrower hereby requests a Conversion of a Loan of one Type into a Loan of another Type under the Credit Agreement, and in that connection sets forth below the information relating to such Conversion as required by such Section of the Credit Agreement:

1.
The requested date of such Conversion is ______________, 20__.

2.
The Type of Loan to be Converted pursuant hereto is currently:

[Check one box only]

¨
Base Rate Loan
¨
LIBOR Loan

3.
The aggregate principal amount of the Loans subject to the requested Conversion is $_____________________ and the portion of such principal amount subject to such Conversion is $___________________.






D-1


Exhibit 10.3

4.
The amount of such Loan to be so Converted is to be converted into Loan of the following Type:

[Check one box only]     

Base Rate Loan
LIBOR Loan, with an initial Interest Period for a duration of:

[Check one box only]

¨      one month
¨      three months
¨      six months


5.
The amount of any such Loan, or portion thereof, so Converted to a LIBOR Loan that the Borrower has elected to have subject to a Specified Derivatives Contract that provides a hedge against interest rate risk is $_____________, and the Specified Derivatives Contract(s) to which such amount is subject is (are) as follows: ___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________.

The Borrower hereby certifies to the Administrative Agent and the Lenders that as of the date hereof, as of the proposed date of the requested Conversion, and after giving effect to such Conversion, (a) no Default or Event of Default shall have occurred and be continuing (provided the certification under this clause (a) shall not be made in connection with a Conversion of a Loan into a Base Rate Loan), and (b) the representations and warranties made or deemed made by the Borrower and each other Loan Party in the Loan Documents to which any of them is a party, are and shall be true and correct in all material respects (except in the case of a representation or warranty qualified by materiality, in which case such representation or warranty shall be true and correct in all respects) with the same force and effect as if made on and as of such date except to the extent that such representations and warranties expressly relate solely to an earlier date (in which case such representations and warranties shall have been true and correct in all material respects (except in the case of a representation or warranty qualified by materiality, in which case such representation or warranty shall be true and correct in all respects) on and as of such earlier date) and except for changes in factual circumstances not prohibited under the Loan Documents.

If notice of the requested Conversion was given previously by telephone, this Notice of Conversion is to be considered the written confirmation of such telephone notice required by Section 2.10. of the Credit Agreement.


[Remainder of Page Intentionally Left Blank]









D-2



Exhibit 10.3


        
IN WITNESS WHEREOF, the undersigned has duly executed and delivered this Notice of Conversion as of the date first written above.

PREIT Associates, L.P.

By:      Pennsylvania Real Estate Investment Trust,
its general partner


By:         
Name:     
Title:     
    


PREIT-RUBIN, INC.


By:         
Name:          
Title:     
    


PENNSYLVANIA REAL ESTATE INVESTMENT TRUST


By:         
Name:          
Title:     
    






D-3


Exhibit 10.3


Schedule 6.1.(y)
Specified Derivatives Contracts

Chatham Financial Ref #
Amount
Effective Date
CFPREIT2014010801
$30,000,000
02/03/2014
CFPREIT2015040802
$25,000,000
05/01/2015
CFPREIT2015040803
$25,000,000
05/01/2015
CFPREIT2015040804
$20,000,000
05/01/2015















Exhibit 10.4
WELLS FARGO


EXECUTION VERSION

Loan Number: 1014685



FIVE-YEAR TERM LOAN AGREEMENT

Dated as of June 26, 2015

by and among

PREIT Associates, L.P.
and
PREIT‑RUBIN, INC.,
each, as a Borrower,

PENNSYLVANIA REAL ESTATE INVESTMENT TRUST,
as Parent and as a Borrower,

The financial institutions party hereto
and their assignees under Section 11.6.(b),
as Lenders

and

WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Administrative Agent

______________________________________________


WELLS FARGO SECURITIES, LLC
and
PNC CAPITAL MARKETS LLC,
as Joint Lead Arrangers and Joint Bookrunners,

PNC BANK, NATIONAL ASSOCIATION,
as Syndication Agent,
and

each of
MUFG Union Bank, N.A.
and
U.S. Bank National Association,
as a Documentation Agent,



TABLE OF CONTENTS
 
 
 
Article I. Definitions
 
Section 1.1. Definitions.
1
 
Section 1.2. General; References to Times.
29
Article II. Credit Facilities
 
Section 2.1. Loans.
29
 
Section 2.2. [Intentionally Omitted].
30
 
Section 2.3. [Intentionally Omitted].
30
 
Section 2.4. Rates and Payment of Interest on Loans.
30
 
Section 2.5. Number of Interest Periods.
31
 
Section 2.6. Repayment of Loans.
31
 
Section 2.7. Late Charges.
32
 
Section 2.8. Optional Prepayments.
32
 
Section 2.9. Continuation.
32
 
Section 2.10. Conversion.
33
 
Section 2.11. Notes.
33
 
Section 2.12. [Intentionally Omitted].
34
 
Section 2.13. [Intentionally Omitted].
34
 
Section 2.14. Voluntary Reduction of the Commitments.
34
 
Section 2.15. Joint and Several Liability of the Borrower.
34
 
Section 2.16. Actions of the Borrower.
35
 
Section 2.17. [Intentionally Omitted].
35
 
Section 2.18. Funds Transfer Disbursements.
35
 
Section 2.19. [Intentionally Omitted].
36
Article III. Payments, Fees and Other General Provisions
 
Section 3.1. Payments.
36
 
Section 3.2. Pro Rata Treatment.
36
 
Section 3.3. Sharing of Payments, Etc.
37
 
Section 3.4. Several Obligations.
37
 
Section 3.5. Fees.
37
 
Section 3.6. Computations.
38
 
Section 3.7. Usury.
38
 
Section 3.8. Statements of Account.
38
 
Section 3.9. Defaulting Lenders.
38
 
Section 3.10. Taxes.
40

- i -

Article IV. Yield Protection, Etc.
 
Section 4.1. Additional Costs; Capital Adequacy.
41
 
Section 4.2. Suspension of LIBOR Loans.
42
 
Section 4.3. Illegality.
43
 
Section 4.4. Compensation.
43
 
Section 4.5. Treatment of Affected Loans.
43
 
Section 4.6. Affected Lenders.
44
 
Section 4.7. Assumptions Concerning Funding of LIBOR Loans.
44
 
Section 4.8. Change of Lending Office.
45
Article V. Conditions Precedent
 
Section 5.1. Initial Conditions Precedent.
45
 
Section 5.2. Conditions Precedent to All Credit Events.
47
Article VI. Representations and Warranties
 
Section 6.1. Representations and Warranties.
47
 
Section 6.2. Survival of Representations and Warranties, Etc.
53
Article VII. Affirmative Covenants
 
Section 7.1. Financial Reporting and Other Information.
54
 
Section 7.2. Preservation of Existence and Similar Matters.
59
 
Section 7.3. Compliance with Applicable Law.
59
 
Section 7.4. Maintenance of Property.
59
 
Section 7.5. Conduct of Business.
59
 
Section 7.6. Insurance.
60
 
Section 7.7. Payment of Taxes and Claims.
60
 
Section 7.8. Books and Records; Visits and Inspections.
60
 
Section 7.9. Use of Proceeds.
60
 
Section 7.10. Environmental Matters.
61
 
Section 7.11. Further Assurances.
61
 
Section 7.12. Material Contracts.
61
 
Section 7.13. REIT Status.
61
 
Section 7.14. Exchange Listing.
62
 
Section 7.15. Guarantors; Release of Guarantors.
62
 
Section 7.16. Release of PREIT-RUBIN, Inc. as Borrower.
64
Article VIII. Negative Covenants

- ii -

 
Section 8.1. Financial Covenants.
64
 
Section 8.2. Restricted Payments.
66
 
Section 8.3. Liens; Negative Pledge.
67
 
Section 8.4. Restrictions on Intercompany Transfers.
67
 
Section 8.5. Mergers, Acquisitions and Sales of Assets.
67
 
Section 8.6. Fiscal Year.
69
 
Section 8.7. Modifications of Organizational Documents and Material Contracts.
69
 
Section 8.8. Transactions with Affiliates.
69
 
Section 8.9. Environmental Matters.
69
 
Section 8.10. ERISA Exemptions.
69
 
Section 8.11. Derivatives Contracts.
70
Article IX. Default
 
Section 9.1. Events of Default.
70
 
Section 9.2. Remedies Upon Event of Default.
74
 
Section 9.3. Remedies Upon Default.
75
 
Section 9.4. Marshaling; Payments Set Aside.
75
 
Section 9.5. Allocation of Proceeds.
75
 
Section 9.6. [Intentionally Omitted].
76
 
Section 9.7. Performance by Administrative Agent.
76
 
Section 9.8. Rescission of Acceleration by Requisite Lenders.
76
 
Section 9.9. Rights Cumulative.
76
Article X. The Administrative Agent
 
Section 10.1. Appointment and Authorization.
77
 
Section 10.2. Administrative Agent’s Reliance, Etc.
78
 
Section 10.3. Notice of Defaults.
78
 
Section 10.4. Administrative Agent and Titled Agents as Lender or Specified Derivatives Provider.
79
 
Section 10.5. Approvals of Lenders.
79
 
Section 10.6. Lender Credit Decision, Etc.
79
 
Section 10.7. Indemnification of Administrative Agent.
80
 
Section 10.8. Successor Administrative Agent.
81
 
Section 10.9. Titled Agents.
82
Article XI. Miscellaneous
 
Section 11.1. Notices.
82
 
Section 11.2. Expenses.
84
 
Section 11.3. Stamp, Intangible and Recording Taxes.
84
 
Section 11.4. Setoff.
84
 
Section 11.5. Litigation; Jurisdiction; Other Matters; Waivers.
85
 
Section 11.6. Successors and Assigns.
86

- iii -

 
Section 11.7. Amendments and Waivers.
90
 
Section 11.8. Nonliability of Administrative Agent and Lenders.
91
 
Section 11.9. Confidentiality.
92
 
Section 11.10. Indemnification.
92
 
Section 11.11. Termination; Survival.
94
 
Section 11.12. Severability of Provisions.
94
 
Section 11.13. GOVERNING LAW.
94
 
Section 11.14. Counterparts.
94
 
Section 11.15. Independence of Covenants.
95
 
Section 11.16. Obligations with Respect to Loan Parties.
95
 
Section 11.17. Limitation of Liability.
95
 
Section 11.18. Entire Agreement.
95
 
Section 11.19. Construction.
95
Section 11.20. Time of the Essence.
95
 
 
 
Commitments
SCHEDULE 1.1.(A)
Existing Ground Leases
SCHEDULE 1.1.(B)
Unencumbered Properties
SCHEDULE 6.1.(b)
Ownership Structure
SCHEDULE 6.1.(f)
Title to Properties
SCHEDULE 6.1.(g)
Indebtedness
SCHEDULE 6.1.(h)
Material Contracts
SCHEDULE 6.1.(i)
Litigation
SCHEDULE 6.1.(w)
Non-Guarantor Subsidiaries
 
 
 
 
EXHIBIT A
Form of Assignment and Assumption Agreement
EXHIBIT B
Form of Guaranty
EXHIBIT C
Form of Notice of Continuation
EXHIBIT D
Form of Notice of Conversion
EXHIBIT E
Form of Notice of Borrowing
EXHIBIT F
Form of Disbursement Instruction Agreement
EXHIBIT G
Form of Note
EXHIBIT H
Form of Opinion
EXHIBIT I
Form of Compliance Certificate
EXHIBIT J
Form of Pricing Certificate


- iv -




THIS FIVE-YEAR TERM LOAN AGREEMENT (this “Agreement”) dated as of June 26, 2015, by and among PREIT Associates, L.P., a Delaware limited partnership (“PREIT”), PREIT-RUBIN, INC., a Pennsylvania corporation (“PREIT-RUBIN”), PENNSYLVANIA REAL ESTATE INVESTMENT TRUST, a Pennsylvania business trust (the “Parent”; together with PREIT and PREIT-RUBIN, each individually, a “Borrower” and collectively, the “Borrower”), each of the financial institutions initially a signatory hereto together with their assignees pursuant to Section 11.6.(b) and Wells Fargo Bank, National Association, as Administrative Agent, with WELLS FARGO SECURITIES, LLC and PNC CAPITAL MARKETS LLC, as Joint Lead Arrangers (the “Arrangers”) and as Joint Bookrunners, PNC BANK, NATIONAL ASSOCIATION, as Syndication Agent (the “Syndication Agent”), and each of MUFG Union Bank, N.A. and U.S. Bank National Association, as a Documentation Agent (each a “Documentation Agent”).

WHEREAS, the Lenders are willing to make available to the Borrower term loans in an aggregate amount of $150,000,000, on the terms and conditions contained herein.

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

Article I. Definitions
Section 1.1. Definitions.
In addition to terms defined elsewhere herein, the following terms shall have the following meanings for the purposes of this Agreement:

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

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

“ Adjusted EBITDA ” means, with respect to any Person and for any given period, (a) the EBITDA of such Person and its Wholly Owned Subsidiaries determined on a consolidated basis for such period, plus (b) rent payments made during such period by such Person and its Wholly Owned Subsidiaries in respect of ground leases minus (c) the Reserve for Replacements for all Properties owned by such Person and its Wholly Owned Subsidiaries. Adjusted EBITDA shall be (i) increased by the greater of a Person’s Ownership Share or Recourse Share of rent payments made during such period by any Consolidation Exempt Entity of such Person in respect of ground leases and (ii) decreased by the greater of a Person’s Investment Share or Recourse Share of the Reserve for Replacements for all Properties owned by the Consolidation Exempt Entities of such Person.

“ Adjusted Gross Asset Value ” means Gross Asset Value determined exclusive of assets that are owned by Excluded Subsidiaries or Unconsolidated Affiliates.
“ Adjusted NOI ” means, with respect to any Property and for a given period and without duplication, the amount equal to: (a) rents and other revenues received in the ordinary course from such Property (including proceeds of rent loss insurance but excluding pre-paid rents and revenues and security deposits except to the extent applied in satisfaction of tenants’ obligations for rent) minus (b) all expenses paid or accrued related to the ownership, operation or maintenance of such Property, including but not limited to taxes, assessments and other similar charges, insurance, utilities, payroll costs, maintenance, repair and landscaping expenses, marketing expenses, and general and administrative expenses (including an appropriate allocation for legal, accounting, advertising, marketing and other expenses incurred in


 





connection with such Property, but specifically excluding general overhead expenses of the Borrower) minus (c) the Reserve for Replacements for such Property as of the end of such period minus (d) the greater of (i) the actual property management fee paid during such period and (ii) an imputed management fee in the amount of three percent (3.0%) of the base rent revenues for such Property for such period.

“ Administrative Agent ” means Wells Fargo, as contractual representative for the Lenders under the terms of this Agreement, or any successor Administrative Agent appointed pursuant to Section 10.8.

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

“ Affected Lender ” has the meaning given that term in Section 4.6.

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

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

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

“ Anti-Corruption Laws ” means all Applicable Laws of any jurisdiction concerning or relating to bribery, corruption or money laundering, including without limitation, the Foreign Corrupt Practices Act of 1977, as amended.

“ Applicable Law ” means all applicable provisions of constitutions, statutes, rules, regulations and orders of all governmental bodies and all orders of all courts, tribunals and arbitrators.

“ Applicable Margin ” means:

(a) Prior to the Investment Grade Rating Date, the Applicable Margin shall be determined pursuant to this clause (a) from time to time based on the percentage rate set forth in the table below corresponding to the level (each, a “Level”) in which the ratio of Total Liabilities to Gross Asset Value as determined from time to time in accordance with Section 8.1.(b) in effect at such time falls:

Level
Ratio of Total Liabilities to Gross Asset Value
Applicable Margin for LIBOR Loans
Applicable Margin for Base Rate Loans
1
Less than 0.450 to 1.00
1.35%
1.35%
2
Equal to or greater than 0.450 to 1.00 but less than 0.500 to 1.00
1.45%
1.45%
3
Equal to or greater than 0.500 to 1.00 but less than 0.550 to 1.00
1.60%
1.60%
4
Equal to or greater than 0.550
1.90%
1.90%

The Applicable Margin shall be determined by the Administrative Agent from time to time, based on the ratio of Total Liabilities to Gross Asset Value as set forth in the Compliance Certificate most recently delivered by the Parent pursuant to Section 7.1.(a)(iii). Any adjustment to the Applicable Margin shall be effective as of the first day of the calendar month immediately following the month during which the

2


Parent delivers to the Administrative Agent the applicable Compliance Certificate pursuant to Section 7.1.(a)(iii). If the Parent fails to deliver a Compliance Certificate pursuant to Section 7.1.(a)(iii), the Applicable Margin shall equal the percentage corresponding to Level 4 until the first day of the calendar month immediately following the month that the required Compliance Certificate is delivered. Notwithstanding the foregoing, for the period from the Effective Date through but excluding the date on which the Administrative Agent first determines the Applicable Margin as set forth above, the Applicable Margin shall be determined based on Level 2. Thereafter, until the Investment Grade Rating Date, such Applicable Margin shall be adjusted from time to time as set forth in this clause (a).

(b)      On, and at all times after, the Investment Grade Rating Date, the Applicable Margin shall be determined pursuant to this clause (b) based on the percentage rate set forth in the table below corresponding to the Level in which the Parent’s Credit Rating falls. During any period that the Parent has received Credit Ratings from each of S&P, Fitch and Moody’s that are not equivalent and the difference between the highest and lowest of such Credit Ratings is (i) one Level, then the Applicable Margin shall be determined based on the highest of such Credit Ratings or (ii) two or more Levels, then the Applicable Margin shall be determined based on the average of the two highest Credit Ratings (unless the average is not a recognized Level, in which case the Applicable Margin shall be determined based on the second highest Credit Rating). During any period that the Parent has received only two Credit Ratings from any of S&P, Fitch and Moody’s that are not equivalent and the difference between such Credit Ratings is (x) one Level, then the Applicable Margin shall be determined based on the higher of such Credit Ratings or (y) two or more Levels, then the Applicable Margin shall be determined based on the average of both such Credit Ratings (unless the average is not a recognized Level, in which case the Applicable Margin shall be determined based on the Credit Rating one Level below the Level corresponding to the higher Credit Rating). During any period that the Parent has only received a Credit Rating from Moody’s or S&P, then the Applicable Margin shall be based upon such Credit Rating. During any period after the Investment Grade Rating Date that the Parent has (A) not received a Credit Rating from any Rating Agency or (B) only received a Credit Rating from a Rating Agency that is neither S&P nor Moody’s, then the Applicable Margin shall be determined based on Level 4 in the table below. Any change in the Parent’s Credit Rating which would cause it to move to a different Level shall be effective as of the first day of the first calendar month immediately following such change.

Level
Credit Rating (S&P/Fitch/Moody’s)
Applicable Margin of LIBOR Loans
Applicable Margin for Base Rate Loans
1
BBB+/Baa1 or better
0.975%
0.975%
2
BBB/Baa2
1.100%
1.100%
3
BBB-/Baa3
1.350%
1.350%
4
Lower than BBB-/Baa3 or not rated
1.800%
1.800%

(c)      The provisions of this definition shall be subject to Section 2.4.(c).

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

“ Arranger ” has the meaning given that term in the first paragraph of this Agreement.

“ Assignment and Assumption Agreement ” means an Assignment and Assumption entered into by a Lender and an Eligible Assignee (with the consent of any party whose consent is required by Section 11.6.), and accepted by the Administrative Agent, in substantially the form of Exhibit A or any other form approved by the Administrative Agent.

3




“ Bankruptcy Event ” means with respect to a Person, any of the events of the type described or referred to in Section 9.1.(e) or (f).

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

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

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

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

“ Borrower ” means, subject to Section 7.16. hereof, each of PREIT, PREIT-RUBIN and the Parent, individually and collectively, and shall include their respective successors and permitted assigns.

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

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

“ Capitalization Rate ” means (a) 6.50% for a Property having an average sales per square foot of more than $500 for the period of 12 consecutive months most recently ending and (b) 7.50% for any other Property.

“ Capitalized Lease Obligation ” means obligations under a lease that are required to be capitalized for financial reporting purposes in accordance with GAAP. The amount of a Capitalized Lease Obligation is the capitalized amount of such obligation determined in accordance with GAAP.

“ Cash Equivalents ” means: (a) securities issued, guaranteed or insured by the United States of America or any of its agencies with maturities of not more than one year from the date acquired; (b) certificates of deposit with maturities of not more than one year from the date acquired issued by a United States federal or state chartered commercial bank of recognized standing, or a commercial bank organized under the laws of any other country which is a member of the Organisation for Economic Cooperation and Development, or a political subdivision of any such country, acting through a branch or agency, which bank has capital and unimpaired surplus in excess of $500,000,000 and which bank or its holding company has a short‑term commercial paper rating of at least A‑2 or the equivalent by S&P or at least P‑2 or the equivalent by Moody’s; (c) reverse repurchase agreements with terms of not more than seven days from the date acquired, for securities of the type described in clause (a) above and entered into

4


only with commercial banks having the qualifications described in clause (b) above; (d) commercial paper issued by any Person incorporated under the laws of the United States of America or any State thereof and rated at least A‑2 or the equivalent thereof by S&P or at least P‑2 or the equivalent thereof by Moody’s, in each case with maturities of not more than one year from the date acquired; and (e) investments in money market funds registered under the Investment Company Act of 1940, as amended, which have net assets of at least $500,000,000 and at least 85% of whose assets consist of securities and other obligations of the type described in clauses (a) through (d) above.

“ CIP Adjustment ” means, at any time of determination, the sum of (i) 75% of Construction in Progress attributable to Properties (or portions thereof) that were Placed in Service in the fiscal quarter of the Parent most recently ended plus, (ii) 50% of Construction in Progress attributable to Properties (or portions thereof) that were Placed in Service in the fiscal quarter of the Parent prior to the immediately preceding fiscal quarter of the Parent most recently ended plus, (iii) 25% of Construction in Progress attributable to Properties (or portions thereof) that were Placed in Service two fiscal quarters of the Parent prior to the immediately preceding fiscal quarter of the Parent most recently ended. For purposes of this definition (x) if portions of a Property are considered to have been Placed in Service although other portions of such Property have not, the portions Placed in Service and the portions not considered Placed in Service shall each be accounted for as a separate Property and (y) the amount of Construction in Progress attributable to a Property (or any portion thereof) that was Placed in Service shall be determined immediately prior to the date such a Property (or any portion thereof) was Placed in Service.

“ Commitment ” means, as to each Lender, such Lender’s obligation to make Loans prior to the Commitment Termination Date pursuant to Section 2.1. in an amount up to, but not exceeding the amount set forth for such Lender on Schedule I as such Lender’s “Initial Commitment Amount” or as set forth in any applicable Assignment and Assumption Agreement, or agreement executed by a Lender becoming a party hereto in accordance with Section 2.19., as the same may be reduced from time to time pursuant to Section 2.1.(a) or 2.14. or increased or reduced as appropriate to reflect any assignments to or by such Lender effected in accordance with Section 11.6. or increased as appropriate to reflect any increase effected in accordance with Section 2.19.

“ Commitment Percentage ” means, as to each Lender, (a) prior to the Commitment Termination Date, the ratio, expressed as a percentage, of (i) the amount of such Lender’s Commitment to (ii) the aggregate amount of the Commitments of all Lenders and (b) on and at all times after the Commitment Termination Date, the ratio, expressed as a percentage, of (i) the aggregate unpaid principal amount of such Lender’s Loans to (ii) the aggregate unpaid principal amount of all Loans.

“ Commitment Termination Date ” means the earlier of (a) June 24, 2016 and (b) the date on which the Commitments have been terminated or reduced to zero.

“ Compliance Certificate ” has the meaning given that term in Section 7.1.(a)(iii).

“ Consolidated Affiliate ” means (a) any Variable Interest Entity, or (b) with respect to a Person (the “Minority Investor”), any other Person (other than a Subsidiary or an Unconsolidated Affiliate of the Minority Investor) in whom the Minority Investor directly or indirectly holds an ownership interest which is less than a majority of the ownership interests in such Person, but by reason of the structure or contracts binding on such Person, the financial results of such Person are consolidated in accordance with GAAP with those of the Minority Investor.

“ Consolidation Exempt Entities ” means, with respect to any Person, such Person’s Consolidated Affiliates, Unconsolidated Affiliates and Non-Wholly Owned Subsidiaries.

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“ Construction in Progress ” means, at any time of determination, an amount equal to the aggregate costs incurred to date with respect to Projects Under Development. For the avoidance of doubt, the aggregate costs associated with any Property (or portion thereof) that is considered to have been Placed in Service (including in accordance with the second sentence of the definition of CIP Adjustment) shall be excluded from Construction in Progress.

“ Contingent Obligation ” as applied to any Person, means (a) any direct or indirect liability, contingent or otherwise, of that Person with respect to any Indebtedness, lease, dividend or other payment obligation of another Person if the primary purpose or intent of the Person incurring such liability, or the primary effect thereof, is to provide assurance to the obligee of such liability that such liability will be paid or discharged, or that the holders of such liability will be protected (in whole or in part) against loss with respect thereto or (b) any obligation of such Person with respect to any total return swap entered into by such Person. Contingent Obligations shall include (i) any Guaranty of the Indebtedness of another (other than of such Person for liabilities arising from Nonrecourse Exceptions), (ii) the obligation to make take‑or‑pay or similar payments if required regardless of nonperformance by any other party or parties to an agreement, and (iii) any liability of such Person for the Indebtedness of another through any agreement to purchase, repurchase or otherwise acquire such obligation or any property constituting security therefor, to provide funds for the payment or discharge of such obligation or to maintain the solvency, financial condition or any balance sheet item or level of income of another. The amount of any Contingent Obligation shall be equal to the amount of the obligation so guaranteed or otherwise supported or, if not a fixed and determined amount, the maximum amount so guaranteed or otherwise supported.

“ Continue ”, “ Continuation ” and “ Continued ” each refers to the continuation of a LIBOR Loan from one Interest Period to another Interest Period pursuant to Section 2.9.

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

“ Convert ”, “ Conversion ” and “ Converted ” each refers to the conversion of a Loan of one Type into a Loan of another Type pursuant to Section 2.10.

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

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

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

“ Default ” means any of the events specified in Section 9.1., whether or not there has been satisfied any requirement for the giving of notice, the lapse of time, or both.

“ Defaulting Lender ” means, subject to Section 3.9.(d), any Lender that (a) has failed to (i) fund all or any portion of its Loans within 2 Business Days of the date such Loans were required to be funded hereunder unless such Lender notifies the Administrative Agent and the Borrower in writing that such failure is the result of such Lender’s determination that one or more conditions precedent to funding set forth in Article V. (each of which conditions precedent, together with any applicable default, shall be

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

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

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

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

“ Disbursement Instruction Agreement ” means an agreement substantially in the form of Exhibit F to be executed and delivered by the Borrower pursuant to Section  5.1.(a), as the same may be amended, restated or modified from time to time with the prior written approval of the Administrative Agent.

“ Disposition ” means any sale, lease, transfer or other disposition (or series of related sales, leases, transfers or dispositions) by any Borrower, any other Loan Party or any other Subsidiary, including any disposition by means of a merger, consolidation or similar transaction, by way of liquidation, winding-up or dissolution, or by way of the issuance of Equity Interests of a Subsidiary (each referred to for the purposes of this definition as a “disposition”), of: (a) any Equity Interests of a Subsidiary (other than directors’ qualifying shares or shares required by Applicable Law to be held by a Person other than a Borrower or any other Subsidiary); (b) all or substantially all the assets of any division or line of business of any Borrower, any other Loan Party or any other Subsidiary; or (c) any other assets of any Borrower, any other Loan Party or any other Subsidiary outside of the ordinary course of business of such Borrower, such other Loan Party or such other Subsidiary; provided, however, a disposition by a Subsidiary to a Borrower or any other Loan Party or by a Borrower or any other Subsidiary to a Wholly Owned Subsidiary (including a Person that will become a Wholly Owned Subsidiary immediately following such disposition) shall not constitute a “Disposition”.

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

“ EBITDA ” means, with respect to any Person for any period and without duplication, net earnings (loss) of such Person and its Wholly Owned Subsidiaries for such period plus the sum of the following amounts (but only to the extent included in determining net earnings (loss) for such period): (a) depreciation and amortization expense and other non-cash charges of such Person and its Wholly Owned Subsidiaries for such period, including without limitation, non-cash compensation expense recorded under Financial Accounting Standards Board Statement No. 123 (Revised 2004), Accounting for Stock Based Compensation of such Person for such period, plus (b) severance and restructuring charges of such Person and its Wholly Owned Subsidiaries for such period, plus (c) interest expense of such Person and its Wholly Owned Subsidiaries for such period, plus (d) all provisions for any federal, state or other income tax of such Person and its Wholly Owned Subsidiaries in respect of such period, plus (e) acquisition related costs of such Person and its Wholly Owned Subsidiaries expensed pursuant to Topic 805 for such period, that would otherwise have been capitalized under GAAP immediately prior to the effectiveness of Topic 805 minus ( plus ) (f) extraordinary gains (losses) of such Person and its Wholly Owned Subsidiaries for such period. In addition, EBITDA shall include the greater of such Person’s Ownership Share or Recourse Share of the EBITDA of the Consolidation Exempt Entities of such Person for such period.

“ Effective Date ” means the later of (a) the Agreement Date and (b) the date on which all of the conditions precedent set forth in Section 5.1. shall have been fulfilled or waived in accordance with the provisions of Section 11.7.

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“ Eligible Assignee ” means (a) a Lender, (b) an Affiliate of a Lender, (c) an Approved Fund and (d) any other Person (other than a natural person); provided, that notwithstanding the foregoing, “Eligible Assignee” shall not include (A) a Borrower or any of its respective Affiliates or Subsidiaries, or (B) an Affiliate of a Lender or an Approved Fund that (1) if organized under the laws of the United States of America, any state thereof or the District of Columbia, does not have total assets in excess of $5,000,000,000, or if organized under the laws of any other country or a political subdivision thereof, is not organized in such a country that is a member of the Organization for Economic Co-operation and Development, does not have total assets in excess of $10,000,000,000, or does not act through a branch or agency located in the United States or (2) does not have a rating of BBB or higher by S&P, Baa2 or higher by Moody’s or the equivalent or higher of either such rating by another rating agency acceptable to the Administrative Agent with respect to such Affiliate of a Lender or Approved Fund’s (or if such Affiliate or Approved Fund is a Subsidiary, such Affiliate’s or Approved Fund’s parent’s) senior unsecured long term indebtedness.

“ Environmental Laws ” means any Applicable Law relating to protection of human health or the environment, relating to Hazardous Materials, relating to liability for or costs of other actual or threatened danger to human health or the environment. The term “Environmental Law” includes, but is not limited to, the following statutes, as amended, any successor thereto, and any regulations promulgated pursuant thereto, and any state or local statutes, ordinances, rules, regulations and the like addressing similar issues: the Comprehensive Environmental Response, Compensation and Liability Act; the Emergency Planning and Community Right-to-Know Act; the Hazardous Substances Transportation Act; the Resource Conservation and Recovery Act (including but not limited to Subtitle I relating to underground storage tanks); the Solid Waste Disposal Act; the Clean Water Act; the Clean Air Act; the Toxic Substances Control Act; the Safe Drinking Water Act; the Occupational Safety and Health Act to the extent the same relates to Hazardous Materials; the Federal Water Pollution Control Act; the Federal Insecticide, Fungicide and Rodenticide Act; the Endangered Species Act; the National Environmental Policy Act; and the River and Harbors Appropriation Act. The term “Environmental Law” also includes, but is not limited to, any Applicable Law: conditioning transfer of a property upon a negative declaration or other approval of a governmental authority of the environmental condition of such property; requiring notification or disclosure of any release, deposit, discharge, emission, leaking, leaching, spilling, seeping, migrating, injecting, pumping, pouring, emptying, escaping, dumping, disposing or other movement of Hazardous Materials or other environmental condition of a property to any Governmental Authority or other Person, whether or not in connection with transfer of title to or interest in such property; imposing conditions or requirements in connection with related permits or other authorization for lawful activity; relating to nuisance, trespass or other causes of action relating to Hazardous Materials related to any property; and relating to wrongful death, personal injury, or property or other damage relating to Hazardous Materials in connection with any physical condition or use of any property.

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

“ Equity Issuance ” means any issuance or sale by a Person of any Equity Interest.

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

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

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

“ Event of Default ” means any of the events specified in Section 9.1., provided that any requirement for notice or lapse of time or any other condition has been satisfied.

“ Excluded Subsidiary ” means any (a) Subsidiary (i) which holds title to assets which are or are to become collateral for any Secured Indebtedness of such Subsidiary, is an owner of the Equity Interests of a Subsidiary holding title to such assets (but has no assets other than such Equity Interests and other assets of nominal value incidental thereto), or is required to be a single purpose entity in connection with any Secured Indebtedness and (ii) which is prohibited from Guarantying the Indebtedness of any other Person pursuant to (A) any document, instrument or agreement evidencing such Secured Indebtedness, (B) a provision of such Subsidiary’s organizational documents which provision was included in such Subsidiary’s organizational documents as a condition to the extension of such Secured Indebtedness or (C) any fiduciary obligation owing to the holders of an Equity Interest in such Subsidiary and imposed under Applicable Law or (b) Non-Wholly Owned Subsidiary that is prohibited from Guarantying the Indebtedness of any Person other than a Wholly Owned Subsidiary of such Non-Wholly Owned Subsidiary pursuant to (i) such Non-Wholly Owned Subsidiary’s organizational documents as a condition to the negotiated business arrangement with the holder of an Equity Interest in such Non-Wholly Owned

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Subsidiary or (ii) any fiduciary obligation owing to the holders of an Equity Interest in such Non-Wholly Owned Subsidiary and imposed under Applicable Law.

“ Existing Credit Agreement ” means that certain Credit Agreement dated as of April 17, 2013 by and among PREIT, PREIT-RUBIN, the Parent, the financial institutions party thereto as “Lenders”, Wells Fargo, as Administrative Agent, and the other parties thereto.

“Existing Five-Year Term Loan Agreement” means that certain Term Loan Agreement dated as of January 8, 2014 by and among PREIT, PREIT-RUBIN, the Parent, the financial institutions party thereto as “Lenders”, Wells Fargo, as Administrative Agent, and the other parties thereto.

“ Fair Market Value ” means, with respect to any asset, the price which could be negotiated in an arm’s-length free market transaction, for cash, between a willing seller and a willing buyer, neither of which is under pressure or compulsion to complete the transaction. Fair Market Value shall be determined by the Board of Directors of the Parent acting in good faith conclusively evidenced by a board resolution thereof delivered to the Administrative Agent or, with respect to any asset valued at up to $5,000,000, such determination may be made by the chief financial officer of the Parent evidenced by an officer’s certificate delivered to the Administrative Agent.

“ FATCA ” means Sections 1471 through 1474 of the Internal Revenue Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with) and any current or future regulations or official interpretations thereof and any agreements entered into pursuant to Section 1471(c) of the Internal Revenue Code.

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

“ Fee Letter ” means, collectively, the Wells Fargo Fee Letter and the PNC Bank Fee Letter.

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

“ Fitch ” means Fitch Ratings, Inc.

“ Fixed Charges ” means, with respect to a Person and for a given period, (a) such Person’s Interest Expense for such period, plus (b) regularly scheduled principal payments on Indebtedness of such Person and its Wholly Owned Subsidiaries made during such period, other than any balloon, bullet or similar principal payment payable on any Indebtedness of such Person which repays such Indebtedness in full, plus (c) Preferred Dividends accrued by such Person and its Wholly Owned Subsidiaries during such period, plus (d) rent payments made during such period by such Person and its Subsidiaries in respect of ground leases. Fixed Charges shall include the greater of such Person’s Investment Share or Recourse Share of the amount of any of the items described in the immediately preceding clause (b) through (d) of such Person’s Consolidation Exempt Entities.

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

“ Funds From Operations ” means, with respect to a Person and for a given period, (a) net income (loss) of such Person determined on a consolidated basis for such period minus (or plus ) (b) gains (or losses) from debt restructuring and sales of operating property during such period plus (c) depreciation with respect to such Person’s real estate assets and amortization (other than amortization of deferred financing costs) of such Person for such period, all after adjustment for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated entities will be calculated to reflect funds from operations on the same basis. For purposes of this Agreement, Funds From Operations shall be calculated consistent with the White Paper on Funds from Operations dated April 2002 issued by National Association of Real Estate Investment Trusts, Inc., but without giving effect to any supplements, amendments or other modifications promulgated after the Agreement Date. Notwithstanding the foregoing, Funds From Operations shall exclude (i) non-cash impairment charges, (ii) acquisition related costs expensed pursuant to Topic 805 that would have otherwise been capitalized under GAAP immediately prior to the effectiveness of Topic 805, and (iii) severance and restructuring charges. For the purpose of the foregoing, sales of operating properties shall not include parcels of land, leased pads or developed building parcels sold within one year from the respective opening date thereof.

“ GAAP ” means generally accepted accounting principles in the United States of America set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as may be approved by a significant segment of the accounting profession in the United States of America, which are applicable to the circumstances as of the date of determination.

“ Gallery ” refers collectively to the Borrower’s Properties known as “Gallery I” and “Gallery II” and its Properties located at 801 and 907 E. Market Street, Philadelphia, Pennsylvania.

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

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

“ Gross Asset Value ” means, at a given time, the sum (without duplication) of (a) Operating Real Estate Value at such time, plus (b) all cash and Cash Equivalents (excluding cash and Cash Equivalents the disposition of which is restricted (other than restrictions on cash held in an exchange account by a “qualified intermediary” in connection with the sale of a property pursuant to and qualifying for tax treatment under Section 1031 of the Internal Revenue Code)), and all accounts receivable net of reserves, of the Parent and its Wholly Owned Subsidiaries at such time, plus (c) the current book value of all land held for future development owned in whole or in part by the Parent and its Wholly Owned Subsidiaries, plus (d) predevelopment costs associated with land referred to in the immediately preceding clause (c) and, subject to the immediately following sentence, refundable deposits associated with land that is not owned by the Parent and its Wholly Owned Subsidiaries, to the extent such predevelopment costs and refundable deposits are included in the Parent’s publicly filed financial statements, plus (e) the amount

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of Construction in Progress of the Parent and its Wholly Owned Subsidiaries, plus (f) the CIP Adjustment of the Parent and its Wholly Owned Subsidiaries plus (g) the purchase price paid by the Parent or any Wholly Owned Subsidiary (less any amounts paid to the Parent or such Subsidiary as a purchase price adjustment, held in escrow, retained as a contingency reserve, or in connection with other similar arrangements) for any Property acquired by the Parent or such Subsidiary during the immediately preceding four fiscal quarters of the Parent, plus (h) with respect to each Consolidation Exempt Entity of the Parent, the greater of the Parent’s Ownership Share or Recourse Share of (v) all cash and Cash Equivalents of such Consolidation Exempt Entity (excluding cash and Cash Equivalents the disposition of which is restricted (other than restrictions on cash held in an exchange account by a “qualified intermediary” in connection with the sale of a property pursuant to and qualifying for tax treatment under Section 1031 of the Internal Revenue Code)), (w) current book value of all land held for future development owned in whole or part by such Consolidation Exempt Entity and predevelopment costs associated with such land, (x) Construction in Progress of such Consolidation Exempt Entity as of the end of the Parent’s fiscal quarter most recently ended, (y) such Consolidation Exempt Entity’s Operating Real Estate Value, and (z) such Consolidation Exempt Entity’s CIP Adjustment, plus (i) the contractual purchase price of Properties of the Parent and its Subsidiaries subject to purchase obligations, repurchase obligations, forward commitments and unfunded obligations to the extent such obligations and commitments are included in determinations of Total Liabilities. If obligations under a contract to purchase or otherwise acquire unimproved or fully developed real property are included when determining Total Liabilities and the seller under such contract does not have the right to specifically enforce such contract, then only an amount equal to the aggregate amount of due diligence deposits, earnest money payments and other similar payments made under the contract which, at such time, would be subject to forfeiture upon termination of the contract, shall be included in Gross Asset Value. If obligations under a contract to purchase or otherwise acquire real property being renovated or developed by a third party are included when determining Total Liabilities and such real property is not owned or leased by the Borrower or any of its Subsidiaries, then only the amount equal to the maximum amount reasonably estimated to be payable by such Person to such third party under a contract between such Person and such third party during the remaining term of such contract, shall be included in Gross Asset Value. To the extent that the current book value of land held for development plus predevelopment costs included pursuant to clause (d) above exceeds 5.0% of Gross Asset Value (determined without giving effect to this sentence), such excess shall be excluded in determining Gross Asset Value.

“ Ground Lease ” means the existing ground leases in which the Borrower or a Subsidiary is lessee described on Schedule 1.1.(A) and any ground lease hereafter entered into by the Borrower or a Subsidiary which contains (a) the following terms and conditions: (i) except for leases where the lessor and lessee are both Subsidiaries of the Parent, a remaining term (exclusive of any unexercised extension options) of 30 years or more from the Agreement Date; (ii) the right of the lessee to mortgage and encumber its interest in the leased property either without the consent of the lessor or with the consent of the lessor not to be unreasonably withheld; (iii) the obligation of the lessor to give the holder of any mortgage Lien on such leased property written notice of any defaults on the part of the lessee and agreement of such lessor that such lease will not be terminated until such holder has had a reasonable opportunity to cure or complete foreclosures, and fails to do so; (iv) reasonable transferability of the lessee’s interest under such lease, including ability to sublease; (v) the obligation of the lessor to grant a new lease to the mortgagee (or its designee) as tenant on the same terms as the existing ground lease if the existing ground lease is terminated for any reason subject to cure of any monetary defaults under the lease; and (vi) such other rights customarily required by mortgagees making a loan secured by the interest of the holder of the leasehold estate demised pursuant to a ground lease; or (b) terms and conditions otherwise acceptable to the Administrative Agent.

“ Guarantor ” means any Person that is party to the Guaranty as a “Guarantor”.

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“ Guarantor Requirement Change Date ” has the meaning given that term in Section 7.15.(a)(i).

“ Guaranty ”, “ Guaranteed ” or to “ Guarantee ” as applied to any obligation means and includes: (a) a guaranty (other than by endorsement of negotiable instruments for collection in the ordinary course of business), directly or indirectly, in any manner, of any part or all of such obligation, or (b) an agreement, direct or indirect, contingent or otherwise, and whether or not constituting a guaranty, the practical effect of which is to assure the payment or performance (or payment of damages in the event of nonperformance) of any part or all of such obligation whether by: (i) the purchase of securities or obligations, (ii) the purchase, sale or lease (as lessee or lessor) of property or the purchase or sale of services primarily for the purpose of enabling the obligor with respect to such obligation to make any payment or performance (or payment of damages in the event of nonperformance) of or on account of any part or all of such obligation, or to assure the owner of such obligation against loss, (iii) the supplying of funds to or in any other manner investing in the obligor with respect to such obligation, (iv) repayment of amounts drawn down by beneficiaries of letters of credit, or (v) the supplying of funds to or investing in a Person on account of all or any part of such Person’s obligation under a Guaranty of any obligation or indemnifying or holding harmless, in any way, such Person against any part or all of such obligation. As the context requires, “Guaranty” shall also mean the guaranty executed and delivered pursuant to Section 5.1. or Section 7.15.(a)(ii) and substantially in the form of Exhibit B.

“ Hazardous Materials ” includes but is not limited to any and all substances (whether solid, liquid or gas) defined, listed, or otherwise classified as pollutants, hazardous wastes, hazardous substances, hazardous materials, extremely hazardous wastes, or words of similar meaning or regulatory effect under any present or future Environmental Laws or that may have a negative impact on human health or the environment, including but not limited to Microbial Matter, petroleum and petroleum products, asbestos and asbestos-containing materials, polychlorinated biphenyls, lead, radon, radioactive materials, flammables and explosives, but excluding substances of kinds and in amounts ordinarily and customarily used or stored in similar properties for the purposes of cleaning or other maintenance or operations or held for sale in a retail shopping mall and otherwise in compliance with all Environmental Laws.

“ Indebtedness ” means, with respect to a Person, at the time of computation thereof, all of the following (without duplication): (a) obligations of such Person in respect of money borrowed or for the deferred purchase price of property or services (other than trade debt incurred in the ordinary course of business); (b) obligations of such Person, whether or not for money borrowed (i) represented by notes payable, or drafts accepted, in each case representing extensions of credit, (ii) evidenced by bonds, debentures, notes or similar instruments, or (iii) constituting purchase money indebtedness, conditional sales contracts, title retention debt instruments or other similar instruments, upon which interest charges are customarily paid or that are issued or assumed as full or partial payment for property; (c) all master lease obligations; (d) Capitalized Lease Obligations of such Person; (e) all reimbursement obligations of such Person under and in respect of any letters of credit or acceptances that have been presented for payment net of any cash collateral provided therefor; (f) all obligations of such Person to purchase, redeem, retire, defease or otherwise make any payment in respect of any Mandatorily Redeemable Stock issued by such Person or any other Person; (g) all Indebtedness of other Persons which (i) such Person has Guaranteed (other than Guarantees which are solely Guarantees of performance and not of payment and other Guarantees of such Person for liabilities arising from Nonrecourse Exceptions) or is otherwise recourse to such Person or (ii) is secured by a Lien on any property of such Person; provided, that such Indebtedness shall be limited to the value of such property so encumbered; and (h) the Recourse Share of all Indebtedness of any partnership of which such Person is a general partner. For purposes of this definition preferred equity (other than Mandatorily Redeemable Stock) of a Person shall not be considered to be Indebtedness.

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

“ Interest Expense ” means, with respect to a Person and for any period, (a) all paid, accrued or capitalized interest expense (including, without limitation, interest expense attributable to Capitalized Lease Obligations but excluding capitalized interest funded from an interest reserve in a construction loan) of such Person and in any event shall include all letter of credit fees and all interest expense with respect to any Indebtedness in respect of which such Person is wholly or partially liable whether pursuant to any repayment, interest carry, performance Guarantee or otherwise, plus (b) to the extent not already included in the foregoing clause (a) the greater of such Person’s Investment Share or Recourse Share of all paid, accrued or capitalized interest expense (as limited above) for such period of Consolidation Exempt Entities of such Person.

“ Interest Period ” means with respect to any LIBOR Loan, the period commencing on the date of the borrowing, Conversion or Continuation of such LIBOR Loan and ending on the last day of the period selected by the Borrower pursuant to the provisions below. The duration of each Interest Period shall be one, three or six months as the Borrower may, in a Notice of Borrowing, a Notice of Continuation or a Notice of Conversion, select. In no event shall an Interest Period of a Loan extend beyond the Termination Date. Whenever the last day of any Interest Period would otherwise occur on a day other than a Business Day, the last day of such Interest Period shall be extended to occur on the next succeeding Business Day; provided , however , that if such extension would cause the last day of such Interest Period to occur in the next following calendar month, the last day of such Interest Period shall occur on the next preceding Business Day.

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

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

“ Investment Grade Rating ” means a Credit Rating of BBB-/BBB-/Baa3 or higher from S&P, Fitch or Moody’s, respectively (or the equivalent or higher of any such rating by another Rating Agency).

“ Investment Grade Rating Date ” means, at any time after the Parent has received an Investment Grade Rating from Moody’s or S&P, the date specified by the Parent in a written notice to the Administrative Agent as the date on which the Parent irrevocably elects to have the Applicable Margin based on the Parent’s Credit Rating.

“ Investment Share ” means, with respect to any Consolidation Exempt Entity of the Parent or any of its Subsidiaries, the ratio (expressed as a percentage) of (a) the aggregate amount of the Investment by the Parent or such Subsidiary in such Consolidation Exempt Entity to (b) the aggregate amount of all

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Investments by all Persons in such Consolidation Exempt Entity, subject to review of calculation of such ratio by the Administrative Agent.

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

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

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

“ LIBOR ” means, with respect to any LIBOR Loan for any Interest Period, the rate of interest obtained by dividing (i) the rate of interest per annum determined on the basis of the rate for deposits in Dollars for a period equal to the applicable Interest Period which appears on Reuters Screen LIBOR01 Page (or any applicable successor page) at approximately 11:00 a.m. (London time) two Business Days prior to the first day of the applicable Interest Period by (ii) a percentage equal to 1 minus the stated maximum rate (stated as a decimal) of all reserves, if any, required to be maintained with respect to Eurocurrency funding (currently referred to as “Eurocurrency liabilities”) as specified in Regulation D of the Board of Governors of the Federal Reserve System (or against any other category of liabilities which includes deposits by reference to which the interest rate on LIBOR Loans is determined or any applicable category of extensions of credit or other assets which includes loans by an office of any Lender outside of the United States of America). If, for any reason, the rate referred to in the preceding clause (i) does not appear on Reuters Screen LIBOR01 Page (or any applicable successor page), then the rate to be used for such clause (i) shall be determined by the Administrative Agent to be the arithmetic average of the rate per annum at which deposits in Dollars would be offered by first class banks in the London interbank market to the Administrative Agent at approximately 11:00 a.m. (London time) two Business Day prior to the first day of the applicable Interest Period for a period equal to such Interest Period. Any change in the maximum rate or reserves described in the preceding clause (ii) shall result in a change in LIBOR on the date on which such change in such maximum rate becomes effective. If LIBOR determined as provided above would be less than zero, LIBOR shall be deemed to be zero for each LIBOR Loan that has not been identified by the Borrower in accordance with the terms of this Agreement as being subject to a Specified Derivative Contract that provides a hedge against interest rate risk.

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

“ LIBOR Market Index Rate ” means, for any day, LIBOR as of that day that would be applicable for a LIBOR Loan having a one-month Interest Period determined at approximately 10:00 a.m. Central time for such day (rather than 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period as otherwise provided in the definition of “LIBOR”), or if such day is not a Business Day, the immediately preceding Business Day. The LIBOR Market Index Rate shall be determined on a daily basis.

“ Lien ” as applied to the property of any Person means: (a) any security interest, encumbrance, mortgage, deed to secure debt, deed of trust, pledge, lien, charge or lease constituting a Capitalized Lease Obligation, conditional sale or other title retention agreement, or other security title or encumbrance of any kind in respect of any property of such Person, or upon the income or profits therefrom; (b) any arrangement, express or implied, under which any property of such Person is transferred, sequestered or otherwise identified for the purpose of subjecting the same to the payment of Indebtedness or

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performance of any other obligation in priority to the payment of the general, unsecured creditors of such Person; (c) the filing of any financing statement under the Uniform Commercial Code or its equivalent in any jurisdiction, excluding any financing statement filed to give notice of the existence of an operating lease; and (d) any agreement by such Person to grant, give or otherwise convey any of the foregoing.

“ Loan ” means a loan made by a Lender to the Borrower pursuant to Section 2.1. or Section 2.19.

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

“ Loan Party ” means each Borrower and each Guarantor.

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

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

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

“ Material Indebtedness ” has the meaning given that term in Section 9.1.(d)(i).

“ Material Subsidiary ” means a Subsidiary (other than any Borrower) to which more than $25,000,000 of Gross Asset Value is directly or indirectly attributable.

“ Microbial Matter ” means fungi or bacterial matter which reproduces through the release of spores or the splitting of cells, including, but not limited to, mold, mildew, and viruses, whether or not such Microbial Matter is living.

“ Moody’s ” means Moody’s Investors Service, Inc.

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

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

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

“ Net Proceeds ” means with respect to an Equity Issuance by a Person, the aggregate amount of all cash or the Fair Market Value of all other property received by such Person in respect of such Equity Issuance net of investment banking fees, legal fees, accountants fees, underwriting discounts and commissions and other customary fees and expenses actually incurred by or on behalf of such Person in connection with such Equity Issuance and paid or payable to a Person other than an Affiliate of such Person.

“ NOI ” means, with respect to any Property and for a given period and without duplication, the amount equal to: (a) rents and other revenues received or accrued in the ordinary course from such Property (including proceeds of rent loss insurance but excluding pre-paid rents and revenues and security deposits except to the extent applied in satisfaction of tenants’ obligations for rent and without giving effect to acceleration of straight line rents, allowances, and lease intangibles as required by GAAP) minus (b) all expenses paid or accrued related to the ownership, operation or maintenance of such Property, including but not limited to taxes, assessments and other similar charges, insurance, utilities, payroll costs, maintenance, repair and landscaping expenses, marketing expenses, and general and administrative expenses (including an appropriate allocation for legal, accounting, advertising, marketing and other expenses incurred in connection with such Property, but specifically excluding general overhead expenses of the Borrower).

“ Non-Consenting Lender ” means any Lender that does not approve any consent, waiver or amendment that (a) requires the approval of all affected Lenders in accordance with the terms of Section 11.7.(b) and (b) has been approved by the Requisite Lenders.

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

“ Nonrecourse Exceptions ” means, with respect to Nonrecourse Indebtedness, reasonable and customary exceptions for fraud, willful misrepresentation, misapplication of funds (including misappropriation of security deposits and failure to apply rents to operating expenses or debt service), indemnities relating to environmental matters and waste of property constituting security for such Nonrecourse Indebtedness, post-default interest, attorney’s fees and other costs of collection to the extent not covered by the value of the property constituting security for such Nonrecourse Indebtedness and other similar exceptions to nonrecourse liability. Nonrecourse Exceptions shall also include the

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contingent liability of a Person in respect of Nonrecourse Indebtedness of another Person providing for liability arising upon the occurrence of a Bankruptcy Event with respect to such other Person or the occurrence of other contingent events such as a violation of a due on sale clause or a due on finance clause or a violation of special purpose entity covenants (whether such liability arises under a Guaranty of such Nonrecourse Indebtedness enforceable only upon the occurrence of such Bankruptcy Event or such other contingent event, as an obligation to pay to the holder of such Nonrecourse Indebtedness damages resulting from the occurrence of such Bankruptcy Event or other contingent event, or otherwise); provided, however, upon the occurrence of any Bankruptcy Event or other contingent event with respect to such other Person, or once such liability shall otherwise cease to be contingent, then such liability shall no longer be considered to be Nonrecourse Indebtedness.

“ Nonrecourse Indebtedness ” means, with respect to a Person, (a) Indebtedness for borrowed money in respect of which recourse for payment (except for obligations in respect to Nonrecourse Exceptions) is contractually limited to specific assets of such Person encumbered by a Lien securing such Indebtedness or (b) if such Person is a Single Asset Entity, any Indebtedness for borrowed money of such Person. Liability of a Person under (i) a Guaranty of Nonrecourse Exceptions or (ii) completion guarantees for Projects Under Development, to the extent relating to the Nonrecourse Indebtedness of another Person, shall not, in and of itself, prevent such liability from being characterized as Nonrecourse Indebtedness.

“ Non-Wholly Owned Subsidiary ” means any Subsidiary of a Person that is not a Wholly Owned Subsidiary.

“ Note ” has the meaning given that term in Section 2.11.

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

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

“ Notice of Conversion ” means a notice substantially in the form of Exhibit D (or such other form reasonably acceptable to the Administrative Agent and containing the information required in such Exhibit) to be delivered to the Administrative Agent pursuant to Section 2.10. evidencing the Borrower’s request for the Conversion of a Loan from one Type to another Type.

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

“ Occupancy Rate ” means, with respect to a Property at any time, the ratio, expressed as a percentage, of (a) the net rentable square footage of such Property actually occupied by tenants paying

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rent (including each tenant in occupancy during a free rent period negotiated under the terms of its lease and space provided to and accepted by a tenant for performance by the tenant of fit-up work) pursuant to binding leases as to which no monetary default has occurred and is continuing to (b) the aggregate net rentable square footage of such Property. When determining the Occupancy Rate of a Property, a tenant will be deemed to be in occupancy provided such tenant (A) is paying rent to the extent required under the lease, (B) has taken physical possession of its leased space, and (C) if not already open for business, the Borrower reasonably anticipates that such tenant will be open for business within 90 days of the date such tenant first took possession of such space.

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

“ Operating Real Estate Value ” means, as of a given date, the Adjusted NOI for each Property of the Parent, its Subsidiaries, its Consolidated Affiliates and its Unconsolidated Affiliates for the four fiscal-quarter period most recently ended divided by the applicable Capitalization Rate for each such Property. For purposes of determining Operating Real Estate Value (a) Adjusted NOI from Properties acquired by the Parent, any Subsidiary, any Consolidated Affiliate or any Unconsolidated Affiliate during the immediately preceding four fiscal quarters of the Parent or disposed of by any such Person during the immediately preceding fiscal quarter of the Parent, shall be excluded and (b) with respect to a Property owned by a Consolidation Exempt Entity, only the greater of the Parent’s Ownership Share or Recourse Share of the Adjusted NOI, as applicable, of such Property shall be used when determining Operating Real Estate Value. If the Borrower or a Subsidiary owns Equity Interests in a Consolidated Affiliate or an Unconsolidated Affiliate which owns a Property the Adjusted NOI of which has not been excluded from determinations of Operating Real Estate Value by virtue of the immediately preceding clause (a), and such Consolidated Affiliate or Unconsolidated Affiliate then becomes a Subsidiary as a result of the acquisition by the Borrower or another Subsidiary of additional Equity Interests or otherwise, the Adjusted NOI for Properties owned by such Consolidated Affiliate or Unconsolidated Affiliate which has become a Subsidiary shall continue to be included in determinations of Operating Real Estate Value and not be excluded by virtue of the immediately preceding clause (a).

“ Ownership Share ” means, with respect to any Consolidation Exempt Entity of a Person, the greater of (a) such Person’s relative nominal direct and indirect ownership interest (expressed as a percentage) in such Consolidation Exempt Entity or (b) such Person’s relative direct and indirect economic interest (calculated as a percentage) in such Consolidation Exempt Entity determined in accordance with the applicable provisions of the declaration of trust, articles or certificate of incorporation, articles of organization, partnership agreement, joint venture agreement or other applicable organizational document of such Consolidation Exempt Entity, subject to review of the calculation of such Ownership Share by the Administrative Agent.

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

“ Participant ” has the meaning given that term in Section 11.6.(d).

“ Participant Register ” has the meaning given that term in Section 11.6.(d).

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“ Partnership Agreement ” means that certain First Amended and Restated Agreement of Limited Partnership Agreement of PREIT Associates, L.P. dated as of September 30, 1997, by and among Pennsylvania Real Estate Investment Trust, as the general partner and the limited partners whose names are set forth therein, as amended and in effect on the Effective Date.

