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SEVENTH AMENDED AND RESTATED CREDIT AGREEMENT

Dated as of May 9, 2003

by and among

COMMERCIAL NET LEASE REALTY, INC.,

as Borrower

WACHOVIA SECURITIES, INC.

as Sole Lead Arranger
               and
Book Manager,

WACHOVIA BANK, NATIONAL ASSOCIATION,

as Administrative Agent,

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Syndication Agent,

AMSOUTH BANK

and

SUNTRUST BANK,

each as Co-Documentation Agent,

THE FINANCIAL INSTITUTIONS PARTY HERETO
AND THEIR ASSIGNEES UNDER SECTION 12.5.,

as Lenders

 

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TABLE OF CONTENTS

Article I. Definitions 1   Section 1.1. Definitions. 1 Section 1.2. General;
References to Times. 22   Article II. Credit Facility 22   Section 2.1.
Revolving Loans. 22 Section 2.2. Bid Rate Loans. 23 Section 2.3. Swingline
Loans. 27 Section 2.4. Letters of Credit. 29 Section 2.5. Rates and Payment of
Interest on Loans. 33 Section 2.6. Number of Interest Periods. 34 Section 2.7.
Repayment of Loans. 34 Section 2.8. Prepayments. 34 Section 2.9. Continuation.
34 Section 2.10. Conversion. 35 Section 2.11. Notes. 35 Section 2.12. Extension
of Termination Date. 36 Section 2.13. Expiration or Maturity Date of Letters of
Credit Past Termination Date. 36 Section 2.14. Voluntary Reductions of the
Commitment. 37 Section 2.15. Increase of Commitments. 37 Section 2.16. Amount
Limitations. 38     Article III. Payments, Fees and Other General Provisions 38
  Section 3.1. Payments. 38 Section 3.2. Pro Rata Treatment. 39 Section 3.3.
Sharing of Payments, Etc. 39 Section 3.4. Several Obligations. 40 Section 3.5
Minimum Amounts. 40 Section 3.6. Fees. 40 Section 3.7. Computations. 41 Section
3.8. Usury. 41 Section 3.9. Agreement Regarding Interest and Charges. 42 Section
3.10. Statements of Account. 42 Section 3.11. Defaulting Lenders. 42 Section
3.12. Taxes. 43     Article IV. Yield Protection, Etc. 45   Section 4.1.
Additional Costs; Capital Adequacy. 45 Section 4.2. Suspension of LIBOR Loans.
46 Section 4.3. Illegality. 47 Section 4.4. Compensation. 47 Section 4.5.
Affected Lenders. 48 Section 4.6. Treatment of Affected Loans. 48

-i-

  Section 4.7. Change of Lending Office. 49 Section 4.8. Assumptions Concerning
Funding of LIBOR Loans. 49     Article V. Conditions Precedent 49   Section 5.1.
Initial Conditions Precedent. 49 Section 5.2. Conditions Precedent to All Loans
and Letters of Credit. 52 Section 5.3. Conditions as Covenants. 52   Article VI.
Representations and Warranties 52   Section 6.1. Representations and Warranties.
52 Section 6.2. Survival of Representations and Warranties, Etc. 58   Article
VII. Affirmative Covenants 59   Section 7.1. Preservation of Existence and
Similar Matters. 59 Section 7.2. Compliance with Applicable Law. 59 Section 7.3.
Maintenance of Property. 59 Section 7.4. Insurance. 59 Section 7.5. Payment of
Taxes and Claims. 60 Section 7.6. Visits and Inspections. 60 Section 7.7. Use of
Proceeds; Letters of Credit. 60 Section 7.8. Environmental Matters. 61 Section
7.9. Books and Records. 61 Section 7.10. Further Assurances. 61 Section 7.11.
New Subsidiaries/Guarantors. 61 Section 7.12. REIT Status. 62 Section 7.13.
Exchange Listing. 62   Article VIII. Information 62   Section 8.1. Quarterly
Financial Statements. 62 Section 8.2. Year-End Statements. 63 Section 8.3.
Compliance Certificate; Additional Information. 63 Section 8.4. Other
Information. 63   Article IX. Negative Covenants 65   Section 9.1. Financial
Covenants. 65 Section 9.2. Restricted Payments. 66 Section 9.3. Debt. 67 Section
9.4. Certain Permitted Investments. 67 Section 9.5. Conduct of Business. 68
Section 9.6. Liens: Negative Pledges; Other Matters. 68 Section 9.7. Merger,
Consolidation, Sales of Assets and Other Arrangements. 68 Section 9.8. Fiscal
Year. 69 Section 9.9. Modifications of Organizational Documents. 69 Section
9.10. Transactions with Affiliates. 69 Section 9.11. ERISA Exemptions. 69
Section 9.12. Ownership of CNLRS. 69

-ii-

  Article X. Default 70   Section 10.1. Events of Default. 70 Section 10.2.
Remedies Upon Event of Default. 73 Section 10.3. Remedies Upon Default. 74
Section 10.4. Allocation of Proceeds. 74 Section 10.5. Collateral Account. 75
Section 10.6. Performance by Agent. 76 Section 10.7. Rights Cumulative. 76  
Article XI. The Agent 76   Section 11.1. Authorization and Action. 76 Section
11.2. Agent's Reliance, Etc. 77 Section 11.3. Notice of Defaults. 78 Section
11.4. Wachovia as Lender. 78 Section 11.5. Approvals of Lenders. 78 Section
11.6. Lender Credit Decision, Etc. 79 Section 11.7. Indemnification of Agent. 79
Section 11.8. Successor Agent. 80 Section 11.9. Titled Agents. 81     Article
XII. Miscellaneous 81   Section 12.1. Notices. 81 Section 12.2. Expenses. 82
Section 12.3. Setoff. 83 Section 12.4. Litigation; Jurisdiction; Other Matters;
Waivers. 83 Section 12.5. Successors and Assigns. 84 Section 12.6. Amendments.
87 Section 12.7. Nonliability of Agent and Lenders. 88 Section 12.8.
Confidentiality. 88 Section 12.9. Indemnification. 89 Section 12.10.
Termination; Survival. 91 Section 12.11. Severability of Provisions. 91 Section
12.12. GOVERNING LAW. 92 Section 12.13. Counterparts. 92 Section 12.14.
Obligations with Respect to Loan Parties. 92 Section 12.15. Limitation of
Liability. 92 Section 12.16. Entire Agreement. 92 Section 12.17. Construction.
92 Section 12.18. NO NOVATION. 93     SCHEDULE 1.1(A) Existing Letters of Credit
SCHEDULE 1.1(B) List of Loan Parties SCHEDULE 6.1.(b) Ownership Structure
SCHEDULE 6.1.(f) Title to Properties; Liens SCHEDULE 6.1.(g) Existing Debt

-iii-

  SCHEDULE 6.1.(h) Litigation SCHEDULE 6.1.(x) Unencumbered Assets     EXHIBIT A
Form of Assignment and Acceptance Agreement EXHIBIT B Form of Designation
Agreement EXHIBIT C Form of Notice of Borrowing EXHIBIT D Form of Notice of
Continuation EXHIBIT E Form of Notice of Conversion EXHIBIT F Form of Notice of
Swingline Borrowing EXHIBIT G Form of Swingline Note EXHIBIT H Form of Bid Rate
Quote Request EXHIBIT I Form of Bid Rate Quote EXHIBIT J Form of Bid Rate Quote
Acceptance EXHIBIT K Form of Revolving Note EXHIBIT L Form of Bid Rate Note
EXHIBIT M Form of Opinion of Counsel EXHIBIT N Form of Compliance Certificate
EXHIBIT O Form of Guaranty    

-iv-

 

           THIS SEVENTH AMENDED AND RESTATED CREDIT AGREEMENT (this “Agreement”)
dated as of May 9, 2003 by and among COMMERCIAL NET LEASE REALTY, INC., a
corporation formed under the laws of the State of Maryland (the “Borrower”),
WACHOVIA SECURITIES, INC., as Sole Lead Arranger and Book Manager (the
“Arranger”), WACHOVIA BANK, NATIONAL ASSOCIATION, as Agent, WELLS FARGO BANK,
NATIONAL ASSOCIATION, as Syndication Agent (the “Syndication Agent”), each of
AMSOUTH BANK and SUNTRUST BANK, as Co-Documentation Agent (the “Co-Documentation
Agents”), and each of the financial institutions initially a signatory hereto
together with their assignees pursuant to Section 12.5.(d).

          WHEREAS, certain of the Lenders and other financial institutions have
made available to Borrower a $200,000,000 revolving credit facility, on the
terms and conditions contained in that certain Sixth Amended and Restated Credit
Agreement dated as of October 26, 2000 (as amended and in effect immediately
prior to the date hereof, the “Existing Credit Agreement”) by and among the
Borrower, such Lenders, certain other financial institutions, the Agent and the
other parties thereto;

          WHEREAS, the Agent and the Lenders desire to amend and restate the
terms of the Existing Credit Agreement to make available to the Borrower a
revolving credit facility in the initial amount of $225,000,000, which will
include a $30,000,000 letter of credit subfacility and a $10,000,000 swingline
subfacility, 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 that the Existing Credit Agreement is amended and restated in its
entirety as follows:

 

ARTICLE I.    DEFINITIONS

Section 1.1    Definitions.

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

          “Absolute Rate” has the meaning given that term in Section
2.2.(c)(ii)(C).

          “Absolute Rate Auction” means a solicitation of Bid Rate Quotes
setting forth Absolute Rates pursuant to Section 2.2.

          “Absolute Rate Loan” means a Bid Rate Loan, the interest rate on which
is determined on the basis of an Absolute Rate pursuant to an Absolute Rate
Auction.

          “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.

 

          “Adjusted Eurodollar Rate” means, with respect to each Interest Period
for any LIBOR Loan, the rate obtained by dividing (a) LIBOR for such Interest
Period by (b) a percentage equal to 1 minus the stated maximum rate (stated as a
decimal) of all reserves, if any, required to be maintained against
“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 category of extensions of credit or other
assets which includes loans by an office of any Lender outside of the United
States of America to residents of the United States of America). Any change in
such maximum rate shall result in a change in the Adjusted Eurodollar Rate on
the date on which such change in such maximum rate becomes effective.

          “Affiliate” means any Person (other than the Agent or any Lender):
(a) directly or indirectly controlling, controlled by, or under common control
with, the Borrower; (b) directly or indirectly owning or holding ten percent
(10.0%) or more of any Equity Interest in the Borrower; or (c) ten percent
(10.0%) or more of whose voting stock or other Equity Interest is directly or
indirectly owned or held by the Borrower. For purposes of this definition,
“control” (including with correlative meanings, the terms “controlling”,
“controlled by” and “under common control with”) means the possession directly
or indirectly of the power to direct or cause the direction of the management
and policies of a Person, whether through the ownership of voting securities or
by contract or otherwise. The Affiliates of a Person shall include any executive
officer or director of such Person.

          “Agent” means Wachovia Bank, National Association, as contractual
representative for the Lenders under the terms of this Agreement, and any of its
successors.

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

          “Applicable Law” means all applicable provisions of constitutions,
statutes, rules, regulations and orders of all governmental bodies and all
orders and decrees of all courts, tribunals and arbitrators.

          “Applicable Margin” means the percentage per annum determined, at any
time, based on the range into which the Borrower’s Credit Rating then falls, in
accordance with the levels in the table set forth below (each a “Level”). Any
change in the Borrower’s Credit Rating which would cause it to move to a
different Level in such table shall effect a change in the Applicable Margin on
the Business Day on which such change occurs. During any period for which the
Borrower has received a Credit Rating from only one Rating Agency, then the
Applicable Margin shall be determined based on such Credit Rating. During any
period that the Borrower has received two Credit Ratings, the Applicable Margin
shall be determined by the lower of such two Credit Ratings. During any period
that the Borrower has received three Credit Ratings, the Applicable Margin shall
be determined by the lower of the highest two such Credit Ratings. During any
period for which the Borrower has not received a Credit Rating from any Rating
Agency, then the Applicable Margin shall be determined based on Level 5. As of
the Agreement Date, the Applicable Margin is determined based on Level 4.

    -2-

    Level Borrower’s Credit Rating
(S&P/Moody’s) Applicable Margin for
LIBOR Loans Applicable Margin for
Base Rate Loans  

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    1 A-/A3 (or equivalent) 0.70% 0.0%   2 BBB+/Baa1 (or equivalent) 0.80% 0.0%
  3 BBB/Baa2 (or equivalent) 0.90% 0.0%   4 BBB-/Baa3 (or equivalent) 1.00% 0.0%
  5 ‹ BBB-/Baa3 (or equivalent) 1.35% 0.25%

   

          “Arranger” means Wachovia Securities, Inc., together with its
successors and permitted assigns.

          “Assignee” has the meaning given that term in Section 12.5.(d).

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

          “Bankruptcy Proceeding” means a case, proceeding or condition of any
of the types described in Section 10.1.(f) or (g).

          “Base Rate” means the per annum rate of interest equal to the greater
of (a) the Prime Rate or (b) the Federal Funds Rate plus one-half of one percent
(0.5%). Any change in the Base Rate resulting from a change in the Prime Rate or
the Federal Funds Rate shall become effective as of 12:01 a.m. on the Business
Day on which each such change occurs. The Base Rate is a reference rate used by
the Lender acting as the Agent in determining interest rates on certain loans
and is not intended to be the lowest rate of interest charged by the Lender
acting as the Agent or any other Lender on any extension of credit to any
debtor.

          “Base Rate Loan” means a Revolving Loan 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 Plan or a
Multiemployer Plan and which is maintained or otherwise contributed to by any
member of the ERISA Group.

          “Bid Rate Borrowing” has the meaning given that term in Section
2.2.(b).

          “Bid Rate Loan” means a loan made by a Lender under Section 2.2.

          “Bid Rate Notes” has the meaning given that term in Section 2.11.(b).

          “Bid Rate Quote” means an offer in accordance with Section 2.2.(c) by
a Lender to make a Bid Rate Loan with one single specified interest rate.

          “Bid Rate Quote Request” has the meaning given that term in Section
2.2.(b).

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

    -3-

 

          “Business Day” means (a) any day other than a Saturday, Sunday or
other day on which banks in Charlotte, North Carolina are authorized or required
to close and (b) with reference to a LIBOR Loan, any such day that is also a day
on which dealings in Dollar deposits are carried out in the London interbank
market.

          “Capital Expenditure” means, with respect to any Person and for a
given period, the aggregate of all expenditures by such Person for the
acquisition or leasing (pursuant to a capital lease) of fixed or capital assets
or additions to equipment that should be capitalized under GAAP on a
consolidated balance sheet of such Person.

          “Capital Lease Obligation” means Debt represented by obligations under
a lease that is required to be capitalized for financial reporting purposes in
accordance with GAAP. The amount of a Capital Lease Obligation is the
capitalized amount of such obligation determined in accordance with GAAP.

          “Capitalization Rate” means 9.5%.

          “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 Organization 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 $500,000,000.00 and which bank
or its holding company has a short-term commercial paper rating of at least A-2
or the equivalent by S&P or at least P-2 or the equivalent by Moody’s;
(c) reverse repurchase agreements with terms of not more than seven days from
the date acquired, for securities of the type described in clause (a) above and
entered into only with commercial banks having the qualifications described in
clause (b) above; (d) commercial paper issued by any Person incorporated under
the laws of the United States of America or any State thereof and rated at least
A-2 or the equivalent thereof by S&P or at least P-2 or the equivalent thereof
by Moody’s, in each case with maturities of not more than one year from the date
acquired; and (e) investments in money market funds registered under the
Investment Company Act of 1940, which have net assets of at least
$500,000,000.00 and at least 85.0% of whose assets consist of securities and
other obligations of the type described in clauses (a) through (d) above.

          “Collateral Account” means a special non-interest bearing deposit
account maintained by the Agent at the Principal Office and under its sole
dominion and control.

          “Commitment” means, as to each Lender, such Lender’s obligation to
make Revolving Loans pursuant to Section 2.1. and to issue (in the case of the
Agent) or participate in (in the case of the Lenders) Letters of Credit pursuant
to Section 2.4.(a) and 2.4.(i), respectively, in an amount up to, but not
exceeding (but in the case of the Lender acting as the Agent excluding the
aggregate amount of participations in the Letters of Credit held by other
Lenders), the amount set forth for such Lender on its signature page hereto as
such Lender’s “Commitment Amount” or as

    -4-

   

set forth in the applicable Assignment and Acceptance Agreement, as the same may
be reduced from time to time pursuant to Section 2.14. or as appropriate to
reflect any assignments to or by such Lender effected in accordance with
Section 12.5.

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

          “Compliance Certificate” has the meaning given that term in Section
8.3.

          “Construction Budget” means the fully budgeted costs associated with
the acquisition and construction of real property (including, but not limited
to, the cost of acquiring such real property) as reasonably determined by the
Borrower in good faith.

          “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.

          “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 (or deemed
making) of any Loan, (b) the Conversion of a Loan and (c) the issuance of a
Letter of Credit.

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

          “Debt” 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; (b) obligations of such Person (other than
trade debt incurred in the ordinary course of business), 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) Capital Lease
Obligations of such Person; (d) all reimbursement obligations of such Person
under any letters of credit or acceptances (whether or not the same have been
presented for payment); (e) obligations of such Person with respect to any
Equity Issuance of such Person which is convertible into or exchangeable for
Debt of such Person, valued at the amount of Debt resulting from such conversion
or exchange; (f) all obligations of such Person to purchase, redeem, retire,
defease or otherwise make any payment in respect of any Equity Interests in such
Person or any other Person (other than obligations of such Person to make
payments in respect of such Equity Interests in order to maintain its status as
a REIT), valued, in the case of redeemable Preferred Equity Interests, at the
greater of its voluntary or involuntary liquidation preference plus accrued

    -5-

 

and unpaid dividends (excluding, (i) in the case of the Borrower and its
Subsidiaries, any obligation to acquire limited partnership interests in any
Subsidiary of the Borrower or the UPREIT which can be satisfied in full by
exchanging shares of common stock of the Borrower for such limited partnership
interests, and (ii) in the case of the Borrower, dividends declared and paid to
holders of common shares of the Borrower); (g) net obligations of such Person
under Swap Agreements; and (h) all Debt of other Persons which (i) such Person
has guaranteed or is otherwise recourse to such Person or (ii) is secured by a
Lien on any property of such Person. The amount of any net obligation under any
Swap Agreement on any date shall be deemed to be the Swap Termination Value
thereof as of such date.

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

          “Defaulting Lender” has the meaning set forth in Section 3.11.

          “Designated Lender” means a special purpose corporation which is
sponsored by a Lender, that is engaged in making, purchasing or otherwise
investing in commercial loans in the ordinary course of its business and that
issues (or the parent of which issues) commercial paper rated at least P-1 (or
the then equivalent grade) by Moody’s or A-1 (or the then equivalent grade) by
S&P that, in either case, (a) is organized under the laws of the United States
of America or any state thereof, (b) shall have become a party to this Agreement
pursuant to Section 12.5.(e) and (c) is not otherwise a Lender.

          “Designated Lender Note” means a Bid Rate Note of the Borrower
evidencing the obligation of the Borrower to repay Bid Rate Loans made by a
Designated Lender.

          “Designating Lender” has the meaning given that term in Section
12.5.(e).

          “Designation Agreement” means a Designation Agreement between a Lender
and a Designated Lender and accepted by the Agent, substantially in the form of
Exhibit B or such other form as may be agreed to by such Lender, such Designated
Lender and the Agent.

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

          “EBITDA” means for any period for the Borrower and its Subsidiaries,
net income (prior to the payment of any preferred dividends) excluding the
following amounts (but only to the extent included in determining net income for
such period): (a) Interest Expense; (b) all provisions for any federal, state or
other income taxes; (c) depreciation, amortization and other non-recurring or
non-cash charges; (d) extraordinary gains and losses; and (e) taxes on such
excluded gains and tax deductions or credits on account of such excluded losses,
in each case on a consolidated basis determined in accordance with GAAP.

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

    -6-

 

          “Eligible Assignee” means any Person who is: (i) currently a Lender or
an affiliate of a Lender; (ii) a commercial bank, trust, trust company,
insurance company, investment bank or pension fund organized under the laws of
the United States of America, or any state thereof, and having total assets in
excess of $5,000,000,000; (iii) a savings and loan association or savings bank
organized under the laws of the United States of America, or any state thereof,
and having a tangible net worth of at least $500,000,000; or (iv) a commercial
bank organized under the laws of any other country which is a member of the
Organization for Economic Cooperation and Development, or a political
subdivision of any such country, and having total assets in excess of
$10,000,000,000, provided that such bank is acting through a branch or agency
located in the United States of America. If such Person is not currently a
Lender or an affiliate of a Lender, such Person’s senior unsecured long term
indebtedness must be rated 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 Agent. Notwithstanding the foregoing, during any period in
which an Event of Default shall have occurred and be continuing under any of
subsections (a), (b), (f) or (g) of Section 10.1., the term “Eligible Assignee”
shall mean any Person that is not an individual.

          “Eligible Mortgage Income” means, for any given period, the aggregate
income of the Borrower and the Guarantors from Eligible Mortgage Notes
Receivable during such period.

          “Eligible Mortgage Note Receivable” means a promissory note which
satisfies all of the following requirements: (a) such promissory note is owned
solely by the Borrower or a Guarantor; (b) such promissory note is secured by a
Mortgage; (c) neither such promissory note, nor any interest of any of the
Borrower or such Guarantor therein, is subject to (i) any Lien other than
Permitted Liens of the types described in clauses (a) through (c) of the
definition thereof or (ii) any Negative Pledge; (d) the real property subject to
such Mortgage is not subject to any other Lien other than Permitted Liens of the
types described in clauses (a) through (c) of the definition thereof; (e) the
real property subject to such Mortgage is free of all structural defects,
environmental conditions or other adverse matters except for defects, conditions
or matters individually or collectively which are not material to the profitable
operation of such real property; (f) such real property is occupied and is in
operation (or will be in operation after the completion of construction (which
is otherwise permitted hereunder) with respect to such real property); (g) any
required principal, interest or other payment due under such promissory note is
not more than 60 days past due; and (h) there exists no default or event of
default under such promissory note.

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

    -7-

 

          “Equity Interest” means, with respect to any Person, any share of
capital stock of (or other ownership or profit interests in) such Person, any
warrant, option or other right for the purchase or other acquisition from such
Person of any share of capital stock of (or other ownership or profit interests
in) such Person, any security convertible into or exchangeable for any share of
capital stock of (or other ownership or profit interests in) such Person or
warrant, right or option for the purchase or other acquisition from such Person
of such shares (or such other interests), and any other ownership or profit
interest in such Person (including, without limitation, partnership, member or
trust interests therein), whether voting or nonvoting, and whether or not such
share, 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.

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

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

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

          “Excluded Asset” means either a lease by the Borrower or any
Guarantor, as lessor, of a real property asset, or a promissory note held by the
Borrower or any Guarantor which is secured by a Mortgage on real property, in
either case where (a) any required base rental payment, or principal or interest
payment, as the case may be, is more than 60 days past due or (b) in the case of
a lease wherein the tenant is the subject of a Bankruptcy Proceeding, such lease
has been rejected in bankruptcy; provided that assets with respect to real
property subject to a lease rejected in bankruptcy shall cease to be considered
Excluded Assets once such real property has been re-leased to a third-party
which is not otherwise subject to clause (a) or (b) above.

          “Excluded Subsidiary” means any Subsidiary (a) either (i) formed for
the specific purpose of holding title to assets which are collateral for any
outstanding Secured Debt of such Subsidiary and which is prohibited from
Guarantying the Debt of any other Person pursuant to (x) any document,
instrument or agreement evidencing such Secured Debt or (y) a provision of such
Person’s organizational documents which provision was included in such Person’s
organizational documents as a condition to the extension of such Secured Debt or
(ii) that is not a Wholly Owned Subsidiary and cannot become a party to the
Guaranty without violating (x) terms of its articles of incorporation, operating
agreement, partnership agreement, declaration of trust, shareholders agreement,
member agreement or other similar organizational document, which terms expressly
prohibit such Subsidiary from providing Guarantees of Indebtedness of any other
Person or (y) any fiduciary obligation owing to the holders of an Equity
Interest in such Subsidiary and imposed under Applicable Law and (b) for which
none of the Borrower, any Subsidiary (other than another Excluded Subsidiary) or
any other Loan Party has Guaranteed any

    -8-

 

of the Debt of such Subsidiary or has any direct obligation to maintain or
preserve such Subsidiary’s financial condition or to cause such Subsidiary to
achieve any specified levels of operating results, except for customary
exceptions for fraud, misapplication of funds, environmental indemnities, and
other similar exceptions to recourse liability. A Subsidiary shall only remain
an Excluded Subsidiary for so long as (A) the above requirements are satisfied
and (B) such Subsidiary does not Guarantee any Indebtedness of any Person (other
than another Excluded Subsidiary).

          “Existing Credit Agreement” has the meaning given that term in the
first “WHEREAS” clause of this Agreement.

          “Existing Letters of Credit” means each of the letters of credit
issued by the Agent under the Existing Credit Agreement and described on
Schedule 1.1.(A).

          “Facility Fee” means the per annum 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 Borrower’s Credit Rating
(S&P/Moody’s) Facility Fee    

--------------------------------------------------------------------------------

    1 A-/A3 (or equivalent) 0.15%     2 BBB+/Baa1 (or equivalent) 0.15%     3
BBB/Baa2 (or equivalent) 0.20%     4 BBB-/Baa3 (or equivalent) 0.20%     5 ‹
BBB-/Baa3 (or equivalent) 0.30%  

   

As of the Agreement Date, the Facility Fee equals 0.20%.

 

          “Fair Market Value” means, with respect to (a) a security listed on a
national securities exchange or the NASDAQ National Market, the price of such
security as reported on such exchange by any widely recognized reporting method
customarily relied upon by financial institutions and (b) with respect to any
other property, 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.

 

          “Federal Funds Rate” means, for any day, the rate per annum (rounded
upward to the nearest 1/100th of 1%) equal to the weighted average of the rates
on overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers on such day, as published by the
Federal Reserve Bank of New York on the Business Day next succeeding such day,
provided that (a) if such day is not a Business Day, the Federal Funds Rate for
such day shall be such rate on such transactions on the next preceding Business
Day, and (b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate quoted to the
Agent by federal funds dealers selected by the Agent on such day on such
transaction as determined by the Agent.

 

          “Fees” means the fees and commissions provided for or referred to in
Section 3.6. and any other fees payable by the Borrower hereunder or under any
other Loan Document.

    -9-

   

          “Finance Lease” means a lease of a real property asset which would be
categorized as a capital lease under GAAP other than a lease categorized as a
capital lease solely because such lease contains a bargain purchase option.

 

          “Fitch” means Fitch, Inc. and its successors.

 

          “Fixed Charges” means for any period, the sum of (a) Interest Expense
plus (b) regularly scheduled principal payments on Debt during such period
(excluding any balloon, bullet or similar principal payment payable on any Debt
which repays such Debt in full) plus (c) all cash dividends and distributions on
Preferred Equity Interests of the Borrower or any Subsidiary paid during such
period to any Person other than the Borrower or a Subsidiary, all on a
consolidated basis determined in accordance with GAAP.

 

          “Funds Available for Distribution” means, for any accounting period,
(a) Funds From Operations for such period minus (b) the aggregate amount of
Capital Expenditures actually incurred by the Borrower and its Subsidiaries
during such period, excluding (i) Capital Expenditures which directly result in
an aggregate increase in the square footage of real property assets owned by the
Borrower or any Subsidiary which are available for lease, (ii) Capital
Expenditures resulting from tenant improvement and leasing commissions incurred
for new tenants and (iii) Capital Expenditures made in connection with the
acquisition of real property assets, provided that such Capital Expenditures are
fully reflected in the budget relating to such acquisition, and provided further
that such capital expenditures are made within twelve months following
consummation of such acquisition of real property assets.

 

          “Funds From Operations” means, for any period, (a) net income (before
preferred dividends) of the Borrower and its Subsidiaries for such period
determined on a consolidated basis exclusive of the following (to the extent
included in the determination of such net income): (i) depreciation and
amortization and other non-cash charges; (ii) gains and losses from
extraordinary or non-recurring items; (iii) gains and losses on sales of real
estate excluding gains and losses through entities whose primary business is the
acquisition/development of assets for sale, plus (b) the Borrower’s share of
Funds From Operations from Unconsolidated Affiliates.

 

          “GAAP” means generally accepted accounting principles 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, which are applicable to the circumstances as of the date of
determination.

 

          “Governmental Approvals” means all authorizations, consents,
approvals, 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, public or statutory instrumentality,
authority, body, agency, bureau

    -10-

   

or 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 Lease Revenues” means, for a given period, the aggregate gross
revenue of the Borrower and its Subsidiaries from leases of real property
assets, (a) excluding with respect to such leases that are not Finance Leases,
straight line rent adjustments (reported in the consolidated financial
statements of the Borrower and its Subsidiaries for purposes of GAAP) in respect
of such leases for such period, and (b) including the principal component of all
payments actually received in respect of Finance Leases during such period.

 

          “Ground Lease” means a ground lease containing the following terms and
conditions: (a) either (i) a remaining term (taking into account extensions
which may be effected by the lessee without the consent of the lessor) of no
less than 30 years from the Agreement Date, or (ii) the right of the lessee to
purchase the property on terms reasonably acceptable to the Agent; (b) the right
of the lessee to mortgage and encumber its interest in the leased property
without the consent of the lessor; (c) the obligation of the lessor to give the
holder of any mortgage Lien on such leased property written notice of any
defaults on the part of the lessee and that such lease will not be terminated
until such holder has had a reasonable opportunity to cure or complete
foreclosures, and fails to do so; (d) free transferability of the lessee’s
interest under such lease, including ability to sublease, subject to only
reasonable consent provisions; and (e) 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.

 

          “Guarantor” means any Person that is a party to the Guaranty as a
“Guarantor” and in any event shall include each Subsidiary (unless an Excluded
Subsidiary).

 

          “Guaranty”, “Guaranteed”, “Guarantying” 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 (including Letters of Credit), or (v) the
supplying of funds to or investing in a Person on account of all or any part of
such Person’s obligation under a Guaranty of any obligation or indemnifying or
holding harmless, in any way, such Person against any part or all of such
obligation. As the context requires, “Guaranty” shall also mean the Guaranty to
which the Guarantors are parties substantially in the form of Exhibit O.

    -11-

   

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

 

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

 

          “Interest Expense” means, for any period, the total interest expense
(including, without limitation, capitalized interest expense and interest
expense attributable to Capital Lease Obligations) of the Borrower and its
Subsidiaries determined in accordance with GAAP.

 

          “Interest Period” means:

 

          (a)       with respect to any LIBOR Loan, each period commencing on
the date such LIBOR Loan is made or the last day of the immediately preceding
Interest Period for such Loan and ending one week (if available from all of the
Lenders), or one, two or three months thereafter, as the Borrower may select in
a Notice of Borrowing, Notice of Continuation or Notice of Conversion, as the
case may be, except that each Interest Period that commences on the last
Business Day of a calendar month shall end on the last Business Day of the
appropriate subsequent calendar month; and

 

          (b)       with respect to any Bid Rate Loan, the period commencing on
the date such Bid Rate Loan is made and ending 30, 60 or 90 days thereafter, as
the Borrower may select as provided in Section 2.2.(b).

 

Notwithstanding the foregoing: (i) if any Interest Period would otherwise end
after the Termination Date, such Interest Period shall end on the Termination
Date; and (ii) each Interest Period that would otherwise end on a day which is
not a Business Day shall end on the immediately following Business Day (or, if
such immediately following Business Day falls in the next calendar month, on the
immediately preceding Business Day).

 

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

 

          “Investment” means, (x) with respect to any Person, any acquisition or
investment (whether or not of a controlling interest) by such Person, by means
of any of the following: (a) the purchase or other acquisition of any Equity
Interest in another Person, (b) a loan, advance or extension of credit to,
capital contribution to, Guaranty of Debt of, or purchase or other acquisition
of any Debt 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

    -12-

   

transactions) of assets of another Person that constitute the business or a
division or operating unit of another Person and (y) with respect to any
Property or other asset, the acquisition thereof. Any binding commitment to make
an Investment in any other Person, as well as any option of another Person to
require an Investment in such Person, shall be deemed to be 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.

 

          “Investment Grade Rating” shall mean a rating of BBB-/Baa3 (or
equivalent) or higher from two of the Rating Agencies.

 

          “L/C Commitment Amount” equals $30,000,000.

 

          “Lender” means each financial institution from time to time party
hereto as a “Lender” or a “Designated Lender,” together with its respective
successors and permitted assigns, and as the context requires, includes the
Swingline Lender; provided, however, that the term “Lender” shall exclude each
Designated Lender when used in reference to any Loan other than a Bid Rate Loan,
the Commitments or terms relating to any Loan other than a Bid Rate Loan and
shall further exclude each Designated Lender for all other purposes under the
Loan Documents except that any Designated Lender which funds a Bid Rate Loan
shall, subject to Section 12.5.(e), have the rights (including the rights given
to a Lender contained in Sections 12.2. and 12.9.) and obligations of a Lender
associated with holding such Bid Rate Loan.

 

          “Lending Office” means, for each Lender and for each Type of Loan, the
office of such Lender specified as such on its signature page hereto or in the
applicable Assignment and Acceptance Agreement, or such other office of such
Lender as such Lender may notify the Agent in writing from time to time.

 

          “Letter of Credit” has the meaning given that term in Section 2.4.(a).

 

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

 

          “Letter of Credit Liabilities” means, without duplication, at any time
and in respect of any Letter of Credit, the sum of (a) the Stated Amount of such
Letter of Credit plus (b) the aggregate unpaid principal amount of all
Reimbursement Obligations of the Borrower at such time due and payable in
respect of all drawings made under such Letter of Credit. For purposes of this
Agreement, a Lender (other than the Lender acting as the Agent) shall be deemed
to hold a Letter of Credit Liability in an amount equal to its participation
interest in the related Letter of Credit under Section 2.4.(i), and the Lender
acting as the Agent shall be deemed to hold a Letter of Credit Liability in an
amount equal to its retained interest in the related Letter of Credit after

    -13-

   

giving effect to the acquisition by the Lenders other than the Lender acting as
the Agent of their participation interests under such Section.

