Exhibit 10.1
 
EXECUTION VERSION

 

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CREDIT AGREEMENT

Dated as of June 29, 2012

by and among

CAPLEASE, LP; PREFCO DIX-NEUF LLC; PREFCO NINETEEN LIMITED PARTNERSHIP;
CLF CANE RUN MEMBER, LLC; CLF CANE RUN LOUISVILLE, LLC;
CLF LANDMARK OMAHA LLC; CLF DODGE OMAHA LLC; KDC BUSCH BOULEVARD LLC; AND CLF
555 N DANIELS WAY LLC,

     as Borrowers,  

THE FINANCIAL INSTITUTIONS PARTY HERETO
AND THEIR ASSIGNEES UNDER SECTION 13.6,

   
as Lenders,
 

 
WELLS FARGO BANK, NATIONAL ASSOCIATION,

   
as Administrative Agent,
 

and

WELLS FARGO SECURITIES, LLC,

   
as Sole Lead Arranger and Bookrunner
 

 
 

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TABLE OF CONTENTS           Page

 
ARTICLE I
DEFINITIONS
1
     
Section 1.1
Definitions
1
     
Section 1.2
General; References to Eastern Time
28
     
Section 1.3
Financial Attributes of Non-Wholly Owned Subsidiaries
29
     
ARTICLE II
CREDIT FACILITY
29
     
Section 2.1
Revolving Loans
29
     
Section 2.2
Reserved
30
     
Section 2.3
Reserved
30
     
Section 2.4
Letters of Credit
30
     
Section 2.5
Reserved
34
     
Section 2.6
Rates and Payment of Interest on Loans
34
     
Section 2.7
Number of Interest Periods
35
     
Section 2.8
Repayment of Loans
35
     
Section 2.9
Prepayments
35
     
Section 2.10
Continuation
36
     
Section 2.11
Conversion
36
     
Section 2.12
Notes
37
     
Section 2.13
Voluntary Reductions of the Revolving Commitment
37
     
Section 2.14
Extension of Maturity Date
38
     
Section 2.15
Expiration Date of Letters of Credit Past Revolving Commitment Termination
38
     
Section 2.16
Amount Limitations
39
     
Section 2.17
Reserved
39
     
Section 2.18
Funds Transfer Disbursements
39
     
ARTICLE III
PAYMENTS, FEES AND OTHER GENERAL PROVISIONS
40
     
Section 3.1
Payments
40
     
Section 3.2
Pro Rata Treatment
41
     
Section 3.3
Sharing of Payments, Etc
41
     
Section 3.4
Several Obligations
42
     
Section 3.5
Fees
42
     
Section 3.6
Computations
43
     
Section 3.7
Usury
43
     
Section 3.8
Statements of Account
43
     
Section 3.9
Defaulting Lenders
43

 
 

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TABLE OF CONTENTS           Page

 
Section 3.10
Taxes; Foreign Lenders
46
     
ARTICLE IV
BORROWING BASE PROPERTIES
48
     
Section 4.1
Eligibility of Properties
48
     
Section 4.2
Release of Properties
50
     
Section 4.3
Frequency of Appraisals
51
     
Section 4.4
Frequency of Calculations of Borrowing Base
52
     
ARTICLE V
YIELD PROTECTION, ETC
52
     
Section 5.1
Additional Costs; Capital Adequacy
52
     
Section 5.2
Suspension of LIBOR Loans
54
     
Section 5.3
Illegality
54
     
Section 5.4
Compensation
55
     
Section 5.5
Treatment of Affected Loans
55
     
Section 5.6
Affected Lenders
56
     
Section 5.7
Change of Lending Office
56
     
Section 5.8
Assumptions Concerning Funding of LIBOR Loans
56
     
ARTICLE VI
CONDITIONS PRECEDENT
57
     
Section 6.1
Initial Conditions Precedent
57
     
Section 6.2
Conditions Precedent to All Loans and Letters of Credit
59
     
Section 6.3
Conditions Precedent to a Property Becoming a Borrowing Base Property
60
     
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
61
     
Section 7.1
Representations and Warranties
61
     
Section 7.2
Survival of Representations and Warranties, Etc
68
     
ARTICLE VIII
AFFIRMATIVE COVENANTS
68
     
Section 8.1
Preservation of Existence and Similar Matters
68
     
Section 8.2
Compliance with Applicable Law
68
     
Section 8.3
Maintenance of Property
69
     
Section 8.4
Conduct of Business
69
     
Section 8.5
Insurance
69
     
Section 8.6
Payment of Taxes and Claims
70
     
Section 8.7
Books and Records; Inspections
70
     
Section 8.8
Use of Proceeds
70
     
Section 8.9
Environmental Matters
71
     
Section 8.10
Further Assurances
71

 
 