“ Patriot Act ” means The Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Title III of Pub. L. No. 107-56 (signed into law October 26, 2001)).

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

“ Permitted Liens ” means, with respect to any asset or property of a Person, (a)(i) Liens securing taxes, assessments and other charges or levies imposed by any Governmental Authority (excluding any Lien imposed pursuant to any of the provisions of ERISA or pursuant to any Environmental Laws) or (ii) the claims of materialmen, mechanics, carriers, warehousemen or landlords for labor, materials, supplies or rentals incurred in the ordinary course of business, which, in the case of both clauses (i) and (ii), are not at the time required to be paid or discharged under Section 7.7.; (b) Liens consisting of deposits or pledges made, in the ordinary course of business, in connection with, or to secure payment of, obligations under workers’ compensation, unemployment insurance or similar Applicable Laws; (c) Liens consisting of encumbrances in the nature of zoning restrictions, easements, and rights or restrictions of record on the use of real property, which do not materially detract from the value of such property or impair the intended use thereof in the business of such Person; (d) the rights of tenants under leases or subleases not interfering with the ordinary conduct of business of such Person; (e) Liens in favor of the Administrative Agent for its benefit and the benefit of the Lenders and each Specified Derivatives Provider; and (f) Liens securing judgments so long as the judgment it secures does not give rise to an Event of Default under Section 9.1.(h).

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

“ Placed in Service ” means for each Project Under Development (or portion thereof), the time, determined in accordance with GAAP, at which the ground-up construction, redevelopment and/or expansion of such Property is considered substantially completed and such Property is held available for occupancy subject only to completion of tenant improvements but in any event shall be deemed to have occurred no later than one year from cessation of major construction activity (as distinguished from activities such as routine maintenance, punch list items and cleanup).

“ Post-Default Rate ” means a rate per annum equal to 4.0% plus the rate applicable to Base Rate Loans under Section 2.4.(a).

“ PNC Bank Fee Letter ” means that certain fee letter dated as of May 27, 2015, by and among the Parent, PREIT, PREIT-RUBIN, PNC Bank, National Association and PNC Capital Markets LLC.

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

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

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

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

“ Principal Office ” means the office of the Administrative Agent located at 608 Second Avenue S., 11 th Floor, Minneapolis, Minnesota 55402-1916, or any other subsequent office that the Administrative Agent shall have specified by written notice to the Borrower and the Lenders as the Principal Office referred to herein, to which payments due are to be made and at which Loans will be disbursed.

“ Project Under Development ” means a Property owned by the Parent, any Subsidiary, any Consolidated Affiliate or any Unconsolidated Affiliate on which ground-up construction, redevelopment, and/or expansion has commenced. A Property undergoing ordinary course capital improvements which would qualify as recurring capital expenditures or incurring costs due to ordinary course turnover of non-anchor tenant space, shall not be considered to be a Project Under Development. A Property or portions of that Property shall no longer be considered a Project Under Development after the earlier of (i) the time it is Placed in Service, and (ii) the Borrower’s election (which election shall be irrevocable without the Administrative Agent’s consent) to no longer treat such Property (or portion thereof) as a Project Under Development.

“ Property ” means a parcel (or group of related parcels) of real property developed (or which is to be developed) principally for retail, office, industrial or residential multi-family use.

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

“ Rating Agency ” means S&P, Moody’s, Fitch or another rating agency approved by the Requisite Lenders.

“ Recourse Share ” means, with respect to any Person, the portion (calculated as a percentage) of the total Indebtedness of another Person guaranteed by such Person, or which is otherwise recourse to such Person (other than Indebtedness consisting of Guarantees which are solely Guarantees of performance and not of payment and other Guarantees of such Person for liabilities arising from Nonrecourse Exceptions), subject to review of the calculation of such portion by the Administrative Agent.

“ Register ” has the meaning given that term in Section 11.6.(c).

“ Regulatory Change ” means, with respect to any Lender, any change effective after the Agreement Date (or with respect to any Lender that becomes a party to this Agreement after the Agreement Date, any change effective after the date on which such Lender becomes a party hereto) in Applicable Law (including without limitation, Regulation D of the Board of Governors of the Federal Reserve System) or the adoption or making after such date of any interpretation, directive or request

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applying to a class of banks, including such Lender, of or under any Applicable Law (whether or not having the force of law and whether or not failure to comply therewith would be unlawful) by any Governmental Authority or monetary authority charged with the interpretation or administration thereof or compliance by any Lender with any request or directive regarding capital adequacy. Notwithstanding anything herein to the contrary, (a) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (b) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Regulatory Change”, regardless of the date enacted, adopted or issued.

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

“ REIT Taxable Income ” means, with respect to a Person for any taxable year, the taxable income of such Person determined in accordance with Section 857(b)(2) of the Internal Revenue Code before deduction for dividends paid.

“ Requisite Lenders ” means (a) as of any date prior to the Commitment Termination Date, Lenders having more than 50.0% of the aggregate amount of the Commitments, or (b) on or after the Commitment Termination Date, Lenders holding at least more than 50.0% of the principal amount of the aggregate outstanding Loans; provided that (i) in determining such percentage at any given time, all then existing Defaulting Lenders will be disregarded and excluded, and the Commitment Percentages and Loans, as applicable, of the Lenders shall be redetermined, for voting purposes only, to exclude the Commitments and Loans, as applicable, of such Defaulting Lender, and (ii) at all times when two or more Lenders (excluding Defaulting Lenders) are party to this Agreement, the term “Requisite Lenders” shall in no event mean less than two Lenders.

“ Reserve for Replacements ” means, for any period and with respect to any Property, an amount equal to (a)(i) the aggregate square footage of all completed space of such Property times (ii) $0.15 times (b) the number of days in such period divided by (c) 365. The Properties included in the calculation of Reserve for Replacements shall not include those Properties or portions thereof with respect to which or to the extent that a third party (x) owns the improvements thereon, (y) is a party to a ground lease with the a Borrower or a Subsidiary with respect to the land therein and (z) is contractually obligated to make all repairs and capital improvements and replacements thereof.

“ Responsible Officer ” means with respect to a Borrower or any other Subsidiary, the chief executive officer, president and/or chief financial officer of such Borrower, or the corresponding officer of each such Subsidiary, or if any of the foregoing is a partnership, such officer of its general partner.

“ Restricted Payment ” means: (a) any dividend or other distribution, direct or indirect, on account of any Equity Interest of the Parent or any of its Subsidiaries now or hereafter outstanding, except a dividend payable to holders of Equity Interests solely in the form of Equity Interests of the Parent or any such Subsidiary, as the case may be; (b) any redemption, conversion, exchange, retirement, sinking fund or similar payment, purchase or other acquisition for value, direct or indirect, of any shares or similar units of any class of stock or other equity interest of the Parent or any of its Subsidiaries now or hereafter outstanding; and (c) any payment made to retire, or to obtain the surrender of, any outstanding warrants, options or other rights to acquire shares or similar units of any class of stock or other equity interest of the Parent or any of its Subsidiaries now or hereafter outstanding.

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“ S&P ” means Standard & Poor’s Rating Services, a Standard & Poor’s Financial Services LLC business.

“ Secured Indebtedness ” means Indebtedness that is secured in any manner by a Lien.

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

“ Seven-Year Term Loan Agreement ” means that certain Seven-Year Term Loan Agreement dated as of January 8, 2014, by and among PREIT, PREIT-RUBIN, the Parent, the financial institutions party thereto as “Lenders”, Wells Fargo, as Administrative Agent, and the other parties thereto.

“ Significant Subsidiary ” means any Subsidiary (other than any Borrower) to which more than 2.5% of Adjusted Gross Asset Value is attributable on an individual basis.

“ Single Asset Entity ” means a Person (other than an individual) that (a)  only owns a single Property; (b) is engaged only in the business of owning, developing and/or leasing such Property; and (c) receives substantially all of its gross revenues from such Property. In addition, if the assets of a Person consist solely of (i) Equity Interests in one other Single Asset Entity and (ii) cash and other assets of nominal value incidental to such Person’s ownership of the other Single Asset Entity, such Person shall also be deemed to be a Single Asset Entity for purposes of this Agreement.

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

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

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

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

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

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“ Substantial Amount ” means, at the time of determination thereof, an amount in excess of 30.0% of total consolidated assets (exclusive of depreciation) at such time of the Parent and its Subsidiaries determined on a consolidated basis.

“ Tangible Net Worth ” means, for any Person and as of a given date, such Person’s total consolidated stockholder’s equity (including equity attributable to any non-controlling ownership interests of PREIT consistent with the Statement of Financial Accounting Standards No. 160) plus (a) (to the extent reflected in determining stockholders’ equity of such Person) the sum of (i) accumulated depreciation and amortization, plus (ii) any unrealized losses recorded pursuant to Topic 815, minus (b) (to the extent reflected in determining stockholders’ equity of such Person): (i) the amount of any write-up in the book value of any assets reflected in any balance sheet resulting from revaluation thereof or any write‑up in excess of the cost of such assets acquired, (ii) the aggregate of all amounts appearing on the assets side of any such balance sheet for patents, patent applications, copyrights, trademarks, trade names, goodwill and other like assets (other than liquor licenses the value of which shall be included) which would be classified as intangible assets under GAAP, all determined on a consolidated basis and (iii) any unrealized gains recorded pursuant to Topic 815.

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

“ Temporary Lease ” means any Tenant Lease entered into for seasonal or temporary uses, carts, kiosks, directory and other advertising or marketing agreements with a term of 1 year or less that cannot be automatically extended at the option of the tenant party thereto.

“ Tenant Lease ” means any lease or license agreement entered into by the Parent or any Subsidiary with respect to all or any portion of any Property owned or leased by the Parent or such Subsidiary, including any Temporary Lease or Tower Lease.

“ Termination Date ” means June 26, 2020.

“ Titled Agent ” has the meaning given that term in Section 10.9.

“ Topic 805 ” means Topic 805 as described in the Financial Accounting Standards Board (FASB) Accounting Standards of Codification™.

“ Topic 810 ” means Topic 810 as described in the Financial Accounting Standards Board (FASB) Accounting Standards of Codification™.

“ Topic 815 ” means Topic 815 as described in the Financial Accounting Standards Board (FASB) Accounting Standards of Codification™.

“ Total Budgeted Cost Until Stabilization ” means, with respect to a Project Under Development, and at any time, the aggregate amount of all costs budgeted to be paid, incurred or otherwise expended or accrued by the Parent, another Borrower, any other Subsidiary, a Consolidated Affiliate or an Unconsolidated Affiliate with respect to such Property to achieve an Occupancy Rate of 100%, including without limitation, all amounts budgeted with respect to all of the following: (a) acquisition of land and any related site improvements, demolition costs, architecture, engineering, construction/project management and development fees, legal fees and entitlement fees; (b) a reasonable and appropriate reserve for construction interest; (c) tenant improvements; (d) leasing commissions and other leasing costs, (e) infrastructure costs and (f) other hard and soft costs associated with the development or redevelopment of such Property. With respect to any Property that is a redevelopment involving the addition of gross leasable area, the Total Budgeted Cost Until Stabilization shall include all

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budgeted costs for expansions of the Property associated with the additional gross leasable area and all budgeted costs for renovations and other expenditures. With respect to any Property to be developed from the ground up in more than one phase, the Total Budgeted Cost Until Stabilization shall exclude budgeted costs (other than costs relating to acquisition of land and related site improvements, demolition costs, architecture, engineering, construction/project management and development fees, legal fees and entitlement fees) to the extent relating to any phase for which (i) construction has not yet commenced and (ii) a binding construction contract or lease agreement has not been entered into by the Parent, another Borrower, any other Subsidiary, any Consolidated Affiliate or any Unconsolidated Affiliate, as the case may be. The calculation of Total Budgeted Cost Until Stabilization herein shall be net of (x) any amount of budgeted costs attributable to portions of any Property that have been Placed in Service and (y) the aggregate sale proceeds of a sale of a pad site within a Project under Development that are payable pursuant to a binding sale contract with a third party approved by the Administrative Agent.

“ Total Liabilities ” means, as to any Person as of a given date, all liabilities which would, in conformity with GAAP, be properly classified as a liability on the consolidated balance sheet of such Person as of such date, and in any event shall include (without duplication): (a) all Indebtedness of such Person (whether or not Nonrecourse Indebtedness and whether or not secured by a Lien), including without limitation, Capitalized Lease Obligations and the full stated amount of undrawn letters of credit issued for the account of such Person, but excluding (i) letters of credit secured with cash collateral, (ii) letters of credit issued solely in lieu of a non-payment performance obligation and (iii) letters of credit securing a refundable obligation under a binding contract; (b) all accounts payable (including tenant deposits accounted for as payables but excluding tenant deposits held as restricted cash and not included in the calculation of Gross Asset Value pursuant to clause (b) of the definition of such term) and accrued expenses of such Person; (c) all purchase and repurchase obligations and forward commitments of such Person to the extent such obligations or commitments are evidenced by a binding purchase agreement (forward commitments shall include without limitation forward equity commitments and commitments to purchase properties); (d) all unfunded obligations of such Person; (e) all lease obligations of such Person (including ground leases) to the extent required under GAAP to be classified as a liability on the balance sheet of such Person; (f) all Contingent Obligations and Off-Balance Sheet Obligations of such Person; (g) all liabilities of any Consolidation Exempt Entity of such Person, which liabilities such Person has Guaranteed or is otherwise obligated on a recourse basis; and (h) the greater of such Person’s Investment Share or Recourse Share of the Indebtedness of any Consolidation Exempt Entity of such Person, including Nonrecourse Indebtedness of such Person. For purposes of clauses (c) and (d) of this definition, the amount of Total Liabilities of a Person at any given time in respect of a contract to purchase or otherwise acquire unimproved or fully developed real property shall be equal to (i) the total purchase price payable by such Person under the contract if, at such time, the seller of such real property would be entitled to specifically enforce the contract against such Person, otherwise and (ii) the aggregate amount of due diligence deposits, earnest money payments and other similar payments made by such Person under the contract which, at such time, would be subject to forfeiture upon termination of the contract. For purposes of clause (c) of this definition, the amount of Total Liabilities of a Person at any given time in respect of a contract to purchase or otherwise acquire real property being renovated or developed by a third party shall be equal to the maximum amount reasonably estimated to be payable by such Person to such third party under a contract between such Person and such third party during the remaining term of such contract. For purposes of this definition, if the assets of a Subsidiary of a Person consist solely of Equity Interests in one Consolidation Exempt Entity of such Person and such Person is not otherwise obligated in respect of the Indebtedness of such Consolidation Exempt Entity, then only such Person’s Investment Share of the Indebtedness of such Consolidation Exempt Entity shall be included as Total Liabilities of such Person. For purposes of determining the Total Liabilities of the Parent and the Subsidiaries, (i) the amount of any Indebtedness assumed by the Parent or any Subsidiary at the time of an acquisition which the Parent is required under GAAP to reflect at fair value on a balance sheet, shall be equal to outstanding principal balance of such

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Indebtedness and not the fair value of such Indebtedness as would be reflected on the Parent’s balance sheet and (ii) liabilities recorded in connection with derivative accounting pursuant to Topic 815 and liabilities relating to intangible items recorded pursuant to Topic 805 shall be excluded.

“ Tower Lease ” means any Tenant Lease entered into for a wireless communication, broadcast or other transmission tower.

“ Trust Agreement ” means that certain Pennsylvania Real Estate Investment Trust Agreement, as amended and restated as of December 16, 1997, among the trustees a party thereto, as amended and in effect on the Effective Date.

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

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

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

“ Unencumbered Debt Yield ” means, at the time of determination, the ratio (expressed as a percentage) of (a) Unencumbered NOI divided by (b) the sum of (without duplication) (i) the aggregate outstanding principal amount of all Unsecured Indebtedness of the Parent and its Wholly Owned Subsidiaries plus (ii) the greater of the Parent’s Investment Share or Recourse Share of the aggregate outstanding principal amount of all Unsecured Indebtedness of its Consolidation Exempt Entities, in the case of each of the foregoing clauses (i) and (ii), as of the last day of the applicable period of determination of Unencumbered NOI. Solely when determining Unencumbered NOI for purposes of this definition for any given period: (x) with respect to any Unencumbered Property acquired during such period, Adjusted NOI attributable to such Unencumbered Property shall be included in the calculation of Unencumbered NOI on a pro forma basis reasonably acceptable to the Administrative Agent and (y) with respect to any Unencumbered Property disposed of during such period, Adjusted NOI attributable to such Unencumbered Property shall be excluded from the calculation of Unencumbered NOI.

“ Unencumbered NOI ” means Adjusted NOI for the period of four consecutive fiscal quarters most recently ended attributable to all Unencumbered Properties.

“ Unencumbered Property ” means (a) each Property described on Schedule 1.1.(B) and (b) any Property not listed on Schedule 1.1.(B) which satisfies all of the following requirements: (i) such Property is fully developed for use substantially as a retail property or other use acceptable to the Administrative Agent; (ii) the Borrower or a Wholly Owned Subsidiary has either a fee simple interest or a leasehold estate under a Ground Lease, in such Property, which interest is held entirely by the Borrower or such Wholly Owned Subsidiary, as applicable; (iii) such Property is located in a State of the United States of America or in the District of Columbia; (iv) regardless of whether such Property is owned or leased under a Ground Lease by the Borrower or a Subsidiary, the Borrower has the right directly, or indirectly through a Subsidiary, to take the following actions: (A) without the need to obtain the consent of any Person (or in the case of a Property leased under a Ground Lease, with the consent of the lessor not to be unreasonably withheld), to create Liens on the interest of the Borrower or applicable Subsidiary in such Property as security for Indebtedness of the Borrower or such Subsidiary, as applicable, and (B) if such Property is owned in fee simple, to sell, transfer or otherwise dispose of such interest in such Property without the

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need to obtain the consent of any Person, or if such Property is leased under a Ground Lease, to sell, transfer or otherwise dispose of such interest in such Property pursuant to terms and conditions of such Ground Lease providing for reasonable transferability as required under the definition of “Ground Lease” or pursuant to terms and conditions otherwise approved by the Administrative Agent; (v) neither such Property, nor if such Property is owned by a Subsidiary, any of the Borrower’s direct or indirect ownership interest in such Subsidiary, is subject to (A) any Lien other than Permitted Liens (but not Permitted Liens of the type described in clause (f) of the definition of such term unless the aggregate amount of all such Permitted Liens then encumbering any of the Unencumbered Properties does not exceed $25,000,000) or (B) any Negative Pledge other than Negative Pledges permitted under Sections 8.3.(b)(ii), (iii), (iv) and (v); (vi) such Property is not a Project Under Development (other than a Project Under Development where not more than 25.0% (or 33.0% in the case of the Gallery) of the applicable gross leasable area of the Property is undergoing redevelopment and/or expansion); and (vii) such Property is free of all structural defects or major architectural deficiencies, title defects, environmental conditions or other adverse matters except for defects, deficiencies, conditions or other matters which, individually or collectively, are not material to the profitable operation of such Property. Notwithstanding anything to the contrary in this definition, if a Property listed on Schedule 1.1.(B) at any time after the Effective Date fails to satisfy any requirements in clause (b) of this definition (other than those, if any, it failed to satisfy on January 8, 2014), such Property shall no longer be an Unencumbered Property until such time as it satisfies at least all of the requirements in such clause (b) that it satisfied on January 8, 2014.

“ Unsecured Indebtedness ” means Indebtedness that is not Secured Indebtedness.

“ Unsecured Interest Expense ” means Interest Expense attributable to Unsecured Indebtedness.

“ Variable Interest Entities ” means those Persons who (a) are neither Guarantors or Subsidiaries of the Parent and (b) who are consolidated with the Parent in the financial statements of the Parent solely by reason of the application of Topic 810.

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

“ Wells Fargo Fee Letter ” means that certain fee letter dated as of May 28, 2015, by and among the Parent, PREIT, PREIT-RUBIN, Wells Fargo and Wells Fargo Securities, LLC.

“ Wholly Owned Subsidiary ” means any Subsidiary of a Person all of the equity securities or other ownership interests (other than, in the case of a corporation, directors’ qualifying shares) of which are at the time directly or indirectly owned or controlled by such Person or one or more other Subsidiaries of such Person or by such Person and one or more other Subsidiaries of such Person. In the case of the Parent, the term “Wholly Owned Subsidiary” shall also include PREIT. With respect to clause (b) of the term “Excluded Subsidiary”, the term “Wholly Owned Subsidiary” shall include any Subsidiary of a Person, (a) of which such Person owns or controls, directly or indirectly through one or more other Subsidiaries, substantially all of the Equity Interests and (b) over which such Person possesses sufficient control to warrant treating such Subsidiary as if it were a Wholly Owned Subsidiary.

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

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Section 1.2. General; References to Times.
Unless otherwise indicated (other than in the definition of the term “GAAP”), all accounting terms, ratios and measurements shall be interpreted or determined in accordance with GAAP as in effect as of the Agreement Date. Notwithstanding any other provision contained herein, all terms of an accounting or financial nature used herein shall be construed, and all computations of amounts and ratios referred to herein shall be made, without giving effect to any election under Statement of Financial Accounting Standards 159 (or any other financial accounting standard promulgated by the Financial Accounting Standards Board having a similar result or effect) to value any Indebtedness or other liabilities of the Parent, any other Borrower or any other Subsidiary at “fair value”, as defined therein. References in this Agreement to “Sections”, “Articles”, “Exhibits” and “Schedules” are to sections, articles, exhibits and schedules herein and hereto unless otherwise indicated. references in this Agreement to any document, instrument or agreement (a) shall include all exhibits, schedules and other attachments thereto, (b) shall include, unless otherwise indicated, all documents, instruments or agreements issued or executed in replacement thereof, to the extent permitted hereby and (c) shall mean, unless otherwise indicated, such document, instrument or agreement, or replacement thereto, as amended, supplemented, restated or otherwise modified from time to time to the extent permitted hereby and in effect at any given time. Wherever from the context it appears appropriate, each term stated in either the singular or plural shall include the singular and plural, and pronouns stated in the masculine, feminine or neuter gender shall include the masculine, the feminine and the neuter. Unless explicitly set forth to the contrary, a reference to “Subsidiary” means a Subsidiary of the Parent or a Subsidiary of such Subsidiary and a reference to an “Affiliate” means a reference to an Affiliate of the Parent. Titles and captions of Articles, Sections, subsections and clauses in this Agreement are for convenience only, and neither limit nor amplify the provisions of this Agreement. Unless otherwise indicated, all references to time are references to Central time. Certifications as to the matters contained in any certificate delivered by an officer of a Borrower to any or all of the Administrative Agent and the Lenders under the terms of this Agreement or any other Loan Document are made in such officer’s capacity as an officer of such Borrower and not in such officer’s individual capacity.

Article II. Credit Facilities
Section 2.1. Loans.
(a)      Making of Loans . Subject to the terms and conditions set forth in this Agreement, each Lender severally and not jointly agrees to make Loans to the Borrower during the period from and including the Effective Date to but excluding the Commitment Termination Date, in an aggregate principal amount of up to, but not exceeding, such Lender’s Commitment. The Loans shall be made to the Borrower in no more than six separate borrowings, and each borrowing of Loans under this subsection shall be in an aggregate minimum amount of $10,000,000 and integral multiples of $500,000 in excess thereof. Notwithstanding the immediately preceding sentence, a borrowing of Loans may be in the aggregate amount of the Commitments. Upon a Lender’s funding of a Loan, such Lender’s Commitment shall be permanently reduced by the principal amount of such Loan. On June 24, 2016, unless previously terminated or reduced to zero in accordance with the immediately preceding sentence and/or Section 2.14., the Commitment of each Lender shall terminate. Any Loan or portion of a Loan made under this Section and repaid or prepaid may not be reborrowed.

(b)      Requests for Loans . Not later than 11:00 a.m. Central time at least 1 Business Day prior to a borrowing of Base Rate Loans and not later than 11:00 a.m. Central time at least 3 Business Days prior to a borrowing of LIBOR Loans, the Borrower shall deliver to the Administrative Agent a Notice of Borrowing. Each Notice of Borrowing shall specify the aggregate principal amount of the Loans to be borrowed, the date such Loans are to be borrowed (which must be a Business Day), the use of the

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proceeds of such Loans, the Type of the requested Loans, and if such Loans are to be LIBOR Loans, the initial Interest Period for such Loans and the principal amount of such Loans, if any, that the Borrower has elected to have subject to a Specified Derivatives Contract that provides a hedge against interest rate risk and the Specified Derivatives Contract(s) to which such amount is subject. Each Notice of Borrowing shall be irrevocable once given and binding on the Borrower. Prior to delivering a Notice of Borrowing, the Borrower may (without specifying whether a Loan will be a Base Rate Loan or a LIBOR Loan) request that the Administrative Agent provide the Borrower with the most recent LIBOR available to the Administrative Agent. The Administrative Agent shall provide such quoted rate to the Borrower on the date of such request or as soon as possible thereafter.

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

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

Section 2.2. [Intentionally Omitted].
Section 2.3. [Intentionally Omitted].     
Section 2.4. Rates and Payment of Interest on Loans.
(a)      Rates . The Borrower promises to pay to the Administrative Agent for the account of each Lender interest on the unpaid principal amount of each Loan made by such Lender, for the period from and including the date of the making of such Loan to but excluding the date such Loan shall be paid in full, at the following per annum rates:

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

(ii)      during such periods as such Loan is a LIBOR Loan, at LIBOR for such Loan for the Interest Period therefor (from the first day to, but excluding, the last day of such Interest Period), plus the Applicable Margin for LIBOR Loans.

Notwithstanding the foregoing, during the continuance of an Event of Default specified in Section 9.1.(a), Section 9.1.(e) or Section 9.1.(f), or if as a result of the occurrence of any other Event of Default the Obligations have been accelerated pursuant to Section 9.2., the Borrower shall pay to the Administrative Agent for the account of each Lender interest at the Post-Default Rate on the outstanding principal amount of each Loan made by such Lender and on any other amount payable by the Borrower hereunder or under the Note held by such Lender to or for the account of such Lender (including without limitation, accrued but unpaid interest to the extent permitted under Applicable Law).

(b)      Payment of Interest . All accrued and unpaid interest on the outstanding principal amount of each Loan shall be payable (i) monthly in arrears on the 10 th day of each month, commencing with the first full month occurring after the Effective Date and (ii) on any date on which the principal balance of such Loan is due and payable in full (whether at maturity, due to acceleration or otherwise). Interest payable at the Post-Default Rate shall be payable from time to time on demand. All determinations by the Administrative Agent of an interest rate hereunder shall be conclusive and binding on the Lenders and the Borrower for all purposes, absent manifest error.

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

Section 2.5. Number of Interest Periods.
There may be no more than 3 different Interest Periods for LIBOR Loans outstanding at the same time.

Section 2.6. Repayment of Loans.
The Borrower shall repay the entire outstanding principal amount of, and all accrued and unpaid interest on, the Loans on the Termination Date.

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Section 2.7. Late Charges.
If any payment required by the Borrower under this Agreement is not paid within 10 days after it becomes due and payable, the Requisite Lenders may, by notice to the Borrower, require that the Borrower pay a late charge for late payment to compensate the Lenders for the loss of use of funds and for the expenses of handling the delinquent payment, in an amount not to exceed four percent (4.0%) of such delinquent payment. Such late charge shall be paid in any event not later than the due date of the next subsequent installment of principal and/or interest. In the event the maturity of the Obligations hereunder occurs or is accelerated pursuant to Section 9.2., this Section shall apply only to payments overdue prior to the time of such acceleration. This Section shall not be deemed to be a waiver of the Lenders’ right to accelerate payment of any of the Obligations as permitted under the terms of this Agreement.

Section 2.8. Optional Prepayments.
Subject to Section 4.4., the Borrower may prepay any Loan, in whole or part, at any time without premium or penalty. The Borrower shall give the Administrative Agent at least 3 Business Days prior written notice of the prepayment of any Loan. Each voluntary prepayment of Loans by the Borrower shall be in an aggregate minimum amount of $1,000,000 and integral multiples of $100,000 in excess thereof or, if the Loans are being prepaid in full at such time, the prepayment may be in the amount of the Loans that are then outstanding.

Section 2.9. Continuation.
So long as no Event of Default exists, the Borrower may on any Business Day, with respect to any LIBOR Loan, elect to maintain such LIBOR Loan or any portion thereof as a LIBOR Loan by selecting a new Interest Period for such LIBOR Loan or any portion thereof. Each Continuation of LIBOR Loans shall be in an aggregate minimum amount of $1,000,000 and integral multiples of $250,000 in excess of that amount. Each new Interest Period selected under this Section shall commence on the last day of the immediately preceding Interest Period. Each selection of a new Interest Period shall be made by the Borrower giving to the Administrative Agent a Notice of Continuation not later than 11:00 a.m. (Central time) on the third Business Day prior to the date of any such Continuation. Such notice of a Continuation shall be by telephone (confirmed immediately in writing), telecopy, electronic mail or other similar form of communication, confirmed immediately in writing if by telephone, in the form of a Notice of Continuation, specifying (a) the proposed date of such Continuation, (b) the LIBOR Loan and portion thereof subject to such Continuation, (c) the duration of the selected Interest Period, all of which of the foregoing (a), (b) and (c) shall be specified in such manner as is necessary to comply with all limitations on Loans outstanding hereunder, and (d) the amount of such LIBOR Loan, or portion thereof, that the Borrower has elected to have subject to a Specified Derivatives Contract that provides a hedge against interest rate risk and the Specified Derivatives Contract(s) to which such amount is subject. Each Notice of Continuation shall be irrevocable by and binding on the Borrower once given. Promptly after receipt of a Notice of Continuation, the Administrative Agent shall notify each Lender by telecopy, or other similar form of transmission of the proposed Continuation. If the Borrower shall fail to select in a timely manner a new Interest Period for any LIBOR Loan owing by it in accordance with this Section, such Loan will automatically, on the last day of the current Interest Period therefor, Continue as a LIBOR Loan having an Interest Period of one month; provided, however, that if a Default or Event of Default exists, such Loan will automatically, on the last day of the current Interest Period therefor, Convert into a Base Rate Loan notwithstanding the first sentence of Section 2.10. or the Borrower’s failure to comply with any terms of this Section.

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Section 2.10. Conversion.
So long as no Event of Default exists, the Borrower may on any Business Day, upon the Borrower’s giving of a Notice of Conversion to the Administrative Agent, Convert all or a portion of a Loan of one Type into a Loan of another Type. Any Conversion of a LIBOR Loan into a Base Rate Loan shall be made on, and only on, the last day of an Interest Period for such LIBOR Loan. Each Conversion of Base Rate Loans into LIBOR Loans shall be in an aggregate minimum amount of $1,000,000 and integral multiples of $250,000 in excess of that amount. Each such Notice of Conversion shall be given not later than 11:00 a.m. (Central time) one Business Day prior to the date of any proposed Conversion into Base Rate Loans and three Business Days prior to the date of any proposed Conversion into LIBOR Loans. Promptly after receipt of a Notice of Conversion, the Administrative Agent shall notify each Lender by telecopy, or other similar form of transmission of the proposed Conversion. Subject to the restrictions specified above, each Notice of Conversion shall be by telephone (confirmed immediately in writing), telecopy, electronic mail or other similar form of communication in the form of a Notice of Conversion specifying (a) the requested date of such Conversion, (b) the Type of Loan to be Converted, (c) the portion of such Type of Loan to be Converted, (d) the Type of Loan such Loan is to be Converted into, and (e) if such Conversion is into a LIBOR Loan, the requested duration of the Interest Period of such Loan and the amount of such LIBOR Loan, if any, that the Borrower has elected to have subject to a Specified Derivatives Contract that provides a hedge against interest rate risk and the Specified Derivatives Contract(s) to which such amount is subject. Each Notice of Conversion shall be irrevocable by and binding on the Borrower once given.

Section 2.11. Notes.
(a)      Notes . Except in the case of a Lender that has notified the Administrative Agent in writing that it elects not to receive a Note, the Loans made by each Lender shall, in addition to this Agreement, also be evidenced by a promissory note substantially in the form of Exhibit G (each a “Note”), payable to the order of such Lender in a principal amount equal to the amount of its Commitment as originally in effect and otherwise duly completed.

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

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


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Section 2.12. [Intentionally Omitted].
Section 2.13. [Intentionally Omitted].
Section 2.14. Voluntary Reduction of the Commitments.
Prior to the Commitment Termination Date, the Borrower may terminate or reduce the amount of the Commitments at any time and from time to time without penalty or premium upon not less than 5 Business Days prior written notice to the Administrative Agent of each such termination or reduction, which notice shall specify the effective date thereof and the amount of any such reduction (which in the case of any partial reduction of the Commitments shall not be less than $10,000,000 and integral multiples of $5,000,000 in excess of that amount in the aggregate) and shall be irrevocable once given and effective only upon receipt by the Administrative Agent (such notice, a “Commitment Reduction Notice”); provided, however, that if the Borrower seeks to reduce the aggregate amount of the Commitments below $50,000,000 then unless the Administrative Agent and all of the Lenders have previously agreed in writing, the Commitments shall be reduced to zero. Promptly after receipt of a Commitment Reduction Notice, the Administrative Agent shall notify each Lender of the proposed termination or Commitment reduction. The Commitments, once reduced or terminated pursuant to this Section, may not be increased. The Borrower shall pay all interest and fees, on the Loans accrued to the date of such reduction or termination of the Commitments to the Administrative Agent for the account of the Lenders, including but not limited to any applicable compensation due to each Lender in accordance with Section 4.4.

Section 2.15. Joint and Several Liability of the Borrower.
(a)      The obligations of each Borrower hereunder and under the other Loan Documents to which any Borrower is a party shall be joint and several, and accordingly, each Borrower confirms that it is liable for the full amount of the Obligations, regardless of whether incurred by such Borrower or another Borrower.

(b)      Each Borrower represents and warrants to the Administrative Agent and the Lenders that each Borrower, though separate legal entities, are mutually dependent on each other in the conduct of their respective businesses as an integrated operation and have determined it to be in their mutual best interests to obtain financing from the Lenders through their collective efforts.

(c)      Neither the Administrative Agent nor any Lender shall be obligated or required before enforcing any Loan Document against a Borrower: (a)  to pursue any right or remedy any of them may have against any other Borrower, any Guarantor or any other Person or commence any suit or other proceeding against any other Borrower, any Guarantor or any other Person in any court or other tribunal; (b) to make any claim in a liquidation or bankruptcy of any other Borrower, any Guarantor or any other Person; or (c) to make demand of any other Borrower, any Guarantor or any other Person or to enforce or seek to enforce or realize upon any collateral security held by the Administrative Agent or any Lender which may secure any of the Obligations.

(d)      It is the intent of each Borrower, the Administrative Agent and the Lenders that in any proceeding of the types described in Sections 9.1.(e) or 9.1.(f), a Borrower’s maximum obligation hereunder shall equal, but not exceed, the maximum amount which would not otherwise cause the obligations of such Borrower hereunder to be avoidable or unenforceable against such Borrower in such proceeding as a result of Applicable Law, including without limitation, (i) Section 548 of the Bankruptcy Code of 1978, as

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amended and (ii) any state fraudulent transfer or fraudulent conveyance act or statute applied in such proceeding, whether by virtue of Section 544 of the Bankruptcy Code of 1978, as amended, or otherwise. The Applicable Laws under which the possible avoidance or unenforceability of the obligations of such Borrower hereunder shall be determined in any such proceeding are referred to as the “Avoidance Provisions”. Accordingly, to the extent that the obligations of a Borrower hereunder would otherwise be subject to avoidance under the Avoidance Provisions, the maximum Obligations for which such Borrower shall be liable hereunder shall be reduced to that amount which, as of the time any of the Obligations are deemed to have been incurred under the Avoidance Provisions, would not cause the obligations of such Borrower hereunder, to be subject to avoidance under the Avoidance Provisions. This subsection is intended solely to preserve the rights of the Administrative Agent and the Lenders hereunder to the maximum extent that would not cause the obligations of a Borrower hereunder to be subject to avoidance under the Avoidance Provisions, and no Borrower or any other Person shall have any right or claim under this Section that would not otherwise be available to such Person under the Avoidance Provisions.

(e)      To the extent that a Borrower shall be required hereunder to pay any portion of the Obligations exceeding the greater of (a) the amount of the value actually received by such Borrower and its Subsidiaries from the Loans and other Obligations and (b) the amount such Borrower would otherwise have paid if such Borrower had paid the aggregate amount of Obligations in the same proportion as such Borrower’s net worth on the date enforcement is sought hereunder bears to the aggregate net worth of the Borrower on such date, then such Borrower shall be reimbursed by each other Borrower for the amount of such excess.

(f)      Each Borrower assumes all responsibility for being and keeping itself informed of the financial condition of each other Borrower, and of all other circumstances bearing upon the risk of nonpayment of any of the Obligations and the nature, scope and extent of the risks that such Borrower assumes and incurs hereunder, and agrees that neither the Administrative Agent nor any Lender shall have any duty whatsoever to advise any Borrower of information regarding such circumstances or risks.

Section 2.16. Actions of the Borrower.
Each Borrower hereby appoints each other Borrower to act as its agent for all purposes under the Loan Documents (including, without limitation, with respect to all matters related to the borrowing and repayment of Loans). Each Borrower acknowledges and agrees that (i) one Borrower may execute such documents as such Borrower deems appropriate in its sole discretion, and with respect to any such document executed by only one Borrower, each Borrower shall be bound by and obligated by all of the terms of any such document, (ii) any notice or other communication delivered by the Administrative Agent or any Lender hereunder to any Borrower shall be deemed to have been delivered to each Borrower and (iii) the Administrative Agent and the Lenders shall accept (and shall be permitted to rely on) any document or agreement executed by each Borrower or any Borrower individually. Each Borrower agrees that any action taken by one Borrower without the consent of, or notice to, any other Borrower shall not release or discharge any Borrower from its obligations hereunder.

Section 2.17. [Intentionally Omitted].
Section 2.18. Funds Transfer Disbursements.
The Borrower hereby authorizes the Administrative Agent to disburse the proceeds of any Loan made by the Lenders pursuant to the Loan Documents as requested by an authorized representative of PREIT to any of the accounts designated in the Disbursement Instruction Agreement.


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Section 2.19. [Intentionally Omitted].

Article III. Payments, Fees and Other General Provisions
Section 3.1. Payments.
(a)      Payments by Borrower . Except to the extent otherwise provided herein, all payments of principal, interest and other amounts to be made by the Borrower under this Agreement, the Notes or any other Loan Document shall be made in Dollars, in immediately available funds, without setoff, deduction or counterclaim, to the Administrative Agent at the Principal Office, not later than 1:00 p.m. Central time on the date on which such payment shall become due (each such payment made after such time on such due date to be deemed to have been made on the next succeeding Business Day). Subject to Section 9.5., the Borrower shall, at the time of making each payment under this Agreement or any other Loan Document, specify to the Administrative Agent the amounts payable by the Borrower hereunder to which such payment is to be applied. Each payment received by the Administrative Agent for the account of a Lender under this Agreement or any Note shall be paid to such Lender by wire transfer of immediately available funds in accordance with the wiring instructions provided by such Lender to the Administrative Agent from time to time, for the account of such Lender at the applicable Lending Office of such Lender. In the event the Administrative Agent fails to pay such amounts to such Lender within one Business Day of receipt of such amounts, the Administrative Agent shall pay interest on such amount until paid at a rate per annum equal to the Federal Funds Rate from time to time in effect. If the due date of any payment under this Agreement or any other Loan Document would otherwise fall on a day which is not a Business Day such date shall be extended to the next succeeding Business Day and interest shall continue to accrue at the rate, if any, applicable to such payment for the period of such extension.

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

Section 3.2. Pro Rata Treatment.
Except to the extent otherwise provided herein: (a) the making of the Loans under Section 2.1.(a) shall be made by the Lenders, each payment of the Fees under Section 3.5.(b) shall be made for the account of the Lenders, and each termination or reduction of the amount of the Commitments under Sections 2.14. shall be applied to the respective Commitments of the Lenders, pro rata according to the amounts of their respective Commitments; (b) each payment or prepayment of principal of Loans by the Borrower shall be made for the account of the Lenders pro rata in accordance with the respective unpaid principal amounts of the Loans held by them; (c) each payment of interest on Loans by the Borrower shall be made for the account of the Lenders pro rata in accordance with the amounts of interest on such Loans then due and payable to the respective Lenders and (d) the Conversion and Continuation of Loans of a particular Type (other than Conversions provided for by Section 4.5.) shall be made pro rata among the Lenders according to the amounts of their respective Loans and the then current Interest Period for each Lender’s portion of each such Loan of such Type shall be coterminous. Any payment or prepayment of

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principal or interest made during the existence of an Event of Default shall be made for the account of the Lenders in accordance with the order set forth in Section 9.5.

Section 3.3. Sharing of Payments, Etc.
If a Lender shall obtain payment of any principal of, or interest on, any Loan under this Agreement or shall obtain payment on any other Obligation owing by any Loan Party through the exercise of any right of set-off, banker’s lien or counterclaim or similar right or otherwise or through voluntary prepayments directly to a Lender (other than any payment made in respect of Specified Derivatives Obligations) or other payments made by the Borrower or any other Loan Party to a Lender not in accordance with the terms of this Agreement and such payment should be distributed to the Lenders in accordance with Section 3.2. or Section 9.5., such Lender shall promptly purchase from such other Lenders participations in (or, if and to the extent specified by such Lender, direct interests in) the Loans made by the other Lenders or other Obligations owed to such other Lenders in such amounts, and make such other adjustments from time to time as shall be equitable, to the end that all the Lenders shall share the benefit of such payment (net of any reasonable expenses which may actually be incurred by such Lender in obtaining or preserving such benefit) in accordance with the requirements of Section 3.2. or Section 9.5., as applicable. To such end, all the Lenders shall make appropriate adjustments among themselves (by the resale of participations sold or otherwise) if such payment is rescinded or must otherwise be restored. The Borrower agrees that any Lender so purchasing a participation (or direct interest) in the Loans or other Obligations owed to such other Lenders may exercise all rights of set-off, banker’s lien, counterclaim or similar rights with respect to such participation as fully as if such Lender were a direct holder of Loans in the amount of such participation. Nothing contained herein shall require any Lender to exercise any such right or shall affect the right of any Lender to exercise and retain the benefits of exercising, any such right with respect to any other indebtedness or obligation of the Borrower.

Section 3.4. Several Obligations.
No Lender shall be responsible for the failure of any other Lender to make a Loan or to perform any other obligation to be made or performed by such other Lender hereunder, and the failure of any Lender to make a Loan or to perform any other obligation to be made or performed by it hereunder shall not relieve the obligation of any other Lender to make any Loan or to perform any other obligation to be made or performed by such other Lender.

Section 3.5. Fees.
(a)      Loan Fees . On the Effective Date, the Borrower agrees to pay to the Administrative Agent all loan fees as have been agreed to in writing by the Borrower and the Administrative Agent and as have been agreed to in writing by the Borrower and any Lender.

(b)      Facility Fees . During the period from the Effective Date to but excluding the Commitment Termination Date, the Borrower agrees to pay to the Administrative Agent for the account of the Lenders an unused facility fee equal to the sum of the daily amount of the Commitments multiplied by a per annum rate equal to 0.20%. Such fee shall be computed on a daily basis and payable in arrears on [July 1, 2015,] October 1, 2015, January 1, 2016, April 1, 2016, and on the Commitment Termination Date.

(c)      Other Fees . The Borrower agrees to pay the administrative and other fees of the Administrative Agent and the Arrangers as provided in the Fee Letter and as may be agreed to in writing from time to time.

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Section 3.6. Computations.
Unless otherwise expressly set forth herein, any accrued interest on any Loan, any Fees or other Obligations due hereunder shall be computed on the basis of a year of 360 days and the actual number of days elapsed.

Section 3.7. Usury.
In no event shall the amount of interest due or payable on the Loans or the other Obligations exceed the maximum rate of interest allowed by Applicable Law and, if any such payment is paid by the Borrower or any other Loan Party or received by any Lender, then such excess sum shall be credited as a payment of principal, unless the Borrower shall notify the respective Lender in writing that the Borrower elects to have such excess sum returned to it forthwith. It is the express intent of the parties hereto that the Borrower not pay and that the Lenders not receive, directly or indirectly, in any manner whatsoever, interest in excess of that which may be lawfully paid by the Borrower under Applicable Law. The parties hereto hereby agree and stipulate that the only charge imposed upon the Borrower for the use of money in connection with this Agreement is and shall be the interest specifically described in Sections 2.4.(a)(i) and (ii). Notwithstanding the foregoing, the parties hereto further agree and stipulate that all agency fees, syndication fees, loan fees, facility fees, underwriting fees, default charges, late charges, funding or “breakage” charges, increased cost charges, attorneys’ fees and reimbursement for costs and expenses paid by the Administrative Agent or any Lender to third parties or for damages incurred by the Administrative Agent or any Lender, are charges made to compensate the Administrative Agent or any such Lender for underwriting or administrative services and costs or losses performed or incurred, and to be performed or incurred, by the Administrative Agent and the Lenders in connection with this Agreement and under no circumstances shall be deemed to be charges for the use of money. Unless otherwise expressly provided herein, all fees and all charges, other than charges for the use of money, shall be fully earned and nonrefundable when due.

Section 3.8. Statements of Account.
The Administrative Agent will account to the Borrower monthly with a statement of Loans, accrued interest and Fees, charges and payments made pursuant to this Agreement and the other Loan Documents, and such account rendered by the Administrative Agent shall be deemed conclusive upon the Borrower absent manifest error. The failure of the Administrative Agent to deliver such a statement of accounts shall not relieve or discharge the Borrower from any of its obligations hereunder.

Section 3.9. Defaulting Lenders.
Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting Lender, then, until such time as such Lender is no longer a Defaulting Lender, to the extent permitted by Applicable Law:

(a)      Waivers and Amendments . Such Defaulting Lender’s right to approve or disapprove any amendment, waiver or consent with respect to this Agreement shall be restricted as set forth in the definition of Requisite Lenders and in Section 11.7.

(b)      Defaulting Lender Waterfall . Any payment of principal, interest, Fees or other amounts received by the Administrative Agent for the account of such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Article IX. or otherwise) or received by the Administrative Agent from a Defaulting Lender pursuant to Section 11.4. shall be applied at such time or times as may be

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determined by the Administrative Agent as follows: first , to the payment of any amounts owing by such Defaulting Lender to the Administrative Agent hereunder; second , as the Borrower may request (so long as no Default or Event of Default exists), to the funding of any Loan in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent; third , if so determined by the Administrative Agent and the Borrower, to be held in a deposit account and released pro rata in order to satisfy such Defaulting Lender’s potential future funding obligations with respect to Loans under this Agreement; fourth , to the payment of any amounts owing to the Lenders as a result of any judgment of a court of competent jurisdiction obtained by any Lender against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; fifth , so long as no Default or Event of Default exists, to the payment of any amounts owing to the Borrower as a result of any judgment of a court of competent jurisdiction obtained by the Borrower against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; and sixth , to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that if (x) such payment is a payment of the principal amount of any Loans in respect of which such Defaulting Lender has not fully funded its appropriate share, and (y) such Loans were made at a time when the conditions set forth in Article V. were satisfied or waived, such payment shall be applied solely to pay the Loans of all Non‑Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Loans of such Defaulting Lender until such time as all Loans are held by the Lenders pro rata in accordance with their respective Commitment Percentages). Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender pursuant to this subsection shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto.

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

(d)      Defaulting Lender Cure . If the Borrower and the Administrative Agent agree in writing that a Lender is no longer a Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein, that Lender will, to the extent applicable, purchase at par that portion of outstanding Loans of the other Lenders or take such other actions as the Administrative Agent may determine to be necessary to cause the Loans to be held pro rata by the Lenders in accordance with their respective Commitment Percentages, whereupon such Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to Fees accrued or payments made by or on behalf of the Borrower while that Lender was a Defaulting Lender; and provided , further , that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.

(e)      Purchase of Defaulting Lender’s Commitment . During any period that a Lender is a Defaulting Lender, the Borrower may, by the Borrower giving written notice thereof to the Administrative Agent, such Defaulting Lender and the other Lenders, demand that such Defaulting Lender assign its Commitment and Loans to an Eligible Assignee subject to and in accordance with the provisions of Section 11.6.(b). No party hereto shall have any obligation whatsoever to initiate any such replacement or to assist in finding an Eligible Assignee. In addition, any Lender who is not a Defaulting Lender may, but shall not be obligated, in its sole discretion, to acquire the face amount of all or a portion of such Defaulting Lender’s Commitment and Loans via an assignment subject to and in accordance with the provisions of Section 11.6.(b). In connection with any such assignment, such Defaulting Lender shall promptly execute all documents reasonably requested to effect such assignment, including an appropriate

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Assignment and Assumption Agreement and, notwithstanding Section 11.6.(b), shall pay to the Administrative Agent an assignment fee in the amount of $7,500. The exercise by the Borrower of its rights under this Section shall be at the Borrower’s sole cost and expense and at no cost or expense to the Administrative Agent or any of the Lenders and shall not constitute a waiver or release of any claim against a Defaulting Lender.

Section 3.10. Taxes.
(a)      Taxes Generally . All payments by the Borrower of principal of, and interest on, the Loans, and all other Obligations shall be made free and clear of and without deduction for any present or future excise, stamp or other taxes, fees, duties, levies, imposts, charges, deductions, withholdings or other charges of any nature whatsoever imposed by any taxing authority, but excluding (i) franchise taxes, (ii) any taxes (other than withholding taxes) that would not be imposed but for a connection between the Administrative Agent or a Lender and the jurisdiction imposing such taxes (other than a connection arising solely by virtue of the activities of the Administrative Agent or such Lender pursuant to or in respect of this Agreement or any other Loan Document), (iii)  any taxes imposed on or measured by any Lender’s assets, net income, receipts or branch profits (iv) any taxes arising after the Agreement Date solely as a result of or attributable to a Lender changing its designated Lending Office after the date such Lender becomes a party hereto and (v) any taxes imposed by FATCA on any “withholdable payment” payable to such recipient as a result of the failure of such recipient to satisfy the applicable requirements as set forth in FATCA (such non‑excluded items being collectively called “Taxes”). If any withholding or deduction from any payment to be made by the Borrower hereunder is required in respect of any Taxes pursuant to any Applicable Law, then the Borrower will:

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

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

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

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

(c)      Tax Forms . Prior to the date that any Lender organized under the laws of a jurisdiction outside the United States of America becomes a party hereto, such Person shall deliver to the Borrower and the Administrative Agent such certificates, documents or other evidence, as required by the Internal Revenue Code or Treasury Regulations issued pursuant thereto (including Internal Revenue Service Forms W-8ECI and W-8BEN, as applicable, or appropriate successor forms), properly completed, currently effective and duly executed by such Lender establishing that payments to it hereunder and under

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the Notes are (i) not subject to United States Federal backup withholding tax and (ii) not subject to United States Federal withholding tax under the Internal Revenue Code. Each such Lender shall (x) deliver further copies of such forms or other appropriate certifications on or before the date that any such forms expire or become obsolete and after the occurrence of any event requiring a change in the most recent form delivered to the Borrower and (y) obtain such extensions of the time for filing, and renew such forms and certifications thereof, as may be reasonably requested by the Borrower or the Administrative Agent. The Borrower shall not be required to pay any amount pursuant to last sentence of subsection (a) above to any Lender that is organized under the laws of a jurisdiction outside of the United States of America or the Administrative Agent, if it is organized under the laws of a jurisdiction outside of the United States of America, if such Lender or the Administrative Agent, as applicable, fails to comply with the requirements of this subsection. If any such Lender fails to deliver the above forms or other documentation, then the Administrative Agent may withhold from such payment to such Lender such amounts as are required by the Internal Revenue Code. If any Governmental Authority asserts that the Administrative Agent did not properly withhold or backup withhold, as the case may be, any tax or other amount from payments made to or for the account of any Lender, such Lender shall indemnify the Administrative Agent therefor, including all penalties and interest, any taxes imposed by any jurisdiction on the amounts payable to the Administrative Agent under this Section, and costs and expenses (including all fees and disbursements of any law firm or other external counsel and the allocated cost of internal legal services and all disbursements of internal counsel) of the Administrative Agent. The obligation of the Lenders under this Section shall survive termination of the Commitments, repayment of all Obligations and the resignation or replacement of the Administrative Agent.

Article IV. Yield Protection, Etc.
Section 4.1. Additional Costs; Capital Adequacy.
(a)      Capital Adequacy . If any Lender reasonably determines that compliance with any law or regulation or with any guideline or request from any central bank or other Governmental Authority (whether or not having the force of law) affects or would affect the amount of capital required or expected to be maintained by such Lender, or any corporation controlling such Lender, as a consequence of, or with reference to, such Lender’s Commitment or its making or maintaining Loans below the rate which such Lender or such corporation controlling such Lender could have achieved but for such compliance (taking into account the policies of such Lender or such corporation with regard to capital), then the Borrower shall, from time to time, within 30 calendar days after written demand by such Lender, pay to such Lender additional amounts sufficient to compensate such Lender or such corporation controlling such Lender to the extent that such Lender determines such increase in capital is allocable to such Lender’s obligations hereunder.

(b)      Additional Costs. In addition to, and not in limitation of the immediately preceding clause (a), the Borrower shall promptly pay to the Administrative Agent for the account of a Lender from time to time such amounts as such Lender may reasonably determine to be necessary to compensate such Lender for any costs incurred by such Lender that it reasonably determines are attributable to its making or maintaining of any LIBOR Loans or its obligation to make any LIBOR Loans hereunder, any reduction in any amount receivable by such Lender under this Agreement or any of the other Loan Documents in respect of any of such LIBOR Loans or such obligation or the maintenance by such Lender of capital in respect of its LIBOR Loans or its Commitment (such increases in costs and reductions in amounts receivable being herein called “Additional Costs”), resulting from any Regulatory Change that: (i) changes the basis of taxation of any amounts payable to such Lender under this Agreement or any of the other Loan Documents in respect of any of such LIBOR Loans or its Commitment (other than taxes imposed on or measured by the overall net income of such Lender or of its Lending Office for any of such LIBOR Loans by the jurisdiction in which such Lender has its principal office or such Lending Office), or

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(ii) imposes or modifies any reserve, special deposit or similar requirements (excluding Regulation D of the Board of Governors of the Federal Reserve System or other similar reserve requirement applicable to any other category of liabilities or category of extensions of credit or other assets by reference to which the interest rate on LIBOR Loans is determined) relating to any extensions of credit or other assets of, or any deposits with or other liabilities of, or other credit extended by, or any other acquisition of funds by such Lender (or its parent corporation), or any commitment of such Lender (including without limitation, the Commitment of such Lender hereunder) or (iii) has or would have the effect of reducing the rate of return on capital of such Lender to a level below that which such Lender could have achieved but for such Regulatory Change (taking into consideration such Lender’s policies with respect to capital adequacy).

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

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

Section 4.2. Suspension of LIBOR Loans.
Anything herein to the contrary notwithstanding, if, on or prior to the determination of LIBOR for any Interest Period:

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

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

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

Section 4.3. Illegality.
Notwithstanding any other provision of this Agreement, if any Lender shall determine (which determination shall be conclusive and binding) that it is unlawful for such Lender to honor its obligation to make or maintain LIBOR Loans hereunder, then such Lender shall promptly notify the Borrower thereof (with a copy of such notice to the Administrative Agent) and such Lender’s obligation to make or Continue, or to Convert Base Rate Loans into, LIBOR Loans shall be suspended until such time as such Lender may again make and maintain LIBOR Loans (in which case the provisions of Section 4.5. shall be applicable).

Section 4.4. Compensation.
The Borrower shall pay to the Administrative Agent for the account of each Lender, upon the request of such Lender through the Administrative Agent, such amount or amounts as shall be sufficient to compensate such Lender for any loss, cost or expense that such Lender reasonably determines is attributable to:

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

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

Not in limitation of the foregoing, such compensation shall include, without limitation; in the case of a LIBOR Loan, an amount equal to the then present value of (i) the amount of interest that would have accrued on such LIBOR Loan for the remainder of the Interest Period at the rate applicable to such LIBOR Loan, less (ii) the amount of interest that would accrue on the same LIBOR Loan for the same period if LIBOR were set on the date on which such LIBOR Loan was repaid, prepaid or Converted or the date on which the Borrower failed to borrow, Convert or Continue such LIBOR Loan, as applicable, calculating present value by using as a discount rate LIBOR quoted on such date plus the Applicable Margin. Upon the Borrower’s request (made through the Administrative Agent), any Lender seeking compensation under this Section shall provide the Borrower with a statement setting forth the basis for requesting such compensation and the method for determining the amount thereof. Any such statement shall be conclusive absent manifest error.

Section 4.5. Treatment of Affected Loans.
If the obligation of any Lender to make LIBOR Loans or to Continue, or to Convert Base Rate Loans into, LIBOR Loans shall be suspended pursuant to Section 4.1.(c) or Section 4.3. then such Lender’s LIBOR Loans shall be automatically Converted into Base Rate Loans on the last day(s) of the then current Interest Period(s) for LIBOR Loans (or, in the case of a Conversion required by

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Section 4.1.(c) or Section 4.3. on such earlier date as such Lender may specify to the Borrower with a copy to the Administrative Agent) and, unless and until such Lender gives notice as provided below that the circumstances specified in Section 4.1.(c) or Section 4.3. that gave rise to such Conversion no longer exist:

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

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

If such Lender gives notice to the Borrower (with a copy to the Administrative Agent) that the circumstances specified in Section 4.1.(c) or Section 4.3. that gave rise to the Conversion of such Lender’s LIBOR Loans pursuant to this Section no longer exist (which such Lender agrees to do promptly upon such circumstances ceasing to exist) at a time when LIBOR Loans made by other Lenders are outstanding, then such Lender’s Base Rate Loans shall be automatically Converted, on the first day(s) of the next succeeding Interest Period(s) for such outstanding LIBOR Loans, to the extent necessary so that, after giving effect thereto, all Loans held by the Lenders holding LIBOR Loans and by such Lender are held pro rata (as to principal amounts, Types and Interest Periods) in accordance with the respective unpaid principal amount of the Loans held by each of the Lenders.