 

          “Level” has the meaning given that term in the definition of the term
“Applicable Margin.”

 

          “LIBOR” means, for any LIBOR Loan for any Interest Period therefor,
the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%)
appearing on Telerate Page 3750 (or any successor page) as the London interbank
offered rate for deposits in Dollars at approximately 11:00 a.m. (London time)
two Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period. If for any reason such rate is not
available, the term “LIBOR” shall mean, for any LIBOR Loan for any Interest
Period therefor, the rate per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) appearing on the Reuters Screen LIBO Page as the London
interbank offered rate for deposits in Dollars at approximately 11:00 a.m.
(London time) two Business Days prior to the first day of such Interest Period
for a term comparable to such Interest Period; provided, however, if more than
one rate is specified on the Reuters Screen LIBO Page, the applicable rate shall
be the arithmetic mean of all such rates. If for any reason none of the
foregoing rates is available, LIBOR shall be, for any Interest Period, the rate
per annum reasonably determined by the Agent as the rate of interest at which
Dollar deposits in the approximate amount of the LIBOR Loan comprising part of
such borrowing would be offered by the Agent to major banks in the London
interbank eurodollar market at their request at or about 11:00 a.m. (London
time) two Business Days prior to the first day of such Interest Period for a
term comparable to such Interest Period.

 

          “LIBOR Auction” means a solicitation of Bid Rate Quotes setting forth
LIBOR Margin Loans based on LIBOR pursuant to Section 2.2.

 

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

 

          “LIBOR Margin Loan” means a Bid Rate Loan the interest rate on which
is determined on the basis of LIBOR pursuant to a LIBOR Auction.

 

          “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, Negative Pledge, 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 Debt or 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; and (d) any agreement by such Person to grant,
give or otherwise convey any of the foregoing.

 

          “Loan” means a Revolving Loan, a Bid Rate Loan or a Swingline Loan.

    -14-

   

          “Loan Document” means this Agreement, each Note, each Letter of Credit
Document, 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.

 

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

 

          “Material Adverse Effect” means a materially adverse effect on (a) the
business, assets, liabilities, condition (financial or otherwise), results of
operations or business prospects of the Borrower and its Subsidiaries taken as a
whole, (b) the ability of the Borrower or any other Loan Party 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 Agent under any of the Loan Documents or (e) the timely payment
of the principal of or interest on the Loans or other amounts payable in
connection therewith or the timely payment of all Reimbursement Obligations.

 

          “Material Debt” has the meaning given that term in Section
10.1.(e)(i).

 

          “Material Plan” means at any time a Plan or Plans having aggregate
Unfunded Liabilities in excess of $1,000,000.

 

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

 

          “Mortgage” means a mortgage, deed of trust, deed to secure debt or
similar security instrument made by a Person owning an interest in real property
granting a Lien on such interest in real property as security for the payment of
Debt of such Person or another Person.

 

          “Mortgage Receivable” means a promissory note secured by a Mortgage of
which the Borrower, a Guarantor or one of their respective Subsidiaries is the
holder and retains the rights of collection of all payments thereunder.

 

          “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 five plan years made contributions, including for these purposes any
Person which ceased to be a member of the ERISA Group during such five year
period.

 

          “Negative Pledge” means a provision of any agreement (other than this
Agreement or any other Loan Document) that prohibits or limits the creation or
assumption of any Lien on any assets of a Person or entitles another Person to
obtain or claim the benefit of a Lien on any assets of such 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

    -15-

   

the encumbrance of specific assets, shall not constitute a Negative Pledge for
purposes of this Agreement.

 

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

 

          “Note” means a Revolving Note, a Bid Rate Note or a Swingline Note.

 

          “Notice of Borrowing” means a notice in the form of Exhibit C to be
delivered to the Agent pursuant to Section 2.1.(b) evidencing the Borrower’s
request for a borrowing of Revolving Loans.

 

          “Notice of Continuation” means a notice in the form of Exhibit D to be
delivered to the Agent pursuant to Section 2.9. evidencing the Borrower’s
request for the Continuation of a LIBOR Loan.

 

          “Notice of Conversion” means a notice in the form of Exhibit E to be
delivered to the Agent pursuant to Section 2.10. evidencing the Borrower’s
request for the Conversion of a Loan from one Type to another Type.

 

          “Notice of Swingline Borrowing” means a notice in the form of Exhibit
F to be delivered to the Agent pursuant to Section 2.3. evidencing the
Borrower’s request for a borrowing of Swingline Loans.

 

          “Obligations” means, individually and collectively: (a) the aggregate
principal balance of, and all accrued and unpaid interest on, all Loans; (b) all
Reimbursement Obligations and all other Letter of Credit Liabilities; and (c)
all other indebtedness, liabilities, obligations, covenants and duties of the
Borrower and the other Loan Parties owing to the 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 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.

 

          “Participant” has the meaning given that term in Section 12.5.(c).

 

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

 

          “Permitted Liens” means, as to any Person: (a) Liens securing taxes,
assessments and other charges or levies imposed by any Governmental Authority
(excluding any Lien imposed pursuant to any of the provisions of ERISA) or the
claims of materialmen, mechanics, carriers, warehousemen or landlords for labor,
materials, supplies or rentals incurred in the ordinary course of business,
which are not at the time required to be paid or discharged under Section 7.5.;
(b) Liens consisting of deposits or pledges made, in the ordinary course of
business, in

    -16-

   

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 use thereof in
the business of such Person; and (d) Liens, if any, in favor of the Agent for
the benefit of the Lenders.

 

          “Person” means an individual, corporation, partnership, limited
liability company, association, trust or unincorporated organization, or a
government or any agency or political subdivision thereof.

 

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

 

          “Post-Default Rate” means, in respect of any principal of any Loan or
any other Obligation that is not paid when due (whether at stated maturity, by
acceleration, by optional or mandatory prepayment or otherwise), a rate per
annum equal to the Base Rate as in effect from time to time plus the Applicable
Margin for Base Rate Loans plus four percent (4.0%).

 

          “Preferred Equity Interests” means, with respect to any Person, Equity
Interests in such Person which are entitled to preference or priority over any
other Equity Interest in such Person in respect of the payment of dividends or
distribution of assets upon liquidation or both.

 

          “Prime Rate” means the rate of interest per annum announced publicly
by the Lender acting as the Agent as its prime rate from time to time. The Prime
Rate is not necessarily the best or the lowest rate of interest offered by the
Lender acting as the Agent or any other Lender.

 

          “Principal Office” means the office of the Agent located at One
Wachovia Center, Charlotte, North Carolina, or such other office of the Agent as
the Agent may designate from time to time.

 

          “Property” means any parcel of real property, together with all
improvements thereon, owned or leased pursuant to a Ground Lease by the Borrower
or any Subsidiary.

 

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

 

          “Real Property Value” means the annualized Gross Lease Revenues as of
the last day of the fiscal quarter of the Borrower most recently ended of all
Properties in place at the end of such fiscal quarter divided by the
Capitalization Rate.

 

          “Register” has the meaning given that term in Section 12.5.(f).

    -17-

   

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

 

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

 

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

 

          “Requisite Lenders” means, as of any date, Lenders having at least
66-2/3% of the aggregate amount of the Commitments (not held by Defaulting
Lenders who are not entitled to vote), or, if the Commitments have been
terminated or reduced to zero, Lenders holding at least 66-2/3% of the principal
amount of the aggregate outstanding Loans and Letter of Credit Liabilities (not
held by Defaulting Lenders who are not entitled to vote).

 

          “Responsible Officer” means with respect to the Borrower or any
Subsidiary, the chief executive officer, the chief financial officer and the
chief operating officer of the Borrower or such Subsidiary.

 

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

 

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

 

          “Revolving Note” has the meaning given that term in Section 2.11.(a).

 

          “Secured Debt” means, with respect to a Person as of any given date,
the aggregate principal amount of all Debt of such Person outstanding at such
date and that is secured in any manner by a Mortgage or any other Lien.

    -18-

   

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

 

          “Solvent” means, when used with respect to any Person, that (a) the
fair value and the fair salable value of its assets (excluding any Debt due from
any affiliate of such Person) are each in excess of the fair valuation of its
total liabilities (including all contingent liabilities computed at the amount
which, in light of all the facts and circumstances existing at such time,
represents the amount that could reasonably be expected to become an actual and
matured liability); (b) such Person is 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.

 

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

 

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

 

          “Subsidiary” means, for any Person, any corporation, partnership or
other entity of which at least a majority of the 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, and shall include all Persons the accounts
of which are consolidated with those of such Person pursuant to GAAP. Commercial
Net Lease Realty Services, Inc. and its Subsidiaries shall be deemed to be
Subsidiaries of the Borrower.

 

          “Swap Agreement” has the meaning given the term “swap agreement” in 11
U.S.C. §101, as in effect on the Agreement Date.

 

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

 

          “Swingline Commitment” means the Swingline Lender’s obligation to make
Swingline Loans pursuant to Section 2.3. in an amount up to, but not exceeding,
$10,000,000, as such amount may be reduced from time to time in accordance with
the terms hereof.

    -19-

   

          “Swingline Lender” means Wachovia Bank, National Association, together
with its respective successors and assigns.

 

          “Swingline Loan” means a loan made by the Swingline Lender to the
Borrower pursuant to Section 2.3.(a).

 

          “Swingline Note” means the promissory note of the Borrower payable to
the order of the Swingline Lender in a principal amount equal to the amount of
the Swingline Commitment as originally in effect and otherwise duly completed,
substantially in the form of Exhibit G.

 

          “Tangible Net Worth” means total stockholders’ equity of the Borrower
and its Subsidiaries determined in accordance with GAAP, plus (a) accumulated
depreciation and amortization to the extent reflected in the determination of
stockholders’ equity of the Borrower and its Subsidiaries, plus (b) the
accumulated principal component of all payments made to the Borrower and its
Subsidiaries in respect of Finance Leases to the extent reflected in the
determination of stockholders’ equity of the Borrower and its Subsidiaries,
minus (c) the aggregate value of all intangible assets of the Borrower and its
Subsidiaries.

 

          “Taxes” has the meaning given that term in Section 3.12.

 

          “Termination Date” means May 9, 2006, or such later date to which the
Termination Date may be extended pursuant to Section 2.12.

 

          “Titled Agents” means each of the Arranger, the Syndication Agent and
the Documentation Agent and their respective successors and permitted assigns.

 

          “Total Assets” means (without duplication): (a) Real Property Value
plus (b) 50.0% of the undepreciated cost of Properties that are developed but
that are unleased and vacant plus (c) the book value of all other tangible
assets of the Borrower and its Subsidiaries less (d) cash and cash equivalents
of the Borrower and its Subsidiaries the disposition of which is restricted in
any way.

 

          “Total Liabilities” means the total liabilities of the Borrower and
its Subsidiaries (including, without limitation, all obligations or indebtedness
of any other Person which the Borrower or any Subsidiary has assumed,
guaranteed, or endorsed or in connection with which the Borrower or any
Subsidiary has otherwise become directly or contingently liable and the amount
of any outstanding Letters of Credit) computed in accordance with GAAP.

 

          “Type” with respect to any Revolving Loan, refers to whether such Loan
is a LIBOR Loan or Base Rate Loan.

 

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

    -20-

   

          “Unencumbered Asset Value” means the sum (without duplication) of (a)
the Real Property Value of all Unencumbered Assets which are not Excluded
Assets; plus (b) aggregate book value of all Eligible Mortgage Notes Receivable;
provided, however, that if the aggregate book value of Eligible Mortgage Notes
Receivable exceeds 15.0% of Total Assets, the value of such Eligible Mortgage
Notes Receivable in excess of 15.0% of Total Assets shall be excluded in the
determination of Unencumbered Asset Value hereunder; plus (c) all of the
Borrower’s and Guarantors’ cash and cash equivalents (excluding tenant deposits
and other cash and cash equivalents the disposition of which is restricted in
any way); provided, however, that if the aggregate value of such cash and cash
equivalents exceeds 2.0% of Total Assets, the value of such cash and cash
equivalents in excess of 2.0% of Total Assets shall be excluded in the
determination of Unencumbered Asset Value hereunder; all as determined in
accordance with GAAP.

 

          “Unencumbered Assets” means, collectively, each Property of the
Borrower or any Guarantor which meets the following criteria: (a) the Property
is owned, or leased under a Ground Lease, entirely by the Borrower and/or a
Guarantor; (b) neither such Property, nor any interest of the Borrower or such
Guarantor therein, is subject to any Lien (other than Permitted Liens of the
types described in clauses (a) through (c) of the definition thereof) or to any
Negative Pledge; and (c) if such Property is owned or leased by Person other
than the Borrower (i) none of the Borrower’s direct or indirect ownership
interest in such Person is subject to any Lien (other than Permitted Liens of
the types described in clauses (a) through (c) of the definition thereof) or to
any Negative Pledge; and (ii) the Borrower directly, or indirectly through a
Subsidiary, has the right to take the following actions without the need to
obtain the consent of any Person: (x) to sell, transfer or otherwise dispose of
such Property and (y) to create a Lien on such Property as security for Debt of
the Borrower or such Guarantor, as applicable.

 

          “Unfunded Liabilities” means, with respect to any Plan at any time,
the amount (if any) by which (a) the value of all benefit liabilities under such
Plan, determined on a plan termination basis using the assumptions prescribed by
the PBGC for purposes of Section 4044 of ERISA, exceeds (b) the fair market
value of all Plan assets allocable to such liabilities under Title IV of ERISA
(excluding any accrued but unpaid contributions), all determined as of the then
most recent valuation date for such Plan, but only to the extent that such
excess represents a potential liability of a member of the ERISA Group to the
PBGC or any other Person under Title IV of ERISA.

 

          “Unsecured Debt” means, with respect to a Person as of any given date,
the aggregate principal amount of all Debt of such Person outstanding at such
date and that is not Secured Debt.

 

          “UPREIT” means a limited partnership which is a Subsidiary of the
Borrower formed by the Borrower to function as an umbrella partnership REIT and
which becomes a Guarantor hereunder pursuant to Section 7.11.

 

          “Wachovia” means Wachovia Bank, National Association together with its
successors and assigns.

    -21-

   

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

 

Section 1.2.    General; References to Times.

 

          Unless otherwise indicated, all accounting terms, ratios and
measurements shall be interpreted or determined in accordance with GAAP
consistently applied; provided that, if at any time any change in GAAP would
affect the computation of any financial ratio or requirement set forth in any
Loan Document, and either the Borrower or the Requisite Lenders shall so
request, the Agent, the Lenders and the Borrower shall negotiate in good faith
to amend such ratio or requirement to preserve the original intent thereof in
light of such change in GAAP (subject to the approval of the Requisite Lenders);
provided further that, until so amended, (i) such ratio or requirement shall
continue to be computed in accordance with GAAP prior to such change therein and
(ii) the Borrower shall provide to the Agent and the Lenders financial
statements and other documents required under this Agreement or as reasonably
requested hereunder setting forth a reconciliation between calculations of such
ratio or requirement made before and after giving effect to such change in GAAP.
References in this Agreement to “Sections”, “Articles”, “Exhibits” and
“Schedules” are to sections, articles, exhibits and schedules herein and hereto
unless otherwise indicated. References in this Agreement to any document,
instrument or agreement (a) shall include all exhibits, schedules and other
attachments thereto, (b) shall include all documents, instruments or agreements
issued or executed in replacement thereof, to the extent permitted hereby and
(c) shall mean such document, instrument or agreement, or replacement or
predecessor thereto, as amended, supplemented, restated or otherwise modified as
of the date of this Agreement and from time to time thereafter to the extent not
prohibited hereby and in effect at any given time. Wherever from the context it
appears appropriate, each term stated in either the singular or plural shall
include the singular and plural, and pronouns stated in the masculine, feminine
or neuter gender shall include the masculine, the feminine and the neuter.
Unless explicitly set forth to the contrary, a reference to “Subsidiary” means a
Subsidiary of the Borrower or a Subsidiary of such Subsidiary and a reference to
an “Affiliate” means a reference to an Affiliate of the Borrower. 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
Charlotte, North Carolina time.

ARTICLE II.   CREDIT FACILITY

 

Section 2.1.    Revolving Loans.

 

          (a)           Generally.     Subject to the terms and conditions
hereof, during the period from the Effective Date to but excluding the
Termination Date, each Lender severally and not jointly agrees to make Revolving
Loans to the Borrower in an aggregate principal amount at any one time
outstanding up to, but not exceeding, the amount of such Lender’s Commitment.
Subject to the terms and conditions of this Agreement, during the period from
the Effective Date to but

    -22-

   

excluding the Termination Date, the Borrower may borrow, repay and reborrow
Revolving Loans hereunder.

 

          (b)           Requesting Revolving Loans.     The Borrower shall give
the Agent notice pursuant to a Notice of Borrowing or telephonic notice of each
borrowing of Revolving Loans. Each Notice of Borrowing shall be delivered to the
Agent before 10:00 a.m. (i) in the case of LIBOR Loans, on the date three
Business Days prior to the proposed date of such borrowing and (ii) in the case
of Base Rate Loans, on the date one Business Day prior to the proposed date of
such borrowing. Any such telephonic notice shall include all information to be
specified in a written Notice of Borrowing and shall be promptly confirmed in
writing by the Borrower pursuant to a Notice of Borrowing sent to the Agent by
telecopy on the same day of the giving of such telephonic notice. The Agent will
transmit by telecopy the Notice of Borrowing (or the information contained in
such Notice of Borrowing) to each Lender promptly upon receipt by the Agent.
Each Notice of Borrowing or telephonic notice of each borrowing shall be
irrevocable once given and binding on the Borrower.

 

          (c)           Disbursements of Revolving Loan Proceeds.     No later
than 1:00 p.m. on the date specified in the Notice of Borrowing, each Lender
will make available for the account of its applicable Lending Office to the
Agent at the Principal Office, in immediately available funds, the proceeds of
the Revolving Loan to be made by such Lender. With respect to Revolving Loans to
be made after the Effective Date, unless the Agent shall have been notified by
any Lender prior to the specified date of borrowing that such Lender does not
intend to make available to the Agent the Revolving Loan to be made by such
Lender on such date, the Agent may assume that such Lender will make the
proceeds of such Revolving Loan available to the Agent on the date of the
requested borrowing as set forth in the Notice of Borrowing and the Agent may
(but shall not be obligated to), in reliance upon such assumption, make
available to the Borrower the amount of such Revolving Loan to be provided by
such Lender. Subject to satisfaction of the applicable conditions set forth in
Article V. for such borrowing, the Agent will make the proceeds of such
borrowing available to the Borrower no later than 2:00 p.m. on the date and at
the account specified by the Borrower in such Notice of Borrowing.

 

Section 2.2.    Bid Rate Loans.

 

          (a)           Bid Rate Loans.     So long as the Borrower maintains an
Investment Grade Rating, in addition to borrowings of Revolving Loans, at any
time during the period from the Effective Date to but excluding the Termination
Date the Borrower may, as set forth in this Section, request the Lenders to make
offers to make Bid Rate Loans to the Borrower in Dollars. The Lenders may, but
shall have no obligation to, make such offers and the Borrower may, but shall
have no obligation to, accept any such offers in the manner set forth in this
Section.

 

          (b)           Requests for Bid Rate Loans.     When the Borrower
wishes to request from the Lenders offers to make Bid Rate Loans, it shall give
the Agent notice (a “Bid Rate Quote Request”) so as to be received no later than
10:00 a.m. on (x) the Business Day immediately preceding the date of borrowing
proposed therein, in the case of an Absolute Rate Auction and (y) the date four
Business Days prior to the proposed date of borrowing, in the case of a LIBOR
Auction. The Agent shall deliver to each Lender a copy of each Bid Rate Quote
Request promptly upon receipt thereof by the Agent. The Borrower may request
offers to make Bid Rate

    -23-

   

Loans for up to three (3) different Interest Periods in each Bid Rate Quote
Request; provided that the request for each separate Interest Period shall be
deemed to be a separate Bid Rate Quote Request for a separate borrowing (a “Bid
Rate Borrowing”). Each Bid Rate Quote Request shall be substantially in the form
of Exhibit H and shall specify as to each Bid Rate Borrowing:

 

              (i)     the proposed date of such Bid Rate Borrowing, which shall
be a Business Day;

 

              (ii)     the aggregate amount of such Bid Rate Borrowing, which
(x) shall be in the minimum amount of $10,000,000 and integral multiples of
$1,000,000 and (y) shall not cause any of the limits specified in Section 2.16.
to be violated;

 

              (iii)     whether the Bid Rate Quote Request is for LIBOR Margin
Loans or Absolute Rate Loans; and

 

              (iv)     the duration of the Interest Period applicable thereto,
which shall not extend beyond the Termination Date.

 

Except as otherwise provided in this subsection (b), no Bid Rate Quote Request
shall be given within five Business Days (or such other number of days as the
Borrower and the Agent, with the consent of the Requisite Lenders, may agree) of
the giving of any other Bid Rate Quote Request.

 

          (c)           Bid Rate Quotes.

 

              (i)     Each Lender may submit one or more Bid Rate Quotes, each
containing an offer to make a Bid Rate Loan in response to any Bid Rate Quote
Request; provided that, if the Borrower’s request under Section 2.2.(b)
specified more than one Interest Period, such Lender may make a single
submission containing one or more Bid Rate Quotes for each such Interest Period.
Each Bid Rate Quote must be submitted to the Agent not later than 10:00 a.m. on
the proposed date of borrowing; provided that the Lender then acting as Agent
may submit a Bid Rate Quote only if it notifies the Borrower of the terms of the
offer contained therein not later than 9:45 a.m. (x) on the proposed date of
such borrowing, in the case of an Absolute Rate Auction and (y) on the date
three Business Days prior to the proposed date of borrowing, in the case of a
LIBOR Auction. Subject to Articles V. and X., any Bid Rate Quote so made shall
be irrevocable except with the consent of the Agent given at the request of the
Borrower. Any Bid Rate Loan may be funded by a Lender’s Designated Lender (if
any) as provided in Section 12.5.(e), however such Lender shall not be required
to specify in its Bid Rate Quote whether such Bid Rate Loan will be funded by
such Designated Lender.

 

              (ii)     Each Bid Rate Quote shall be substantially in the form of
Exhibit I and shall specify:

 

          (A)     the proposed date of borrowing and the Interest Period
therefor;

    -24-

   

          (B)     the principal amount of the Bid Rate Loan for which each such
offer is being made; provided that the aggregate principal amount of all Bid
Rate Loans for which a Lender submits Bid Rate Quotes (x) may be greater or less
than the Commitment of such Lender but (y) shall not exceed the principal amount
of the Bid Rate Borrowing for a particular Interest Period for which offers were
requested;

 

          (C)     in the case of an Absolute Rate Auction, the rate of interest
per annum (rounded upwards, if necessary, to the nearest 1/10,000th of 1%)
offered for each such Bid Rate Loan (the “Absolute Rate”);

 

          (D)     in the case of a LIBOR Auction, the margin above or below
applicable LIBOR (the “LIBOR Margin”) offered for each such LIBOR Margin Loan,
expressed as a percentage (rounded upwards, if necessary, to the nearest
1/1,000th of 1%) to be added to (or subtracted from) the applicable LIBOR; and

 

          (E)     the identity of the quoting Lender.

 

Unless otherwise agreed by the Agent and the Borrower, no Bid Rate Quote shall
contain qualifying, conditional or similar language or propose terms other than
or in addition to those set forth in the applicable Bid Rate Quote Request and,
in particular, no Bid Rate Quote may be conditioned upon acceptance by the
Borrower of all (or some specified minimum) of the principal amount of the Bid
Rate Loan for which such Bid Rate Quote is being made.

 

          (d)           Notification by Agent.     The Agent shall, as promptly
as practicable after the Bid Rate Quotes are submitted (but in any event not
later than 10:30 a.m. on the proposed date of borrowing), notify the Borrower of
the terms (i) of any Bid Rate Quote submitted by a Lender that is in accordance
with Section 2.2.(c) and (ii) of any Bid Rate Quote that amends, modifies or is
otherwise inconsistent with a previous Bid Rate Quote submitted by such Lender
with respect to the same Bid Rate Quote Request. Any such subsequent Bid Rate
Quote shall be disregarded by the Agent unless such subsequent Bid Rate Quote is
submitted solely to correct a manifest error in such former Bid Rate Quote. The
Agent’s notice to the Borrower shall specify (A) the aggregate principal amount
of the Bid Rate Borrowing for which offers have been received and (B) the
principal amounts and Absolute Rates or LIBOR Margins, as applicable, so offered
by each Lender (identifying the Lender that made each Bid Rate Quote).

 

          (e)           Acceptance by Borrower.

 

              (i)     Not later than 11:00 a.m. (x) on the proposed date of
borrowing, in the case of an Absolute Rate Auction and (y) on the date three
Business Days prior to the proposed date of borrowing, in the case of a LIBOR
Auction, the Borrower shall notify the Agent of its acceptance or nonacceptance
of the offers so notified to it pursuant to Section 2.2.(d) which notice shall
be in the form of Exhibit J. In the case of acceptance, such notice shall
specify the aggregate principal amount of offers for each Interest Period that
are accepted. The failure of the Borrower to give such notice by such time shall

    -25-

   

constitute nonacceptance. The Agent shall promptly notify each affected Lender.
The Borrower may accept any Bid Rate Quote in whole or in part; provided that:

 

          (A)     the aggregate principal amount of each Bid Rate Borrowing may
not exceed the applicable amount set forth in the related Bid Rate Quote
Request;

 

          (B)     the aggregate principal amount of each Bid Rate Borrowing
shall not cause the limits specified in Section 2.16. to be violated;

 

          (C)     acceptance of offers may be made only in ascending order of
Absolute Rates or LIBOR Margins, as applicable, in each case beginning with the
lowest rate so offered;

 

          (D)     the Borrower may not accept any Bid Rate Quote that fails to
comply with Section 2.2.(c) or otherwise fails to comply with the requirements
of this Agreement); and

 

          (E)     any acceptance in part shall be in a minimum amount of
$5,000,000 and integral multiples of $1,000,000 in excess thereof.

 

              (ii)     If offers are made by two or more Lenders with the same
Absolute Rates or LIBOR Margins, as applicable, for a greater aggregate
principal amount than the amount in respect of which offers are permitted to be
accepted for the related Interest Period, the principal amount of Bid Rate Loans
in respect of which such offers are accepted shall be allocated by the Agent
among such Lenders in proportion to the aggregate principal amount of such
offers. Determinations by the Agent of the amounts of Bid Rate Loans shall be
conclusive in the absence of manifest error.

 

          (f)           Obligation to Make Bid Rate Loans.     The Agent shall
promptly (and in any event not later than (x) 12:00 noon on the proposed date of
borrowing of Absolute Rate Loans and (y) on the date three Business Days prior
to the proposed date of borrowing of LIBOR Margin Loans) notify each Lender
whose Bid Rate Quote has been accepted and the amount and rate thereof. A Lender
who is notified that it has been selected to make a Bid Rate Loan may designate
its Designated Lender (if any) to fund such Bid Rate Loan on its behalf, as
described in Section 12.5.(e). Any Designated Lender which funds a Bid Rate Loan
shall on and after the time of such funding become the obligee under such Bid
Rate Loan and be entitled to receive payment thereof when due. No Lender shall
be relieved of its obligation to fund a Bid Rate Loan, and no Designated Lender
shall assume such obligation, prior to the time the applicable Bid Rate Loan is
funded. Any Lender whose offer to make any Bid Rate Loan has been accepted
shall, not later than 1:30 p.m. on the date specified for the making of such
Loan, make the amount of such Loan available to the Agent at its Principal
Office in immediately available funds, for the account of the Borrower. The
amount so received by the Agent shall, subject to the terms and conditions of
this Agreement, be made available to the Borrower no later than 2:00 p.m. on
such date by depositing the same, in immediately available funds, in an account
of the Borrower designated by the Borrower.

    -26-

   

          (g)           No Effect on Commitment.     Except for the purpose and
to the extent expressly stated in Section 2.14. the amount of any Bid Rate Loan
made by any Lender shall not constitute a utilization of such Lender’s
Commitment.

 

Section 2.3.    Swingline Loans.

 

          (a)           Swingline Loans.     Subject to the terms and conditions
hereof, during the period from the Effective Date to but excluding the
Termination Date, the Swingline Lender agrees to make Swingline Loans to the
Borrower in an aggregate principal amount at any one time outstanding up to, but
not exceeding, the amount of the Swingline Commitment. 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, the Borrower shall
immediately pay the 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.

 

          (b)           Procedure for Borrowing Swingline Loans.     The
Borrower shall give the Agent and the Swingline Lender notice pursuant to a
Notice of Swingline Borrowing or telephonic notice of each borrowing of a
Swingline Loan. Each Notice of Swingline Borrowing shall be delivered to the
Swingline Lender no later than 3:00 p.m. on the proposed date of such borrowing.
Any such notice given telephonically shall include all information to be
specified in a written Notice of Swingline Borrowing and shall be promptly
confirmed in writing by the Borrower pursuant to a Notice of Swingline Borrowing
sent to the Swingline Lender by telecopy on the same day of the giving of such
telephonic notice. On the date of the requested Swingline Loan and subject to
satisfaction of the applicable conditions set forth in Article V. for such
borrowing, the Swingline Lender will make the proceeds of such Swingline Loan
available to the Borrower in Dollars, in immediately available funds, at the
account specified by the Borrower in the Notice of Swingline Borrowing not later
than 4:00 p.m. on such date.

 

          (c)           Interest.     Swingline Loans shall bear interest at a
per annum rate equal to the Base Rate plus the Applicable Margin for Base Rate
Loans (or at such other rate or rates as the Borrower and the Swingline Lender
may agree from time to time in writing). Interest payable on Swingline Loans is
solely for the account of the Swingline Lender (except to the extent a Lender
acquires a participating interest in a Swingline Loan pursuant to the
immediately following subsection (e)). All accrued and unpaid interest on
Swingline Loans shall be payable on the dates and in the manner provided in
Section 2.5. with respect to interest on Base Rate Loans (except as the
Swingline Lender and the Borrower may otherwise agree in writing in connection
with any particular Swingline Loan).

 

          (d)           Swingline Loan Amounts, Etc.     Each Swingline Loan
shall be in the minimum amount of $100,000 and integral multiples of $25,000 or
such other minimum amounts agreed to by the Swingline Lender and the Borrower.
Any voluntary prepayment of a Swingline Loan must be in integral multiples of
$100,000 or the aggregate principal amount of all outstanding Swingline Loans
(or such other minimum amounts upon which the Swingline Lender and the Borrower
may agree) and in connection with any such prepayment, the Borrower must give
the Swingline Lender prior written notice thereof no later than 10:00 a.m. on
the date of such

    -27-

   

prepayment. The Swingline Loans shall, in addition to this Agreement, be
evidenced by the Swingline Note.

 

          (e)           Repayment and Participations of Swingline Loans.     The
Borrower agrees to repay each Swingline Loan within one Business Day of demand
therefor by the Swingline Lender and in any event, within 5 Business Days after
the date such Swingline Loan was made. Notwithstanding the foregoing, the
Borrower shall repay the entire outstanding principal amount of, and all accrued
but unpaid interest on, the Swingline Loans on the Termination Date (or such
earlier date as the Swingline Lender and the Borrower may agree in writing). In
lieu of demanding repayment of any outstanding Swingline Loan from the Borrower,
the Swingline Lender may, on behalf of the Borrower (which hereby irrevocably
directs the Swingline Lender to act on its behalf), request a borrowing of Base
Rate Loans from the Lenders in an amount equal to the principal balance of such
Swingline Loan. The amount limitations of Section .5.(a) shall not apply to any
borrowing of Base Rate Loans made pursuant to this subsection. The Swingline
Lender shall give notice to the Agent of any such borrowing of Base Rate Loans
not later than 12:00 noon on the proposed date of such borrowing and the Agent
shall give prompt notice of such borrowing to the Lenders. No later than 2:00
p.m. on such date, each Lender will make available to the Agent at the Principal
Office for the account of Swingline Lender, in immediately available funds, the
proceeds of the Base Rate Loan to be made by such Lender. The Agent shall pay
the proceeds of such Base Rate Loans to the Swingline Lender, which shall apply
such proceeds to repay such Swingline Loan. If the Lenders are prohibited from
making Loans required to be made under this subsection for any reason, including
without limitation, the occurrence of any of the Events of Default described in
Sections 10.1.(f) or 10.1.(g), each Lender shall purchase from the Swingline
Lender, without recourse or warranty, an undivided interest and participation to
the extent of such Lender’s Commitment Percentage of such Swingline Loan, by
directly purchasing a participation in such Swingline Loan in such amount
(regardless of whether the conditions precedent thereto set forth in Section
5.2. are then satisfied, whether or not the Borrower has submitted a Notice of
Borrowing and whether or not the Commitments are then in effect, any Event of
Default exists or all the Loans have been accelerated) and paying the proceeds
thereof to the Agent for the account of the Swingline Lender in Dollars and in
immediately available funds. If such amount is not in fact made available to the
Swingline Lender by any Lender, the Swingline Lender shall be entitled to
recover such amount on demand from such Lender, together with accrued interest
thereon for each day from the date of demand thereof, at the Federal Funds Rate.
If such Lender does not pay such amount forthwith upon the Swingline Lender’s
demand therefor, and until such time as such Lender makes the required payment,
the Swingline Lender shall be deemed to continue to have outstanding Swingline
Loans in the amount of such unpaid participation obligation for all purposes of
the Loan Documents (other than those provisions requiring the other Lenders to
purchase a participation therein). Further, such Lender shall be deemed to have
assigned any and all payments made of principal and interest on its Loans, and
any other amounts due to it hereunder, to the Swingline Lender to fund Swingline
Loans in the amount of the participation in Swingline Loans that such Lender
failed to purchase pursuant to this Section until such amount has been purchased
(as a result of such assignment or otherwise). A Lender’s obligation to purchase
such a participation in a Swingline Loan shall be absolute and unconditional and
shall not be affected by any circumstance whatsoever, including without
limitation, (i) any claim of setoff, counterclaim, recoupment, defense or other
right which such Lender or any other Person may have or claim

    -28-

   

against the Agent, the Swingline Lender or any other Person whatsoever, (ii) the
occurrence or continuation of a Default or Event of Default (including without
limitation, any of the Defaults or Events of Default described in Sections
10.1.(f) or 10.1.(g)) or the termination of any Lender’s Commitment, (iii) the
existence (or alleged existence) of an event or condition which has had or could
have a Material Adverse Effect, (iv) any breach of any Loan Document by the
Agent, any Lender or the Borrower or (v) any other circumstance, happening or
event whatsoever, whether or not similar to any of the foregoing.

