After the first anniversary of the closing, the borrower may prepay the loan in whole subject to the payment of a specified make-whole amount, except during the last three months of the term, when no make whole amount payment is required. The loan agreement contains various customary events of default, including, among other things, nonpayment of principal, interest, fees or other amounts; inaccuracy of representations and warranties; and violation of covenants. If an event of default occurs under the loan agreement, then, subject to customary cure rights, the Lenders may declare the entire outstanding balance, including all accrued and unpaid interest, fees and other obligations of the borrower, to be immediately due and payable. Upon the occurrence of certain bankruptcy events with respect to the borrower or PREIT Associates, L.P., the Company's operating partnership, the entire outstanding balance of the loan automatically becomes immediately due and payable. PREIT Associates has agreed to guarantee the payment of certain non recourse carve outs under the loan agreement and the payment of all make whole amounts under the loan.

On December 16, 2008, the Company also announced that two subsidiaries of the Company borrowed an aggregate of $103.0 million through two separate non-recourse loan transactions, each of which is secured by a mortgage on a mall owned indirectly by the Company. The malls are Francis Scott Key Mall (Frederick, Maryland) and Viewmont Mall (Scranton, Pennsylvania).

The loan secured by Francis Scott Key Mall is for a principal amount of $55.0 million. The loan secured by Viewmont Mall is for a principal amount of $48.0 million. The interest rate on both loans has been swapped to a fixed rate of 5.245%. The loans mature on December 1, 2013. Interest only is payable until the maturity date. The loans contain a debt service coverage ratio covenant. The borrowers may prepay the loans in whole or in part, subject to the payment of a prepayment fee if a loan is repaid within 36 months of closing. The loan agreements contain various customary events of default, including, among other things, nonpayment of principal, interest, fees or other amounts; inaccuracy of representations and warranties; violation of covenants; and the occurrence of certain bankruptcy events with respect to the borrower, the owner of the mall or PREIT Associates. If an event of default occurs under a loan agreement, then, subject to customary cure rights, the lender may declare the entire outstanding balance of such loan, including all accrued and unpaid interest, fees and other obligations of the borrower, to be immediately due and payable. PREIT Associates has agreed to guarantee the payment of certain non recourse carve outs under the loan agreements.