Section 4.6. Affected Lenders.
If (a) a Lender requests compensation pursuant to Section 3.10. or 4.1., and the Requisite Lenders are not also doing the same, (b) the obligation of a Lender to make LIBOR Loans or to Continue, or to Convert Base Rate Loans into LIBOR Loans shall be suspended pursuant to Section 4.1.(c) or 4.3. but the obligation of the Requisite Lenders shall not have been suspended under such Sections, or (c) a Lender is a Non‑Consenting Lender, then, so long as there does not then exist any Default or Event of Default, the Borrower may demand that such Lender (the “Affected Lender”), and upon such demand the Affected Lender shall promptly, assign its Commitment and all of its outstanding Loans to an Eligible Assignee subject to and in accordance with the provisions of Section 11.6.(b) for a purchase price equal to the aggregate principal balance of Loans then owing to the Affected Lender plus any accrued but unpaid interest thereon and accrued but unpaid fees and other amounts owing to the Affected Lender under the Loan Documents. Each of the Administrative Agent, the Borrower and the Affected Lender shall reasonably cooperate in effectuating the replacement of such Affected Lender under this Section, but at no time shall the Administrative Agent, such Affected Lender nor any other Lender be obligated in any way whatsoever to initiate any such replacement or to assist in finding an Eligible Assignee. The exercise by the Borrower of its rights under this Section shall be at the Borrower’s sole cost and expense and at no cost or expense to the Administrative Agent, the Affected Lender or any of the other Lenders. The terms of this Section shall not in any way limit the Borrower’s obligation to pay to any Affected Lender compensation owing to such Affected Lender pursuant to Section 3.10. or 4.1. No assignment resulting from a Lender being a Non-Consenting Lender shall be permitted unless the applicable assignee Lender shall have consented to the applicable amendment, waiver or consent.

Section 4.7. Assumptions Concerning Funding of LIBOR Loans.
Calculation of all amounts payable to a Lender under this Article IV. shall be made as though such Lender had actually funded LIBOR Loans through the purchase of deposits in the relevant market bearing interest at the rate applicable to such LIBOR Loans in an amount equal to the amount of the

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LIBOR Loans and having a maturity comparable to the relevant Interest Period; provided, however, that each Lender may fund each of its LIBOR Loans in any manner it sees fit and the foregoing assumption shall be used only for calculation of amounts payable under this Article IV.

Section 4.8. Change of Lending Office.
Each Lender agrees that it will use reasonable efforts to designate an alternate Lending Office with respect to any of its Loans affected by the matters or circumstances described in Sections 3.10., 4.1. or 4.3. to reduce the liability of the Borrower or avoid the results provided thereunder, so long as such designation is not disadvantageous to such Lender as determined by such Lender in its sole discretion, except that such Lender shall have no obligation to designate a Lending Office located in the United States of America.

Article V. Conditions Precedent
Section 5.1. Initial Conditions Precedent.
The effectiveness of this Agreement and the obligation of the Lenders to make the initial Loans are subject to the satisfaction or waiver of the following conditions precedent:

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

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

(ii)      Notes executed by the Borrower, payable to each applicable Lender (excluding any Lender that has requested that it not receive a Note) and complying with the terms of Section 2.11.(a);

(iii)      the Guaranty executed by each of the Guarantors initially required to be a party thereto pursuant to Section 7.15.(a)(i);

(iv)      an opinion of counsel to the Borrower and the other Loan Parties addressed to the Administrative Agent and the Lenders and covering the matters set forth on Exhibit H;

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

(vi)      the certificate or articles of incorporation, articles of organization, certificate of limited partnership, declaration of trust or other comparable organizational instrument (if any) of the Borrower and each other Loan Party, certified as of a recent date by the Secretary of State of the State of formation of such Loan Party, or in the case of any Loan Party that has not altered its organizational instrument since the date such Loan Party became a party to the Existing Credit Agreement, a certificate from the Secretary or Assistant Secretary (or other individual performing similar functions) of such Loan Party certifying that there have been no changes to the

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organizational instrument delivered by such Loan Party in connection with the Existing Credit Agreement;

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

(viii)      copies certified by the Secretary or Assistant Secretary (or other individual performing similar functions) of the Borrower and each other Loan Party of the by-laws of such Person, if a corporation, the operating agreement, if a limited liability company, the partnership agreement, if a limited or general partnership, or other comparable document in the case of any other form of legal entity, or in the case of any Loan Party that has not altered its by-laws, operating agreement, partnership agreement or other comparable document since the date such Loan Party became a party to the Existing Credit Agreement, a certificate from the Secretary or Assistant Secretary (or other individual performing similar functions) of such Loan Party certifying that there have been no changes to the by-laws, operating agreement, partnership agreement or other comparable document delivered by such Loan Party in connection with the Credit Agreement;

(ix)      copies certified by the Secretary or Assistant Secretary (or other individual performing similar functions) of the Borrower and each other Loan Party of all corporate, partnership, member or other necessary action taken by each such Loan Party to authorize the execution, delivery and performance of the Loan Documents to which it is a party;

(x)      a Disbursement Instruction Agreement executed by the Borrower effective as of the Agreement Date;

(xi)      a Compliance Certificate calculated as of the Parent’s fiscal quarter ended March 31, 2015 giving pro forma effect to the making of any Loans hereunder; and

(xii)      evidence satisfactory to the Administrative Agent that the Fees then due and payable under Section 3.5., together with all other fees, expenses and reimbursement amounts then due and payable to the Administrative Agent and any of the Lenders for which payment has been demanded, have been paid;

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

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

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(d)      The Borrower and the other Loan Parties shall have received all approvals, consents and waivers, and shall have made or given all necessary filings and notices as shall be required to consummate the transactions contemplated hereby without the occurrence of any default under or violation of (i) any Applicable Law or (ii) any agreement, document or instrument to which any Loan Party is a party or by which any of them or their respective properties is bound, except for such approvals, consents, waivers, filings and notices the receipt, making or giving of which, or the failure to make, give or receive which, would not reasonably be likely to (A) have a Material Adverse Effect, or (B) restrain or enjoin, impose materially burdensome conditions on, or otherwise materially and adversely affect the ability of the Borrower or any other Loan Party to fulfill its obligations under the Loan Documents to which it is a party; and

(e)      The Borrower and each other Loan Party shall have provided all information requested by the Administrative Agent and each Lender in order to comply with applicable “know your customer” and anti-money laundering rules and regulations, including without limitation, the Patriot Act.

Section 5.2. Conditions Precedent to All Credit Events.
The obligations of the Lenders to make any Loans are subject to the further condition precedent that: (a) no Default or Event of Default shall have occurred and be continuing as of the date of the making of such Loan or would exist immediately after giving effect thereto; (b) the representations and warranties made or deemed made by the Borrower and each other Loan Party in the Loan Documents to which any of them is a party, shall be true and correct in all material respects (except in the case of a representation or warranty qualified by materiality, in which case such representation or warranty shall be true and correct in all respects) on and as of the date of the making of such Loan with the same force and effect as if made on and as of such date except to the extent that such representations and warranties expressly relate solely to an earlier date (in which case such representations and warranties shall have been true and correct in all material respects (except in the case of a representation or warranty qualified by materiality, in which case such representation or warranty shall be true and correct in all respects) on and as of such earlier date) and except for changes in factual circumstances not prohibited under the Loan Documents; and (c) in the case of the borrowing of Loans, the Administrative Agent shall have received a timely Notice of Borrowing. Each Credit Event shall constitute a certification by the Borrower to the effect set forth in clauses (a) and (b) of the preceding sentence (both as of the date of the giving of notice relating to such Credit Event and, unless the Borrower otherwise notifies the Administrative Agent prior to the date of such Credit Event, as of the date of the occurrence of such Credit Event). In addition, if such Credit Event is the making of a Loan or, the Borrower shall be deemed to have represented to the Administrative Agent and the Lenders at the time such Loan is made that all conditions to the occurrence of such Credit Event contained in this Article V. have been satisfied or waived as permitted hereunder.

Article VI. Representations and Warranties
Section 6.1. Representations and Warranties.
In order to induce the Administrative Agent and each Lender to enter into this Agreement and the Lenders to make the Loans, each Borrower represents and warrants to the Administrative Agent and each Lender as follows:

(a)      Organization; Power; Qualification . Each of the Loan Parties is a corporation, partnership or other legal entity, duly organized or formed, validly existing and in good standing under the jurisdiction of its incorporation or formation, has the power and authority to own or lease its respective properties and to carry on its respective business as now being and hereafter proposed to be conducted and is duly qualified and is in good standing as a foreign corporation, partnership or other legal

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entity, and authorized to do business, in each jurisdiction in which the character of its properties or the nature of its business requires such qualification or authorization and where the failure to be so qualified or authorized could reasonably be expected to have, in each instance, a Material Adverse Effect.

(b)      Ownership Structure . Part I of Schedule 6.1.(b) is a complete and correct list, as of the Agreement Date of all Subsidiaries of the Parent, setting forth for each such Subsidiary (i) the jurisdiction of organization of such Subsidiary, (ii) each Person holding any Equity Interest in such Subsidiary (other than PREIT), (iii) the nature of the Equity Interests held by each such Person and (iv) the percentage of ownership of such Subsidiary represented by such Equity Interests. Except as disclosed in Part I of Schedule 6.1.(b), (w) each of the Parent and its Subsidiaries owns, free and clear of all Liens, and has the unencumbered right to vote, all outstanding Equity Interests in each Person shown to be held by it on such Schedule, (x) all of the issued and outstanding capital stock of each such Person organized as a corporation is validly issued, fully paid and nonassessable and (y) there are no outstanding subscriptions, options, warrants, commitments, preemptive rights or agreements of any kind (including, without limitation, any stockholders’ or voting trust agreements) for the issuance, sale, registration or voting of, or outstanding securities convertible into, any additional shares of capital stock of any class, or partnership or other ownership interests of any type in, any such Person. Part II of Schedule 6.1.(b) correctly sets forth, as of the Agreement Date, all Consolidated Affiliates and Unconsolidated Affiliates of the Parent, including the correct legal name of such Person, the type of legal entity which each such Person is, and all Equity Interests in such Person held directly or indirectly by the Parent.

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

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

(e)      Compliance with Law; Governmental Approvals . Each Loan Party and each other Subsidiary is in compliance with each Governmental Approval applicable to it and in compliance with all other Applicable Law relating to such Loan Party or such other Subsidiary except for noncompliances

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which, and Governmental Approvals the failure to possess, individually and in the aggregate, could not reasonably be expected to have a Material Adverse Effect.

(f)      Title to Properties . Schedule 6.1.(f) is, as of the Agreement Date, a complete and correct listing of all Properties of the Borrower, the other Loan Parties and all other Subsidiaries, setting forth, for each such Property, (i) to the best of the Loan Parties’ knowledge, the occupancy status of such Property as of March 31, 2015, (ii) whether such Property is a Project Under Development and, (iii) if such Property is a Project Under Development, the status of completion of such Property. Each Borrower, the other Loan Parties and all other Subsidiaries has good, marketable and legal title to, or a valid leasehold interest in, its respective assets necessary to the conduct of their businesses.

(g)      Existing Indebtedness; Liabilities . Part I of Schedule 6.1.(g) is, as of March 31, 2015 (unless otherwise indicated on Part I of such Schedule), a complete and correct listing of all Indebtedness (including all Guarantees of Indebtedness) of each Borrower, the other Loan Parties, the other Subsidiaries, any Consolidated Affiliates and any Unconsolidated Affiliates, and if such Indebtedness is secured by any Lien, a description of all of the property subject to such Lien. The aggregate principal amount of Indebtedness for which any Borrower, any other Loan Party, any other Subsidiary, any Consolidated Affiliate or any Unconsolidated Affiliate has become obligated since the dates referred to in the immediately preceding sentence, does not exceed $10,000,000 in the aggregate. As of the Agreement Date, the Loan Parties and the other Subsidiaries have performed and are in compliance with all of the terms of all Indebtedness of the Loan Parties and other Subsidiaries and all instruments and agreements relating thereto, and no default or event of default, or event or condition which with the giving of notice, the lapse of time, or both, would constitute such a default or event of default, exists with respect to any such Indebtedness. Part II of Schedule 6.1.(g) is, as of March 31, 2015, to the best of the Loan Parties’ knowledge, a complete and correct listing of all Total Liabilities of the Borrower, the other Loan Parties and the other Subsidiaries (excluding any Indebtedness set forth on Part I of such Schedule but including Contingent Obligations not set forth on Part I of such Schedule). The aggregate amount of Total Liabilities for which any Borrower, any other Loan Party, any other Subsidiary, any Consolidated Affiliate or any Unconsolidated Affiliate has become obligated since March 31, 2015 (excluding any Indebtedness set forth on Part I of such Schedule but including Contingent Obligations not set forth on Part I of such Schedule), does not exceed $10,000,000 in the aggregate.

(h)      Material Contracts . Schedule 6.1.(h) is, as of the Agreement Date, a true, correct and complete listing of all Material Contracts. As of the Agreement Date, all such Material Contracts are in full force and effect and each Loan Party and the other Subsidiaries that are parties to any Material Contract have performed and are in compliance with all of the terms of such Material Contract, and no default or event of default, or event or condition which with the giving of notice, the lapse of time, or both, would constitute such a default or event of default, exists with respect to any such Material Contract.

(i)      Litigation . Except as set forth on Schedule 6.1.(i), there are no actions, suits, proceedings or, to the knowledge of the Parent or PREIT, any investigations by any Governmental Authority pending (nor, to the knowledge of the Parent or PREIT, are there any actions, suits, proceedings or investigations by any Governmental Authority threatened, nor is there any basis therefor) against or in any other way relating adversely to or affecting a Borrower, any other Loan Party or any other Subsidiary or any of its respective property in any court or before any arbitrator of any kind or before or by any other Governmental Authority which (i) could reasonably be expected to have a Material Adverse Effect or (ii) in any manner draws into question by a Borrower, any other Loan Party or any other Subsidiary the validity or enforceability of any Loan Documents, and there are no strikes, slow downs, work stoppages or walkouts or other labor disputes in progress or threatened relating to any Loan Party or any other Subsidiary which could reasonably be expected to have a Material Adverse Effect.

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(j)      Taxes . All federal, state and other tax returns of the Loan Parties and the other Subsidiaries required by Applicable Law to be filed have been duly filed, and all federal, state and other taxes, assessments and other governmental charges or levies upon any Loan Party or any other Subsidiary and its respective properties, income, profits and assets which are due and payable have been paid, except any such nonpayment which is at the time permitted under Section 7.7. All charges, accruals and reserves on the books of the Parent and each of its Subsidiaries in respect of any taxes or other governmental charges are in accordance with GAAP.

(k)      Financial Statements . The Parent has furnished to each Lender copies of (i) the audited consolidated balance sheet of the Parent and its consolidated Subsidiaries for the fiscal year ended December 31, 2014, and the related consolidated statements of income, shareholders’ equity and cash flows for the fiscal year ended on such date, with the opinion thereon of KPMG LLP and (ii) the unaudited consolidated balance sheet of the Parent and its consolidated Subsidiaries for the fiscal quarter ended March 31, 2015, and the related unaudited consolidated statements of operations, shareholders’ equity and cash flow of the Borrower and its consolidated Subsidiaries for the fiscal quarter ended on such date. Such financial statements (including in each case related schedules and notes) present fairly, in accordance with GAAP consistently applied throughout the periods involved, and in all material respects, the consolidated financial position of the Parent and its consolidated Subsidiaries as at their respective dates and the results of operations and the cash flow for such periods (subject, as to interim statements, to changes resulting from normal year-end audit adjustments). Neither the Parent nor any of its Subsidiaries has on the Agreement Date any material contingent liabilities, liabilities, liabilities for taxes, unusual or long-term commitments or unrealized or forward anticipated losses from any unfavorable commitments, except as referred to or reflected or provided for in said financial statements.

(l)      No Material Adverse Change . Since December 31, 2012, there has been no material adverse change in the consolidated financial condition, results of operations, business or prospects of the Parent and its consolidated Subsidiaries taken as a whole. Each of the Borrower, the other Loan Parties and the other Subsidiaries is Solvent.

(m)      ERISA .

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

(ii)      With respect to any Benefit Arrangement that is a retiree welfare benefit arrangement, all amounts have been accrued on the applicable ERISA Group’s financial statements in accordance with Statement of Financial Accounting Standards No. 106. The

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“benefit obligation” of all Benefit Plans does not exceed the “fair market value of plan assets” for such Benefit Plans by more than $10,000,000 all as determined by and with such terms defined in accordance with Statement of Financial Accounting Standards No. 158.

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

(n)      Absence of Defaults . No Loan Party or any other Subsidiary is in default under its declaration of trust, certificate or articles of incorporation, bylaws, partnership agreement or other similar organizational documents, and no event has occurred, which has not been remedied, cured or waived: (i) which constitutes a Default or an Event of Default; or (ii) which constitutes, or which with the passage of time, the giving of notice, or both, would constitute, a default or event of default by any Loan Party or any other Subsidiary under any agreement (excluding any Loan Document) or judgment, decree or order to which any Loan Party or any other Subsidiary is a party or by which any such Person or any of its respective properties may be bound where such default or event of default could, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(o)      Environmental Laws . Each of the Borrower, the other Loan Parties and the other Subsidiaries: (i) is in compliance with all Environmental Laws applicable to its business, operations and the Properties, (ii) has obtained all Governmental Approvals which are required under Environmental Laws, and each such Governmental Approval is in full force and effect, and (iii) is in compliance with all terms and conditions of such Governmental Approvals, where with respect to each of the immediately preceding clauses (i) through (iii) the failure to obtain or to comply with could reasonably be expected to have a Material Adverse Effect. Except for any of the following matters that could not reasonably be expected to have a Material Adverse Effect, no Borrower has any knowledge of, nor has any Borrower, any other Loan Party or any other Subsidiary received notice of, any past, present, or pending releases, events, conditions, circumstances, activities, practices, incidents, facts, occurrences, actions, or plans that, with respect to any Borrower, any other Loan Party or any other Subsidiary, their respective businesses, operations or with respect to the Properties, may: (i) cause or contribute to an actual or alleged violation of or noncompliance with Environmental Laws, (ii) cause or contribute to any other potential common‑law or legal claim or other liability, or (iii) cause any of the Properties to become subject to any restrictions on ownership, occupancy, use or transferability under any Environmental Law or require the filing or recording of any notice, approval or disclosure document under any Environmental Law and, with respect to the immediately preceding clauses (i) through (iii) is based on or related to the on-site or off-site manufacture, generation, processing, distribution, use, treatment, storage, disposal, transport, removal, clean up or handling, or the emission, discharge, release or threatened release of any wastes or Hazardous Material, or any other requirement under Environmental Law. There is no civil, criminal, or administrative action, suit, demand, claim, hearing, notice, or demand letter, mandate, order, lien, request, investigation, or proceeding pending or, to any Borrower’s knowledge after due inquiry, threatened, against the Parent, any other Borrower, any other Loan Party or any other Subsidiary relating in any way to Environmental Laws which could reasonably be expected to have a Material Adverse Effect. None of the Properties is listed on or proposed for listing on the National Priority List promulgated pursuant to the Comprehensive Environmental Response, Compensation and Liability Act of 1980 and its implementing

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regulations, or any state or local priority list promulgated pursuant to any analogous state or local law. To the best of the Borrower’s knowledge, no Hazardous Materials generated at or transported from the Properties is or has been transported to, or disposed of at, any location that is listed or proposed for listing on the National Priority List or any analogous state or local priority list, or any other location that is or has been the subject of a clean-up, removal or remedial action pursuant to any Environmental Law, except to the extent that such transportation or disposal could not reasonably be expected to result in a Material Adverse Effect.

(p)      Investment Company; Etc . No Loan Party nor any other Subsidiary is (i) an “investment company” or a company “controlled” by an “investment company” within the meaning of the Investment Company Act of 1940, as amended, or (ii) subject to any other Applicable Law which purports to regulate or restrict its ability to borrow money obtain other extensions of credit or to consummate the transactions contemplated by this Agreement or to perform its obligations under any Loan Document to which it is a party.

(q)      Margin Stock . No Loan Party nor any other Subsidiary is engaged principally, or as one of its important activities, in the business of extending credit for the purpose, whether immediate, incidental or ultimate, of buying or carrying “margin stock” within the meaning of Regulation U of the Board of Governors of the Federal Reserve System.

(r)      Affiliate Transactions . Except as permitted by Section 8.8., no Loan Party is a party to or bound by any agreement or arrangement (whether oral or written) to which any Affiliate of the Borrower is a party.

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

(t)      Business . As of the Agreement Date, the Parent, each other Borrower, the other Loan Parties and the other Subsidiaries are engaged in the business of acquiring, developing, owning, operating and managing primarily retail real estate, but also office, multi-family and industrial properties, together with related business activities and investments incidental thereto.

(u)      Accuracy and Completeness of Information . All written information, reports and other papers and data (excluding financial projections or other forward looking statements) furnished to the Administrative Agent or any Lender by, or at the direction of, the Parent, any other Borrower, any other Loan Party or any other Subsidiary were, at the time the same were so furnished, to the best of the Parent’s and PREIT’s knowledge, complete and correct in all material respects, to the extent necessary to give the recipient a true and accurate knowledge of the subject matter, or, in the case of financial statements, present fairly, in accordance with GAAP consistently applied throughout the periods

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involved, the financial position of the Persons involved as at the date thereof and the results of operations for such periods. All financial projections and other forward looking statements prepared by or on behalf of the Parent, any other Borrower or any other Loan Party or Subsidiary that have been or may hereafter be made available to the Administrative Agent or any Lender were or will be prepared in good faith based on reasonable assumptions. No document furnished or written statement made, in each case by, or at the direction of any Loan Party or any other Subsidiary to the Administrative Agent or any Lender in connection with the negotiation, preparation or execution of any Loan Document contains or will contain any untrue statement of a fact material to the creditworthiness of the Loan Parties and other Subsidiaries, taken as a whole, or omits, or will omit to state a fact material to the creditworthiness of the Loan Parties and the other Subsidiaries, taken as a whole, which is necessary in order to make the statements contained therein not misleading.

(v)      Not Plan Assets . None of the assets of the Parent, any other Borrower, any other Loan Party or any other Subsidiary constitutes “plan assets” within the meaning of ERISA, the Internal Revenue Code and the respective regulations promulgated thereunder. Assuming that no Lender funds any amount payable by it hereunder with “plan assets,” as that term is defined in 29 C.F.R. 2510.3-101 (as modified by Section 3(42) of ERISA), the execution, delivery and performance of this Agreement and the other Loan Documents, and the extensions of credit and repayment of amounts hereunder, do not and will not constitute “prohibited transactions” under ERISA or the Internal Revenue Code.

(w)      Non-Guarantor Subsidiaries . Schedule 6.1.(w) is, as of the Agreement Date, a complete and correct list of all Subsidiaries which are not required to become a Guarantor as of the Agreement Date, setting forth for each such Person, the correct legal name of such Person, the type of legal entity which each such Person is, all equity interests in such Person held directly or indirectly by the Parent and the reason such Subsidiary is not required to become a Guarantor as of the Agreement Date.

(x)      OFAC . None of the Borrower, any of the other Loan Parties, any of the other Subsidiaries, or any other Affiliate of the Borrower: (i) is a person named on the list of Specially Designated Nationals or Blocked Persons maintained by the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) available at http://www.treas.gov/offices/enforcement/ofac/index.shtml, or as otherwise published from time to time; (ii) is (A) an agency of the government of a country, (B) an organization controlled by a country, or (C) a person resident in a country that is subject to a sanctions program identified on the list maintained by OFAC and available at http://www.treas.gov/offices/enforcement/ofac/index.shtml, or as otherwise published from time to time, as such program may be applicable to such agency, organization or person; or (iii) derives any of its assets or operating income from investments in or transactions with any such country, agency, organization or person; and none of the proceeds from the Loans will be used to finance any operations, investments or activities in, or make any payments to, any such country, agency, organization, or person or in any manner that would directly or indirectly violate Anti-Corruption Laws.

Section 6.2. Survival of Representations and Warranties, Etc.
All statements contained in any certificate, financial statement or other instrument delivered by, or at the direction of, any Loan Party or any other Subsidiary to the Administrative Agent or any Lender (other than the content of any projections or other similar forward looking statements) pursuant to or in connection with this Agreement or any of the other Loan Documents (including, but not limited to, any such statement made in or in connection with any amendment thereto or any statement contained in any certificate, financial statement or other instrument delivered by, or at the direction of, the Parent or PREIT prior to the Agreement Date and delivered to the Administrative Agent or any Lender in connection with closing the transactions contemplated hereby) shall constitute representations and warranties made by the Parent and PREIT under this Agreement. All representations and warranties made under this Agreement

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and the other Loan Documents shall be deemed to be made at and as of the Agreement Date, the Effective Date and at and as of the date of the occurrence of any Credit Event, except to the extent that such representations and warranties expressly relate solely to an earlier date (in which case such representations and warranties shall have been true and correct on and as of such earlier date) and except for changes in factual circumstances not prohibited under the Loan Documents. All such representations and warranties shall survive the effectiveness of this Agreement, the execution and delivery of the Loan Documents and the making of the Loans.

Article VII. Affirmative Covenants
For so long as this Agreement is in effect, unless the Requisite Lenders (or, if required pursuant to Section 11.7.(b), all of the Lenders directly affected thereby) shall otherwise consent in the manner provided for in Section 11.7., the Parent and each other Borrower, as applicable, shall comply with the following covenants:

Section 7.1. Financial Reporting and Other Information.
(a)      The Parent shall furnish to the Administrative Agent for distribution to each of the Lenders each of the following:

(i)      Quarterly Financial Statements . As soon as available and in any event when the same is required to be filed with the Securities and Exchange Commission, but in no event later than 45 days after the close of each of the first, second and third fiscal quarters of the Parent, the unaudited consolidated balance sheet of the Parent and its Subsidiaries as at the end of such period and the related unaudited consolidated statements of income and cash flows of the Parent and its Subsidiaries for such period, and setting forth in each case in comparative form the figures for the corresponding periods of the previous fiscal year, all of which shall be accompanied by a statement signed by the chief financial officer of the Parent on behalf of the Parent stating that, in his or her opinion, such statements present fairly, in accordance with GAAP and in all material respects, the consolidated financial position of the Parent and its Subsidiaries as at the date thereof and the results of operations for such period (subject to normal year‑end audit adjustments).

(ii)      Year-End Statements . As soon as available and in any event when the same is required to be filed with the Securities and Exchange Commission, but in no event later than 90 days after the end of each fiscal year of the Parent, the audited consolidated balance sheet of the Parent and its Subsidiaries as at the end of such fiscal year and the related audited consolidated statements of income and cash flows of the Parent and its Subsidiaries for such fiscal year, setting forth in comparative form the figures as at the end of and for the previous fiscal year, all of which shall be (a) accompanied by a statement signed by the chief financial officer of the Parent on behalf of the Parent stating that, in his or her opinion, such statements present fairly, in accordance with GAAP and in all material respects, the financial position of the Parent and its Subsidiaries as at the date thereof and the result of operations for such period and (b) certified by KPMG LLP or any other independent certified public accountants of recognized national standing acceptable to the Administrative Agent, whose opinion shall be unqualified, or if qualified, any such qualification shall be satisfactory to the Administrative Agent, and who shall have authorized the Parent to deliver such financial statements and certification thereof to the Administrative Agent and the Lenders pursuant to this Agreement.

(iii)      Compliance Certificate . At the time the financial statements are furnished pursuant to the immediately preceding subsections (a)(i) and (a)(ii), a certificate substantially in

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the form of Exhibit I (a “Compliance Certificate”) executed on behalf of the Parent by the chief financial officer of the Parent (A) setting forth as of the end of such quarterly accounting period or fiscal year, as the case may be, the calculations required to establish whether or not the Parent and each other Borrower, as applicable, were in compliance with the covenants contained in Section 8.1., including, without limitation, in each case, the reconciliation calculations and other calculations utilized by the Parent to adjust the results set forth in the Parent’s financial statements (which may include a consolidation of Variable Interest Entities) to account for the Variable Interest Entities; and (B) stating that no Default or Event of Default exists or, if such is not the case, specifying such Default or Event of Default and its nature, when it occurred and, whether it is continuing and the steps being taken by the Parent or PREIT with respect to such event, condition or failure.

(iv)      Pricing Certificate . Prior to the Investment Grade Rating Date, at the time the financial statements are furnished pursuant to subsections (a)(i) and (a)(ii) above, a certificate in the form of Exhibit J setting forth at the end of such quarterly accounting period or fiscal year, as the case may be, (A) the calculations required to establish the ratio of Total Liabilities to Gross Asset Value and (B) stating the corresponding Level of Applicable Margin with respect to such ratio.

(v)      Reports from Accountants . Upon the request of the Administrative Agent, copies of all reports, if any, submitted to the Parent or its Board of Trustees by its independent public accountants including, without limitation, any management report.

(vi)      Shareholder Information . Promptly upon the mailing thereof to the shareholders of the Parent generally, copies of all financial statements, reports, proxy statements and other written information so mailed and promptly upon the issuance thereof copies of all press releases issued by the Parent, any other Borrower, any other Subsidiary or any other Loan Party; provided, however, the Parent need not deliver any such information to the Administrative Agent so long as the Parent makes such information generally available on its website free of charge and the Parent notifies the Administrative Agent when any such information has been posted to the Parent’s website.

(vii)      Securities Filings . Within 10 Business Days of the filing thereof, copies of all registration statements (excluding the exhibits thereto and any registration statements on Form S‑8 or its equivalent), reports on Forms 10‑K, 10‑Q and 8‑K (or their equivalents) and all other periodic reports which the Parent, any other Borrower, any other Loan Party or any other Subsidiary shall file with the Securities and Exchange Commission (or any Governmental Authority substituted therefor) or any national securities exchange; provided, however, the Parent need not deliver any such information to the Administrative Agent so long as the Parent makes such information generally available on its website free of charge and the Parent notifies the Administrative Agent when any such information has been posted to the Parent’s website.

(viii)      Operating Summary; Rent Roll; Etc. At the time the year-end financial statements are furnished pursuant to the immediately preceding subsection (a)(ii), with respect to each Unencumbered Property (A) an operating summary prepared in accordance with GAAP for the four fiscal quarters most recently ended, including without limitation, a statement of NOI, (B) a current rent roll for such Property, and (C)  such other information reasonably requested by the Administrative Agent, in each case certified by a representative of the Parent to be true and correct in all material respects. The Temporary Leases and Tower Leases need not be shown on any such rent roll, but income therefrom shall be included in any applicable operating summary as specialty leasing income or otherwise; provided, however, that not more than 20 Business

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Days following the Administrative Agent’s request, the Parent shall furnish to the Administrative Agent a list for each Temporary Lease and Tower Lease, setting forth in detail reasonably satisfactory to the Administrative Agent, the tenant party to such Temporary Lease and such Tower Lease, the square feet of gross leasable area leased thereunder, and the income therefrom that has been included in any applicable operating summary as specialty leasing income or otherwise.

(ix)      Annual Budget and Plans of the Parent . No later than 15 days after the beginning of each fiscal year of the Parent, projected balance sheets, operating statements and cash flow budgets of the Parent and its Subsidiaries on a consolidated basis for each quarter of such fiscal year, all itemized in reasonable detail. The foregoing shall be accompanied by pro forma calculations, together with detailed assumptions, required to establish whether or not the Parent, and when appropriate its consolidated Subsidiaries, will be in compliance with the covenants contained in Section 8.1. at the end of each fiscal quarter of such fiscal year.

(x)      Report on Sources and Uses Funds . Within 20 Business Days of the Administrative Agent’s request therefor (but not more frequently than once per quarter so long as no Event of Default exists), a report in form and substance reasonably satisfactory to the Administrative Agent detailing the Parent’s, together with its Subsidiaries’, projected sources and uses of cash for the period of four consecutive fiscal quarters immediately following the date of the Administrative Agent’s request. Such sources shall include but not be limited to excess operating cash flow, availability under this Agreement, unused availability under committed development loans, unfunded committed equity and any other committed sources of funds. Such uses shall include but not be limited to cash obligations for binding acquisitions, unfunded development costs, capital expenditures, debt service, overhead, dividends, maturing project loans, hedge settlements and other anticipated uses of cash.

(xi)      Ownership, Investment and Recourse Share Calculations . Promptly upon the request of the Administrative Agent (but not more frequently than quarterly so long as no Event of Default exists), evidence of the Parent’s calculation of the Ownership Share, Investment Share and Recourse Share with respect to each Consolidation Exempt Entity, such evidence to be in form and detail reasonably satisfactory to the Administrative Agent.

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

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

(xiv)      Modification of Organizational Documents . At least five (5) Business Days prior to the effectiveness thereof, a copy of any material amendment or other material modification to

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the Trust Agreement, the Partnership Agreement, the bylaws of PREIT-RUBIN, or other organizational documents of a Borrower.

(xv)      Material Adverse Change . Prompt notice of any change in the business, assets, liabilities, financial condition, results of operations of the Parent, any other Borrower, any other Loan Party or any other Subsidiary which has had or could reasonably be expected to have Material Adverse Effect.

(xvi)      Default . Prompt notice of the occurrence of (i) any Default, or (ii) Event of Default, or (iii) the occurrence of any event which constitutes or which with the passage of time, the giving of notice, or otherwise, would constitute an event of default by the Parent, any other Borrower, any other Loan Party or any other Subsidiary under any Material Contract to which any such Person is a party or by which any such Person or any of its respective properties may be bound.

(xvii)      Material Contracts . Promptly upon entering into any Material Contract or Specified Derivatives Contact after the Agreement Date, a copy of such Material Contract or Specified Derivatives Contract to the Administrative Agent.

(xviii)      Judgments . Prompt notice of (A) any order, judgment or decree in excess of $1,000,000 having been entered against a Loan Party that owns or leases an Unencumbered Property and (B) any other order, judgment or decree in excess of $10,000,000 having been entered against the Parent, any other Borrower or any Material Subsidiary or any of their respective properties or assets.

(xix)      Notice of Violations of Law . Any notification of a violation of any Applicable Law or any inquiry regarding the same shall have been received by the Parent, any other Borrower, any other Loan Party or any other Subsidiary from any Governmental Authority, which could reasonably be expected to have a Material Adverse Effect.

(xx)      Subsidiaries . Notice, within 45 days after the end of the quarter in which it occurs, of the acquisition, incorporation or other creation of any Subsidiary, the purpose for such Subsidiary, the nature of the assets and liabilities thereof and whether such Subsidiary is a Wholly Owned Subsidiary of the Parent.

(xxi)      Notice of Violation of Environmental Laws . Promptly, and in any event within 10 Business Days after a Responsible Officer of the Parent or PREIT obtains knowledge thereof, the Parent or PREIT, as applicable, shall provide the Administrative Agent with written notice of the occurrence of any of the following: (i) the Parent, any other Borrower, any other Loan Party or any other Subsidiary shall receive notice that any violation of or noncompliance with any Environmental Law has or may have been committed or is threatened; (ii) the Parent, any other Borrower, any other Loan Party or any other Subsidiary shall receive notice that any administrative or judicial complaint, order or petition has been filed or other proceeding has been initiated, or is about to be filed or initiated against any such Person alleging any violation of or noncompliance with any Environmental Law or requiring any such Person to take any action in connection with the release or threatened release of Hazardous Materials; (iii) the Parent, any other Borrower, any other Loan Party or any other Subsidiary shall receive any notice from a Governmental Authority or private party alleging that any such Person may be liable or responsible for any costs associated with a response to, or remediation or cleanup of, a release or threatened release of Hazardous Materials or any damages caused thereby; or (iv) the Parent, any other Borrower, any other

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Loan Party or any other Subsidiary shall receive notice of any other fact, circumstance or condition that could reasonably be expected to form the basis of an environmental claim, and the matters referred to in such notice(s) under clauses (i) through (iv), whether individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

(xxii)      Credit Rating . At all times after the Investment Grade Rating Date, promptly upon any change in the Parent’s Credit Rating from any Rating Agency, a certificate of a Responsible Officer of the Parent stating that such Credit Rating has changed and the new Credit Rating that is in effect.

(xxiii)      Other Information, Etc. From time to time and promptly upon each request, such data, certificates, reports, statements, opinions of counsel, documents or further information regarding the business, assets, liabilities, financial condition, results of operations of the Parent, any other Borrower, any other Loan Party or any other Subsidiary as the Administrative Agent (or any Lender through the Administrative Agent) may reasonably request.

(b)      Electronic Delivery of Certain Information .

(i)      Documents required to be delivered pursuant to the Loan Documents shall be delivered by electronic communication and delivery, including, the Internet, e-mail or intranet websites to which the Administrative Agent and each Lender have access (including a commercial, third-party website such as www.sec.gov or a website sponsored or hosted by the Administrative Agent or the Borrower) provided that (A) the foregoing shall not apply to notices to any Lender pursuant to Article II. and (B) any Lender has not notified the Administrative Agent or Borrower that it cannot or does not want to receive electronic communications. The Administrative Agent or the Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic delivery pursuant to procedures approved by it for all or particular notices or communications. Documents or notices delivered electronically shall be deemed to have been delivered twenty-four (24) hours after the date and time on which the Administrative Agent or the Borrower posts such documents or the documents become available on a commercial website and the Administrative Agent, the Borrower notifies each Lender of said posting and provides a link thereto provided if such notice or other communication is not sent or posted during the normal business hours of the recipient, said posting date and time shall be deemed to have commenced as of 11:00 a.m. Central time on the opening of business on the next business day for the recipient. Notwithstanding anything contained herein, in every instance the Parent shall be required to provide paper copies of the certificate required by Section 7.1.(a)(iii) to the Administrative Agent (absent consent otherwise from the Administrative Agent), and shall deliver paper copies of any documents to the Administrative Agent or to any Lender that requests such paper copies until a written request to cease delivering paper copies is given by the Administrative Agent or such Lender. The Administrative Agent shall have no obligation to request the delivery of or to maintain paper copies of the documents delivered electronically, and in any event shall have no responsibility to monitor compliance by the Parent or any other Borrower with any such request for delivery. Each Lender shall be solely responsible for requesting delivery to it of paper copies and maintaining its paper or electronic documents.

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

(c)      Patriot Act Notice; Compliance . The Patriot Act and federal regulations issued with respect thereto require all financial institutions to obtain, verify and record certain information that

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

(d)      Public/Private Information . The Borrower shall cooperate with the Administrative Agent in connection with the publication of certain materials and/or information provided by or on behalf of the Borrower. Documents required to be delivered pursuant to the Loan Documents shall be delivered by or on behalf of the Borrower to the Administrative Agent and the Lenders (collectively, “Information Materials”) pursuant to this Article and shall designate Information Materials (a) that are either available to the public or not material with respect to the Parent, any other Borrower and the other Subsidiaries or any of their respective securities for purposes of United States federal and state securities laws, as “Public Information” and (b) that are not Public Information as “Private Information”.

Section 7.2. Preservation of Existence and Similar Matters.
Except as otherwise permitted under Section 8.5., the Borrower shall preserve and maintain, and cause each other Loan Party and each other Subsidiary to preserve and maintain, its respective existence, rights, franchises, licenses and privileges in the jurisdiction of its incorporation or formation and qualify and remain qualified and authorized to do business in each jurisdiction in which the character of its properties or the nature of its business requires such qualification and authorization and where the failure to be so authorized and qualified could reasonably be expected to have a Material Adverse Effect.

Section 7.3. Compliance with Applicable Law.
The Borrower shall comply, and shall cause each other Loan Party and each other Subsidiary to comply, with all Applicable Law, including the obtaining of all Governmental Approvals, the failure with which to comply could reasonably be expected to have a Material Adverse Effect.

Section 7.4. Maintenance of Property.
In addition to the requirements of any of the other Loan Documents, the Borrower shall, and shall cause each other Loan Party and each other Subsidiary to, (a) protect and preserve all of its properties, including, but not limited to, all Intellectual Property, and maintain in good repair, working order and condition all tangible properties, ordinary wear and tear and casualty excepted, and (b) from time to time make or cause to be made all needed and appropriate repairs, renewals, replacements and additions to such properties, so that the business carried on in connection therewith may be properly and advantageously conducted at all times except where the failure to do any of the foregoing under clauses (a) and (b) herein could not reasonably be expected to have a Material Adverse Effect.

Section 7.5. Conduct of Business.
The Borrower shall at all times carry on, and, except as permitted under Section 8.5., cause each of their respective Subsidiaries to carry on, its respective businesses as described in Section 6.1.(t).

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Section 7.6. Insurance.
In addition to the requirements of any of the other Loan Documents, the Borrower shall, and shall cause each other Loan Party and each other Subsidiary to, maintain insurance with insurance carriers with a financial strength rating of A- or better by S&P (the “Required Financial Rating”) against such risks and in such amounts as is customarily maintained by similar businesses or as may be required by Applicable Law; provided, however, that if at any time an insurance carrier with whom any Borrower, any other Loan Party or any other Subsidiary is maintaining insurance is downgraded so that it no longer has the Required Financial Rating, such Borrower, such other Loan Party or such other Subsidiary shall have until the date that is 180 days after such downgrade to obtain insurance with an insurance carrier that has the Required Financial Rating. The Borrower shall from time to time deliver to the Administrative Agent upon request a detailed list, together with copies of all policies of the insurance then in effect, stating the names of the insurance companies, the amounts and rates of the insurance, the dates of the expiration thereof and the properties and risks covered thereby and insurance certificates, in form acceptable to the Administrative Agent, providing that the insurance coverage required under this Section (including without limitation, both property and liability insurance) is in full force and effect.

Section 7.7. Payment of Taxes and Claims.
The Borrower shall pay or discharge, and cause each other Loan Party and each other Subsidiary to pay and discharge, when due (a) all taxes, assessments and governmental charges or levies imposed upon it or upon its income or profits or upon any properties belonging to it, and (b) all lawful claims of materialmen, mechanics, carriers, warehousemen and landlords for labor, materials, supplies and rentals which, if unpaid, might become a Lien on any properties of such Person, except in each case, any such non-payment or failure to discharge which could not reasonably be expected to have a Material Adverse Effect; provided, however, that this Section shall not require the payment or discharge of any such tax, assessment, charge, levy or claim which is being contested in good faith by appropriate proceedings which operate to suspend the collection thereof and for which adequate reserves have been established on the books of such Borrower, such other Loan Party or such other Subsidiary, as applicable, in accordance with GAAP.

Section 7.8. Books and Records; Visits and Inspections.
The Borrower will keep, and will cause each other Loan Party and each other Subsidiary to keep, proper books of record and account in which full, true and correct entries shall be made of all dealings and transactions in relation to its business and activities. The Borrower will permit, and will cause each Subsidiary to permit, representatives of the Administrative Agent or any Lender to visit and inspect any of their respective properties, to examine and make abstracts from any of their respective books and records and to discuss their respective affairs, finances and accounts with their respective officers, employees and independent public accountants in the Borrower’s presence prior to an Event of Default, all at such reasonable times during business hours and as often as may reasonably be desired and so long as no Event of Default shall have occurred and be continuing, with reasonable notice and, at any time after the occurrence and during the continuance of a Default or Event of Default, all at the Borrower’s expense.

Section 7.9. Use of Proceeds.
(a)      Loans . The Borrower will use the proceeds of Loans for (i) the repayment of Indebtedness, (ii) payment of development or redevelopment costs and (iii) working capital and general corporate purposes of the Borrower and the other Subsidiaries.

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(b)      Margin Stock . The Borrower shall not, and shall not permit any other Loan Party or any other Subsidiary, to use any part of the proceeds of any Loan to purchase or carry, or to reduce or retire or refinance any credit incurred to purchase or carry, any margin stock (within the meaning of Regulation U of the Board of Governors of the Federal Reserve System) or to extend credit to others for the purpose of purchasing or carrying any such margin stock; provided, however, that, the Borrower may use proceeds of the Loans to purchase margin stock so long as such use will not result in any of the Loans being considered to be “purpose credit” directly or indirectly secured by margin stock within the meaning of Regulation U or Regulation X of the Board of Governors of the Federal Reserve System.

Section 7.10. Environmental Matters.
The Borrower shall, and shall cause each other Loan Party and each other Subsidiary to, comply, and the Borrower shall use, and shall cause each other Loan Party and each other Subsidiary to use, commercially reasonable efforts to cause all other Persons occupying, using or present on the Properties to comply, with all Environmental Laws the failure with which to comply could reasonably be expected to have a Material Adverse Effect. The Borrower shall, and shall cause each other Loan Party and each other Subsidiary to, promptly take all actions necessary for it and for the Properties to comply with all Environmental Laws and all Governmental Approvals, including actions to remove and dispose of all Hazardous Materials and to clean up the Properties as required under Environmental Laws, where the failure to comply could reasonably be expected to have Material Adverse Effect. The Borrower shall, and shall cause the other Loan Parties and the other Subsidiaries to, promptly take all actions necessary to prevent the imposition of any Liens on any of the Properties arising out of or related to any Environmental Laws that could reasonably be expected to have a Material Adverse Effect. Nothing in this Section shall impose any obligation or liability whatsoever on the Administrative Agent or any Lender, nor shall anything in this Section create rights in third parties or impose obligations or costs on the Borrower or the other Loan Parties to third parties.

Section 7.11. Further Assurances.
At the Borrower’s cost and expense, upon request of the Administrative Agent, the Borrower shall, and shall cause the other Loan Parties to, duly execute and deliver or cause to be duly executed and delivered, to the Administrative Agent such further instruments, documents and certificates, and do and cause to be done such further acts that may be reasonably necessary or advisable in the reasonable opinion of the Administrative Agent to carry out more effectively the provisions and purposes of this Agreement and the other Loan Documents.

Section 7.12. Material Contracts.
Each Borrower shall, and shall cause each other Loan Party and each other Subsidiary to, duly and punctually perform and comply with any and all material representations, warranties, covenants and agreements expressed as binding upon any such Person under any Material Contract and no Borrower shall, nor shall any Borrower permit any other Loan Party or any other Subsidiary to, do or knowingly permit to be done anything to impair materially the value of any of the Material Contracts.

Section 7.13. REIT Status.
The Parent shall at all times maintain its status as a REIT.

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Section 7.14. Exchange Listing.
The Parent shall maintain at least one class of common shares of the Parent having trading privileges on the New York Stock Exchange or the American Stock Exchange or which is subject to price quotations on The NASDAQ Stock Market’s National Market System.

Section 7.15. Guarantors; Release of Guarantors.
(a)      Generally .

(i)      Subject to subsection (d) below, at all times prior to the Parent providing written notice to the Administrative Agent that the Parent has received an Investment Grade Rating from at least (A) S&P and Moody’s or (B) S&P or Moody’s and any other Rating Agency (the date of the Administrative Agent’s receipt of such notice, the “Guarantor Requirement Change Date”), the Parent shall cause (1) each Significant Subsidiary (other than an Excluded Subsidiary), (2) each Subsidiary that owns or leases an Unencumbered Property, (3) each Subsidiary (other than a Borrower) that owns, directly or indirectly, a Subsidiary described in the immediately preceding clause (2), and (4) so long as the Existing Credit Agreement remains in effect, each Subsidiary that is a “Guarantor” under and as defined in the Existing Credit Agreement, in each case, that is not already a Guarantor to execute and deliver to the Administrative Agent an Accession Agreement to the Guaranty, together with the other items required to be delivered under the immediately following subsection (c).

(ii)      Subject to subsection (d) below, on and at all times after the Guarantor Requirement Change Date, the Parent shall cause any Subsidiary (other than an Excluded Subsidiary) that is not already a Guarantor and to which any of the following conditions applies to execute and deliver to the Administrative Agent an Accession Agreement to the Guaranty (or if the Guaranty has previously been terminated because all Guarantors party to it have been released pursuant to subsection (d) below, a Guaranty), together with the other items required to be delivered under the immediately following subsection (c):

(A)      such Subsidiary Guarantees, or otherwise becomes obligated in respect of, any Indebtedness of a Borrower or any other Subsidiary of a Borrower (other than Indebtedness under Guarantees which are solely Guarantees of performance and not of payment and other Guarantees of such Person for liabilities arising from Nonrecourse Exceptions); or

(B)      (1) such Subsidiary owns any Unencumbered Property and (2) such Subsidiary, or any other Subsidiary that directly or indirectly owns any Equity Interests in such Subsidiary, has incurred, acquired or suffered to exist any Indebtedness other than Nonrecourse Indebtedness.

Any such Accession Agreement (or Guaranty, as applicable) and the other items required under such subsection (b) must be delivered to the Administrative Agent no later than 45 days following the last day of the Parent’s fiscal quarter during which any of the above conditions first applies to a Subsidiary; provided , however , prior to the Guarantor Requirement Change Date, the NOI of a Property owned by a Subsidiary that is not already a Guarantor shall not be included in any calculation of Unencumbered NOI or Unencumbered Debt Yield unless and until such Subsidiary executes and delivers to the Administrative Agent an Accession Agreement (or Guaranty, as applicable) and the other items required to be delivered under the immediately following subsection (c).

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(b)      Other Guarantors . The Parent may, at its option, cause any other Person that is not already a Guarantor to become a Guarantor by causing such Person to execute and deliver to the Administrative Agent an Accession Agreement to the Guaranty, together with the other items required to be delivered under the immediately following subsection (c).

(c)      Required Deliveries . Each Accession Agreement (or Guaranty, as applicable) delivered by a Subsidiary required to become a Guarantor under the immediately preceding subsection (a) (each, a “New Guarantor”) shall be accompanied by (i) the items that would have been delivered under Sections 5.1.(a)(iv) through (ix) if such New Guarantor had been a Guarantor on the Agreement Date; (ii) if such New Guarantor is not a Wholly Owned Subsidiary, a written acknowledgement of all Persons (other than Loan Parties) holding Equity Interests in such New Guarantor, pursuant to which such Persons acknowledge and consent to the Guaranty made by such New Guarantor and (iii) such other documents and instruments as the Administrative Agent may reasonably request.

(d)      Release of Certain Guarantors . The Borrower may request in writing that the Administrative Agent release a Guarantor from the Guaranty if (i) such Guarantor is not, or immediately upon its release will not be, required to be a party to the Guaranty under the immediately preceding subsection (a) because of events or transactions not otherwise prohibited under any of the Loan Documents, (ii) no Event of Default shall then be in existence or would occur as a result of such release and (iii) the representations and warranties made or deemed made by the Borrower and each other Loan Party in the Loan Documents to which any of them is a party, shall be true and correct on and as of the date of such request and after giving effect to such release with the same force and effect as if made on and as of such date except to the extent that such representations and warranties expressly relate solely to an earlier date (in which case such representations and warranties shall have been true and correct on and as of such earlier date) and except for changes in factual circumstances not prohibited under the Loan Documents. Together with any such request, the Borrower shall deliver to the Administrative Agent a certificate signed by the chief financial officer of the Parent certifying that the conditions set forth in immediately preceding clauses (i), (ii) and (iii) will be true and correct upon the release of such Guarantor. No later than 10 Business Days (or such shorter period as may be agreed to in writing by the Administrative Agent in its sole discretion) following the Administrative Agent’s receipt of such written request and the related certificate, and so long as the conditions set forth in immediately preceding clauses (i), (ii) and (iii) will be true and correct, the release shall be effective and Administrative Agent shall execute and deliver, at the sole cost and expense of the Borrower, such documents as the Borrower may reasonably request to evidence such release. For the avoidance of doubt, this subsection (d) shall also apply to any request by the Borrower to release any Guarantor on or about the Guarantor Requirement Change Date.

(e)      Automatic Release of Guarantors . If a Guarantor under and as defined in the Existing Credit Agreement that is a Guarantor hereunder solely by reason of Section 7.15.(a)(i)(4) is released as a “Guarantor” under the Existing Credit Agreement, such Guarantor shall be automatically released as a Guarantor hereunder (without any further action by the Administrative Agent or the Lenders) so long as (i) no Event of Default shall then be in existence or would occur as a result of such release and (ii) the representations and warranties made or deemed made by the Borrower and each other Loan Party in the Loan Documents to which any of them is a party, shall be true and correct on and as of the date of such request and after giving effect to such release with the same force and effect as if made on and as of such date except to the extent that such representations and warranties expressly relate solely to an earlier date (in which case such representations and warranties shall have been true and correct on and as of such earlier date) and except for changes in factual circumstances not prohibited under the Loan Documents. The release of such “Guarantors” under the Existing Credit Agreement shall constitute a certification by the Borrower of the matters set forth in clauses (i) and (ii) of the preceding sentence.

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Section 7.16. Release of PREIT-RUBIN, Inc. as Borrower.
PREIT-RUBIN may request in writing that the Administrative Agent release it as a Borrower (but not as a Guarantor unless otherwise permitted by Section 7.15.(d)), so long as (a) the Parent delivers a certificate signed by the chief financial officer of the Parent certifying that no Event of Default then exists or would occur as a result of such release and (b) effective upon its release as a Borrower, PREIT-RUBIN will be released as a “Borrower” under the Existing Credit Agreement, the Existing Five-Year Term Loan Agreement, and the Seven-Year Term Loan Agreement. No later than 5 Business Days following the Administrative Agent’s receipt of such written request and the related certificate, and so long as the conditions set forth above will be satisfied, the release shall be effective and the Administrative Agent shall execute and deliver, at the sole cost and expense of the Borrower, such documents as the Borrower may reasonably request to evidence such release. Upon the effectiveness of such release, the defined term “Borrower” as used in the Loan Documents shall mean PREIT and the Parent and their respective successors and permitted assigns.

Article VIII. Negative Covenants
For so long as this Agreement is in effect, unless the Requisite Lenders (or, if required pursuant to Section 11.7.(b), all of the Lenders directly affected thereby) shall otherwise consent in the manner set forth in Section 11.7., each Borrower, as applicable, shall comply with the following covenants:

Section 8.1. Financial Covenants.
(a)      Minimum Tangible Net Worth . The Parent shall not permit its Tangible Net Worth determined on a consolidated basis at the end of any fiscal quarter to be less than (i) $1,314,516,000, plus (ii) 75% of the Net Proceeds of all Equity Issuances effected at any time after December 31, 2012 by the Parent or any of its Subsidiaries to any Person other than the Parent or any of its Subsidiaries (in the case of any Equity Issuance effected by a Subsidiary, the amount of such Net Proceeds shall be appropriately adjusted to account for minority interests consistent with GAAP). Net Proceeds from the following Equity Issuances shall be excluded from the immediately preceding clause (ii): (x) Equity Issuances of Equity Interest of the Parent made after December 31, 2012 solely in exchange for (A) other Equity Interest of the Parent or (B) common operating units of PREIT and (y) Equity Issuances to employees and trustees of the Parent and its Subsidiaries as part of a stock bonus plan, restricted stock plan or similar plan but only to the extent neither the Parent nor any Subsidiary received cash in connection with any such Equity Issuance.

(b)      Ratio of Total Liabilities to Gross Asset Value . The Parent shall not permit the ratio of (i) Total Liabilities of the Parent and its Subsidiaries determined on a consolidated basis to (ii) Gross Asset Value of the Parent and its Subsidiaries determined on a consolidated basis, to exceed 0.60 to 1.0 at any time; provided , however , that if such ratio is greater than 0.60 to 1.0 but is not greater than 0.625 to 1.0, then such failure to comply with the foregoing covenant shall not constitute a Default or an Event of Default and the Borrower shall be deemed to be in compliance with this subsection (b) so long as (1) such ratio does not exceed 0.60 to 1.0 for a period of more than two consecutive fiscal quarters and (2) such ratio has not exceeded 0.60 to 1.0 more than two times during the term of this Agreement; provided, further, however, in no event shall such ratio exceed 0.625 to 1.0 at any time.

(c)      Ratio of Adjusted EBITDA to Fixed Charges . The Parent shall not permit the ratio of (i) Adjusted EBITDA of the Parent and its Subsidiaries determined on a consolidated basis for the period of four consecutive fiscal quarters most recently ended to (ii) Fixed Charges of the Parent and its Subsidiaries determined on a consolidated basis for such period, to be less than 1.50 to 1.00.

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(d)      Unencumbered Debt Yield . The Parent shall not permit the Unencumbered Debt Yield to be less than 11.0% at any time.

(e)      Ratio of Unencumbered NOI to Unsecured Interest Expense . The Parent shall not permit the ratio of (i) Unencumbered NOI to (ii) Unsecured Interest Expense of the Parent and its Subsidiaries determined on a consolidated basis for the applicable period of determination of Unencumbered NOI, to be less than 1.75 to 1.00 for any such period.

(f)      Ratio of Secured Indebtedness to Gross Asset Value . The Parent shall not permit the ratio of (i) Secured Indebtedness of the Parent and its Subsidiaries determined on a consolidated basis to (ii) Gross Asset Value, to be greater than 0.60 to 1.00 at any time.

(g)      Permitted Investments . The Borrower shall not make any Investment in or otherwise own, and shall not permit any Subsidiary to make any Investment in or otherwise own, the following items which would cause the aggregate value of such holdings of the Parent, each other Borrower and their Subsidiaries to exceed the following percentages of Gross Asset Value:

(A)      unimproved real estate and predevelopment costs such that the aggregate value of all such unimproved real estate and predevelopment costs, calculated on the basis of cost, exceeds 5.0% of Gross Asset Value

(B)      Investments in Persons (other than Investments in Subsidiaries, Consolidated Affiliates and Unconsolidated Affiliates) such that the aggregate value of such Investment calculated on the basis of cost exceeds 5.0% of Gross Asset Value;

(C)      Mortgages in favor of the Parent, any other Borrower or any other Subsidiary, such that the aggregate amount of Indebtedness secured by such Mortgages exceeds 5.0% of Gross Asset Value (excluding any Mortgage encumbering any Property owned by a Subsidiary the accounts of which are required to be consolidated with those of the Parent under GAAP); and

(D)      Investments in Consolidation Exempt Entities such that the aggregate value of such Investments (other than the Parent’s Investment in PREIT) calculated on the basis of cost, exceeds 25.0% of Gross Asset Value.