 

Section 2.4.    Letters of Credit.

 

          (a)           Letters of Credit.     Subject to the terms and
conditions of this Agreement, the Agent, on behalf of the Lenders, agrees to
issue for the account of the Borrower (or the Borrower and any other Loan Party)
during the period from and including the Effective Date to, but excluding, the
date 30 days prior to the Termination Date one or more standby letters of credit
(each a “Letter of Credit”) up to a maximum aggregate Stated Amount at any one
time outstanding not to exceed the L/C Commitment Amount. The parties hereto
agree that the Existing Letters of Credit shall be deemed to be Letters of
Credit hereunder.

 

          (b)           Terms of Letters of Credit.     At the time of issuance,
the amount, form, terms and conditions of each Letter of Credit, and of any
drafts or acceptances thereunder, shall be subject to approval by the Agent and
the Borrower. At the time of issuance of each Letter of Credit, the Agent and
the Borrower shall determine whether such Letter of Credit will be subject to
(x) the rules of the “International Standby Practices 1998” published by the
Institute of International Banking Law & Practice (or such later version thereof
as may be in effect at the time of issuance) or (y) the Uniform Customs and
Practice for Documentary Credits (1993 Revision), International Chamber of
Commerce Publication No. 500 (or such later version thereof as may be in effect
at the time of issuance). Notwithstanding the foregoing, in no event may (i) the
expiration date of any Letter of Credit extend beyond the earlier of (A) the
date one year from its date of issuance or (B) the Termination Date or (ii) any
Letter of Credit contain an automatic renewal provision (other than renewal
provisions which are automatic in the absence of a notice of non-renewal from
the Agent which may be given at least once during any 12-month period, so long
as any such renewal provision does not provide for a renewal period that extends
beyond the Termination Date).

 

          (c)           Requests for Issuance of Letters of Credit.     The
Borrower shall give the Agent written notice (or telephonic notice promptly
confirmed in writing) at least 3 Business Days prior to the requested date of
issuance of a Letter of Credit, such notice to describe in reasonable detail the
proposed terms of such Letter of Credit and the nature of the transactions or
obligations proposed to be supported by such Letter of Credit, and in any event
shall set forth with respect to such Letter of Credit the proposed (i) Stated
Amount, (ii) the beneficiary, and (iii) the expiration date. The Borrower shall
also execute and deliver such customary letter of credit application forms as
requested from time to time by the Agent. Provided the Borrower has given the
notice prescribed by the first sentence of this subsection and subject to the
other terms and conditions of this Agreement, including the satisfaction of any
applicable conditions precedent set forth in Article V., the Agent shall issue
the requested Letter of Credit on the requested date of issuance for the benefit
of the stipulated beneficiary. Upon the written request of the Borrower, the
Agent shall deliver to the Borrower a copy of each issued Letter of Credit
within a reasonable time after

    -29-

   

the date of issuance thereof. To the extent any term of a Letter of Credit
Document is inconsistent with a term of any Loan Document, the term of such Loan
Document shall control.

 

          (d)           Reimbursement Obligations.     Upon receipt by the Agent
from the beneficiary of a Letter of Credit of any demand for payment under such
Letter of Credit, the Agent shall promptly notify the Borrower of the amount to
be paid by the Agent as a result of such demand and the date on which payment is
to be made by the Agent to such beneficiary in respect of such demand; provided,
however, the Agent’s failure to give, or delay in giving, such notice shall not
discharge the Borrower in any respect from the applicable Reimbursement
Obligation. The Borrower hereby unconditionally and irrevocably agrees to pay
and reimburse the Agent for the amount of each demand for payment under such
Letter of Credit on or prior to the date on which payment is to be made by the
Agent to the beneficiary thereunder, without presentment, demand, protest or
other formalities of any kind (other than notice as provided in this
subsection). Upon receipt by the Agent of any payment in respect of any
Reimbursement Obligation, the Agent shall promptly pay to each Lender that has
acquired a participation therein under the second sentence of Section 2.4.(i)
such Lender’s Commitment Percentage of such payment.

 

          (e)           Manner of Reimbursement.     Upon its receipt of a
notice referred to in the immediately preceding subsection (d), the Borrower
shall advise the Agent whether or not the Borrower intends to borrow hereunder
to finance its obligation to reimburse the Agent for the amount of the related
demand for payment and, if it does, the Borrower shall submit a timely request
for such borrowing as provided in the applicable provisions of this Agreement.
If the Borrower fails to so advise the Agent, or if the Borrower fails to
reimburse the Agent for a demand for payment under a Letter of Credit by the
date of such payment, then (i) if the applicable conditions contained in Article
V. would permit the making of Revolving Loans, the Borrower shall be deemed to
have requested a borrowing of Revolving Loans (which shall be Base Rate Loans)
in an amount equal to the unpaid Reimbursement Obligation and the Agent shall
give each Lender prompt notice of the amount of the Revolving Loan to be made
available to the Agent not later than 1:00 p.m. and (ii) if such conditions
would not permit the making of Revolving Loans, the provisions of subsection (j)
of this Section shall apply. The minimum amount limitations of Section 3.5.(a)
shall not apply to any borrowing of Base Rate Loans under this subsection.

 

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

 

          (g)           Agent’s Duties Regarding Letters of Credit;
Unconditional Nature of Reimbursement Obligations.     In examining documents
presented in connection with drawings under Letters of Credit and making
payments under such Letters of Credit against such documents, the Agent shall
only be required to use the same standard of care as it uses in connection with
examining documents presented in connection with drawings under letters of
credit in which it has not sold participations and making payments under such
letters of credit.

    -30-

   

The Borrower assumes all risks of the acts and omissions of, or misuse of the
Letters of Credit by, the respective beneficiaries of such Letters of Credit. In
furtherance and not in limitation of the foregoing, neither the Agent nor any of
the Lenders shall be responsible for (i) the form, validity, sufficiency,
accuracy, genuineness or legal effects of any document submitted by any party in
connection with the application for and issuance of or any drawing honored under
any Letter of Credit even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any Letter of Credit, or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason; (iii) failure of the beneficiary of any
Letter of Credit to comply fully with conditions required in order to draw upon
such Letter of Credit; (iv) errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable, telex, telecopy or
otherwise, whether or not they be in cipher; (v) errors in interpretation of
technical terms; (vi) any loss or delay in the transmission or otherwise of any
document required in order to make a drawing under any Letter of Credit, or of
the proceeds thereof; (vii) the misapplication by the beneficiary of any Letter
of Credit, or the proceeds of any drawing under any Letter of Credit; or (viii)
any consequences arising from causes beyond the control of the Agent or the
Lenders. None of the above shall affect, impair or prevent the vesting of any of
the Agent’s rights or powers hereunder. Any action taken or omitted to be taken
by the Agent under or in connection with any Letter of Credit, if taken or
omitted in the absence of gross negligence or willful misconduct, shall not
create against the Agent or any Lender any liability to the Borrower or any
Lender. In this connection, the obligation of the Borrower to reimburse the
Agent for any drawing made under any Letter of Credit shall be absolute,
unconditional and irrevocable and shall be paid strictly in accordance with the
terms of this Agreement and any other applicable Letter of Credit Document under
all circumstances whatsoever, including without limitation, the following
circumstances: (A) any lack of validity or enforceability of any Letter of
Credit Document or any term or provisions therein; (B) any amendment or waiver
of or any consent to departure from all or any of the Letter of Credit
Documents; (C) the existence of any claim, setoff, defense or other right which
the Borrower may have at any time against the Agent, any Lender, any beneficiary
of a Letter of Credit or any other Person, whether in connection with this
Agreement, the transactions contemplated hereby or in the Letter of Credit
Documents or any unrelated transaction; (D) any breach of contract or dispute
between the Borrower, the Agent, any Lender or any other Person; (E) any demand,
statement or any other document presented under a Letter of Credit proving to be
forged, fraudulent, invalid or insufficient in any respect or any statement
therein or made in connection therewith being untrue or inaccurate in any
respect whatsoever; (F) any non-application or misapplication by the beneficiary
of a Letter of Credit of the proceeds of any drawing under such Letter of
Credit; (G) payment by the Agent under any Letter of Credit against presentation
of a draft or certificate which does not strictly comply with the terms of such
Letter of Credit, unless such payment constituted gross negligence of the Agent
as actually and finally determined by a court of competent jurisdiction; and (H)
any other act, omission to act, delay or circumstance whatsoever that might, but
for the provisions of this Section, constitute a legal or equitable defense to
or discharge of the Borrower’s Reimbursement Obligations. Notwithstanding
anything to the contrary contained in this Section or Section 12.9., but not in
limitation of the Borrower’s unconditional obligation to reimburse the Agent for
any drawing made under a Letter of Credit as provided in this Section, the
Borrower shall have no obligation to indemnify the Agent or any Lender in
respect of any liability incurred by the Agent

    -31-

   

or a Lender arising solely out of the gross negligence or willful misconduct of
the Agent or a Lender in respect of a Letter of Credit as actually and finally
determined by a court of competent jurisdiction. Except as otherwise provided in
this Section, nothing in this Section shall affect any rights the Borrower may
have with respect to the gross negligence or willful misconduct of the Agent or
any Lender with respect to any Letter of Credit.

 

          (h)           Amendments, Etc.     The issuance by the Agent of any
amendment, supplement or other modification to any Letter of Credit shall be
subject to the same conditions applicable under this Agreement to the issuance
of new Letters of Credit (including, without limitation, that the request
therefor be made through the Agent), and no such amendment, supplement or other
modification shall be issued unless either (i) the respective Letter of Credit
affected thereby would have complied with such conditions had it originally been
issued hereunder in such amended, supplemented or modified form or (ii) the
Requisite Lenders shall have consented thereto. In connection with any such
amendment, supplement or other modification, the Borrower shall pay the Fees, if
any, payable under the last sentence of Section 3.6.(b).

 

          (i)           Lenders’ Participation in Letters of Credit.
    Immediately upon the issuance by the Agent of any Letter of Credit each
Lender shall be deemed to have irrevocably and unconditionally purchased and
received from the Agent, without recourse or warranty, an undivided interest and
participation to the extent of such Lender’s Commitment Percentage of the
liability of the Agent with respect to such Letter of Credit and each Lender
thereby shall absolutely, unconditionally and irrevocably assume, as primary
obligor and not as surety, and shall be unconditionally obligated to the Agent
to pay and discharge when due, such Lender’s Commitment Percentage of the
Agent’s liability under such Letter of Credit. In addition, upon the making of
each payment by a Lender to the Agent in respect of any Letter of Credit
pursuant to the immediately following subsection (j), such Lender shall,
automatically and without any further action on the part of the Agent or such
Lender, acquire (i) a participation in an amount equal to such payment in the
Reimbursement Obligation owing to the Agent by the Borrower in respect of such
Letter of Credit and (ii) a participation in a percentage equal to such Lender’s
Commitment Percentage in any interest or other amounts payable by the Borrower
in respect of such Reimbursement Obligation (other than the Fees payable to the
Agent pursuant to the third and last sentences of Section 3.6.(b)).

 

          (j)           Payment Obligations of Lenders.     Each Lender
severally agrees to pay to the Agent on demand in immediately available funds in
Dollars the amount of such Lender’s Commitment Percentage of each drawing paid
by the Agent under each Letter of Credit to the extent such amount is not
reimbursed by the Borrower pursuant to Section 2.4.(d); provided, however, that
in respect of any drawing under any Letter of Credit, the maximum amount that
any Lender shall be required to fund, whether as a Revolving Loan or as a
participation, shall not exceed such Lender’s Commitment Percentage of such
drawing. Each such Lender’s obligation to make such payments to the Agent under
this subsection, and the Agent’s right to receive the same, shall be absolute,
irrevocable and unconditional and shall not be affected in any way by any
circumstance whatsoever, including without limitation, (i) the failure of any
other Lender to make its payment under this subsection, (ii) the financial
condition of the Borrower or any other Loan Party, (iii) the existence of any
Default or Event of Default, including any Event of Default described in

    -32-

     

Section 10.1.(f) or 10.1.(g) or (iv) the termination of the Commitments. Each
such payment to the Agent shall be made without any offset, abatement,
withholding or deduction whatsoever.

 

          (k)           Information to Lenders.     Upon the request of any
Lender from time to time, the Agent shall deliver to such Lender information
reasonably requested by such Lender with respect to each Letter of Credit then
outstanding. Other than as set forth in this subsection, the Agent shall have no
duty to notify the Lenders regarding the issuance or other matters regarding
Letters of Credit issued hereunder. The failure of the Agent to perform its
requirements under this subsection shall not relieve any Lender from its
obligations under Section 2.4.(j).

   

Section 2.5.    Rates and Payment of Interest on Loans.

 

          (a)           Rates.     The Borrower promises to pay to the 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:

 

              (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;

 

              (ii)     during such periods as such Loan is a LIBOR Loan, at the
Adjusted Eurodollar Rate for such Loan for the Interest Period therefor plus the
Applicable Margin;

 

              (iii)     if such Loan is an Absolute Rate Loan, at the Absolute
Rate for such Loan for the Interest Period therefor quoted by the Lender making
such Loan in accordance with Section 2.2.; and

 

              (iv)     if such Loan is a LIBOR Margin Loan, at LIBOR for such
Loan for the Interest Period therefor plus the LIBOR Margin for such Loan quoted
by the Lender making such Loan in accordance with Section 2.2.

 

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

 

          (b)           Payment of Interest.      Accrued and unpaid interest on
each Loan shall be payable (i) in the case of a Base Rate Loan, monthly in
arrears on the first day of each calendar month, (ii) in the case of a LIBOR
Loan or a Bid Rate Loan, in arrears on the last day of each Interest Period
therefor, and (iii) in the case of any Loan, in arrears upon the payment,
prepayment or Continuation thereof or the Conversion of such Loan to a Loan of
another Type (but only on the principal amount so paid, prepaid, Continued or
Converted). Interest payable at the Post-Default Rate shall be payable from time
to time on demand. Promptly after the determination of any interest rate
provided for herein or any change therein, the Agent shall give notice thereof
to the

    -33-

   

Lenders to which such interest is payable and to the Borrower. All
determinations by the Agent of an interest rate hereunder shall be conclusive
and binding on the Lenders and the Borrower for all purposes, absent manifest
error.

 

Section 2.6.    Number of Interest Periods.

 

          There may be no more than 6 different Interest Periods for LIBOR Loans
and Bid Rate Loans, collectively outstanding at the same time (for which purpose
Interest Periods described in different lettered clauses of the definition of
the term “Interest Period” shall be deemed to be different Interest Periods even
if they are coterminous).

 

Section 2.7.    Repayment of Loans.

 

          (a)           Revolving Loans.     The Borrower shall repay the entire
outstanding principal amount of, and all accrued but unpaid interest on, the
Revolving Loans on the Termination Date.

 

          (b)           Bid Rate Loans.     The Borrower shall repay the entire
outstanding principal amount of, and all accrued but unpaid interest on, each
Bid Rate Loan on the last day of the Interest Period of such Bid Rate Loan.

 

Section 2.8.    Prepayments.

 

          (a)           Optional.     Subject to Section 4.4., the Borrower may
prepay any Loan (other than a Bid Rate Loan) in whole or in part at any time
without premium or penalty. Bid Rate Loans may not be prepaid at the option of
the Borrower. The Borrower shall give the Agent notice of any prepayment of a
Loan before 10:00 a.m. (i) in the case of LIBOR Loans, on the date three
Business Days prior to the proposed date of such prepayment and (ii) in the case
of any other Loans, on the date one Business Day prior to the proposed date of
such prepayment.

 

          (b)           Mandatory.     If at any time the aggregate principal
amount of all outstanding Revolving Loans, together with the aggregate amount of
all Letter of Credit Liabilities, the aggregate principal amount of all
outstanding Bid Rate Loans and the aggregate principal amount of all outstanding
Swingline Loans, exceeds the aggregate amount of the Commitments in effect at
such time, the Borrower shall immediately pay to the Agent for the accounts of
the Lenders the amount of such excess. Such payment shall be applied to pay all
amounts of principal outstanding on the Loans and any Reimbursement Obligations
pro rata in accordance with Section 3.2. and if any Letters of Credit are
outstanding at such time the remainder, if any, shall be deposited into the
Collateral Account for application to any Reimbursement Obligations. If the
Borrower is required to pay any outstanding LIBOR Loans or Bid Rate Loans by
reason of this Section prior to the end of the applicable Interest Period
therefor, the Borrower shall pay all amounts due under Section 4.4.

 

Section 2.8.    Continuation.

 

          So long as no Default or Event of Default shall have occurred and be
continuing, 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

    -34-

   

LIBOR Loan. Each new Interest Period selected under this Section shall commence
on the last day of the immediately preceding Interest Period. Each selection of
a new Interest Period shall be made by the Borrower giving to the Agent a Notice
of Continuation not later than 10:00 a.m. on the third Business Day prior to the
date of any such Continuation. Such notice by the Borrower of a Continuation
shall be by telephone or telecopy, 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 Loans and portions thereof subject to
such Continuation and (c) the duration of the selected Interest Period, all of
which shall be specified in such manner as is necessary to comply with all
limitations on Loans outstanding hereunder. Each Notice of Continuation shall be
irrevocable by and binding on the Borrower once given. Promptly after receipt of
a Notice of Continuation, the 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 in accordance with this Section, or if a Default or Event of Default
shall have occurred and be continuing, 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 of the terms of such Section.

 

Section 2.10.    Conversion.

 

          So long as no Default or Event of Default shall have occurred and be
continuing, the Borrower may on any Business Day, upon the Borrower’s giving of
a Notice of Conversion to the 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 and, upon Conversion of a Base Rate Loan into a LIBOR Loan, the
Borrower shall pay accrued interest to the date of Conversion on the principal
amount so Converted. Each such Notice of Conversion shall be given not later
than 10:00 a.m. on the Business Day prior to the date of any proposed Conversion
into Base Rate Loans and on the third Business Day prior to the date of any
proposed Conversion into LIBOR Loans. Promptly after receipt of a Notice of
Conversion, the 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) or telecopy 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. Each
Notice of Conversion shall be irrevocable by and binding on the Borrower once
given.

 

Section 2.11.    Notes.

 

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

    -35-

   

          (b)           Bid Rate Notes.     The Bid Rate Loans made by any
Lender shall, in addition to this Agreement, also be evidenced by a Promissory
note of the Borrower substantially in the form of Exhibit L (each a “Bid Rate
Note”), payable to the order of such Lender and otherwise duly completed.

 

          (c)           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.

 

          (d)           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
the expense of such Lender, execute and deliver to such Lender a new Note dated
the date of such lost, stolen, destroyed or mutilated Note.

 

Section 2.12.    Extension of Termination Date.

 

          The Borrower shall have the right, exercisable one time, to extend the
Termination Date by one year. The Borrower may exercise such right only by
executing and delivering to the Agent at least 90 days but not more than 150
days prior to the current Termination Date, a written request for such extension
(an “Extension Request”). The Agent shall forward to each Lender a copy of the
Extension Request delivered to the Agent promptly upon receipt thereof. Subject
to satisfaction of the following conditions, the Termination Date shall be
extended for one year: (a) immediately prior to such extension and immediately
after giving effect thereto, no Default or Event of Default shall exist, (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 would be
true and correct immediately after giving effect to the requested extension of
the Termination Date, except to the extent that such representations and
warranties expressly relate solely to an earlier date (in which case such
representations and warranties shall have been true and accurate on and as of
such earlier date) and (c)  the Borrower shall have paid the Fees payable under
Section 3.6.(c).

 

Section 2.13.    Expiration or Maturity Date of Letters of Credit Past
Termination Date.

 

          If on the date (the “Facility Termination Date”) the Commitments are
terminated (whether voluntarily, by reason of the occurrence of an Event of
Default or otherwise), there are any Letters of Credit outstanding hereunder,
the Borrower shall, on the Facility Termination Date, pay to the Agent an amount
of money equal to the Stated Amount of such Letter(s) of Credit for deposit into
the Collateral Account. If a drawing pursuant to any such Letter of Credit
occurs on or prior to the expiration date of such Letter of Credit, the Borrower
authorizes the Agent to use the monies deposited in the Collateral Account to
make payment to the beneficiary with respect to such drawing or the payee with
respect to such presentment. If no drawing occurs on or prior to the expiration
date of such Letter of Credit, the Agent shall withdraw the monies deposited in
the Collateral Account with respect to such outstanding Letter of Credit on

    -36-

   

or before the date 15 Business Days after the expiration date of such Letter of
Credit and apply such funds to the Obligations, if any, then due and payable in
the order prescribed by Section 10.4.

 

Section 2.14.    Voluntary Reductions of the Commitment.

 

          The Borrower shall have the right to terminate or reduce the aggregate
unused amount of the Commitments (for which purpose use of the Commitments shall
be deemed to include the aggregate amount of Letter of Credit Liabilities and
the aggregate principal amount of all outstanding Swingline Loans and Bid Rate
Loans) at any time and from time to time without penalty or premium upon not
less than 5 Business Days prior written notice to the Agent of each such
termination or reduction, which notice shall specify the effective date thereof
and the amount of any such reduction and shall be irrevocable once given and
effective only upon receipt by the Agent; provided, however, that if the
Borrower seeks to reduce the aggregate amount of the Commitments below
$100,000,000, then the Commitments shall be reduced to zero and except as
otherwise provided herein, the provisions of this Agreement shall terminate. The
Agent will promptly transmit such notice to each Lender. The Commitments, once
terminated or reduced may not be increased or reinstated.

 

Section 2.15.    Increase of Commitments.

 

          The Borrower shall have the right at any time and from time to time
during the period beginning on the Effective Date through and including the date
180 days prior to the Termination Date to request increases in the aggregate
amount of the Commitments (provided that the aggregate amount of increases in
the Commitments pursuant to this Section shall not exceed $175,000,000) by
providing written notice to the Agent, which notice shall be irrevocable once
given. No Lender shall be required to increase its Commitment and any new Lender
becoming a party to this Agreement in connection with any such requested
increase must be an Eligible Assignee. If a new Lender becomes a party to this
Agreement, or if any existing Lender agrees to increase its Commitment, such
Lender shall on the date it becomes a Lender hereunder (or increases its
Commitment, in the case of an existing Lender) (and as a condition thereto)
purchase from the other Lenders its Commitment Percentage (as determined after
giving effect to the increase of Commitments) of any outstanding Revolving
Loans, by making available to the Agent for the account of such other Lenders,
in same day funds, an amount equal to the sum of (A) the portion of the
outstanding principal amount of such Revolving Loans to be purchased by such
Lender plus (B) the aggregate amount of payments previously made by the other
Lenders under Section 2.4.(j) which have not been repaid plus (C) interest
accrued and unpaid to and as of such date on such portion of the outstanding
principal amount of such Revolving Loans. The Borrower shall pay to the Lenders
amounts payable, if any, to such Lenders under Section 4.4. as a result of the
prepayment of any such Revolving Loans. No increase of the Commitments may be
effected under this Section if (x) a Default or Event of Default exists on the
effective date of such increase or (y) any representation or warranty made or
deemed made by the Borrower or any other Loan Party in any Loan Document to
which any such Loan Party is a party is not (or would not be) true or correct on
the effective date of such increase (except for representations or warranties
which expressly relate solely to an earlier date). In connection with any
increase in the aggregate amount of the Commitments pursuant to this subsection,
(a) any Lender becoming a party hereto shall execute such documents and
agreements as the Agent may reasonably

    -37-

   

request and (b) the Borrower shall make appropriate arrangements so that each
new Lender, and any existing Lender increasing its Commitment, receives a new or
replacement Note, as appropriate, in the amount of such Lender’s Commitment
within 2 Business Days of the effectiveness of the applicable increase in the
aggregate amount of Commitments.

 

Section 2.16.    Amount Limitations.

 

          Notwithstanding any other term of this Agreement or any other Loan
Document, no Lender shall be required to make a Loan and the Agent shall not be
required to issue a Letter of Credit, if immediately after the making of such
Loan or the issuance of such Letter of Credit:

 

          (a)         the aggregate principal amount of all outstanding
Revolving Loans, together with the aggregate principal amount of all outstanding
Bid Rate Loans, the aggregate principal amount of all outstanding Swingline
Loans and the aggregate amount of all Letter of Credit Liabilities, would exceed
the aggregate amount of the Commitments at such time; or

 

          (b)         the aggregate principal amount of all outstanding Bid Rate
Loans would exceed 50.0% of the aggregate amount of the Commitments at such
time.

ARTICLE III.   PAYMENTS, FEES AND OTHER GENERAL PROVISIONS

 

Section 3.1.    Payments.

 

          Except to the extent otherwise provided herein, all payments of
principal, interest and other amounts to be made by the Borrower under this
Agreement or any other Loan Document shall be made in Dollars, in immediately
available funds, without deduction, set-off or counterclaim, to the Agent at its
Principal Office, not later than 2:00 p.m. 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
Sections 3.2. and 3.3., the Agent, or any Lender for whose account any such
payment is made, may (but shall not be obligated to) debit the amount of any
such payment which is not made by such time from any special or general deposit
account of the Borrower with the Agent or such Lender, as the case may be (with
notice to the Borrower, the other Lenders and the Agent). The Borrower shall, at
the time of making each payment under this Agreement or any Note, specify to the
Agent the amounts payable by the Borrower hereunder to which such payment is to
be applied. Each payment received by the Agent for the account of a Lender under
this Agreement or any Note shall be paid to such Lender at the applicable
Lending Office of such Lender no later than 5:00 p.m. on the date of receipt. If
the Agent fails to pay such amount to a Lender as provided in the previous
sentence, the 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 be payable for the period
of such extension.

    -38-

   

Section 3.2.    Pro Rata Treatment.

 

          Except to the extent otherwise provided herein: (a) each borrowing
from the Lenders under Section 2.1.(a) shall be made from the Lenders, each
payment of the Fees under Section 3.6.(a), the first sentence of Section 3.6.(b)
and Section 3.6.(c) shall be made for the account of the Lenders, and each
termination or reduction of the amount of the Commitments under Section 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 Revolving 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 Revolving Loans held by them, provided that if
immediately prior to giving effect to any such payment in respect of any
Revolving Loans the outstanding principal amount of the Revolving Loans shall
not be held by the Lenders pro rata in accordance with their respective
Commitments in effect at the time such Loans were made, then such payment shall
be applied to the Revolving Loans in such manner as shall result, as nearly as
is practicable, in the outstanding principal amount of the Revolving Loans being
held by the Lenders pro rata in accordance with their respective Commitments;
(c) each payment of interest on Revolving Loans 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; (d) the
making, Conversion and Continuation of Revolving Loans of a particular Type
(other than Conversions provided for by Section 4.6.) shall be made pro rata
among the Lenders according to the amounts of their respective Commitments (in
the case of making of Loans) or their respective Loans (in the case of
Conversions and Continuations of Loans) and the then current Interest Period for
each Lender’s portion of each Loan of such Type shall be coterminous; (e) the
Lenders’ participation in, and payment obligations in respect of, Letters of
Credit under Section 2.4., shall be pro rata in accordance with their respective
Commitments; (f) the Lenders’ participation in, and payment obligations in
respect of, Swingline Loans under Section 2.3., shall be pro rata in accordance
with their respective Commitments; and (g) each mandatory prepayment of
principal of Bid Rate Loans by the Borrower pursuant to Section 2.8.(b) shall be
made for account of the Lenders then owed Bid Rate Loans pro rata in accordance
with the respective unpaid principal amounts of the Bid Rate Loans then owing to
each such Lender. All payments of principal, interest, fees and other amounts in
respect of the Swingline Loans shall be for the account of the Swingline Lender
only (except to the extent any Lender shall have acquired a participating
interest in any such Swingline Loan pursuant to Section 2.3.(e), in which case
such payments shall be pro rata in accordance with such participating
interests).

 

Section 3.3.    Sharing of Payments, Etc.

 

          If a Lender shall obtain payment of any principal of, or interest on,
any Loan made by it to the Borrower under this Agreement, or shall obtain
payment on any other Obligation owing by the Borrower or a 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 or
other payments made by the Borrower to a Lender not in accordance with the terms
of this Agreement and such payment should be distributed to the Lenders pro rata
in accordance with Section 3.2. or Section 10.4., as applicable, such Lender
shall promptly purchase from the other Lenders participations in (or, if and to
the extent specified by such Lender, direct interests in) the Loans made by the
other Lenders or other Obligations owed to such other Lenders in such

    -39-

   

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 be incurred by such Lender in
obtaining or preserving such benefit) pro rata in accordance with Section 3.2.
or Section 10.4. 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.    Minimum Amounts.

 

          (a)           Borrowings and Conversions.     Each borrowing of Base
Rate Loans shall be in an aggregate minimum amount of $100,000 and integral
multiples of $100,000 in excess thereof. Each borrowing and each Conversion of
LIBOR Loans shall be in an aggregate minimum amount of $1,000,000 and integral
multiples of $100,000 in excess of that amount.

 

          (b)           Prepayments.     Each voluntary prepayment of Revolving
Loans shall be in an aggregate minimum amount of $100,000 and integral multiples
of $100,000 in excess thereof (or, if less, the aggregate principal amount of
Revolving Loans then outstanding).

 

          (c)           Reductions of Commitments.     Each reduction of the
Commitments under Section 2.14. shall be in an aggregate minimum amount of
$10,000,000 and integral multiples of $5,000,000 in excess thereof.

 

          (d)           Letters of Credit.     The initial Stated Amount of each
Letter of Credit shall be at least $50,000.

 

Section 3.6.    Fees.

 

          (a)           Facility Fees.     The Borrower agrees to pay to the
Agent for the account of each Lender a facility fee equal to the average daily
amount of the Commitment of such Lender (whether or not utilized) times the
Facility Fee for the period from and including the Agreement Date to but
excluding the date such Commitment is terminated or reduced to zero or the
Termination Date, such fee to be paid in arrears on (i) the last day of March,
June, September

    -40-

   

and December in each year, (ii) the date of each reduction in the Commitments
(but only on the amount of the reduction) and (iii) on the Termination Date.

 

          (b)           Letter of Credit Fees.     The Borrower agrees to pay to
the Agent for the account of each Lender a letter of credit e at a rate per
annum equal to the Applicable Margin for LIBOR Loans times the daily average
Stated Amount of each Letter of Credit for the period from and including the
date of issuance of such Letter of Credit (x) through and including the date
such Letter of Credit expires or is terminated or (y) to but excluding the date
such Letter of Credit is drawn in full. The fees provided for in the immediately
preceding sentence shall be nonrefundable and payable in arrears on (i) the last
day of March, June, September and December in each year, (ii) the Termination
Date, (iii) the date the Commitments are terminated or reduced to zero and (iv)
thereafter from time to time on demand of the Agent. In addition, the Borrower
shall pay to the Agent for its own account and not the account of any Lender, a
fronting fee in respect of each Letter of Credit at the rate equal to one-eighth
of one percent (0.125%) per annum on the daily average Stated Amount of such
Letter of Credit for the period from and including the date of issuance of such
Letter of Credit (A) through and including the date such Letter of Credit
expires or is terminated or (B) to but excluding the date such Letter of Credit
is drawn in full. The fee provided for in the immediately preceding sentence
shall be nonrefundable and payable upon issuance of the applicable Letter of
Credit. The Borrower shall pay directly to the Agent from time to time on demand
all commissions, charges, costs and expenses in the amounts customarily charged
by the Agent from time to time in like circumstances with respect to the
issuance of each Letter of Credit, drawings, amendments and other transactions
relating thereto.

 

          (c)           Extension Fee.     If the Borrower exercises its right
to extend the Termination Date in accordance with Section 2.12., the Borrower
agrees to pay to the Agent for the account of each Lender a fee equal to
one-quarter of one percent (0.25%) of the amount of such Lender's Commitment
(whether or not utilized). Such fee shall be due and payable in full on the date
the Agent receives the Extension Request pursuant to such Section.

 

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

 

Section 3.7.    Computations.

 

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

 

Section 3.8.    Usury.

 

          In no event shall the amount of interest due or payable on the Loans
or other Obligations exceed the maximum rate of interest allowed by Applicable
Law and, if any such payment is paid by the Borrower or 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

    -41-

   

parties hereto that the Borrower not pay and the Lenders not receive, directly
or indirectly, in any manner whatsoever, interest in excess of that which may be
lawfully paid by the Borrower under Applicable Law.

 

Section 3.9.    Agreement Regarding Interest and Charges.

 

          The parties hereto hereby agree and stipulate that the only charge
imposed upon the Borrower for the use of money in connection with this Agreement
is and shall be the interest specifically described in Section 2.5.(a)(i)
through (iv) and in Section 2.3.(c). Notwithstanding the foregoing, the parties
hereto further agree and stipulate that all agency fees, syndication fees,
facility fees, closing fees, letter of credit fees, underwriting fees, default
charges, late charges, funding or “breakage” charges, increased cost charges,
attorneys’ fees and reimbursement for costs and expenses paid by the Agent or
any Lender to third parties or for damages incurred by the Agent or any Lender,
in each case in connection with the transactions contemplated by this Agreement
and the other Loan Documents, are charges made to compensate the 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 Agent and the
Lenders in connection with this Agreement and shall under no circumstances be
deemed to be charges for the use of money. All charges other than charges for
the use of money shall be fully earned and nonrefundable when due.

 

Section 3.10.    Statements of Account.

 

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

 

Section 3.11.    Defaulting Lenders.

 

          (a)           Generally.     If for any reason any Lender (a
“Defaulting Lender”) shall fail or refuse to perform any of its obligations
under this Agreement or any other Loan Document to which it is a party within
the time period specified for performance of such obligation or, if no time
period is specified, if such failure or refusal continues for a period of two
Business Days after notice from the Agent, then, in addition to the rights and
remedies that may be available to the Agent or the Borrower under this Agreement
or Applicable Law, such Defaulting Lender's right to participate in the
administration of the Loans, this Agreement and the other Loan Documents,
including without limitation, any right to vote in respect of, to consent to, or
to direct, any action or inaction of the Agent or to be taken into account in
the calculation of the Requisite Lenders, shall be suspended during the pendency
of such failure or refusal. If a Lender is a Defaulting Lender because it has
failed to make timely payment to the Agent of any amount required to be paid to
the Agent hereunder (without giving effect to any notice or cure periods), in
addition to other rights and remedies which the Agent or the Borrower may have
under the immediately preceding provisions or otherwise, the Agent shall be
entitled (i) to collect interest from such Defaulting Lender on such delinquent
payment for the period from the date on which the payment was due until the date
on which the payment is made at the Federal Funds Rate,

    -42-

   

(ii) to withhold or setoff and to apply in satisfaction of the defaulted payment
and any related interest, any amounts otherwise payable to such Defaulting
Lender under this Agreement or any other Loan Document and (iii) to bring an
action or suit against such Defaulting Lender in a court of competent
jurisdiction to recover the defaulted amount and any related interest. Any
amounts received by the Agent in respect of a Defaulting Lender’s Loans shall
not be paid to such Defaulting Lender and shall be held uninvested by the Agent
and either applied against the purchase price of such Loans under the following
subsection (b) or paid to such Defaulting Lender upon the Defaulting Lender’s
curing of its default.

 

          (b)           Purchase or Cancellation of Defaulting Lender’s
Commitment.     Any Lender who is not a Defaulting Lender shall have the right,
but not the obligation, in its sole discretion, to acquire all of a Defaulting
Lender’s Commitment. Any Lender desiring to exercise such right shall give
written notice thereof to the Agent and the Borrower no sooner than 2 Business
Days and not later than 5 Business Days after such Defaulting Lender became a
Defaulting Lender. If more than one Lender exercises such right, each such
Lender shall have the right to acquire an amount of such Defaulting Lender’s
Commitment in proportion to the Commitments of the other Lenders exercising such
right. If after such 5th Business Day, the Lenders have not elected to purchase
all of the Commitment of such Defaulting Lender, then the Borrower may, by
giving written notice thereof to the Agent, such Defaulting Lender and the other
Lenders, either (i) demand that such Defaulting Lender assign its Commitment to
an Eligible Assignee subject to and in accordance with the provisions of Section
12.5.(d) for the purchase price provided for below or (ii) terminate the
Commitment of such Defaulting Lender, whereupon such Defaulting Lender shall no
longer be a party hereto or have any rights or obligations hereunder or under
any of the other Loan Documents. No party hereto shall have any obligation
whatsoever to initiate any such replacement or to assist in finding an Eligible
Assignee. Upon any such purchase or assignment, the Defaulting Lender's interest
in the Loans and its rights hereunder (but not its liability in respect thereof
or under the Loan Documents or this Agreement to the extent the same relate to
the period prior to the effective date of the purchase) shall terminate on the
date of purchase, and the Defaulting Lender shall promptly execute all documents
reasonably requested to surrender and transfer such interest to the purchaser or
assignee thereof, including an appropriate Assignment and Acceptance Agreement
and, notwithstanding Section 12.5.(d), shall pay to the Agent an assignment fee
in the amount of $7,000. The purchase price for the Commitment of a Defaulting
Lender shall be equal to the amount of the principal balance of the Loans
outstanding and owed by the Borrower to the Defaulting Lender. Prior to payment
of such purchase price to a Defaulting Lender, the Agent shall apply against
such purchase price any amounts retained by the Agent pursuant to the last
sentence of the immediately preceding subsection (a). The Defaulting Lender
shall be entitled to receive amounts owed to it by the Borrower under the Loan
Documents which accrued prior to the date of the default by the Defaulting
Lender, to the extent the same are received by the Agent from or on behalf of
the Borrower. There shall be no recourse against any Lender or the Agent for the
payment of such sums except to the extent of the receipt of payments from any
other party or in respect of the Loans.

 

Section 3.12.    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

    -43-

   

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 Agent or a Lender and the jurisdiction imposing such
taxes (other than a connection arising solely by virtue of the activities of the
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, and (iv) any taxes, fees, duties,
levies, imposts, charges, deductions, withholdings or other charges to the
extent imposed as a result of the failure of the Agent or a Lender, as
applicable, to provide and keep current (to the extent legally able) any
certificates, documents or other evidence required to qualify for an exemption
from, or reduced rate of, any such taxes fees, duties, levies, imposts, charges,
deductions, withholdings or other charges or required by the immediately
following subsection (c) to be furnished by the Agent or such Lender, as
applicable (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 Agent an official receipt or
other documentation satisfactory to the Agent evidencing such payment to such
Governmental Authority; and

 

              (iii)     pay to the 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 Agent or such
Lender will equal the full amount that the 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 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 Agent and the Lenders for any incremental Taxes,
interest or penalties that may become payable by the Agent or any Lender as a
result of any such failure. For purposes of this Section, a distribution
hereunder by the 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 or
Participant 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 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 or Participant establishing that payments to it hereunder and under
the Notes are (i) not subject to United States Federal backup withholding tax
and (ii) not subject to United States Federal withholding tax under the Internal
Revenue Code. Each such Lender or Participant shall (x)

    -44-

   

deliver further copies of such forms or other appropriate certifications on or
before the date that any such forms expire or become obsolete and after the
occurrence of any event requiring a change in the most recent form delivered to
the Borrower or the Agent and (y) obtain such extensions of the time for filing,
and renew such forms and certifications thereof, as may be reasonably requested
by the Borrower or the Agent. The Borrower shall not be required to pay any
amount pursuant to last sentence of subsection (a) above to any Lender or
Participant that is organized under the laws of a jurisdiction outside of the
United States of America or the Agent, if it is organized under the laws of a
jurisdiction outside of the United States of America, if such Lender,
Participant or the Agent, as applicable, fails to comply with the requirements
of this subsection. If any such Lender or Participant fails to deliver the above
forms or other documentation, then the Agent may withhold from any payments to
be made to such Lender under any of the Loan Documents such amounts as are
required by the Internal Revenue Code. If any Governmental Authority asserts
that the 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 Agent therefor, including all penalties and
interest, any taxes imposed by any jurisdiction on the amounts payable to the
Agent under this Section, and costs and expenses (including all reasonable fees
and disbursements of any law firm or other external counsel and the allocated
cost of internal legal services and all disbursements of internal counsel) of
the Agent. The obligation of the Lenders under this Section shall survive the
termination of the Commitments, repayment of all Obligations and the resignation
or replacement of the Agent.

ARTICLE IV.   YIELD PROTECTION, ETC.

 

Section 4.1.    Additional Costs; Capital Adequacy.

 

          (a)           Additional Costs.     The Borrower shall promptly pay to
the Agent for the account of a Lender from time to time such amounts as such
Lender may determine to be necessary to compensate such Lender for any costs
incurred by such Lender that it determines are attributable to its making or
maintaining of any LIBOR Loans or its obligation to make any LIBOR Loans
hereunder, any reduction in any amount receivable by such Lender under this
Agreement or any of the other Loan Documents in respect of any of such Loans or
such obligation or the maintenance by such Lender of capital in respect of its
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 Loans or its Commitment (other than taxes, fees, duties,
levies, imposts, charges, deductions, withholdings or other charges which are
excluded from the definition of Taxes pursuant to the first sentence of Section
3.12.(a)); or (ii) imposes or modifies any reserve, special deposit or similar
requirements (other than Regulation D of the Board of Governors of the Federal
Reserve System or other reserve requirement to the extent utilized in the
determination of the Adjusted Eurodollar Rate for such Loan) relating to any
extensions of credit or other assets of, or any deposits with or other
liabilities of, such Lender, 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).

    -45-

   

          (b)           Lender’s Suspension of LIBOR Loans.     Without limiting
the effect of the provisions of the immediately preceding subsection (a), 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 Agent), the
obligation of such Lender to make or Continue, or to Convert any other Type of
Loans into, LIBOR Loans hereunder shall be suspended until such Regulatory
Change ceases to be in effect (in which case the provisions of Section 4.6.
shall apply).

 

          (c)           Additional Costs in Respect of Letters of Credit.     
Without limiting the obligations of the Borrower under the preceding subsections
of this Section (but without duplication), if as a result of any Regulatory
Change or any risk-based capital guideline or other requirement heretofore or
hereafter issued by any Governmental Authority there shall be imposed, modified
or deemed applicable any tax, reserve, special deposit, capital adequacy or
similar requirement against or with respect to or measured by reference to
Letters of Credit and the result shall be to increase the cost to the Agent of
issuing (or any Lender of purchasing participations in) or maintaining its
obligation hereunder to issue (or purchase participations in) any Letter of
Credit or reduce any amount receivable by the Agent or any Lender hereunder in
respect of any Letter of Credit, then, upon demand by the Agent or such Lender,
the Borrower shall pay promptly, and in any event within 3 Business Days of
demand, to the Agent for its account or the account of such Lender, as
applicable, from time to time as specified by the Agent or a Lender, such
additional amounts as shall be sufficient to compensate the Agent or such Lender
for such increased costs or reductions in amount.

 

          (d)           Notification and Determination of Additional Costs.     
Each of the Agent and each Lender agrees to notify the Borrower of any event
occurring after the Agreement Date entitling the Agent or such Lender to
compensation under any of the preceding subsections of this Section as promptly
as practicable; provided, however, the failure of the Agent or any Lender to
give such notice shall not release the Borrower from any of its obligations
hereunder (and in the case of a Lender, to the Agent). The Agent or such Lender
agrees to furnish to the Borrower (and in the case of a Lender, to the Agent) a
certificate setting forth the basis and amount of each request by the Agent or
such Lender for compensation under this Section. Absent manifest error,
determinations by the Agent or any Lender of the effect of any Regulatory Change
shall be conclusive, 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 any Adjusted Eurodollar Rate for any Interest Period:

 

              (a)      the Agent reasonably determines (which determination
shall be conclusive) that by reason of circumstances affecting the relevant
market, adequate and

    -46-

   

reasonable means do not exist for ascertaining the Adjusted Eurodollar Rate for
such Interest Period, or

 

            (b)      the Agent reasonably determines (which determination shall
be conclusive) that the Adjusted Eurodollar Rate will not adequately and fairly
reflect the cost to the Lenders of making or maintaining LIBOR Loans for such
Interest Period;

 

then the Agent shall give the Borrower and each Lender prompt notice thereof
and, so long as such condition remains in effect, the Lenders shall be under no
obligation to, and shall not, make additional LIBOR Loans, 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 repay 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 reasonably determine (which determination shall be conclusive and binding)
that it has become 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 to the Agent) and such Lender’s obligation to make
or Continue, or to Convert Loans of any other Type 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 4.6. shall be applicable).

 

Section 4.4.    Compensation.

 

           The Borrower shall pay to the Agent for the account of each Lender,
upon the request of such Lender through the Agent, such amount or amounts as
shall be sufficient (in the reasonable opinion of such Lender) to compensate it
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 Bid Rate 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 or Bid Rate Loan
from such Lender on the requested 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.

 

Upon the Borrower’s request, any Lender requesting 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.
Absent manifest error, determinations by any Lender in any such statement shall
be conclusive, provided that such determinations are made on a reasonable basis
and in good faith.

    -47-

   

Section 4.5.    Affected Lenders.

 

           If (a) a Lender requests compensation pursuant to Section 3.12. or
4.1., and the Requisite Lenders are not requesting compensation under such
Sections, or (b) 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.(b) or 4.3. but the obligation of the Requisite Lenders
shall not have been suspended under such Sections, then, so long as there does
not then exist any Default or Event of Default, the Borrower may demand that
such Lender (the “Affected Lender”), and upon such demand the Affected Lender
shall promptly, assign its Commitment to an Eligible Assignee subject to and in
accordance with the provisions of Section 12.5.(d) 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 owing to the
Affected Lender. Each of the Agent and the Affected Lender shall reasonably
cooperate in effectuating the replacement of such Affected Lender under this
Section, but at no time shall the 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 expenses and
at no cost or expense to the 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 3.12. or 4.1.

 

Section 4.6.    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.(b), 4.2. or 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 Section 4.1.(b) or 4.3., on such earlier date as such Lender may
specify to the Borrower with a copy to the Agent) and, unless and until such
Lender gives notice as provided below that the circumstances specified in
Section 4.1. or 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 Agent) that the
circumstances specified in Section 4.1. or 4.3. that gave rise to the Conversion
of such Lender’s LIBOR Loans pursuant to this Section no longer exist (which
such Lender agrees to do promptly upon such circumstances ceasing to exist) at a
time when LIBOR Loans made by other Lenders are outstanding, then such Lender’s
Base Rate Loans shall be automatically Converted, on the first day(s) of the
next succeeding Interest Period(s) for such outstanding LIBOR Loans, to the
extent

    -48-

   

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 their respective
Commitments.

 

Section 4.7.    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 3.12., 4.1. or 4.3. to reduce the
liability of the Borrower or avoid the results provided thereunder, so long as
such designation is not disadvantageous to such Lender as determined by such
Lender in its sole discretion, except that such Lender shall have no obligation
to designate a Lending Office located in the United States of America.

 

Section 4.8.    Assumptions Concerning Funding of LIBOR Loans.

 

           Calculation of all amounts payable to a Lender under this Article 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 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.

ARTICLE V.   CONDITIONS PRECEDENT

 

Section 5.1.    Initial Conditions Precedent.

 

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

 

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

 

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

 

              (ii)      Revolving Notes and Bid Rate Notes executed by the
Borrower, payable to each Lender (or Designated Lender, if applicable) and
complying with the applicable provisions of Section 2.11., and the Swingline
Note executed by the Borrower;

 

              (iii)      The Guaranty executed by each Guarantor existing as of
the Effective Date;

 

              (iv)      The certificate or articles of incorporation of the
Borrower certified by the Secretary or Assistant Secretary of the Borrower;

    -49-

   

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

 

              (vi)     A certificate of incumbency signed by the Secretary or
Assistant Secretary of the Borrower with respect to each of the officers of the
Borrower authorized to execute and deliver the Loan Documents to which the
Borrower is a party and the officers of the Borrower then authorized to deliver
Notices of Borrowing, Notices of Swingline Borrowings, Bid Rate Quote Requests,
Bid Rate Quote Acceptances, Notices of Continuation and Notices of Conversion
and to request the issuance of Letters of Credit;

 

              (vii)     Copies, certified by the Secretary or Assistant
Secretary of the Borrower, of (i) the bylaws of the Borrower and (ii) all
corporate (or comparable) action taken by the Borrower to authorize the
execution, delivery and performance of the Loan Documents to which the Borrower
is a party;

 

              (viii)     The articles of incorporation, articles of
organization, certificate of limited partnership or other comparable
organizational instrument (if any) of each Guarantor certified by the Secretary
or Assistant Secretary (or other individual performing similar functions) of
such Guarantor;

 

              (ix)     A certificate of good standing or certificate of similar
meaning with respect to each Guarantor issued as of a recent date by the
Secretary of State of the state of formation of each such Guarantor 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 Guarantor is required to be
so qualified and where the failure to be so qualified could reasonably be
expected to have a Material Adverse Effect;

 

              (x)     A certificate of incumbency signed by the Secretary or
Assistant Secretary (or other individual performing similar functions) of each
Guarantor with respect to each of the officers of such Guarantor authorized to
execute and deliver the Loan Documents to which such Guarantor is a party;

 

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

    -50-

   

              (xii)     An opinion of counsel to the Loan Parties, addressed to
the Agent, the Lenders and the Swingline Lender, addressing the matters set
forth in Exhibit M;

 

              (xiii)     A copy of each of the documents, instruments and
agreements evidencing any of the Debt described on Schedule 6.1.(g), in each
case certified as true, correct and complete by the chief executive officer or
chief financial officer of the Borrower;

 

              (xiv)     The Fees then due and payable under Section 3.6., and
any other Fees payable to the Agent, the Titled Agents and the Lenders on or
prior to the Effective Date;

 

              (xv)      A Compliance Certificate calculated as of December 31,
2002; and

 

              (xvi)     Such other documents, agreements and instruments as the
Agent on behalf of the Lenders may reasonably request; and

 

          (b)           In the good faith judgment of the Agent and the Lenders:

 

              (i)     There shall not have occurred or become known to the Agent
or any of 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 Borrower and its Subsidiaries
delivered to the Agent and the Lenders prior to the Agreement Date that has had
or could reasonably be expected to result in a Material Adverse Effect;

 

              (ii)     No litigation, action, suit, investigation or other
arbitral, administrative or judicial proceeding shall be pending or threatened
which could reasonably be expected to (1) result in a Material Adverse Effect or
(2) 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;

 

              (iii)     The Borrower and its Subsidiaries 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, conflict with
or violation of (1) any Applicable Law or (2) any agreement, document or
instrument to which the Borrower or any other 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
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

 

              (iv)     There shall not have occurred or exist any other material
disruption of financial or capital markets that could reasonably be expected to
materially and adversely affect the transactions contemplated by the Loan
Documents.

    -51-

   

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

 

          The obligations of the Lenders to make any Loans, and of the Agent to
issue Letters of Credit, are all subject to the further condition precedent
that: (a) no Default or Event of Default shall exist as of the date of the
making of such Loan or date of issuance of such Letter of Credit or would exist
immediately after giving effect thereto; and (b) the representations and
warranties made or deemed made by the Borrower and each other Loan Party in the
Loan Documents to which any of them is a party, shall be true and correct on and
as of the date of the making of such Loan or date of issuance of such Letter of
Credit with the same force and effect as if made on and as of such date except
to the extent that such representations and warranties expressly relate solely
to an earlier date (in which case such representations and warranties shall have
been true and accurate on and as of such earlier date). Each Credit Event shall
constitute a certification by the Borrower to the effect set forth in the
preceding sentence (both as of the date of the giving of notice relating to such
Credit Event and, unless the Borrower otherwise notifies the 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
issuance of a Letter of Credit, the Borrower shall be deemed to have represented
to the Agent and the Lenders at the time such Loan is made or Letter of Credit
issued that all conditions to the occurrence of such Credit Event contained in
Article V. have been satisfied.

 

Section 5.3.    Conditions as Covenants.

 

          If the Lenders make any Loans, or the Agent issues a Letter of Credit,
prior to the satisfaction of all conditions precedent set forth in Sections 5.1.
and 5.2., the Borrower shall nevertheless cause such condition or conditions to
be satisfied within 5 Business Days after the date of the making of such Loans
or the issuance of such Letter of Credit. Unless set forth in writing to the
contrary, the making of its initial Loan by a Lender shall constitute a
certification by such Lender to the Agent and the other Lenders that the
Borrower has satisfied the conditions precedent for initial Loans set forth in
Sections 5.1. and 5.2.

ARTICLE VI.   REPRESENTATIONS AND WARRANTIES

 

Section 6.1.    Representations and Warranties.

 

          In order to induce the Agent and each Lender to enter into this
Agreement and to make Loans and issue Letters of Credit, the Borrower represents
and warrants to the Agent and each Lender as follows:

 

          (a)           Organization; Power; Qualification.     Each of the
Borrower, each other Loan Party and each other Subsidiary 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 entity, and authorized to do business,
in each jurisdiction in which the character of its properties or the nature of
its

    -52-

   

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.     As of the Agreement Date Part I
of Schedule 6.1.(b) is a complete and correct list of all Subsidiaries of the
Borrower setting forth for each such Subsidiary, (i) the jurisdiction of
organization of such Subsidiary, (ii) the type of legal entity of such
Subsidiary, (iii) each Person holding any Equity Interests in such Subsidiary,
(iv) the nature of the Equity Interests held by each such Person, (v) the
percentage of ownership of such Subsidiary represented by such Equity Interests
and (vi) whether such Subsidiary is an Excluded Subsidiary. Except as disclosed
in such Schedule, as of the Agreement Date (i) each of the Borrower 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, (ii) all of the issued and outstanding capital stock of each
such Person organized as a corporation is validly issued, fully paid and
nonassessable and (iii) 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. As of the Agreement
Date Part II of Schedule 6.1.(b) correctly sets forth all Unconsolidated
Affiliates of the Borrower, 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 Borrower.

 

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

 

          (d)           Compliance of Loan Documents with Laws, Etc.     The
execution, delivery and performance of this Agreement, the Notes and the other
Loan Documents to which the 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 the Borrower or any other
Loan Party; (ii) conflict with, result in a breach of or constitute a default
under the organizational documents of the Borrower or any other Loan Party, or
any indenture, agreement or other instrument to which the Borrower or any other
Loan Party is a party or by which it or any of its respective properties may

    -53-

   

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 the
Borrower or any other Loan Party.

 

          (e)           Compliance with Law; Governmental Approvals.     The
Borrower, each Subsidiary and each other Loan Party is in compliance with each
Governmental Approval applicable to it and in compliance with all other
Applicable Laws (including without limitation, Environmental Laws) relating to
the Borrower, a Subsidiary or such other Loan Party except for noncompliances
which, and Governmental Approvals the failure to possess which, would not,
individually or in the aggregate, cause a Default or Event of Default or have a
Material Adverse Effect.

 

          (f)           Title to Properties.     As of the Agreement Date,
Schedule 6.1.(f) sets forth all of the real property owned or leased by the
Borrower, each other Loan Party and each other Subsidiary. Each such Person has
good, marketable and legal title to, or a valid leasehold interest in, its
respective assets.

 

          (g)           Existing Debt.     Schedule 6.1.(g) is, as of the
Agreement Date, a complete and correct listing of all Debt of the Borrower and
its Subsidiaries, including without limitation, Guarantees of the Borrower and
its Subsidiaries, and indicating whether such Debt is Secured Debt or Unsecured
Debt. The Borrower and its Subsidiaries have performed and are in material
compliance with all of the terms of such Debt and all instruments and agreements
relating thereto.

 

          (h)           Litigation.     Except as set forth on Schedule 6.1.(h),
there are no actions, suits, investigations or proceedings pending (nor, to the
knowledge of the Borrower, are there any actions, suits or proceedings
threatened, nor to the knowledge of the Borrower is there any basis therefor)
against or in any other way relating adversely to or affecting the Borrower, any
Subsidiary or any other Loan Party 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 could reasonably be expected to have a Material
Adverse Effect. There are no strikes, slow downs, work stoppages or walkouts or
other labor disputes in progress or threatened relating to the Borrower, any
Subsidiary or any other Loan Party which could reasonably be expected to have a
Material Adverse Effect.

 

          (i)           Taxes.     All federal, state and other tax returns of
the Borrower, any Subsidiary or any other Loan Party 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 the Borrower, any
Subsidiary and each other Loan Party 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 7.5. As of the Agreement
Date, none of the United States income tax returns of the Borrower, its
Subsidiaries or any other Loan Party is under audit. All charges, accruals and
reserves on the books of the Borrower and each of its Subsidiaries and each
other Loan Party in respect of any taxes or other governmental charges are in
accordance with GAAP.

    -54-

   

          (j)           Financial Statements.     The Borrower has furnished to
each Lender copies of the audited consolidated balance sheet of the Borrower and
its consolidated Subsidiaries for the fiscal year ending December 31, 2002, and
the related audited consolidated statements of earnings, cash flows and
stockholders' equity for the fiscal year ending on such dates, with the opinion
thereon of KPMG LLP. Such financial statements (including in each case related
schedules and notes) are complete and correct and present fairly, in accordance
with GAAP, the consolidated financial position of the Borrower and its
consolidated Subsidiaries as at their respective dates and the results of
operations and the cash flow for such periods. Neither the Borrower 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.

 

          (k)           No Material Adverse Change.     Since December 31, 2002,
there has been no material adverse change in the business, assets, liabilities,
condition (financial or otherwise), results of operations or business prospects
of the Borrower and its consolidated Subsidiaries taken as a whole. Each of the
Borrower and the other Loan Parties is Solvent and the Borrower and its
Subsidiaries, taken as a whole, are Solvent.

 

          (l)            ERISA.     Each member of the ERISA Group is in
compliance with its obligations under the minimum funding standards of ERISA and
the Internal Revenue Code with respect to each Plan and is in compliance with
the presently applicable provisions of ERISA and the Internal Revenue Code with
respect to each Plan, except in each case for noncompliances which could not
reasonably be expected to have a Material Adverse Effect. As of the Agreement
Date, no member of the ERISA Group has (i) sought a waiver of the minimum
funding standard under Section 412 of the Internal Revenue Code in respect of
any Plan, (ii) failed to make any contribution or payment to any Plan or
Multiemployer Plan or in respect of any Benefit Arrangement, or made any
amendment to any Plan or Benefit Arrangement, which has resulted or could result
in the imposition of a Lien or the posting of a bond or other security under
ERISA or the Internal Revenue Code or (iii) incurred any liability under Title
IV of ERISA other than a liability to the PBGC for premiums under Section 4007
of ERISA.

 

          (m)           Not Plan Assets; No Prohibited Transaction.     None of
the assets of the Borrower, any Subsidiary or any other Loan Party constitute
"plan assets" within the meaning of ERISA, the Internal Revenue Code and the
respective regulations promulgated thereunder. The execution, delivery and
performance of this Agreement and the other Loan Documents, and the borrowing
and repayment of amounts hereunder, do not and will not constitute "prohibited
transactions" under ERISA or the Internal Revenue Code.

 

          (n)           Absence of Material Defaults.     Neither the Borrower,
any Subsidiary nor any other Loan Party is in default under its 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, a determination of materiality, the satisfaction of any
condition, or any combination of the foregoing, would constitute, a default or
event of default by the Borrower, any Subsidiary or any other Loan Party

    -55-

   

under any agreement (other than this Agreement) or judgment, decree or order to
which the Borrower or any Subsidiary or other Loan Party is a party or by which
the Borrower or any Subsidiary or other Loan Party or any of their respective
properties may be bound where such default or event of default could,
individually or in the aggregate, have a Material Adverse Effect.

 

          (o)           Environmental Laws.     Each of the Borrower, its
Subsidiaries and the other Loan Parties has obtained all Governmental Approvals
which are required under Environmental Laws and is in compliance with all terms
and conditions of such Governmental Approvals which 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 be reasonably expected to
have a Material Adverse Effect, (i) the Borrower is not aware of, and has not
received notice of, any past, present, or future events, conditions,
circumstances, activities, practices, incidents, actions, or plans which, with
respect to the Borrower, its Subsidiaries and each other Loan Party, may
interfere with or prevent compliance or continued compliance with Environmental
Laws, or may give rise to any common-law or legal liability, or otherwise form
the basis of any claim, action, demand, suit, proceeding, hearing, study, or
investigation, based on or related to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport, or handling or the emission,
discharge, release or threatened release into the environment, of any pollutant,
contaminant, chemical, or industrial, toxic, or other Hazardous Material, and
(ii) there is no civil, criminal, or administrative action, suit, demand, claim,
hearing, notice, or demand letter, notice of violation, investigation, or
proceeding pending or, to the Borrower's knowledge after due inquiry,
threatened, against the Borrower, its Subsidiaries and each other Loan Party
relating in any way to Environmental Laws.

 

          (p)            Investment Company; Public Utility Holding Company.
    Neither the Borrower nor any Subsidiary nor any other Loan Party 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, (ii) a “holding
company” or a “subsidiary company” of a “holding company”, or an “affiliate” of
a “holding company” or of a “subsidiary company” of a “holding company”, within
the meaning of the Public Utility Holding Company Act of 1935, as amended, or
(iii) subject to any other Applicable Law which purports to regulate or restrict
its ability to borrow money 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.     Neither the Borrower, any Subsidiary
nor any other Loan Party is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose, whether
immediate, incidental or ultimate, of buying or carrying “margin stock” within
the meaning of Regulation U of the Board of Governors of the Federal Reserve
System.

 

          (r)           Affiliate Transactions.     Except as permitted by
Section 9.10., neither the Borrower, any Subsidiary nor any other Loan Party is
a party to or bound by any agreement or arrangement (whether oral or written) to
which any Affiliate of the Borrower, any Subsidiary or any other Loan Party is a
party.

    -56-

   

          (s)            Intellectual Property.     Each of the Borrower, each
other Loan Party and each other Subsidiary owns or has 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 its businesses 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. The Borrower, each other Loan Party and each other Subsidiary
have taken all such steps as they reasonably deem necessary to protect their
respective rights under and with respect to such Intellectual Property. No
material claim has been asserted by any Person with respect to the use of any
Intellectual Property by the Borrower, any other Loan Party or any other
Subsidiary, or challenging or questioning the validity or effectiveness of any
Intellectual Property. The use of such Intellectual Property by the Borrower,
its Subsidiaries and the other Loan Parties, does not infringe on the rights of
any Person, subject to such claims and infringements as do not, in the
aggregate, give rise to any liabilities on the part of the Borrower, any other
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 Borrower and
its Subsidiaries are engaged in the business of acquiring, owning, financing,
leasing, managing, developing and selling retail, office and industrial real
property generally leased to credit-worthy tenants under net leases, together
with other business activities incidental thereto.

 

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

 

          (v)           Accuracy and Completeness of Information.     No written
information, report or other papers or data (excluding financial projections and
other forward looking statements) furnished to the Agent or any Lender by, on
behalf of, or at the direction of, the Borrower, any Subsidiary or any other
Loan Party in connection with or relating in any way to this Agreement,
contained any untrue statement of a fact material to the creditworthiness of the
Borrower, any Subsidiary or any other Loan Party or omitted to state a material
fact necessary in order to make such statements contained therein, in light of
the circumstances under which they were made, not misleading. All financial
statements furnished to the Agent or any Lender by, on behalf of, or at the
direction of, the Borrower, any Subsidiary or any other Loan Party in connection
with or relating in any way to this Agreement, present fairly, in accordance
with GAAP consistently applied throughout the periods 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 Borrower, any Subsidiary or any other
Loan Party that have been or may hereafter be made available to the Agent or any
Lender were or will be prepared in good faith based on reasonable assumptions.
As of the Effective Date, no fact is known to the Borrower which has had, or may
in the future have (so far as the Borrower can reasonably foresee), a Material
Adverse Effect which has not been set forth in the financial statements referred
to in Section 6.1.(j) or in such information, reports or other papers or data or
otherwise disclosed in writing to the Agent and the Lenders.

    -57-

   

          (w)            REIT Status.     The Borrower qualifies as a REIT and
is in compliance with all requirements and conditions imposed under the Internal
Revenue Code to allow the Borrower to maintain its status as a REIT.

 

          (x)           Unencumbered Assets.     As of the Agreement Date,
Schedule 6.1.(x) is a correct and complete list of all Unencumbered Assets. Each
of the assets included by the Borrower in calculations of Unencumbered Asset
Value satisfies all of the requirements contained in the definition of
“Unencumbered Asset”.

 

          (y)            Tax Shelter Regulations.     None of the Borrower, any
other Loan Party nor any other Subsidiary intends to treat the Loans, the
Letters of Credit or any of the transactions contemplated by this Agreement and
the other Loan Documents as being a “reportable transaction” (within the meaning
of Treasury Regulation Section 1.6011-4). If the Borrower, any other Loan Party
or any other Subsidiary determines to take any action inconsistent with such
intention, the Borrower will promptly notify the Agent thereof. If the Borrower
so notifies the Agent, (i) the Borrower acknowledges that one or more of the
Lenders may treat its Loans or interest in Letters of Credit as part of a
transaction that is subject to Treasury Regulation Section 301.6112-1, and such
Lender or Lenders, as applicable, will maintain the lists and other records all
as required by such Treasury Regulation and (ii) the Borrower shall, promptly
after giving such notice, deliver to the Agent a duly completed copy of IRS Form
8886 or any successor form.

 

Section 6.2      Survival of Representations and Warranties, Etc.

 

          All statements contained in any certificate, financial statement or
other instrument delivered by or on behalf of the Borrower, any Subsidiary or
any other Loan Party to the Agent or any Lender pursuant to or in connection
with this Agreement or any of the other Loan Documents (including, but not
limited to, any such statement made in or in connection with any amendment
thereto or any statement contained in any certificate, financial statement or
other instrument delivered by or on behalf of the Borrower prior to the
Agreement Date and delivered to the Agent or any Lender in connection with
closing the transactions contemplated hereby) shall constitute representations
and warranties made by the Borrower in favor of the Agent or any of the Lenders
under this Agreement. All representations and warranties made under this
Agreement and the other Loan Documents shall be deemed to be made at and as of
the Agreement Date, the Effective Date, the date on which any extension of the
Termination Date is effectuated pursuant to Section 2.12. and 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 accurate on and as of
such earlier date) and except for changes in factual circumstances specifically
permitted hereunder. All such representations and warranties shall survive the
effectiveness of this Agreement, the execution and delivery of the Loan
Documents and the making of the Loans and the issuance of the Letters of Credit.

    -58-

 

ARTICLE VII.   AFFIRMATIVE COVENANTS

 

          For so long as this Agreement is in effect, unless the Requisite
Lenders (or, if required pursuant to Section 12.6., all of the Lenders) shall
otherwise consent in the manner provided for in Section 12.6., the Borrower
shall comply with the following covenants:

 

Section 7.1.    Preservation of Existence and Similar Matters.

 

          Except as otherwise permitted under Section 9.7., the Borrower shall,
and shall cause each Subsidiary and each other Loan Party to, preserve and
maintain its respective existence, rights, franchises, licenses and privileges
in the jurisdiction of its incorporation or formation and qualify and remain
qualified and authorized to do business in each jurisdiction in which the
character of its properties or the nature of its business requires such
qualification and authorization and where the failure to be so authorized and
qualified could reasonably be expected to have a Material Adverse Effect.

 

Section 7.2.    Compliance with Applicable Law.

 

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

 

Section 7.3.    Maintenance of Property.

 

          In addition to the requirements of any of the other Loan Documents,
the Borrower shall, and shall cause each Subsidiary and other Loan Party to, (a)
protect and preserve all of its material 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 excepted, and (b) 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.

 

Section 7.4.    Insurance.

 

          In addition to the requirements of any of the other Loan Documents,
the Borrower shall, and shall cause each Subsidiary and other Loan Party to,
maintain insurance (on a full replacement cost basis) with financially sound and
reputable insurance companies against such risks and in such amounts as is
customarily maintained by Persons engaged in similar businesses or as may be
required by Applicable Law, and from time to time deliver to the Agent upon its
request a detailed list, together with copies of all policies of the insurance
then in effect if requested, 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. Subject to the requirements of any
applicable lease, the Borrower shall, and shall cause its Subsidiaries to, apply
any proceeds from such insurance coverage with respect to any Unencumbered Asset
to either (i) repair or rebuild the property for which such proceeds are being
received, (ii) acquire a substantially equivalent property or (iii) repay
Obligations.