In addition to the foregoing limitations, (x) the aggregate value of the Investments and the other items subject to the limitations in the preceding clauses (A) through (C) shall not exceed 10.0% of Gross Asset Value and (y) the aggregate value of the Investments and the other items subject to the limitations in the preceding clauses (A) through (D), together with the Total Budgeted Cost Until Stabilization with respect to all Projects Under Development owned by any Borrower, any other Subsidiary, any Consolidated Affiliate or any Unconsolidated Affiliate calculated in accordance with the immediately following subsection (h), shall not in the aggregate exceed 35.0% of Gross Asset Value at any time.

(h)      Properties under Development or Redevelopment . The Borrower shall not permit the aggregate amount of Total Budgeted Cost Until Stabilization with respect to all Projects Under Development owned by the any Borrower, any other Subsidiary, any Consolidated Affiliate or any Unconsolidated Affiliate to exceed at any time, 15.0% of Gross Asset Value. For purposes of this subsection, Total Budgeted Cost Until Stabilization with respect to any Project Under Development owned by a Consolidation Exempt Entity of the Parent shall equal the greater of (i) the product of (x) the Parent’s Investment Share in such Consolidation Exempt Entity and (y) the Total Budgeted Cost Until Stabilization for such Property and (ii) the Parent’s Recourse Share of all Indebtedness of such

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Consolidation Exempt Entity incurred solely to finance the Total Budgeted Cost Until Stabilization for such Property.

For purposes of determining compliance with immediately preceding subsections (e) and (f), the Indebtedness of the Parent shall include the greater of the Parent’s Recourse Share or Investment Share of the Indebtedness of the Parent’s Consolidation Exempt Entities.

Section 8.2. Restricted Payments.
The Borrower will not declare or make, or permit any other Subsidiary to declare or make any Restricted Payment; provided, however that the Parent, each other Borrower and the other Subsidiaries may declare and make the following Restricted Payments so long as no Default or Event of Default would result therefrom:

(a)      PREIT may declare and pay cash dividends to the Parent and other holders of limited partnership interests in PREIT in any fiscal year of the Parent to the extent necessary for the Parent to distribute, and the Parent may so distribute, cash dividends to its shareholders with respect to such period, in an aggregate amount not to exceed (i) with respect to any Preferred Stock, the dividends payable on such Preferred Stock in accordance with the terms of such Preferred Stock and (ii) with respect to its common shareholders, the greater of (x) 95.0% of Funds From Operations of the Parent and its Subsidiaries for such period and (y) 110.0% of the Parent’s REIT Taxable Income for such period unless necessary for the Parent to remain in compliance with Section 7.13.;

(b)      the Parent may acquire limited partnership interests in PREIT for common stock of the Parent, and the Parent and PREIT may acquire limited partnership interests in PREIT for cash in an amount not to exceed $250,000 in the aggregate in any calendar year for such limited partnership acquisitions made by the Parent and PREIT;

(c)      the Parent, PREIT and their Subsidiaries may make cash distributions to their respective shareholders to avoid any liability for taxes imposed under Sections 857(b)(1), 857(b)(3) and 4981 of the Internal Revenue Code;

(d)      Subsidiaries may make Restricted Payments to the Parent, PREIT or any other Subsidiary; and

(e)      the Parent may make cash payments to repurchase outstanding Equity Interests of the Parent.

Notwithstanding the foregoing, but subject to the following sentence, if a Default or Event of Default exists, the Parent and PREIT shall not, and shall not permit any other Subsidiary to, make any Restricted Payments to any Person whatsoever other than cash dividends from Subsidiaries (directly or indirectly through intermediate Subsidiaries) to PREIT and from PREIT to the Parent and other holders of limited partnership interests in PREIT in any year to the extent necessary for the Parent to distribute, and the Parent may so distribute, cash dividends to its shareholders (including without limitation, dividends with respect to Preferred Stock) with respect to such period, in an aggregate amount not to exceed the amount required to be distributed for the Parent to remain in compliance with Section 7.13. Notwithstanding the foregoing, if a Default or Event of Default specified in Section 9.1.(a), Section 9.1.(e) or Section 9.1.(f) shall have occurred and be continuing, or if as a result of the occurrence of any other Event of Default the Obligations have been accelerated pursuant to Section 9.2.(a), the Parent and PREIT shall not, and shall not permit any other Subsidiary to, make any Restricted Payments to any Person whatsoever other than to the Borrower or any Subsidiary.

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Section 8.3. Liens; Negative Pledge.
(a)      The Borrower shall not, and shall not permit any other Loan Party or any other Subsidiary to, create, assume, or incur any Lien (other than Permitted Liens) upon any of its properties, assets, income or profits of any character whether now owned or hereafter acquired if immediately prior to the creation, assumption or incurring of such Lien, or immediately thereafter, a Default or Event of Default is or would be in existence, including without limitation, a Default or Event of Default resulting from a violation of any of the covenants contained in Section 8.1.

(b)      The Borrower shall not, and shall not permit any other Loan Party or any other Subsidiary (other than an Excluded Subsidiary) to, enter into, assume or otherwise be bound by any Negative Pledge except for a Negative Pledge contained in (i) an agreement (x) evidencing Indebtedness which the Parent, any other Borrower, such other Loan Party or such other Subsidiary, as applicable, may create, incur, assume, or permit or suffer to exist under this Agreement, (y) which Indebtedness is secured by a Lien permitted to exist under the Loan Documents, and (z) which prohibits the creation of any other Lien on only the property securing such Indebtedness, (ii) an agreement relating to the sale of a Subsidiary or assets pending such sale, provided that in any such case the Negative Pledge applies only to the Subsidiary or the assets that are the subject of such sale, (iii) the Existing Credit Agreement, (iv) the Seven-Year Term Loan Agreement, (v) the Existing Five-Year Term Loan Agreement or (vi) any other agreement that evidences Unsecured Indebtedness which contains restrictions on encumbering assets that are not more restrictive than those restrictions contained in the Loan Documents.

Section 8.4. Restrictions on Intercompany Transfers.
The Borrower shall not create or otherwise cause or suffer to exist or become effective, or permit any other Loan Party or other Subsidiary (other than an Excluded Subsidiary) to create or otherwise cause or suffer to exist or become effective, any consensual encumbrance or restriction of any kind on the ability of such Subsidiary to: (i) pay dividends or make any other distribution on any of such Subsidiary’s capital stock or other equity interests owned by the Borrower or such Subsidiary of the Borrower; (ii) pay any Indebtedness owed to the Borrower or any Subsidiary; (iii) make loans or advances to the Borrower or any Subsidiary; or (iv) transfer any of its property or assets to the Borrower or any Subsidiary; provided , however that the Borrower or any such Subsidiary may have provision for preferred, priority or guaranteed payments to a co-venturer in a joint venture of such Subsidiary. Notwithstanding anything to the contrary in the foregoing sentence, the restrictions in (x) this Section shall not apply to any provision of any Guaranty entered into by the Parent, any other Borrower, any other Loan Party or any other Subsidiary to Guarantee the obligations and liabilities of any Subsidiary, which provision subordinates any rights of the Parent, any other Borrower, any other Loan Party or any other Subsidiary to payment from such Subsidiary to the payment in full of the obligations and liabilities that are Guaranteed pursuant to the terms of such Guaranty, (y) clauses (i) and (iv) of this Section shall not apply to any applicable prohibitions contained in an agreement evidencing any Secured Indebtedness of a Borrower or a Guarantor and (z) this Section shall not apply to any applicable prohibitions contained in (1) any Loan Document, (2) the Existing Credit Agreement, (3) the Seven-Year Term Loan Agreement, (4) the Existing Five-Year Term Loan Agreement or (5) any other agreement that evidences Unsecured Indebtedness which contains prohibitions on the actions described above that are not more restrictive than those prohibitions contained in the Loan Documents.

Section 8.5. Mergers, Acquisitions and Sales of Assets.
The Borrower shall not, and shall not permit any other Loan Party or any other Subsidiary to: (i) engage in any transaction of merger or consolidation; (ii) liquidate, wind-up or dissolve itself (or suffer

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any liquidation or dissolution); (iii) convey, sell, lease, sublease, transfer or otherwise dispose of, in one transaction or a series of transactions, all or any substantial part of its business or assets, or the capital stock of or other Equity Interests in any of its Subsidiaries, whether now owned or hereafter acquired or (iv) acquire any of the assets of, or make an Investment in, any other Person; unless

(a)      a Default or Event of Default would not result therefrom immediately following the consummation thereof;

(b)      if any Default or Event of Default exists immediately prior thereto, or would exist immediately thereafter or after giving effect thereto, then (i) in the case of any transaction referred to in any of the preceding clauses (i) through (iii) resulting in a Disposition, the book value of the assets subject to such Disposition, together with the book value of all other assets subject to Dispositions made during the period of existence of such Default or Event of Default, would not, in the aggregate, exceed a Substantial Amount (determined as of the date on which such Default or Event of Default came into existence) and (ii) in the case of any transaction referred to in the preceding clause (iv) the book value of such assets or such Investment, together with the book value of all other assets acquired and Investments made during the period of existence of such Default or Event of Default, would not, in the aggregate, exceed a Substantial Amount (determined as of the date on which such Default or Event of Default came into existence);

(c)      in the case of a consolidation or merger involving a Borrower, such Borrower shall be the survivor thereof; provided, however, PREIT and PREIT‑RUBIN may merge or consolidate with each other or with the Parent so long as (i) immediately prior to such consolidation or merger, and immediately thereafter and after giving effect thereto, no Default or Event of Default is or would be in existence, (ii) the Borrower shall have given the Administrative Agent at least 10 Business Days’ prior written notice of such consolidation or merger, such notice to include a certification as to the matters described in the immediately preceding clause (i), and (iii) in the case of a consolidation or merger involving the Parent, the Parent shall be the survivor thereof;

(d)      in the case of a consolidation or merger involving a Loan Party other than a Borrower (excluding a disposition of a Loan Party by way of merger or consolidation which disposition is not prohibited by this Agreement), either such Loan Party shall be the survivor thereof, or if not, (x) the survivor thereof is a Person organized and existing under the laws of the United States of America, any State thereof or the District of Columbia, (y) the survivor thereof expressly assumes all the obligations of such Loan Party under the Loan Documents to which such Loan Party is a party by executing and delivering to the Administrative Agent such documents, instruments and agreements as the Administrative Agent may reasonably require and (z) the Administrative Agent shall have received such other instruments, documents, agreements, certificates and opinions as the Administrative Agent may reasonably request; and

(e)      in the case of the acquisition, Investment or sale of a Substantial Amount of assets, the Parent shall have given the Administrative Agent and the Lenders at least 30 days prior written notice of such, acquisition, Investment or sale, such notice to be accompanied by a Compliance Certificate, calculated on a pro forma basis, evidencing the continued compliance by the Borrower with the terms and conditions of this Agreement and the other Loan Documents, including without limitation, the financial covenants contained in Section 8.1., after giving effect to such acquisition, Investment or sale.

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Notwithstanding the foregoing, (x) the Borrower, the other Loan Parties and the other Subsidiaries may lease and sublease their respective assets, as lessor or sublessor (as the case may be), in the ordinary course of their business, (y) the Borrower and the other Loan Parties may sell, transfer or dispose of assets among themselves and (z) Subsidiaries that are not Loan Parties may sell, transfer or dispose of assets among themselves and to any of the Loan Parties.

Section 8.6. Fiscal Year.
The Borrower shall not, and shall not permit any Material Subsidiary to, change its fiscal year from that in effect as of the Agreement Date.

Section 8.7. Modifications of Organizational Documents and Material Contracts.
No Borrower shall amend, supplement, restate or otherwise modify its articles or certificate of incorporation, bylaws, declaration of trust, partnership agreement or other applicable organizational documents, including without limitation the Trust Agreement and the Partnership Agreement, unless such amendment, supplement, restatement or other modification could not reasonably be expected to have in a Material Adverse Effect. The Borrower shall not enter into, and shall not permit any Subsidiary or other Loan Party to enter into, any amendment or modification to any Material Contract that could reasonably be expected to have a Material Adverse Effect.

Section 8.8. Transactions with Affiliates.
The Borrower shall not permit to exist or enter into, and will not permit any other Loan Party or any other Subsidiary to permit to exist or enter into, any transaction (including the purchase, sale, lease or exchange of any property or the rendering of any service) with any Affiliate, except (a) transactions in the ordinary course of and pursuant to the reasonable requirements of the business of such Borrower, such other Loan Party or such other Subsidiary and upon fair and reasonable terms which are no less favorable to such Borrower, such other Loan Party or such other Subsidiary than would be obtained in a comparable arm’s length transaction with a Person that is not an Affiliate, (b) transactions between or among the Loan Parties and (c) transactions with an Affiliate existing on the Agreement Date that are not otherwise permitted under the immediately preceding clauses (a) and (b).

Section 8.9. Environmental Matters.
The Borrower shall not, and shall not permit any other Loan Party or any other Subsidiary or any other Person to, use, generate, discharge, emit, manufacture, handle, process, store, release, transport, remove, dispose of or clean up any Hazardous Materials on, under or from the Properties in violation of any Environmental Law or in a manner that could reasonably be expected to lead to any environmental claim or pose a risk to human health, safety or the environment that could reasonably be expected to have a Material Adverse Effect. Nothing in this Section shall impose any obligation or liability whatsoever on the Administrative Agent or any Lender.

Section 8.10. ERISA Exemptions.
The Borrower shall not, and shall not permit any other Loan Party or any other Subsidiary to, permit any of its respective assets to become or be deemed to be “plan assets” within the meaning of ERISA, the Internal Revenue Code and the respective regulations promulgated thereunder. The Borrower shall not, and shall not permit any other member of the ERISA Group to, cause or permit to occur any ERISA Event if such ERISA Event could reasonably be expected to have a Material Adverse Effect.


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Section 8.11. Derivatives Contracts.
The Borrower shall not, and shall not permit any other Loan Party or other Subsidiary to, enter into or become obligated in respect of Derivatives Contracts other than Derivatives Contracts entered into by such Borrower, such other Loan Party or such other Subsidiary in the ordinary course of business and which establish an effective hedge in respect of liabilities, commitments or assets held or reasonably anticipated by a Borrower, other Loan Party or other Subsidiary.

Section 8.12. Total Assets Owned by Borrower and Guarantors.
Prior to the Guarantor Requirement Change Date, the Borrower shall not permit the amount of Gross Asset Value attributable to assets directly owned by the Borrower and the Guarantors to be less than 95% of Adjusted Gross Asset Value at any time.

Article IX. Default
Section 9.1. Events of Default.
Each of the following shall constitute an Event of Default, whatever the reason for such event and whether it shall be voluntary or involuntary or be effected by operation of Applicable Law or pursuant to any judgment or order of any Governmental Authority:

(a)      Default in Payment .

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

(ii)      Any other Loan Party shall fail to pay when due any payment obligation owing by such Loan Party under any Loan Document to which it is a party and in the case of this clause (ii) only, any such failure shall continue for a period of 5 calendar days thereafter.

(b)      Default in Performance .

(i)      The Borrower shall fail to perform or observe any term, covenant, condition or agreement on its part to be performed or observed and contained in Section 7.1.(a)(xvi), Section 7.2. (solely with respect to maintaining the existence of a Borrower) or Article VIII.; or

(ii)      The Borrower or any other Loan Party shall fail to perform or observe any term, covenant, condition or agreement contained in this Agreement or any other Loan Document to which it is a party and not otherwise mentioned in this Section and such failure shall continue for a period of 30 days after the earlier of (x) the date upon which the Parent or PREIT obtains knowledge of such failure or (y) the date upon which the Parent or PREIT has received written notice of such failure from the Administrative Agent; provided , however , that if any such failure referred to in this clause (ii) is reasonably capable of being cured but not within such 30‑day period and the Borrower has in good faith commenced to cure such failure prior to the expiration of such 30‑day period and continues to diligently prosecute such cure, no Event of Default shall be deemed to have occurred unless such failure has not been cured within 30 calendar days after the last day of such initial 30‑day period;

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

(d)      Indebtedness Cross‑Default .

(i)      Any Borrower, any other Loan Party, any other Subsidiary shall fail to pay when due and payable the principal of, or interest on, any Indebtedness (other than the Loans) having an aggregate outstanding principal amount (or in the case of any Derivatives Contract, having a Derivatives Termination Value) of $25,000,000 or more (or $250,000,000 or more in the case of Nonrecourse Indebtedness) (“Material Indebtedness”), and in any such case such failure shall continue beyond any applicable notice and cure periods; or

(ii)      The maturity of any Material Indebtedness shall have been accelerated in accordance with the provisions of any indenture, contract or instrument evidencing, providing for the creation of or otherwise concerning such Indebtedness or any Material Indebtedness shall have been required to be prepaid or repurchased prior to the stated maturity thereof; or

(iii)      Any other event shall have occurred and be continuing which would permit any holder or holders of any Material Indebtedness, any trustee or agent acting on behalf of such holder or holders or any other Person, to accelerate the maturity of any such Material Indebtedness or require any such Material Indebtedness to be prepaid, repurchased, redeemed or defeased prior to its stated maturity; or

(iv)      An Event of Default under and as defined in the Existing Credit Agreement shall occur; or

(v)      An Event of Default under and as defined in the Seven-Year Term Loan Agreement shall occur; or

(vi)      An Event of Default under and as defined in the Existing Five-Year Term Loan Agreement shall occur.

(e)      Voluntary Bankruptcy Proceeding . Any Borrower, any Material Subsidiary, any Subsidiary that owns or leases an Unencumbered Property or any other Subsidiary (other than an Excluded Subsidiary) that does not own or lease an Unencumbered Property (other than any such Subsidiary that, together with all other Subsidiaries (other than Excluded Subsidiaries) that do not own or lease any Unencumbered Property and that are then subject to a bankruptcy proceeding or other proceeding or condition described in this subsection or the immediately following subsection, does not account for more than $25,000,000 of Gross Asset Value) shall: (i) commence a voluntary case under the Bankruptcy Code of 1978, as amended or other federal bankruptcy laws (as now or hereafter in effect); (ii) file a petition seeking to take advantage of any other Applicable Laws, domestic or foreign, relating to bankruptcy, insolvency, reorganization, winding‑up, or composition or adjustment of debts; (iii) consent to, or fail to contest in a timely and appropriate manner, any petition filed against it in an involuntary case under such bankruptcy laws or other Applicable Laws or consent to any proceeding or action described in the immediately following subsection; (iv) apply for or consent to, or fail to contest in a timely and appropriate manner, the appointment of, or the taking of possession by, a receiver, custodian, trustee, or liquidator of itself or of a substantial part of its property, domestic or foreign; (v) admit in writing its

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inability to pay its debts as they become due; (vi) make a general assignment for the benefit of creditors; (vii) make a conveyance fraudulent as to creditors under any Applicable Law; or (viii) take any corporate or partnership action for the purpose of effecting any of the foregoing.

(f)      Involuntary Bankruptcy Proceeding . A case or other proceeding shall be commenced against any Borrower, any Material Subsidiary, any Subsidiary that owns or leases an Unencumbered Property or any other Subsidiary (other than an Excluded Subsidiary) that does not own or lease an Unencumbered Property (other than any such Subsidiary that, together with all other Subsidiaries (other than Excluded Subsidiaries) that do not own or lease any Unencumbered Property and that are then subject to a bankruptcy proceeding or other proceeding or condition described in this subsection or the immediately preceding subsection, does not account for more than $25,000,000 of Gross Asset Value) in any court of competent jurisdiction seeking: (i) relief under the Bankruptcy Code of 1978, as amended or other federal bankruptcy laws (as now or hereafter in effect) or under any other Applicable Laws, domestic or foreign, relating to bankruptcy, insolvency, reorganization, winding‑up, or composition or adjustment of debts; or (ii) the appointment of a trustee, receiver, custodian, liquidator or the like of such Person, or of all or any substantial part of the assets, domestic or foreign, of such Person, and in the case of either clause (i) or (ii) such case or proceeding shall continue undismissed or unstayed for a period of 60 consecutive days, or an order granting the relief requested in such case or proceeding (including, but not limited to, an order for relief under such Bankruptcy Code or such other federal bankruptcy laws) shall be entered.

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

(h)      Judgment . A judgment or order for the payment of money shall be entered against any Borrower, any Material Subsidiary, any Subsidiary that owns or leases an Unencumbered Property or any other Subsidiary (other than an Excluded Subsidiary) that does not own or lease an Unencumbered Property (other than any such Subsidiary that, together with all other Subsidiaries (other than Excluded Subsidiaries) that do not own or lease any Unencumbered Property and that have judgments or orders for the payment of money entered against them, does not account for more than $25,000,000 of Gross Asset Value) by any court or other tribunal and (i) such judgment or order shall continue for a period of 30 days without being paid, bonded over, stayed or dismissed through appropriate appellate proceedings (provided however, that if a bond has been issued in favor of the claimant or other Person obtaining such judgment or order, the issuer of such bond shall have executed an agreement in form and substance satisfactory to the Administrative Agent pursuant to which the issuer of such bond waives any Lien it may have on the assets of any such Person), and (ii) either (A) the amount for which the insurer has denied liability exceeds, individually or together with all other such judgments or orders entered against the Borrower, the other Loan Parties and the other Subsidiaries, $25,000,000 (or $250,000,000 or more if the judgment or order for the payment of money directly relates to Nonrecourse Indebtedness and is itself nonrecourse) in amount or (B) could reasonably be expected to have a Material Adverse Effect.

(i)      Attachment . A warrant, writ of attachment, execution or similar process shall be issued against any property of any Borrower, any Material Subsidiary, any Subsidiary that owns or leases an Unencumbered Property or any other Subsidiary (other than an Excluded Subsidiary) that does not own or lease an Unencumbered Property (other than any such Subsidiary that, together with all other Subsidiaries (other than Excluded Subsidiaries) that do not own or lease any Unencumbered Property and that have a warrant, writ of attachment, execution or similar process issued against any property of such Person, does

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not account for more than $25,000,000 of Gross Asset Value), which exceeds, individually or together with all other such warrants, writs, executions and processes, $25,000,000 (or $250,000,000 or more if the warrant, writ of attachment, execution or similar process directly relates to Nonrecourse Indebtedness and is itself nonrecourse) in amount and such warrant, writ, execution or process shall not be paid, discharged, vacated, stayed or bonded for a period of 30 days; provided however, that if a bond has been issued in favor of the claimant or other Person obtaining such warrant, writ of attachment, execution or process, the issuer of such bond shall have executed an agreement in form and substance satisfactory to the Administrative Agent pursuant to which the issuer of such bond subordinates its right of reimbursement or subrogation to the Obligations and waives any Lien it may have on the assets of any Borrower, any other Loan Party or any other Subsidiary.

(j)      ERISA .

(i)      Any ERISA Event shall have occurred that results or could reasonably be expected to result in liability to any member of the ERISA Group aggregating in excess of $10,000,000; or

(ii)      The “benefit obligation” of all Benefit Plans exceeds the “fair market value of plan assets” for such Benefit Plans by more than $10,000,000, all as determined, and with such terms defined, in accordance with Statement of Financial Accounting Standards No. 158.
(k)      Loan Documents . An Event of Default (as defined therein) shall occur under any of the other Loan Documents;

(i)
Change of Control .

(i)      Any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) is or becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a Person will be deemed to have “beneficial ownership” of all securities that such Person has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of more than 35.0% of the total voting power of the then outstanding voting shares of the Parent other than such Persons who are, as of the Agreement Date, current officers or trustees of the Parent, or Affiliates of current officers or trustees of the Parent; or

(ii)      During any period of 12 consecutive months ending after the Agreement Date, individuals who at the beginning of any such 12‑month period constituted the Board of Trustees of the Parent (together with any new trustees whose election by such Board or whose nomination for election by the shareholders of the Parent was approved by a vote of a majority of the trustees then still in office who were either trustees at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the Board of Trustees of the Parent then in office; or

(iii)      The Parent or a Wholly Owned Subsidiary of the Parent that is a Guarantor shall cease (A) to be the sole general partner of PREIT or (B) to own and control, directly or indirectly, at least 80.0% (or such lesser percentage not less than 70.0% as may be acceptable to the Administrative Agent) of all partnership interests of PREIT.

(m)      Strike; Casualty . Any strike, lockout, labor dispute, embargo, condemnation, act of God or public enemy, or other casualty which causes, for more than 30 consecutive days beyond the coverage period of any applicable business interruption insurance, the cessation or substantial curtailment of

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revenue producing activities of any Borrower, any other Loan Party and any other Subsidiary taken as a whole and only if any such event or circumstance could reasonably be expected to have a Material Adverse Effect.

Section 9.2. Remedies Upon Event of Default.
Upon the occurrence of an Event of Default the following provisions shall apply:

(a)      Acceleration; Termination of Facilities .

(i)      Automatic . Upon the occurrence of an Event of Default specified in Sections 9.1.(e) or 9.1.(f), (A)(1) the principal of, and all accrued interest on, the Loans and the Notes at the time outstanding and (2) all of the other Obligations of the Borrower, including, but not limited to, the other amounts owed to the Lenders and the Administrative Agent under this Agreement, the Notes or any of the other Loan Documents, shall become immediately and automatically due and payable without presentment, demand, protest, or other notice of any kind, all of which are expressly waived by the Borrower, and, (B) the Commitments, if not already terminated, and the obligation of the Lenders to make Loans hereunder shall all immediately and automatically terminate.

(ii)      Optional . If any other Event of Default shall have occurred and be continuing, the Administrative Agent may, and at the direction of the Requisite Lenders shall: (A) declare (1) the principal of, and accrued interest on, the Loans and the Notes at the time outstanding and (2) all of the other Obligations, including, but not limited to, the other amounts owed to the Lenders and the Administrative Agent under this Agreement, the Notes or any of the other Loan Documents to be forthwith due and payable, whereupon the same shall immediately become due and payable without presentment, demand, protest or other notice of any kind, all of which are expressly waived by the Borrower and (B) terminate the Commitments, if not already terminated, and the obligation of the Lenders to make Loans hereunder.

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

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

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

(e)      Specified Derivatives Contract Remedies . Notwithstanding any other provision of this Agreement or other Loan Document, each Specified Derivatives Provider shall have the right, with the prompt notice to the Administrative Agent, but without the approval or consent of or other action by the Administrative Agent or the Lenders, and without limitation of other remedies available to such Specified Derivatives Provider under contract or Applicable Law, to undertake any of the following: (a) to declare an event of default, termination event or other similar event under any Specified Derivatives Contract and

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to create an “Early Termination Date” (as defined therein) in respect thereof, (b) to determine net termination amounts in respect of any and all Specified Derivatives Contracts in accordance with the terms thereof, and to set off amounts among such contracts, (c) to set off or proceed against deposit account balances, securities account balances and other property and amounts held by such Specified Derivatives Provider pursuant to any Derivatives Support Document, including any “Posted Collateral” (as defined in any credit support annex included in any such Derivatives Support Document to which such Specified Derivatives Provider may be a party), and (d) to prosecute any legal action against the Borrower, any other Loan Party or other Subsidiary to enforce or collect net amounts owing to such Specified Derivatives Provider pursuant to any Specified Derivatives Contract.

Section 9.3. Remedies Upon Default.
Upon the occurrence of a Default specified in Section 9.1.(f), the Commitments shall immediately and automatically terminate, if not already terminated.

Section 9.4. Marshaling; Payments Set Aside.
None of the Administrative Agent, any Lender or any Specified Derivatives Provider shall be under any obligation to marshal any assets in favor of any Loan Party or any other party or against or in payment of any or all of the Obligations or Specified Derivatives Obligations. To the extent that any Loan Party makes a payment or payments to the Administrative Agent, any Lender or any Specified Derivatives Provider, or the Administrative Agent, any Lender or any Specified Derivatives Provider enforces its security interest or exercise its right of setoff, and such payment or payments or the proceeds of such enforcement or setoff or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside and/or required to be repaid to a trustee, receiver or any other party under any bankruptcy law, state or federal law, common law or equitable cause, then to the extent of such recovery, the Obligations or Specified Derivatives Obligations or part thereof originally intended to be satisfied, and all Liens, rights and remedies therefor, shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred.

Section 9.5. Allocation of Proceeds.
If an Event of Default shall have occurred and be continuing, all payments received by the Administrative Agent under any of the Loan Documents, in respect of any principal of or interest on the Obligations or any other amounts payable by the Borrower or any other Loan Party hereunder or thereunder, shall be applied in the following order and priority:

(i)      amounts due to the Administrative Agent and the Lenders in respect of Fees and other fees and expenses due under Section 11.2.;

(ii)      payments of interest on all Loans to be paid to the Lenders equally and ratably in accordance with the respective amounts thereof then due and owing;

(iii)      payments of principal of all Loans to be paid to the Lenders equally and ratably in accordance with the respective amounts thereof then due and owing to such Persons;

(iv)      amounts due to the Administrative Agent and the Lenders pursuant to Sections 10.7. and 11.10.;

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

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

Section 9.6. [Intentionally Omitted].
    
Section 9.7. Performance by Administrative Agent.
If the Borrower shall fail to perform any covenant, duty or agreement contained in any of the Loan Documents, the Administrative Agent may perform or attempt to perform such covenant, duty or agreement on behalf of the Borrower after the expiration of any cure or grace periods set forth herein. In such event, the Borrower shall, at the request of the Administrative Agent, promptly pay any amount reasonably expended by the Administrative Agent in such performance or attempted performance to the Administrative Agent, together with interest thereon at the applicable Post‑Default Rate from the date of such expenditure until paid. Notwithstanding the foregoing, neither the Administrative Agent nor any Lender shall have any liability or responsibility whatsoever for the performance of any obligation of the Borrower under this Agreement or any other Loan Document.

Section 9.8. Rescission of Acceleration by Requisite Lenders.
If at any time after acceleration of the maturity of the Loans and the other Obligations, the Borrower shall pay all arrears of interest and all payments on account of principal of the Obligations, which shall have become due otherwise than by acceleration (with interest on principal and, to the extent permitted by Applicable Law, on overdue interest, at the rates specified in this Agreement) and all Events of Default and Defaults (other than nonpayment of principal of and accrued interest on the Obligations due and payable solely by virtue of acceleration) shall become remedied or waived to the satisfaction of the Requisite Lenders, then by written notice to the Borrower, the Requisite Lenders may elect, in the sole discretion of such Requisite Lenders, to rescind and annul the acceleration and its consequences. The provisions of the preceding sentence are intended merely to bind all of the Lenders to a decision which may be made at the election of the Requisite Lenders, and are not intended to benefit the Borrower and do not give the Borrower the right to require the Lenders to rescind or annul any acceleration hereunder, even if the conditions set forth herein are satisfied.

Section 9.9. Rights Cumulative.
(a)      Generally . The rights and remedies of the Administrative Agent, the Lenders and the Specified Derivatives Providers under this Agreement and each of the other Loan Documents, the Fee Letter and Specified Derivatives Contracts shall be cumulative and not exclusive of any rights or remedies which any of them may otherwise have under Applicable Law. In exercising their respective rights and remedies, the Administrative Agent, the Lenders and the Specified Derivatives Providers may be selective and no failure or delay by the Administrative Agent, any of the Lenders, or any of the Specified Derivatives Providers in exercising any right shall operate as a waiver of it, nor shall any single or partial exercise of any power or right preclude its other or further exercise or the exercise of any other power or right.

(b)      Enforcement by Administrative Agent . Notwithstanding anything to the contrary contained herein or in any other Loan Document, the authority to enforce rights and remedies hereunder and under the other Loan Documents against the Loan Parties or any of them shall be vested exclusively in, and all actions and proceedings at law in connection with such enforcement shall be instituted and maintained exclusively by, the Administrative Agent in accordance with Article IX. for the benefit of all

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the Lenders; provided that the foregoing shall not prohibit (i) the Administrative Agent from exercising on its own behalf the rights and remedies that inure to its benefit (solely in its capacity as Administrative Agent) hereunder and under the other Loan Documents, (ii) any Specified Derivatives Provider from exercising the rights and remedies that inure to its benefit (solely in its capacity as a Specified Derivatives Provider) hereunder, under the other Loan Documents or under any Specified Derivatives Contract, as applicable, (iii) any Lender from exercising setoff rights in accordance with Section 11.4. (subject to the terms of Section 3.3.), or (iv) any Lender from filing proofs of claim or appearing and filing pleadings on its own behalf during the pendency of a Bankruptcy Event relative to any Loan Party; and provided , further , that if at any time there is no Person acting as Administrative Agent hereunder and under the other Loan Documents, then (x) the Requisite Lenders shall have the rights otherwise ascribed to the Administrative Agent pursuant to Article IX. and (y) in addition to the matters set forth in clauses (ii), (iii) and (iv) of the preceding proviso and subject to Section 3.3., any Lender may, with the consent of the Requisite Lenders, enforce any rights and remedies available to it and as authorized by the Requisite Lenders.

Article X. The Administrative Agent
Section 10.1. Appointment and Authorization.
Each Lender hereby irrevocably appoints and authorizes the Administrative Agent to take such action as contractual representative on such Lender’s behalf and to exercise such powers under this Agreement and the other Loan Documents as are specifically delegated to the Administrative Agent by the terms hereof and thereof, together with such powers as are reasonably incidental thereto. Not in limitation of the foregoing, each Lender authorizes and directs the Administrative Agent in its capacity as Administrative Agent to enter into the Loan Documents for the benefit of the Lenders. Each Lender hereby agrees that, except as otherwise set forth herein, any action taken by the Requisite Lenders in accordance with the provisions of this Agreement or the Loan Documents, and the exercise by the Requisite Lenders of the powers set forth herein or therein, together with such other powers as are reasonably incidental thereto, shall be authorized and binding upon all of the Lenders. Nothing herein shall be construed to deem the Administrative Agent a trustee or fiduciary for any Lender or to impose on the Administrative Agent duties or obligations other than those expressly provided for herein. Without limiting the generality of the foregoing, the use of the terms “Agent”, “Administrative Agent”, “agent” and similar terms in the Loan Documents with reference to the Administrative Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any Applicable Law. Instead, use of such terms is merely a matter of market custom, and is intended to create or reflect only an administrative relationship between independent contracting parties. The Administrative Agent shall deliver to each Lender, promptly upon receipt thereof by the Administrative Agent, copies of each of the financial statements, certificates, notices and other documents delivered to the Administrative Agent pursuant to Section 7.1.(a) that the Borrower is not otherwise required to deliver to the Lenders. The Administrative Agent will also furnish to any Lender, upon the request of such Lender, a copy (or, where appropriate, an original) of any document, instrument, agreement, certificate or notice furnished to the Administrative Agent by the Borrower, any other Loan Party or any other Affiliate of the Borrower, pursuant to this Agreement or any other Loan Document not already delivered or otherwise made available to such Lender pursuant to the terms of this Agreement or any such other Loan Document. As to any matters not expressly provided for by the Loan Documents (including, without limitation, enforcement or collection of any of the Obligations), the Administrative Agent shall not be required to exercise any discretion or take any action, but shall be required to act or to refrain from acting (and shall be fully protected in so acting or refraining from acting) upon the instructions of the Requisite Lenders (or all of the Lenders if explicitly required under any other provision of this Agreement), and such instructions shall be binding upon all Lenders and all holders of any of the Obligations; provided, however, that, notwithstanding anything in this Agreement to the contrary, the Administrative Agent shall

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not be required to take any action which exposes the Administrative Agent to personal liability or which is contrary to this Agreement or any other Loan Document or Applicable Law. Not in limitation of the foregoing, the Administrative Agent may exercise any right or remedy it or the Lenders may have under any Loan Document upon the occurrence of a Default or an Event of Default unless the Requisite Lenders have directed the Administrative Agent otherwise. Without limiting the foregoing, no Lender shall have any right of action whatsoever against the Administrative Agent as a result of the Administrative Agent acting or refraining from acting under this Agreement or any of the other Loan Documents in accordance with the instructions of the Requisite Lenders, or where applicable, all the Lenders.

Section 10.2. Administrative Agent’s Reliance, Etc.
Notwithstanding any other provisions of this Agreement or any other Loan Documents, neither the Administrative Agent nor any of its directors, officers, agents, employees or counsel shall be liable for any action taken or not taken by it under or in connection with this Agreement or any other Loan Document, except for its or their own gross negligence or willful misconduct in connection with its duties expressly set forth herein or therein. Without limiting the generality of the foregoing, the Administrative Agent: may consult with legal counsel (including its own counsel or counsel for the Borrower or any other Loan Party), independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants or experts. Neither the Administrative Agent nor any of its directors, officers, agents, employees or counsel: (a) makes any warranty or representation to any Lender or any other Person and shall be responsible to any Lender or any other Person for any statement, warranty or representation made or deemed made by any Borrower, any other Loan Party or any other Person in or in connection with this Agreement or any other Loan Document; (b) shall have any duty to ascertain or to inquire as to the performance or observance of any of the terms, covenants or conditions of this Agreement or any other Loan Document or the satisfaction of any conditions precedent under this Agreement or any Loan Document on the part of the Borrower or other Persons or inspect the property, books or records of the Borrower or any other Person; (c) shall be responsible to any Lender for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or any other Loan Document, any other instrument or document furnished pursuant thereto or any collateral covered thereby or the perfection or priority of any Lien in favor of the Administrative Agent on behalf of the Lenders in any such collateral; (d) shall have any liability in respect of any recitals, statements, certifications, representations or warranties contained in any of the Loan Documents or any other document, instrument, agreement, certificate or statement delivered in connection therewith; and (e) shall incur any liability under or in respect of this Agreement or any other Loan Document by acting upon any notice, consent, certificate or other instrument or writing (which may be by telephone, telecopy or electronic mail) believed by it to be genuine and signed, sent or given by the proper party or parties. The Administrative Agent may execute any of its duties under the Loan Documents by or through agents, employees or attorneys-in-fact and shall not be responsible for the negligence or misconduct of any agent or attorney-in-fact that it selects in the absence of gross negligence or willful misconduct.

Section 10.3. Notice of Defaults.
The Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of a Default or Event of Default unless the Administrative Agent has received notice from a Lender or the Borrower referring to this Agreement, describing with reasonable specificity such Default or Event of Default and stating that such notice is a “notice of default”. If any Lender (excluding the Lender which is also serving as the Administrative Agent) becomes aware of any Default or Event of Default, it shall promptly send to the Administrative Agent such a “notice of default”. Further, if the Administrative Agent receives such a “notice of default,” the Administrative Agent shall give prompt notice thereof to the Lenders.

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Section 10.4. Administrative Agent and Titled Agents as Lender or Specified Derivatives Provider.
The Lender acting as Administrative Agent and each Titled Agent, as a Lender or as a Specified Derivatives Provider, as the case may be, shall have the same rights and powers under this Agreement and any other Loan Document and under any Specified Derivatives Contract, as the case may be, as any other Lender or Specified Derivatives Provider and may exercise the same as though it were not the Administrative Agent or a Titled Agent, as the case may be; and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated, include the Lender acting as Administrative Agent or a Titled Agent, as applicable and in each case, in its individual capacity. The Lender acting as Administrative Agent, the Titled Agents and their respective Affiliates may each accept deposits from, maintain deposits or credit balances for, invest in, lend money to, act as trustee under indentures of, serve as financial advisor to, and generally engage in any kind of business with any Borrower, any other Loan Party or any other Affiliate thereof as if it were any other bank and without any duty to account therefor to the other Lenders or any other Specified Derivatives Providers. Further, the Lender acting as Administrative Agent, the Titled Agents and their respective Affiliates may each accept fees and other consideration from the Borrower for services in connection with this Agreement or any other Specified Derivatives Contract, or otherwise without having to account for the same to the other Lenders or any other Specified Derivatives Providers. The Lenders acknowledge that, pursuant to such activities, the Lender acting as Administrative Agent, the Titled Agents and their respective Affiliates may receive information regarding the Borrower, other Loan Parties, other Subsidiaries and other Affiliates (including information that may be subject to confidentiality obligations in favor of such Person) and acknowledge that the Lender acting as Administrative Agent, the Titled Agents and their respective Affiliates shall be under no obligation to provide such information to them.

Section 10.5. Approvals of Lenders.
All communications from the Administrative Agent to any Lender requesting such Lender’s determination, consent, approval or disapproval (a) shall be given in the form of a written notice to such Lender, (b) shall be accompanied by a description of the matter or issue as to which such determination, approval, consent or disapproval is requested, or shall advise such Lender where information, if any, regarding such matter or issue may be inspected, or shall otherwise describe the matter or issue to be resolved, (c) shall include, if reasonably requested by such Lender and to the extent not previously provided to such Lender, written materials and a summary of all oral information provided to the Administrative Agent by the Borrower in respect of the matter or issue to be resolved, and (d) shall include the Administrative Agent’s recommended course of action or determination in respect thereof. Unless a Lender shall give written notice to the Administrative Agent that it specifically objects to the recommendation or determination of the Administrative Agent (together with a reasonable written explanation of the reasons behind such objection) within 10 Business Days (or such lesser or greater period as may be specifically required under the express terms of the Loan Documents) of receipt of such communication, such Lender shall be deemed to have conclusively approved of or consented to such recommendation or determination.

Section 10.6. Lender Credit Decision, Etc.
Each Lender expressly acknowledges and agrees that neither the Administrative Agent nor any of its officers, directors, employees, agents, counsel, attorneys‑in‑fact or other Affiliates has made any representations or warranties to such Lender and that no act by the Administrative Agent hereafter taken, including any review of the affairs of any Borrower, any other Loan Party or any other Subsidiary or Affiliate, shall be deemed to constitute any such representation or warranty by the Administrative Agent

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to any Lender. Each Lender acknowledges that it has, independently and without reliance upon the Administrative Agent, any other Lender or counsel to the Administrative Agent, or any of their respective officers, directors, employees, agents or counsel, and based on the financial statements of the Parent, any other Borrower, the other Loan Parties, the other Subsidiaries and other Affiliates, and inquiries of such Persons, its independent due diligence of the business and affairs of the Parent, each other Borrower, the other Loan Parties, the other Subsidiaries and other Persons, its review of the Loan Documents, the legal opinions required to be delivered to it hereunder, the advice of its own counsel and such other documents and information as it has deemed appropriate, made its own credit and legal analysis and decision to enter into this Agreement and the transactions contemplated hereby. Each Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent, any other Lender or counsel to the Administrative Agent or any of their respective officers, directors, employees and agents, and based on such review, advice, documents and information as it shall deem appropriate at the time, continue to make its own decisions in taking or not taking action under the Loan Documents. The Administrative Agent shall not be required to keep itself informed as to the performance or observance by the Parent, any other Borrower or any other Loan Party of the Loan Documents or any other document referred to or provided for therein or to inspect the properties or books of, or make any other investigation of, the Parent, any other Borrower, any other Loan Party or any other Subsidiary. Except for notices, reports and other documents and information expressly required to be furnished to the Lenders by the Administrative Agent under this Agreement or any of the other Loan Documents, the Administrative Agent shall have no duty or responsibility to provide any Lender with any credit or other information concerning the business, operations, property, financial and other condition or creditworthiness of the Parent, any other Borrower, any other Loan Party or any other Affiliate thereof which may come into possession of the Administrative Agent or any of its officers, directors, employees, agents, attorneys‑in‑fact or other Affiliates. Each Lender acknowledges that the Administrative Agent’s legal counsel in connection with the transactions contemplated by this Agreement is only acting as counsel to the Administrative Agent and is not acting as counsel to such Lender.

Section 10.7. Indemnification of Administrative Agent.
Regardless of whether the transactions contemplated by this Agreement and the other Loan Documents are consummated, each Lender agrees to indemnify the Administrative Agent (to the extent not reimbursed by the Borrower, and without limiting the obligation of the Borrower to do so) pro rata in accordance with such Lender’s respective Commitment Percentage, determined at the time of any claim, from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever which may at any time be imposed on, incurred by, or asserted against the Administrative Agent (in its capacity as Administrative Agent but not as a “Lender”) in any way relating to or arising out of the Loan Documents, any transaction contemplated hereby or thereby or any action taken or omitted by the Administrative Agent under the Loan Documents (collectively, “Indemnifiable Amounts”); provided, however, that no Lender shall be liable for any portion of such Indemnifiable Amounts to the extent resulting from the Administrative Agent’s gross negligence or willful misconduct as determined by a court of competent jurisdiction in a final, non-appealable judgment; provided, however, that no action taken in accordance with the directions of the Requisite Lenders (or all of the Lenders if expressly required hereunder) shall be deemed to constitute gross negligence or willful misconduct for purposes of this Section. Without limiting the generality of the foregoing, each Lender agrees to reimburse the Administrative Agent (to the extent not reimbursed by the Borrower and without limiting the obligation of the Borrower to do so) promptly upon demand for its ratable share of any out‑of‑pocket expenses (including the reasonable fees and expenses of the counsel to the Administrative Agent) incurred by the Administrative Agent in connection with the preparation, negotiation, execution, administration, or enforcement (whether through negotiations, legal proceedings, or otherwise) of, or legal advice with respect to the rights or responsibilities of the parties under, the Loan

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Documents, any suit or action brought by the Administrative Agent to enforce the terms of the Loan Documents and/or collect any Obligations, any “lender liability” suit or claim brought against the Administrative Agent and/or the Lenders, and any claim or suit brought against the Administrative Agent and/or the Lenders arising under any Environmental Laws. Such out‑of‑pocket expenses (including counsel fees) shall be advanced by the Lenders on the request of the Administrative Agent notwithstanding any claim or assertion that the Administrative Agent is not entitled to indemnification hereunder upon receipt of an undertaking by the Administrative Agent that the Administrative Agent will reimburse the Lenders if it is actually and finally determined by a court of competent jurisdiction that the Administrative Agent is not so entitled to indemnification. The agreements in this Section shall survive the payment of the Loans and all other amounts payable hereunder or under the other Loan Documents and the termination of this Agreement. If the Borrower shall reimburse the Administrative Agent for any Indemnifiable Amount following payment by any Lender to the Administrative Agent in respect of such Indemnifiable Amount pursuant to this Section, the Administrative Agent shall share such reimbursement on a ratable basis with each Lender making any such payment.

Section 10.8. Successor Administrative Agent.
The Administrative Agent may resign at any time as Administrative Agent under the Loan Documents by giving written notice thereof to the Lenders and the Borrower. Upon 30 days’ prior written notice to the Administrative Agent, the Administrative Agent may be removed as Administrative Agent under the Loan Documents by the Requisite Lenders (other than the Lender then acting as Administrative Agent) for any acts or omissions of the Administrative Agent in connection with its duties set forth in this Agreement or the other Loan Documents that constitute gross negligence or willful misconduct. Upon any such resignation or removal, the Requisite Lenders (other than the Lender then acting as the Administrative Agent in the case of the removal of the Administrative Agent under the immediately preceding sentence) shall have the right to appoint a successor Administrative Agent which appointment shall, provided no Default or Event of Default exists, be subject to the Borrower’s approval, which approval shall not be unreasonably withheld or delayed. If no successor Administrative Agent shall have been so appointed in accordance with the immediately preceding sentence, and shall have accepted such appointment, within 30 days after the current Administrative Agent’s giving of notice of resignation or its removal, then the current Administrative Agent may, on behalf of the Lenders, appoint a successor Administrative Agent, which shall be a Lender, if any Lender shall be willing to serve, and otherwise shall be an Eligible Assignee; provided that if the Administrative Agent shall notify the Borrower and the Lenders that no Lender has accepted such appointment, then such resignation shall nonetheless become effective in accordance with such notice and (1) the Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents and (2) all payments, communications and determinations provided to be made by, to or through the Administrative Agent shall instead be made to or by each Lender directly, until such time as a successor Administrative Agent has been appointed as provided for above in this Section; provided, further that such Lenders so acting directly shall be and be deemed to be protected by all indemnities and other provisions herein for the benefit and protection of the Administrative Agent as if each such Lender were itself the Administrative Agent. Upon the acceptance of any appointment as Administrative Agent hereunder by a successor Administrative Agent, such successor Administrative Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the current Administrative Agent, and the current Administrative Agent shall be discharged from its duties and obligations under the Loan Documents. After any Administrative Agent’s resignation or removal hereunder as Administrative Agent, the provisions of this Article X. shall continue to inure to its benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent under the Loan Documents. Notwithstanding anything contained herein to the contrary, the Administrative Agent may assign its rights and duties under the Loan Documents to any of its Affiliates by giving the Borrower and each Lender prior written notice. The resignation or removal of the Administrative Agent, or the assignment by the Administrative Agent

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of its rights and duties under the Loan Documents, as provided in this Section shall have no effect on the obligations as a “Lender” of the Lender then acting as the Administrative Agent.

Section 10.9. Titled Agents.
Each of the Arrangers, the Syndication Agent and each Documentation Agent (each a “Titled Agent”) in each such respective capacity, assumes no responsibility or obligation hereunder, including, without limitation, for servicing, enforcement or collection of any of the Loans, nor any duties as an agent hereunder for the Lenders. The titles given to the Titled Agents are solely honorific and imply no fiduciary responsibility on the part of the Titled Agents to the Administrative Agent, any Lender, the Parent, any other Borrower or any other Loan Party and the use of such titles does not impose on the Titled Agents any duties or obligations greater than those of any other Lender or entitle the Titled Agents to any rights other than those to which any other Lender is entitled.

Article XI. Miscellaneous
Section 11.1. Notices.
Unless otherwise provided herein, communications provided for hereunder shall be in writing and shall be mailed, telecopied or delivered as follows:

If to the Borrower:

PREIT Associates, L.P.
200 South Broad Street
Philadelphia, PA 19102
Attention: Andrew Ioannou
Telephone: (215) 875-0700
Telecopy: (215) 546-7311

With a copy of notices of Defaults, Events of Default or notices pursuant to Article IX. to:

PREIT Associates, L.P.
200 South Broad Street
Philadelphia, PA 19102
Attention: Bruce Goldman
Telephone: (215) 875-0700
Telecopy: (215) 546-7311

and

Drinker Biddle & Reath LLP
One Logan Square
18 th and Cherry Streets
Philadelphia, PA 19103
Attention: Rush T. Haines
Telephone: (215) 988-2700
Telecopy: (215) 988-2757


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If to the Administrative Agent:

Wells Fargo Bank, National Association, as Administrative Agent
550 South Tryon Street, 6th Floor
MAC D1086-061
Charlotte, North Carolina 28202
Attention: D. Bryan Gregory
Telephone:      (704) 410‑1776
Telecopy:      (704) 410-0329

with copies to:

Wells Fargo Bank, National Association, as Administrative Agent
608 Second Avenue, 11 th Floor
MAC N9303-110
Minneapolis, Minnesota 55402
Attention: Anthony J. Gangelhoff
Telephone:      (612) 316-0109
Telecopy:      (877) 410-5023

and:

Wells Fargo Bank, National Association, as Administrative Agent
1750 H Street, NW Suite 400
Washington, D.C. 20006
Attention: Loan Administration Manager
Telephone:      (202) 303-3000
Telecopy:      (202) 429-2985

If to a Lender:

To the address or telecopy number, as applicable, of the Administrative Agent or such Lender, as the case may be, set forth on the Administrative Questionnaire.

or, as to each party at such other address as shall be designated by such party in a written notice to the other parties delivered in compliance with this Section. All such notices and other communications shall be effective (i) if mailed, upon the first to occur of receipt or the expiration of 3 days after the deposit in the United States Postal Service mail, postage prepaid; (ii) if telecopied, upon mechanical confirmation of transmission if received on a Business Day prior to 5:00 p.m. local time at the point of destination and, if otherwise, on the next succeeding Business Day; (iii) if hand delivered, when delivered or (iv) if delivered in accordance with Section 7.1.(b) to the extent applicable; provided, however that in the case of the immediately preceding clauses (i), (ii) and (iii) non-receipt of any communication as of the result of any change of address of which the sending party was not notified or as the result of a refusal to accept delivery shall be deemed receipt of such communication. Notwithstanding the immediately preceding sentence, all notices or communications to the Administrative Agent or any Lender under Article II. shall be effective only when actually received. Any notice to the Borrower received by any individual designated by the Borrower to receive such notice shall be effective notwithstanding the fact that any other individual designated by the Borrower to receive a copy of such notice did not receive such copy.

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None of the Administrative Agent or any Lender shall incur any liability to the Borrower (nor shall the Administrative Agent incur any liability to the Lenders) for acting upon any telephonic notice referred to in this Agreement which the Administrative Agent or such Lender, as the case may be, believes in good faith to have been given by a Person authorized to deliver such notice or for otherwise acting in good faith hereunder.

Section 11.2. Expenses.
The Borrower agrees (a) to pay or reimburse the Administrative Agent for all of its reasonable out-of-pocket costs and expenses incurred in connection with the preparation, negotiation and execution of, and any amendment, supplement or modification to, any of the Loan Documents, and the consummation of the transactions contemplated thereby, including due diligence expense and reasonable travel expenses related to closing and the reasonable fees and disbursements of counsel to the Administrative Agent, (b) to pay or reimburse the Administrative Agent and, after the occurrence and during the continuance of an Event of Default, the Lenders, for all their costs and expenses incurred in connection with the enforcement or preservation of any rights under the Loan Documents, including the reasonable fees and disbursements of their respective counsel (including the allocated fees and expenses of in-house counsel) and any payments in indemnification or otherwise payable by the Lenders to the Administrative Agent pursuant to the Loan Documents, (c) to pay, indemnify and hold the Administrative Agent and the Lenders harmless from any and all recording and filing fees and any and all liabilities with respect to, or resulting from any failure to pay or delay in paying, documentary, stamp, excise and other similar taxes, if any, which may be payable or determined to be payable in connection with the execution and delivery of any of the Loan Documents, or consummation of any amendment, supplement or modification of, or any waiver or consent under or in respect of, any Loan Document and (d) to the extent not already covered by any of the preceding subsections, to pay the fees and disbursements of counsel to the Administrative Agent and any Lender incurred in connection with the representation of the Administrative Agent or such Lender in any matter relating to or arising out of any bankruptcy or other proceeding of the type described in Sections 9.1.(e) or 9.1.(f), including, without limitation (i) any motion for relief from any stay or similar order, (ii) the negotiation, preparation, execution and delivery of any document relating to the Obligations and (iii) the negotiation and preparation of any debtor‑in‑possession financing or any plan of reorganization of the Parent, any other Borrower or any other Loan Party, whether proposed by the Parent, any other Borrower, such Loan Party, the Lenders or any other Person, and whether such fees and expenses are incurred prior to, during or after the commencement of such proceeding or the confirmation or conclusion of any such proceeding.

Section 11.3. Stamp, Intangible and Recording Taxes.
The Borrower will pay any and all stamp, excise, intangible, registration, recordation and similar taxes, fees or charges and shall indemnify the Administrative Agent, each Lender and each Specified Derivatives Provider against any and all liabilities with respect to or resulting from any delay in the payment or omission to pay any such taxes, fees or charges, which may be payable or determined to be payable in connection with the execution, delivery, recording, performance or enforcement of this Agreement, the Notes and any of the other Loan Documents, the amendment, supplement, modification or waiver of or consent under this Agreement, the Notes, any of the other Loan Documents or any of the Specified Derivatives Contracts or the perfection of any rights or Liens under this Agreement, the Notes, any of the other Loan Documents or any of the Specified Derivatives Contracts.

Section 11.4. Setoff.
Subject to Section 3.3. and in addition to any rights now or hereafter granted under Applicable Law and not by way of limitation of any such rights, the Administrative Agent, each Lender and each

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Participant is hereby authorized by the Borrower, at any time or from time to time while an Event of Default exists, without notice to the Borrower or to any other Person, any such notice being hereby expressly waived, but in the case of a Lender or a Participant subject to receipt of the prior written consent of the Requisite Lenders exercised in their sole discretion, to set off and to appropriate and to apply any and all deposits (general or special, including, but not limited to, indebtedness evidenced by certificates of deposit, whether matured or unmatured) and any other indebtedness at any time held or owing by the Administrative Agent, such Lender or any Affiliate of the Administrative Agent or such Lender, to or for the credit or the account of the Borrower against and on account of any of the Obligations, irrespective of whether or not any or all of the Loans and all other Obligations have been declared to be, or have otherwise become, due and payable as permitted by Section 9.2., and although such obligations shall be contingent or unmatured. Promptly following any such set-off the Administrative Agent shall notify the Borrower thereof and of the application of such set-off, provided that the failure to give such notice shall not invalidate such set-off. Notwithstanding anything to the contrary in this Section, if any Defaulting Lender shall exercise any such right of setoff, (x) all amounts so set off shall be paid over immediately to the Administrative Agent for further application in accordance with the provisions of Section 3.9. and, pending such payment, shall be segregated by such Defaulting Lender from its other funds and deemed held in trust for the benefit of the Administrative Agent and the Lenders and (y) such Defaulting Lender shall provide promptly to the Administrative Agent a statement describing in reasonable detail the Obligations owing to such Defaulting Lender as to which it exercised such right of setoff.

Section 11.5. Litigation; Jurisdiction; Other Matters; Waivers.
(a)      EACH PARTY HERETO ACKNOWLEDGES THAT ANY DISPUTE OR CONTROVERSY BETWEEN OR AMONG THE BORROWER, THE ADMINISTRATIVE AGENT OR ANY OF THE LENDERS WOULD BE BASED ON DIFFICULT AND COMPLEX ISSUES OF LAW AND FACT AND WOULD RESULT IN DELAY AND EXPENSE TO THE PARTIES. ACCORDINGLY, TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE LENDERS, THE ADMINISTRATIVE AGENT AND THE BORROWER HEREBY WAIVES ITS RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING OF ANY KIND OR NATURE IN ANY COURT OR TRIBUNAL IN WHICH AN ACTION MAY BE COMMENCED BY OR AGAINST ANY PARTY HERETO ARISING OUT OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT.

(b)      EACH OF THE BORROWER, THE ADMINISTRATIVE AGENT AND EACH LENDER HEREBY AGREES THAT THE FEDERAL DISTRICT COURT OF THE EASTERN DISTRICT OF PENNSYLVANIA AND ANY STATE COURT LOCATED IN PHILADELPHIA COUNTY, PENNSYLVANIA, SHALL HAVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN OR AMONG THE BORROWER, THE ADMINISTRATIVE AGENT OR ANY OF THE LENDERS, PERTAINING DIRECTLY OR INDIRECTLY TO THIS AGREEMENT, THE LOANS OR ANY OTHER LOAN DOCUMENT OR TO ANY MATTER ARISING HEREFROM OR THEREFROM. THE BORROWER, THE ADMINISTRATIVE AGENT AND EACH OF THE LENDERS EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR PROCEEDING COMMENCED IN SUCH COURTS.