    -59-

   

Section 7.5.    Payment of Taxes and Claims.

 

          The Borrower shall, and shall cause each Subsidiary and other Loan
Party 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;
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
the Borrower, such Subsidiary or such other Loan Party, as applicable, in
accordance with GAAP.

 

Section 7.6.    Visits and Inspections.

 

          The Borrower shall, and shall cause each Subsidiary and other Loan
Party to, permit representatives or agents of any Lender or the Agent, from time
to time after reasonable prior notice if no Event of Default shall be in
existence, as often as may be reasonably requested, but only during normal
business hours and at all times subject to the rights of tenants under their
respective leases, to: (a) visit and inspect all properties of the Borrower or
such Subsidiary or other Loan Party to the extent any such right to visit or
inspect is within the control of such Person; (b) inspect and make extracts from
their respective books and records, including but not limited to management
letters prepared by independent accountants; and (c) discuss with its officers
and employees, and its independent accountants, its business, properties,
condition (financial or otherwise), results of operations and performance. If
requested by the Agent, the Borrower shall execute an authorization letter
addressed to the Borrower’s accountants authorizing the Agent to discuss the
financial affairs of the Borrower and any Subsidiary or any other Loan Party
with its accountants; provided, however, so long as no Default or Event of
Default exists, the Borrower shall have the right to have a representative
present during any such discussions. The Borrower shall reimburse the Agent and,
if an Event of Default exists, the Lenders, for their costs and expenses
incurred in connection with the exercise of their rights under this Section.

 

Section 7.7.    Use of Proceeds; Letters of Credit.

 

          The Borrower shall use the proceeds of the Loans and the Letters of
Credit for general corporate purposes only. The Borrower and the Guarantors
shall not, and shall not permit any other Loan Party or any of their respective
Subsidiaries to, use any part of such proceeds or any Letter of Credit 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, the Borrower may use proceeds of the Loans and Letters of Credit to
purchase the Borrower’s common stock so long as such use will not result in any
of the Loans, Letters of Credit or other Obligations 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.

    -60-

   

Section 7.8.    Environmental Matters.

 

          The Borrower shall, and shall cause all of its Subsidiaries and the
other Loan Parties to, comply with all Environmental Laws the failure with which
to comply could reasonably be expected to have a Material Adverse Effect. If the
Borrower, any Subsidiary or any other Loan Party shall (a) receive notice that
any violation of any Environmental Law may have been committed or is about to be
committed by such Person, (b) receive notice that any administrative or judicial
complaint or order has been filed or is about to be filed against the Borrower,
any Subsidiary or any other Loan Party alleging violations of any Environmental
Law or requiring the Borrower, any Subsidiary or any other Loan Party to take
any action in connection with the release of Hazardous Materials or (c) receive
any notice from a Governmental Authority or private party alleging that the
Borrower, any Subsidiary or any other Loan Party may be liable or responsible
for costs associated with a response to or cleanup of a release of Hazardous
Materials or any damages caused thereby, and such notices, individually or in
the aggregate, could reasonably be expected to have a Material Adverse Effect,
the Borrower shall provide the Agent and each Lender with a copy of such notice
promptly, and in any event within 10 Business Days, after the receipt thereof by
the Borrower, any Subsidiary or any other Loan Party. The Borrower shall, and
shall cause its Subsidiaries and the other Loan Parties to, take promptly all
actions necessary to prevent the imposition of any Liens on any of their
respective properties arising out of or related to any Environmental Laws.

 

Section 7.9.    Books and Records.

 

          The Borrower shall, and shall cause each of its Subsidiaries and the
other Loan Parties to, maintain books and records pertaining to its respective
business operations in such detail, form and scope as is consistent with good
business practice and in accordance with GAAP.

 

Section 7.10.    Further Assurances.

 

          The Borrower shall, at the Borrower’s cost and expense and upon
request of the Agent, execute and deliver or cause to be executed and delivered,
to the 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 Agent to carry out more effectively the
provisions and purposes of this Agreement and the other Loan Documents.

 

Section 7.11.    New Subsidiaries/Guarantors.

 

          (a)           Requirement to Become Guarantor.     Within 10 Business
Days of any Person (other than an Excluded Subsidiary) becoming a Subsidiary
after the Effective Date, the Borrower shall deliver to the Agent each of the
following items, each in form and substance satisfactory to the Agent: (i) an
Accession Agreement executed by such Subsidiary and (ii) the items that would
have been delivered under Sections 5.1.(a)(viii) through (xiii) and (xvi) if
such Subsidiary had been one on the Effective Date; provided, however, promptly
(and in any event within 10 Business Days) upon any Subsidiary ceasing to
qualify as an Excluded Subsidiary, such Subsidiary shall comply with the
provisions of this Section. Upon the request of any

    -61-

   

Lender, the Agent shall send to such Lender a copy of each of the foregoing
items received by the Agent with respect to a Subsidiary.

 

          (b)           Release of a Guarantor.     The Borrower may request in
writing that the Agent release, and upon receipt of such request the Agent shall
release, a Guarantor from the Guaranty so long as: (i) such Guarantor meets, or
will meet simultaneously with its release from the Guaranty, all of the
provisions of the definition of the term “Excluded Subsidiary” and none of the
Guarantor’s Properties or other assets are to be taken into account when
calculating Unencumbered Asset Value; (ii) such Guarantor is not otherwise
required to be a party to the Guaranty under the immediately preceding
subsection (a); (iii) no Default or Event of Default shall then be in existence
or would occur as a result of such release, including without limitation, a
Default or Event of Default resulting from a violation of any of the covenants
contained in Section 9.1.; and (iv) the Agent shall have received such written
request at least 10 Business Days prior to the requested date of release.
Delivery by the Borrower to the Agent of any such request shall constitute a
representation by the Borrower that the matters set forth in the preceding
sentence (both as of the date of the giving of such request and as of the date
of the effectiveness of such request) are true and correct with respect to such
request.

 

Section 7.12.    REIT Status.

 

          The Borrower shall at all times maintain its status as a REIT.

 

Section 7.13.    Exchange Listing.

 

          The Borrower shall maintain at least one class of common shares of the
Borrower having trading privileges on the New York Stock Exchange or the
American Stock Exchange or which is the subject of price quotations in the
over-the-counter market as reported by the National Association of Securities
Dealers Automated Quotation System.

ARTICLE VIII.   INFORMATION

 

          For so long as this Agreement is in effect, unless the Requisite
Lenders (or, if required pursuant to Section 12.6., all of the Lenders) shall
otherwise consent in the manner set forth in Section 12.6., the Borrower shall
furnish to each Lender (or to the Agent if so provided below) at its Lending
Office:

 

Section 8.1.    Quarterly Financial Statements.

 

          As soon as available and in any event within 45 days after the close
of each of the first, second and third fiscal quarters of the Borrower, the
unaudited consolidated balance sheet of the Borrower and its Subsidiaries as at
the end of such period and the related unaudited consolidated statements of
earnings, and cash flows of the Borrower and its Subsidiaries for such period,
setting forth in each case in comparative form the figures as of the end of and
for the corresponding periods of the previous fiscal year, all of which shall be
certified by the chief executive officer or chief financial officer of the
Borrower, in his or her opinion, to present fairly, in accordance with GAAP and
in all material respects, the consolidated financial position

    -62-

   

of the Borrower and its Subsidiaries as at the date thereof and the results of
operations for such period (subject to normal year-end audit adjustments).

 

Section 8.2.    Year-End Statements.

 

          Within 90 days after the end of each fiscal year of the Borrower, the
audited consolidated balance sheet of the Borrower and its Subsidiaries as at
the end of such fiscal year and the related audited consolidated statements of
earnings, stockholders’ equity and cash flows of the Borrower 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
certified by (a) the chief executive officer or chief financial officer of the
Borrower, in his or her opinion, to present fairly, in accordance with GAAP, the
consolidated financial position of the Borrower and its Subsidiaries as at the
date thereof and the results of operations for such period and (b) independent
certified public accountants of recognized national standing acceptable to the
Agent, whose certificate shall be unqualified and in scope and substance
satisfactory to the Requisite Lenders and who shall have authorized the Borrower
to deliver such financial statements and certification thereof to the Agent and
the Lenders pursuant to this Agreement.

 

Section 8.3.    Compliance Certificate; Additional Information.

 

          At the time financial statements are furnished pursuant to Sections
8.1. and 8.2., and within 5 Business Days of the Agent’s request with respect to
any other fiscal period, a certificate substantially in the form of Exhibit N (a
“Compliance Certificate”) executed by the chief financial officer of the
Borrower: (a) setting forth in reasonable detail as at the end of such quarterly
accounting period, fiscal year, or other fiscal period, as the case may be, the
calculations required to establish whether or not the Borrower was in compliance
with the covenants contained in Sections 9.1., 9.2. and 9.4. and (b) stating
that, to the best of his or her knowledge, information and belief after due
inquiry, no Default or Event of Default exists, or, if such is not the case,
specifying such Default or Event of Default and its nature, when it occurred,
whether it is continuing and the steps being taken by the Borrower with respect
to such event, condition or failure. Together with any Compliance Certificate
delivered with financial statements furnished pursuant to Sections 8.1. and
8.2., the Borrower shall deliver reports, in form and detail satisfactory to the
Agent, setting forth (a) a statement of Funds From Operations for the fiscal
quarter then ending; (b) all Capital Expenditures made during the fiscal quarter
then ended; (c) a description of all Properties acquired during such fiscal
quarter, including the net operating income of each such Property, acquisition
costs and related mortgage debt and such other information as the Agent may
request; and (d) all Unencumbered Assets at the end of such fiscal quarter.

 

Section 8.4.    Other Information.

 

          (a)     Management Letter Comments.     Promptly upon receipt thereof,
copies of all management letter comments, if any, submitted to the Borrower or
its Board of Directors by its independent public accountants;

 

          (b)     Securities Filings.     Promptly upon, and in any event within
10 Business Days of, the filing thereof, copies of all registration statements
(excluding the exhibits thereto (unless

    -63-

   

requested by the Agent) and any registration statements on Form S-8 or its
equivalent), reports on Forms 10-K, 10-Q and 8-K (or their equivalents) and all
other periodic reports which the Borrower, any Subsidiary or any other Loan
Party shall file with the Securities and Exchange Commission (or any
Governmental Authority substituted therefor) or any national securities
exchange;

 

          (c)           Shareholder Information; Press Releases.     Promptly
upon the mailing thereof to the shareholders of the Borrower generally, copies
of all financial statements, reports and proxy statements so mailed and promptly
upon the issuance thereof copies of all press releases issued by the Borrower,
any Subsidiary or any other Loan Party;

 

          (d)           ERISA.     If and when any member of the ERISA Group (i)
gives or is required to give notice to the PBGC of any “reportable event” (as
defined in Section 4043 of ERISA) with respect to any Plan which might
constitute grounds for a termination of such Plan under Title IV of ERISA, or
knows that the plan administrator of any Plan has given or is required to give
notice of any such reportable event, a copy of the notice of such reportable
event given or required to be given to the PBGC; (ii) receives notice of
complete or partial withdrawal liability under Title IV of ERISA or notice that
any Multiemployer Plan is in reorganization, is insolvent or has been
terminated, a copy of such notice; (iii) receives notice from the PBGC under
Title IV of ERISA of an intent to terminate, impose liability (other than for
premiums under Section 4007 of ERISA) in respect of, or appoint a trustee to
administer any Plan, a copy of such notice; (iv) applies for a waiver of the
minimum funding standard under Section 412 of the Internal Revenue Code, a copy
of such application; (v) gives notice of intent to terminate any Plan under
Section 4041(c) of ERISA, a copy of such notice and other information filed with
the PBGC; (vi) gives notice of withdrawal from any Plan pursuant to Section 4063
of ERISA, a copy of such notice; or (vii) fails to make any payment or
contribution to any Plan or Multiemployer Plan or in respect of any Benefit
Arrangement or makes any amendment to any Plan or Benefit Arrangement which has
resulted or could result in the imposition of a Lien or the posting of a bond or
other security, a certificate of the chief financial officer of the Borrower
setting forth details as to such occurrence and the action, if any, which the
Borrower or applicable member of the ERISA Group is required or proposes to
take;

 

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

 

          (f)           Modification of Organizational Documents.     A copy of
any material amendment to the certificate or articles of incorporation, bylaws,
partnership agreement or other similar organizational documents of the Borrower
or any other Loan Party promptly upon, and in any event within 15 Business Days
of, the effectiveness thereof;

    -64-

   

          (g)           Change of Management or Financial Condition.     Prompt
notice of any material change in the executive management of the Borrower, any
Subsidiary or any other Loan Party and any change in the business, assets,
liabilities, condition (financial or otherwise), results of operations or
business prospects of the Borrower, any Subsidiary or any other Loan Party which
has had or could reasonably be expected to have a Material Adverse Effect;

 

          (h)           Default.     Notice of the occurrence of any Default or
Event of Default promptly upon a Responsible Officer of the Borrower, any other
Loan Party or any other Subsidiary obtaining knowledge thereof;

 

          (i)            Judgments.     Prompt notice of any order, judgment or
decree in excess of $5,000,000 having been entered against the Borrower, any
Subsidiary or any other Loan Party of any of their respective properties or
assets;

 

          (j)            Notice of Violations of Law.     Prompt notice if the
Borrower, any Subsidiary or any other Loan Party shall receive any notification
from any Governmental Authority alleging a violation of any Applicable Law, or
any inquiry with respect to any matters, in either case which could reasonably
be expected to have a Material Adverse Effect;

 

          (k)            Material Asset Sales.     Prompt notice of the sale,
transfer or other disposition of any assets having a book value or fair market
value in excess of $50,000,000 in the aggregate of the Borrower, any Subsidiary
or any other Loan Party to any Person other than the Borrower, any Subsidiary or
any other Loan Party;

 

          (l)             Ratings Change.     Notice of a change in any Credit
Rating within two Business Days of the occurrence of such change; and

 

          (m)           Other Information.     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 or business prospects of
the Borrower or any of its Subsidiaries as the Agent or any Lender may
reasonably request.

ARTICLE IX.   NEGATIVE COVENANTS

 

          For so long as this Agreement is in effect, unless the Requisite
Lenders (or, if required pursuant to Section 12.6., all of the Lenders) shall
otherwise consent in the manner set forth in Section 12.6., the Borrower shall
comply with the following covenants:

 

Section 9.1.    Financial Covenants.

 

           The Borrower shall not permit:

 

          (a)           Maximum Leverage Ratio.     The ratio of (i) Total
Liabilities to (ii) Total Assets, to exceed 0.50 to 1.00 at any time.

    -65-

   

          (b)           Minimum Interest Ratio.     The ratio of (i) EBITDA for
the fiscal quarter of the Borrower most recently ended to (ii) Interest Expense
for such period, to be less than 2.0 to 1.0 at any time.

 

          (c)           Minimum Fixed Charge Ratio.     The ratio of (i) EBITDA
for the fiscal quarter of the Borrower most recently ended to (ii) Fixed Charges
for such period, to be less than 1.75 to 1.0 at any time.

 

          (d)           Unencumbered Asset Ratio.     The ratio of (i)
Unencumbered Asset Value to (ii) Unsecured Debt of the Borrower and its
Subsidiaries, to be less than 1.75 to 1.0 at any time.

 

          (e)           Unencumbered Interest Ratio.     The ratio of (i) the
sum of (A) Gross Lease Revenues attributable to Properties that are Unencumbered
Assets for the fiscal quarter of the Borrower most recently ended minus (B) an
imputed management fee in the amount of 2.0% of the aggregate rents received by
the Borrower and the Guarantors with respect to such Unencumbered Assets during
such period plus (C) Eligible Mortgage Income for such period to (ii) Interest
Expense in respect of Unsecured Debt of the Borrower and its Subsidiaries for
such period, to be less than 2.0 to 1.0 at any time.

 

          (f)           Minimum Tangible Net Worth.     Tangible Net Worth at
any time to be less than (i) $490,000,000 plus (ii) 85.0% of the Net Proceeds of
all Equity Issuances effected by the Borrower or any Subsidiary after December
31, 2002 (other than Equity Issuances to the Borrower or any Subsidiary).

 

          (g)           Maximum Secured Debt Ratio.     The ratio of (i) Secured
Debt of the Borrower and its Subsidiaries to (ii) Total Assets, to exceed 0.30
to 1.0 at any time.

 

          (h)           Revenues from Ground Leases.     The ratio (expressed as
a percentage) of (i) the aggregate income of the Borrower and its Subsidiaries
from ground leases, including without limitation, all Ground Leases, for any
fiscal quarter ending during the term of this Agreement to (ii) Gross Lease
Revenues for such fiscal quarter, to exceed 5.0%.

 

Section 9.2.    Restricted Payments.

 

          The Borrower and the Guarantors will not, and will not permit any of
their respective Subsidiaries to, declare or make any Restricted Payments;
provided, however, that (a) Subsidiaries of the Borrower may make Restricted
Payments to the Borrower or other Subsidiaries of the Borrower; (b) the Borrower
and the UPREIT may declare or make cash distributions to their shareholders and
partners, respectively, during any period of four consecutive fiscal quarters in
an aggregate amount not to exceed 100% of Funds Available for Distribution for
such four quarter period; and (c) subject to the following sentence, if a
Default or Event of Default exists, the Borrower and the UPREIT may only declare
or make cash distributions to their shareholders and partners, respectively,
during any fiscal year in an aggregate amount not to exceed the lesser of (i)
the amount otherwise permitted to be declared or made under the immediately
preceding clause (b) and (ii) the minimum amount necessary for the Borrower to
remain in compliance with Section 7.12. Notwithstanding the foregoing, if a
Default or Event of Default specified in Section 10.1.(a), Section 10.1.(b),
Section 10.1.(f) or

    -66-

   

Section 10.1.(g) shall exist, or if as a result of the occurrence of any other
Event of Default any of the Obligations have been accelerated pursuant to
Section 10.2.(a), the Borrower and the Guarantors will not, and will not permit
any of their respective Subsidiaries to, declare or make any Restricted Payments
whatsoever.

 

Section 9.3.    Debt.

 

          The Borrower shall not, and shall not permit any Subsidiary or any
other Loan Party to, incur, assume, or otherwise become obligated in respect of
any Debt after the Agreement Date if immediately prior to the assumption,
incurring or becoming obligated in respect thereof, or immediately thereafter
and after giving effect thereto, 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 9.1.

 

Section 9.4.    Certain Permitted Investments.

 

          The Borrower and the Guarantors shall not, and shall not permit any of
their Subsidiaries to, make any Investment, or otherwise own the following
items, which would cause the aggregate value of such holdings of the Borrower,
the Guarantors and such Subsidiaries to exceed the applicable limits set forth
below:

 

          (a)           Investments in Unconsolidated Affiliates such that the
aggregate book value of such Investments determined in accordance with GAAP
exceeds 20.0% of Total Assets at any time (for purposes of clarity, the parties
agree that loans by the Borrower or any Subsidiary to CNL Commercial Finance,
Inc. are Investments subject to this subsection (a) so long as CNL Commercial
Finance, Inc. is an Unconsolidated Affiliate);

 

          (b)           Mortgage Receivables, including without limitation,
Eligible Mortgage Notes Receivable, such that the aggregate book value of all
such Mortgage Receivables exceeds 10.0% of Total Assets;

 

          (c)           real property under construction such that the aggregate
Construction Budget for all such real property exceeds 15.0% of Total Assets;
provided, however, the Borrower and Guarantors shall not, and shall not permit
any of their Subsidiaries to, make investments in real property under
construction otherwise permitted hereunder unless at least 75.0% of the total
square footage under construction is the subject of executed leases; and

 

          (d)           Investments in loans and interests in securitized pools
of promissory notes, mortgage loans, chattel paper, leases or similar financial
assets originated by CNL Commercial Finance, Inc., such that the aggregate value
(determined on the basis of lower of cost or fair value) of all such Investments
exceeds the greater of (i) the lesser of (A) 60,000,000 or (B) 7.5% of Total
Assets or (ii) 10.0% of Tangible Net Worth.

 

In addition to the foregoing limitations, the aggregate value of all of the
items subject to the limitations in the preceding clauses (a), (b) and (d) shall
not exceed 25.0% of Total Assets at any time.

    -67-

   

Section 9.5.    Conduct of Business.

 

          The Borrower shall not, and shall not permit any Subsidiary or any
other Loan Party to, engage in any type of business except as described in
Section 6.1.(t).

 

Section 9.6.    Liens; Negative Pledges; Other Matters.

 

          (a)           The Borrower shall not, and shall not permit any
Subsidiary or other Loan Party 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 9.1.

 

          (b)           The Borrower shall not, and shall not permit any
Subsidiary or other Loan Party to, create or otherwise cause or suffer to exist
or become effective any consensual encumbrance or restriction of any kind on the
ability of any Subsidiary (other than an Excluded 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 any Subsidiary; (ii)
pay any Debt 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.

 

Section 9.7.    Merger, Consolidation, Sales of Assets and Other Arrangements.

 

          The Borrower shall not, and shall not permit any Subsidiary or other
Loan Party to: (i) enter into any transaction of merger or consolidation; (ii)
liquidate, wind up or dissolve itself (or suffer any liquidation or
dissolution); or (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, whether now owned or hereafter
acquired; provided, however, that:

 

          (a)           any of the actions described in the immediately
preceding clauses (i) through (iii) may be taken with respect to any Subsidiary
or any other Loan Party (other than the Borrower) so long as immediately prior
to the taking of such action, and immediately thereafter and after giving effect
thereto, no Default or Event of Default is or would be in existence;

 

          (b)           the Borrower, each Subsidiary and each other Loan Party
may sell, transfer or dispose of assets among themselves;

 

          (c)           the Borrower, its Subsidiaries and the other Loan
Parties may lease and sublease their respective assets, as lessor or sublessor
(as the case may be), in the ordinary course of their business; and

 

          (d)           a Person may merge with and into the Borrower, any
Subsidiary or any Loan Party so long as (i) the Borrower, such Subsidiary or
such Loan Party, as applicable, is the survivor of such merger, (ii) immediately
prior to such merger, and immediately thereafter and after giving effect
thereto, no Default or Event of Default is or would be in existence, and

    -68-

   

(iii) the Borrower shall have given the Agent and the Lenders at least 10
Business Days’ prior written notice of such merger (except that such prior
notice shall not be required in the case of the merger of a Subsidiary with and
into the Borrower).

 

If, as a result of the consummation of any transaction described in the
immediately preceding clause (a) or (b), a Person would become a Subsidiary that
has assets having a book value or fair market value in excess of $50,000,000 in
the aggregate and that is not an Excluded Subsidiary, the Borrower shall not
permit the consummation of such transaction unless the items described in
Section 7.11.(a) are delivered to the Agent at the time of the consummation of
such transaction.

 

Section 9.8.    Fiscal Year.

 

          The Borrower shall not change its fiscal year from that in effect as
of the Agreement Date.

 

Section 9.9.    Modifications of Organizational Documents.

 

          The Borrower shall not, and shall not permit any other Loan Party or
other Subsidiary to, amend, supplement, restate or otherwise modify its articles
or certificate of incorporation, by-laws, operating agreement, declaration of
trust, partnership agreement or other applicable organizational document if such
amendment, supplement, restatement or other modification could reasonably be
expected to have a Material Adverse Effect.

 

Section 9.10.    Transactions with Affiliates.

 

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

 

Section 9.11.    ERISA Exemptions.

 

          The Borrower shall not, and shall not permit any 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.

 

Section 9.12.    Ownership of CNLRS.

 

          The Borrower shall not permit (a) its percentage ownership of all of
the Equity Interests of Commercial Net Lease Realty Services, Inc. (“CNLRS”)
entitling holders thereof to the payment of dividends or other distributions
from revenues of CNLRS to decrease after the Agreement Date or (b) ordinary
voting power to elect a majority of the board of directors of

    -69-

   

CNLRS (without regard to the occurrence of any contingency) to be directly owned
or controlled by any Persons other than senior officers of the Borrower.

ARTICLE X.   DEFAULT

 

Section 10.1.    Events of Default.

 

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

 

          (a)           Default in Payment of Principal.     The Borrower shall
fail to pay when due (whether upon demand, at maturity, by reason of
acceleration or otherwise) the principal of any of the Loans, or any
Reimbursement Obligation.

 

          (b)           Default in Payment of Interest and Other Obligations.
    The Borrower shall fail to pay when due any interest on any of the Loans or
any of the other payment Obligations owing by the Borrower under this Agreement
or any other Loan Document, or any other Loan Party shall fail to pay when due
any payment Obligation owing by such other Loan Party under any Loan Document to
which it is a party, and such failure shall continue for a period of 5 Business
Days.

 

          (c)           Default in Performance.     (i) The Borrower shall fail
to perform or observe any term, covenant, condition or agreement contained in
Section 8.4.(h) or in Article IX. 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 a Responsible
Officer of the Borrower or such Loan Party obtains knowledge of such failure or
(y) the date upon which the Borrower has received written notice of such failure
from the Agent.

 

          (d)           Material Misrepresentations.     Any written statement,
representation or warranty made or deemed made by or on behalf of the 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 at any
time furnished or made or deemed made by or on behalf of the Borrower or any
other Loan Party to the Agent or any Lender, shall at any time prove to have
been incorrect or misleading, in light of the circumstances in which made or
deemed made, in any material respect when furnished or made or deemed made.

 

          (e)           Debt Cross-Default.     

 

              (i)         The Borrower, any Subsidiary or any other Loan Party
shall fail to pay when due and payable, after the expiration of any applicable
notice and cure period, the principal of, or interest on, any Debt (other than
the Loans) having an aggregate outstanding principal amount of $10,000,000 or
more (“Material Debt”); or

 

              (ii)       (x) the maturity of any Material Debt shall have been
accelerated in accordance with the provisions of any indenture, contract or
instrument evidencing,

    -70-

 

providing for the creation of or otherwise concerning such Material Debt or (y)
any Material Debt 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, with or without the passage of time, the giving of notice, or both, would
permit any holder or holders of Material Debt, any trustee or agent acting on
behalf of such holder or holders or any other Person, to accelerate the maturity
of any such Material Debt or require any such Material Debt to be prepaid or
repurchased prior to its stated maturity; or

 

              (iv)       there occurs under any Swap Agreement an Early
Termination Date (as defined in such Swap Agreement) resulting from (A) any
event of default under such Swap Agreement as to which any Loan Party is the
Defaulting Party (as defined in such Swap Agreement) or (B) any Termination
Event (as so defined) under such Swap Agreement as to which any Loan Party is an
Affected Party (as so defined) and, in either event, the Swap Termination Value
owed by any Loan Party as a result thereof is $10,000,000 or more.

 

          (f)           Voluntary Bankruptcy Proceeding.     The Borrower, any
other Loan Party or any Subsidiary 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
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.

 

          (g)           Involuntary Bankruptcy Proceeding.     A case or other
proceeding shall be commenced against the Borrower, any other Loan Party or any
Subsidiary 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 such case or
proceeding shall continue undismissed or unstayed for a period of 60 consecutive
calendar days, or an order granting the remedy or other relief requested in such
case or proceeding against the Borrower, such Subsidiary or such other Loan
Party (including, but not limited to, an order for relief under such Bankruptcy
Code or such other federal bankruptcy laws) shall be entered.

    -71-

   

          (h)           Litigation; Enforceability.     The Borrower or any
other Loan Party shall disavow, revoke or terminate (or attempt to terminate)
any Loan Document to which it is a party or shall otherwise challenge or contest
in any action, suit or proceeding in any court or before any Governmental
Authority the validity or enforceability of this Agreement, any Note or any
other Loan Document or this Agreement, any Note, the Guaranty or any other Loan
Document shall cease to be in full force and effect (except as a result of the
express terms thereof).

 

          (i)           Judgment.     A judgment or order for the payment of
money or for an injunction shall be entered against the Borrower, any Subsidiary
or any other Loan Party, by any court or other tribunal and (i) such judgment or
order shall continue for a period of 60 days without being paid, stayed or
dismissed through appropriate appellate proceedings and (ii) either (A) the
amount of such judgment or order for which insurance has not been acknowledged
in writing by the applicable insurance carrier (or the amount as to which the
insurer has denied liability) exceeds, individually or together with all other
such outstanding judgments or orders entered against the Borrower, such
Subsidiaries and such other Loan Parties, $10,000,000 or (B) in the case of an
injunction or other non-monetary judgment, such judgment could reasonably be
expected to have a Material Adverse Effect.

 

          (j)           Attachment.     A warrant, writ of attachment, execution
or similar process shall be issued against any property of the Borrower, any
Subsidiary or any other Loan Party which exceeds, individually or together with
all other such warrants, writs, executions and processes, $10,000,000 in amount
and such warrant, writ, execution or process shall not be discharged, vacated,
stayed or bonded for a period of 60 days; provided, however, that if a bond has
been issued in favor of the claimant or other Person obtaining such warrant,
writ, execution or process, the issuer of such bond shall execute a waiver or
subordination agreement in form and substance satisfactory to the Agent pursuant
to which the issuer of such bond subordinates its right of reimbursement,
contribution or subrogation to the Obligations and waives or subordinates any
Lien it may have on the assets of any Loan Party.

 

          (k)           ERISA.     Any member of the ERISA Group shall fail to
pay when due an amount or amounts aggregating in excess of $10,000,000 which it
shall have become liable to pay under Title IV of ERISA; or notice of intent to
terminate a Material Plan shall be filed under Title IV of ERISA by any member
of the ERISA Group, any plan administrator or any combination of the foregoing;
or the PBGC shall institute proceedings under Title IV of ERISA to terminate, to
impose liability (other than for premiums under Section 4007 of ERISA) in
respect of, or to cause a trustee to be appointed to administer, any Material
Plan; or a condition shall exist by reason of which the PBGC would be entitled
to obtain a decree adjudicating that any Material Plan must be terminated; or
there shall occur a complete or partial withdrawal from, or a default, within
the meaning of Section 4219(c)(5) of ERISA, with respect to, one or more
Multiemployer Plans which could cause one or more members of the ERISA Group to
incur a current payment obligation in excess of $10,000,000.

 

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

    -72-

   

          (m)           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 stock of the Borrower; 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 Directors of the Borrower (together with any new
directors whose election by such Board or whose nomination for election by the
shareholders of the Borrower was approved by a vote of a majority of the
directors then still in office who were either directors 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
Directors of the Borrower then in office.

 

Section 10.2.    Remedies Upon Event of Default.

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

 

          (a)           Acceleration; Termination of Facilities.

 

              (i)         Automatic.     Upon the occurrence of an Event of
Default specified in Sections 10.1.(f) or 10.1.(g), (A)(i) the principal of, and
all accrued interest on, the Loans and the Notes at the time outstanding, (ii)
an amount equal to the Stated Amount of all Letters of Credit outstanding as of
the date of the occurrence of such Event of Default and (iii) all of the other
Obligations of the Borrower, including, but not limited to, the other amounts
owed to the Lenders, the Swingline Lender and the Agent under this Agreement,
the Notes or any of the other Loan Documents shall become immediately and
automatically due and payable by the Borrower without presentment, demand,
protest, or other notice of any kind, all of which are expressly waived by the
Borrower and (B) all of the Commitments, the obligation of the Lenders to make
Revolving Loans, the Swingline Commitment, the obligation of the Swingline
Lender to make Swingline Loans, and the obligation of the Agent to issue Letters
of Credit hereunder, shall all immediately and automatically terminate.

 

              (ii)         Optional.     If any other Event of Default shall
have occurred and be continuing, the Agent shall, at the direction of the
Requisite Lenders: (A) declare (1) the principal of, and accrued interest on,
the Loans and the Notes at the time outstanding, (2) an amount equal to the
Stated Amount of all Letters of Credit outstanding as of the date of the
occurrence of such other Event of Default and (3) all of the other Obligations,
including, but not limited to, the other amounts owed to the Lenders and the
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

    -73-

   

presentment, demand, protest or other notice of any kind, all of which are
expressly waived by the Borrower and (B) terminate the Commitments and the
obligation of the Lenders to make Loans hereunder and the obligation of the
Agent to issue Letters of Credit hereunder. Further, if the Agent has exercised
any of the rights provided under the preceding sentence, the Swingline Lender
shall: (x) declare the principal of, and accrued interest on, the Swingline
Loans and the Swingline Note at the time outstanding, and all of the other
Obligations owing to the Swingline Lender, 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 (y) terminate the Swingline Commitment and the obligation of
the Swingline Lender to make Swingline Loans.

 

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

 

          (c)           Applicable Law.     The Requisite Lenders may direct the
Agent to, and the 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 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 business
operations of the Borrower and its Subsidiaries and to exercise such power as
the court shall confer upon such receiver.

 

Section 10.3.    Remedies Upon Default.

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

 

Section 10.4.    Allocation of Proceeds.

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

 

              (a)     amounts due to the Agent in respect of fees and expenses
due under Section 12.2.;

 

              (b)     amounts due to the Lenders in respect of fees and expenses
due under Section 12.2.;

 

              (c)     payments of interest on Swingline Loans;

    -74-

   

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

 

              (e)     payments of principal of Swingline Loans;

 

              (f)     payments of principal of all other Loans and Reimbursement
Obligations, to be applied for the ratable benefit of the Lenders;

 

              (g)     amounts to be deposited into the Collateral Account in
respect of Letters of Credit;

 

              (h)     amounts due the Agent and the Lenders pursuant to Sections
11.7. and 12.9.;

 

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

 

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

 

Section 10.5.    Collateral Account.

          (a)           As collateral security for the prompt payment in full
when due of all Letter of Credit Liabilities and the other Obligations, the
Borrower hereby pledges and grants to the Agent, for the benefit of the Agent
and the Lenders as provided herein, a security interest in all of its right,
title and interest in and to the Collateral Account and the balances from time
to time in the Collateral Account (including the investments and reinvestments
therein provided for below). The balances from time to time in the Collateral
Account shall not constitute payment of any Letter of Credit Liabilities until
applied by the Agent as provided herein. Anything in this Agreement to the
contrary notwithstanding, funds held in the Collateral Account shall be subject
to withdrawal only as provided in this Section and in Section 2.13.