(c)      EACH PARTY FURTHER WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT FORUM AND EACH AGREES NOT TO PLEAD OR CLAIM THE SAME.

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(d)      THE CHOICE OF FORUM SET FORTH IN THIS SECTION SHALL NOT BE DEEMED TO PRECLUDE THE BRINGING OF ANY ACTION BY THE ADMINISTRATIVE AGENT OR ANY LENDER OR THE ENFORCEMENT BY THE ADMINISTRATIVE AGENT OR ANY LENDER OF ANY JUDGMENT OBTAINED IN SUCH FORUM IN ANY OTHER APPROPRIATE JURISDICTION.

(e)      THE FOREGOING WAIVERS HAVE BEEN MADE WITH THE ADVICE OF COUNSEL AND WITH A FULL UNDERSTANDING OF THE LEGAL CONSEQUENCES THEREOF, AND SHALL SURVIVE THE PAYMENT OF THE LOANS AND ALL OTHER AMOUNTS PAYABLE HEREUNDER OR UNDER ANY OTHER LOAN DOCUMENTS AND THE TERMINATION OF THIS AGREEMENT.

Section 11.6. Successors and Assigns.
(a)      Successors and Assigns Generally . The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that neither the Borrower nor any other Loan Party may assign or otherwise transfer any of its rights or obligations hereunder or under any other Loan Document without the prior written consent of the Administrative Agent and each Lender, and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an Eligible Assignee in accordance with the provisions of the immediately following subsection (b), (ii) by way of participation in accordance with the provisions of the immediately following subsection (d) or (iii) by way of pledge or assignment of a security interest subject to the restrictions of the immediately following subsection (e) (and, subject to the last sentence of the immediately following subsection (b), any other attempted assignment or transfer by any party hereto shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in the immediately following subsection (d) and, to the extent expressly contemplated hereby, the respective partners, shareholders, directors, officers, employees, agents, counsel, other advisors and representatives of the Administrative Agent and the Lenders and of the respective Affiliates of the Administrative Agent and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

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

(i)      Minimum Amounts .

(A)      in the case of an assignment of the entire remaining amount of an assigning Lender’s Commitment and/or the Loans at the time owing to it, in the case of contemporaneous assignments to related Approved Funds that equal at least the amount specified in the immediately following clause (B) in the aggregate, or in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum amount need be assigned; and

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

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Assignment and Assumption Agreement, as of the Trade Date) shall not be less than $5,000,000, unless each of the Administrative Agent and, so long as no Default or Event of Default shall exist, the Borrower otherwise consents (each such consent not to be unreasonably withheld or delayed); provided, however, that if, after giving effect to such assignment, the amount of the Commitment held by such assigning Lender and the outstanding principal balance of the Loans of such assigning Lender, as applicable, would be less than $5,000,000 in the aggregate, then such assigning Lender shall assign the entire amount of its Commitment and the Loans at the time owing to it.

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

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

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

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

(iv)      Assignment and Assumption; Notes . The parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption Agreement, together with a processing and recordation fee of $4,500 for each assignment (which fee the Administrative Agent may, in its sole discretion, elect to waive), and the assignee, if it is not a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire. If requested by the transferor Lender or the assignee, upon the consummation of any assignment, the transferor Lender, the Administrative Agent and the Borrower shall make appropriate arrangements so that new Notes are issued to the assignee and such transferor Lender, as appropriate, upon return to the Borrower of any Notes being replaced (subject to Section 2.11.(c)).

(v)      No Assignment to Certain Persons . No such assignment shall be made to (A) the Borrower or any of the Borrower’s Affiliates or Subsidiaries or (B) to any Defaulting Lender or any of its Subsidiaries, or to any Person who, upon becoming a Lender hereunder, would constitute any of the foregoing Persons described in this clause (B).

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

(vii)      Certain Additional Payments . In connection with any assignment of rights and obligations of any Defaulting Lender hereunder, no such assignment shall be effective unless and until, in addition to the other conditions thereto set forth herein, the parties to the assignment shall

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make such additional payments to the Administrative Agent in an aggregate amount sufficient, upon distribution thereof as appropriate (which may be outright payment, purchases by the assignee of participations or subparticipations, or other compensating actions, including funding, with the consent of the Borrower and the Administrative Agent, the applicable pro rata share of Loans previously requested but not funded by the Defaulting Lender, to each of which the applicable assignee and assignor hereby irrevocably consent), to (x) pay and satisfy in full all payment liabilities then owed by such Defaulting Lender to the Administrative Agent and each other Lender hereunder (and interest accrued thereon), and (y) acquire (and fund as appropriate) its full pro rata share of all Loans in accordance with its Commitment Percentage. Notwithstanding the foregoing, in the event that any assignment of rights and obligations of any Defaulting Lender hereunder shall become effective under Applicable Law without compliance with the provisions of this paragraph, then the assignee of such interest shall be deemed to be a Defaulting Lender for all purposes of this Agreement until such compliance occurs.

Subject to acceptance and recording thereof by the Administrative Agent pursuant to the immediately following subsection (c), from and after the effective date specified in each Assignment and Assumption Agreement, the assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Assumption Agreement, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption Agreement, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption Agreement covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto) but shall continue to be entitled to the benefits of Sections 4.4., 11.2. and 11.10. and the other provisions of this Agreement and the other Loan Documents as provided in Section 11.11. with respect to facts and circumstances occurring prior to the effective date of such assignment; provided, that except to the extent otherwise expressly agreed by the affected parties, no assignment by a Defaulting Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender having been a Defaulting Lender. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this paragraph shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with the immediately following subsection (d).

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

(d)      Participations . Any Lender may at any time, without the consent of, or notice to, the Borrower or the Administrative Agent, sell participations to any bank or other financial institution (but in no event to a natural Person or the Borrower or any of the Borrower’s Affiliates or Subsidiaries or a Defaulting Lender) (each, a “Participant”) in all or a portion of such Lender’s rights and/or obligations under this Agreement (including all or a portion of its Commitment and/or the Loans owing to it); provided that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Borrower, the Administrative Agent and the Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. Any

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agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to (v) decrease the amount of such Lender’s Loan (unless such decrease will not result in an decrease in the Participant’s share), (w) increase such Lender’s Commitment (unless such increase will not result in an increase in the Participant’s share), (x) extend the date fixed for the payment of principal on the Loans or portions thereof owing to such Lender, (y) reduce the rate at which interest is payable thereon or (z) release any Guarantor from its Obligations under the Guaranty except as contemplated by Section 7.15.(d) or Section 7.15.(e), in each case, as applicable to that portion of such Lender’s rights and/or obligations that are subject to the participation. The Borrower agrees that each Participant shall be entitled to the benefits of Sections 3.10., 4.1., 4.4. (subject to the requirements and limitations therein, including the requirements under Section 3.10.(c) (it being understood that the documentation required under Section 3.10.(c) shall be delivered to the participating Lender)) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to subsection (b) of this Section; provided that such Participant (A) agrees to be subject to the provisions of Section 4.6. as if it were an assignee under subsection (b) of this Section; and (B) shall not be entitled to receive any greater payment under Sections 4.1. or 3.10., with respect to any participation, than its participating Lender would have been entitled to receive, except to the extent such entitlement to receive a greater payment results from a Regulatory Change that occurs after the Participant acquired the applicable participation. Each Lender that sells a participation agrees, at the Borrower’s request and expense, to use reasonable efforts to cooperate with the Borrower to effectuate the provisions of Section 4.6. with respect to any Participant. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 11.4. as though it were a Lender; provided that such Participant agrees to be subject to Section 3.3. as though it were a Lender. Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Loans or other obligations under the Loan Documents (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant’s interest in any commitments, loans, letters of credit or its other obligations under any Loan Document) to any Person except to the extent that such disclosure is necessary to establish that such commitment, loan, letter of credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.

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

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

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(g)      Patriot Act Notice; Compliance . In order for the Administrative Agent to comply with “know your customer” and anti-money laundering rules and regulations, including without limitation, the Patriot Act, prior to any Lender that is organized under the laws of a jurisdiction outside of the United States of America becoming a party hereto, the Administrative Agent may request, and such Lender shall provide to the Administrative Agent, its name, address, tax identification number and/or such other identification information as shall be necessary for the Administrative Agent to comply with federal law.

(h)      Information to Assignee, Etc . A Lender may furnish any information concerning the Parent, any other Borrower, any other Loan Party or any other Subsidiary in the possession of such Lender from time to time to assignees and Participants of such Lender (including prospective assignees and Participants) subject to compliance with the applicable terms of Section 11.9.

Section 11.7. Amendments and Waivers.
(a)      Generally . Except as otherwise expressly provided in this Agreement, (i) any consent or approval required or permitted by this Agreement or in any Loan Document to be given by the Lenders may be given, (ii) any term of this Agreement or of any other Loan Document may be amended, (iii) the performance or observance by the Borrower or any other Loan Party of any terms of this Agreement or such other Loan Document may be waived, and (iv) the continuance of any Default or Event of Default may be waived (either generally or in a particular instance and either retroactively or prospectively) with, but only with, the written consent of the Requisite Lenders (or the Administrative Agent at the written direction of the Requisite Lenders), and, in the case of an amendment to any Loan Document, the written consent of each Loan Party which is party thereto.

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

(i)      increase the Commitment of a Lender (excluding any increase as a result of an assignment of Commitments permitted under Section 11.6. or subject a Lender to any additional obligations;

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

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

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

(v)      change the “Commitment Percentages” (excluding any change as a result of an assignment of Commitments permitted under Section 11.6. or the making of additional Loans effected under Section 2.19.) or amend or otherwise modify the provisions of Section 3.2.;

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

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

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(viii)      release any Guarantor from its obligations under the Guaranty except as contemplated under Section 7.15.(d) or Section 7.15.(e); or

(ix)      waive a Default or Event of Default under Section 9.1.(a), except as permitted by Section 9.8.

(c)      Amendment of Administrative Agent’s Duties, Etc . No amendment, waiver or consent unless in writing and signed by the Administrative Agent, in addition to the Lenders required hereinabove to take such action, shall affect the rights or duties of the Administrative Agent under this Agreement or any of the other Loan Documents. No waiver shall extend to or affect any obligation not expressly waived or impair any right consequent thereon and any amendment, waiver or consent shall be effective only in the specific instance and for the specific purpose set forth therein. Notwithstanding anything to the contrary herein, no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder (and any amendment, waiver or consent which by its terms requires the consent of all Lenders or each affected Lender may be effected with the consent of the applicable Lenders other than Defaulting Lenders), except that (x) the Commitment of a Defaulting Lender may not be increased, reinstated or extended without the written consent of such Defaulting Lender and (y) any waiver, amendment or modification requiring the consent of each affected Lender under the immediately preceding subsection (b) that by its terms affects any Defaulting Lender more adversely than other affected Lenders shall require the written consent of such Defaulting Lender. No course of dealing or delay or omission on the part of the Administrative Agent or any Lender in exercising any right shall operate as a waiver thereof or otherwise be prejudicial thereto. Any Event of Default occurring hereunder shall continue to exist until such time as such Event of Default is waived in writing in accordance with the terms of this Section, notwithstanding any attempted cure or other action by the Parent, any other Borrower, any other Loan Party or any other Person subsequent to the occurrence of such Event of Default. Except as otherwise explicitly provided for herein or in any other Loan Document, no notice to or demand upon the Borrower shall entitle the Borrower to other or further notice or demand in similar or other circumstances.

(d)      Technical Amendments . Notwithstanding anything to the contrary in this Section 11.7., if the Administrative Agent and the Borrower have jointly identified an ambiguity, omission, mistake or defect in any provision of this Agreement or an inconsistency between provisions of this Agreement, the Administrative Agent and the Borrower shall be permitted to amend such provision or provisions to cure such ambiguity, omission, mistake, defect or inconsistency so long as to do so would not adversely affect the interests of the Lenders or materially change the intent of any provision of this Agreement. Any such amendment shall become effective without any further action or consent of any of other party to this Agreement. The Administrative Agent will provide the Lenders with a copy of any such amendment.

Section 11.8. Nonliability of Administrative Agent and Lenders.
The relationship between the Borrower, on the one hand, and the Lenders and the Administrative Agent, on the other hand, shall be solely that of borrower and lender. Neither the Administrative Agent nor any Lender shall have any fiduciary responsibilities to the Borrower and no provision in this Agreement or in any of the other Loan Documents, and no course of dealing between or among any of the parties hereto, shall be deemed to create any fiduciary duty owing by the Administrative Agent or any Lender to any Lender, the Borrower, any other Subsidiary or any other Loan Party. Neither the Administrative Agent nor any Lender undertakes any responsibility to the Borrower to review or inform the Borrower of any matter in connection with any phase of the business or operations of the Borrower.

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Section 11.9. Confidentiality.
Except as otherwise provided by Applicable Law, the Administrative Agent and each Lender shall utilize all non‑public information obtained pursuant to the requirements of this Agreement which has been identified as confidential or proprietary by the Parent or PREIT in accordance with its customary procedure for handling confidential information of this nature and in accordance with safe and sound banking practices solely in connection with the transactions contemplated by this Agreement but in any event may make disclosure: (a) to any of their respective Affiliates (provided any such Affiliate shall agree to keep such information confidential in accordance with the terms of this Section); (b) as reasonably requested by any bona fide assignee, Participant or other transferee in connection with the contemplated transfer of any Commitment and/or Loans or participations therein as permitted hereunder (provided they shall agree to keep such information confidential in accordance with the terms of this Section); (c) as required or requested by any Governmental Authority or representative thereof or pursuant to legal process or in connection with any legal proceedings; (d) to the Administrative Agent’s or such Lender’s independent auditors and other professional advisors (provided they shall be notified of the confidential nature of the information); (e) if an Event of Default exists, to any other Person, in connection with the exercise by the Administrative Agent or the Lenders of rights hereunder or under any of the other Loan Documents; (f) to the extent such information (x) becomes publicly available other than as a result of a breach of this Section or (y) becomes available to the Administrative Agent or any Lender on a nonconfidential basis from a source other than the Parent, any other Borrower or any Affiliate; (g) to the extent requested by, or required to be disclosed to, any nationally recognized rating agency or regulator or similar authority (including any self-regulatory authority, such as the National Association of Insurance Commissioners) having or purporting to have jurisdiction over it; and (h) with the consent of the Parent or PREIT.

Section 11.10. Indemnification.
(a)      The Borrower shall and hereby agrees to indemnify, defend and hold harmless the Administrative Agent, any Affiliate of the Administrative Agent and each of the Lenders and their respective directors, officers, shareholders, agents, employees and counsel (each referred to herein as an “Indemnified Party”) from and against any and all losses, costs, claims, damages, liabilities, deficiencies, judgments or expenses of every kind and nature (including, without limitation, amounts paid in settlement, court costs and the fees and disbursements of counsel incurred in connection with any litigation, investigation, claim or proceeding or any advice rendered in connection therewith, but excluding losses, costs, claims, damages, liabilities, deficiencies, judgments or expenses indemnification in respect of which is specifically covered by Section 3.10. or 4.1. or expressly excluded from the coverage of such Sections) incurred by an Indemnified Party in connection with, arising out of, or by reason of, any suit, cause of action, claim, arbitration, investigation or settlement, consent decree or other proceeding (the foregoing referred to herein as an “Indemnity Proceeding”) which is in any way related directly or indirectly to: (i) this Agreement or any other Loan Document or the transactions contemplated thereby; (ii) the making of any Loans; (iii) any actual or proposed use by the Borrower of the proceeds of the Loans; (iv) the Administrative Agent’s or any Lender’s entering into this Agreement; (v) the fact that the Administrative Agent and the Lenders have established the credit facility evidenced hereby in favor of the Borrower; (vi) the fact that the Administrative Agent and the Lenders are creditors of the Borrower and have or are alleged to have information regarding the financial condition, strategic plans or business operations of the Parent, PREIT and the other Subsidiaries; (vii) the fact that the Administrative Agent and the Lenders are material creditors of the Borrower and are alleged to influence directly or indirectly the business decisions or affairs of the Parent, PREIT and the other Subsidiaries or their financial condition; (viii) the exercise of any right or remedy the Administrative Agent or the Lenders may have under this Agreement or the other Loan Documents including, but not limited to, the foreclosure upon, or seizure of, any collateral or the exercise of any other rights of a secured party; provided, however, that the

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Borrower shall not be obligated to indemnify any Indemnified Party for any acts or omissions of such Indemnified Party in connection with matters described in clause (i) or (viii) to the extent found in a final, non-appealable judgment by a court of competent jurisdiction to have resulted from such Indemnified Party’s gross negligence or willful misconduct; or (ix) any violation or non‑compliance by the Parent, PREIT or any other Subsidiary of any Applicable Law (including any Environmental Law) including, but not limited to, any Indemnity Proceeding commenced by (A) the Internal Revenue Service or state taxing authority or (B) any Governmental Authority or other Person under any Environmental Law, including any Indemnity Proceeding commenced by a Governmental Authority or other Person seeking remedial or other action to cause the Borrower or its Subsidiaries (or its respective properties) (or the Administrative Agent and/or the Lenders as successors to the Borrower) to be in compliance with such Environmental Laws.

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

(c)      This indemnification shall apply to any Indemnity Proceeding arising during the pendency of any bankruptcy proceeding filed by or against the Parent, PREIT, any other Loan Party or any other Subsidiary.

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

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

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

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

References in this Section 11.10. to “Lender” or “Lenders” shall be deemed to include such Persons (and their Affiliates) in their capacity as Specified Derivatives Providers.

Section 11.11. Termination; Survival.
This Agreement shall terminate at such time as (a) all of the Commitments have been terminated, (b) none of the Lenders is obligated any longer under this Agreement to make any Loans, and (c) all Obligations (other than obligations which survive as provided in the following sentence) have been paid and satisfied in full. Notwithstanding any termination of this Agreement, or of the other Loan Documents, the indemnities to which the Administrative Agent and the Lenders are entitled under the provisions of Sections 10.7., 11.2. and 11.10. and any other provision of this Agreement and the other Loan Documents, and the waivers of jury trial and submission to jurisdictions contained in Section 11.5., shall continue in full force and effect and shall protect the Administrative Agent and the Lenders (i) notwithstanding any termination of this Agreement, or of the other Loan Documents, against events arising after such termination as well as before and (ii) at all times after any such party ceases to be a party to this Agreement with respect to all matters and events existing on or prior to the date such party ceased to be a party to this Agreement.

Section 11.12. Severability of Provisions.
If any provision under this Agreement or the other Loan Documents shall be determined by a court of competent jurisdiction to be invalid or unenforceable, that provision shall be deemed severed from the Loan Documents, and the validity, legality and enforceability of the remaining provisions shall remain in full force as thought the invalid, illegal, or unenforceable provision had never been part of the Loan Documents.

Section 11.13. GOVERNING LAW.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH COMMONWEALTH.

Section 11.14. Counterparts.
To facilitate execution, this Agreement and any amendments, waivers, consents or supplements may be executed in any number of counterparts as may be convenient or required. It shall not be necessary that the signature of, or on behalf of, each party, or that the signature of all persons required to bind any party, appear on each counterpart. All counterparts shall collectively constitute a single document. It shall not be necessary in making proof of this document to produce or account for more than a single counterpart containing the respective signatures of, or on behalf of, each of the parties hereto. Delivery of an executed counterpart via facsimile, portable document format (“PDF”) or electronic mail shall constitute delivery of an original.

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Section 11.15. Independence of Covenants.
All covenants hereunder shall be given in any jurisdiction independent effect so that if a particular action or condition is not permitted by any of such covenants, the fact that it would be permitted by an exception to, or be otherwise within the limitations of, another covenant shall not avoid the occurrence of a Default or an Event of Default if such action is taken or condition exists.

Section 11.16. Obligations with Respect to Loan Parties.
The obligations of PREIT, PREIT-RUBIN or the Parent to direct or prohibit the taking of certain actions by the other Loan Parties as specified herein shall be absolute and not subject to any defense PREIT, PREIT-RUBIN, the Parent or any other Loan Party may have that it does not control such Loan Parties.

Section 11.17. Limitation of Liability.
None of the Administrative Agent, any Lender, nor any Affiliate, officer, director, employee, attorney, or agent of the Administrative Agent or any Lender shall have any liability with respect to, and the Borrower hereby waives, releases, and agrees not to sue any of them upon, any claim for any special, indirect, incidental, or consequential damages suffered or incurred by the Borrower in connection with, arising out of, or in any way related to, this Agreement, any of the other Loan Documents, the Fee Letter or any of the transactions contemplated by this Agreement or any of the other Loan Documents. The Borrower hereby waives, releases, and agrees not to sue the Administrative Agent or any Lender or any of their respective Affiliates, officers, directors, employees, attorneys, or agents for punitive damages in respect of any claim in connection with, arising out of, or in any way related to, this Agreement or any of the other Loan Documents, the Fee Letter, or any of the transactions contemplated by this Agreement or financed hereby. Notwithstanding anything in this Section to the contrary, no Defaulting Lender shall be entitled to claim any of the benefits of this Section.

Section 11.18. Entire Agreement.
This Agreement and the other Loan Documents referred to herein embody the final, entire agreement among the parties hereto and supersede any and all prior commitments, agreements, representations, and understandings, whether written or oral, relating to the subject matter hereof and may not be contradicted or varied by evidence of prior, contemporaneous, or subsequent oral agreements or discussions of the parties hereto. There are no oral agreements among the parties hereto.

Section 11.19. Construction.
The Borrower, the Administrative Agent and each Lender acknowledge that each of them has had the benefit of legal counsel of its own choice and has been afforded an opportunity to review this Agreement and the other Loan Documents with its legal counsel and that this Agreement and the other Loan Documents shall be construed as if jointly drafted by the Borrower, the Administrative Agent and each Lender.

Section 11.20. Time of the Essence.
Time is of the essence of each and every provision of this Agreement.

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


PREIT Associates, L.P.

By:      Pennsylvania Real Estate Investment Trust,
its general partner


By: /s/ Andrew Ioannou
Name: Andrew Ioannou
Title: Executive Vice President - Finance & Acquisitions and Treasurer


PREIT-RUBIN, INC.


By: /s/ Andrew Ioannou
Name: Andrew Ioannou
Title: Executive Vice President - Finance & Acquisitions and Treasurer


PENNSYLVANIA REAL ESTATE INVESTMENT TRUST


By: /s/ Andrew Ioannou
Name: Andrew Ioannou
Title: Executive Vice President - Finance & Acquisitions and Treasurer
















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[Signature Page to Five-Year Term Loan Agreement
with PREIT Associates, L.P. et al.]


Wells Fargo Bank, National Association, as Administrative Agent and as a Lender


By: /s/ D. Bryan Gregory
Name: D. Bryan Gregory
Title: Director





























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[Signature Page to Five-Year Term Loan Agreement
with PREIT Associates, L.P. et al.]


PNC BANK, NATIONAL ASSOCIATION


By: /s/ Sharon L. Schmidt
Name: Sharon L. Schmidt
Title: Vice President     
























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[Signature Page to Five-Year Term Loan Agreement
with PREIT Associates, L.P. et al.]


MUFG UNION BANK, N.A. (FORMERLY KNOWN AS UNION BANK, N.A.)


By: /s/ Donald Wattson
Name: Donald Wattson
Title: Vice President     





























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[Signature Page to Five-Year Term Loan Agreement
with PREIT Associates, L.P. et al.]


U.S. BANK NATIONAL ASSOCIATION


By: /s/ Renee Lewis
Name: Renee Lewis
Title: Senior Vice President     





























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[Signature Page to Five-Year Term Loan Agreement
with PREIT Associates, L.P. et al.]


CAPITAL ONE, NATIONAL ASSOCIATION


By: /s/ Michael J. Vergura, Jr.
Name: Michael J. Vergura, Jr.
Title: Vice President     





























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[Signature Page to Five-Year Term Loan Agreement
with PREIT Associates, L.P. et al.]


JPMORGAN CHASE BANK, N.A.


By: /s/ Elizabeth Johnson
Name: Elizabeth Johnson
Title: Executive Director





























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[Signature Page to Five-Year Term Loan Agreement
with PREIT Associates, L.P. et al.]


MANUFACTURERS AND TRADERS TRUST COMPANY


By: /s/ Michael J. DiSanto
Name: Michael J. DiSanto
Title: Vice President     





























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[Signature Page to Five-Year Term Loan Agreement
with PREIT Associates, L.P. et al.]


CITIZENS BANK OF PENNSYLVANIA


By: /s/ Samuel A Bluso
Name: Samuel A. Bluso
Title: Senior Vice President     





























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[Signature Page to Five-Year Term Loan Agreement
with PREIT Associates, L.P. et al.]


TD BANK, N.A.


By: /s/ William Hutchinson
Name: William Hutchinson
Title: Vice President     



















































SCHEDULE I

Commitments


Lender
Initial Commitment Amount
Wells Fargo Bank, National Association
$25,000,000
PNC Bank, National Association
$25,000,000
MUFG Union Bank, N.A.
$20,000,000
U.S. Bank National Association
$20,000,000
Capital One, National Association
$15,000,000
JPMorgan Chase Bank, N.A.
$15,000,000
Manufacturers and Traders Trust Company
$10,000,000
Citizens Bank of Pennsylvania
$10,000,000
TD Bank, N.A.
$10,000,000
TOTAL
$150,000,000




                    
EXHIBIT A

FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT


This Assignment and Assumption Agreement (the “Assignment and Assumption”) is dated as of the Effective Date set forth below and is entered into by and between [the][each] For bracketed language here and elsewhere in this form relating to the Assignor(s), if the assignment is from a single Assignor, choose the first bracketed language. If the assignment is from multiple Assignors, choose the second bracketed language. Assignor identified in item 1 below ([the][each, an] “Assignor”) and [the][each] For bracketed language here and elsewhere in this form relating to the Assignee(s), if the assignment is to a single Assignee, choose the first bracketed language. If the assignment is to multiple Assignees, choose the second bracketed language. Assignee identified in item 2 below ([the][each, an] “Assignee”). [It is understood and agreed that the rights and obligations of [the Assignors][the Assignees] Select as appropriate. hereunder are several and not joint.] Include bracketed language if there are either multiple Assignors or multiple Assignees. Capitalized terms used but not defined herein shall have the meanings given to them in the Credit Agreement identified below (as amended, the “Credit Agreement”), receipt of a copy of which is hereby acknowledged by [the][each] Assignee. The Standard Terms and Conditions for Assignment and Assumption (the “Standard Terms and Conditions”) set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Assumption as if set forth herein in full.

For an agreed consideration, [the][each] Assignor hereby irrevocably sells and assigns to [the Assignee][the respective Assignees], and [the][each] Assignee hereby irrevocably purchases and assumes from [the Assignor][the respective Assignors], subject to and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the Effective Date inserted by the Administrative Agent as contemplated below (i) all of [the Assignor’s][the respective Assignors’] rights and obligations in [its capacity as a Lender][their respective capacities as Lenders] under the Credit Agreement and any other documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of [the Assignor][the respective Assignors] under the respective facilities identified below (including without limitation any Guarantees included in such facilities), and (ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and any other right of [the][any] Assignor (in its capacity as a Lender)][the respective Assignors (in their respective capacities as Lenders)] against any Person, whether known or unknown, arising under or in connection with the Credit Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including, but not limited to, contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned by [the][any] Assignor to [the][any] Assignee pursuant to clauses (i) and (ii) above being referred to herein collectively as [the][an] “Assigned Interest”). Each such sale and assignment is without recourse to [the][any] Assignor and, except



as expressly provided in this Assignment and Assumption, without representation or warranty by [the][any] Assignor.



1.      Assignor[s]:          ________________________________

______________________________
[Assignor [is] [is not] a Defaulting Lender]

2.
Assignee[s]:          ______________________________

______________________________
[for each Assignee, indicate [Affiliate][Approved Fund] of [ identify Lender ]

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3.
Borrower(s):          PREIT Associates, L.P., PREIT-RUBIN, Inc. and Pennsylvania Real Estate              Investment Trust

4.
Administrative Agent:      Wells Fargo Bank, National Association, as the administrative agent under the Credit Agreement

5.
Credit Agreement:      The $150,000,000 Five-Year Term Loan Agreement dated as of June 26, 2015 by and among the Borrowers, the Lenders parties thereto, Wells Fargo Bank, National Association, as Administrative Agent, and the other parties thereto

6.
Assigned Interest[s]:

Assignor[s]  
Assignee[s]  
Facility Assigned  
Aggregate Amount of Commitment/Loans for all Lenders  
Amount of Commitment/Loans Assigned 8
Percentage Assigned of Commitment/
Loans  
CUSIP Number
 
 
 
$
$
%
 
 
 
 
$
$
%
 
 
 
 
$
$
%
 
5. List each Assignor, as appropriate.
6 List each Assignee, as appropriate.
7 Fill in the appropriate terminology for the types of facilities under the Credit Agreement that are being assigned under this Assignment (e.g., “Commitment,” “Loan,” etc.)
8 Amount to be adjusted by the counterparties to take into account any payments or prepayments made between the Trade Date and the Effective Date.
9 Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of all Lenders thereunder.





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[7.      Trade Date:          ______________] 10  












10 To be completed if the Assignor(s) and the Assignee(s) intend that the minimum assignment amount is to be determined as of the Trade Date.















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Effective Date: _____________ ___, 20___ [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]

The terms set forth in this Assignment and Assumption are hereby agreed to:

ASSIGNOR[S] 11
[NAME OF ASSIGNOR]


By:______________________________
Name: _________________________     
Title: __________________________

[NAME OF ASSIGNOR]


By:______________________________
Name: _________________________     
Title: __________________________

ASSIGNEE[S] 12
[NAME OF ASSIGNEE]


By:______________________________
Name: _________________________     
Title: __________________________


[NAME OF ASSIGNEE]


By:______________________________
Name: _________________________     
Title: __________________________

11Add additional signature blocks as needed. Include both Fund/Pension Plan and manager making the trade (if applicable).

12 Add additional signature blocks as needed. Include both Fund/Pension Plan and manager making the trade (if applicable).




[Consented to and] 13 Accepted:

WELLS FARGO BANK, NATIONAL ASSOCIATION, as
Administrative Agent


By: _________________________________
Name: _____________________________
Title: ______________________________

[Consented to:]

PREIT ASSOCIATES, L.P.

By: Pennsylvania Real Estate Investment Trust,
its general partner


By: _________________________________
Name: _____________________________
Title: ______________________________


PREIT-RUBIN, INC.


By: _________________________________
Name: _____________________________
Title: ______________________________


PENNSYLVANIA REAL ESTATE INVESTMENT TRUST


By: _________________________________
Name: _____________________________
Title: ______________________________





13 To be added only if the consent of the Administrative Agent is required by the terms of the Credit Agreement.         14 To be added only if the consent of the Borrower is required by the terms of the Credit Agreement.
                



ANNEX 1

[__________________] 1

STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION

1.      Representations and Warranties .

1.1      Assignor[s] . [The][Each] Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of [the][the relevant] Assigned Interest, (ii) [the][such] Assigned Interest is free and clear of any lien, encumbrance or other adverse claim, (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and (iv) it is [not] a Defaulting Lender; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Credit Agreement or any other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial condition of the Borrower, any of its Subsidiaries or Affiliates or any other Person obligated in respect of any Loan Document, or (iv) the performance or observance by the Borrower, any of its Subsidiaries or Affiliates or any other Person of any of their respective obligations under any Loan Document.

1.2. Assignee[s] . [The][Each] Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and to become a Lender under the Credit Agreement, (ii) it meets all the requirements to be an Eligible Assignee as defined in the Credit Agreement (subject to such consents, if any, as may be required under such definition), (iii) from and after the Effective Date specified for this Assignment and Assumption, it shall be bound by the provisions of the Credit Agreement as a Lender thereunder and, to the extent of [the][the relevant] Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it is sophisticated with respect to decisions to acquire assets of the type represented by the Assigned Interest and either it, or the person exercising discretion in making its decision to acquire the Assigned Interest, is experienced in acquiring assets of such type, (v) it has received a copy of the Credit Agreement, and has received or has been accorded the opportunity to receive copies of the financial statements referenced in Section 6.1.(k) thereof or of the most recent financial statements delivered pursuant to Section 7.1.(a)(i) or Section 7.1.(a)(ii) thereof, as applicable, and such other documents and information as it deems appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption and to purchase [the][such] Assigned Interest, (vi) it has, independently and without reliance upon the Administrative Agent, the Assignor or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Assignment and Assumption and to purchase [the][such] Assigned Interest, and (vii) if it is a Lender organized under the laws of a jurisdiction outside of the United States of America, attached to the Assignment and Assumption is any documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by [the][such] Assignee; and (b) agrees that (i) it will, independently and without reliance on the Administrative Agent, [the][any] Assignor 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






1 Describe Credit Agreement at option of Administrative Agent.


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not taking action under the Loan Documents, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender.

2. Payments . From and after the Effective Date, the Administrative Agent shall make all payments in respect of [the][each] Assigned Interest (including payments of principal, interest, Fees and other amounts) to [the][the relevant] Assignee whether such amounts have accrued prior to, on or after the Effective Date specified for this Assignment and Assumption. The Assignor[s] and the Assignee[s] shall make all appropriate adjustments in payments by the Administrative Agent for periods prior to such Effective Date or with respect to the making of this assignment directly between themselves.

3. General Provisions . This Assignment and Assumption shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns. This Assignment and Assumption may be executed in any number of counterparts, which together shall constitute one instrument. Delivery of an executed counterpart of a signature page of this Assignment and Assumption by telecopy shall be effective as delivery of a manually executed counterpart of this Assignment and Assumption. This Assignment and Assumption shall be governed by, and construed in accordance with, the law of the Commonwealth of Pennsylvania.























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EXHIBIT B
FORM OF GUARANTY
FIVE-YEAR TERM LOAN GUARANTY

THIS FIVE-YEAR TERM LOAN GUARANTY dated as of _______________ (this “Guaranty”) executed and delivered by each of the undersigned and the other Persons from time to time party hereto pursuant to the execution and delivery of an Accession Agreement in the form of Annex I hereto (all of the undersigned, together with such other Persons each a “Guarantor” and collectively, the “Guarantors”) in favor of WELLS FARGO BANK, NATIONAL ASSOCIATION, in its capacity as Administrative Agent (the “Administrative Agent”) for the Lenders under that certain Five-Year Term Loan Agreement dated as of June 26, 2015 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), by and among PREIT Associates, L.P. (“PREIT”), PREIT-RUBIN, Inc. (“PREIT-RUBIN”), Pennsylvania Real Estate Investment Trust (the “Parent”; together with PREIT and PREIT-RUBIN, each individually, a “Borrower” and collectively, the “Borrower”), the financial institutions party thereto and their assignees under Section 11.6.(b) thereof (the “Lenders”), the Administrative Agent, and the other parties thereto, for its benefit and the benefit of the Lenders (the Administrative Agent and the Lenders, each individually a “Guarantied Party” and collectively, the “Guarantied Parties”).

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

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

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

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

WHEREAS, each Guarantor’s execution and delivery of this Guaranty is a condition precedent to the effectiveness of the Credit Agreement and to the Guarantied Parties making such financial accommodations to the Borrower.

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

Section 1. Guaranty . Each Guarantor hereby absolutely, irrevocably and unconditionally guaranties the due and punctual payment and performance when due, whether at stated maturity, by acceleration or otherwise, of all of the following (collectively referred to as the “Guarantied Obligations”): (a) all Obligations; (b) any and all extensions, renewals, modifications, amendments or substitutions of the foregoing and (c) all expenses, including, without limitation, reasonable attorneys’






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fees and disbursements, that are incurred by the Administrative Agent or any other Guarantied Party in the enforcement of any of the foregoing or any obligation of such Guarantor hereunder. Guarantied Obligations shall not include Specified Derivatives Obligations.

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

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

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

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

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

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

(e)      any bankruptcy, insolvency, reorganization, composition, adjustment, dissolution, liquidation or other like proceeding relating to such Guarantor, the Borrower, any other Loan Party or an








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y other Person, or any action taken with respect to this Guaranty by any trustee or receiver, or by any court, in any such proceeding;

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

(g)      any invalidity or nonperfection of any security interest or lien on, if any, or any other impairment of, any collateral, if any, securing any of the Guarantied Obligations or any failure of the Administrative Agent or any other Person to preserve any collateral security or any other impairment of such collateral;

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

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

(j)      any defense, set off, claim or counterclaim (other than indefeasible payment and performance in full) which any at any time be available to or be asserted by the Borrower, any other Loan party or any other Person against the Administrative Agent or any Lender;

(k)      any change in the corporate existence, structure or ownership of the Borrower or any other Loan Party;

(l)      any statement, representation or warranty made or deemed made by or on behalf of the Borrower, any Guarantor or any other Loan Party under any Loan Document, or any amendment hereto or thereto, proves to have been incorrect or misleading in any respect; or

(m)      any other circumstance which might otherwise constitute a defense available to, or a discharge of, a Guarantor hereunder (other than termination of this Guaranty as provided in Section 21 hereof).

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

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






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

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

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

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

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

Section 11. Payments Free and Clear . All sums payable by each Guarantor hereunder, whether of principal, interest, Fees, expenses, premiums or otherwise, shall be paid in full, without set-off or counterclaim or any deduction or withholding whatsoever (including any Taxes), and if such Guarantor is required by Applicable Law or by any Governmental Authority to make any such deduction or withholding provided the requirements set forth in Section 3.10. of the Credit Agreement are satisfied, such Guarantor shall pay to the Administrative Agent and the Lenders such additional amount as will






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result in the receipt by the Administrative Agent and the Lenders of the full amount payable hereunder had such deduction or withholding not occurred or been required.

Section 12. Set-off . In addition to any rights now or hereafter granted under any of the other Loan Documents or Applicable Law and not by way of limitation of any such rights, each Guarantor hereby authorizes each Guarantied Party and each Participant, at any time while an Event of Default exists, without any prior notice to such Guarantor or to any other Person, any such notice being hereby expressly waived, but in the case of a Lender or a Participant subject to receipt of the prior written consent of the Administrative Agent exercised in its sole discretion, to set-off and to appropriate and to apply any and all deposits (general or special, including, but not limited to, indebtedness evidenced by certificates of deposit, whether matured or unmatured) and any other indebtedness at any time held or owing by the Administrative Agent, such Lender or such Participant or any Affiliate of the Administrative Agent or such Lender to or for the credit or the account of the Borrower against and on account of any of the Guarantied Obligations, although such obligations shall be contingent or unmatured. Each Guarantor agrees, to the fullest extent permitted by Applicable Law, that any Participant may exercise rights of setoff or counterclaim and other rights with respect to its participation as fully as if such Participant were a direct creditor of such Guarantor in the amount of such participation.

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

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







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Section 15. Contribution . To the extent that any Guarantor shall be required hereunder to pay any portion of any Guarantied Obligation exceeding the greater of (a) the amount of the value actually received by such Guarantor and its Subsidiaries from the Loans and the other Obligations and (b) the amount such Guarantor would otherwise have paid if such Guarantor had paid the aggregate amount of the Guarantied Obligations (excluding the amount thereof repaid by the Borrower) in the same proportion as such Guarantor’s net worth on the date enforcement is sought hereunder bears to the aggregate net worth of all the Guarantors on such date, then such Guarantor shall be reimbursed by such other Guarantors for the amount of such excess, pro rata, based on the respective net worth of such other Guarantors on such date.

Section 16. Information . Each Guarantor assumes all responsibility for being and keeping itself informed of the financial condition of the Borrower and the other Loan Parties, and of all other circumstances bearing upon the risk of nonpayment of any of the Guarantied Obligations and the nature, scope and extent of the risks that such Guarantor assumes and incurs hereunder, and agrees that neither the Administrative Agent nor any other Guarantied Party shall have any duty whatsoever to advise any Guarantor of information regarding such circumstances or risks.

Section 17. Governing Law . THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH COMMONWEALTH.

SECTION 18. WAIVER OF JURY TRIAL .

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

(b)      EACH GUARANTOR, AND EACH OF THE Administrative Agent AND THE OTHER GUARANTIED PARTIES BY ACCEPTING THE BENEFITS HEREOF, HEREBY AGREES THAT THE FEDERAL DISTRICT COURT LOCATED IN THE EASTERN DISTRICT OF PENNSYLVANIA OR ANY STATE COURT LOCATED IN PHILADELPHIA COUNTY, PENNSYLVANIA SHALL HAVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN OR AMONG THE GUARANTORS, THE ADMINISTRATIVE AGENT OR ANY OF THE OTHER GUARANTIED PARTIES, PERTAINING DIRECTLY OR INDIRECTLY TO THIS GUARANTY. EACH GUARANTOR AND EACH OF THE GUARANTIED PARTIES EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR PROCEEDING COMMENCED IN SUCH COURTS. EACH PARTY FURTHER WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT FORUM AND EACH AGREES NOT TO PLEAD OR CLAIM THE SAME. THE CHOICE OF FORUM SET FORTH IN THIS SECTION






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SHALL NOT BE DEEMED TO PRECLUDE THE BRINGING OF ANY ACTION BY THE ADMINISTRATIVE AGENT OR ANY OTHER GUARANTIED PARTY OR THE ENFORCEMENT BY THE ADMINISTRATIVE AGENT OR ANY OTHER GUARANTIED PARTY OF ANY JUDGMENT OBTAINED IN SUCH FORUM IN ANY OTHER APPROPRIATE JURISDICTION.
(c)      THE FOREGOING WAIVERS HAVE BEEN CONSIDERED BY EACH PARTY WITH THE ADVICE OF COUNSEL AND WITH A FULL UNDERSTANDING OF THE LEGAL CONSEQUENCES THEREOF, AND SHALL SURVIVE THE PAYMENT OF THE LOANS AND ALL OTHER AMOUNTS PAYABLE HEREUNDER OR UNDER THE OTHER LOAN DOCUMENTS AND THE TERMINATION OF THIS GUARANTY.

Section 19. Loan Accounts . The Administrative Agent and each Lender may maintain books and accounts setting forth the amounts of principal, interest and other sums paid and payable with respect to the Guarantied Obligations arising under or in connection with the Credit Agreement, and in the case of any dispute relating to any of the outstanding amount, payment or receipt of any of such Guarantied Obligations or otherwise, the entries in such books and accounts shall constitute prima facie evidence of the outstanding amount of such Guarantied Obligations and the amounts paid and payable with respect thereto absent manifest error. The failure of the Administrative Agent or any Lender to maintain such books and accounts shall not in any way relieve or discharge any Guarantor of any of its obligations hereunder.

Section 20. Waiver of Remedies . No delay or failure on the part of the Administrative Agent or any other Guarantied Party in the exercise of any right or remedy it may have against any Guarantor hereunder or otherwise shall operate as a waiver thereof, and no single or partial exercise by the Administrative Agent or any other Guarantied Party of any such right or remedy shall preclude any other or further exercise thereof or the exercise of any other such right or remedy.

Section 21. Termination . This Guaranty shall remain in full force and effect with respect to each Guarantor until indefeasible payment in full of the Guarantied Obligations and the other Obligations and the termination or cancellation of the Credit Agreement in accordance with its terms.

Section 22. Successors and Assigns . Each reference herein to the Administrative Agent or any other Guarantied Party shall be deemed to include such Person’s respective successors and assigns (including, but not limited to, any holder of the Guarantied Obligations) in whose favor the provisions of this Guaranty also shall inure, and each reference herein to each Guarantor shall be deemed to include such Guarantor’s successors and assigns, upon whom this Guaranty also shall be binding. The Guarantied Parties may, in accordance with the applicable provisions of the Credit Agreement, assign, transfer or sell any Guarantied Obligation, or grant or sell participations in any Guarantied Obligations, to any Person without the consent of, or notice to, any Guarantor and without releasing, discharging or modifying any Guarantor’s obligations hereunder. Each Guarantor hereby consents to the delivery by the Administrative Agent and any other Guarantied Party to any assignee or Participant of a Lender (or any prospective assignee or Participant of a Lender) of any financial or other information regarding the Borrower or any Guarantor. No Guarantor may assign or transfer its obligations hereunder to any Person without the prior written consent of all Lenders and any such assignment or other transfer to which all of the Lenders have not so consented shall be null and void.

Section 23. Joint and Several Obligations . the obligationS of the Guarantors HEREUNDER SHALL BE joint and several, and ACCORDINGLY, each Guarantor CONFIRMS THAT IT is liable for the full amount of the “GUARANTiED Obligations” AND ALL OF THE OBLIGATIONS AND LIABILITIES OF EACH OF THE OTHER gUARANTORS HEREUNDER.






B-7






Section 24. Amendments . This Guaranty may not be amended except in writing signed by the Administrative Agent and each Guarantor.

Section 25. Payments . All payments to be made by any Guarantor pursuant to this Guaranty shall be made in Dollars, in immediately available funds to the Administrative Agent at its Principal Office, not later than 11:00 a.m. Central time, on the date one Business Day after demand therefor.

Section 26. Notices . All notices, requests and other communications hereunder shall be in writing (including facsimile transmission or similar writing) and shall be given (a) to each Guarantor at its address set forth below its signature hereto, (b) to the Administrative Agent or any other Guarantied Party at its respective address for notices provided for in the Credit Agreement, or (c) as to each such party at such other address as such party shall designate in a written notice to the other parties. Each such notice, request or other communication shall be effective (i) if mailed, when received; (ii) if telecopied, when transmitted; or (iii) if hand delivered, when delivered; provided , however , that any notice of a change of address for notices shall not be effective until received.

Section 27. Severability . In case any provision of this Guaranty shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

Section 28. Headings . Section headings used in this Guaranty are for convenience only and shall not affect the construction of this Guaranty.

Section 29. Limitation of Liability .      Neither the Administrative Agent nor any other Guarantied Party, nor any Affiliate, officer, director, employee, attorney, or agent of the Administrative Agent or any other Guarantied Party, shall have any liability with respect to, and each Guarantor hereby waives, releases, and agrees not to sue any of them upon, any claim for any special, indirect, incidental, or consequential damages suffered or incurred by a Guarantor in connection with, arising out of, or in any way related to, this Guaranty or any of the other Loan Documents, or any of the transactions contemplated by this Guaranty, the Credit Agreement or any of the other Loan Documents. Each Guarantor hereby waives, releases, and agrees not to sue the Administrative Agent or any other Guarantied Party or any of the Administrative Agent’s or any other Guarantied Party’s Affiliates, officers, directors, employees, attorneys, or agents for punitive damages in respect of any claim in connection with, arising out of, or in any way related to, this Guaranty, the Credit Agreement or any of the other Loan Documents, or any of the transactions contemplated thereby.

Section 30. Electronic Delivery of Certain Information . Each Guarantor acknowledges and agrees that information regarding the Guarantor may be delivered electronically pursuant to Section 7.1.(b) of the Credit Agreement.

Section 31. Definitions .

(a) For the purposes of this Guaranty,      “Proceeding” means any of the following: (i) a voluntary or involuntary case concerning any Guarantor shall be commenced under the Bankruptcy Code of 1978, as amended; (ii) a custodian (as defined in such Bankruptcy Code or any other applicable bankruptcy laws) is appointed for, or takes charge of, all or any substantial part of the property of any Guarantor; (iii) any other proceeding under any Applicable Law, domestic or foreign, relating to bankruptcy, insolvency, reorganization, winding-up or composition for adjustment of debts, whether now or hereafter in effect, is commenced relating to any Guarantor; (iv) any Guarantor is adjudicated insolvent or




B-8




bankrupt; (v) any order of relief or other order approving any such case or proceeding is entered by a court of competent jurisdiction; (vi) any Guarantor makes a general assignment for the benefit of creditors; (vii) any Guarantor shall fail to pay, or shall state that it is unable to pay, or shall be unable to pay, its debts generally as they become due; (viii) any Guarantor shall call a meeting of its creditors with a view to arranging a composition or adjustment of its debts; (ix) any Guarantor shall by any act or failure to act indicate its consent to, approval of or acquiescence in any of the foregoing; or (x) any corporate action shall be taken by any Guarantor for the purpose of effecting any of the foregoing.

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

[Signatures on Following Page]






































B-9





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

[GUARANTOR]


By:     
Name:     
Title:     


Address for Notices for all Guarantors:

c/o PREIT Associates, L.P.
200 South Broad Street
Philadelphia, PA 19102
Attention: Andrew Ioannou
Telephone: (215) 875-0700
Telecopy: (215) 546-7311































B-10




ANNEX I

FORM OF ACCESSION AGREEMENT

THIS ACCESSION AGREEMENT dated as of ____________, ____, executed and delivered by ______________________, a _____________ (the “New Guarantor”) in favor of WELLS FARGO BANK, NATIONAL ASSOCIATION, in its capacity as Administrative Agent (the “Administrative Agent”) for the Lenders under that certain Five-Year Term Loan Agreement dated as of June 26, 2015 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), by and among PREIT Associates, L.P. (“PREIT”), PREIT-RUBIN, Inc. (“PREIT-RUBIN”), Pennsylvania Real Estate Investment Trust (the “Parent”; together with PREIT and PREIT-RUBIN, each individually, a “Borrower” and collectively, the “Borrower”), the financial institutions party thereto and their assignees under Section 11.6.(b) thereof (the “Lenders”), the Administrative Agent, and the other parties thereto, for its benefit and the benefit of the Lenders (the Administrative Agent and the Lenders, each individually a “Guarantied Party” and collectively, the “Guarantied Parties”).

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

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

WHEREAS, the Borrower, the New Guarantor and the existing Guarantors, though separate legal entities, are mutually dependent on each other in the conduct of their respective businesses as an integrated operation and have determined it to be in their mutual best interests to obtain financing under the Credit Agreement through their collective efforts;

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

WHEREAS, the New Guarantor’s execution and delivery of this Accession Agreement is a condition to the Guarantied Parties continuing to make such financial accommodations to the Borrower.

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

Section 1. Accession to Guaranty . The New Guarantor hereby agrees that it is a “Guarantor” under that certain Five-Year Term Loan Guaranty dated as of June 26, 2015 (as amended, restated, supplemented or otherwise modified from time to time, the “Guaranty”), made by the Guarantors party thereto in favor of the Administrative Agent, for its benefit and the benefit of the other Guarantied Parties and assumes all obligations of a “Guarantor” thereunder and agrees to be bound thereby, all as if the New Guarantor had been an original signatory to the Guaranty. Without limiting the generality of the foregoing, the New Guarantor hereby:

(a)      irrevocably and unconditionally guarantees the due and punctual payment and performance when due, whether at stated maturity, by acceleration or otherwise, of all Guarantied Obligations (as defined in the Guaranty);





B-11






(b)      makes to the Administrative Agent and the other Guarantied Parties as of the date hereof each of the representations and warranties with respect to or in any way relating to itself contained in Section 5. of the Guaranty and agrees to be bound by each of the covenants contained in Section 6. of the Guaranty; and

(c)      consents and agrees to each provision set forth in the Guaranty.

SECTION 2. GOVERNING LAW . THIS ACCESSION AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH COMMONWEALTH.

Section 3. Definitions . Capitalized terms used herein and not otherwise defined herein shall have their respective defined meanings given them in the Credit Agreement.


[Signatures on Next Page]
































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IN WITNESS WHEREOF, the New Guarantor has caused this Accession Agreement to be duly executed and delivered under seal by its duly authorized officers as of the date first written above.

[NEW GUARANTOR]


By:     
Name:     
Title:     

(CORPORATE SEAL)

Address for Notices:

c/o PREIT Associates, L.P.
200 South Broad Street
Philadelphia, PA 19102
Attention: Andrew Ioannou
Telephone: (215) 875-0700
Telecopy: (215) 546-7311


Accepted:

WELLS FARGO BANK, NATIONAL
ASSOCIATION, as Administrative Agent


By:     
                    
Name:     
                
Title:     
                
                













B-13



EXHIBIT C

FORM OF NOTICE OF CONTINUATION

____________, 20__


Wells Fargo Bank, National Association,
as Administrative Agent
550 South Tryon Street, 6th Floor
MAC D1086-061
Charlotte, North Carolina 28202
Attention: D. Bryan Gregory

Ladies and Gentlemen:

Reference is made to that certain Five-Year Term Loan Agreement dated as of June 26, 2015 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), by and among PREIT Associates, L.P. (“PREIT”), PREIT-RUBIN, Inc. (“PREIT-RUBIN”), Pennsylvania Real Estate Investment Trust (the “Parent”; together with PREIT and PREIT-RUBIN, each individually, a “Borrower” and collectively, the “Borrower”), the financial institutions party thereto and their assignees under Section 11.6.(b) thereof (the “Lenders”), Wells Fargo Bank, National Association, as Administrative Agent (the “Administrative Agent”), and the other parties thereto. Capitalized terms used herein, and not otherwise defined herein, have their respective meanings given them in the Credit Agreement.

Pursuant to Section 2.9. of the Credit Agreement, the Borrower hereby requests a Continuation of a LIBOR Loan under the Credit Agreement, and in that connection sets forth below the information relating to such Continuation as required by such Section of the Credit Agreement:

1.
The requested date of such Continuation is ____________, 20__.

2.
The LIBOR Loan to be continued pursuant hereto is a Loan in the aggregate principal amount of $________________.

3.
The portion of the principal amount of such LIBOR Loan subject to the requested Continuation is $__________________________.

4.
The current Interest Period of such LIBOR Loan subject to such Continuation ends on ________________, 20___.

5.
The portion of the principal amount of such LIBOR Loan subject to a Specified Derivatives Contract is $__________________________.

6.
The Specified Derivatives Contract(s) to which such LIBOR Loan is subject: _______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________.




C-1




7.
The duration of the Interest Period for such LIBOR Loan or portion thereof subject to such Continuation is:

[Check one box only]

o      one month
o      three months
o      six months


The Borrower hereby certifies to the Administrative Agent and the Lenders that as of the date hereof, as of the proposed date of the requested Continuation, and after giving effect to such Continuation, (a) no Default or Event of Default shall have occurred and be continuing, and (b) the representations and warranties made or deemed made by the Borrower and each other Loan Party in the Loan Documents to which any of them is a party, are and shall be true and correct in all material respects (except in the case of a representation or warranty qualified by materiality, in which case such representation or warranty shall be true and correct in all respects) with the same force and effect as if made on and as of such date except to the extent that such representations and warranties expressly relate solely to an earlier date (in which case such representations and warranties shall have been true and correct in all material respects (except in the case of a representation or warranty qualified by materiality, in which case such representation or warranty shall be true and correct in all respects) on and as of such earlier date) and except for changes in factual circumstances not prohibited under the Loan Documents.

If notice of the requested Continuation was given previously by telephone, this Notice of Continuation is to be considered written confirmation of such telephone notice required by Section 2.9. of the Credit Agreement.


[Remainder of Page Intentionally Left Blank]


























C-2



IN WITNESS WHEREOF, the undersigned has duly executed and delivered this Notice of Continuation as of the date first written above.


PREIT Associates, L.P.

By:      Pennsylvania Real Estate Investment Trust,
its general partner


By:     
Name:     
Title:     


PREIT-RUBIN, INC.


By:     
Name:     
Title:     


PENNSYLVANIA REAL ESTATE INVESTMENT TRUST


By:     
Name:     
Title:     





            









C-3




EXHIBIT D

FORM OF NOTICE OF CONVERSION

____________, 20__


Wells Fargo Bank, National Association,
as Administrative Agent
550 South Tryon Street, 6th Floor
MAC D1086-061
Charlotte, North Carolina 28202
Attention: D. Bryan Gregory

Ladies and Gentlemen:

Reference is made to that certain Five-Year Term Loan Agreement dated as of June 26, 2015 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), by and among PREIT Associates, L.P. (“PREIT”), PREIT-RUBIN, Inc. (“PREIT-RUBIN”), Pennsylvania Real Estate Investment Trust (the “Parent”; together with PREIT and PREIT-RUBIN, each individually, a “Borrower” and collectively, the “Borrower”), the financial institutions party thereto and their assignees under Section 11.6.(b) thereof (the “Lenders”), Wells Fargo Bank, National Association, as Administrative Agent (the “Administrative Agent”), and the other parties thereto. Capitalized terms used herein, and not otherwise defined herein, have their respective meanings given them in the Credit Agreement.

Pursuant to Section 2.10. of the Credit Agreement, the Borrower hereby requests a Conversion of a Loan of one Type into a Loan of another Type under the Credit Agreement, and in that connection sets forth below the information relating to such Conversion as required by such Section of the Credit Agreement:

1.
The requested date of such Conversion is ______________, 20__.

2.
The Type of Loan to be Converted pursuant hereto is currently:

[Check one box only]

o
Base Rate Loan
o
LIBOR Loan

3.
The aggregate principal amount of the Loans subject to the requested Conversion is $_____________________ and the portion of such principal amount subject to such Conversion is $___________________.








D-1



4.
The amount of such Loan to be so Converted is to be converted into Loan of the following Type:

[Check one box only]     

Base Rate Loan
LIBOR Loan, with an initial Interest Period for a duration of:

[Check one box only]

o      one month
o      three months
o      six months


5.
The amount of such Loan to be so Converted into a LIBOR Loan subject to a Specified Derivatives Contract is $__________________________.

6.
The Specified Derivatives Contract(s) to which such Loan to be so Converted into a LIBOR Loan is subject: ______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________.



The Borrower hereby certifies to the Administrative Agent and the Lenders that as of the date hereof, as of the proposed date of the requested Conversion, and after giving effect to such Conversion, (a) no Default or Event of Default shall have occurred and be continuing (provided the certification under this clause (a) shall not be made in connection with a Conversion of a Loan into a Base Rate Loan), and (b) the representations and warranties made or deemed made by the Borrower and each other Loan Party in the Loan Documents to which any of them is a party, are and shall be true and correct in all material respects (except in the case of a representation or warranty qualified by materiality, in which case such representation or warranty shall be true and correct in all respects) with the same force and effect as if made on and as of such date except to the extent that such representations and warranties expressly relate solely to an earlier date (in which case such representations and warranties shall have been true and correct in all material respects (except in the case of a representation or warranty qualified by materiality, in which case such representation or warranty shall be true and correct in all respects) on and as of such earlier date) and except for changes in factual circumstances not prohibited under the Loan Documents.