 

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

 

          (c)           If an Event of Default shall have occurred and be
continuing, the Requisite Lenders may, in their discretion, at any time and from
time to time, instruct the Agent to liquidate any such investments and
reinvestments and credit the proceeds thereof to the

    -75-

   

Collateral Account and apply or cause to be applied such proceeds and any other
balances in the Collateral Account to the payment of any of the Letter of Credit
Liabilities due and payable.

 

          (d)           If (i) no Default or Event of Default has occurred and
is continuing and (ii) all of the Letter of Credit Liabilities have been paid in
full, the Agent shall, from time to time, at the request of the Borrower,
deliver to the Borrower, against receipt but without any recourse, warranty or
representation whatsoever, such of the balances in the Collateral Account as
exceed the aggregate amount of Letter of Credit Liabilities at such time.

 

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

 

Section 10.6.    Performance by Agent.

          If the Borrower shall fail to perform any covenant, duty or agreement
contained in any of the Loan Documents, the 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 Agent, promptly pay any amount reasonably
expended by the Agent in such performance or attempted performance to the Agent,
together with interest thereon at the applicable Post-Default Rate from the date
of such expenditure until paid. Notwithstanding the foregoing, neither the 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 10.7.    Rights Cumulative.

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

ARTICLE XI.   THE AGENT

 

Section 11.1.    Authorization and Action.

 

          Each Lender hereby appoints and authorizes the 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 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 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

    -76-

   

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 Agent a trustee or fiduciary for any Lender nor to impose
on the Agent duties or obligations other than those expressly provided for
herein. At the request of a Lender, the Agent will forward to such Lender copies
or, where appropriate, originals of the documents delivered to the Agent
pursuant to this Agreement or the other Loan Documents. The Agent will also
furnish to any Lender, upon the request of such Lender, a copy of any
certificate or notice furnished to the Agent by the Borrower, any Loan Party or
any other Affiliate of the Borrower, pursuant to this Agreement or any other
Loan Document not already delivered to such Lender pursuant to the terms of this
Agreement or any such other Loan Document. As to any matters not expressly
provided for by the Loan Documents (including, without limitation, enforcement
or collection of any of the Obligations), the 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 Agent shall not be required to take any action
which exposes the 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 Agent shall not 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 so directed the Agent to exercise such
right or remedy.

 

Section 11.2.    Agent’s Reliance, Etc.

 

          Notwithstanding any other provisions of this Agreement or any other
Loan Documents, neither the Agent nor any of its directors, officers, agents,
employees or counsel shall be liable for any action taken or omitted to be taken
by it or them under or in connection with this Agreement or any other Loan
Document, except for its or their own gross negligence or willful misconduct.
Without limiting the generality of the foregoing, the Agent: (a) may treat the
payee of any Note as the holder thereof until the Agent receives written notice
of the assignment or transfer thereof signed by such payee and in form
satisfactory to the Agent; (b) 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; (c) makes no warranty or
representation to any Lender or any other Person and shall not be responsible to
any Lender or any other Person for any statements, warranties or representations
made by any Person in or in connection with this Agreement or any other Loan
Document; (d) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of any 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; (e) shall not 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 Agent on behalf of the Lenders in any
such collateral; and (f) shall incur no liability under or in

    -77-

   

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
or telecopy) believed by it to be genuine and signed, sent or given by the
proper party or parties.

 

Section 11.3.    Notice of Defaults.

 

          The Agent shall not be deemed to have knowledge or notice of the
occurrence of a Default or Event of Default unless the 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 Agent) becomes aware of any Default or Event of Default, it
shall promptly send to the Agent such a “notice of default.” Further, if the
Agent receives such a “notice of default”, the Agent shall give prompt notice
thereof to the Lenders.

 

Section 11.4.    Wachovia as Lender.

 

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

 

Section 11.5.    Approvals of Lenders.

 

          All communications from the 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 Agent by the Borrower in respect of the matter or issue to be resolved, and
(d) shall include the Agent’s recommended course of action or determination in
respect thereof. Each Lender shall reply promptly, but in any event within 10
Business Days (or such lesser or greater period as may be specifically required
under the Loan Documents) of receipt of such communication. Except as otherwise
provided in this Agreement and except with respect to items requiring the
unanimous consent or approval of the Lenders under Section 12.6.,

    -78-

   

unless a Lender shall give written notice to the Agent that it specifically
objects to the recommendation or determination of the Agent (together with a
written explanation of the reasons behind such objection) within the applicable
time period for reply, such Lender shall be deemed to have conclusively approved
of or consented to such recommendation or determination.

 

Section 11.6.    Lender Credit Decision, Etc.

 

          Each Lender expressly acknowledges and agrees that neither the Agent
nor any of its officers, directors, employees, agents, counsel,
attorneys-in-fact or other affiliates has made any representations or warranties
as to the financial condition, operations, creditworthiness, solvency or other
information concerning the business or affairs of the Borrower, any other Loan
Party, any Subsidiary or any other Person to such Lender and that no act by the
Agent hereafter taken, including any review of the affairs of the Borrower, any
other Loan Party or any other Subsidiary, shall be deemed to constitute any such
representation or warranty by the Agent to any Lender. Each Lender acknowledges
that it has, independently and without reliance upon the Agent, any other Lender
or counsel to the Agent, or any of their respective officers, directors,
employees and agents, and based on the financial statements of the Borrower, the
Subsidiaries or any other Affiliate thereof, and inquiries of such Persons, its
independent due diligence of the business and affairs of the Borrower, the Loan
Parties, the 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 Agent,
any other Lender or counsel to the 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. Except for
notices, reports and other documents and information expressly required to be
furnished to the Lenders by the Agent under this Agreement or any of the other
Loan Documents, the 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 Borrower, any
other Loan Party or any other Affiliate thereof which may come into possession
of the Agent, or any of its officers, directors, employees, agents,
attorneys-in-fact or other Affiliates. Each Lender acknowledges that the Agent’s
legal counsel in connection with the transactions contemplated by this Agreement
is only acting as counsel to the Agent and is not acting as counsel to such
Lender.

 

Section 11.7.    Indemnification of Agent.

 

          Each Lender agrees to indemnify the Agent (to the extent not
reimbursed by the Borrower and without limiting the obligation of the Borrower
to do so) pro rata in accordance with such Lender’s respective Commitment
Percentage, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever which may at any time be imposed on, incurred
by, or asserted against the Agent (in its capacity as Agent but not as a Lender)
in any way relating to or arising out of the Loan Documents, any transaction
contemplated hereby or thereby

    -79-

   

or any action taken or omitted by the 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 Agent’s gross negligence or willful misconduct as determined by a court
of competent jurisdiction in a final, non-appealable judgment or if the Agent
fails to follow the written direction of the Requisite Lenders unless such
failure results from the Agent following the advice of counsel to the Agent of
which advice the Lenders have received notice. Without limiting the generality
of the foregoing but subject to the preceding proviso, each Lender agrees to
reimburse the 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 counsel fees of the
counsel(s) of the Agent’s own choosing) incurred by the Agent in connection with
the preparation, negotiation, execution, or enforcement of, or legal advice with
respect to the rights or responsibilities of the parties under, the Loan
Documents, any suit or action brought by the Agent to enforce the terms of the
Loan Documents and/or collect any Obligations, any “lender liability” suit or
claim brought against the Agent and/or the Lenders, and any claim or suit
brought against the 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 Agent notwithstanding any claim or assertion
that the Agent is not entitled to indemnification hereunder upon receipt of an
undertaking by the Agent that the Agent will reimburse the Lenders if it is
actually and finally determined by a court of competent jurisdiction that the
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 Agent for any Indemnifiable Amount following
payment by any Lender to the Agent in respect of such Indemnifiable Amount
pursuant to this Section, the Agent shall share such reimbursement on a ratable
basis with each Lender making any such payment.

 

Section 11.8.    Successor Agent.

 

          The Agent may resign at any time as Agent under the Loan Documents by
giving at least 30 days’ prior written notice thereof to the Lenders and the
Borrower. The Agent may be removed as Agent under the Loan Documents for good
cause by all of the Lenders (other than the Lender then acting as Agent) upon at
least 30 days’ prior notice. Upon any such resignation or removal, the Requisite
Lenders (other than the Lender then acting as Agent, in the case of the removal
of the Agent under the immediately preceding sentence) shall have the right to
appoint a successor Agent which appointment shall, provided no Default or Event
of Default shall have occurred and be continuing, be subject to the Borrower’s
approval, which approval shall not be unreasonably withheld or delayed (except
that the Borrower shall, in all events, be deemed to have approved each Lender
and its affiliates as a successor Agent). If no successor Agent shall have been
so appointed in accordance with the immediately preceding sentence, and shall
have accepted such appointment, within 30 days after the resigning Agent’s
giving of notice of resignation or the Lenders’ removal of the resigning Agent,
then the resigning or removed Agent may, on behalf of the Lenders, appoint a
successor Agent, which shall be a Lender, if any Lender shall be willing to
serve, and otherwise shall be a commercial bank having total combined assets of
at least $50,000,000,000. Upon the acceptance of any appointment as Agent
hereunder by a successor Agent, such successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Agent and of the Swingline Lender, and

    -80-

   

the retiring Agent shall be discharged from its duties and obligations under the
Loan Documents. Such successor Agent shall issue letters of credit in
substitution for the Letters of Credit, if any, outstanding at the time of such
succession or make other arrangements satisfactory to the current Agent to
effectively assume the obligations of the current Agent with respect to such
Letters of Credit. After any Agent’s resignation or removal hereunder as Agent,
the provisions of this Article XI. shall continue to inure to its benefit as to
any actions taken or omitted to be taken by it while it was Agent under the Loan
Documents.

 

Section 11.9.    Titled Agents.

 

          Each of the Titled Agents 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 of “Sole Lead Arranger”, “Book
Runner,” “Syndication Agent” and “Co-Documentation Agent” are solely honorific
and imply no fiduciary responsibility on the part of the Titled Agents to the
Agent, the Borrower or any Lender 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 XII.   MISCELLANEOUS

 

Section 12.1.    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:

  Commercial Net Lease Realty, Inc.
450 S. Orange Avenue, Suite 900
Orlando, Florida 32801
Attn:  Kevin B. Habicht
Telephone:    (407) 265-7348
Telecopy:      (407) 650-1044  

 

          If to the Agent:

  Wachovia Bank, National Association
301 S. College St., NC0172
Charlotte, North Carolina 28288
Attn:  Rex E. Rudy
Telephone:    (704) 383-6506
Telecopy:      (704) 383-6205     -81-

   

          If to a Lender:

  To such Lender’s address or telecopy number, as applicable, set forth on its
signature page hereto or in the applicable Assignment and Acceptance Agreement;

 

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, when received; (ii) if telecopied, when transmitted; or (iii) if hand
delivered, when delivered. Notwithstanding the immediately preceding sentence,
all notices or communications to the Agent or any Lender under Article II. shall
be effective only when actually received. Neither the Agent nor any Lender shall
incur any liability to the Borrower (nor shall the Agent incur any liability to
the Lenders) for acting upon any telephonic notice referred to in this Agreement
which the 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 12.2.    Expenses.

 

          The Borrower agrees (a) to pay or reimburse the Agent for all of its
reasonable out-of-pocket costs and expenses incurred in connection with the
preparation, negotiation and execution of, and any amendment, supplement or
modification to, any of the Loan Documents (including due diligence expenses and
travel expenses relating to closing), and the consummation of the transactions
contemplated thereby, including the reasonable fees and disbursements of counsel
to the Agent, (b) to pay or reimburse the Agent, and 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 Agent pursuant to the Loan Documents, (c) to pay,
and indemnify and hold harmless the Agent, and the Lenders 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 or
reimburse the Agent, and the Lenders for all their costs and expenses incurred
in connection with any bankruptcy or other proceeding of the type described in
Sections 10.1.(f) or 10.1.(g), including the reasonable fees and disbursements
of counsel to the Agent and any Lender, whether such fees and expenses are
incurred prior to, during or after the commencement of such proceeding or the
confirmation or conclusion of any such proceeding. If the Borrower shall fail to
pay any amounts required to be paid by it pursuant to this Section, the Agent,
and/or the Lenders may pay such amounts on behalf of the Borrower and either
deem the same to be Loans outstanding hereunder or otherwise Obligations owing
hereunder.

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Section 12.3.    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 Agent, each Lender and each Participant is hereby authorized by the
Borrower, at any time or from time to time during the continuance of an Event of
Default, without prior notice to the Borrower or to any other Person, any such
notice being hereby expressly waived, but in the case of a Lender or Participant
subject to receipt of the prior written consent of the 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 Agent, such Lender or any
affiliate of the 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 10.2., and although such obligations shall be contingent or unmatured.

 

Section 12.4.    Litigation; Jurisdiction; Other Matters; Waivers.

 

          (a)           EACH PARTY HERETO ACKNOWLEDGES THAT ANY DISPUTE OR
CONTROVERSY BETWEEN OR AMONG THE BORROWER, THE 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 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, THE NOTES, OR ANY OTHER LOAN
DOCUMENT OR BY REASON OF ANY OTHER SUIT, CAUSE OF ACTION OR DISPUTE WHATSOEVER
BETWEEN OR AMONG THE BORROWER, THE AGENT OR ANY OF THE LENDERS OF ANY KIND OR
NATURE.

 

          (b)           EACH OF THE BORROWER, THE AGENT AND EACH LENDER HEREBY
AGREES THAT ANY FEDERAL DISTRICT COURT LOCATED IN NORTH CAROLINA OR, AT THE
OPTION OF THE AGENT, ANY STATE COURT LOCATED IN CHARLOTTE, NORTH CAROLINA, SHALL
HAVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN OR AMONG
THE BORROWER, THE AGENT OR ANY OF THE LENDERS, PERTAINING DIRECTLY OR INDIRECTLY
TO THIS AGREEMENT, THE LOANS AND LETTERS OF CREDIT, THE NOTES OR ANY OTHER LOAN
DOCUMENT OR TO ANY MATTER ARISING HEREFROM OR THEREFROM. THE BORROWER AND EACH
OF THE LENDERS 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

    -83-

   

OF ANY ACTION BY THE AGENT OR ANY LENDER OR THE ENFORCEMENT BY THE AGENT OR ANY
LENDER OF ANY JUDGMENT OBTAINED IN SUCH FORUM IN ANY OTHER APPROPRIATE
JURISDICTION.

 

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

 

Section 12.5.    Successors and Assigns.

 

          (a)           The provisions of this Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and permitted assigns, except that the Borrower may not assign or otherwise
transfer any of its rights or obligations under this Agreement 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.

 

          (b)           Any Lender may make, carry or transfer Loans at, to or
for the account of any of its branch offices or the office of an affiliate of
such Lender except to the extent such transfer would result in increased costs
to the Borrower.

 

          (c)           Any Lender may at any time grant to one or more banks or
other financial institutions (each a “Participant”) participating interests in
its Commitment or the Obligations owing to such Lender; provided, however, (i)
any such participating interest must be for a constant and not a varying
percentage interest (ii) no Lender may grant a participating interest in its
Commitment, or if the Commitments have been terminated, the aggregate
outstanding principal balance of Notes held by it, in an amount less than
$5,000,000 and (iii) after giving effect to any such participation by a Lender,
the amount of its Commitment, or if the Commitments have been terminated, the
aggregate outstanding principal balance of Notes held by it, in which it has not
granted any participating interests much be equal to $5,000,000 and integral
multiples of $1,000,000 in excess thereof. Except as otherwise provided in
Section 12.3., no Participant shall have any rights or benefits under this
Agreement or any other Loan Document. In the event of any such grant by a Lender
of a participating interest to a Participant, such Lender shall remain
responsible for the performance of its obligations hereunder, and the Borrower
and the Agent shall continue to deal solely and directly with such Lender in
connection with such Lender’s rights and obligations under this Agreement. Any
agreement pursuant to which any Lender may grant such a participating interest
shall provide that such Lender shall retain the sole right and responsibility to
enforce the obligations of the Borrower hereunder including, without limitation,
the right to approve any amendment, modification or waiver of any provision of
this Agreement; provided, however, such Lender may agree with the Participant
that it will not, without the consent of the Participant, agree to (i) increase,
or extend the term or extend the time or waive any requirement for the reduction
or termination of, such Lender’s Commitment, (ii) extend the date fixed for the
payment of principal of or interest on the Loans or portions thereof owing to
such Lender, (iii) reduce the

    -84-

   

amount of any such payment of principal, (iv) reduce the rate at which interest
is payable thereon or (v) release any Guarantor (except as otherwise permitted
under Section 7.11.(b)). An assignment or other transfer which is not permitted
by subsection (d) or (e) below shall be given effect for purposes of this
Agreement only to the extent of a participating interest granted in accordance
with this subsection (c). Upon request from the Agent, a Lender shall notify the
Agent of the sale of any participation hereunder and, if requested by the Agent,
certify to the Agent that such participation is permitted hereunder.

 

          (d)           Any Lender may with the prior written consent of the
Agent and, so long as no Default or Event of Default shall have occurred and be
continuing, the Borrower (which consent, in each case, shall not be unreasonably
withheld), assign to one or more Eligible Assignees (each an “Assignee”) all or
a portion of its Commitment and its other rights and obligations under this
Agreement and the Notes; provided, however, (i) no such consent by the Borrower
shall be required in the case of any assignment to another Lender or any
affiliate of such Lender or another Lender and no such consent by the Agent
shall be required in the case of any assignment by a Lender to any affiliate of
such Lender; (ii) any partial assignment shall be in an amount at least equal to
$5,000,000 and integral multiples of $1,000,000 in excess thereof and after
giving effect to such assignment the assigning Lender retains a Commitment, or
if the Commitments have been terminated, holds Notes having an aggregate
outstanding principal balance, of at least $5,000,000 and integral multiples of
$1,000,000 in excess thereof; and (iii) each such assignment shall be effected
by means of an Assignment and Acceptance Agreement. Upon execution and delivery
of such instrument and payment by such Assignee to such transferor Lender of an
amount equal to the purchase price agreed between such transferor Lender and
such Assignee, such Assignee shall be deemed to be a Lender party to this
Agreement as of the effective date of the Assignment and Acceptance Agreement
and shall have all the rights and obligations of a Lender with a Commitment as
set forth in such Assignment and Acceptance Agreement, and the transferor Lender
shall be released from its obligations hereunder to a corresponding extent, and
no further consent or action by any party shall be required. Upon the
consummation of any assignment pursuant to this subsection (d), the transferor
Lender, the Agent and the Borrower shall make appropriate arrangements so that
new Notes are issued to the Assignee and such transferor Lender, as appropriate.
In connection with any such assignment, the transferor Lender shall pay to the
Agent an administrative fee for processing such assignment in the amount of
$3,500.

 

          (e)           Any Lender (each, a “Designating Lender”) may at any
time while the Borrower has been assigned an Investment Grade Rating from either
S&P or Moody’s designate one Designated Lender to fund Bid Rate Loans on behalf
of such Designating Lender subject to the terms of this subsection (e) and the
provisions in the immediately preceding subsections (c) and (d) shall not apply
to such designation. No Lender may designate more than one Designated Lender.
The parties to each such designation shall execute and deliver to the Agent for
its acceptance a Designation Agreement. Upon such receipt of an appropriately
completed Designation Agreement executed by a Designating Lender and a designee
representing that it is a Designated Lender, the Agent will accept such
Designation Agreement and give prompt notice thereof to the Borrower, whereupon
(i) the Borrower shall execute and deliver to the Designating Lender a
Designated Lender Note payable to the order of the Designated Lender, (ii) from
and after the effective date specified in the Designation Agreement, the
Designated Lender shall

    -85-

   

become a party to this Agreement with a right to make Bid Rate Loans on behalf
of its Designating Lender pursuant to Section 2.2. after the Borrower has
accepted a Bid Rate Loan (or portion thereof) of the Designating Lender, and
(iii) the Designated Lender shall not be required to make payments with respect
to any obligations in this Agreement except to the extent of excess cash flow of
such Designated Lender which is not otherwise required to repay obligations of
such Designated Lender which are then due and payable; provided, however, that
regardless of such designation and assumption by the Designated Lender, the
Designating Lender shall be and remain obligated to the Borrower, the Agent and
the Lenders for each and every of the obligations of the Designating Lender and
its related Designated Lender with respect to this Agreement, including, without
limitation, any indemnification obligations under Section 11.7. and any sums
otherwise payable to the Borrower by the Designated Lender. Each Designating
Lender shall serve as the administrative agent of the Designated Lender and
shall on behalf of, and to the exclusion of, the Designated Lender: (i) receive
any and all payments made for the benefit of the Designated Lender and (ii) give
and receive all communications and notices and take all actions hereunder,
including, without limitation, votes, approvals, waivers, consents and
amendments under or relating to this Agreement and the other Loan Documents. Any
such notice, communication, vote, approval, waiver, consent or amendment shall
be signed by the Designating Lender as administrative agent for the Designated
Lender and shall not be signed by the Designated Lender on its own behalf and
shall be binding on the Designated Lender to the same extent as if signed by the
Designated Lender on its own behalf. The Borrower, the Agent and the Lenders may
rely thereon without any requirement that the Designated Lender sign or
acknowledge the same. No Designated Lender may assign or transfer all or any
portion of its interest hereunder or under any other Loan Document, other than
assignments to the Designating Lender which originally designated such
Designated Lender. The Borrower, the Lenders and the Agent each hereby agrees
that it will not institute against any Designated Lender or join any other
Person in instituting against any Designated Lender any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceeding under any
federal or state bankruptcy or similar law, until the later to occur of (x) one
year and one day after the payment in full of the latest maturing commercial
paper note issued by such Designated Lender and (y) the Termination Date.

 

          (f)           The Agent shall maintain at the Principal Office a copy
of each Assignment and Acceptance Agreement delivered to and accepted by it and
a register for the recordation of the names and addresses of the Lenders and the
Commitment of each Lender from time to time (the “Register”). The Agent shall
give each Lender and the Borrower notice of the assignment by any Lender of its
rights as contemplated by this Section. The Borrower, the Agent and the Lenders
may treat each Person whose name is recorded in the Register as a Lender
hereunder for all purposes of this Agreement. The Register and copies of each
Assignment and Acceptance Agreement shall be available for inspection by the
Borrower or any Lender at any reasonable time and from time to time upon
reasonable prior notice to the Agent. Upon its receipt of an Assignment and
Acceptance Agreement executed by an assigning Lender, together with each Note
subject to such assignment, the Agent shall, if such Assignment and Acceptance
Agreement has been completed and if the Agent receives the processing and
recording fee described in subsection (d) above, (i) accept such Assignment and
Acceptance Agreement, (ii) record the information contained therein in the
Register and (iii) give prompt notice thereof to the Borrower.

    -86-

   

          (g)           In addition to the assignments and participations
permitted under the foregoing provisions of this Section, any Lender may assign
and pledge all or any portion of its Loans and its Notes to any Federal Reserve
Bank as collateral security pursuant to Regulation A and any Operating Circular
issued by such Federal Reserve Bank, and such Loans and Notes shall be fully
transferable as provided therein. No such assignment shall release the assigning
Lender from its obligations hereunder.

 

          (h)           A Lender may furnish any information concerning the
Borrower, any other Loan Party or any of their respective Subsidiaries in the
possession of such Lender from time to time to Assignees and Participants
(including prospective Assignees and Participants) subject to compliance with
Section 12.8.

 

          (i)           Anything in this Section to the contrary
notwithstanding, no Lender may assign or participate any interest in any Loan
held by it hereunder to the Borrower, any other Loan Party or any of their
respective Affiliates or Subsidiaries.

 

          (j)           Each Lender agrees that, without the prior written
consent of the Borrower and the Agent, it will not make any assignment hereunder
in any manner or under any circumstances that would require registration or
qualification of, or filings in respect of, any Loan or Note under the
Securities Act or any other securities laws of the United States of America or
of any other jurisdiction.

 

Section 12.6.    Amendments.

 

          Except as otherwise expressly provided in this Agreement, any consent
or approval required or permitted by this Agreement or any other Loan Document
to be given by the Lenders may be given, and any term of this Agreement or of
any other Loan Document may be amended, and the performance or observance by the
Borrower or any other Loan Party or any Subsidiary of any terms of this
Agreement or such other Loan Document or the continuance of any Default or Event
of Default may be waived (either generally or in a particular instance and
either retroactively or prospectively) with, but only with, the written consent
of the Requisite Lenders (and, in the case of an amendment to any Loan Document,
the written consent of the Borrower). Notwithstanding the foregoing, no
amendment, waiver or consent shall, unless in writing, and signed by all of the
Lenders (or the Agent at the written direction of the Lenders), do any of the
following: (i) change the Commitments of the Lenders (except for (x) any
increase in the Commitments effectuated pursuant to Section 2.15. or (y) any
decrease in the Commitments effectuated pursuant to Section 2.14. or that is pro
rata in accordance with the respective amounts of the Lenders’ Commitments) or
subject the Lenders to any additional obligations; (ii) reduce the principal of,
or interest rates that have accrued or that will be charged on the outstanding
principal amount of, any Loans or Fees or other Obligations; (iii) reduce the
amount of any Fees payable hereunder; (iv) modify the definition of the term
“Termination Date” (except as contemplated under Section 2.12.) or otherwise
postpone any date fixed for any payment of any principal of, or interest on, any
Loans or any other Obligations (including the waiver of any Default or Event of
Default as a result of the nonpayment of any such Obligations as and when due),
or extend the expiration date of any Letter of Credit beyond the Termination
Date; (v) amend or otherwise modify the provisions of Section 3.2.; (vi) modify
the definition of the

    -87-

   

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, including without limitation, any
modification of this Section 12.6. if such modification would have such effect;
(vii) release any Guarantor from its obligations under the Guaranty (except as
otherwise permitted under Section 7.11.(b)); (viii) amend or otherwise modify
the provisions of Section 2.16.(a); or (ix) amend Section 9.1.(d), waive any
Default or Event of Default occurring under Section 10.1.(c)(i) resulting from a
violation of such Section, or modify the definition of the terms “Unsecured
Debt” and “Unencumbered Asset Value”. Further, no amendment, waiver or consent
unless in writing and signed by the Agent, in addition to the Lenders required
hereinabove to take such action, shall affect the rights or duties of the Agent
under this Agreement or any of the other Loan Documents. Any amendment, waiver
or consent relating to Section 2.3. or the obligations of the Swingline Lender
under this Agreement or any other Loan Document shall, in addition to the
Lenders required hereinabove to take such action, require the written consent of
the Swingline Lender. No waiver shall extend to or affect any obligation not
expressly waived or impair any right consequent thereon and any amendment,
waiver or consent shall be effective only in the specific instance and for the
specific purpose set forth therein. No course of dealing or delay or omission on
the part of the Agent or any Lender in exercising any right shall operate as a
waiver thereof or otherwise be prejudicial thereto. 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 any other or further
notice or demand in similar or other circumstances.

 

Section 12.7.    Nonliability of Agent and Lenders.

 

          The relationship between the Borrower and the Lenders and the Agent
shall be solely that of borrower and lender. Neither the 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 Agent or any Lender to any Lender, the Borrower, any
Subsidiary or any other Loan Party. Neither the 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 Borrower’s business or operations.

 

Section 12.8.    Confidentiality.

 

          Except as otherwise provided by Applicable Law, the 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 Borrower in accordance with its customary procedure for
handling confidential information of this nature and in accordance with safe and
sound banking practices but in any event may make disclosure: (a) to any of
their respective affiliates (provided they shall agree to keep such information
confidential in accordance with the terms of this Section 12.8.); (b) as
reasonably requested by any bona fide Assignee, Participant or other transferee
in connection with the contemplated transfer of any Commitment 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 Agent’s or such Lender’s independent auditors and other

    -88-

   

professional advisors (provided they shall be notified of the confidential
nature of the information); (e) after the happening and during the continuance
of an Event of Default, to any other Person, in connection with the exercise by
the Agent or the Lenders of rights hereunder or under any of the other Loan
Documents; (f) upon Borrower’s prior consent (which consent shall not be
unreasonably withheld), to any contractual counter-parties to any swap or
similar hedging agreement or to any rating agency; and (g) 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 Agent or any Lender on a
nonconfidential basis from a source other than the Borrower or any Affiliate.
Notwithstanding anything to the contrary set forth herein or in any other
written or oral understanding or agreement to which the parties hereto are
parties or by which they are bound, the parties hereto acknowledge and agree
that (i) any obligations of confidentiality contained herein and therein do not
apply and have not applied from the commencement of discussions between the
parties to the tax treatment and tax structure of the transactions contemplated
by the Loan Documents (and any related transactions or arrangements), and (ii)
each party (and each of its employees, representatives, or other agents) may
disclose to any and all Persons, without limitation of any kind, the tax
treatment and tax structure of the transactions contemplated by the Loan
Documents and all materials of any kind (including opinions or other tax
analyses) that are provided to such party relating to such tax treatment and tax
structure, all within the meaning of Treasury Regulations Section 1.6011-4;
provided, however, that with respect to any document or similar item that in
either case contains information concerning the tax treatment or tax structure
of the transactions contemplated by the Loan Documents as well as other
information, this sentence shall only apply to such portions of the document or
similar item that relate to the tax treatment or tax structure of the
transactions contemplated by the Loan Documents; provided, further, however, to
the extent not inconsistent with the immediately preceding clause (ii), the
parties hereto do not intend anything contained in this sentence to be a waiver
of the privilege each has to maintain, in its sole discretion, the
confidentiality of a communication with its attorney or a confidential
communication with a federally authorized tax practitioner under Section 7525 of
the Internal Revenue Code relating to the transactions contemplated by the Loan
Documents.

 

Section 12.9.    Indemnification.

 

          (a)           The Borrower shall and hereby agrees to indemnify,
defend and hold harmless the Agent, each of the Lenders, any affiliate of the
Agent or any Lender, and their respective directors, officers, shareholders,
agents, employees and counsel (each referred to herein as an “Indemnified
Party”) from and against any and all of the following (collectively, the
“Indemnified Costs”): losses, costs, claims, damages, liabilities, deficiencies,
judgments or expenses of every kind and nature (including, without limitation,
amounts paid in settlement, court costs and the reasonable fees and
disbursements of counsel incurred in connection with any litigation,
investigation, claim or proceeding or any advice rendered in connection
therewith, but excluding losses, costs, claims, damages, liabilities,
deficiencies, judgments or expenses indemnification in respect of which is
specifically covered by Section 3.12. or 4.1. or expressly excluded from the
coverage of such Sections 3.12. or 4.1.) 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

    -89-

   

making of any Loans or issuance of Letters of Credit hereunder; (iii) any actual
or proposed use by the Borrower of the proceeds of the Loans or Letters of
Credit; (iv) the Agent’s or any Lender’s entering into this Agreement; (v) the
fact that the Agent and the Lenders have established the credit facility
evidenced hereby in favor of the Borrower; (vi) the fact that the 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 Borrower and the Subsidiaries; (vii) the fact that the 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
Borrower and the Subsidiaries or their financial condition; (viii) the exercise
of any right or remedy the Agent or the Lenders may have under this Agreement or
the other Loan Documents; provided, however, that the 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 this clause (viii)
that constitute gross negligence or willful misconduct; or (ix) any violation or
non-compliance by the Borrower or any Subsidiary of any Applicable Law
(including any Environmental Law) including, but not limited to, any Indemnity
Proceeding commenced by (A) the Internal Revenue Service or state taxing
authority or (B) any Governmental Authority or other Person under any
Environmental Law, including any Indemnity Proceeding commenced by a
Governmental Authority or other Person seeking remedial or other action to cause
the Borrower or its Subsidiaries (or its respective properties) (or the 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 12.9. 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 Indemnified Costs of any Indemnified Party in connection with any
deposition of any Indemnified Party or compliance with any subpoena (including
any subpoena requesting the production of documents). This indemnification
shall, among other things, apply to any Indemnity Proceeding commenced by other
creditors of the Borrower or any Subsidiary, any shareholder of the Borrower or
any Subsidiary (whether such shareholder(s) are prosecuting such Indemnity
Proceeding in their individual capacity or derivatively on behalf of the
Borrower), any account debtor of the Borrower or any Subsidiary or by any
Governmental Authority. If indemnification is to be sought hereunder by an
Indemnified Party, then such Indemnified Party shall notify the Borrower of the
commencement of any Indemnity Proceeding; provided, however, that the failure to
so notify the Borrower shall not relieve the Borrower from any liability that it
may have to such Indemnified Party pursuant to this Section 12.9.

 

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

 

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

    -90-

   

indemnification hereunder together with reasonable costs of collection actually
incurred, including court costs and attorneys fees.

 

          (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
Indemnified Costs incurred by such Indemnified Party shall be reimbursed by the
Borrower. No action taken by legal counsel chosen by an Indemnified Party in
investigating or defending against any such Indemnity Proceeding shall vitiate
or in any way impair the obligations and duties of the Borrower hereunder to
indemnify and hold harmless each such Indemnified Party; provided, however, that
(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).

 

          (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 other of their obligations set forth in this Agreement or
any other Loan Document to which it is a party.

 

Section 12.10.    Termination; Survival.

 

          At such time as (a) all of the Commitments have been terminated, (b)
all Letters of Credit have terminated, (c) none of the Lenders nor the Swingline
Lender is obligated any longer under this Agreement to make any Loans and (d)
all Obligations (other than obligations which survive as provided in the
following sentence) have been paid and satisfied in full, this Agreement shall
terminate. The indemnities to which the Agent, the Lenders and the Swingline
Lender are entitled under the provisions of Sections 3.12., 4.1., 4.4., 11.7.,
12.2. and 12.9. and any other provision of this Agreement and the other Loan
Documents, and the provisions of Section 12.4., shall continue in full force and
effect and shall protect the Agent, the Lenders and the Swingline Lender (i)
notwithstanding any termination of this Agreement, or of the other Loan
Documents, against events arising after such termination as well as before and
(ii) at all times after any such party ceases to be a party to this Agreement
with respect to all matters and events existing on or prior to the date such
party ceased to be a party to this Agreement.

 

Section 12.11.    Severability of Provisions.

 

          Any provision of this Agreement which is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective only to the
extent of such prohibition or unenforceability without invalidating the
remainder of such provision or the remaining provisions or affecting the
validity or enforceability of such provision in any other jurisdiction.

    -91-

   

Section 12.12.    GOVERNING LAW.

 

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

 

Section 12.13.    Counterparts.

 

          This Agreement and any amendments, waivers, consents or supplements
may be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed an original, but all of which counterparts together shall constitute but
one and the same instrument.

 

Section 12.14.    Obligations with Respect to Loan Parties.

 

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

 

Section 12.15.    Limitation of Liability.

 

          Neither the Agent nor any Lender, nor any affiliate, officer,
director, employee, attorney, or agent of the 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 or any of the other
Loan Documents, or any of the transactions contemplated by this Agreement or any
of the other Loan Documents. The Borrower hereby waives, releases, and agrees
not to sue the Agent or any Lender or any of the Agent’s or any Lender’s
affiliates, officers, directors, employees, attorneys, or agents for punitive
damages in respect of any claim in connection with, arising out of, or in any
way related to, this Agreement or any of the other Loan Documents, or any of the
transactions contemplated by this Agreement or financed hereby.

 

Section 12.16.    Entire Agreement.

 

          This Agreement, the Notes, 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 thereof and
may not be contradicted or varied by evidence of prior, contemporaneous, or
subsequent oral agreements or discussions of the parties hereto. There are no
oral agreements among the parties hereto.

 

Section 12.17.    Construction.

 

          The Agent, the Borrower and each Lender acknowledge that each of them
has had the benefit of legal counsel of its own choice and has been afforded an
opportunity to review this

    -92-

   

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 Agent, the Borrower and each Lender.

 

Section 12.18.    NO NOVATION.

 

          THE PARTIES HERETO HAVE ENTERED INTO THIS AGREEMENT SOLELY TO AMEND
AND RESTATE THE TERMS OF THE EXISTING CREDIT AGREEMENT. THE PARTIES DO NOT
INTEND THIS AGREEMENT NOR THE TRANSACTIONS CONTEMPLATED HEREBY TO BE, AND THIS
AGREEMENT AND THE TRANSACTION CONTEMPLATED HEREBY SHALL NOT BE CONSTRUED TO BE,
A NOVATION OF ANY OF THE OBLIGATIONS OWING BY BORROWER UNDER OR IN CONNECTION
WITH THE EXISTING CREDIT AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS (AS
DEFINED IN THE EXISTING CREDIT AGREEMENT).

   

[Signatures on Following Pages]

    -93-

   

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

 

COMMERCIAL NET LEASE REALTY, INC.

By:________________________________
      Name:___________________________
      Title:____________________________

   

 

STATE OF GEORGIA

 

COUNTY OF FULTON

 

          BEFORE ME, a Notary Public in and for said County, personally appeared
____________________, known to me to be a person who, as _______________ of
Commercial Net Lease Realty, Inc., the entity which executed the foregoing
Credit Agreement, signed the same, and acknowledged to me that he did so sign
said instrument in the name and upon behalf of said corporation as an officer of
said corporation.

 

          IN TESTIMONY WHEREOF, I have subscribed my name, and affixed my
official seal, as of May 9, 2003.

   

_____________________________________
Notary Public

My Commission Expires:

[NOTARIAL SEAL]

   

 

[Signatures Continued on Next Page]

    -94-

 

[Signature Page to Seventh Amended and Restated Credit Agreement dated as of
May 9, 2003 with Commercial Net Lease Realty, Inc.]

 

 

WACHOVIA BANK, NATIONAL ASSOCIATION, as
    Agent, as a Lender and as Swingline Lender

By:________________________________
      Name:___________________________
      Title:____________________________

Commitment Amount:

$40,000,000

Lending Office (all Types of Loans):

301 S. College Street, NC0172
Charlotte, North Carolina 28288
Attn:    Rex A. Rudy
Telephone:    (704) 383-6506
Telecopy:      (704) 383-6205

   

[Signatures Continued on Next Page]

    -95-

 

[Signature Page to Seventh Amended and Restated Credit Agreement dated as of
May 9, 2003 with Commercial Net Lease Realty, Inc.]

 

 

WELLS FARGO BANK, NATIONAL ASSOCIATION

By:________________________________
      Name:    Edwin S. Poole III
      Title:    Vice President

Commitment Amount:

$40,000,000

Lending Office (all Types of Loans):

401 East Jackson Street
Suite 1450
Tampa, Florida 33602
Attn:    Shannon Mack
Telephone:    (813) 202-7209
Telecopy:      (813) 202-7201

   

[Signatures Continued on Next Page]

    -96-

 

[Signature Page to Seventh Amended and Restated Credit Agreement dated as of
May 9, 2003 with Commercial Net Lease Realty, Inc.]

 

 

AMSOUTH BANK

By:________________________________
      Name:___________________________
      Title:____________________________

Commitment Amount:

$35,000,000

Lending Office (all Types of Loans):

111 N. Orange Avenue
Suite 1010
Orlando, Florida 32801
Attn:    Aileen W. Leach
Telephone:    (407) 246-8923
Telecopy:      (407) 835-3015

   

[Signatures Continued on Next Page]

    -97-

 

[Signature Page to Seventh Amended and Restated Credit Agreement dated as of
May 9, 2003 with Commercial Net Lease Realty, Inc.]

 

 

SUNTRUST BANK

By:________________________________
      Name:    Blake K. Thompson
      Title:    Vice President

Commitment Amount:

$30,000,000

Lending Office (all Types of Loans):

8245 Boone Blvd.
Suite 820
Vienna, Virginia 22182
Attn:    Connie A. Dores
Telephone:    (703) 902-9166
Telecopy:      (703) 902-9245

   

[Signatures Continued on Next Page]

    -98-

 

[Signature Page to Seventh Amended and Restated Credit Agreement dated as of
May 9, 2003 with Commercial Net Lease Realty, Inc.]

 

 

BANK OF AMERICA, N.A.

By:________________________________
      Name:___________________________
      Title:____________________________

Commitment Amount:

$20,000,000

Lending Office (all Types of Loans):

901 Main Street
TX1-492-14-05
Dallas, Texas 75202
Attn:    Kenneth Smith
Telephone:    (214) 209-0592
Telecopy:      (214) 290-9673

   

[Signatures Continued on Next Page]

    -99-

 

[Signature Page to Seventh Amended and Restated Credit Agreement dated as of
May 9, 2003 with Commercial Net Lease Realty, Inc.]

 

 

COMERICA INC.

By:________________________________
      Name:___________________________
      Title:____________________________

Commitment Amount:

$20,000,000

Lending Office (all Types of Loans):

500 Woodward Ave.
MC 3256
Detroit, Michigan 48226
Attn:    Betsy Branson
Telephone:    (313) 222-5978
Telecopy:      (313) 222-3697

   

[Signatures Continued on Next Page]

    -100-

 

[Signature Page to Seventh Amended and Restated Credit Agreement dated as of
May 9, 2003 with Commercial Net Lease Realty, Inc.]

 

 

CHEVY CHASE BANK, FSB

By:________________________________
      Name:___________________________
      Title:____________________________

Commitment Amount:

$15,000,000

Lending Office (all Types of Loans):

7501 Wisconsin Ave.
12th Floor
Bethesda, Maryland 20814
Attn:    J. Jordan O’Neill III
Telephone:    (240) 497-7733
Telecopy:      (240) 497-7714

   

[Signatures Continued on Next Page]

    -101-

 

[Signature Page to Seventh Amended and Restated Credit Agreement dated as of
May 9, 2003 with Commercial Net Lease Realty, Inc.]

 

 

PNC BANK, NATIONAL ASSOCIATION

By:________________________________
      Name:___________________________
      Title:____________________________

Commitment Amount:

$15,000,000

Lending Office (all Types of Loans):

One PNC Plaza
Mail Stop P1-POPP-19-2
Pittsburgh, Pennsylvania 15222
Attn:    Colleen Choff
Telephone:    (412) 762-6092
Telecopy:      (412) 768-3930

   

[Signatures Continued on Next Page]

    -102-

 

[Signature Page to Seventh Amended and Restated Credit Agreement dated as of
May 9, 2003 with Commercial Net Lease Realty, Inc.]

 

 

CITICORP NORTH AMERICA, INC.

By:________________________________
      Name:___________________________
      Title:____________________________

Commitment Amount:

$10,000,000

Lending Office (all Types of Loans):

399 Park Avenue
16th Floor 1
New York, New York 10043
Attn:    Dana Fusti Dugan
Telephone:    (302) 894-6003
Telecopy:      (212) 994-0849

    -103-

 

EXHIBIT A

FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT

 

 

          THIS ASSIGNMENT AND ACCEPTANCE AGREEMENT dated as of ___________, 200_
(the “Agreement”) by and among _________________________ (the “Assignor”),
_________________________ (the “Assignee”), and WACHOVIA BANK, NATIONAL
ASSOCIATION, as Agent (the “Agent”).

 

          WHEREAS, the Assignor is a Lender under that certain Seventh Amended
and Restated Credit Agreement dated as of May 9, 2003 (as amended, restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”),
by and among Commercial Net Lease Realty, Inc. (the “Borrower”), the financial
institutions party thereto and their assignees under Section 12.5. thereof (the
“Lenders”), the Agent, and the other parties thereto;

 

          WHEREAS, the Assignor desires to assign to the Assignee, among other
things, all or a portion of the Assignor’s Commitment under the Credit
Agreement, all on the terms and conditions set forth herein; and

 

          WHEREAS, the Agent consents to such assignment on the terms and
conditions set forth herein;

 

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

 

          Section 1.           Assignment.

 

          (a)           Subject to the terms and conditions of this Agreement
and in consideration of the payment to be made by the Assignee to the Assignor
pursuant to Section 2 of this Agreement, effective as of ____________, 200_ (the
“Assignment Date”), the Assignor hereby irrevocably sells, transfers and assigns
to the Assignee, without recourse, a $__________ interest (such interest being
the “Assigned Commitment”) in and to the Assignor’s Commitment and all of the
other rights and obligations of the Assignor under the Credit Agreement, such
Assignor’s Revolving Note and the other Loan Documents (representing ______% in
respect of the aggregate amount of all Lenders’ Commitments), including without
limitation, a principal amount of outstanding Revolving Loans equal to
$_________ and all voting rights of the Assignor associated with the Assigned
Commitment, all rights to receive interest on such amount of Revolving Loans and
all commitment and other Fees with respect to the Assigned Commitment and other
rights of the Assignor under the Credit Agreement and the other Loan Documents
with respect to the Assigned Commitment, all as if the Assignee were an original
Lender under and signatory to the Credit Agreement having a Commitment equal to
the amount of the Assigned Commitment. The Assignee, subject to the terms and
conditions hereof, hereby assumes all obligations of the Assignor with respect
to the Assigned Commitment as if the Assignee were an original Lender under and
signatory to the Credit Agreement having a Commitment equal to the Assigned
Commitment, which obligations shall include, but shall not be limited to, the
obligation of the Assignor to make Revolving Loans to the Borrower with

    A-1

   

respect to the Assigned Commitment, the obligation to pay the Agent amounts due
in respect of draws under Letters of Credit as required under Section 2.4.(i) of
the Credit Agreement and the obligation to indemnify the Agent as provided
therein (the foregoing enumerated obligations, together with all other similar
obligations more particularly set forth in the Credit Agreement and the other
Loan Documents, collectively, the “Assigned Obligations”). [In addition, the
Assignor hereby irrevocably sells, transfers and assigns to the Assignee,
without recourse, a $____________ interest in and to the Assignor’s Bid Rate
Note, including without limitation, a principal amount of outstanding Bid Rate
Loans owing to the Assignor in an aggregate amount equal to $__________, all
rights to receive interest on such amount of Bid Rate Loans and other rights of
the Assignor under the Credit Agreement and the other Loan Documents with
respect to such Bid Rate Loans, all as if the Assignee had originally made such
amount of Bid Rate Loans to the Borrower. The obligations assigned pursuant to
the immediately preceding sentence shall constitute Assigned Obligations
hereunder.] The Assignor shall have no further duties or obligations with
respect to, and shall have no further interest in, the Assigned Obligations or
the Assigned Commitment from and after the Assignment Date.

 

          (b)           The assignment by the Assignor to the Assignee hereunder
is without recourse to the Assignor. The Assignee makes and confirms to the
Agent, the Assignor, and the other Lenders all of the representations,
warranties and covenants of a Lender under Article XI. of the Credit Agreement.
Not in limitation of the foregoing, the Assignee acknowledges and agrees that,
except as set forth in Section 4 below, the Assignor is making no
representations or warranties with respect to, and the Assignee hereby releases
and discharges the Assignor for any responsibility or liability for: (i) the
present or future solvency or financial condition of the Borrower, any
Subsidiary or any other Loan Party, (ii) any representations, warranties,
statements or information made or furnished by the Borrower, any Subsidiary or
any other Loan Party in connection with the Credit Agreement or otherwise, (iii)
the validity, efficacy, sufficiency, or enforceability of the Credit Agreement,
any other Loan Document or any other document or instrument executed in
connection therewith, or the collectibility of the Assigned Obligations, (iv)
the perfection, priority or validity of any Lien with respect to any collateral
at any time securing the Obligations or the Assigned Obligations under the Notes
or the Credit Agreement and (v) the performance or failure to perform by the
Borrower or any other Loan Party of any obligation under the Credit Agreement or
any other Loan Document to which it is a party. Further, the Assignee
acknowledges that it has, independently and without reliance upon the Agent, or
on any affiliate or subsidiary thereof, the Assignor or any other Lender and
based on the financial statements supplied by the Borrower and such other
documents and information as it has deemed appropriate, made its own credit
analysis and decision to become a Lender under the Credit Agreement. The
Assignee also acknowledges that it will, independently and without reliance upon
the Agent, the 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 not taking action under the Credit Agreement or
any other Loan Documents or pursuant to any other obligation. Except as
expressly provided in the Credit Agreement, the Agent shall have no duty or
responsibility whatsoever, either initially or on a continuing basis, to provide
the Assignee with any credit or other information with respect to the Borrower
or any other Loan Party or to notify the Assignee of any Default or Event of
Default. The Assignee has not relied on the Agent as to any legal or factual
matter in connection therewith or in connection with the transactions
contemplated thereunder.

    A-2

   

          Section 2.     Payment by Assignee.     In consideration of the
assignment made pursuant to Section 1 of this Agreement, the Assignee agrees to
pay to the Assignor on the Assignment Date, an amount equal to $_________
representing (i) the aggregate principal amount outstanding of the Loans owing
to the Assignor under the Credit Agreement and the other Loan Documents being
assigned hereby plus (ii) the aggregate amount of payments previously made by
Assignor under Section 2.4.(j) of the Credit Agreement which have not been
repaid and which are being assigned hereby.

 

          Section 3.     Payments by Assignor.     The Assignor agrees to pay to
the Agent on the Assignment Date the administration fee, if any, payable under
the applicable provisions of the Credit Agreement.

 

          Section 4.     Representations and Warranties of Assignor.     The
Assignor hereby represents and warrants to the Assignee that (a) as of the
Assignment Date (i) the Assignor is a Lender under the Credit Agreement having a
Commitment under the Credit Agreement [and the outstanding principal balance of
Bid Rate Loans owing to the Assignor] (without reduction by any assignments
thereof which have not yet become effective), equal to $____________ [and
$__________, respectively], and that the Assignor is not in default of its
obligations under the Credit Agreement; and (ii) the outstanding balance of
Revolving Loans owing to the Assignor (without reduction by any assignments
thereof which have not yet become effective) is $____________; and (b) it is the
legal and beneficial owner of the Assigned Commitment which is free and clear of
any adverse claim created by the Assignor.

 

          Section 5.     Representations, Warranties and Agreements of Assignee.
    The Assignee (a) represents and warrants that it is (i) legally authorized
to enter into this Agreement, (ii) an “accredited investor” (as such term is
used in Regulation D of the Securities Act) and (iii) an Eligible Assignee; (b)
confirms that it has received a copy of the Credit Agreement, together with
copies of the most recent financial statements delivered pursuant thereto and
such other documents and information (including without limitation the Loan
Documents) as it has deemed appropriate to make its own credit analysis and
decision to enter into this Agreement; (c) appoints and authorizes the Agent to
take such action as contractual representative on its behalf and to exercise
such powers under the Loan Documents as are delegated to the Agent by the terms
thereof together with such powers as are reasonably incidental thereto; and (d)
agrees that it will become a party to and shall be bound by the Credit Agreement
and the other Loan Documents to which the other Lenders are a party on the
Assignment Date and will perform in accordance therewith all of the obligations
which are required to be performed by it as a Lender.

 

          Section 6.     Recording and Acknowledgment by the Agent.
    Following the execution of this Agreement, the Assignor will deliver to the
Agent (a) a duly executed copy of this Agreement for acknowledgment and
recording by the Agent and (b) the Assignor’s Revolving Note [and Bid Rate
Note]. Upon such acknowledgment and recording, from and after the Assignment
Date, the Agent shall make all payments in respect of the interest assigned
hereby (including payments of principal, interest, Fees and other amounts) to
the Assignee. The Assignor and Assignee shall make all appropriate adjustments
in payments under the Credit Agreement for periods prior to the Assignment Date
directly between themselves.

    A-3

   

          Section 7.     Addresses.     The Assignee specifies as its address
for notices and its Lending Office for all Loans, the offices set forth below:

 

          Notice Address:                    _________________________________
                                                          
_________________________________
                                                          
_________________________________
                                                           Telephone
No.:_____________________
                                                           Telecopy
No.:______________________

          Lending Office:                      _________________________________
                                                          
_________________________________
                                                          
_________________________________
                                                           Telephone
No.:_____________________
                                                           Telecopy
No.:______________________

 

          Section 8.     Payment Instructions.     All payments to be made to
the Assignee under this Agreement by the Assignor, and all payments to be made
to the Assignee under the Credit Agreement, shall be made as provided in the
Credit Agreement in accordance with the following instructions:

          _______________________________
          _______________________________

 

          Section 9.     Effectiveness of Assignment.     This Agreement, and
the assignment and assumption contemplated herein, shall not be effective until
(a) this Agreement is executed and delivered by each of the Assignor, the
Assignee, the Agent, and if required under Section 12.5.(d) of the Credit
Agreement, the Borrower, and (b) the payment to the Assignor of the amounts, if
any, owing by the Assignee pursuant to Section 2 hereof and (c) the payment to
the Agent of the amounts, if any, owing by the Assignor pursuant to Section 3
hereof. Upon recording and acknowledgment of this Agreement by the Agent, from
and after the Assignment Date, (i) the Assignee shall be a party to the Credit
Agreement and, to the extent provided in this Agreement, have the rights and
obligations of a Lender thereunder and (ii) the Assignor shall, to the extent
provided in this Agreement, relinquish its rights (except as otherwise provided
in Section 12.10. of the Credit Agreement) and be released from its obligations
under the Credit Agreement; provided, however, that if the Assignor does not
assign its entire interest under the Loan Documents, it shall remain a Lender
entitled to all of the benefits and subject to all of the obligations thereunder
with respect to its Commitment.

 

          Section 10.     Governing Law.     THIS AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF FLORIDA
APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH STATE.

 

          Section 11.     Counterparts.     This Agreement may be executed in
any number of counterparts each of which, when taken together, shall constitute
one and the same agreement.

    A-4

   

          Section 12.     Headings.     Section headings have been inserted
herein for convenience only and shall not be construed to be a part hereof.

 

          Section 13.     Amendments; Waivers.     This Agreement may not be
amended, changed, waived or modified except by a writing executed by the
Assignee and the Assignor; provided, however, any amendment, waiver or consent
which shall affect the rights or duties of the Agent under this Agreement shall
not be effective unless signed by the Agent.

 

          Section 14.     Entire Agreement.     This Agreement embodies the
entire agreement between the Assignor and the Assignee with respect to the
subject matter hereof and supersedes all other prior arrangements and
understandings relating to the subject matter hereof.

 

          Section 15.     Binding Effect.     This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns.

 

          Section 16.     Definitions.     Terms not otherwise defined herein
are used herein with the respective meanings given them in the Credit Agreement.

 

          [Include this Section only if Borrower’s consent is required under
Section 12.5.(d)     Section 17.    Agreements of the Borrower.     The Borrower
hereby agrees that the Assignee shall be a Lender under the Credit Agreement
having a Commitment equal to the Assigned Commitment. The Borrower agrees that
the Assignee shall have all of the rights and remedies of a Lender under the
Credit Agreement and the other Loan Documents as if the Assignee were an
original Lender under and signatory to the Credit Agreement, including, but not
limited to, the right of a Lender to receive payments of principal and interest
with respect to the Assigned Obligations, and to the Revolving Loans made by the
Lenders after the date hereof and to receive the commitment and other Fees
payable to the Lenders as provided in the Credit Agreement. Further, the
Assignee shall be entitled to the indemnification provisions from the Borrower
in favor of the Lenders as provided in the Credit Agreement and the other Loan
Documents. The Borrower further agrees, upon the execution and delivery of this
Agreement, to execute in favor of the Assignee Notes as required by Section
12.5.(d) of the Credit Agreement. Upon receipt by the Assignor of the amounts
due the Assignor under Section 2, the Assignor agrees to surrender to the
Borrower such Assignor’s Notes.]

[Signatures on Following Pages]

    A-5

   

          IN WITNESS WHEREOF, the parties hereto have duly executed this
Assignment and Acceptance Agreement as of the date and year first written above.

 

ASSIGNOR:

[NAME OF ASSIGNOR]

By:________________________________
      Name:___________________________
      Title:____________________________

ASSIGNEE:

[NAME OF ASSIGNEE]

By:________________________________
      Name:___________________________
      Title:____________________________

 

Accepted as of the date first written above.

AGENT:

WACHOVIA BANK, NATIONAL
   ASSOCIATION, as Agent

By:________________________________
      Name:___________________________
      Title:____________________________

[Signatures Continued on Following Page]

    A-6

   

[Include signature of the Borrower only if required
  under Section 12.5.(d) of the Credit Agreement]
Agreed and consented to as of the
  date first written above.

BORROWER:

COMMERCIAL NET LEASE REALTY, INC.

By:________________________________
      Name:___________________________
      Title:____________________________

    A-7

 

EXHIBIT B

FORM OF DESIGNATION AGREEMENT

 

 

          THIS DESIGNATION AGREEMENT dated as of ___________, 200__ (the
“Agreement”) by and among _________________________ (the“Lender”),
_________________________ (the “Designated Lender”) and Wachovia Bank, National
Association, as Agent (the “Agent”).

 

          WHEREAS, the Lender is a Lender under that certain Seventh Amended and
Restated Credit Agreement dated as of May 9, 2003 (as amended, restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”),
by and among Commercial Net Lease Realty, Inc. (the “Borrower”), the financial
institutions party thereto and their assignees under Section 12.5. thereof (the
“Lenders”), the Agent, and the other parties thereto;

 

          WHEREAS, pursuant to Section 12.5.(e), the Lender desires to designate
the Designated Lender as its “Designated Lender” under and as defined in the
Credit Agreement; and

 

          WHEREAS, the Agent consents to such designation on the terms and
conditions set forth herein.

 

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

 

          Section 1.     Designation.     Subject to the terms and conditions of
this Agreement, the Lender hereby designates the Designated Lender, and the
Designated Lender hereby accepts such designation, to have a right to make Bid
Rate Loans on behalf of the Lender pursuant to Section 2.2. of the Credit
Agreement. Any assignment by the Lender to the Designated Lender of rights to
make a Bid Rate Loan shall only be effective at the time such Bid Rate Loan is
funded by the Designated Lender. The Designated Lender, subject to the terms and
conditions hereof, hereby agrees to make such accepted Bid Rate Loans and to
perform such other obligations as may be required of it as a Designated Lender
under the Credit Agreement.

 

          Section 2.     Lender Not Discharged.     Notwithstanding the
designation of the Designated Lender hereunder, the Lender shall be and remain
obligated to the Borrower, the Agent and the Lenders for each and every of the
obligations of the Lender and its related Designated Lender with respect to the
Credit Agreement and the other Loan Documents, including, without limitation,
any indemnification obligations under Section 11.7. of the Credit Agreement and
any sums otherwise payable to the Borrower by the Designated Lender.

 

          Section 3.     No Representation by Lender.     The Lender makes no
representation or warranty and, except as set forth in Section 8 below, assumes
no responsibility pursuant to this Agreement with respect to (a) any statements,
warranties or representations made in or in connection with any Loan Document or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of any Loan Document or any other instrument and document

    B-1

   

furnished pursuant thereto and (b) the financial condition of the Borrower, any
Subsidiary or any other Loan Party or the performance or observance by the
Borrower or any other Loan Party of any of its respective obligations under any
Loan Document to which it is a party or any other instrument or document
furnished pursuant thereto.

 

          Section 4.     Representations and Covenants of Designated Lender.
    The Designated Lender makes and confirms to the Agent, the Lender, and the
other Lenders all of the representations, warranties and covenants of a Lender
under Article XI. of the Credit Agreement. Not in limitation of the foregoing,
the Designated Lender (a) represents and warrants that it (i) is legally
authorized to enter into this Agreement; (ii) is an “accredited investor” (as
such term is used in Regulation D of the Securities Act) and (iii) meets the
requirements of a “Designated Lender” contained in the definition of such term
contained in the Credit Agreement; (b) confirms that it has received a copy of
the Credit Agreement, together with copies of the most recent financial
statements delivered pursuant thereto and such other documents and information
(including without limitation the Loan Documents) as it has deemed appropriate
to make its own credit analysis and decision to enter into this Agreement; (c)
confirms that it has, independently and without reliance upon the Agent, or on
any affiliate thereof, the Lender or any other Lender and based on such
financial statements and such other documents and information, made its own
credit analysis and decision to become a Designated Lender under the Credit
Agreement; (d) appoints and authorizes the Agent to take such action as
contractual representative on its behalf and to exercise such powers under the
Loan Documents as are delegated to the Agent by the terms thereof together with
such powers as are reasonably incidental thereto; and (e) agrees that it will
become a party to and shall be bound by the Credit Agreement, the other Loan
Documents to which the other Lenders are a party on the Effective Date (as
defined below) and will perform in accordance therewith all of the obligations
which are required to be performed by it as a Designated Lender. The Designated
Lender also acknowledges that it will, independently and without reliance upon
the Agent, the Lender or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Credit Agreement or
any Note or pursuant to any other obligation. The Designated Lender acknowledges
and agrees that except as expressly required under the Credit Agreement, the
Agent shall have no duty or responsibility whatsoever, either initially or on a
continuing basis, to provide the Designated Lender with any credit or other
information with respect to the Borrower, any Subsidiary or any other Loan Party
or to notify the Designated Lender of any Default or Event of Default.

 

          Section 5.     Appointment of Lender as Attorney-In-Fact.     The
Designated Lender hereby appoints the Lender as the Designated Lender’s agent
and attorney-in-fact, and grants to the Lender an irrevocable power of attorney,
to receive any and all payments to be made for the benefit of the Designated
Lender under the Credit Agreement, to deliver and receive all notices and other
communications under the Credit Agreement and other Loan Documents and to
exercise on the Designated Lender’s behalf all rights to vote and to grant and
make approvals, waivers, consents of amendments to or under the Credit Agreement
or other Loan Documents. Any document executed by the Lender on the Designated
Lender’s behalf in connection with the Credit Agreement or other Loan Documents
shall be binding on the Designated Lender. Each Borrower, each Agent and each of
the Lenders may rely on and are beneficiaries of the preceding provisions.

    B-2

   

          Section 6.     Acceptance by the Agent.     Following the execution of
this Agreement by the Lender and the Designated Lender, the Lender will (i)
deliver to the Agent a duly executed original of this Agreement for acceptance
by the Agent and (ii) pay to the Agent the fee, if any, payable under the
applicable provisions of the Credit Agreement whereupon this Agreement shall
become effective as of the date of such acceptance or such other date as may be
specified on the signature page hereof (the “Effective Date”).

 

          Section 7.     Effect of Designation.     Upon such acceptance and
recording by the Agent, as of the Effective Date, the Designated Lender shall be
a party to the Credit Agreement with a right to make Bid Rate Loans as a Lender
pursuant to Section 2.2. of the Credit Agreement and the rights and obligations
of a Lender related thereto; provided, however, that the Designated Lender shall
not be required to make payments with respect to such obligations except to the
extent of excess cash flow of the Designated Lender which is not otherwise
required to repay obligations of the Designated Lender which are then due and
payable. Notwithstanding the foregoing, the Lender, as agent for the Designated
Lender, shall be and remain obligated to the Borrowers, the Agent and the
Lenders for each and every of the obligations of the Designated Lender and the
Lender with respect to the Credit Agreement.

 

          Section 8.     Indemnification of Designated Lender.     The Lender
unconditionally agrees to pay or reimburse the Designated Lender and save the
Designated Lender harmless against all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever which may be imposed or asserted by any of the
parties to the Loan Documents against the Designated Lender, in its capacity as
such, in any way relating to or arising out of this Agreement or any other Loan
Documents or any action taken or omitted by the Designated Lender hereunder or
thereunder, provided that the Lender shall not be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements if the same results from the Designated
Lender’s gross negligence or willful misconduct.

 

          Section 9.     Governing Law.     THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF FLORIDA APPLICABLE TO
CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH STATE.

 

          Section 10.     Counterparts.     This Agreement may be executed in
any number of counterparts each of which, when taken together, shall constitute
one and the same agreement.

 

          Section 11.     Headings.     Section headings have been inserted
herein for convenience only and shall not be construed to be a part hereof.

 

          Section 12.     Amendments; Waivers.     This Agreement may not be
amended, changed, waived or modified except by a writing executed by all parties
hereto.

 

          Section 13.     Binding Effect.     This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns.

    B-3

   

          Section 14.     Definitions.     Terms not otherwise defined herein
are used herein with the respective meanings given them in the Credit Agreement.

 

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

 

EFFECTIVE DATE:  ___________________

LENDER:

[NAME OF LENDER]

By:________________________________
      Name:___________________________
      Title:____________________________

DESIGNATED LENDER:

[NAME OF DESIGNATED LENDER]

By:________________________________
      Name:___________________________
      Title:____________________________

 

Accepted as of the date first written above.

AGENT:

WACHOVIA BANK, NATIONAL
   ASSOCIATION, as Agent

By:________________________________
      Name:___________________________
      Title:____________________________

    B-4

 

EXHIBIT C

FORM OF NOTICE OF BORROWING

_____________, 200__

 

 

Wachovia Bank, National Association, as Agent
One Wachovia Center
301 S. College St., NC0172
Charlotte, North Carolina 28288
Attention:  Rex E. Rudy

Ladies and Gentlemen:

 

          Reference is made to that certain Seventh Amended and Restated Credit
Agreement dated as of May 9, 2003 (as amended, restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”), by and among
Commercial Net Lease Realty, Inc. (the “Borrower”), the financial institutions
party thereto and their assignees under Section 12.5. thereof (the “Lenders”),
Wachovia Bank, National Association, as Agent (the “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 such Revolving Loans be made available to the
Borrower on _______________, 200__.

 

3.

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

   

[Check one box only]

   

          Base Rate Loans

   

          LIBOR Loans, each with an initial Interest Period for a duration of:

   

       [Check one box only]           1 week
                                                        1 month
                                                        2 months
                                                        3 months

 

4.

The proceeds of this borrowing of Revolving Loans will be used for the following
purpose:
_____________________________________________________________________________
_____________________________________________________________________________.

    C-1

   

5.

The Borrower requests that the proceeds of this borrowing of Revolving Loans be
made available to the Borrower by ____________________________.

 

          The Borrower hereby certifies to the Agent and the Lenders that as of
the date hereof and as of the date of the making of the requested Revolving
Loans and after giving effect thereto, (a) no Default or Event of Default exists
or shall exist, 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 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 accurate on and as of such earlier date). In addition, the
Borrower certifies to the Agent and the Lenders that all conditions to the
making of the requested Revolving Loans contained in Article V. of the Credit
Agreement will have been satisfied at the time such Revolving Loans are made.

 

          If notice of the requested borrowing of Revolving Loans was previously
given by telephone, this notice is to be considered the written confirmation of
such telephone notice required by Section 2.1.(b) of the Credit Agreement.

 

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

 

COMMERCIAL NET LEASE REALTY, INC.

By:________________________________
      Name:___________________________
      Title:____________________________

    C-2

 

EXHIBIT D

FORM OF NOTICE OF CONTINUATION

_____________, 200__

 

 

Wachovia Bank, National Association, as Agent
One Wachovia Center
301 S. College St., NC0172
Charlotte, North Carolina 28288
Attention:  Rex E. Rudy

Ladies and Gentlemen:

 

          Reference is made to that certain Seventh Amended and Restated Credit
Agreement dated as of May 9, 2003 (as amended, restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”), by and among
Commercial Net Lease Realty, Inc. (the “Borrower”), the financial institutions
party thereto and their assignees under Section 12.5. thereof (the “Lenders”),
Wachovia Bank, National Association, as Agent (the “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 borrowing of Loans 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 proposed date of such Continuation is ____________, 200__.

 

2.

The aggregate principal amount of Loans subject to the requested Continuation is
$__________________ and was originally borrowed by the Borrower on ____________,
200__.

 

3.

The portion of such principal amount subject to such Continuation is
$_______________________.

 

4.

The current Interest Period for each of the Loans subject to such Continuation
ends on ________, 200_.

 

5.

The duration of the new Interest Period for each of such Loans or portion
thereof subject to such Continuation is:

   

       [Check one box only]           1 week
                                                        1 month
                                                        2 months
                                                        3 months

    D-1

   

          The Borrower hereby certifies to the 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 exists
or will exist.

 

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

 

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

 

COMMERCIAL NET LEASE REALTY, INC.

By:________________________________
      Name:___________________________
      Title:____________________________

    D-2

 

EXHIBIT E

FORM OF NOTICE OF CONVERSION

_____________, 200__

 

 

Wachovia Bank, National Association, as Agent
One Wachovia Center
301 S. College St., NC0172
Charlotte, North Carolina 28288
Attention:  Rex E. Rudy

Ladies and Gentlemen:

 

          Reference is made to that certain Seventh Amended and Restated Credit
Agreement dated as of May 9, 2003 (as amended, restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”), by and among
Commercial Net Lease Realty, Inc. (the “Borrower”), the financial institutions
party thereto and their assignees under Section 12.5. thereof (the “Lenders”),
Wachovia Bank, National Association, as Agent (the “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 borrowing of Loans of one Type into Loans 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 proposed date of such Conversion is ____________, 200__.

 

2.

The Loans to be Converted pursuant hereto are currently:

   

       [Check one box only]            Base Rate Loans
                                                        LIBOR Loans

 

3.