If notice of the requested Conversion was given previously by telephone, this Notice of Conversion is to be considered the written confirmation of such telephone notice required by Section 2.10. of the Credit Agreement.


[Remainder of Page Intentionally Left Blank]







D-2





IN WITNESS WHEREOF, the undersigned has duly executed and delivered this Notice of Conversion as of the date first written above.

PREIT Associates, L.P.

By:      Pennsylvania Real Estate Investment Trust,
its general partner


By:     
Name:     
Title:     


PREIT-RUBIN, INC.


By:     
Name:     
Title:     


PENNSYLVANIA REAL ESTATE INVESTMENT TRUST


By:     
Name:     
Title:     
        






















D-3




EXHIBIT E

FORM OF NOTICE OF BORROWING

____________, 20__


Wells Fargo Bank, National Association,
as Administrative Agent
550 South Tryon Street, 6th Floor
MAC D1086-061
Charlotte, North Carolina 28202
Attention: D. Bryan Gregory

Ladies and Gentlemen:

Reference is made to that certain Five-Year Term Loan Agreement dated as of June 26, 2015 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), by and among PREIT Associates, L.P. (“PREIT”), PREIT-RUBIN, Inc. (“PREIT-RUBIN”), Pennsylvania Real Estate Investment Trust (the “Parent”; together with PREIT and PREIT-RUBIN, each individually, a “Borrower” and collectively, the “Borrower”), the financial institutions party thereto and their assignees under Section 11.6.(b) thereof (the “Lenders”), Wells Fargo Bank, National Association, as Administrative Agent (the “Administrative Agent”), and the other parties thereto. Capitalized terms used herein, and not otherwise defined herein, have their respective meanings given them in the Credit Agreement.

1.
Pursuant to Section 2.1.(b) of the Credit Agreement, the Borrower hereby requests that the Lenders make Loans to the Borrower in an aggregate amount equal to $___________________.

2.
The Borrower requests that the Loans be made available to the Borrower on ____________, 20__.

3.
The Borrower hereby requests that the requested Loans be of the following Type:

[Check one box only]     
o      Base Rate Loan
o      LIBOR Loan, with an initial Interest Period for a duration of:

[Check one box only]
o      one month
o      three months
o      six months


4.
The principal amount of such Loans subject to a Specified Derivatives Contract is $__________________________.

5.
The Specified Derivatives Contract(s) to which such Loans is subject: _______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________.

E-1



6.
The proceeds of the Loans will be used for the following purpose: ___________________________________________________________________________________________________________________________________________________________.

The Borrower hereby certifies to the Administrative Agent and the Lenders that as of the date hereof, as of the date of the making of the requested Loans, and after making such Loans, (a) no Default or Event of Default shall have occurred and be continuing; and (b) the representations and warranties of the Borrower and the Guarantors contained in the Credit Agreement and in the other Loan Documents to which any of them is a party, are and shall be true and correct in all material respects (except in the case of a representation or warranty qualified by materiality, in which case such representation or warranty shall be true and correct in all respects) with the same force and effect as if made on and as of such date except to the extent that such representations and warranties expressly relate solely to an earlier date (in which case such representations and warranties shall have been true and correct in all material respects (except in the case of a representation or warranty qualified by materiality, in which case such representation or warranty shall be true and correct in all respects) on and as of such earlier date) and except for changes in factual circumstances not prohibited under the Loan Documents. In addition, the Borrower certifies to the Administrative Agent and the Lenders that all conditions to the making of the requested Loans contained in Article V. of the Credit Agreement will have been satisfied at the time such Loans are made.


[Remainder of Page Intentionally Left Blank]


























E-2








IN WITNESS WHEREOF, the undersigned has duly executed and delivered this Notice of Borrowing as of the date first written above.

PREIT Associates, L.P.

By:      Pennsylvania Real Estate Investment Trust,
its general partner


By:     
Name:          
Title:          


PREIT-RUBIN, INC.


By:          
Name:     
    
Title:     
    


PENNSYLVANIA REAL ESTATE INVESTMENT TRUST


By:     
    
Name:     
    
Title:     
    















E-3











EXHIBIT F

FORM OF DISBURSEMENT INSTRUCTION AGREEMENT
[Attached]






















F-1



DISBURSEMENT INSTRUCTION AGREEMENT


Borrower: PREIT Associates, L.P., PREIT-RUBIN, Inc. and Pennsylvania Real Estate Investment Trust


Administrative Agent: Wells Fargo Bank, National Association

Loan:   Loan number [ INSERT LOAN NUMBER ]  made pursuant to that certain Five-Year Term Loan Agreement dated as of June 26, 2015 (as amended from time to time, the “Credit Agreement”) by and among the Borrower, the Lenders party thereto and the Administrative Agent

Effective Date: INSERT DATE

Check applicable box:

o New   - This is the first Disbursement Instruction Agreement submitted in connection with the Loan.
o Replace Previous Agreement  - This is a replacement Disbursement Instruction Agreement. All prior instructions submitted in connection with this Loan are cancelled as of the Effective Date set forth above.

This Agreement must be signed by the Borrower and is used for the following purposes:

(1)
to designate an individual or individuals with authority to request disbursements of Loan proceeds, whether at the time of Loan closing/origination or thereafter;
(2)
to designate an individual or individuals with authority to request disbursements of funds from Restricted Accounts (as defined in the Terms and Conditions attached to this Agreement), if applicable; and
(3)
to provide Administrative Agent with specific instructions for wiring or transferring funds on Borrower’s behalf.

Any of the disbursements, wires or transfers described above are referred to herein as a “ Disbursement .”

Specific dollar amounts for Disbursements must be provided to Administrative Agent at the time of the applicable Disbursement in the form of a signed closing statement, an email instruction or other written communication (each, a “ Disbursement Request ”) from an applicable Authorized Representative (as defined in the Terms and Conditions attached to this Agreement).

A new Disbursement Instruction Agreement must be completed and signed by the Borrower if (i) all or any portion of a Disbursement is to be transferred to an account or an entity not described in this Agreement or (ii) Borrower wishes to add or remove any Authorized Representatives.

See the Additional Terms and Conditions attached hereto for additional information and for definitions of certain capitalized terms used in this Agreement.















F-2





Disbursement of Loan Proceeds at Origination/Closing

Closing Disbursement Authorizers : Administrative Agent is authorized to accept one or more Disbursement Requests from any of the individuals named below (each, a “ Closing Disbursement Authorizer ”) to disburse Loan proceeds on or about the date of the Loan origination/closing and to initiate Disbursements in connection therewith (each, a “ Closing Disbursement ”):
 
Individual’s Name
Title
1.
 
 
2.
 
 
3.
 
 

Describe Restrictions, if any, on the authority of the Closing Disbursement Authorizers (dollar amount limits, wire/deposit destinations, etc.):
DESCRIBE APPLICABLE RESTRICTIONS OR INDICATE “N/A”
If there are no restrictions described here, any Closing Disbursement Authorizer may submit a Disbursement Request for all available Loan proceeds.

DELETE FOLLOWING SECTION IF NO WIRE TRANSFERS AT ORIGINATION/CLOSING

Permitted Wire Transfers:   Disbursement Requests for the Closing Disbursement(s) to be made by wire transfer must specify the amount and applicable Receiving Party. Each Receiving Party included in any such Disbursement Request must be listed below. Administrative Agent is authorized to use the wire instructions that have been provided directly to Administrative Agent by the Receiving Party or Borrower and attached as the Closing Exhibit. All wire instructions must be in the format specified on the Closing Exhibit.
 
Names of Receiving Parties for the Closing Disbursement(s) (may include as many parties as needed; wire instructions for each Receiving Party must be attached as the Closing Exhibit)
1.
 
2.
 
3.
 

DELETE FOLLOWING SECTION IF NO DEPOSITS INTO WFB ACCOUNTS AT ORIGINATION/CLOSING

Direct Deposit:   Disbursement Requests for the Closing Disbursement(s) to be deposited into an account at Wells Fargo Bank, N.A. must specify the amount and applicable account. Each account included in any such Disbursement Request must be listed below.
Name on Deposit Account:
Wells Fargo Bank, N.A. Deposit Account Number:
Further Credit Information/Instructions:










F-3




Disbursements of Loan Proceeds Subsequent to Loan Closing/Origination

Subsequent Disbursement Authorizers : Administrative Agent is authorized to accept one or more Disbursement Requests from any of the individuals named below (each, a “ Subsequent Disbursement Authorizer ”) to disburse Loan proceeds after the date of the Loan origination/closing and to initiate Disbursements in connection therewith (each, a “ Subsequent Disbursement ”):
 
Individual’s Name
Title
1.
 
 
2.
 
 
3.
 
 

Describe Restrictions, if any, on the authority of the Subsequent Disbursement Authorizers (dollar amount limits, wire/deposit destinations, etc.):   
DESCRIBE APPLICABLE RESTRICTIONS OR INDICATE “N/A”
If there are no restrictions described here, any Subsequent Disbursement Authorizer may submit a Disbursement Request for all available Loan proceeds.

DELETE FOLLOWING SECTION IF NO SUBSEQUENT WIRE TRANSFERS ANTICIPATED

Permitted Wire Transfers:   Disbursement Requests for Subsequent Disbursements to be made by wire transfer must specify the amount and applicable Receiving Party. Each Receiving Party included in any such Disbursement Request must be listed below. Administrative Agent is authorized to use the wire instructions that have been provided directly to Administrative Agent by the Receiving Party or Borrower and attached as the Subsequent Disbursement Exhibit. All wire instructions must be in the format specified on the Subsequent Disbursement Exhibit.
 
Names of Receiving Parties for Subsequent Disbursements (may include as many parties as needed; wire instructions for each Receiving Party must be attached as the Subsequent Disbursement Exhibit)
1.
 
2.
 
3.
 

DELETE FOLLOWING SECTION IF NO SUBSEQUENT DEPOSITS INTO WFB ACCOUNTS ANTICIPATED

Direct Deposit:   Disbursement Requests for Subsequent Disbursements to be deposited into an account at Wells Fargo Bank, N.A. must specify the amount and applicable account. Each account included in any such Disbursement Request must be listed below.
Name on Deposit Account:
Wells Fargo Bank, N.A. Deposit Account Number:
Further Credit Information/Instructions:








F-4





Borrower acknowledges that all of the information in this Agreement is correct and agrees to the terms and conditions set forth herein and in the Additional Terms and Conditions on the following page.

PREIT ASSOCIATES, L.P.

By: Pennsylvania Real Estate Investment Trust,
its general partner


By: _________________________________
Name: _____________________________
Title: ______________________________


PREIT-RUBIN, INC.


By: _________________________________
Name: _____________________________
Title: ______________________________


PENNSYLVANIA REAL ESTATE INVESTMENT TRUST


By: _________________________________
Name: _____________________________
Title: ______________________________


















F-5



Additional Terms and Conditions to the Disbursement Instruction Agreement

Definitions. The following capitalized terms shall have the meanings set forth below:

“Authorized Representative” means any or all of the Closing Disbursement Authorizers, Subsequent Disbursement Authorizers and Restricted Account Disbursement Authorizers, as applicable.
“Receiving Bank” means the financial institution where a Receiving Party maintains its account.
“Receiving Party” means the ultimate recipient of funds pursuant to a Disbursement Request.
“Restricted Account” means an account at Wells Fargo Bank, N.A. associated with the Loan to which Borrower’s access is restricted.

Capitalized terms used in these Additional Terms and Conditions to Disbursement Instruction Agreement and not otherwise defined herein shall have the meanings given to such terms in the body of the Agreement.

Disbursement Requests. Except as expressly provided in the Credit Agreement, Administrative Agent must receive Disbursement Requests in writing. Disbursement Requests will only be accepted from the applicable Authorized Representatives designated in the Disbursement Instruction Agreement. Disbursement Requests will be processed subject to satisfactory completion of Administrative Agent’s customer verification procedures. Administrative Agent is only responsible for making a good faith effort to execute each Disbursement Request and may use agents of its choice to execute Disbursement Requests. Funds disbursed pursuant to a Disbursement Request may be transmitted directly to the Receiving Bank, or indirectly to the Receiving Bank through another bank, government agency, or other third party that Administrative Agent considers to be reasonable. Administrative Agent will, in its sole discretion, determine the funds transfer system and the means by which each Disbursement will be made. Administrative Agent may delay or refuse to accept a Disbursement Request if the Disbursement would: (i) violate the terms of this Agreement; (ii) require use of a bank unacceptable to Administrative Agent or Lenders or prohibited by government authority; (iii) cause Administrative Agent or Lenders to violate any Federal Reserve or other regulatory risk control program or guideline; or (iv) otherwise cause Administrative Agent or Lenders to violate any applicable law or regulation.

Limitation of Liability. Administrative Agent and Lenders shall not be liable to Borrower or any other parties for: (i) errors, acts or failures to act of others, including other entities, banks, communications carriers or clearinghouses, through which Borrower’s requested Disbursements may be made or information received or transmitted, and no such entity shall be deemed an agent of the Administrative Agent or any Lender; (ii) any loss, liability or delay caused by fires, earthquakes, wars, civil disturbances, power surges or failures, acts of government, labor disputes, failures in communications networks, legal constraints or other events beyond Administrative Agent’s or any Lender’s control; or (iii) any special, consequential, indirect or punitive damages, whether or not (A) any claim for these damages is based on tort or contract or (B) Administrative Agent, any Lender or Borrower knew or should have known the likelihood of these damages in any situation. Neither Administrative Agent nor any Lender makes any representations or warranties other than those expressly made in this Agreement. IN NO EVENT WILL ADMINISTRATIVE AGENT OR ANY LENDER BE LIABLE FOR DAMAGES ARISING DIRECTLY OR INDIRECTLY IF A DISBURSEMENT REQUEST IS EXECUTED BY ADMINISTRATIVE AGENT IN GOOD FAITH AN IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT.

Reliance on Information Provided. Administrative Agent is authorized to rely on the information provided by Borrower or any Authorized Representative in or in accordance with this Agreement when executing a Disbursement Request until Administrative Agent has received a new Agreement signed by Borrower. Borrower agrees to be bound by any Disbursement Request: (i) authorized or transmitted by Borrower; or (ii) made in Borrower’s name and accepted by Administrative Agent in good faith and in compliance with this Agreement, even if not properly authorized by Borrower. Administrative Agent may rely solely (i) on the account number of the Receiving Party, rather than the Receiving Party’s name, and (ii) on the bank routing number of the Receiving Bank, rather than the Receiving Bank’s name, in executing a Disbursement Request. Administrative Agent is not obligated or required in any way to take any actions to detect errors in information provided by Borrower or an Authorized Representative. If Administrative Agent takes any actions in an attempt to detect errors in the transmission or content of transfers or requests or takes any actions in an attempt to detect unauthorized Disbursement Requests, Borrower agrees that, no matter how many times Administrative Agent takes these actions, Administrative Agent will not in any situation be liable for failing to take or correctly perform these actions in the future, and such actions shall not become any part of the Disbursement procedures authorized herein, in the Loan Documents, or in any agreement between Administrative Agent and Borrower.

International Disbursements. A Disbursement Request expressed in US Dollars will be sent in US Dollars, even if the Receiving Party or Receiving Bank is located outside the United States. Administrative Agent will not execute Disbursement Requests expressed in foreign currency unless permitted by the Credit Agreement.

Errors. Borrower agrees to notify Administrative Agent of any errors in the Disbursement of any funds or of any unauthorized or improperly authorized Disbursement Requests within fourteen (14) days after Administrative Agent’s confirmation to Borrower of such Disbursement.

Finality of Disbursement Requests. Disbursement Requests will be final and will not be subject to stop payment or recall; provided that Administrative Agent may, at Borrower’s request, make an effort to effect a stop payment or recall but will incur no liability whatsoever for its failure or inability to do so.












F-6




CLOSING EXHIBIT
WIRE INSTRUCTIONS

ADMINISTRATIVE AGENT
TO ATTACH WIRE INSTRUCTIONS FROM RECEIVING PARTIES

All wire instructions must contain the following information:


Transfer/Deposit Funds to (Receiving Party Account Name)
Receiving Party Deposit Account Number
Receiving Bank Name, City and State
Receiving Bank Routing (ABA) Number
Further identifying information, if applicable (title escrow number, borrower name, loan number, etc.)
































F-7
                            



SUBSEQUENT DISBURSEMENT EXHIBIT
WIRE INSTRUCTIONS

ADMINISTRATIVE AGENT
TO ATTACH WIRE INSTRUCTIONS FROM RECEIVING PARTIES

All wire instructions must contain the following information:


Transfer/Deposit Funds to (Receiving Party Account Name)
Receiving Party Deposit Account Number
Receiving Bank Name, City and State
Receiving Bank Routing (ABA) Number
Further identifying information, if applicable (title escrow number, borrower name, loan number, etc.)





            

































F-8




EXHIBIT G

FORM OF NOTE

FIVE-YEAR TERM LOAN NOTE

$_____________      June 26, 2015

FOR VALUE RECEIVED, the undersigned, PREIT ASSOCIATES, L.P. (“PREIT”), PREIT-RUBIN, INC. (“PREIT-RUBIN”) and PENNSYLVANIA REAL ESTATE INVESTMENT TRUST (the “Parent”; together with PREIT and PREIT-RUBIN, each individually, a “Borrower” and collectively, the “Borrower”) jointly and severally hereby unconditionally promise to pay to the order of ___________________________ (the “Lender”), in care of Wells Fargo Bank, National Association, as Administrative Agent (the “Administrative Agent”), to its address at 608 Second Avenue, 11 th Floor, Minneapolis, Minnesota 55402 or at such other address as may be specified by the Administrative Agent to the Borrower, the principal sum of ___________________ AND ___/100 DOLLARS ($_____________), or such lesser amount as may be the then outstanding and unpaid balance of all Loans made by the Lender to the Borrower pursuant to, and in accordance with the terms of, the Credit Agreement (as defined below).

The Borrower further agrees to pay interest at said office, in like money, on the unpaid principal amount owing hereunder from time to time on the dates and at the rates and at the times specified in the Credit Agreement.

This Five-Year Term Loan Note (this “Note”) is one of the “Notes” referred to in that certain Five-Year Term Loan Agreement dated as of June 26, 2015 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), by and among the Borrower, the financial institutions party thereto and their assignees under Section 11.6.(b) thereof, the Administrative Agent and the other parties thereto, and is subject to, and entitled to, all provisions and benefits thereof. Capitalized terms used herein and not defined herein shall have the respective meanings given to such terms in the Credit Agreement. The Credit Agreement, among other things, (a) provides for the making of Loans by the Lender to the Borrower in the aggregate principal Dollar amount first above mentioned, (b) permits the prepayment of the Loans by the Borrower subject to certain terms and conditions and (c) provides for the acceleration of the Loans upon the occurrence of certain specified events.

The Borrower hereby waives presentment, demand, protest and notice of any kind. No failure to exercise, and no delay in exercising any rights hereunder on the part of the holder hereof shall operate as a waiver of such rights.

Time is of the essence for this Note.

[This Note is given in replacement of the Five-Year Term Loan Note previously delivered to the Lender under the Credit Agreement. THIS NOTE IS NOT INTENDED TO BE, AND SHALL NOT BE CONSTRUED TO BE, A NOVATION OF ANY OF THE OBLIGATIONS OWING UNDER OR IN CONNECTION WITH THE OTHER NOTE.] 1     




1 Language to be included if this Note replaces a Note previously delivered to the Lender.

G-1




THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH COMMONWEALTH.

[Remainder of Page Intentionally Left Blank]














































G-2





IN WITNESS WHEREOF, the undersigned has executed and delivered this Five-Year Term Loan Note under seal as of the date written above.

PREIT Associates, L.P.

By: Pennsylvania Real Estate Investment Trust,
its general partner


By:___________________
    
Name:___________________
    
Title:___________________
    

PREIT-RUBIN, INC.


By:___________________
                    
Name: ___________________
Title: ____________________

PENNSYLVANIA REAL ESTATE INVESTMENT TRUST


By:___________________
                    
Name: ___________________
Title: ____________________
























G-3         



EXHIBIT H

FORM OF OPINION
[Attached]
















































H-1






June 26, 2015



Wells Fargo Bank, National Association,
as Administrative Agent
550 South Tryon Street, 6th Floor
MAC D1086-061
Charlotte, North Carolina 28202

The Lenders party to the
Loan Agreement
referred to below

Ladies and Gentlemen:

We have acted as counsel to (a) PREIT Associates, L.P., a Delaware limited partnership (“PREIT”), (b) PREIT-RUBIN, Inc., a Pennsylvania corporation (“PREIT-RUBIN”), (c) Pennsylvania Real Estate Investment Trust, a Pennsylvania business trust (the “Parent” and together with PREIT and PREIT-RUBIN, each individually, a “Borrower” and collectively, the “Borrower”) and (d) the subsidiaries of Parent identified on Annex A attached hereto (collectively, the “Guarantors”, and together with the Borrower, the “Loan Parties”) in connection with the negotiation, execution and delivery of that certain Five-Year Term Loan Agreement dated as of June ___, 2015 (the “Loan Agreement”), by and among the Borrower, each of the financial institutions initially a signatory thereto (the “Lenders”) together with their assignees pursuant to Section 11.6.(b) of the Loan Agreement and Wells Fargo Bank, National Association, as Administrative Agent (the “Administrative Agent”, collectively with the Lenders, the “Lender Parties”).
All capitalized terms used but not defined herein shall have the respective meanings set forth in the Loan Agreement.
In these capacities, we have reviewed copies of the following:
(a) the Loan Agreement;
(b) the Notes; and
(c) the Guaranty.
The documents and instruments set forth in items (a) through (c) above are referred to herein as the “Transaction Documents”.

In addition to the foregoing, we have reviewed certificates of limited partnership, limited partnership agreements, certificates of formation, certificates of organization,



operating agreements or other similar organizational documents, as applicable, of each Loan Party and its respective general partner or sole member and certain resolutions of the board of trustees or other governing body, if applicable, of each Loan Party or its respective general partner or sole member (collectively, the “Organizational Documents”) and have also examined originals or copies, certified or otherwise identified to our satisfaction, of such documents, corporate records, and other instruments as we have deemed necessary or advisable for the purposes of rendering this opinion.

The opinions expressed below are limited to (a) the laws of the Commonwealth of Pennsylvania which in our experience are normally applicable to transactions of the type contemplated by the Transaction Documents and (b) the New Jersey Limited Liability Company Act, the Delaware Limited Liability Company Act, the Delaware Limited Partnership Act, and the South Carolina Uniform Limited Liability Company Act, each as published on-line on LexisNexis as of June ___, 2015 (the foregoing statutes, collectively, the “Acts”). Except for our opinions with respect to the Acts, we express no opinion concerning the laws of any jurisdiction other than Pennsylvania and federal laws of the United States. Our opinions are based upon the assumption that only the laws of the Commonwealth of Pennsylvania and the Acts, as set forth above, are applicable to the matters set forth herein.

When we state herein that matters are to our “knowledge,” we mean that we have no actual knowledge of facts which are contrary to the opinion rendered, without having undertaken independent investigation or verification of any such facts. The words “actual knowledge” mean the conscious attention to such information by the Primary Lawyer Group. The phrase “Primary Lawyer Group” includes only attorneys who are currently members of or employed by this firm who have been involved in the preparation of this letter and such other attorneys as have been involved in the representation of Borrower or other Loan Parties in connection with the transaction that is the subject of this letter.

The opinions hereinafter expressed are specifically subject to the following additional assumptions, exceptions and qualifications:

(a)      We have made no inquiry or investigation concerning the status, authority to act or authorization of any party participating in the subject transaction or delivering any document in connection therewith other than the Loan Parties.

(b)      We have assumed the due authorization, execution and delivery by each party thereto (other than the Loan Parties) of each of the Transaction Documents to be executed and delivered by any of such other parties and the enforceability of the Transaction Documents against such other parties. We have assumed the legal capacity of all individuals executing any of the Transaction Documents.

    



(c)      As to any matters of fact material to the opinions hereafter expressed, we have relied with your permission upon the truth and accuracy of certain representations, warranties and certifications made by the Loan Parties in or pursuant to the Transaction Documents. To the extent that we have relied upon original documents or copies thereof, we have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals and the conformity with the originals of all documents submitted to us as copies.

Based upon the foregoing, and subject to all of the qualifications and assumptions set forth herein, we are of the opinion that:

1. Each Borrower has the power to execute, deliver and perform the Transaction Documents to which it is a party, to own and use its assets, and to conduct its business as, to our knowledge, it is presently conducted and as, to our knowledge, it is proposed to be conducted immediately following the consummation of the transactions contemplated by the Loan Agreement.
2. Each Guarantor has the power to execute, deliver and perform under the Guaranty.
3. PREIT is a limited partnership subsisting and in good standing under the laws of the State of Delaware, PREIT-RUBIN is a corporation subsisting under the laws of the Commonwealth of Pennsylvania, and Parent is a business trust subsisting under the laws of the Commonwealth of Pennsylvania, in each case based solely on the good standing certificates and subsistence certificates identified on Annex B .
4. Each Guarantor is an entity organized and subsisting or in good standing, as applicable, under the laws of the State of its formation, based solely on the good standing/subsistence certificate for such entity identified on Annex C .
5. The execution and delivery by each of the Loan Parties of the Transaction Documents to which it is a party and the performance of all obligations of such Loan Party thereunder have been duly authorized. Each of the Loan Parties and each respective general partner or sole member on behalf of the applicable Loan Parties has duly executed and delivered such Transaction Documents. The individuals executing the Transaction Documents on behalf of the Loan Parties and each respective general partner or sole member of the Loan Parties, as the case may be, have been duly authorized to do so.
6. The execution and delivery by each of the Loan Parties of the Transaction Documents to which it is a party do not, and, if each of the Loan Parties were now to perform its obligations under such Transaction Documents, such performance would not, result in any:



(a)      violation of any such Loan Party's Organizational Documents;

(b)      violation of any existing constitution, statute, regulation, rule, order, or law of Pennsylvania or the United States of America or the Acts, as the case may be, to which any Loan Party or its assets are subject;

(c)      breach or violation of or default under any agreements, instruments, indentures or other documents evidencing any indebtedness for money borrowed shown on Schedule 6.1(h) of the Loan Agreement or any other Material Contract to which, to our knowledge, a Loan Party is bound or under which a Loan Party or its assets is subject;

(d)      creation or imposition of a contractual lien or security interest in, on or against the assets of any Loan Party (other than the liens of the Transaction Documents) under any Material Contract to which, to our knowledge, any Loan Party is a party or by which any Loan Party or its assets are bound; or

(e)      violation of any judicial or administrative decree, writ, judgment or order to which, to our knowledge, any Loan Party or its assets are subject.

7. The execution, delivery and performance by each of the Loan Parties of each Transaction Document to which it is a party, and the consummation of the transactions thereunder, do not and will not require any registration with, consent or approval of, or notice to, or other action with or by, any Governmental Authority of the United States of America or the Commonwealth of Pennsylvania, except filings with the United States Securities and Exchange Commission.
8. The Transaction Documents constitute the legal, valid and binding obligations of each of the Loan Parties that is signatory thereto, enforceable against such Loan Party in accordance with their respective terms.
9. No recording, mortgage, registration, intangible, documentary stamp, filing, privilege or other tax must be paid in Pennsylvania in connection with the execution, delivery, recordation or performance of any of the Transaction Documents.
10. None of the Loan Parties is, or, after giving effect to any Loan, will be, subject to regulation under the Investment Company Act of 1940 or to any federal or Pennsylvania statute or regulation limiting its ability to incur indebtedness for borrowed money.



11. Assuming that Borrower applies the proceeds of the Loans as provided in the Loan Agreement, the transactions contemplated by the Transaction Documents do not violate the provisions of Regulations T, U or X of the Federal Reserve Board.
12. The Loans, as made, will not violate any applicable civil usury laws of the Commonwealth of Pennsylvania or other applicable laws regulating the interest rate, fees and other charges that may be collected with respect to the Loans; provided, however, that no opinion is expressed (a) as to whether the Pennsylvania criminal usury limits of 25% and/or 36% would be applicable to borrowings under the Transaction Documents, or (b) whether late charges, prepayment premiums or other fees, costs, charges or expenses, in addition to the interest charged at the rate recited could, under some circumstances, be deemed to cause the effective rate of interest to increase to a rate in excess of the foregoing limits.
The foregoing opinions are subject to the further qualifications, limitations and assumptions that:

(A)      Our opinion as to the validity and enforceability of the Transaction Documents is subject to the effect of applicable bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer, receivership, moratorium and similar laws affecting creditor’s rights generally.

(B)      The availability and enforceability of particular remedies, and the enforceability of particular provisions or waivers in the relevant documents may be limited by equitable principles and federal bankruptcy law.

(C)      We express no opinion as to the availability of the remedy of specific performance.

(D)      We express no opinion concerning any provisions of the Transaction Documents which purport to (i) authorize a party to exercise any extra-judicial remedy including self-help, except where permitted by law; (ii) waive personal service of judicial process, right to jury trial, statutes of limitation, or benefit of the automatic stay and other rights under the Federal Bankruptcy Code; (iii) establish evidentiary standards; (iv) waive non-waiveable rights including, without limitation, the obligation to mitigate damages; (v) waive commercial reasonableness; (vi) retain a claim against a guarantor where the primary debtor has been discharged or released or the claim been disallowed; (vii) provide for post-judgment interest in excess of that permitted on judgments in Pennsylvania; (viii) impose late charges, increased rates of interest, penalties or forfeitures upon the occurrence of a default; (ix) provide for the vesting of jurisdiction in, or the consent to the exercise of jurisdiction by, any court where the exercise of jurisdiction is within discretion of such court or



the court is not a court of general jurisdiction; (x) grant a power of attorney to act on behalf of another party; or (xi) grant a right to confess judgment.

Subject to the qualifications, exceptions, assumptions and limitations stated herein, we confirm to you that to our knowledge, other than as disclosed in writing to Administrative Agent, no litigation or other proceeding is pending against any Loan Party before any court, governmental agency, self-regulatory organization or arbitrator which could reasonably be expected to have a Material Adverse Effect.

This opinion is furnished for the benefit of addressee and its successors and assigns which become holders of the Transaction Documents and may not be used or relied upon by any other person or entity or in connection with any other transaction without our prior written consent. The opinions given herein are as of the date hereof, limited by facts, circumstances and laws in effect on such date, and, by rendering this opinion, we undertake no obligation to advise the addressee or any other party entitled to rely on this opinion with the respect to any changes therein. Our opinions as to subsistence and good standing in paragraphs 3 and 4 hereof are as of the date of the good standing/subsistence certificates identified on Annexes B and C respectively.


Very truly yours,
    
DRINKER BIDDLE & REATH LLP
RTH:RCJ







ANNEX A

GUARANTORS



 
Entity
(listed alphabetically)
State of Formation
1.
Bala Cynwyd Associates
Pennsylvania
2.
Echelon Title LLC
Delaware
3.
Moorestown Mall LLC
Delaware
4.
Plymouth Ground Associates LLC
Pennsylvania
5.
Plymouth Ground Associates LP
Pennsylvania
6.
PR AEKI Plymouth, L.P.
Delaware
7.
PR AEKI Plymouth LLC
Delaware
8.
PR Beaver Valley Limited Partnership
Pennsylvania
9.
PR Beaver Valley LLC
Delaware
10.
PR BVM, LLC
Pennsylvania
11.
PR Cherry Hill Office GP, LLC
Delaware
12.
PR Chestnut Associates, LP
Pennsylvania
13.
PR Chestnut Mezzco LLC
Pennsylvania
14.
PR Chestnut Sub Mezzco LLC
Pennsylvania
15.
PR Crossroads I, LLC
Pennsylvania
16.
PR Crossroads II, LLC
Pennsylvania
17.
PR Cumberland Outparcel LLC
New Jersey
18.
PR Echelon Limited Partnership
Pennsylvania
19.
PR Echelon LLC
Pennsylvania
20.
PR Exton Limited Partnership
Pennsylvania
2.
PR Exton LLC
Pennsylvania
22.
PR Exton Outparcel GP, LLC
Delaware
23.
PR Exton Outparcel Holdings, LP
Pennsylvania
24.
PR Exton Outparcel Limited Partnership
Pennsylvania
25.
PR Exton Square Property L.P.
Delaware
26.
PR Fin Delaware, LLC
Delaware
27.
PR Financing I LLC
Delaware
28.
PR Financing II LLC
Delaware
29.
PR Financing Limited Partnership
Delaware
30.
PR Gainesville Limited Partnership
Delaware
31.
PR Gainesville LLC
Delaware
32.
PR GV LLC
Delaware
33.
PR GV LP
Delaware
34
PR Jacksonville Limited Partnership
Pennsylvania
35.
PR Jacksonville LLC
Delaware



36.
PR JK LLC
Delaware
37.
PR Logan Valley Limited Partnership
Pennsylvania
38.
PR Logan Valley LLC
Delaware
39.
PR LV LLC
Delaware
40.
PR Magnolia LLC
Delaware
41.
PR Monroe Old Trail Limited Partnership
Pennsylvania
42.
PR Monroe Old Trail Holdings, L.P.
Pennsylvania
43.
PR Monroe Old Trail, LLC
Delaware
44.
PR Monroe Old Trail Holdings, LLC
Delaware
45.
PR Monroe Unit One Limited Partnership
Pennsylvania
46.
PR Monroe Unit One Holdings, L.P.
Pennsylvania
47.
PR Monroe Unit One GP, LLC
Delaware
48.
PR Monroe Unit 10C Limited Partnership
Delaware
49.
PR Monroe Unit 10C Holdings, L.P.
Pennsylvania
50.
PR Monroe Unit 10C GP, LLC
Delaware
51.
PR Moorestown Limited Partnership
Pennsylvania
52
PR Moorestown LLC
Pennsylvania
53.
PR New Garden LLC
Pennsylvania
54.
PR New Garden Limited Partnership
Pennsylvania
55.
PR New Garden Residential Limited Partnership
Pennsylvania
56.
PR New Garden Residential LLC
Delaware
57.
PR New Garden/Chesco Holdings, L.P.
Pennsylvania
58.
PR New Garden/Chesco Holdings, LLC
Delaware
59.
PR New Garden/Chesco Limited Partnership
Pennsylvania
60
PR New Garden/Chesco, LLC
Delaware
61.
PR Palmer Park, L.P.
Pennsylvania
62.
PR Palmer Park Mall Limited Partnership
Pennsylvania
63.
PR Palmer Park Trust
Pennsylvania
64.
PR Pitney Lot 3 Limited Partnership
Pennsylvania
65.
PR Pitney Lot 3 Holdings, L.P.
Pennsylvania
66.
PR Pitney Lot 3 GP, LLC
Delaware
67.
PR Plymouth Meeting Associates PC LP
Delaware
68.
PR Plymouth Meeting Limited Partnership
Pennsylvania
69.
PR Plymouth Meeting LLC
Pennsylvania
70.
PR PM PC Associates LLC
Delaware
71.
PR PM PC Associates LP
Delaware
72.
PR Radio Drive LLC
South Carolina
73
PR Springfield Town Center LLC
Delaware
74.
PR Sunrise Outparcel 1, LLC
New Jersey
75.
PR Sunrise Outparcel 2, LLC
New Jersey



76.
PR Swedes Square LLC
Delaware
77.
PR TP LLC
Delaware
78.
PR TP LP
Delaware
79.
PR Walnut Associates, LP
Pennsylvania
80.
PR Walnut Mezzco LLC
Pennsylvania
81.
PR Walnut Sub Mezzco LLC
Pennsylvania
82.
PR Washington Crown Limited Partnership
Pennsylvania
83.
PR Washington Crown LLC
Delaware
84.
PR WC LLC
Delaware
85.
PR Westgate Limited Partnership
Pennsylvania
86.
PR Westgate LLC
Pennsylvania
87.
PR Wiregrass Anchor LLC
Delaware
88.
PR Wiregrass Commons LLC
Delaware
89.
PREIT Gadsden Mall LLC
Delaware
90.
PREIT-RUBIN, Inc. 1
Pennsylvania
91.
PREIT-Rubin OP, Inc.
Pennsylvania
92.
WG Park - Anchor B, LLC
Delaware
93.
WG Park - Anchor B LP
Delaware
94.
XGP LLC
Delaware


1 PREIT-RUBIN, In, is both a Borrower and a Guarantor




ANNEX B

GOOD STANDING/SUBSISTENCE CERTIFICATE FOR BORROWER

PREIT Associates, L.P. - Certificate of Good Standing issued by the Secretary of State of the State Delaware dated June 16, 2015.

PREIT-RUBIN, Inc. - Certificate of Subsistence issued by the Department of State of the Commonwealth of Pennsylvania dated June 16, 2015.

Pennsylvania Real Estate Investment Trust - Certificate of Subsistence issued by the Department of State of the Commonwealth of Pennsylvania dated June 16, 2015.




ANNEX C

GOOD STANDING/SUBSISTENCE CERTIFICATES FOR GUARANTORS

Bala Cynwyd Associates, L.P. - Certificate of Subsistence issued by the Department of State of the Commonwealth of Pennsylvania dated June 16, 2015.

Echelon Title LLC - Certificate of Good Standing issued by the Secretary of State of the State of Delaware dated June 16, 2015.

Moorestown Mall LLC -- Certificate of Good Standing issued by the Secretary of State of the State of Delaware dated June 16, 2015.

Plymouth Ground Associates LLC - Certificate of Subsistence issued by the Department of State of the Commonwealth of Pennsylvania dated June 16, 2015.

Plymouth Ground Associates LP - Certificate of Subsistence issued by the Department of State of the Commonwealth of Pennsylvania dated June 16, 2015.

PR AEKI Plymouth, L.P. - Certificate of Good Standing issued by the Secretary of State of the State of Delaware dated June 16, 2015.

PR AEKI Plymouth LLC - Certificate of Good Standing issued by the Secretary of State of the State of Delaware dated June 16, 2015.

PR Beaver Valley Limited Partnership - Certificate of Subsistence issued by the Department of State of the Commonwealth of Pennsylvania dated June 16, 2015.

PR Beaver Valley LLC - Certificate of Good Standing issued by the Secretary of State of the State of Delaware dated June 16, 2015.

PR BVM, LLC - Certificate of Subsistence issued by the Department of State of the Commonwealth of Pennsylvania dated June 16, 2015.

PR Cherry Hill Office GP, LLC -- Certificate of Good Standing issued by the Secretary of State of the State of Delaware dated June 16, 2015.

PR Chestnut Associates, LP - Certificate of Subsistence issued by the Department of State of the Commonwealth of Pennsylvania dated June 16, 2015.

PR Chestnut Mezzco LLC - Certificate of Subsistence issued by the Department of State of the Commonwealth of Pennsylvania dated June 16, 2015.

PR Chestnut Sub Mezzco LLC - Certificate of Subsistence issued by the Department of State of the Commonwealth of Pennsylvania dated June 16, 2015.




PR Crossroads I, LLC - Certificate of Subsistence issued by the Department of State of the Commonwealth of Pennsylvania dated June 16, 2015.

PR Crossroads II, LLC - Certificate of Subsistence issued by the Department of State of the Commonwealth of Pennsylvania dated June 16, 2015.

PR Cumberland Outparcel LLC - Certificate of Good Standing issued by the Department of the Treasury of the State of New Jersey dated June 16, 2015.

PR Echelon Limited Partnership - Certificate of Subsistence issued by the Department of State of the Commonwealth of Pennsylvania dated June 16, 2015.

PR Echelon LLC - Certificate of Subsistence issued by the Department of State of the Commonwealth of Pennsylvania dated June 16, 2015.

PR Exton Limited Partnership - Certificate of Subsistence issued by the Department of State of the Commonwealth of Pennsylvania dated June 16, 2015.

PR Exton LLC - Certificate of Subsistence issued by the Department of State of the Commonwealth of Pennsylvania dated June 16, 2015.

PR Exton Outparcel GP, LLC - Certificate of Good Standing issued by the Secretary of State of the State of Delaware dated June 16, 2015.

PR Exton Outparcel Holdings, LP - Certificate of Subsistence issued by the Department of State of the Commonwealth of Pennsylvania dated June 16, 2015.

PR Exton Outparcel Limited Partnership - Certificate of Subsistence issued by the Department of State of the Commonwealth of Pennsylvania dated June 16, 2015.

PR Exton Square Property L.P. - Certificate of Good Standing issued by the Secretary of State of the State of Delaware dated June 16, 2015.

PR Fin Delaware, LLC - Certificate of Good Standing issued by the Secretary of State of the State of Delaware dated June 16, 2015.

PR Financing I LLC - Certificate of Good Standing issued by the Secretary of State of the State of Delaware dated June 16, 2015.

PR Financing II LLC - Certificate of Good Standing issued by the Secretary of State of the State of Delaware dated June 16, 2015.




PR Financing Limited Partnership - Certificate of Good Standing issued by the Secretary of State of the State of Delaware dated June 16, 2015

PR Gainesville Limited Partnership - Certificate of Good Standing issued by the Secretary of State of the State of Delaware dated June 16, 2015.

PR Gainesville LLC - Certificate of Good Standing issued by the Secretary of State of the State of Delaware dated June 16, 2015.

PR GV LLC - Certificate of Good Standing issued by the Secretary of State of the State of Delaware dated June 16, 2015.

PR GV LP - Certificate of Good Standing issued by the Secretary of State of the State of Delaware dated June 16, 2015.

PR Jacksonville Limited Partnership - Certificate of Subsistence issued by the Department of State of the Commonwealth of Pennsylvania dated June 16, 2015.

PR Jacksonville LLC - Certificate of Good Standing issued by the Secretary of State of the State of Delaware dated June 16, 2015.

PR JK LLC - Certificate of Good Standing issued by the Secretary of State of the State of Delaware dated June 16, 2015.

PR Logan Valley Limited Partnership - Certificate of Subsistence issued by the Department of State of the Commonwealth of Pennsylvania dated June 16, 2015.

PR Logan Valley LLC - Certificate of Good Standing issued by the Secretary of State of the State of Delaware dated June 16, 2015.

PR LV LLC - Certificate of Good Standing issued by the Secretary of State of the State of Delaware dated June 16, 2015.

PR Magnolia LLC -Certificate of Good Standing issued by the Secretary of State of the State of Delaware dated June 16, 2015.

PR Monroe Old Trail Limited Partnership - Certificate of Subsistence issued by the Department of State of the Commonwealth of Pennsylvania dated June 16, 2015.

PR Monroe Old Trail Holdings, L.P. - Certificate of Subsistence issued by the Department of State of the Commonwealth of Pennsylvania dated June 16, 2015.




PR Monroe Old Trail, LLC - Certificate of Good Standing issued by the Secretary of State of the State of Delaware dated June 16, 2015.

PR Monroe Old Trail Holdings, LLC - Certificate of Good Standing issued by the Secretary of State of the State of Delaware dated June 16, 2015.

PR Monroe Unit One Limited Partnership - Certificate of Subsistence issued by the Department of State of the Commonwealth of Pennsylvania dated June 16, 2015.

PR Monroe Unit One Holdings, L.P. - Certificate of Subsistence issued by the Department of State of the Commonwealth of Pennsylvania dated June 16, 2015.

PR Monroe Unit One GP, LLC - Certificate of Good Standing issued by the Secretary of State of the State of Delaware dated June 16, 2015.

PR Monroe Unit 10C Limited Partnership - Certificate of Good Standing issued by the Secretary of State of the State of Delaware dated June 16, 2015

PR Monroe Unit 10C Holdings, L.P. - Certificate of Subsistence issued by the Department of State of the Commonwealth of Pennsylvania dated June 16, 2015.

PR Monroe Unit 10C GP, LLC - Certificate of Good Standing issued by the Secretary of State of the State of Delaware dated June 16, 2015.

PR Moorestown Limited Partnership - Certificate of Subsistence issued by the Department of State of the Commonwealth of Pennsylvania dated June 16, 2015.

PR Moorestown LLC - Certificate of Subsistence issued by the Department of State of the Commonwealth of Pennsylvania dated June 16, 2015.

PR New Garden LLC - Certificate of Subsistence issued by the Department of State of the Commonwealth of Pennsylvania dated June 16, 2015.

PR New Garden Limited Partnership - Certificate of Subsistence issued by the Department of State of the Commonwealth of Pennsylvania dated June 16, 2015.

PR New Garden Residential Limited Partnership - Certificate of Subsistence issued by the Department of State of the Commonwealth of Pennsylvania dated June 16, 2015.

PR New Garden Residential LLC - Certificate of Good Standing issued by the Secretary of State of the State of Delaware dated June 16, 2015.

PR New Garden/Chesco Limited Partnership - Certificate of Subsistence issued by the Department of State of the Commonwealth of Pennsylvania dated June 16, 2015.




PR New Garden/Chesco Holdings, L.P. - Certificate of Subsistence issued by the Department of the State of the State of the Commonwealth of Pennsylvania dated June 16, 2015.

PR New Garden/Chesco Holdings, LLC - Certificate of Good Standing issued by the Secretary of State of the State of Delaware dated June 16, 2015.

PR New Garden/Chesco, LLC - Certificate of Good Standing issued by the Secretary of State of the State of Delaware dated June 16, 2015.

PR Palmer Park, L.P. - Certificate of Subsistence issued by the Department of State of the Commonwealth of Pennsylvania dated June 16, 2015.

PR Palmer Park Mall Limited Partnership - Certificate of Subsistence issued by the Department of State of the Commonwealth of Pennsylvania dated June 16, 2015.

PR Palmer Park Trust - Certificate of Subsistence issued by the Department of State of the Commonwealth of Pennsylvania dated June 16, 2015.

PR Pitney Lot 3 Limited Partnership -- Certificate of Subsistence issued by the Department of State of the Commonwealth of Pennsylvania dated June 16, 2015.

PR Pitney Lot 3 Holdings, L.P. -- Certificate of Subsistence issued by the Department of State of the Commonwealth of Pennsylvania dated June 16, 2015.

PR Pitney Lot 3 GP, LLC -- Certificate of Good Standing issued by the Secretary of State of the State of Delaware dated June 16, 2015.

PR Plymouth Meeting Associates PC LP - Certificate of Good Standing issued by the Secretary of State of the State of Delaware dated June 16, 2015.

PR Plymouth Meeting Limited Partnership - Certificate of Subsistence issued by the Department of State of the Commonwealth of Pennsylvania dated June 16, 2015.

PR Plymouth Meeting LLC - Certificate of Subsistence issued by the Department of State of the Commonwealth of Pennsylvania dated June 16, 2015.

PR PM PC Associates LLC - Certificate of Good Standing issued by the Secretary of State of the State of Delaware dated June 16, 2015.

PR PM PC Associates LP - Certificate of Good Standing issued by the Secretary of State of the State of Delaware dated June 16, 2015.




PR Radio Drive LLC - Certificate of Existence issued by the Secretary of State of the State of South Carolina dated June 16, 2015.

PR Springfield Town Center LLC - Certificate of Good Standing issued by the Secretary of State of the State of Delaware dated June 16, 2015.

PR Sunrise Outparcel 1, LLC -- Certificate of Good Standing issued by the Department of the Treasury of the State of New Jersey dated June 16, 2015.

PR Sunrise Outparcel 2, LLC -- Certificate of Good Standing issued by the Department of the Treasury of the State of New Jersey dated June 16, 2015.

PR Swedes Square LLC - Certificate of Good Standing issued by the Secretary of State of the Delaware dated June 16, 2015.

PR TP LLC - Certificate of Good Standing issued by the Secretary of State of the Delaware dated June 16, 2015.

PR TP LP - Certificate of Good Standing issued by the Secretary of State of the Delaware dated June 16, 2015.

PR Walnut Associates, LP - Certificate of Subsistence issued by the Department of State of the Commonwealth of Pennsylvania dated June 16, 2015.

PR Walnut Mezzco LLC - Certificate of Subsistence issued by the Department of State of the Commonwealth of Pennsylvania dated June 16, 2015.

PR Walnut Sub Mezzco LLC - Certificate of Subsistence issued by the Department of State of the Commonwealth of Pennsylvania dated June 16, 2015.

PR Washington Crown Limited Partnership - Certificate of Subsistence issued by the Department of State of the Commonwealth of Pennsylvania dated June 16, 2015.

PR Washington Crown LLC - Certificate of Good Standing issued by the Secretary of State of the Delaware dated June 16, 2015.

PR WC LLC - Certificate of Good Standing issued by the Secretary of State of the Delaware dated June 16, 2015.

PR Westgate Limited Partnership - Certificate of Subsistence issued by the Department of State of the Commonwealth of Pennsylvania dated June 16, 2015.

PR Westgate LLC - Certificate of Subsistence issued by the Department of State of the Commonwealth of Pennsylvania dated June 16, 2015.




PR Wiregrass Anchor LLC - Certificate of Good Standing issued by the Secretary of State of the Delaware dated June 16, 2015.

PR Wiregrass Commons LLC - Certificate of Good Standing issued by the Secretary of State of the State of Delaware dated June 16, 2015.

PREIT Gadsden Mall LLC - Certificate of Good Standing issued by the Secretary of State of the State of Delaware dated June 16, 2015.

PREIT-RUBIN, Inc. - Certificate of Subsistence issued by the Department of State of the Commonwealth of Pennsylvania dated June 16, 2015. 2  

PREIT-Rubin OP, Inc. - Certificate of Subsistence issued by the Department of State of the Commonwealth of Pennsylvania dated June 16, 2015.

WG Park-Anchor B, LLC - Certificate of Good Standing issued by the Secretary of State of the State of Delaware dated June 16, 2015.

WG Park-Anchor B LP - Certificate of Good Standing issued by the Secretary of State of the State of Delaware dated June 16, 2015.

XGP LLC - Certificate of Good Standing issued by the Secretary of State of the State of Delaware dated June 16, 2015.




























2 PREIT-RUBIN, Inc. is both a Borrower and a Guarantor.






































I-1
LEGAL02/35612143v2                                     




EXHIBIT I

FORM OF COMPLIANCE CERTIFICATE


Reference is made to that certain Five-Year Term Loan Agreement dated as of June 26, 2015 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), by and among PREIT Associates, L.P. (“PREIT”), PREIT-RUBIN, Inc. (“PREIT-RUBIN”), Pennsylvania Real Estate Investment Trust (the “Parent”; together with PREIT and PREIT-RUBIN, each individually, a “Borrower” and collectively, the “Borrower”), the financial institutions party thereto and their assignees under Section 11.6.(b) thereof (the “Lenders”), Wells Fargo Bank, National Association, as Administrative Agent (the “Administrative Agent”), and the other parties thereto. Capitalized terms used herein, and not otherwise defined herein, have their respective meanings given to them in the Credit Agreement.

Pursuant to Section 7.1.(a)(iii) of the Credit Agreement, the undersigned, in his or her capacity as Chief Financial Officer of the Parent and not in her or her individual capacity, hereby certifies to the Administrative Agent and the Lenders that:

1.      (a) The undersigned has reviewed the terms of the Credit Agreement and has made a review of the transactions, financial condition and other affairs of the Parent and its Subsidiaries as of, and during the relevant accounting period ended on, _______________, 20___ and (b) such review has not disclosed the existence during such accounting period, and the undersigned does not have knowledge of the existence, as of the date hereof, of any condition or event constituting a Default or Event of Default [except as set forth on Attachment A hereto, which accurately describes the nature of the conditions(s) or event(s) that constitute (a) Default(s) or (an) Event(s) of Default and the actions which the Borrower (is taking)(is planning to take) with respect to such condition(s) or event(s)] .

2.      Schedule 1 attached hereto accurately and completely sets forth the calculations required to establish compliance with Section 8.1. of the Credit Agreement on the date of the financial statements for the accounting period set forth above.

3.      As of the date hereof, (a) no Default or Event of Default exists and (b) the representations and warranties of the Borrower and the other Loan Parties contained in the Credit Agreement and the other Loan Documents are true and correct in all material respects, except to the extent such representations or warranties expressly relate solely to an earlier date (in which case such representations and warranties were true and accurate on and as of such earlier date) and except for changes in factual circumstances not prohibited under the Credit Agreement or the other Loan Documents.


[Remainder of Page Intentionally Left Blank]

    






I-1



IN WITNESS WHEREOF, the undersigned has signed this Compliance Certificate in his or her capacity as Chief Financial Officer of the Parent and not in his or her individual capacity on and as of ___________, 20__.


    
Name:     
Title: Chief Financial Officer























I-2





EXHIBIT J

FORM OF PRICING CERTIFICATE


Reference is made to that certain Five-Year Term Loan Agreement dated as of June 26, 2015 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), by and among PREIT Associates, L.P. (“PREIT”), PREIT-RUBIN, Inc. (“PREIT-RUBIN”), Pennsylvania Real Estate Investment Trust (the “Parent”; together with PREIT and PREIT-RUBIN, each individually, a “Borrower” and collectively, the “Borrower”), the financial institutions party thereto and their assignees under Section 11.6.(b) thereof (the “Lenders”), Wells Fargo Bank, National Association, as Administrative Agent (the “Administrative Agent”), and the other parties thereto. Capitalized terms used herein, and not otherwise defined herein, have their respective meanings given to them in the Credit Agreement.

Pursuant to Section 7.1.(a)(iv) of the Credit Agreement, the undersigned hereby certifies to the Agent and the Lenders in his or her capacity as Chief Financial Officer of Parent, and not in his or her individual capacity, that:

1.      (a) The undersigned has reviewed the terms of the Credit Agreement and has made a review of the transactions, financial condition and other affairs of the Borrower and the other Loan Parties as of, and during the relevant accounting period ending on, _______________, 20__ (the “Pricing Date”) and (b) such review has not disclosed the existence during such accounting period, and the undersigned does not have knowledge of the existence, as of the date hereof, of any condition or event constituting a Default or Event of Default.

2.      Schedule 1 attached hereto accurately and completely sets forth the calculations required to determine the ratio of Total Liabilities to Gross Asset Value on the Pricing Date.

3.      The ratio of Total Liabilities to Gross Asset Value as of such date is ______ to 1.00. The corresponding Level in clause (a) of the definition of “Applicable Margin” in the Credit Agreement is Level __.


[Remainder of Page Intentionally Left Blank]


















J-1






IN WITNESS WHEREOF, the undersigned has signed this Pricing Certificate on and as of ___________, 20__.


    
Name:     
Title: Chief Financial Officer






                

J-2





SCHEDULE 1.1.(A)

Existing Ground Leases

Crossroads Mall
Lease dated September 28, 1977 between Herman G. Hendricks and Sue Ann Hendricks & Ralph Biernbaum, as amended or supplemented from time to time.

Uniontown Mall
Lease dated April 28, 1989 between Fayette County Commissioners and Crown American Corporation, as amended or supplemented from time to time.

Uniontown Mall
Lease dated March 30, 1970 between Alfred W. Ratner & Gertrude Ratner, Herbert G. Ratner & Betty G. Ratner and Uniontown Mall, Inc., as amended or supplemented from time to time.

Gallery I
Lease dated December 16, 1975 between the Redevelopment Authority of the City of Philadelphia and Rouse Philadelphia, Inc., as amended or supplemented from time to time.

Gallery II - MSEJV lease
Amended and Restated Lease dated September 29, 1983 between the Redevelopment Authority of the City of Philadelphia and The Market Street East Joint Venture, as amended or supplemented from time to time.

Gallery II- JCP lease
Amended and Restated Indenture of Lease dated September 30, 2002 (effective March 31, 2002) between the Redevelopment Authority of the City of Philadelphia and Center City East Retail, Inc., as amended or supplemented from time to time.

Exton (Kmart parcel)
Amended and Restated Lease/Option Agreement dated October 26, 1993 between Hugh J. Lattomus, a Trustee, under Trust Agreement dated June 14, 1990 and Whiteland Holding Limited Partnership, as amended or supplemented from time to time.

Springfield Town Center
Ground Lease dated March 13, 1969 by and between Village Green Properties and PR Springfield Town Center LLC (successor-in-interest to Arlen of Virginia, Inc.), as amended or supplemented from time to time.





SCHEDULE 1.1.(B)

Unencumbered Properties

1.
1501-05 Walnut Street
2.
1520-22 Chestnut Street
3.
Beaver Valley Mall
4.
Crossroads Mall
5.
Exton Square Mall
6.
Gadsden Mall
7.
Jacksonville Mall
8.
Logan Valley Mall
9.
Magnolia Mall
10.
Moorestown Mall
11.
One Cherry Hill
12.
Palmer Park Mall
13.
Pitney Road Plaza
14.
Plymouth Meeting Mall
15.
Springfield Town Center
16.
Uniontown Mall
17.
Voorhees Town Center
18.
Washington Crown Center
19.
Wiregrass Commons




Schedule 6.1.(b) - Ownership Structure
PART I
Limited Partnerships

Limited Partnerships
Jurisdiction of Organization
Each Person holding any Equity Interest in the Subsidiary; nature of the Equity Interest; percentage ownership of Subsidiary represented by the Equity Interest
Property Owned by Subsidiary
801 Developers, LP
PA
801 Developers GP, LLC - 1.0% GP
PREIT - 99% LP
See 801-Gallery Associates, L.P.
Bala Cynwyd Associates, LP
PA
PR Cherry Hill Office GP, LLC - 0.1% GP
PREIT - 99.9% LP
One Cherry Hill Plaza
Cumberland Mall Associates
NJ
PR Cumberland GP, LLC - 1% GP
PR Cumberland LP, LLC - 99% LP
Cumberland Mall
Plymouth Ground Associates, LP
PA
Plymouth Ground Associates LLC - 0.1% GP
PREIT - 99.9% LP
Plymouth Meeting Mall (fee owner)
PR 8-10 Market LP
DE
PR 8-10 Market Mezz LLC - 0.1% GP
PREIT - 99.9% LP
See PM Gallery LP
PR 907 Market Mezz LP
DE
PR 907 Market Mezz GP LLC - 1.0% GP
PREIT - 99.0% LP
See PR 907 Market LP
PR AEKI Plymouth, L.P.
DE
PR AEKI Plymouth LLC - 0.1% GP
PREIT - 99.9% LP
IKEA Parcel
PR Beaver Valley Limited Partnership
PA
PR Beaver Valley LLC - 1% GP
PREIT - 99% LP
Beaver Valley Mall (Parcels 1 & 2)
PR BOS LP
PA
PR BOS GP, LLC - 1% GP
PREIT - 99% LP
Lehigh Valley Mall - Boscov’s Outparcel (50% joint venture)
PR Capital City Limited Partnership
PA
PR Capital City LLC - 0.5% GP
PREIT - 99.5% LP
Capital City Mall (leasehold)
PR CC Limited Partnership
PA
PR CC I LLC - 0.01% GP
PREIT - 99.99% LP
Capital City Mall (land)
PR Chestnut Associates, LP
PA
PR Chestnut Sub Mezzco, LLC - 11% GP
PR Chesnut Mezzco, LLC - 89% LP
1520-22 Chestnut Street
PR Echelon Limited Partnership
PA
PR Echelon LLC - 0.1% GP
PREIT - 99.9% LP
See Echelon Title, LLC



PR Exton Limited Partnership
PA
PR Exton LLC - 0.1% GP
PREIT - 99.9% LP
See XGP LLC, X-I Holding LP and X-II Holding LP
PR Exton Outparcel Holdings, LP
PA
PR Exton Outparcel GP, LLC - 0.1% GP
PREIT - 99.9% LP
See PR Exton Outparcel Limited Partnership
PR Exton Outparcel Limited Partnership
PA
PR Exton Outparcel GP, LLC - 0.1% GP
PR Exton Outparcel Holdings, LP - 99.9% LP
Exton Outparcel
PR Exton Square Property, L.P. (f/k/a X-I Holding LP)
DE
XGP LLC - 1% GP
PR Exton Limited Partnership - 99% LP
Exton Square Mall Parcel and Leasehold in Kmart parcel at Mall
PR Financing Limited Partnership
DE
PR Financing I LLC - 0.5% GP
PREIT - 99.5% LP
Francis Scott Key Mall
Jacksonville Mall (leasehold)
Lycoming Mall*
New River Valley Mall
Patrick Henry Mall
Uniontown Mall (leasehold)
Viewmont Mall*

*Certain parcels at these properties are owned by PREIT-RUBIN OP, Inc.
PR Gainesville Limited Partnership
DE
PR Gainesville LLC - 0.1% GP
PR GV LP - 99.9% LP
540 acres of land in Alachua County near Gainesville, Florida
PR Gallery II Limited Partnership
PA
PR Gallery II LLC - 0.1% GP
PREIT - 99.9% LP
See Keystone Philadelphia Properties, L.P.
PR GV LP
DE
PR GV LLC - 0.1% GP
PREIT - 99.9% LP
See PR Gainesville Limited Partnership
PR Holding Sub Limited Partnership
PA
PR Holding Sub LLC - 0.1% GP
PREIT - 99.9% LP
Stand by acquisition entity for Pennsylvania transactions
PR Jacksonville Limited Partnership
PA
PR Jacksonville LLC - 0.5 % GP
PREIT - 99.5% LP
Jacksonville Mall
PR Logan Valley Limited Partnership
PA
PR Logan Valley LLC - 0.01% GP
PREIT - 99.99% LP
Logan Valley Mall
(record title holder and ground lessor)
PR Lycoming Limited Partnership
PA
PR Lycoming LLC - 0.01% GP
PREIT - 99.99% LP
Lycoming Mall
PR Monroe Old Trail Limited Partnership
PA
PR Monroe Old Trail, LLC - 0.1% GP
PR Monroe Old Trail Holdings, L.P. - 99.9% LP
0.466 acre parcel of land located in Monroe Township, PA.
PR Monroe Old Trail Holdings, L.P.
PA
PR Monroe Old Trail Holdings LLC - 0.1% GP
PREIT-RUBIN, INC. - 99.9% LP
See PR Monroe Old Trail Limited Partnership.
PR Monroe Unit One Holdings, L.P.
PA
PR Monroe Unit One GP, LLC - 0.01% GP
PREIT-RUBIN, INC. - 99.99% LP
See PR Monroe Unit One Limited Partnership



PR Monroe Unit One Limited Partnership
PA
PR Monroe Unit One GP, LLC - 0.01% GP
PR Monroe Unit One Holding, L.P. - 99.99% LP
Monroe Mall Outparcel
PR Monroe Unit 10C Holdings, L.P.
PA
PR Monroe Unit 10C GP, LLC - 0.01% GP
PREIT-RUBIN, INC. - 99.99% LP
See PR Monroe Unit 10C Limited Partnership
PR Monroe Unit 10C Limited Partnership
PA
PR Monroe Unit One GP, LLC - 0.01% GP
PR Monroe Unit 10C Holdings, L.P. - 99.99% LP
Monroe Mall Outparcel
PR Moorestown Limited Partnership
PA
PR Moorestown LLC - 0.1% GP
PREIT - 99.9% LP
See Moorestown Mall LLC
PR New Castle Associates
PA
PR New Castle LLC - 0.1% GP
PREIT - 99.9% LP
See Cherry Hill Center, LLC
PR New Garden Limited Partnership
PA
PR New Garden LLC - 0.1% GP
PREIT - 99.9% LP
22.3 acre parcel of land and 4.9 acre parcel of land in New Garden Township, Chester County, Pennsylvania
PR New Garden Residential Limited Partnership
PA
PR New Garden Residential LLC - 0.1% GP
PREIT-RUBIN, INC. - 99.9% LP
Residential parcel (46.7 acres) in New Garden Township, Chester County, Pennsylvania
PR New Garden/ Chesco Limited Partnership
PA
PR New Garden/Chesco LLC - 0.1% GP
PR New Garden/Chesco Holdings, Limited Partnership - 99.9% LP
Retail parcels (107.8 acres) in New Garden Township, Chester County, Pennsylvania
PR New Garden/ Chesco Holdings, Limited Partnership
PA
PR New Garden/Chesco Holdings LLC - 0.1% GP
PREIT - 99.9% LP
See PR New Garden/Chesco Limited Partnership
PR Outdoor, LP
PA
PR Outdoor, LLC -0.01% GP
PREIT-RUBIN, INC. - 99.99% LP
See Catalyst Outdoor Advertising, LLC
PR Outdoor 2, L.P.
PA
PR Outdoor 2, LLC - 0.01% GP
PREIT-RUBIN, INC. - 99.99% LP
See Catalyst Outdoor 2, LLC
PR Palmer Park Mall Limited Partnership
PA
PR Palmer Park, L.P. - 50.1% GP
PREIT - 49.9% LP
Palmer Park Mall
PR Palmer Park, L.P.
PA
PR Palmer Park Trust - 1% GP
PREIT - 99% LP
See PR Palmer Park Mall Limited Partnership
PR Pitney Lot 3 Holdings, L.P.
PA
PR Pitney Lot 3 GP, LLC - 0.01% GP
PREIT-RUBIN, INC. - 99.99% LP
See PR Pitney Lot 3 Limited Partnership



PR Pitney Lot 3 Limited Partnership
PA
PR Pitney Lot 3 GP, LLC - 0.01% GP
PR Pitney Lot 3 Holdings, L.P. - 99.99% LP
Land located in Lancaster, Pennsylvania
PR Plymouth Meeting Associates PC LP
DE
PR PM PC Associates LLC - 0.1% GP
PR PM PC Associates L.P. - 99.9% LP
Plymouth Commons
PR PM PC Associates LP
DE
PR PM PC Associates LLC - 0.1% GP
PREIT - 99.9% LP
See PR Plymouth Meeting Associates PC LP
PR Plymouth Meeting Limited Partnership
PA
PR Plymouth Meeting LLC - 0.1% GP
PREIT - 99.9% LP
Plymouth Meeting Mall (leasehold interest) and the Boscov’s parcel (fee interest)
PR Springfield Associates, L.P.
PA
PR Springfield Trust - 1% GP
PREIT - 99% LP
Springfield East (Fee title to a 50% interest in a commercial condominium at Baltimore Pike & Woodlawn Avenue)
PR Springfield/Delco Limited Partnership
PA
PR Springfield/Delco LLC - 0.1% GP
PR Springfield/Delco Holdings, L.P. - 99.9% LP
50% interest, as tenant in common, in Springfield Mall
PR Springfield/Delco Holdings, L.P.
PA
PR Springfield/Delco Holdings, LLC - 0.1% GP
PREIT - 99.9% LP
See PR Springfield/Delco Limited Partnership
PR TP LP
DE
PR TP LLC - 0.1% GP
PREIT - 99.9% LP
Tenants under lease on lands adjoining Plymouth Meeting Mall
PR Valley Limited Partnership
PA
PR Valley LLC - 0.5% GP
PREIT - 99.5% LP
Valley Mall
PR Hagerstown LLC is the borrower under a mortgage loan secured by Valley Mall.
PR Valley View Limited Partnership
PA
PR Valley View LLC - 0.5% GP
PREIT - 99.5% LP
Valley View Mall
PR Viewmont Limited Partnership
PA
PR Viewmont LLC - 0.01% GP
PREIT - 99.99% LP
Borrower for $48 million mortgage loan secured by Viewmont Mall. Also lessee of Viewmont Mall under 29 year lease from PR Financing Limited Partnership
PR Walnut Associates, LP
PA
PR Walnut Sub Mezzco, LLC - 11% GP
PR Walnut Mezzco, LLC - 89% LP
1501-05 Walnut Street
PR Washington Crown Limited Partnership
PA
PR Washington Crown LLC - 0.5% GP
PREIT - 99.5% LP
Washington Crown Center
PR Westgate Limited Partnership
(to be dissolved)
PA
PR Westgate LLC - 0.01% GP
PREIT - 99.99% LP
None



PR Woodland Limited Partnership
DE
PR Woodland General, LLC - 1.0% GP
PREIT - 99% LP
Woodland Mall
PR Wyoming Valley Limited Partnership
PA
PR Wyoming Valley LLC - 0.5% GP
PREIT - 99.5% LP
Wyoming Valley Mall (fee)
PREIT Associates, L.P. (“PREIT”)
DE
Pennsylvania Real Estate Investment Trust - 89.19% consolidated interest as of 3/31/2015
Minority Limited Partners 10.81%
See rest of this Chart
PREIT Capital Advisors, LP
(to be dissolved)
PA
PR Advisors GP, LLC - 0.01% GP
PREIT-RUBIN, INC. - 99.99% LP
None
WG Holdings, L.P.
PA
PRWGP General, LLC - 0.02% GP
PREIT - 99.98% LP
See WG Park, L.P.
WG Park General, L.P.
PA
WG Holdings of Pennsylvania, L.L.C. - 0.1% GP
WG Holdings, L.P. - 99.9% LP
See WG Park, L.P.
WG Park Limited, L.P.
PA
WG Holdings of Pennsylvania, L.L.C. - 0.1% GP
WG Holdings, L.P. - 99.9% LP
See WG Park, L.P.
WG Park, L.P.
PA
WG Park General, L.P. - 20% GP
WG Park Limited, L.P. - 80% LP
Willow Grove Mall
WG Park-Anchor B LP
DE
WG Park-Anchor B, LLC - 0.5% GP
PREIT - 99.5% LP
Anchor site at Willow Grove Park (previously used for operation of Strawbridge department store).
Limited Liability Companies






Limited Liability Companies 2
Jurisdiction of Organization
Each Person holding any Equity Interest in the Subsidiary; nature of the Equity Interest; percentage ownership of Subsidiary represented by the Equity Interest
Property Owned by Subsidiary
801 Developers GP, LLC
PA
PREIT - 100% Sole Member
See 801 Developers, LP
Beverage Two, LLC
NJ
PREIT-RUBIN, INC. - 100% Sole Member
None
Cherry Hill Center Manager, LLC
DE
PREIT - 100% Sole Equity Member
William Langan - 0% Special Member
See Cherry Hill Center, LLC



Cherry Hill Center, LLC
MD
PR New Castle Associates - 99.9% Member
Cherry Hill Center Manager, LLC - 0.1% Member
Cherry Hill Mall
Cumberland Mall Retail Condominium Association, LLC
NJ
Pennsylvania Real Estate Investment Trust entity and other condominium owners are members.
None. This entity is a unit owners association related to retail condominium at Cumberland Mall.
Echelon Beverage LLC
NJ
PREIT-RUBIN, INC. - 100% Sole Member
Liquor license associated with Voorhees Town Center
Echelon Title LLC
DE
PR Echelon Limited Partnership -100% Sole Member
Voorhees Town Center
Keystone Philadelphia Properties, LLC
DE
PR Gallery II LLC - 100% Sole Member
See Keystone
Philadelphia Properties, L.P.
Moorestown Beverage I, LLC
NJ
PREIT-RUBIN, INC. 100% - Sole Member
Liquor license associated with Moorestown Mall
Moorestown Beverage II, LLC
NJ
PREIT-RUBIN, INC. 100% - Sole Member
Liquor license associated with Moorestown Mall
Moorestown Mall LLC
DE
PR Moorestown Limited Partnership - 100% Sole Member
Moorestown Mall
Plymouth Ground Associates LLC
PA
PREIT - 100% Sole Member
See Plymouth Ground Associates, L.P.
Plymouth License III, LLC
PA
PREIT-RUBIN, INC. - 100% Sole Member
Liquor license associated with Plymouth Meeting Mall
Plymouth License IV, LLC
PA
PREIT-RUBIN, INC. - 100% Sole Member
Former owner of Liquor license R-17547
PR 8-10 Market GP LLC
DE
PREIT - 100% Sole Member
See PM Gallery LP
PR 8-10 Market Mezz LLC
DE
PREIT - 100% Sole Member
See PR 8-10 Market LP
PR 907 Market GP LLC
(to be dissolved)
DE
PR 907 Market Mezz LP - 100% Sole Member
None
PR 907 Market Mezz GP LLC
DE
PREIT - 100% Sole Member
See PR 907 Market LP
PR Acquisition Sub LLC
DE
PREIT - 100% Sole Member
Standby acquisition entity for transactions outside of Pennsylvania
PR Advisors GP, LLC
(to be dissolved)
DE
PREIT-RUBIN, INC. - 100% Sole Member
See PREIT Capital Advisors, LP
PR AEKI Plymouth LLC
DE
PREIT - 100% Sole Member
See PR AEKI Plymouth, L.P.
PR Beaver Valley LLC
DE
PREIT - 100% Sole Member
See PR Beaver Valley Limited Partnership
PR BOS GP, LLC
DE
PREIT - 100% Sole Member
See PR BOS LP
PR BVM, LLC
PA
PREIT - 100% Sole Member
Beaver Valley Mall (Parcel 3)
PR Capital City LLC
DE
PR CC II LLC -99.99% Member
PREIT - 0.01% Member
See PR Capital City Limited Partnership
PR CC I LLC
DE
PR CC II LLC - 99.99% Member
PREIT - 0.01% Member
See PR CC Limited Partnership



PR CC II LLC
DE
PREIT - 100% Sole Member
See PR CC Limited Partnership
PR Cherry Hill Office GP, LLC
DE
PREIT - 100% Sole Member
See Bala Cynwyd Associates, L.P.
PR Cherry Hill STW LLC
DE
PREIT - 100% Sole Member
Former Strawbridge property at Cherry Hill Mall.
PR Chestnut Mezzco, LLC
PA
PREIT - 100% Sole Member
See PR Chestnut Associates, LP
PR Chestnut Sub Mezzco, LLC
PA
PREIT - 100% Sole Member
See PR Chestnut Associates, LP
PR Crossroads I, LLC
PA
PREIT - 100% Sole Member
Crossroads Mall (record owner of a portion of mall and ground lessee of remainder of mall)
PR Crossroads II, LLC
PA
PREIT - 100% Sole Member
Crossroads Mall (90% undivided interest in ground lessor estate)
PR Cumberland GP LLC
DE
PREIT - 100% Sole Member
See Cumberland Mall Associates (limited partnership)
PR Cumberland LP LLC
DE
PREIT - 100% Sole Member
See Cumberland Mall Associates (limited partnership)
PR Cumberland Outparcel LLC
NJ
PREIT - 100% Sole Member
Vacant land parcel adjacent to Cumberland Mall
PR Echelon LLC
PA
PREIT - 100% Sole Member
See PR Echelon Limited Partnership
PR Exton LLC
PA
PREIT - 100% Sole Member
See Exton Limited Partnership
PR Exton Outparcel GP, LLC
DE
PREIT - 100% Sole Member
See PR Exton Outparcel Limited Partnership
PR Fin Delaware, LLC
DE
PREIT - 100% Sole Member
None
PR Financing I LLC
DE
PR Financing II LLC - 99.99% Member
PREIT - 0.01% Member
See PR Financing Limited Partnership
PR Financing II LLC
DE
PREIT - 100% Sole Member
See PR Financing Limited Partnership
PR Francis Scott Key LLC
DE
PR Financing Limited Partnership - 100% Sole Member
Borrower under $55 million mortgage loan secured by Francis Scott Key Mall.
PR Gallery I LLC
(to be dissolved)
PA
PREIT - 100% Sole Member
None
PR Gallery II LLC
DE
PREIT - 100% Sole Member
See PR Gallery II Limited Partnership
PR Gainesville LLC
DE
PREIT - 100% Sole Member
See PR Gainesville Limited Partnership
PR Gloucester LLC
DE
PREIT - 100% Sole Member
None
PR GV LLC
DE
PREIT - 100% Sole Member
See PR Gainesville Limited Partnership
PR Hagerstown LLC
DE
PR Valley Limited Partnership - 100% Sole Member
None, Borrower under Mortgage Loan for Valley Mall
PR Holding Sub LLC
PA
PREIT - 100% Sole Member
See PR Holding Sub Limited Partnership
PR Hyattsville LLC
DE
PR Prince George’s Plaza LLC - 100% Sole Member
Borrower under mortgage loan secured by The Mall at Prince George’s.
PR Jacksonville LLC
DE
PR JK LLC - 99.99% Member
PREIT - 0.01% Member
See PR Jacksonville Limited Partnership



PR JK LLC
DE
PREIT - 100% Sole Member
See PR Jacksonville Limited Partnership
PR Lehigh Valley LLC
PA
PREIT - 100% Sole Member
See Lehigh Valley Associates on Part II of this Schedule
PR Logan Valley LLC
DE
PR LV LLC - 99.99% Member
PREIT - 0.01% Member
See PR Logan Valley Limited Partnership
PR LV LLC
DE
PREIT - 100% Sole Member
See PR Logan Valley Limited Partnership
PR Lycoming LLC
DE
PREIT - 100% Sole Member
See PR Lycoming Limited Partnership
PR Magnolia LLC
DE
PREIT - 100% Sole Member
Magnolia Mall; Undeveloped land held in fee
PR Metroplex West, LLC
DE
PREIT - 100% Sole Member
See Metroplex General, Inc. on Part II of this Schedule
PR Monroe Old Trail LLC
DE
PREIT-RUBIN, INC. - 100% Sole Member
See PR Monroe Old Trail Limited Partnership
PR Monroe Old Trail Holdings LLC
DE
PREIT-RUBIN, INC. - 100% Sole Member
See PR Monroe Old Trail Limited Partnership
PR Monroe Unit One GP, LLC
DE
PREIT-RUBIN, INC. - 100% Sole Member
PR Monroe Unit One Limited Partnership
PR Monroe Unit 10C GP, LLC
DE
PREIT-RUBIN, INC. - 100% Sole Member
PR Monroe Unit 10C Limited Partnership
PR Moorestown LLC
PA
PREIT - 100% Sole Member
See PR Moorestown Limited Partnership
PR New Castle LLC
PA
PREIT - 100% Sole Member
See PR New Castle Associates
PR New Garden LLC
PA
PREIT - 100% Sole Member
See PR New Garden L.P.
PR New Garden Residential LLC
DE
PREIT-RUBIN, INC. - 100% Sole Member
See PR New Garden Residential L.P.
PR New Garden/Chesco LLC
DE
PR New Garden LLC - 100% Sole Member

PREIT Services, LLC - 0% Non-member manager
See PR New Garden/Chesco Holdings LLC
PR New Garden/Chesco Holdings LLC
DE
PREIT - 100% Sole Member
See PR New Garden/Chesco Holdings, L.P.
PR North Dartmouth LLC
DE
PREIT - 100% Sole Member
Dartmouth Mall
PR Orlando Fashion Square LLC
(to be dissolved)
DE
PREIT - 100% Sole Member
None
PR Outdoor, LLC
DE
PREIT-RUBIN, INC. - 100% Sole Member
See PR Outdoor, LP
PR Outdoor 2, LLC
DE
PREIT-RUBIN, INC. - 100% Sole Member
See PR Outdoor 2, L.P.
PR Oxford Valley General, LLC
DE
PREIT - 100% Sole Member
See Oxford Valley Road Associates on Part II of this Schedule
PR Patrick Henry LLC
DE
PREIT - 100% Sole Member
Patrick Henry Mall
PR Pitney Lot 3 GP, LLC
DE
PREIT-RUBIN, INC. - 100% Sole Member
See PR Pitney Lot 3 Limited Partnership
PR PG Plaza LLC
DE
PREIT - 100% Sole Member
See PR Prince George’s Plaza LLC



PR Plymouth Meeting LLC
PA
PREIT - 100% Sole Member
See PR Plymouth Meeting Limited Partnership
PR PM PC Associates LLC
DE
PREIT - 100% Sole Member
PREIT Services, LLC - 0% Non-member manager
See PR Plymouth Meeting Associates PC LP
PR Prince George’s Plaza LLC
DE
PR PG Plaza LLC - 1% Managing Member
PREIT - 99% Member
The Mall at Prince Georges
PR Radio Drive LLC
(to be dissolved)
SC
PREIT-RUBIN, INC. - 100% Sole Member
None
PR Red Rose LLC
DE
PREIT - 100% Sole Member
See Red Rose Commons Associates, L.P. on Part II of this Schedule
PR Springfield/Delco LLC
DE
PREIT - 100% Sole Member
See PR Springfield/Delco, L.P.
PR Springfield/Delco Holdings LLC
DE
PREIT - 100% Sole Member
See PR Springfield/Delco Holdings, L.P.
PR Springfield Town Center LLC
DE
PREIT - 100% Sole Member
Ground Lessee of Springfield Town Center
PR Swedes Square LLC
DE
PREIT - 100% Sole Member
Land in New Castle, Delaware
PR Sunrise Outparcel 1, LLC
NJ
PREIT-RUBIN, INC. - 100% Sole Member
Sunrise Plaza Outparcel
PR Sunrise Outparcel 2, LLC
NJ
PREIT-RUBIN, INC. - 100% Sole Member
Sunrise Plaza Outparcel
PR TP LLC
DE
PREIT - 100% Sole Member
See PR TP LP
PR Valley LLC
DE
PREIT - 100% Sole Member
See PR Valley Limited Partnership
PR Valley View LLC
DE
PR VV LLC - 99.99% Member
PREIT - 0.01% Member
See PR Valley View Limited Partnership
PR Valley View Downs LLC
(to be dissolved)
PA
PREIT - 100% Sole Member
None
PR Viewmont LLC
DE
PREIT - 100% Sole Member
See PR Viewmont Limited Partnership
PR VV LLC
DE
PREIT - 100% Sole Member
See PR Valley View Limited Partnership
PR Walnut Mezzco, LLC
PA
PREIT - 100% Sole Member
See PR Walnut Associates, LP
PR Walnut Street Abstract LLC
DE
PREIT-RUBIN, INC. - 100% Sole member
See Walnut Street Abstract, L.P. in Part II of this Schedule
PR Walnut Sub Mezzco, LLC
PA
PREIT - 100% Sole Member
See PR Walnut Associates, LP
PR Washington Crown LLC
DE
PR WC LLC - 99.99% Member
PREIT - 0.01% Member
See PR Washington Crown Limited Partnership
PR WC LLC
DE
PREIT - 100% Sole Member
See PR Washington Crown Limited Partnership
PR Westgate LLC
(to be dissolved)
PA
PREIT - 100% Sole Member
See PR Westgate Limited Partnership
PR Wiregrass Anchor LLC
DE
PREIT - 100% Sole Member
McRae’s anchor store at Wiregrass Mall



PR Wiregrass Commons LLC
DE
PREIT - 100% Sole Member
Wiregrass Commons Mall
PR Woodland General LLC
DE
PREIT - 100% Sole Member
See PR Woodland Limited Partnership
PR Woodland Outparcel LLC
DE
PREIT - 100% Sole Member
Outparcel at Woodland Mall
PR WV LLC
DE
PREIT - 100% Sole Member
See PR Wyoming Valley LLC
PR Wyoming Valley LLC
DE
PR WV LLC - 99.99%
PREIT - 0.01%
See PR Wyoming Valley Limited Partnership
PREIT Advisors, LLC
(to be dissolved)
PA
PREIT-RUBIN, INC. - 100% Sole Member
None
PREIT CDE LLC (f/k/a Exton License II, LLC)
(to be dissolved)
PA
PREIT-RUBIN, INC. - 1 % Member
PREIT - 99% Member
None
PREIT Gadsden Mall LLC
DE
PREIT - 100% Sole Member
Gadsden Mall
PREIT Gallery TRS Sub LLC
PA
PREIT-RUBIN, INC. - 100% Sole Member
See Keystone Philadelphia Properties, L.P., PR Gallery I Limited Partnership and PR 907 Market LP
PREIT Services, LLC
DE
PREIT - 100% Sole Member
None
PRWGP General, LLC
DE
PREIT - 100% Sole Member
See WG Park, L.P.
WG Holdings of Pennsylvania, L.L.C.
PA
WG Holdings, L.P. - 100% Sole Member
See WG Park, L.P.
WG Park - Anchor B, LLC
DE
PREIT - 100% Sole Member
See WG Park - Anchor B LP
XGP LLC
DE
PR Exton Limited Partnership - 100% Sole Member
See X-I Holding LP


Corporations









Corporations 2
Jurisdiction of Organization
Each Person holding any Equity Interest in the Subsidiary; nature of the Equity Interest; percentage ownership of Subsidiary represented by the Equity Interest
Property Owned by Subsidiary
1150 Plymouth Associates, Inc.  
MD
PREIT-RUBIN, INC. - 100%
Liquor licenses associated with Plymouth Meeting Mall
Exton License, Inc.
MD
PREIT-RUBIN, INC. - 100%
Liquor licenses associated with Exton Square
PR GC Inc.
MD
PREIT Services, LLC - 100%
None
PREIT-RUBIN, Inc.
PA
PREIT - 100%
Former Strawbridge store located at 8 th  and Market. Also, see PR New Garden Residential Limited Partnership and PR Radio Drive LLC.
PREIT-RUBIN OP, Inc.
PA
PREIT-RUBIN, INC. - 100%
Outparcels acquired in the Crown Transaction that are located at the following properties: Lycoming Mall, North Hanover Mall and Viewmont Mall. (See PR Financing Limited Partnership).
PREIT TRS, Inc.
DE
Pennsylvania Real Estate Investment Trust - 100%
REIT Income Test Assignee
Capital City Beverage Enterprise, Inc. (f/k/a R8267 Plymouth Enterprises, Inc.)
MD
PREIT-RUBIN, INC. - 100%
Liquor licenses associated with Plymouth Meeting Mall
Springhills Northeast Quadrant Owners Drainage Association No. One, Inc.
FL
PR Gainesville Limited Partnership, sole member
Property owner’s association for property located in Alachua county, Florida (Gainesville)
Springhill Owners Association, Inc.
FL
PR Gainesville Limited Partnership, sole member
Property owner’s association for property located in Alachua county, Florida (Gainesville)
Trusts

Trusts
Jurisdiction of Organization
Each Person holding any Equity Interest in the Subsidiary; nature of the Equity Interest; percentage ownership of Subsidiary represented by the Equity Interest
Property Owned by Subsidiary
PR Palmer Park Trust
PA
PREIT - Sole Beneficiary
See PR Palmer Park Mall Limited Partnership
PR Springfield Trust
PA
PREIT - Sole Beneficiary
See PR Springfield Associates, L.P.
PREIT Protective Trust 1
PA
PREIT-RUBIN, INC. - Sole Beneficiary
REIT Asset Test Assignee

A. The following wholly owned entities are inactive and are slated for dissolution:
1.      PR Orlando Fashion Square LLC



2.      PR Westgate Limited Partnership
3.      PREIT Capital Advisors, LP
4.      PR 907 Market GP LLC
5.      PR Advisors GP, LLC
6.      PR Radio Dive LLC
7.      PR Valley View Downs LLC
8.      PR Westgate LLC
9.      PREIT Advisors, LLC
10.      PREIT CDE LLC

Schedule 6.1.(b) - Ownership Structure
PART II
Consolidated Affiliates
None.
Unconsolidated Affiliates
Unconsolidated Affiliates
Jurisdiction of Organization
Each Person holding any Equity Interest in the Unconsolidated Affiliate; nature of the Equity Interest; percentage ownership of Unconsolidated Affiliate represented by the Equity Interest
Property Owned by Unconsolidated Affiliate
801 4-6 Fee Owner GP LLC
DE
801 Market Venture LP - 100% Member
GPM GP LLC - 0% Non-member manager
See 801 4-6 Fee Owner LP
801 4-6 Fee Owner LP
DE
801 4-6 Fee Owner GP LLC - 0.1% GP
801 Market Venture LP - 88.9% LP
801 4-6 Mezz LP - 11% LP
Unit 1AC of the Unit 1 801 Market Street Condominium
801 4-6 Mezz GP LLC
DE
801 Market Venture LP - 100% Member
See 801 4-6 Fee Owner LP
801 4-6 Mezz LP
DE
801 4-6 Mezz GP LLC - 0.1% GP
801 market Venture LP - 99.9% LP
See 801 4-6 Fee Owner LP



801 C-3 Fee Owner LP
DE
801 C-3 Fee Owner GP LLC - 0.1% GP
801 Market Venture LP - 88.9% LP
801 C-3 Mezz LP - 11.0% LP
Units 1EH and 1D of the Unit 1 801 Market Street Condominium
801 C-3 Fee Owner GP LLC
DE
801 Market Venture LP - 100% Member
GPM GP LLC - 0% Non-member manager
See 801 C-3 Fee Owner LP
801 C-3 Mezz LP
DE
801 C-3 Mezz GP LLC - 0.1% GP
801 Market Venture LP - 99.9% LP
See 801 C-3 Fee Owner LP
801 C-3 Mezz GP LLC
DE
801 Market Venture LP - 100% Sole Member
See 801 C-3 Fee Owner LP
801-Gallery C-3 Associates, L.P.
PA
801 Gallery C-3 GP, LLC - 0.01% GP
801-Gallery Associates, L.P. - 89.99% LP
801 Gallery C-3 MT, L.P. - 10% LP
See 801-Gallery Associates, L.P.
801-Gallery C-3 GP, LLC
PA
801-Gallery Associates, L.P. - 100% Sole Member
See 801-Gallery C-3 Associates, L.P.
801-Gallery C-3 MT, L.P.
PA
801-Tenant C-3 Manager, LLC - 0.01% GP
Chevron U.S.A. Inc. - 99.99% LP
Retail Master Tenant at 801 Market
801-Gallery GP, LLC
PA
PREIT-RUBIN, INC. - 50% member
Macerich Management Company - 50% Member*
GPM GP LLC - 0% Non-member manager
See 801-Gallery Associates, L.P.
801-Gallery Associates, L.P.
PA
801-Gallery GP, LLC - 0.1% GP
PREIT-RUBIN, INC. - 49.95% LP
Macerich Management Company - 49.95% LP*
801 Market Street (leasehold)
801-Gallery Office Associates, L.P.
PA
801-Gallery Office GP, LLC - 1% GP
801-Gallery Office MT, L.P. - 20% LP
801-Gallery Associates, L.P. - 79% LP
See 801-Gallery Associates, L.P.
801-Gallery Office GP, LLC
PA
801-Gallery Associates, L.P. - 100% Sole Member
See 801-Gallery Office Associates, L.P.
801-Gallery Office MT, L.P.
PA
801-Tenant Office Manager, LLC - 0.01% GP
Chevron U.S.A. Inc. - 99.99% LP
See 801-Gallery Office Associates, L.P.
801-Tenant C-3 Manager, LLC
PA
801-Gallery Associates, L.P. - 100% Sole Member
0.01% GP Interest in 801-Gallery C-3 MT, L.P.



801-Tenant Office Manager, LLC
PA
801-Gallery Associates, L.P. - 100% Sole Member
0.01% GP Interest in 801-Gallery Office MT, L.P.
801 Market Venture LP
DE
801 Market Venture GP LLC - 1% GP
PREIT-RUBIN, INC. - 49.5% LP
Macerich Management Company - 49.5% LP*
Indirect JV Interest in Units 1AC, 1EH and 1D of the Unit 1 801 Market Street Condominium
801 Market Venture GP LLC
DE
PREIT-RUBIN, INC - 50% Member
Macerich Management Company - 50% Member*
GPM GP LLC - 0% Non-member manager
See 801 Market Venture LP
1010-1016 Market Street Realty GP, LLC
DE
MP MSR GP LLC - 50% Member
PEI MSR GP III LLC - 50% Member
See 1010-1016 Market Street Realty, LP
1010-1016 Market Street Realty, LP
PA
PEI MSR GP III LLC - 1% GP
PEI MSR GP III LLC - 10% LP
PEI MSR III LP - 89% LP
1010-1016 Market Street
1018 Market Street Realty GP, LLC
DE
MP MSR GP LLC - 50% Member
PEI MSR GP I LLC - 50% Member
See 1018 Market Street Realty, LP
1018 Market Street Realty, LP
PA
PEI MSR GP I LLC - 1% GP
PEI MSR GP I LLC - 10% LP
PEI MSR I LP - 89% LP
1018 Market Street
1020-1024 Market Street Realty GP, LLC
DE
MP MSR GP LLC - 50% Member
PEI MSR GP II LLC - 50% Member
See 1020-1024 Market Street Realty, LP
1020-1024 Market Street Realty, LP
PA
PEI MSR GP II LLC - 1% GP
PEI MSR GP II LLC - 10% LP
PEI MSR II LP - 89% LP
1020-1024 Market Street
Catalyst Outdoor Advertising, LLC
DE
PR Outdoor, LP - 39.0% Member
Thaddeus Bartkowski - 41.4784% Member
Crystal Anne Crawford - 11.5079% Member
Patrick Wofington - 8.0137% Member
Indirect interest in Outdoor Advertising
Catalyst Outdoor 2, LLC
DE
PR Outdoor 2, L.P. - 39.0% Member
Thaddeus Bartkowski - 41.4784% Member
Crystal Anne Crawford - 11.5079% Member
Patrick Wofington - 8.0137% Member
Indirect interest in Outdoor Advertising
GPM GP LLC
DE
PM Gallery LP - 100% Sole Member
See PM Gallery LP



Keystone Philadelphia Properties, LP
PA
GPM GP LLC - 0.1% GP
PREIT Gallery TRS Sub LLC - 0.1% LP
Macerich Gallery Market East TRS Sub LLC - 0.1% LP*
PM Gallery LP - 87.2% LP
PR Gallery II Limited Partnership - 12.5% LP
The Gallery at Market East II (ground lessee)
Lehigh BOS Acquisition L.P.
DE
Lehigh BOS Acquisition GP, LLC - 0.5% GP*
PR BOS GP, LLC - 0.5% GP
Simon Property Group, L.P. - 49.5% LP *
PR BOS LP - 49 .5% LP
Boscov’s Parcel at Lehigh Valley Mall
Lehigh Valley Associates (Limited Partnership)
PA
PR Lehigh Valley LLC - 0.5% GP,
PREIT - 49.5% LP
Delta Ventures, Inc. - 0.5% GP*
Kravco Simon Investments, L.P. - 49.5% LP*
Lehigh Valley Mall
Lehigh Valley Mall GP, LLC
DE
Lehigh Valley Associates - 100% member
See Mall at Lehigh Valley, L.P.
Mall at Lehigh Valley, L.P.
DE
Lehigh Valley Mall GP, LLC - 0.5% GP
Lehigh Valley Mall Associates - 99.5% LP
Lessor of Lehigh Valley Mall. Borrower under mortgage loan secured by Lehigh Valley Mall.
Mall Maintenance Corporation (I)
PA
PREIT holds an indirect minority membership interest in Mall Maintenance Corporation (I)

Other members:
City of Philadelphia
Redevelopment Authority of City of Philadelphia
Philadelphia Authority for Industrial Development
Philadelphia VF LP
The May Department Stores Company
Market Street East Development Corporation
Purpose is to maintain the public areas of Gallery I at Market East
Mall Maintenance Corporation II
PA
PREIT holds an indirect minority membership interest in Mall Maintenance Corporation II

Other members:
Redevelopment Authority of City of Philadelphia
Philadelphia Authority for Industrial Development
One Reading Center Associates
Purpose is to maintain the public areas of Gallery II at Market East



Mall Corners Ltd. (Limited Partnership)
GA
PREIT - 19% LP
Charles A. Lotz - 0.5% GP*
Center Developers, Inc. - 1% GP*
Frank L. Ferrier - 1% GP*
Others - 78.5% LP*
None
Mall Corners II, Ltd. (Limited Partnership)
GA
PREIT - 11% LP
Charles A. Lotz - 0.5% GP*
Center Developers, Inc. - 1% GP*
Frank L. Ferrier - 1% GP*
Others - 86.5% LP*
None
Metroplex General, Inc.  
PA
PR Metroplex West, LLC - 50%
MW General, Inc. - 50%*
See Metroplex West Associates, L.P.
Metroplex West Associates, L.P.
PA
Metroplex General, Inc. - 1% GP
PREIT - 49.5% LP
MW General, Inc. - .5% LP*
Goldenberg Metroplex Partners, L.P. - 22.5% LP*
Goldenberg Metroplex Investors, L.P. - 24% LP*
Resource Realty Management, Inc. - 2.5% LP*
Metroplex Power Center
Oxford Valley Road Associates
(limited partnership)
PA
PR Oxford Valley General, LLC - 1% GP
PREIT - 49% LP
OVG General, Inc. - 1% GP*
Goldenberg Investors, L.P. - 22.296% LP*
Goldenberg Partners, L.P. - 24.204% LP*
Milton S. Schneider - 1% LP
 Resource Realty* Management, Inc. - 1.5% LP*
Court at Oxford Valley Shopping Center
Pavilion East Associates, L.P.
PA
PREIT - 40% LP
PE General, L.L.C. - 1% GP*
Goldenberg Pavilion Partners, L.P. - 15.5% LP*
Goldenberg Pavilion Investors, L.P. - 15% LP*
Resource Realty Management, Inc. - 4% LP*
Pavilion Towner Associates, L.P. - 4.5% LP*
LK Pavilion Associates, L.P. - 20% LP*
Pavilion at Market East
PEI MSR GP I LLC
PA
PM Gallery LP - 87.475% Member
PREIT - 12.525% Member
See 1018 Market Street Realty, LP
PEI MSR I LP
PA
PEI MSR GP I LLC - 1% GP
PEI MSR LP LLC - 99% LP
See 1018 Market Street Realty, LP
PEI GP II LLC
PA
PM Gallery LP - 87.475% Member
PREIT - 12.525% Member
See 1020-1024 Market Street Realty, LP
PEI MSR II LP
PA
PEI MSR GP II LLC - 1% GP
PEI MSR LP LLC - 99% LP
See 1020-1024 Market Street Realty, LP



PEI MSR GP III LLC
PA
PM Gallery LP - 87.475% Member
PREIT - 12.525% Member
See 1010-1016 Market Street Realty, LP
PEI MSR III LP
PA
PEI MSR GP III LLC - 1% GP
PEI MSR LP LLC - 99% LP
See 1010-1016 Market Street Realty, LP
PEI MSR LP LLC
PA
PM Gallery LP - 87.475% Member
PREIT - 12.525% Member
See 1010-1016 Market Street Realty, LP, 1018 Market Street Realty, LP and 1020-1024 Market Street Realty, LP
PM Gallery LP
DE
PR 8-10 Market GP LLC - 0.1% GP
Macerich Gallery Market East GP LLC - 0.1% GP*
PR 8-10 Market LP - 42.841% LP
Macerich Gallery Market East LP LLC - 57.159% LP*
See PR Gallery I Limited Partnership, Keystone Philadelphia Properties, L.P., PR 907 Market LP, and 801-Gallery Associates, L.P.
PM 833 Market Mezz LP
DE
PM 833 Market Mezz GP LLC - 0.1% LP
PM Gallery LP - 99.9% LP
See PR Gallery I Limited Partnership
PM 833 Market Mezz GP LLC
DE
PM Gallery LP - 100% Sole Member
See PR Gallery I Limited Partnership
PR 907 Market LP
DE
GPM GP LLC - 0.1% GP
PREIT Gallery TRS Sub LLC - 0.1% LP
Macerich Gallery Market East TRS Sub LLC - 0.1% LP*
PM Gallery LP - 87.2% LP
PR 907 Market Mezz LP - 12.5% LP
907-937 Market Street
PR Gallery I Limited Partnership
PA
GPM GP LLC - 0.1% GP
PREIT Gallery TRS Sub LLC - 0.1% LP
Macerich Gallery Market East TRS Sub LLC - 0.1% LP*
PM Gallery LP - 76.2% LP
PM 833 Market Mezz LP - 11% LP
PREIT - 12.5% LP
The Gallery at Market East I (ground lessee)
PRDB Springfield Limited Partnership
PA
PRDB Springfield LLC - 1% GP
Paul deBotton - 49.5% LP
PREIT - 49.5% LP
Springfield Park (Springfield, PA)
PRDB Springfield LLC
PA
Paul deBotton - 50%
PREIT - 50%
See PRDB Springfield Limited Partnership



Red Rose Commons Associates, L.P.
PA
PR Red Rose LLC - 1% GP
PREIT - 49% LP
RRC General, Inc. - 1% GP*
Goldenberg Lancaster Partners, L.P. - 23% LP*
Goldenberg Lancaster Investors, L.P. - 24% LP*
Resource Realty Management, Inc. - 2% LP*
All units in the Red Rose Condominium constituting the Red Rose Commons Shopping Center
Simon/PREIT Gloucester Development, LLC
DE
PR Gloucester LLC - 25%
Gloucester Premium Outlets Member, LLC - 75% *
Proposed Outlet Development in Gloucester, New Jersey
Walnut Street Abstract, L.P.
NJ
PR Walnut Street Abstract LLC - 50% LP
Affiliate of Madison Title Agency - 50%*
Title insurance agency.

* Neither Parent nor any of its Affiliates owns any interest in this entity.





Schedule 6.1.(f) - Title to Properties
Properties
Owner
Occupancy
(as of 3/31/15)
Project Under Development?
Wholly-Owned
 
 
 
1501-05 Walnut Street
PR Walnut Associates LP
73.6%
Yes.

See Part II of this Schedule for additional information.
1520-22 Chestnut Street
PR Chestnut Associates LP
100%
No.
Beaver Valley Mall
PR Beaver Valley Limited Partnership (Parcels 1 and 2)

PR BVM, LLC (Parcel 3)
96.4%
No.
Capital City Mall
PR Capital City Limited Partnership (Improvements)

PR CC Limited Partnership (Land)
97.7%
Yes
See Part II of this Schedule for additional information.
Cherry Hill Mall
Cherry Hill Center, LLC
PR Cherry Hill STW LLC (Cherry Hill Anchor Store)
93.3%
No.
Crossroads Mall (fee and leasehold)
PR Crossroads I, LLC and PR Crossroads II, LLC
96.2%
Yes

See Part II of this Schedule for additional information.
Cumberland Mall
Cumberland Mall Associates (Unit A)
PR Cumberland Outparcel LLC (vacant outparcel)
90.5%
Yes

See Part II of this Schedule for additional information.
Dartmouth Mall
PR North Dartmouth LLC
98.2%
No.
Exton Square Mall and leasehold interest in Kmart Parcel at Mall
Exton Square Property L.P.
PR Exton Outparcel Limited Partnership (L. Lincoln Highway land parcel)
93.0%
No.
Francis Scott Key Mall
PR Financing Limited Partnership
96.9%
Yes

See Part II of this Schedule for additional information.
Gadsden Mall
PREIT Gadsden Mall LLC
PREIT-RUBIN, Inc. (3.21 vacant land parcel)
96.5%
No
Jacksonville Mall
PR Jacksonville Limited Partnership
97.6%
Yes

See Part II of this Schedule for additional information.
Logan Valley Mall
PR Logan Valley Limited Partnership
94.5%
No



Lycoming Mall
PR Financing Limited Partnership (leased to PR Lycoming Limited Partnership)

PREIT-RUBIN OP, Inc. (Outparcels - D-1, D, M-2, and Q)
94.1%
No
Magnolia Mall
PR Magnolia LLC
99.3%
No.
Mall at Prince Georges
PR Prince Georges Plaza LLC
99.1%
No
Monroe Marketplace
PR Monroe Unit One Limited Partnership (Unit 1A, 2.5 acre parcel)
PR Monroe Old Trail Limited Partnership (.466 acre parcel)
PR Monroe Unit 10C Limited Partnership (Unit 10C)
N/A - Land
Yes

See Part II of this Schedule for additional information.
Moorestown Mall
Moorestown Mall LLC
91.7%
Yes

See Part II of this Schedule for additional information.
New Garden / White Clay Point
PR New Garden L.P.
PR New Garden/Chesco Limited Partnership
PR New Garden Residential Limited Partnership
N/A - Land
Yes
See Part II of this Schedule for additional information.
New River Valley Mall
PR Financing Limited Partnership
85.0%
No
One Cherry Hill Plaza
Bala Cynwyd Associates, LP
44.9%
No
Palmer Park Mall
PR Palmer Park Mall Limited Partnership
93.2%
No
Patrick Henry Mall
PR Patrick Henry LLC
92.0%
No
Pitney Road Plaza - MattressWarehouse
PR Pitney Lot 3 Limited Partnership
100%
Yes

See Part II of this Schedule for additional information.
Plymouth Commons
PR Plymouth Meeting Associates PC LP
0%
No
Plymouth Meeting Mall
PR Plymouth Meeting Limited Partnership (Improvements)
Plymouth Ground Associates, L.P. (Land)
PR AEKI Plymouth, L.P.
92.9%
Yes

See Part II of this Schedule for additional information.
Springfield Town Center
(leasehold)
PR Springfield Town Center LLC
83.9%
No.
Spring Hills
PR Gainesville Limited Partnership
N/A - Land
Yes

See Part II of this Schedule for additional information.
Sunrise Plaza
PR Sunrise Outparcel 1, LLC - .967 acres

PR Sunrise Outparcel 2, LLC - 2.109 acres
N/A - Land
Yes

See Part II of this Schedule for additional information.



Swedes Square Property
PR Swedes Square LLC
N/A -Land
No
Uniontown Mall (leasehold)
PR Financing Limited Partnership
93.4%
Yes
 
See Part II of this Schedule for additional information.
Valley Mall
PR Valley Limited Partnership
93.9%
No
Valley View Mall
PR Valley View Limited Partnership
94.6%
Yes

See Part II of this Schedule for additional information.
Viewmont Mall
PR Financing Limited Partnership

PREIT-RUBIN OP Inc. (Outparcel #s 12401-040-005, 12401-040-003, and 12401-040-001)
97.2%
No
Voorhees Town Center
Echelon Title LLC
74.1%
Yes

See Part II of this Schedule for additional information.
Washington Crown Center
PR Washington Crown Limited Partnership
94.6%
No.
Willow Grove Park
W.G. Park, L.P.
WG Park-Anchor B LP (Anchor Site)
96.8%
No.
Wiregrass Commons Mall
PR Wiregrass Commons LLC

PR Wiregrass Anchor LLC (Anchor Store)
88.7%
No
Woodland Mall
PR Woodland Limited Partnership
PR Woodland Outparcel LLC (Verizon Outparcel)
96.7%
No
Wyoming Valley Mall
PR Wyoming Valley Limited Partnership
95.7%
No
Joint Venture
 
 
 
801 Market
801 4-6 Fee Owner GP LP (Unit 1AC)
801 C-3 Fee Owner LP (Unit 1EH & 1D)
801-Gallery Associates, L.P. (leasehold)
100%
Yes

See Part II of this Schedule for additional information.
907 Market Street
PR 907 Market LP
81.9%
Yes

See Part II of this Schedule for additional information.
1010-1016 Market Street
1010-1016 Market Street Realty, LP
71.7%
No.
1018 Market Street
1018 Market Street Realty, LP
0.0%
No.
1020-1024 Market Street
1020-1024 Market Street Realty, LP
0.0%
No.
Court At Oxford Valley
Oxford Valley Road Associates, LP
99.9%
No.



Gallery at Market East
(Leasehold)
PR Galley I Limited Partnership
14.6%
Yes

See Part II of this Schedule for additional information.
Gallery at Market East II
(Leasehold)
Keystone Philadelphia Properties, LP
77.8%
Yes

See Part II of this Schedule for additional information.
Gloucester Premium Outlets
Simon/PREIT Gloucester Development, LLC
N/A - Land under development
Yes

See Part II of this Schedule for additional information.
Lehigh Valley Mall
Lehigh Valley Associates (leased to Mall at Lehigh Valley, L.P )

Lehigh BOS Acquisition, L.P. (Boscov’s parcel)
95.7%
Yes

See Part II of this Schedule for additional information.
Metroplex Shopping Center
Metroplex West Associates, L.P.
100%
No.
Pavilion East
Pavilion East Associates, L.P.
N/A - Land
Yes

See Part II of this Schedule for additional information.
Red Rose Commons
Red Rose Commons Associates, L.P
100%
No.
Springfield East
Darlington Square Shopping Center Ltd, PR Springfield Associates, L.P, Lawrence Park Partnership, Joyfor Joint Venture as tenants in common
100%
No
Springfield Mall
PR Springfield/Delco Limited Partnership and KS Springfield Limited Partnership as tenant in common
93.2%
Yes

See Part II of this Schedule for additional information.
Springfield Park
PRDB Springfield Limited Partnership
100%
No


Schedule 6.1.(f) - Title to Properties
PART II



Projects Under Development 1
 
 
 
As of 3/31/2015
 
 
 
('000's)
 
 
 
 
 PREIT's Share of Value of Construction in Progress
PREIT's Share of Total Budgeted Costs Remaining 3
Total Projects Under Development
Land in Predevelopment
 
 
 
New Garden / White Clay Point
$34,788
 
$34,788
Springhills
19,243
 
19,243
Sub-Total Land in Predevelopment
54,032
 
54,032
 
 
 
 
Other Projects in Predevelopment
 
 
 
Wholly Owned
 
 
 
Sunrise Plaza
17
 
17
Plymouth Meeting Mall
1
 
1
Joint Venture 2
 
 
 
Pavilion East
784
 
784
Sub-Total Other Predevelopment
802
 
802
 
 
 
 
Construction in Progress
 
 
 
Wholly Owned
 
 
 
1501-05 Walnut Street
47
4,202
4,249
Capital City Mall
664
7,030
7,694
Crossroads Mall
195
190
385
Cumberland Mall
396
1,616
2,011
Francis Scott Key Mall
251
10
261
Jacksonville Mall
86
0
86
Monroe
245
1,236
1,481
Moorestown Mall
2,362
6,496
8,857
Pitney Road
3
0
3
Uniontown Mall
67
606
673
Valley View Mall
125
0
125
Voorhees Town Center
563
946
1,509
Joint Venture 2
 
 
 
801 Market Street
403
188
590
907 Market Street
862
1,795
2,657
Gloucester Premium Outlets
11,517
21,497
33,013
Lehigh Valley Mall
762
0
762
The Gallery at Market East
10,032
0
10,032
Springfield Mall
9
0
9
Sub-Total Construction in Progress
28,589
45,811
74,399
Total
$83,422
$45,811
$129,233
1  Includes the cost of land
 
 
 
2 PREIT's share represents the greater of the ownership interest or PREIT's recourse amount.
 
3 PREIT's Share of Total Budgeted Costs Remaining is net of any expected tenant reimbursements, parcel sales, tax credits or other incentives.





Schedule 6.1.(g) - Indebtedness
Part I
Indebtedness

Loan Party
Indebtedness
Description of property subject to Lien
Borrower
 
 
PREIT Associates, L.P., PREIT-RUBIN, Inc., Pennsylvania Real Estate Investment Trust
$400,000,000 Credit Agreement (for purposes of this Schedule 6.1.(g), the “Senior Credit Agreement”) by and among PREIT Associates, L.P., PREIT-RUBIN, Inc., and Pennsylvania Real Estate Investment Trust as Borrowers, U.S. Bank National Association, as Syndication Agent, Bank of America, N.A., Citibank, N.A, JPMorgan Chase Bank, N.A. and Manufacturers and Traders Trust Company, as Documentation Agent, Wells Fargo Bank, National Association, as Administrative Agent, Wells Fargo Securities, LLC, as Sole Lead Arranger, and each of the Lenders party thereto (for purposes of this Schedule 6.1.(g), the “Senior Facility”)
 
PREIT Associates, L.P.,
PREIT-RUBIN, Inc.,
Pennsylvania Real
Estate Investment Trust
$150,000,000 Term Loan Agreement by and among PREIT
Associates, L.P., PREIT-RUBIN, Inc., and Pennsylvania Real
Estate Investment Trust as Borrowers, Wells Fargo Bank, National
Association, as Administrative Agent, Wells Fargo Securities, LLC, and US Bank, N.A. as Joint Lead Arrangers and Joint
Bookrunners, US Bank N.A. as Syndication Agent, and each of the Lenders party thereto (for purposes of this Schedule 6.1.(g), the “5- Year Term Loan”)
 
PREIT Associates, L.P.,
PREIT-RUBIN, Inc.,
Pennsylvania Real
Estate Investment Trust
$100,000,000 Term Loan Agreement by and among PREIT
Associates, L.P., PREIT-RUBIN, Inc., and Pennsylvania Real
Estate Investment Trust as Borrowers, Wells Fargo Bank, National
Association, as Administrative Agent, Wells Fargo Securities, LLC, and Capital One, N.A. as Joint Lead Arrangers and Joint
Bookrunners, Capital N.A. as Syndication Agent, and each of the
Lenders party thereto (for purposes of this Schedule 6.1.(g), the “7-Year Term Loan”)
 
PR Financing Limited Partnership
$30,000,000 Amended and Restated Term Loan Agreement dated as of January 18, 2012 by and among PR Financing Limited Partnership, as Borrower, PREIT Associates, L.P. and Pennsylvania Real Estate Investment Trust, as Parent, the financial institutions party thereto, as Lenders, and Wells Fargo Bank, National Association, as Administrative Agent (“New River Term Loan”) with a balance of $28,050,000 as of 3/31/2015
New River Valley Mall
Pennsylvania Real Estate Investment Trust, PREIT Associates, L.P.
Guaranty of New River Term Loan
 
PREIT Associates, L.P.
Guaranty of Nonrecourse Carveouts made by PREIT Associates, L.P. in favor of Bank of America, N.A. (Capital City Mall)
 
PREIT Associates, L.P.
Guaranty of NonRecourse Carveouts by PREIT Associates, L.P. in favor of New York Life Insurance Company and Teachers Insurance and Annuity Association of America (Cherry Hill Mall)
 
PREIT Associates, L.P.
Guaranty of Nonrecourse Carveouts made by PREIT Associates, L.P. in favor of Bank of America (Cumberland Mall)
 
PREIT Associates, L.P.
Guaranty of Nonrecourse Carveouts made by PREIT Associates, L.P. in favor of Bank of America, N.A. (Dartmouth Mall)
 
PREIT Associates, L.P.
Guaranty of Nonrecourse Carveouts executed by PREIT Associates, L.P. in favor of Landesbank Baden-Württemberg. (Francis Scott Key Mall)
 
PREIT Associates, L.P.
Guaranty of loan in the amount of $35,500,000 from Susquehanna Bank to PR Lycoming L.P. with a balance of $33,730,152 as of 3/31/2015 (guaranty limited to 25% of the outstanding principal amount of the Note) (Lycoming Mall)
 



PREIT Associates, L.P.
Guaranty of Nonrecourse Carveouts executed by PREIT Associates, L.P. in favor of The Prudential Insurance Company of America (Patrick Henry Mall)
 
PREIT Associates, L.P.
Guaranty of Nonrecourse Carveouts executed by PREIT Associates, L.P. in favor of Wells Fargo Bank, N.A. (The Mall at Prince Georges)
 
PREIT Associates, L.P.
Guaranty of Nonrecourse Carveouts executed by PREIT Associates, L.P. in favor of Eurohypo AG, New York Branch (Valley Mall).
 