The aggregate principal amount of Loans subject to the requested Conversion is
$__________________ and was originally borrowed by the Borrower on ____________,
200__.

 

4.

The portion of such principal amount subject to such Continuation is
$_______________________.

    E-1

   

5.

The amount of such Loans to be so Converted is to be converted into Loans of the
following Type:

   

[Check one box only]

   

          Base Rate Loans

   

          LIBOR Loans, each with an initial Interest Period for a duration of:

   

       [Check one box only]           1 week
                                                        1 month
                                                        2 months
                                                        3 months

 

          The Borrower hereby certifies to the Agent and the Lenders that as of
the date hereof and as of the date of the requested Conversion and after giving
effect thereto, (a) no Default or Event of Default exists or will exist, 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 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 accurate on and
as of such earlier date).

 

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

 

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

 

COMMERCIAL NET LEASE REALTY, INC.

By:________________________________
      Name:___________________________
      Title:____________________________

    E-2

 

EXHIBIT F

FORM OF NOTICE OF SWINGLINE BORROWING

_____________, 200__

 

 

Wachovia Bank, National Association, as Agent
One Wachovia Center
301 S. College St., NC0172
Charlotte, North Carolina 28288
Attention:  Rex E. Rudy

Ladies and Gentlemen:

 

          Reference is made to that certain Seventh Amended and Restated Credit
Agreement dated as of May 9, 2003 (as amended, restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”), by and among
Commercial Net Lease Realty, Inc. (the “Borrower”), the financial institutions
party thereto and their assignees under Section 12.5. thereof (the “Lenders”),
Wachovia Bank, National Association, as Agent (the “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 2.3.(b) of the Credit Agreement, the Borrower hereby
requests that the Swingline Lender make a Swingline Loan to the Borrower in an
amount equal to $___________________.

 

2.

The Borrower requests that such Swingline Loan be made available to the Borrower
on __________, 200_.

 

3.

The proceeds of this Swingline Loan will be used for the following purpose:
_______________________
__________________________________________________________________________.

 

4.

The Borrower requests that the proceeds of such Swingline Loan be made available
to the Borrower by __________________________________________________.

 

          The Borrower hereby certifies to the Agent, the Swingline Lender and
the Lenders that as of the date hereof, as of the date of the making of the
requested Swingline Loan, and after making such Swingline Loan, (a) no Default
or Event of Default exists or will exist, 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 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 accurate on and as of such earlier
date). In addition, the Borrower certifies to the Agent and the Lenders that all
conditions to the making of the requested Swingline Loan contained in

    F-1

   

Article V. of the Credit Agreement will have been satisfied at the time such
Swingline Loan is made.

 

          If notice of the requested borrowing of this Swingline Loan was
previously given by telephone, this notice is to be considered the written
confirmation of such telephone notice required by Section 2.3.(b) of the Credit
Agreement.

 

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

 

COMMERCIAL NET LEASE REALTY, INC.

By:________________________________
      Name:___________________________
      Title:____________________________

    F-2

 

EXHIBIT G

FORM OF SWINGLINE NOTE

   

$10,000,000

 

May 9, 2003

   

          FOR VALUE RECEIVED, the undersigned, COMMERCIAL NET LEASE REALTY,
INC., a corporation formed under the laws of the State of Maryland (the
“Borrower”), hereby promises to pay to the order of WACHOVIA BANK, NATIONAL
ASSOCIATION (the “Swingline Lender”) to its address at One Wachovia Center, 301
South College Street, Charlotte, North Carolina 28288, or at such other address
as may be specified in writing by the Swingline Lender to the Borrower, the
principal sum of TEN MILLION AND NO/100 DOLLARS ($10,000,000) (or such lesser
amount as shall equal the aggregate unpaid principal amount of Swingline Loans
made by the Swingline Lender to the Borrower under the Credit Agreement), on the
dates and in the principal amounts provided in the Credit Agreement, and to pay
interest on the unpaid principal amount owing hereunder, at the rates and on the
dates provided in the Credit Agreement.

 

          The date, amount of each Swingline Loan, and each payment made on
account of the principal thereof, shall be recorded by the Swingline Lender on
its books and, prior to any transfer of this Note, endorsed by the Swingline
Lender on the schedule attached hereto or any continuation thereof, provided
that the failure of the Swingline Lender to make any such recordation or
endorsement shall not affect the obligations of the Borrower to make a payment
when due of any amount owing under the Credit Agreement or hereunder in respect
of the Swingline Loans.

 

          This Note is the Swingline Note referred to in the Seventh Amended and
Restated Credit Agreement dated as of May 9, 2003 (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 12.5. thereof (the “Lenders”), Wachovia Bank, National
Association, as Agent, and the other parties thereto, and evidences Swingline
Loans made to the Borrower thereunder. Terms used but not otherwise defined in
this Note have the respective meanings assigned to them in the Credit Agreement.

 

          The Credit Agreement provides for the acceleration of the maturity of
this Note upon the occurrence of certain events and for prepayments of Swingline
Loans upon the terms and conditions specified therein.

 

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

 

          The Borrower hereby waives presentment for payment, demand, notice of
demand, notice of non-payment, protest, notice of protest and all other similar
notices.

    G-1

   

          Time is of the essence for this Note.

 

          IN WITNESS WHEREOF, the undersigned has executed and delivered this
Swingline Note under seal as of the date first written above.

 

COMMERCIAL NET LEASE REALTY, INC.

By:________________________________
      Name:___________________________
      Title:____________________________

 

STATE OF GEORGIA

 

COUNTY OF FULTON

 

          BEFORE ME, a Notary Public in and for said County, personally appeared
____________________, known to me to be a person who, as _______________ of
Commercial Net Lease Realty, Inc., the entity which executed the foregoing
Swingline Note, signed the same, and acknowledged to me that he did so sign said
instrument in the name and upon behalf of said corporation as an officer of said
corporation.

 

          IN TESTIMONY WHEREOF, I have subscribed my name, and affixed my
official seal, as of May 9, 2003.

   

_____________________________________
Notary Public

My Commission Expires:

[NOTARIAL SEAL]

    G-2

 

SCHEDULE OF SWINGLINE LOANS

 

          This Note evidences Swingline Loans made under the within-described
Credit Agreement to the Borrower, on the dates and in the principal amounts set
forth below, subject to the payments and prepayments of principal set forth
below:

 

Date of Loan

Principal
Amount of
Loan

Amount Paid
or Prepaid

Unpaid
Principal
Amount

Notation
Made By

   

    G-3

 

EXHIBIT H

FORM OF BID RATE QUOTE REQUEST

_____________, 200__

 

Wachovia Bank, National Association, as Agent
One Wachovia Center
301 S. College St., NC0172
Charlotte, North Carolina 28288
Attention:  Rex E. Rudy

Ladies and Gentlemen:

 

          Reference is made to that certain Seventh Amended and Restated Credit
Agreement dated as of May 9, 2003 (as amended, restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”), by and among
Commercial Net Lease Realty, Inc. (the “Borrower”), the financial institutions
party thereto and their assignees under Section 12.5. thereof (the “Lenders”),
Wachovia Bank, National Association, as Agent (the “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.

The Borrower hereby requests Bid Rate Quotes for the following proposed Bid Rate
Borrowings:

 

Borrowing Date

Amount1

Type2

Interest Period3

   

________, 2000__

$__________

__________

_______ days

 

 

2.

Borrower’s Credit Rating, as applicable, as of the date hereof is:

              S&P                    _________
              Moody’s           _________

   

   

_______________________

 

1           Minimum amount of $10,000,000 or larger multiple of $1,000,000.

 

2           Insert either Absolute Rate (for Absolute Rate Loan) or LIBOR Margin
(for LIBOR Margin Loan).

 

3           30, 60 or 90 days after the borrowing date and must end on a
Business Day.

    H-1

   

3.

The proceeds of this Bid Rate borrowing will be used for the following purpose:
________________
__________________________________________________________________________.

 

4.

After giving effect to the Bid Rate Borrowing requested herein, the total amount
of Bid Rate Loans outstanding shall be $_________.1

 

          The Borrower hereby certifies to the Agent and the Lenders that as of
the date hereof, as of the date of the making of the requested Bid Rate Loans,
and after making such Bid Rate Loans, (a) no Default or Event of Default exists
or will exist, 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 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 accurate on and as of such earlier date). In addition, the
Borrower certifies to the Agent and the Lenders that all conditions to the
making of the requested Bid Rate Loans contained in Article V. of the Credit
Agreement will have been satisfied at the time such Bid Rate Loans are made.

 

          IN WITNESS WHEREOF, the undersigned has duly executed and delivered
this Bid Rate Quote Request as of the date first written above.

 

COMMERCIAL NET LEASE REALTY, INC.

By:________________________________
      Name:___________________________
      Title:____________________________

   

 

_______________________

 

1           Must not be in excess of one-half of the aggregate amount of all
existing Commitments.

  H-2

 

EXHIBIT I

FORM OF BID RATE QUOTE

_____________, 200__

 

 

Wachovia Bank, National Association, as Agent
One Wachovia Center
301 S. College St., NC0172
Charlotte, North Carolina 28288
Attention:  Rex E. Rudy

Ladies and Gentlemen:

 

          Reference is made to that certain Seventh Amended and Restated Credit
Agreement dated as of May 9, 2003 (as amended, restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”), by and among
Commercial Net Lease Realty, Inc. (the “Borrower”), the financial institutions
party thereto and their assignees under Section 12.5. thereof (the “Lenders”),
Wachovia Bank, National Association, as Agent (the “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.

 

           In response to Borrower’s Bid Rate Quote Request dated _____________,
200_, the undersigned hereby makes the following Bid Rate Quote(s) on the
following terms:

 

1.

Quoting Lender:___________________

 

2.

Person to contact at quoting Lender:_______________________________

 

3.

The undersigned offers to make Bid Rate Loan(s) in the following principal
amount(s), for the following Interest Period(s) and at the following Bid
Rate(s):

  Borrowing Date Amount1 Type2 Interest Period3 Bid Rate   __________, 200__ $
__________ __________ _____days ______%   __________, 200__ $ __________
__________ _____days ______%   __________, 200__ $ __________ __________
_____days ______%  

 

_______________________

 

1           Minimum amount of $10,000,000 or larger multiple of $1,000,000.

 

2           Insert either Absolute Rate (for Absolute Rate Loan) or LIBOR Margin
(for LIBOR Margin Loan).

 

3           30, 60 or 90 days after the borrowing date and must end on a
Business Day.

    I-1

 

          The undersigned understands and agrees that the offer(s) set forth
above, subject to satisfaction of the applicable conditions set forth in the
Credit Agreement, irrevocably obligate[s] the undersigned to make the Bid Rate
Loan(s) for which any offer(s) [is/are] accepted, in whole or in part.

  _____________________________________
[Name of Quoting Lender]

By:________________________________
      Name:___________________________
      Title:____________________________

    I-2

 

EXHIBIT J

FORM OF BID RATE QUOTE ACCEPTANCE

_____________, 200__

 

 

Wachovia Bank, National Association, as Agent
One Wachovia Center
301 S. College St., NC0172
Charlotte, North Carolina 28288
Attention:  Rex E. Rudy

Ladies and Gentlemen:

 

          Reference is made to that certain Seventh Amended and Restated Credit
Agreement dated as of May 9, 2003 (as amended, restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”), by and among
Commercial Net Lease Realty, Inc. (the “Borrower”), the financial institutions
party thereto and their assignees under Section 12.5. thereof (the “Lenders”),
Wachovia Bank, National Association, as Agent (the “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.

          Borrower hereby accepts the following offer(s) of Bid Rate Quotes to
be made available to the Borrower on ____________, 200___:

Quote Date Quoting Lender Amount Accepted   __________, 200___ ______________
$______________   __________, 200___ ______________ $______________  
__________, 200___ ______________ $______________  

 

           The Borrower hereby certifies to the Agent and the Lenders that as of
the date hereof, as of the date of the making of the requested Bid Rate Loans,
and after making such Bid Rate Loans, (a) no Default or Event of Default exists
or will exist, 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 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 accurate on and as of such earlier date). In addition, the
Borrower certifies to the Agent and the Lenders that all conditions to the
making of the requested Bid Rate Loans contained in Article V. of the Credit
Agreement will have been satisfied at the time such Bid Rate Loans are made.

    J-1

 

           IN WITNESS WHEREOF, the undersigned has duly executed and delivered
this Bid Rate Quote Acceptance as of the date first written above.

  COMMERCIAL NET LEASE REALTY, INC.

By:________________________________
      Name:___________________________
      Title:____________________________

    J-2

 

EXHIBIT K

FORM OF REVOLVING NOTE

   

$______________

 

_______, 200__

   

          FOR VALUE RECEIVED, the undersigned, COMMERCIAL NET LEASE REALTY,
INC., a corporation formed under the laws of the State of Maryland (the
“Borrower”), hereby promises to pay to the order of ____________________ (the
“Lender”), in care of Wachovia Bank, National Association, as Agent (the
“Agent”) to Wachovia Bank, National Association, One Wachovia Center, 301 South
College Street, Charlotte, North Carolina 28288, or at such other address as may
be specified in writing by the Agent to the Borrower, the principal sum of
________________ AND ____/100 DOLLARS ($____________) (or such lesser amount as
shall equal the aggregate unpaid principal amount of Revolving Loans made by the
Lender to the Borrower under the Credit Agreement (as herein defined)), on the
dates and in the principal amounts provided in the Credit Agreement, and to pay
interest on the unpaid principal amount owing hereunder, at the rates and on the
dates provided in the Credit Agreement.

 

          The date, amount of each Revolving Loan made by the Lender to the
Borrower, and each payment made on account of the principal thereof, shall be
recorded by the Lender on its books and, prior to any transfer of this Note,
endorsed by the Lender on the schedule attached hereto or any continuation
thereof, provided that the failure of the Lender to make any such recordation or
endorsement shall not affect the obligations of the Borrower to make a payment
when due of any amount owing under the Credit Agreement or hereunder in respect
of the Revolving Loans made by the Lender.

 

          This Note is one of the Revolving Notes referred to in the Seventh
Amended and Restated Credit Agreement dated as of May 9, 2003 (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 12.5. thereof (the “Lenders”), the 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.

 

          The Credit Agreement provides for the acceleration of the maturity of
this Note upon the occurrence of certain events and for prepayments of Loans
upon the terms and conditions specified therein.

 

          Except as permitted by Section 12.5.(d) of the Credit Agreement, this
Note may not be assigned by the Lender to any other Person.

    K-1

   

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

 

          The Borrower hereby waives presentment for payment, demand, notice of
demand, notice of non-payment, protest, notice of protest and all other similar
notices.

 

          Time is of the essence for this Note.

 

          IN WITNESS WHEREOF, the undersigned has executed and delivered this
Revolving Note under seal as of the date first written above.

   

COMMERCIAL NET LEASE REALTY, INC.

By:________________________________
      Name:___________________________
      Title:____________________________

 

STATE OF GEORGIA

 

COUNTY OF FULTON

 

          BEFORE ME, a Notary Public in and for said County, personally appeared
____________________, known to me to be a person who, as _______________ of
Commercial Net Lease Realty, Inc., the entity which executed the foregoing
Revolving Note, signed the same, and acknowledged to me that he did so sign said
instrument in the name and upon behalf of said corporation as an officer of said
corporation.

 

          IN TESTIMONY WHEREOF, I have subscribed my name, and affixed my
official seal, as of _________, 200__.

   

_____________________________________
Notary Public

My Commission Expires:

[NOTARIAL SEAL]

    K-2

 

SCHEDULE OF BID RATE LOANS

 

          This Note evidences Bid Rate Loans made under the within-described
Credit Agreement to the Borrower, on the dates, in the principal amounts,
bearing interest at the rates and maturing on the dates set forth below, subject
to the payments and prepayments of principal set forth below:

 

Date of
Loan

Principal
Amount of
Loan

Interest
Rate

Maturity
Date of
Loan

Amount
Paid or
Prepaid

Unpaid
Principal
Amount

Notation
Made By

   

    K-3

 

EXHIBIT L

FORM OF BID RATE NOTE

 

__________, 200__

 

 

          FOR VALUE RECEIVED, the undersigned, COMMERCIAL NET LEASE REALTY,
INC., a corporation formed under the laws of the State of Maryland (the
“Borrower”), hereby promises to pay to the order of ________________ (the
“Lender”), in care of Wachovia Bank, National Association, as Agent (the
“Agent”) to Wachovia Bank, National Association, One Wachovia Center, 301 South
College Street, Charlotte, North Carolina 28288, or at such other address as may
be specified in writing by the Agent to the Borrower, the aggregate unpaid
principal amount of Bid Rate Loans made by the Lender to the Borrower under the
Credit Agreement, on the dates and in the principal amounts provided in the
Credit Agreement, and to pay interest on the unpaid principal amount of each
such Bid Rate Loan, at such office at the rates and on the dates provided in the
Credit Agreement.

 

          The date, amount, interest rate and maturity date of each Bid Rate
Loan made by the Lender to the Borrower, and each payment made on account of the
principal thereof, shall be recorded by the Lender on its books and, prior to
any transfer of this Note, endorsed by the Lender on the schedule attached
hereto or any continuation thereof, provided that the failure of the Lender to
make any such recordation or endorsement shall not affect the obligations of the
Borrower to make a payment when due of any amount owing under the Credit
Agreement or hereunder in respect of the Bid Rate Loans made by the Lender.

 

          This Note is one of the Bid Rate Notes referred to in the Seventh
Amended and Restated Credit Agreement dated as of May 9, 2003 (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 12.5. thereof (the “Lenders”), the Agent, and
the other parties thereto, and evidences Bid Rate Loans made by the Lender
thereunder. Terms used but not otherwise defined in this Note have the
respective meanings assigned to them in the Credit Agreement.

 

          The Credit Agreement provides for the acceleration of the maturity of
this Note upon the occurrence of certain events and for prepayments of Bid Rate
Loans upon the terms and conditions specified therein.

 

          Except as permitted by Section 12.5. of the Credit Agreement, this
Note may not be assigned by the Lender to any other Person.

 

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

 

          The Borrower hereby waives presentment for payment, demand, notice of
demand, notice of non-payment, protest, notice of protest and all other similar
notices.

    L-1

   

          Time is of the essence for this Note.

 

          IN WITNESS WHEREOF, the undersigned has executed and delivered this
Bid Rate Note under seal as of the date first written above.

   

COMMERCIAL NET LEASE REALTY, INC.

By:________________________________
      Name:___________________________
      Title:____________________________

 

STATE OF GEORGIA

 

COUNTY OF FULTON

 

          BEFORE ME, a Notary Public in and for said County, personally appeared
____________________, known to me to be a person who, as _______________ of
Commercial Net Lease Realty, Inc., the entity which executed the foregoing Bid
Rate Note, signed the same, and acknowledged to me that he did so sign said
instrument in the name and upon behalf of said corporation as an officer of said
corporation.

 

          IN TESTIMONY WHEREOF, I have subscribed my name, and affixed my
official seal, as of _________, 200__.

   

_____________________________________
Notary Public

My Commission Expires:

[NOTARIAL SEAL]

    L-2

 

SCHEDULE OF BID RATE LOANS

 

          This Note evidences Bid Rate Loans made under the within-described
Credit Agreement to the Borrower, on the dates, in the principal amounts,
bearing interest at the rates and maturing on the dates set forth below, subject
to the payments and prepayments of principal set forth below:

 

Date of
Loan

Principal
Amount of
Loan

Interest
Rate

Maturity
Date of
Loan

Amount
Paid or
Prepaid

Unpaid
Principal
Amount

Notation
Made By

   

    L-3

 

EXHIBIT M

FORM OF OPINION OF COUNSEL

[To be Attached]

    M-1

 

EXHIBIT N

FORM OF COMPLIANCE CERTIFICATE

_____________, 200__

 

Wachovia Bank, National Association, as Agent
One Wachovia Center
301 S. College St., NC0172
Charlotte, North Carolina 28288
Attention:  Rex E. Rudy

Each of the Lenders Party to the Credit
  Agreement referred to below

Ladies and Gentlemen:

 

          Reference is made to that certain Seventh Amended and Restated Credit
Agreement dated as of May 9, 2003 (as amended, restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”), by and among
Commercial Net Lease Realty, Inc. (the “Borrower”), the financial institutions
party thereto and their assignees under Section 12.5. thereof (the “Lenders”),
Wachovia Bank, National Association, as Agent (the “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 8.3. of the Credit Agreement, the undersigned
hereby certifies to the Agent and the Lenders as follows:

 

          (1)       The undersigned is the _____________________ of the
Borrower.

 

          (2)       The undersigned has examined the books and records of the
Borrower and has conducted such other examinations and investigations as are
reasonably necessary to provide this Compliance Certificate.

 

          (3)       No Default or Event of Default exists [if such is not the
case, specify such Default or Event of Default and its nature, when it occurred
and whether it is continuing and the steps being taken by the Borrower with
respect to such event, condition or failure].

 

          (4)       The representations and warranties made or deemed made by
the Borrower and the other Loan Parties in the Loan Documents to which any is a
party, are true and correct in all material respects on and as of the date
hereof except to the extent that such representations and warranties expressly
relate solely to an earlier date (in which case such representations and
warranties shall have been true and accurate on and as of such earlier date).

    N-1

   

          (5)       Attached hereto as Schedule 1 are reasonably detailed
calculations establishing whether or not the Borrower and its Subsidiaries were
in compliance with the covenants contained in Sections 9.1., 9.2. and 9.4. of
the Credit Agreement.

 

          IN WITNESS WHEREOF, the undersigned has executed this certificate as
of the date first above written.

   

________________________________
Name:___________________________
Title:____________________________

    N-2

 

Schedule 1

[Calculations to be Attached]

    N-3

 

EXHIBIT O

FORM OF GUARANTY

 

          THIS GUARANTY dated as of May 9, 2003, 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 (a) WACHOVIA BANK,
NATIONAL ASSOCIATION, in its capacity as Agent (the “Agent”) for the Lenders
under that certain Seventh Amended and Restated Credit Agreement dated as of May
9, 2003 (as amended, restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”), by and among Commercial Net Lease Realty, Inc.
(the “Borrower”), the financial institutions party thereto and their assignees
under Section 12.5. thereof (the “Lenders”), the Agent, and the other parties
thereto, and (b) the Lenders and the Swingline Lender.

 

          WHEREAS, pursuant to the Credit Agreement, the Agent, the Lenders and
the Swingline Lender have agreed to make available to the Borrower certain
financial accommodations on the terms and conditions set forth in the Credit
Agreement;

 

          WHEREAS, the Borrower and each of the 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 from the Agent, the Lenders and
the Swingline Lender through their collective efforts;

 

           WHEREAS, each Guarantor acknowledges that it will receive direct and
indirect benefits from the Agent, the Lenders and the Swingline Lender making
such financial accommodations available to the Borrower under the Credit
Agreement and, accordingly, each Guarantor is willing to guarantee the
Borrower’s obligations to the Agent, the Lenders and the Swingline Lender on the
terms and conditions contained herein; and

 

          WHEREAS, each Guarantor’s execution and delivery of this Guaranty is a
condition to the Agent and the Lenders making, and 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 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 indebtedness and obligations owing by the Borrower to any
Lender, the Swingline Lender or the Agent under or in connection with the Credit
Agreement and any other Loan Document, including without limitation, the
repayment of all principal of the Revolving Loans, Bid Rate Loans, Swingline
Loans and the Reimbursement Obligations, and the payment

    O-1

   

of all interest, Fees, charges, attorneys’ fees and other amounts payable to any
Lender or the Agent thereunder or in connection therewith; (b) any and all
extensions, renewals, modifications, amendments or substitutions of the
foregoing; (c) all expenses, including, without limitation, reasonable
attorneys’ fees and disbursements, that are incurred by the Lenders and the
Agent in the enforcement of any of the foregoing or any obligation of such
Guarantor hereunder; and (d) all other 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, none of the Lenders, the Swingline
Lender or the Agent shall be obligated or required before enforcing this
Guaranty against any Guarantor: (a) to pursue any right or remedy any of them
may have against the Borrower, any other Guarantor or any other Person or
commence any suit or other proceeding against the Borrower, any other Guarantor
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 Guarantor or any other
Person; or (c) to make demand of the Borrower, any other Guarantor or any other
Person or to enforce or seek to enforce or realize upon any collateral security
held by the Lenders, the Swingline Lender or the Agent 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 Agent, the Lenders or the Swingline Lender 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, 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;

    O-2

   

          (c)       any furnishing to the Agent, the Lenders or the Swingline
Lender of any security for the Guarantied Obligations, or any sale, exchange,
release or surrender of, or realization on, any collateral securing any of the
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;

 

          (g)       any nonperfection or impairment of any security interest or
other Lien on any collateral, if any, securing in any way any of the
Obligations;

 

          (h)       any application of sums paid by the Borrower, any other
Guarantor or any other Person with respect to the liabilities of the Borrower to
the Agent, the Lenders or the Swingline Lender, 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; or

 

          (j)       any other circumstance which might otherwise constitute a
defense available to, or a discharge of, a Guarantor hereunder (other than
indefeasible payment in full).

 

          Section 4.     Action with Respect to Guarantied Obligations.     The
Lenders and the Agent 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 Obligations; (d) release any other 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 Guarantor or any other Person; and (f) apply any
sum, by whomsoever paid or however realized, to the Guarantied Obligations in
such order as the Lenders shall elect.

    O-3

   

          Section 5.     Representations and Warranties.     Each Guarantor
hereby makes to the Agent, the Lenders and the Swingline Lender 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 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 Agent, the
Swingline Lender and/or the Lenders 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 Agent, the
Swingline Lender and/or the Lenders 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 claim
is ever made on the Agent, any Lender or the Swingline Lender for repayment or
recovery of any amount or amounts received in payment or on account of any of
the Guarantied Obligations, and the Agent, such Lender or the Swingline Lender
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 Agent, such Lender or
the Swingline Lender 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 Agent, such Lender or the Swingline Lender for the amounts so repaid or
recovered to the same extent as if such amount had never originally been paid to
the Agent, such Lender or the Swingline Lender.

 

          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 Agent,

    O-4

   

the Lenders and the Swingline Lender and shall forthwith pay such amount to the
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 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 any Guarantor
is required by Applicable Law or by a Governmental Authority to make any such
deduction or withholding, such Guarantor shall pay to the Agent, the Lenders and
the Swingline Lender such additional amount as will result in the receipt by the
Agent, the Lenders and the Swingline Lender 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
the Agent and each Lender, at any time during the continuance of an Event of
Default, 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
Participant subject to receipt of the prior written consent of the 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 Agent, such Lender,
or any affiliate of the Agent or such Lender, to or for the credit or the
account of such Guarantor 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 Agent, the Lenders and the Swingline
Lender 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 Agent, the Lenders and the Swingline Lender 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
Agent, the Lenders and the Swingline Lender) to be avoidable or unenforceable
against such Guarantor in such Proceeding as a result of Applicable Law,
including without limitation,

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(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 Agent, the Lenders and the
Swingline Lender) 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 such
Guarantor hereunder (or any other obligations of such Guarantor to the Agent,
the Lenders and the Swingline Lender), to be subject to avoidance under the
Avoidance Provisions. This Section is intended solely to preserve the rights of
the Agent, the Lenders and the Swingline Lender 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 Agent, the
Lenders and the Swingline Lender that would not otherwise be available to such
Person under the Avoidance Provisions.

 

          Section 15.     Information.     Each Guarantor assumes all
responsibility for being and keeping itself informed of the financial condition
of the Borrower and the other Guarantors, 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 none of the Agent, the Lenders or the Swingline Lender shall
have any duty whatsoever to advise any Guarantor of information regarding such
circumstances or risks.

 

          Section 16.     Governing Law.     THIS AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF FLORIDA
APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH STATE.

 

          Section 17.     WAIVER OF JURY TRIAL.

 

          (a)       EACH PARTY HERETO ACKNOWLEDGES THAT ANY DISPUTE OR
CONTROVERSY BETWEEN OR AMONG ANY GUARANTOR, THE 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 AGENT AND EACH GUARANTOR 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 OR BY
REASON OF ANY OTHER SUIT, CAUSE OF

    O-6

   

ACTION OR DISPUTE WHATSOEVER BETWEEN OR AMONG THE BORROWER, THE AGENT OR ANY OF
THE LENDERS OF ANY KIND OR NATURE.

 

          (b)       EACH OF THE GUARANTORS, THE AGENT AND EACH LENDER HEREBY
AGREES THAT ANY FEDERAL DISTRICT COURT LOCATED IN NORTH CAROLINA OR, AT THE
OPTION OF THE AGENT, ANY STATE COURT LOCATED IN CHARLOTTE, NORTH CAROLINA, SHALL
HAVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN OR AMONG
ANY GUARANTOR, THE AGENT OR ANY OF THE LENDERS, PERTAINING DIRECTLY OR
INDIRECTLY TO THIS AGREEMENT, THE LOANS, THE LETTERS OF CREDIT, THE NOTES OR ANY
OTHER LOAN DOCUMENT OR TO ANY MATTER ARISING HEREFROM OR THEREFROM. EACH
GUARANTOR AND EACH OF THE LENDERS 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 AGENT OR ANY LENDER OR THE
ENFORCEMENT BY THE AGENT OR ANY LENDER OF ANY JUDGMENT OBTAINED IN SUCH FORUM IN
ANY OTHER APPROPRIATE JURISDICTION.

 

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

 

          Section 18.     Loan Accounts.     The Agent, each Lender and the
Swingline 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, and in the case of any dispute relating to any of the
outstanding amount, payment or receipt of any of the Guarantied Obligations or
otherwise, the entries in such books and accounts shall be deemed conclusive
evidence of the amounts and other matters set forth herein, absent manifest
error. The failure of the Agent, any Lender or the Swingline Lender to maintain
such books and accounts shall not in any way relieve or discharge any Guarantor
of any of its obligations hereunder.

 

          Section 19.     Waiver of Remedies.     No delay or failure on the
part of the Agent, any Lender or the Swingline Lender 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 Agent, any
Lender or the Swingline Lender of any such right or remedy shall preclude any
other or further exercise thereof or the exercise of any other such right or
remedy.

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          Section 20.     Termination.     This Guaranty shall remain in full
force and effect 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 21.     Successors and Assigns.     Each reference herein to
the Agent or the Lenders 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 Lenders and the Swingline Lender 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 Agent or any
Lender to any Assignee or Participant (or any prospective Assignee or
Participant) 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 22.     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 23.     Amendments.     This Guaranty may not be amended
except in writing signed by the Requisite Lenders (or all of the Lenders if
required under the terms of the Credit Agreement), the Agent and each Guarantor.

 

          Section 24.     Payments.     All payments to be made by any Guarantor
pursuant to this Guaranty shall be made in Dollars, in immediately available
funds to the Agent at the Principal Office, not later than 2:00 p.m. on the date
of demand therefor.

 

          Section 25.     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 Agent, any Lender or the Swingline
Lender 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.

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          Section 26.     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 27.     Headings.     Section headings used in this Guaranty
are for convenience only and shall not affect the construction of this Guaranty.

 

          Section 28.     Limitation of Liability.     Neither the Agent nor any
Lender, nor any affiliate, officer, director, employee, attorney, or agent of
the Agent or any Lender, 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 Agent or any Lender or any of the Agent’s or any Lender’s affiliates,
officers, directors, employees, attorneys, or agents for punitive damages in
respect of any claim in connection with, arising out of, or in any way related
to, this Guaranty, the Credit Agreement or any of the other Loan Documents, or
any of the transactions contemplated by Credit Agreement or financed thereby.

 

          Section 29.     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.

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

 

[GUARANTORS]

By:________________________________
      Name:___________________________
      Title:____________________________

Address for Notices:

c/o Commercial Net Lease Realty, Inc.
450 South Orange Avenue, Suite 900
Orlando, Florida 32801
Attn:    Kevin B. Habicht
Telephone:    (407) 265-7348
Telecopy:      (407) 650-1044

    O-10

 

ANNEX I

FORM OF ACCESSION AGREEMENT

 

          THIS ACCESSION AGREEMENT dated as of ____________, 200__, executed and
delivered by ______________________, a _____________ (the “New Guarantor”), in
favor of (a) WACHOVIA BANK, NATIONAL ASSOCIATION, in its capacity as Agent (the
“Agent”) for the Lenders under that certain Seventh Amended and Restated Credit
Agreement dated as of May 9, 2003 (as amended, restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”), by and among
Commercial Net Lease Realty, Inc. (the “Borrower”), the financial institutions
party thereto and their assignees under Section 12.5. thereof (the “Lenders”),
the Agent, and the other parties thereto, and (b) the Lenders and the Swingline
Lender.

 

          WHEREAS, pursuant to the Credit Agreement, the Agent, the Lenders and
the Swingline Lender have agreed to make available to the Borrower certain
financial accommodations on the terms and conditions set forth in the Credit
Agreement;

 

          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 from the
Agent, the Lenders and the Swingline Lender through their collective efforts;

 

          WHEREAS, the New Guarantor acknowledges that it will receive direct
and indirect benefits from the Agent, the Lenders and the Swingline Lender
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 Agent, the Lenders and the Swingline Lender on the
terms and conditions contained herein; and

 

          WHEREAS, the New Guarantor’s execution and delivery of this Agreement
is a condition to the Agent, the Lenders and the Swingline Lender 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 Guaranty dated as of May 9,
2003 (as amended, supplemented, restated or otherwise modified from time to
time, the “Guaranty”), made by each Subsidiary of the Borrower a party thereto
in favor of the Agent, the Lenders and the Swingline Lender and assumes all
obligations of a “Guarantor” thereunder, 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:

    O-11

   

          (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 Agent, the Lenders and the Swingline Lender as
of the date hereof each of the representations and warranties 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 AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF FLORIDA
APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH STATE.

 

          Section 3.     Definitions.     Capitalized terms used herein and not
otherwise defined herein shall have their respective defined meanings given them
in the Credit Agreement.

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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:____________________________

Address for Notices:

c/o Commercial Net Lease Realty, Inc.
450 South Orange Avenue, Suite 900
Orlando, Florida 32801
Attn:    Kevin B. Habicht
Telephone:    (407) 265-7348
Telecopy:      (407) 650-1044

 

Accepted:

WACHOVIA BANK, NATIONAL
   ASSOCIATION, as Agent

By:________________________________
      Name:___________________________
      Title:____________________________

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