PREIT Associates, L.P.
Guaranty of Nonrecourse Carveouts executed by PREIT Associates, L.P. in favor of JP Morgan Chase Bank, N.A. (Valley View Mall)
 
PREIT Associates, L.P.
Guaranty of Nonrecourse Carveouts executed by PREIT Associates, L.P. in favor of Landesbank Baden-Württemberg. (Viewmont Mall)
 
PREIT Associates, L.P.
Guaranty of Nonrecourse Carveouts executed by PREIT Associates, L.P. in favor of Prudential Insurance Company of America and Teachers Insurance & Annuity Association of America (Willow Grove Mall)
 
PREIT Associates, L.P.
Guaranty of Nonrecourse Carveouts executed by PREIT Associates, L.P. in favor of Prudential Mortgage Capital Company, LLC. (Woodland Mall)
 
PREIT Associates, L.P.
Guaranty of Nonrecourse Carveouts executed by PREIT Associates, L.P. in favor of Cantor Commercial Real Estate Lending, LP. (Wyoming Valley Mall)
 
PREIT Associates, L.P.
Guaranty of Nonrecourse Carveouts executed by PREIT Associates, L.P. and Kenneth N. Goldenberg in favor of CIBX Commercial Mortgage, LLC (The Court at Oxford Valley)
 
PREIT Associates, L.P.
Guaranty of construction loan to Simon/PREIT Gloucester Development, LLC executed by PREIT Associates, L.P. and Simon Property Group LP in favor of MUFG Union Bank, N.A. & Suntrust Bank with a balance of $14,442,668 outstanding as of 3/31/2015 (Gloucester Premium Outlets)
 
PREIT Associates, L.P.
Roof Repairs and $5,000,000 Rollover Guaranty by PREIT Associates, L.P. and Kenneth N. Goldenberg in favor of New York Life Insurance Company (Metroplex West)
 
PREIT Associates, L.P.
Guaranty of Nonrecourse Carveouts by PREIT Associates, L.P. and Kenneth N. Goldenberg in favor of New York Life Insurance Company (Metroplex West)
 
PREIT Associates, L.P.
Guaranty of NonRecourse Carveouts by PREIT Associates, L.P. and Kenneth N. Goldenberg in favor of Citigroup Global Markets Realty Corp. (Red Rose Commons)
 
PREIT Associates, L.P.
Guaranty of Nonrecourse Carveouts executed by Simon Property Group, L.P. (37.985%), PREIT Associates, L.P. (50%) and Powell Springfield Investments, L.P. (12.015%) in favor of US Bank, N.A. (Springfield Mall)
 
PREIT Associates, L.P.
Guaranty of Nonrecourse Carveouts executed by PREIT Associates, L.P. in favor of Capital One, N.A. (Springfield Park/ Springfield East)
 
 
 
 

Loan Parties
 
 
Bala Cynwyd Associates, L.P.
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
Echelon Title LLC
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
Moorestown Mall LLC
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
Plymouth Ground Associates LLC
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 



Plymouth Ground Associates LP
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR AEKI Plymouth, L.P.
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR AEKI Plymouth LLC
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR Beaver Valley LLC
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR Beaver Valley Limited Partnership
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR BVM, LLC
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR Cherry Hill Office GP, LLC
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR Chestnut Associates, LP
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR Chestnut Mezzco LLC
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR Chestnut Sub Mezzco LLC
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR Crossroads I, LLC
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR Crossroads II, LLC
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR Cumberland Outparcel LLC
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR Echelon Limited Partnership
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR Echelon LLC
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR Exton Limited Partnership
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR Exton LLC
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR Exton Outparcel GP, LLC
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR Exton Outparcel Holdings, LP
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR Exton Outparcel Limited Partnership
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR Exton Square Property L.P.
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR Fin Delaware, LLC
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR Financing I LLC
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR Financing II LLC
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR Financing Limited Partnership
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR Gainesville Limited Partnership
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR Gainesville LLC
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR GV LLC
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR GV LP
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 



PR Jacksonville Limited Partnership
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR Jacksonville LLC
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR JK LLC
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR Logan Valley Limited Partnership
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR Logan Valley LLC
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR LV LLC
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR Magnolia LLC
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR Monroe Old Trail Limited Partnership
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR Monroe Old Trail, LLC
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR Monroe Old Trail Holdings, L.P.
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR Monroe Old Trail Holdings, LLC
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR Monroe Unit One Limited Partnership
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR Monroe Unit One Holding, L.P.
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR Monroe Unit One GP, LLC
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR Monroe Unit 10C Limited Partnership
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR Monroe Unit 10C Holdings, L.P.
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR Monroe Unit 10C GP, LLC
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR Moorestown Limited Partnership
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR Moorestown LLC
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR New Garden LLC
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR New Garden Limited Partnership
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR New Garden Residential Limited Partnership
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR New Garden Residential LLC
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR New Garden/Chesco Limited Partnership
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR New Garden/Chesco, LLC
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR New Garden/Chesco Holdings, L.P.
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR New Garden/Chesco Holdings, LLC
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR Palmer Park Mall Limited Partnership
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR Palmer Park, L.P.
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 



PR Palmer Park Trust
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR Pitney Lot 3 Limited Partnership
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR Pitney Lot 3 Holdings, L.P.
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR Pitney Lot 3 GP, LLC
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR Plymouth Meeting Associates PC LP
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR Plymouth Meeting Limited Partnership
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR Plymouth Meeting LLC
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR PM PC Associates LP
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR PM PC Associates LLC
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR Radio Drive LLC
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR Springfield Town Center LLC
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR Sunrise Outparcel 1, LLC
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR Sunrise Outparcel 2, LLC
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR Swedes Square LLC
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR TP LLC
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR TP LP
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR Walnut Associates, LP
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR Walnut Mezzco LLC
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR Walnut Sub Mezzco LLC
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR Washington Crown Limited Partnership
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR Washington Crown LLC
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR WC LLC
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR Westgate Limited Partnership
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR Westgate LLC
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR Wiregrass Anchor LLC
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PR Wiregrass Commons LLC
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PREIT Gadsden Mall LLC
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
PREIT-RUBIN OP, Inc.
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
WG Park - Anchor B, LLC
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 



WG Park - Anchor B LP
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 
XGP LLC
Guaranty of Senior Facility, 5-Year Term Loan and 7-Year Term Loan
 

Other Subsidiaries
 
 
PR Capital City Limited Partnership
Fee and Leasehold Mortgage and Security Agreement in the amount of $65,750,000 from Bank of America, N.A. to PR Capital City Limited Partnership with a balance of $62,995,483 as of 3/31/2015
Capital City Mall (Improvements)
PR CC Limited Partnership
Fee and Leasehold Mortgage and Security Agreement in favor of Bank of America, N.A., with a balance of $62,995,483 as of 3/31/2015
Capital City Mall (Land)
PR Cherry Hill STW LLC
Loan in the amount of $300,000,000 from New York Life Insurance Company and Teachers Insurance and Annuity Association of America to PR Cherry Hill STW LLC and Cherry Hill Center LLC with a balance of $297,338,421 as of 3/31/2015
Cherry Hill Strawbridge Parcel and Cherry Hill Mall
Cherry Hill Center, LLC
Loan in the amount of $300,000,000 from New York Life Insurance Company and Teachers Insurance and Annuity Association of America to PR Cherry Hill STW LLC and Cherry Hill Center LLC with a balance of $297,338,421 as of 3/31/2015
Cherry Hill Strawbridge Parcel and Cherry Hill Mall
Cumberland Mall Associates
Loan in the amount of $52,000,000 from Bank of America, N.A. to Cumberland Mall Associates with a balance of $48,952,457 at 3/31/2015
Cumberland Mall
PR North Dartmouth LLC
Mortgage in favor of Bank of America with a balance of $64,753,192 as of 3/31/2015.
Dartmouth Mall
PR Francis Scott Key LLC
Loan in the amount of $68,468,750 from Landesbank Baden-Württemberg to PR Francis Scott Key with a balance of $68,468,750 as of 3/31/2015
Francis Scott Key Mall
PR Financing Limited Partnership
Guaranty of Loan and Indemnity Deed of Trust in the amount of $68,468,750 in favor of Landesbank Baden-Württemberg to PR Francis Scott Key with a balance of $68,468,750 as of 3/31/2015
Francis Scott Key Mall
PR Lycoming LP
Leasehold Mortgage in the amount of $35,500,000 to Susquehanna Bank with a balance of $33,730,152 as of 3/31/2015
Lycoming Mall (Improvements)
PR Financing Limited Partnership
Guaranty of Loan and Fee Mortgage in the amount of $35,500,000 in favor of Susquehanna Bank with a balance of $33,730,152 as of 3/31/2015
Lycoming Mall (Land)
PR Patrick Henry LLC
Loan in the amount of $97,000,000 from Prudential Insurance Company of America to PR Patrick Henry LLC with a balance of $84,421,314 as of 3/31/2015
Patrick Henry
PR Hyattsville LLC
Loan in the amount of $150,000,000 Wells Fargo Bank, N.A. to PR Hyattsville LLC with a balance of $150,000,000 as of 3/31/2015
Mall at Prince George
PR Prince George’s Plaza LLC
Guaranty of Loan and Indemnity Deed of Trust in the amount of $150,000,000 in favor of Wells Fargo Bank, N.A. with a balance of $150,000,000 as of 3/31/2015
Mall at Prince George
PR Valley Limited Partnership
Indemnity Deed of Trust Security Agreement in the amount of $90,000,000 in favor of Eurohypo AG, New York Branch with a balance of $80,508,204 as of 3/31/2015
Valley Mall
PR Hagerstown LLC
Loan in the amount of $90,000,000 from Eurohypo, AG New York Branch to PR Hagerstown Limited Partnership with a balance of $80,508,204 as of 3/31/2015
Valley Mall
PR Valley View Limited Partnership
Loan in the amount of $32,000,000 from JP Morgan Chase Bank, N.A to PR Valley View Limited Partnership with a balance of $30,074,006 as of 3/31/2015
Valley View Mall
PR Viewmont LP
Fee and Leasehold Mortgage in the amount of $48,000,000 to Landesbank Baden-Württemberg with a balance of $48,000,000 as of 3/31/2015
Viewmont Mall (Improvements)
PR Financing Limited Partnership
Fee and Leasehold Mortgage in the amount of $48,000,000 to Landesbank Baden-Württemberg with a balance of $48,000,000 as of 3/31/2015
Viewmont Mall (Land)



W.G. Park, L.P.
Loan in the amount of $160,000,000 from Prudential Insurance Company of America and Teachers Insurance & Annuity Association of America to W.G. Park, L.P. with a balance of $135,254,084 as of 3/31/2015
Willow Grove Mall
PR Woodland Limited Partnership
Loan in the amount of $156,500,000 from Prudential Mortgage Capital Company, LLC to PR Woodland Limited Partnership with a balance of $143,186,246 as of 3/31/2015
Woodland Mall
PR Wyoming Valley LP
Loan in the amount of $78,000,000 from Cantor Commercial Real Estate Lending, LP to PR Wyoming Valley L.P with a balance of $78,000,000 as of 3/31/2015.
Wyoming Valley Mall
Unconsolidated Affiliates
 
 
Oxford Valley Road Associates
Loan in the amount of $60,000,000 from CIBX Commercial Mortgage, LLC with a balance of $57,894,826 as of 3/31/2015
Court at Oxford Valley
Simon/PREIT Gloucester Development, LLC
Loan in the amount of $90,000,000 from MUFG Union Bank, N.A. & Suntrust Bank with a balance of $14,442,668 as of 3/31/2015
Gloucester Outlets
Mall at Lehigh Valley, L.P.
Loan in the amount of $140,000,000 from The Prudential Insurance Company of America with a balance of $130,836,922 as of 3/31/2015
Lehigh Valley Mall
Metroplex West Associates, L.P.
Loan in the amount of $87,500,000 from New York Life Insurance Company with a balance of $82,809,972 as of 3/31/2015
Metroplex West
Pavilion East Associates, L.P.
Loan in the amount of $9,400,000 from M&T with a balance of $8,773,708 as of 3/31/2015
Pavilion East
Red Rose Commons Associates, L.P.
Loan in the amount of $29,900,000 from Citigroup Global Markets Realty Corp. with a balance of $28,297,264 as of 3/31/2015
Red Rose Commons
PRDB Springfield Limited Partnership
Loan in the amount of $10,000,000 from Capital One, N.A. with a balance of $8,960,564 as of 3/31/2015
Springfield East / Springfield Park
PR Springfield Associates, L.P.
Loan in the amount of $10,000,000 from Capital One, N.A. with a balance of $8,960,564 as of 3/31/2015
Springfield East / Springfield Park
PR Springfield/Delco Limited Partnership
Loan in the amount of $67,000,000 from US Bank, N.A and Aareal Capital Corporation with a balance of $62,307,876 as of 3/31/2015
Springfield Mall


PART II

Total Liabilities Excluding Indebtedness
Set Forth in Part I

Total Liabilities (Excluding Indebtedness set forth in Part I) as of 3/31/2015
[$ In Thousands]
Construction Costs Payable
                   2,132

 
Deferred Rent & Escrow Deposits
             20,803

 
Accrued Pensions et al.
              8,984

 
Accrued Expenses & Other Liabilities
78,560

 
 
 Total Liabilities
 
         110,480





Schedule 6.1.(h)
Material Contracts
$400,000,000 Credit Agreement dated April 17, 2013 by and among PREIT Associates, L.P., PREIT-RUBIN, Inc., and Pennsylvania Real Estate Investment Trust as Borrowers, the Financial Institutions party thereto and Wells Fargo Bank, National Association, as Administrative Agent, as amended.
$300,000,000 Mortgage dated August 15, 2012 by PR Cherry Hill STW LLC and Cherry Hill Center LLC to New York Life Insurance Company and Teachers Insurance and Annuity Association of America.





Schedule 6.1.(i)
Litigation
As disclosed in Part II, Item 1, Legal Proceedings, of Form 10-Q for the fiscal year ended March 31, 2015 filed with the United States Securities and Exchange Commission on May 4, 2015, Parent and Borrowers do not believe that any material litigation is currently pending, and, in any event, that no pending litigation can reasonably be expected to have a Material Adverse Effect.






Schedule 6.1.(w)
Non-Guarantor Subsidiaries

Legal Name of Non-Guarantor Entities
Type of Legal Entity
Equity Interest Held by Parent
Reason for Exclusion
 
Limited Partnerships
 
 
 
 
801 Developers, LP
PA Limited Partnership
801 Developers GP, LLC - 1% GP
PREIT - 99% LP
2 - See 801-Gallery Associates, L.P.
 
Cumberland Mall Associates
NJ Limited Partnership
PR Cumberland GP, LLC - 1% GP
PR Cumberland LP, LLC - 99% LP
2 - Special Purpose Entity (“SPE”)
 
PR 8-10 Market LP
DE Limited Partnership
PR 8-10 Market Mezz LLC - 0.1% GP
PREIT - 99.9% LP
2 -See PM Gallery LP
 
PR 907 Market Mezz LP
DE Limited Partnership
PR 907 Market Mezz GP LLC - 1% GP
PREIT - 99% LP
2 - See PR 907 Market LP
 
PR BOS LP
PA Limited Partnership
PR BOS GP, LLC - 1% GP
PREIT - 99% LP
2- See Lehigh BOS Acquisition L.P.
 
PR Capital City Limited Partnership
PA Limited Partnership
PR Capital City LLC - 0.5% GP
PREIT - 99.5% LP
2 - SPE
 
PR CC Limited Partnership
PA Limited Partnership
PR CC I LLC - 0.01% GP
PREIT - 99.99% LP
2- SPE
 
PR Gallery II Limited Partnership
PA Limited Partnership
PR Gallery II LLC - 0.1% GP
PREIT - 99.9% LP
2- See Keystone Philadelphia Properties, L.P.
 
PR Holding Sub Limited Partnership
PA Limited Partnership
PR Holding Sub LLC - 0.1% GP
PREIT - 99.9% LP
1
 
PR Lycoming Limited Partnership
PA Limited Partnership
PR Lycoming LLC - 0.01% GP
PREIT - 99.99%
2 - SPE
 
PR New Castle Associates
PA Limited Partnership
PR New Castle LLC - 0.1% GP
PREIT - 99.9% LP
2 - SPE See Cherry Hill Center LLC
 
PR Outdoor, LP
PA Limited Partnership
PR Outdoor, LLC -0.01% GP
PREIT-RUBIN, INC. - 99.99% LP
1
 
PR Outdoor 2, L.P.
PA Limited Liability Company
PR Outdoor 2, LLC - 0.01% GP
PREIT-RUBIN, INC. - 99.99% LP
1
 
PR Springfield Associates, L.P.
PA Limited Partnership
PR Springfield Trust - 89% GP
Pennsylvania Real Estate Investment Trust - 11% LP
2 - SPE
 



PR Springfield/Delco Limited Partnership
PA Limited Partnership
PR Springfield/Delco LLC - 0.1% GP
PR Springfield/Delco Holdings, L.P. - 99.9% LP
2 - SPE
 
PR Springfield/Delco Holdings, L.P.
PA Limited Partnership
PR/Springfield/Delco Holdings LLC - 0.1% GP
PREIT - 99.9% LP
2 - PR Springfield/Delco Limited Partnership
 
PR Valley Limited Partnership
PA Limited Partnership
PR Valley LLC - 0.5% GP
PREIT - 99.5% LP
2 - SPE
 
PR Valley View Limited Partnership
PA Limited Partnership
PR Valley View LLC - 0.5% GP
PREIT - 99.5% LP
2 - SPE
 
PR Viewmont Limited Partnership
PA Limited Partnership
PR Viewmont LLC - 0.01% GP
PREIT - 99.99% LP
2 - SPE
 
PR Woodland Limited Partnership
DE Limited Partnership
PR Woodland General, LLC - 1% GP
PREIT - 99% LP
2 - SPE
 
PR Wyoming Valley Limited Partnership
PA Limited Partnership
PR Wyoming Valley LLC 0.5% GP
PREIT 99.5% LP
2 - SPE
 
PREIT Capital Advisors, LP
PA Limited Partnership
PR Advisors GP, LLC - 0.01% GP
PREIT-RUBIN, INC. - 99.99% LP
1
 
WG Holdings, L.P.
PA Limited Partnership
PRWGP General, LLC - 0.02% GP
PREIT - 99.98% LP
2 - See WG Park L.P.
 
WG Park General, L.P.
PA Limited Partnership
WG Holdings of Pennsylvania, L.L.C. - 0.1% GP
WG Holdings, L.P. - 99.9% LP
2 - See WG Park L.P.
 
WG Park Limited, L.P.
PA Limited Partnership
WG Holdings of Pennsylvania, L.L.C. -0.1% GP
WG Holdings, L.P. -99.9% LP
2 - See WG Park L.P.
 
WG Park L.P.
PA Limited Partnership
WG Park General, L.P. - 20% GP
WG Park Limited, L.P. - 80% LP
2 - SPE
 
 
 
 
 
Limited Liability Companies
 
 
 
801 Developers GP, LLC
PA Limited Liability Company
PREIT - 100% Sole Member
2-See 801 Developers, LP
Beverage Two, LLC
NJ Limited Liability Company
PREIT-RUBIN, INC. - 100%
1
Cherry Hill Center, LLC
PA Limited Liability Company
New Castle Associates - 99.9% Member
Cherry Hill Manager, LLC - 0.1% Member
2 - SPE



Cherry Hill Center Manager, LLC
DE
PREIT - 100% Sole Equity Member
William Langan - 0% Special Member
See Cherry Hill Center, LLC
Cumberland Mall Retail Condominium Association, LLC
NJ Limited Liability Company
Pennsylvania Real Estate Investment Trust and other unit owners
1
Echelon Beverage LLC
NJ Limited Liability Company
PREIT-RUBIN, INC. 100%
1
Keystone Philadelphia Properties, LLC
DE Limited Liability Company
PR Gallery II LLC - 100% Sole Member
2-See Keystone
Philadelphia Properties, L.P.
Moorestown Beverage I, LLC
NJ Limited Liability Company
PREIT-RUBIN, INC. 100%
1
Moorestown Beverage II, LLC
NJ Limited Liability Company
PREIT-RUBIN, INC. 100%
1
Plymouth License III, LLC
PA Limited Liability Company
PREIT-RUBIN, INC. - 100% Sole Member
1
Plymouth License IV, LLC
PA Limited Liability Company
PREIT-RUBIN, INC. - 100% Sole Member
1
PR 8-10 Market GP LLC
DE Limited Liability Company
PREIT - 100% Sole Member
2-See PM Gallery LP
PR 8-10 Market Mezz LLC
DE Limited Liability Company
PREIT - 100% Sole Member
2-See PR 8-10 Market LP
PR 907 Market GP LLC
(to be dissolved)
DE Limited Liability Company
PR 907 Market Mezz LP - 100% Sole Member
1
PR 907 Market Mezz GP LLC
DE Limited Liability Company
PREIT - 100% Sole Member
2-See PR 907 Market LP
PR Acquisition Sub LLC
DE Limited Liability Company
PREIT - 100% Sole Member
1
PR Advisors GP, LLC
DE Limited Liability Company
PREIT-RUBIN, INC. - 100% Sole Member
1
PR BOS GP, LLC
DE Limited Liability Company
PREIT - 100% Sole Member
2- See Lehigh BOS Acquisition L.P.
PR Capital City LLC
DE Limited Liability Company
PR CC II LLC - 99.99% Member
PREIT - 0.01% Member
2 - See PR Capital City Limited Partnership
PR CC I LLC
DE Limited Liability Company
PR CC II LLC - 99.99% Member
PREIT - 0.01% Member
2 - See PR CC Limited Partnership
PR CC II LLC
DE Limited Liability Company
PREIT 100% Sole Member
2 - See PR CC Limited Partnership
PR Cherry Hill STW, LLC
DE Limited Liability Company
PREIT - 100% Sole Member
2 - SPE
PR Cumberland GP, LLC
DE Limited Liability Company
PREIT - 100% Sole Member
2 - See Cumberland Mall Associates
PR Cumberland LP, LLC
DE Limited Liability Company
PREIT - 100% Sole Member
2 - See Cumberland Mall Associates
PR Francis Scott Key LLC
DE Limited Liability Company
PR Financing Limited Partnership - 100% Sole Member
2 - SPE
PR Gallery I LLC
(to be dissolved)
PA Limited Liability Company
PREIT - 100% Sole Member
1



PR Gallery II LLC
DE Limited Liability Company
PREIT - 100% Sole Member
2-See PR Gallery II Limited Partnership
PR Gloucester LLC
DE Limited Liability Company
PREIT - 100% Sole Member
1
PR Hagerstown LLC
DE Limited Liability Company
PR Valley Mall Limited Partnership - 100% Sole Member
2 - SPE
PR Holding Sub LLC
PA Limited Liability Company
PREIT - 100% Sole Member
1
PR Hyattsville LLC
DE Limited Liability Company
PR Prince George’s Plaza LLC - 100% Sole Member
2 - SPE
PR Lehigh Valley LLC
PA Limited Liability Company
PREIT - 100% Sole Member
2 - See Lehigh Valley Associates
PR Lycoming LLC
DE
PREIT - 100% Sole Member
2 - See Lycoming Limited Partnership
PR Metroplex West LLC
PA Limited Liability Company
PREIT - 100% Sole Member
2 - See Metroplex General, Inc.
PR New Castle LLC
PA Limited Liability Company
PREIT - 100% Sole Member
2 - See PR New Castle Associates
PR North Dartmouth LLC
DE Limited Liability Company
PREIT - 100% Sole Member
2 - SPE
PR Orlando Fashion Square LLC
(to be dissolved)
DE Limited Liability Company
PREIT - 100% Sole Member
1
PR Outdoor, LLC
DE Limited Liability Company
PREIT-RUBIN, INC. - 100% Sole Member
1
PR Outdoor 2, LLC
DE Limited Liability Company
PREIT-RUBIN, INC. - 100% Sole Member
1
PR Oxford Valley General, LLC
DE
PREIT - 100% Sole Member
2 - See Oxford Valley Road Associates
PR Patrick Henry LLC
DE Limited Liability Company
PREIT - Sole Member
2 - SPE
PR PG Plaza LLC
DE Limited Liability Company
PREIT - 100% Sole Member
2 - See PR Prince Georges Plaza LLC
PR Prince George’s Plaza LLC
DE Limited Liability Company
PR PG Plaza LLC - 1% Managing Member
PREIT - 99% Member
2 - See PR Hyattsville LLC
PR Red Rose LLC
DE Limited Liability Company
PREIT - 100% Sole Member
2 - See Red Rose Commons Associates, L.P.
PR Springfield/Delco LLC
DE Limited Liability Company
PREIT - 100% Sole Member
2 - See PR Springfield/Delco, L.P.
PR Springfield/Delco Holdings LLC
DE Limited Liability Company
PREIT - 100% Sole Member
2 - See PR Springfield/Delco Holdings, L.P.
PR Valley LLC
DE Limited Liability Company
PREIT - 100% Sole Member
2 - See PR Valley Limited Partnership
PR Valley View LLC
DE Limited Liability Company
PR VV LLC - 99.99% Member
PREIT - 0.01% Member
2 - See PR Valley View Limited Partnership
PR Viewmont LLC
DE Limited Liability Company
PREIT - 100% Sole Member
2 - See PR Viewmont Limited Partnership
PR VV LLC
DE Limited Liability Company
PREIT - 100% Sole Member
2 - See PR Valley View Limited Partnership



PR Walnut Street Abstract LLC
DE Limited Liability Company
PREIT-RUBIN, INC. - 100% Sole Member
2 - See Walnut Street Abstract L.P.
WG Holdings of Pennsylvania, L.L.C.
PA Limited Liability Company
WG Holdings L.P. - 100% Sole Member
2 - See WG Park, L.P.
PRWGP General, LLC
DE Limited Liability Company
PREIT - 100% Sole Member
2 - See WG Park, L.P.
PR Woodland General LLC
DE Limited Liability Company
PREIT - 100% Sole Member
2 - See PR Woodland L. P.
PR Woodland Outparcel LLC
DE Limited Liability Company
PREIT - Sole Member
2 - SPE
PR WV LLC
DE Limited Liability Company
PREIT - 100% Sole Member
2 - See PR Wyoming Valley Limited Partnership
PR Wyoming Valley LLC
DE Limited Liability Company
PR WV LLC - 99.99% Member
PREIT - 0.01%
2 - See PR Wyoming Valley Limited Partnership
PREIT Advisors, LLC
PA Limited Liability Company
PREIT -RUBIN, INC. - 100% Sole Member
1
PREIT CDE LLC (f/k/a Exton License II, LLC)
PA Limited Liability Company
PREIT-RUBIN, INC. - 1% Member
PREIT - 99% Member
1
PREIT Gallery TRS Sub LLC
PA Limited Liability Company
PREIT-RUBIN, INC. - 100% Sole Member
2 -See Keystone Philadelphia Properties, L.P., PR Gallery I Limited Partnership and PR 907 Market LP
PREIT Services, LLC
DE Limited Liability Company
PREIT - 100% Sole Member
1
 
 
 
 
 
Corporations
 
 
 
 
1150 Plymouth Associates, Inc.
MD
PREIT-RUBIN, INC. - 100%
1
 
Capital City Beverage Enterprise, Inc. (f/k/a R8267 Plymouth Enterprises, Inc.)
MD
PREIT-RUBIN, INC. - 100%
1
 
Exton License, Inc.
MD
PREIT-RUBIN, INC. - 100%
1
 
PR GC Inc.
MD
PREIT Services, LLC - 100%
1
 
PREIT TRS, Inc.
DE
Pennsylvania Real Estate Investment Trust- 100%
1
 
Springhills NE Quadrant Drainage Association No. One, Inc.
FL
PREIT and other owners.
1
 
Springhill Owners Association, Inc.
FL
PREIT and other owners.
1
 





Trusts
 
 
 
PR Springfield Trust
PA Business Trust
PREIT - Sole Beneficiary
2 - See PR Springfield Associates, L.P.
PREIT Protective Trust 1
PA
PREIT-RUBIN, INC. - Sole Beneficiary
1

1 = Subsidiary (i) is not a Significant Subsidiary, (ii) does not own or lease an Unencumbered Property  (iii) does not own directly or indirectly, a Subsidiary that owns or leases an Unencumbered Property, and (iv) is not a guarantor under the Existing Credit Agreement, so long as that agreement is still in effect.

2 = Subsidiary is an Excluded Subsidiary.





Exhibit 10.5

FIVE-YEAR TERM LOAN GUARANTY

THIS FIVE-YEAR TERM LOAN GUARANTY dated as of June 26, 2015 (this “Guaranty”) executed and delivered by each of the undersigned and the other Persons from time to time party hereto pursuant to the execution and delivery of an Accession Agreement in the form of Annex I hereto (all of the undersigned, together with such other Persons each a “Guarantor” and collectively, the “Guarantors”) in favor of WELLS FARGO BANK, NATIONAL ASSOCIATION, in its capacity as Administrative Agent (the “Administrative Agent”) for the Lenders under that certain Five-Year Term Loan Agreement dated as of June 26, 2015 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), by and among PREIT Associates, L.P. (“PREIT”), PREIT-RUBIN, Inc. (“PREIT-RUBIN”), Pennsylvania Real Estate Investment Trust (the “Parent”; together with PREIT and PREIT-RUBIN, each individually, a “Borrower” and collectively, the “Borrower”), the financial institutions party thereto and their assignees under Section 11.6.(b) thereof (the “Lenders”), the Administrative Agent, and the other parties thereto, for its benefit and the benefit of the Lenders (the Administrative Agent and the Lenders, each individually a “Guarantied Party” and collectively, the “Guarantied Parties”).

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

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

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

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

WHEREAS, each Guarantor’s execution and delivery of this Guaranty is a condition precedent to the effectiveness of the Credit Agreement and to the Guarantied Parties making such financial accommodations to the Borrower.

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

Section 1. Guaranty . Each Guarantor hereby absolutely, irrevocably and unconditionally guaranties the due and punctual payment and performance when due, whether at stated maturity, by acceleration or otherwise, of all of the following (collectively referred to as the “Guarantied Obligations”): (a) all Obligations; (b) any and all extensions, renewals, modifications, amendments or substitutions of the foregoing and (c) all expenses, including, without limitation, reasonable attorneys’ fees and disbursements, that are incurred by the Administrative Agent or any other Guarantied Party in the enforcement of any of the foregoing or any obligation of such Guarantor hereunder. Guarantied Obligations shall not include Specified Derivatives Obligations.

    

1
Exhibit 10.5

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

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

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

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

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

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

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

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

    

2
Exhibit 10.5

(g)      any invalidity or nonperfection of any security interest or lien on, if any, or any other impairment of, any collateral, if any, securing any of the Guarantied Obligations or any failure of the Administrative Agent or any other Person to preserve any collateral security or any other impairment of such collateral;

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

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

(j)      any defense, set off, claim or counterclaim (other than indefeasible payment and performance in full) which any at any time be available to or be asserted by the Borrower, any other Loan party or any other Person against the Administrative Agent or any Lender;

(k)      any change in the corporate existence, structure or ownership of the Borrower or any other Loan Party;

(l)      any statement, representation or warranty made or deemed made by or on behalf of the Borrower, any Guarantor or any other Loan Party under any Loan Document, or any amendment hereto or thereto, proves to have been incorrect or misleading in any respect; or

(m)      any other circumstance which might otherwise constitute a defense available to, or a discharge of, a Guarantor hereunder (other than termination of this Guaranty as provided in Section 21 hereof).

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

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

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

Section 7. Waiver . Each Guarantor, to the fullest extent permitted by Applicable Law, hereby waives notice of acceptance hereof or any presentment, demand, protest or notice of any kind, and any

3
Exhibit 10.5

other act or thing, or omission or delay to do any other act or thing, which in any manner or to any extent might vary the risk of such Guarantor or which otherwise might operate to discharge such Guarantor from its obligations hereunder.

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

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

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

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

Section 12. Set-off . In addition to any rights now or hereafter granted under any of the other Loan Documents or Applicable Law and not by way of limitation of any such rights, each Guarantor hereby authorizes each Guarantied Party and each Participant, at any time while an Event of Default exists, without any prior notice to such Guarantor or to any other Person, any such notice being hereby expressly waived, but in the case of a Lender or a Participant subject to receipt of the prior written

4
Exhibit 10.5

consent of the Administrative Agent exercised in its sole discretion, to set-off and to appropriate and to apply any and all deposits (general or special, including, but not limited to, indebtedness evidenced by certificates of deposit, whether matured or unmatured) and any other indebtedness at any time held or owing by the Administrative Agent, such Lender or such Participant or any Affiliate of the Administrative Agent or such Lender to or for the credit or the account of the Borrower against and on account of any of the Guarantied Obligations, although such obligations shall be contingent or unmatured. Each Guarantor agrees, to the fullest extent permitted by Applicable Law, that any Participant may exercise rights of setoff or counterclaim and other rights with respect to its participation as fully as if such Participant were a direct creditor of such Guarantor in the amount of such participation.

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

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

Section 15. Contribution . To the extent that any Guarantor shall be required hereunder to pay any portion of any Guarantied Obligation exceeding the greater of (a) the amount of the value actually received by such Guarantor and its Subsidiaries from the Loans and the other Obligations and (b) the amount such Guarantor would otherwise have paid if such Guarantor had paid the aggregate amount of the Guarantied Obligations (excluding the amount thereof repaid by the Borrower) in the same proportion as such Guarantor’s net worth on the date enforcement is sought hereunder bears to the aggregate net worth of all the Guarantors on such date, then such Guarantor shall be reimbursed by such other Guarantors for the amount of such excess, pro rata, based on the respective net worth of such other Guarantors on such date.

    

5
Exhibit 10.5

Section 16. Information . Each Guarantor assumes all responsibility for being and keeping itself informed of the financial condition of the Borrower and the other Loan Parties, and of all other circumstances bearing upon the risk of nonpayment of any of the Guarantied Obligations and the nature, scope and extent of the risks that such Guarantor assumes and incurs hereunder, and agrees that neither the Administrative Agent nor any other Guarantied Party shall have any duty whatsoever to advise any Guarantor of information regarding such circumstances or risks.

Section 17. Governing Law . THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH COMMONWEALTH.

SECTION 18. WAIVER OF JURY TRIAL .

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

(b)      EACH GUARANTOR, AND EACH OF THE Administrative Agent AND THE OTHER GUARANTIED PARTIES BY ACCEPTING THE BENEFITS HEREOF, HEREBY AGREES THAT THE FEDERAL DISTRICT COURT LOCATED IN THE EASTERN DISTRICT OF PENNSYLVANIA OR ANY STATE COURT LOCATED IN PHILADELPHIA COUNTY, PENNSYLVANIA SHALL HAVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN OR AMONG THE GUARANTORS, THE ADMINISTRATIVE AGENT OR ANY OF THE OTHER GUARANTIED PARTIES, PERTAINING DIRECTLY OR INDIRECTLY TO THIS GUARANTY. EACH GUARANTOR AND EACH OF THE GUARANTIED PARTIES EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR PROCEEDING COMMENCED IN SUCH COURTS. EACH PARTY FURTHER WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT FORUM AND EACH AGREES NOT TO PLEAD OR CLAIM THE SAME. THE CHOICE OF FORUM SET FORTH IN THIS SECTION SHALL NOT BE DEEMED TO PRECLUDE THE BRINGING OF ANY ACTION BY THE ADMINISTRATIVE AGENT OR ANY OTHER GUARANTIED PARTY OR THE ENFORCEMENT BY THE ADMINISTRATIVE AGENT OR ANY OTHER GUARANTIED PARTY OF ANY JUDGMENT OBTAINED IN SUCH FORUM IN ANY OTHER APPROPRIATE JURISDICTION.
(c)      THE FOREGOING WAIVERS HAVE BEEN CONSIDERED BY EACH PARTY WITH THE ADVICE OF COUNSEL AND WITH A FULL UNDERSTANDING OF THE LEGAL CONSEQUENCES THEREOF, AND SHALL SURVIVE THE PAYMENT OF THE LOANS AND ALL OTHER AMOUNTS PAYABLE HEREUNDER OR UNDER THE OTHER LOAN DOCUMENTS AND THE TERMINATION OF THIS GUARANTY.

    

6
Exhibit 10.5

Section 19. Loan Accounts . The Administrative Agent and each Lender may maintain books and accounts setting forth the amounts of principal, interest and other sums paid and payable with respect to the Guarantied Obligations arising under or in connection with the Credit Agreement, and in the case of any dispute relating to any of the outstanding amount, payment or receipt of any of such Guarantied Obligations or otherwise, the entries in such books and accounts shall constitute prima facie evidence of the outstanding amount of such Guarantied Obligations and the amounts paid and payable with respect thereto absent manifest error. The failure of the Administrative Agent or any Lender to maintain such books and accounts shall not in any way relieve or discharge any Guarantor of any of its obligations hereunder.

Section 20. Waiver of Remedies . No delay or failure on the part of the Administrative Agent or any other Guarantied Party in the exercise of any right or remedy it may have against any Guarantor hereunder or otherwise shall operate as a waiver thereof, and no single or partial exercise by the Administrative Agent or any other Guarantied Party of any such right or remedy shall preclude any other or further exercise thereof or the exercise of any other such right or remedy.

Section 21. Termination . This Guaranty shall remain in full force and effect with respect to each Guarantor until indefeasible payment in full of the Guarantied Obligations and the other Obligations and the termination or cancellation of the Credit Agreement in accordance with its terms.

Section 22. Successors and Assigns . Each reference herein to the Administrative Agent or any other Guarantied Party shall be deemed to include such Person’s respective successors and assigns (including, but not limited to, any holder of the Guarantied Obligations) in whose favor the provisions of this Guaranty also shall inure, and each reference herein to each Guarantor shall be deemed to include such Guarantor’s successors and assigns, upon whom this Guaranty also shall be binding. The Guarantied Parties may, in accordance with the applicable provisions of the Credit Agreement, assign, transfer or sell any Guarantied Obligation, or grant or sell participations in any Guarantied Obligations, to any Person without the consent of, or notice to, any Guarantor and without releasing, discharging or modifying any Guarantor’s obligations hereunder. Each Guarantor hereby consents to the delivery by the Administrative Agent and any other Guarantied Party to any assignee or Participant of a Lender (or any prospective assignee or Participant of a Lender) of any financial or other information regarding the Borrower or any Guarantor. No Guarantor may assign or transfer its obligations hereunder to any Person without the prior written consent of all Lenders and any such assignment or other transfer to which all of the Lenders have not so consented shall be null and void.

Section 23. Joint and Several Obligations . the obligationS of the Guarantors HEREUNDER SHALL BE joint and several, and ACCORDINGLY, each Guarantor CONFIRMS THAT IT is liable for the full amount of the “GUARANTiED Obligations” AND ALL OF THE OBLIGATIONS AND LIABILITIES OF EACH OF THE OTHER gUARANTORS HEREUNDER.

Section 24. Amendments . This Guaranty may not be amended except in writing signed by the Administrative Agent and each Guarantor.

Section 25. Payments . All payments to be made by any Guarantor pursuant to this Guaranty shall be made in Dollars, in immediately available funds to the Administrative Agent at its Principal Office, not later than 11:00 a.m. Central time, on the date one Business Day after demand therefor.

Section 26. Notices . All notices, requests and other communications hereunder shall be in writing (including facsimile transmission or similar writing) and shall be given (a) to each Guarantor at its address set forth below its signature hereto, (b) to the Administrative Agent or any other Guarantied Party

7
Exhibit 10.5

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

Section 27. Severability . In case any provision of this Guaranty shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

Section 28. Headings . Section headings used in this Guaranty are for convenience only and shall not affect the construction of this Guaranty.

Section 29. Limitation of Liability .      Neither the Administrative Agent nor any other Guarantied Party, nor any Affiliate, officer, director, employee, attorney, or agent of the Administrative Agent or any other Guarantied Party, shall have any liability with respect to, and each Guarantor hereby waives, releases, and agrees not to sue any of them upon, any claim for any special, indirect, incidental, or consequential damages suffered or incurred by a Guarantor in connection with, arising out of, or in any way related to, this Guaranty or any of the other Loan Documents, or any of the transactions contemplated by this Guaranty, the Credit Agreement or any of the other Loan Documents. Each Guarantor hereby waives, releases, and agrees not to sue the Administrative Agent or any other Guarantied Party or any of the Administrative Agent’s or any other Guarantied Party’s Affiliates, officers, directors, employees, attorneys, or agents for punitive damages in respect of any claim in connection with, arising out of, or in any way related to, this Guaranty, the Credit Agreement or any of the other Loan Documents, or any of the transactions contemplated thereby.

Section 30. Electronic Delivery of Certain Information . Each Guarantor acknowledges and agrees that information regarding the Guarantor may be delivered electronically pursuant to Section 7.1.(b) of the Credit Agreement.

Section 31. Definitions .

(a) For the purposes of this Guaranty,      “Proceeding” means any of the following: (i) a voluntary or involuntary case concerning any Guarantor shall be commenced under the Bankruptcy Code of 1978, as amended; (ii) a custodian (as defined in such Bankruptcy Code or any other applicable bankruptcy laws) is appointed for, or takes charge of, all or any substantial part of the property of any Guarantor; (iii) any other proceeding under any Applicable Law, domestic or foreign, relating to bankruptcy, insolvency, reorganization, winding-up or composition for adjustment of debts, whether now or hereafter in effect, is commenced relating to any Guarantor; (iv) any Guarantor is adjudicated insolvent or bankrupt; (v) any order of relief or other order approving any such case or proceeding is entered by a court of competent jurisdiction; (vi) any Guarantor makes a general assignment for the benefit of creditors; (vii) any Guarantor shall fail to pay, or shall state that it is unable to pay, or shall be unable to pay, its debts generally as they become due; (viii) any Guarantor shall call a meeting of its creditors with a view to arranging a composition or adjustment of its debts; (ix) any Guarantor shall by any act or failure to act indicate its consent to, approval of or acquiescence in any of the foregoing; or (x) any corporate action shall be taken by any Guarantor for the purpose of effecting any of the foregoing.

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

[Signatures on Following Page]


8
Exhibit 10.5

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

BALA CYNWYD ASSOCIATES, L.P.
By PR Cherry Hill Office GP, LLC, general partner
By: PREIT Associates, L.P., sole member
ECHELON TITLE LLC
By: PR Echelon Limited Partnership, sole member
By: PR Echelon LLC, general partner
By: PREIT Associates, L.P., sole member
MOORESTOWN MALL LLC
By: PR Moorestown Limited Partnership, sole member
By PR Moorestown LLC, general partner
By: PREIT Associates, L.P., sole member
PLYMOUTH GROUND ASSOCIATES LLC
By: PREIT Associates, L.P., sole member
PLYMOUTH GROUND ASSOCIATES LP
By: Plymouth Ground Associates LLC, general partner
By: PREIT Associates, L.P., sole member
PR AEKI PLYMOUTH LLC
By: PREIT Associates, L.P., sole member
PR AEKI PLYMOUTH, L.P.
By: PR AEKI Plymouth LLC, general partner
By: PREIT Associates, L.P., sole member
PR BEAVER VALLEY, LLC
By: PREIT Associates, L.P., sole member
PR BEAVER VALLEY LIMITED PARTNERSHIP
By: PR Beaver Valley, LLC, general partner
By: PREIT Associates, L.P., sole member
PR BVM, LLC
By: PREIT Associates, L.P., sole member
PR CHERRY HILL OFFICE GP, LLC
By: PREIT Associates, L.P., sole member


By: Pennsylvania Real Estate Investment Trust, general partner


By: /s/ Andrew M. Ioannou
Name: Andrew M. Ioannou
Title: Executive Vice President -
Finance and Acquisitions


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Exhibit 10.5


PR CHESTNUT MEZZCO, LLC
By: PREIT Associates, L.P., sole member
PR CHESTNUT SUB MEZZCO, LLC
By: PR Chestnut Mezzco, LLC, sole member
By: PREIT Associates, L.P., sole member
PR CHESTNUT ASSOCIATES, LP
By: PR Chestnut Sub Mezzco, LLC, general partner
By: PR Chestnut Mezzco, LLC, sole member
By: PREIT Associates, L.P., sole member
PR CROSSROADS I, LLC
By: PREIT Associates, L.P., sole member
PR CROSSROADS II, LLC
By: PREIT Associates, L.P., sole member
PR CUMBERLAND OUTPARCEL LLC
By: PREIT Associates, L.P., sole member
PR ECHELON LLC
By: PREIT Associates, L.P., sole member
PR ECHELON LIMITED PARTNERSHIP
By: PR Echelon LLC, general partner
By: PREIT Associates, L.P., sole member
PR EXTON LLC
By: PREIT Associates, L.P., sole member
PR EXTON LIMITED PARTNERSHIP
By: PR Exton LLC, general partner
By: PREIT Associates, L.P., sole member
PR EXTON OUTPARCEL GP, LLC
By: PREIT Associates, L.P., sole member
PR EXTON OUTPARCEL HOLDINGS, LP
By: PR Exton Outparcel GP, LLC, general partner
By: PREIT Associates, L.P., sole member
PR EXTON OUTPARCEL LIMITED PARTNERSHIP
By: PR Exton Outparcel GP, LLC, general partner
By: PREIT Associates, L.P., sole member
XGP LLC
By: PR Exton Limited Partnership, sole member
By: PR Exton LLC, general partner
By: PREIT Associates, L.P., sole member
PR EXTON SQUARE PROPERTY L.P.
By: XGP LLC, general partner
By: PR Exton Limited Partnership, sole member
By: PR Exton LLC, general partner
By: PREIT Associates, L.P., sole member

By: Pennsylvania Real Estate Investment Trust, general partner

By: /s/ Andrew M. Ioannou
Name: Andrew M. Ioannou
Title: Executive Vice President -
Finance and Acquisitions

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Exhibit 10.5

PR FIN DELAWARE, LLC
By: PREIT Associates, L.P., sole member
PR FINANCING II LLC
By: PREIT Associates, L.P., sole member
PR FINANCING I LLC
By: PREIT Associates, L.P., member and
By: PR Financing II LLC, member
By: PREIT Associates, L.P., sole member
PR FINANCING LIMITED PARTNERSHIP,
By: PR Financing I LLC, general partner
By: PREIT Associates, L.P., member and
By: PR Financing II, LLC, member
By: PREIT Associates, L.P., sole member
PR GAINESVILLE LLC
By: PREIT Associates, L.P., sole member
PR GAINESVILLE LIMITED PARTNERSHIP
By: PR Gainesville LLC, general partner
By: PREIT Associates, L.P., sole member
PR GV LLC
By: PREIT Associates, L.P., sole member
PR GV LP
By: PR GV LLC, general partner
By:PREIT Associates, L.P., sole member
PR JK LLC
By: PREIT Associates, L.P., sole member
PR JACKSONVILLE LLC
By: PREIT Associates, L.P. member and
By: PR JK LLC, member
By: PREIT Associates, L.P., sole member
PR JACKSONVILLE LIMITED PARTNERSHIP
By: PR Jacksonville LLC, general partner
By: PREIT Associates, L.P., member
By: PR JK LLC, member
By: PREIT Associates, sole member


By: Pennsylvania Real Estate Investment Trust, general partner


By: /s/ Andrew M. Ioannou
Name: Andrew M. Ioannou
Title: Executive Vice President -
Finance and Acquisitions



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Exhibit 10.5

PR LV LLC
By: PREIT Associates, L.P., sole member
PR LOGAN VALLEY LLC
By: PREIT Associates, L.P., member and
By: PR LV LLC, member
By: PREIT Associates, L.P., sole member
PR LOGAN VALLEY LIMITED PARTNERSHIP
By: PR Logan Valley LLC, general partner
By: PREIT Associates, L.P., member and
By: PR LV LLC, member
By: PREIT Associates, L.P., sole member
PR MAGNOLIA LLC
By: PREIT Associates, L.P., sole member
PR MOORESTOWN LLC
By: PREIT Associates, L.P., sole member
PR MOORESTOWN LIMITED PARTNERSHIP
By PR Moorestown LLC, general partner
By: PREIT Associates, L.P., sole member
PR NEW GARDEN LLC
By: PREIT Associates, L.P., sole member
PR NEW GARDEN LIMITED PARTNERSHIP
By: PR New Garden LLC, general partner
By: PREIT Associates, L.P., sole member
PR NEW GARDEN/CHESCO HOLDINGS, LLC
By: PREIT Associates, L.P., sole member
PR NEW GARDEN/CHESCO, LLC
By: PREIT Services, LLC, non-member manager
By: PREIT Associates, L.P., sole member
PR NEW GARDEN/CHESCO HOLDINGS, L.P.
By: PR New Garden/Chesco Holdings, LLC, general partner
By: PREIT Associates, L.P., sole member
PR NEW GARDEN/CHESCO LIMITED PARTNERSHIP
By: PR New Garden/Chesco, LLC, general partner
By:      PREIT Services, LLC, non-member manager
By: PREIT Associates, L.P., sole member
PR PLYMOUTH MEETING LLC
By: PREIT Associates, L.P., sole member
PR PLYMOUTH MEETING LIMITED PARTNERSHIP
By: PR Plymouth Meeting LLC, general partner
By: PREIT Associates, L.P., sole member
PR PM PC ASSOCIATES LLC
By: PREIT Services, LLC, non-member manager
By: PREIT Associates, L.P., sole member
            
By: Pennsylvania Real Estate Investment Trust, general partner

By: /s/ Andrew M. Ioannou
Name: Andrew M. Ioannou
Title: Executive Vice President -
Finance and Acquisitions

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Exhibit 10.5

PR PM PC ASSOCIATES LP
By: PR PM PC Associates LLC, general partner
By: PREIT Services, LLC, non-member      manager
By: PREIT Associates, L.P., sole member
PR PLYMOUTH MEETING ASSOCIATES PC LP
By: PR PM PC Associates LLC, general partner
By: PREIT Services, LLC, non-member manager
By: PREIT Associates, L.P., sole member
PR SPRINGFIELD TOWN CENTER LLC
By: PREIT Associates, L.P., sole member
PR SWEDES SQUARE LLC
By: PREIT Associates, L.P., sole member
PR TP LLC
By: PREIT Associates, L.P., sole member
PR TP LP
By: PR TP LLC, general partner
By: PREIT Associates, L.P., sole member
PR WALNUT MEZZCO, LLC
By: PREIT Associates, L.P., sole member
PR WALNUT SUB MEZZCO, LLC
By: PR Walnut Mezzco, LLC, sole member
By: PREIT Associates, L.P., sole member
PR WALNUT ASSOCIATES, LP
By: PR Walnut Sub Mezzco, LLC, general partner
By: PR Walnut Mezzco, LLC, sole member
By: PREIT Associates, L.P., sole member
PR WESTGATE LLC
By: PREIT Associates, L.P., sole member
PR WESTGATE LIMITED PARTNERSHIP
By: PR Westgate LLC, general partner
By: PREIT Associates, L.P., sole member
PR WIREGRASS ANCHOR LLC
By: PREIT Associates, L.P., sole member
PR WIREGRASS COMMONS LLC
By: PREIT Associates, L.P., sole member
PREIT GADSDEN MALL LLC
By: PREIT Associates, L.P., sole member
WG PARK - ANCHOR B, LLC
By: PREIT Associates, L.P., sole member
WG PARK - ANCHOR B LP
By: WG Park - Anchor B, LLC, general partner
By: PREIT Associates, L.P., sole member

By: Pennsylvania Real Estate Investment Trust, general partner


By: /s/ Andrew M. Ioannou
Name: Andrew M. Ioannou
Title: Executive Vice President -
Finance and Acquisitions

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Exhibit 10.5


PR PALMER PARK TRUST

By: /s/ Andrew M. Ioannou
Name: Andrew M. Ioannou
Title: Executive Vice President -
Finance and Acquisitions

PR PALMER PARK, L.P.
By: PR Palmer Park Trust, general partner
PR PALMER PARK MALL LIMITED PARTNERSHIP
By: PR Palmer Park, L.P., general partner
By: PR Palmer Park Trust, general partner

By: /s/ Andrew M. Ioannou
Name: Andrew M. Ioannou
Title: Executive Vice President -
Finance and Acquisitions

PR WASHINGTON CROWN LLC

By: /s/ Bruce Goldman
Name: Bruce Goldman
Title: Executive Vice President - General Counsel and Secretary

PR WASHINGTON CROWN LIMITED PARTNERSHIP
By: PR Washington Crown LLC, general partner

By: /s/ Bruce Goldman
Name: Bruce Goldman
Title: Executive Vice President - General Counsel and Secretary

PR WC LLC

By: /s/ Bruce Goldman
Name: Bruce Goldman
Title: Executive Vice President - General Counsel and Secretary




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Exhibit 10.5


PR MONROE OLD TRAIL, LLC
PR MONROE OLD TRAIL LIMITED PARTNERSHIP
By: PR Monroe Old Trail, LLC, general partner
PR MONROE OLD TRAIL HOLDINGS, LLC
PR MONROE OLD TRAIL HOLDINGS, L.P.
By: PR Monroe Old Trail Holdings, LLC, general partner
PR MONROE UNIT ONE GP, LLC
PR MONROE UNIT ONE LIMITED PARTNERSHIP
By: PR Monroe Unit One GP, LLC, general partner
PR MONROE UNIT ONE HOLDINGS, L.P
By: PR Monroe Unit One GP, LLC, general partner
PR MONROE UNIT 10C GP, LLC
PR MONROE UNIT 10C LIMITED PARTNERSHIP
By: PR Monroe Unit 10C GP, LLC, general partner
PR MONROE UNIT 10C HOLDINGS, L.P.
By: PR Monroe Unit 10C GP, LLC, general partner
PR NEW GARDEN RESIDENTIAL LLC
PR NEW GARDEN RESIDENTIAL LIMITED PARTNERSHIP
By: PR New Garden Residential LLC, general partner
PR PITNEY LOT 3 GP, LLC
PR PITNEY LOT 3 HOLDINGS, L.P.
By: PR Pitney Lot 3 GP, LLC, general partner
PR PITNEY LOT 3 LIMITED PARTNERSHIP
By: PR Pitney Lot 3 GP, LLC, general partner
PR RADIO DRIVE LLC
PR SUNRISE OUTPARCEL 1, LLC
PR SUNRISE OUTPARCEL 2, LLC

By: PREIT - RUBIN, Inc., sole member

By: /s/ Andrew M. Ioannou
Name: Andrew M. Ioannou
Title: Executive Vice President -
Finance and Acquisitions

PREIT - RUBIN, INC.
PREIT - RUBIN OP, INC.

By: /s/ Bruce Goldman
Name: Bruce Goldman
Title: Executive Vice President - General Counsel and Secretary

Address for Notices:

c/o PREIT Associates, L.P.
200 South Broad Street
Philadelphia, PA 19102
Attention: Andrew Ioannou
Telephone: (215) 875-0700
Telecopy: (215) 546-7311


[Signature Page to Five-Year Term Loan Guaranty]


Exhibit 10.5









Exhibit 10.5

ANNEX I

FORM OF ACCESSION AGREEMENT

THIS ACCESSION AGREEMENT dated as of ____________, ____, executed and delivered by ______________________, a _____________ (the “New Guarantor”) in favor of WELLS FARGO BANK, NATIONAL ASSOCIATION, in its capacity as Administrative Agent (the “Administrative Agent”) for the Lenders under that certain Five-Year Term Loan Agreement dated as of June 26, 2015 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), by and among PREIT Associates, L.P. (“PREIT”), PREIT-RUBIN, Inc. (“PREIT-RUBIN”), Pennsylvania Real Estate Investment Trust (the “Parent”; together with PREIT and PREIT-RUBIN, each individually, a “Borrower” and collectively, the “Borrower”), the financial institutions party thereto and their assignees under Section 11.6.(b) thereof (the “Lenders”), the Administrative Agent, and the other parties thereto, for its benefit and the benefit of the Lenders (the Administrative Agent and the Lenders, each individually a “Guarantied Party” and collectively, the “Guarantied Parties”).

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

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

WHEREAS, the Borrower, the New Guarantor and the existing Guarantors, though separate legal entities, are mutually dependent on each other in the conduct of their respective businesses as an integrated operation and have determined it to be in their mutual best interests to obtain financing under the Credit Agreement through their collective efforts;

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

WHEREAS, the New Guarantor’s execution and delivery of this Accession Agreement is a condition to the Guarantied Parties continuing to make such financial accommodations to the Borrower.

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

Section 1. Accession to Guaranty . The New Guarantor hereby agrees that it is a “Guarantor” under that certain Five-Year Term Loan Guaranty dated as of June 26, 2015 (as amended, restated, supplemented or otherwise modified from time to time, the “Guaranty”), made by the Guarantors party thereto in favor of the Administrative Agent, for its benefit and the benefit of the other Guarantied Parties and assumes all obligations of a “Guarantor” thereunder and agrees to be bound thereby, all as if the New Guarantor had been an original signatory to the Guaranty. Without limiting the generality of the foregoing, the New Guarantor hereby:

    

17
Exhibit 10.5

(a)      irrevocably and unconditionally guarantees the due and punctual payment and performance when due, whether at stated maturity, by acceleration or otherwise, of all Guarantied Obligations (as defined in the Guaranty);

(b)      makes to the Administrative Agent and the other Guarantied Parties as of the date hereof each of the representations and warranties with respect to or in any way relating to itself contained in Section 5. of the Guaranty and agrees to be bound by each of the covenants contained in Section 6. of the Guaranty; and

(c)      consents and agrees to each provision set forth in the Guaranty.

SECTION 2. GOVERNING LAW . THIS ACCESSION AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH COMMONWEALTH.

Section 3. Definitions . Capitalized terms used herein and not otherwise defined herein shall have their respective defined meanings given them in the Credit Agreement.


[Signatures on Next Page]

    

18
Exhibit 10.5

IN WITNESS WHEREOF, the New Guarantor has caused this Accession Agreement to be duly executed and delivered under seal by its duly authorized officers as of the date first written above.

[NEW GUARANTOR]


By:     
Name:     
Title:     

(CORPORATE SEAL)

Address for Notices:

c/o PREIT Associates, L.P.
200 South Broad Street
Philadelphia, PA 19102
Attention: Andrew Ioannou
Telephone: (215) 875-0700
Telecopy: (215) 546-7311


Accepted:

WELLS FARGO BANK, NATIONAL
ASSOCIATION, as Administrative Agent


By:                     
Name:                  
Title:                  


19


Exhibit 31.1
CERTIFICATION

I, Joseph F. Coradino, certify that:

1.
I have reviewed this Quarterly Report on Form 10-Q of Pennsylvania Real Estate Investment Trust;

2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of trustees (or persons performing the equivalent functions):

(a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 3, 2015
 
 
 
/s/ Joseph F. Coradino
 
 
 
Name:
 
Joseph F. Coradino
 
 
 
Title:
 
Chief Executive Officer




Exhibit 31.2
CERTIFICATION

I, Robert F. McCadden, certify that:

1.
I have reviewed this Quarterly Report on Form 10-Q of Pennsylvania Real Estate Investment Trust;

2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of trustees (or persons performing the equivalent functions):

(a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 3, 2015
 
 
/s/ Robert F. McCadden
 
 
Name:
Robert F. McCadden
 
 
Title:
Chief Financial Officer




Exhibit 32.1

Certification of Chief Executive Officer
Pursuant to Section 906 of Sarbanes-Oxley Act of 2002

I, Joseph F. Coradino, the Chief Executive Officer of Pennsylvania Real Estate Investment Trust (the “Company”), hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1) the Form 10-Q of the Company for the quarter ended June 30, 2015 as filed with the Securities and Exchange Commission on the date hereof (the “Form 10-Q”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and

(2) the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 3, 2015
 
 
/s/ Joseph F. Coradino
 
 
Name:
Joseph F. Coradino
 
 
Title:
Chief Executive Officer




Exhibit 32.2

Certification of Chief Financial Officer
Pursuant to Section 906 of Sarbanes-Oxley Act of 2002

I, Robert F. McCadden, the Executive Vice President and Chief Financial Officer of Pennsylvania Real Estate Investment Trust (the “Company”), hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1) the Form 10-Q of the Company for the quarter ended June 30, 2015 as filed with the Securities and Exchange Commission on the date hereof (the “Form 10-Q”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and

(2) the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 3, 2015
 
 
/s/ Robert F. McCadden
 
 
Name:
Robert F. McCadden
 
 
Title:
Chief Financial Officer