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TABLE OF CONTENTS           Page

 
Section 8.11
Material Contracts
71
     
Section 8.12
REIT Status
71
     
Section 8.13
Exchange Listing
72
     
Section 8.14
Additional Borrowers
72
     
Section 8.15
SPE Entities
72
     
Section 8.16
Post Closing Deliverables
72
     
ARTICLE IX
INFORMATION
73
     
Section 9.1
Quarterly Financial Statements
73
     
Section 9.2
Year-End Statements
74
     
Section 9.3
Compliance Certificate
74
     
Section 9.4
Other Information
74
     
Section 9.5
Electronic Delivery of Certain Information
77
     
Section 9.6
Public/Private Information
77
     
Section 9.7
USA Patriot Act Notice; Compliance
77
     
ARTICLE X
NEGATIVE COVENANTS
78
     
Section 10.1
Financial Covenants
78
     
Section 10.2
Negative Pledge
79
     
Section 10.3
Restrictions on Intercompany Transfers
80
     
Section 10.4
Merger, Consolidation, Sales of Assets and Other Arrangements
80
     
Section 10.5
Plans
80
     
Section 10.6
Fiscal Year
80
     
Section 10.7
Modifications of Organizational Documents and Material Contracts
81
     
Section 10.8
Transactions with Affiliates
81
     
Section 10.9
Environmental Matters
81
     
Section 10.10
Tenant Leases
81
     
Section 10.11
Derivatives Contracts
82
     
ARTICLE XI
DEFAULT
82
     
Section 11.1
Events of Default
82
     
Section 11.2
Remedies Upon Event of Default
85
     
Section 11.3
Remedies Upon Default
86
     
Section 11.4
Marshaling; Payments Set Aside
86
     
Section 11.5
Allocation of Proceeds
87
     
Section 11.6
Letter of Credit Collateral Account
87

 
 
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TABLE OF CONTENTS           Page

 
Section 11.7
Rescission of Acceleration by Requisite Lenders
88
     
Section 11.8
Performance by Administrative Agent
89
     
Section 11.9
Rights Cumulative
89
     
ARTICLE XII
THE ADMINISTRATIVE AGENT
89
     
Section 12.1
Appointment and Authorization
89
     
Section 12.2
Wells Fargo as Lender
90
     
Section 12.3
Collateral Matters; Protective Advances
90
     
Section 12.4
Post-Foreclosure Plans
92
     
Section 12.5
Approvals of Lenders
93
     
Section 12.6
Notice of Events of Default
93
     
Section 12.7
Administrative Agent’s Reliance
93
     
Section 12.8
Indemnification of Administrative Agent
94
     
Section 12.9
Lender Credit Decision, Etc
95
     
Section 12.10
Successor Administrative Agent
95
     
Section 12.11
Titled Agents
96
     
ARTICLE XIII
MISCELLANEOUS
96
     
Section 13.1
Notices
96
     
Section 13.2
Expenses
97
     
Section 13.3
Stamp, Intangible and Recording Taxes
98
     
Section 13.4
Setoff
98
     
Section 13.5
Litigation; Jurisdiction; Other Matters; Waivers
99
     
Section 13.6
Successors and Assigns
100
     
Section 13.7
Amendments and Waivers
103
     
Section 13.8
Nonliability of Administrative Agent and Lenders
105
     
Section 13.9
Confidentiality
105
     
Section 13.10
Indemnification
106
     
Section 13.11
Termination; Survival
108
     
Section 13.12
Severability of Provisions
108
     
Section 13.13
GOVERNING LAW
108
     
Section 13.14
Counterparts
108
     
Section 13.15
Obligations with Respect to Loan Parties
109
     
Section 13.16
Independence of Covenants
109
     
Section 13.17
Limitation of Liability
109

 
 
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TABLE OF CONTENTS           Page

 
Section 13.18
Entire Agreement
109
     
Section 13.19
Construction
109
     
Section 13.20
Headings
110
     
Section 13.21
Joint Borrower Provisions
110
     
Section 13.22
Time
113

 
SCHEDULE 1
Commitments

SCHEDULE 1.1(a)
List of Loan Parties

SCHEDULE 1.1(b)
Kroger Portfolio

SCHEDULE 1.1(c)
Permitted Liens

SCHEDULE 4.1
Initial Borrowing Base Properties

SCHEDULE 7.1(b)
Ownership Structure

SCHEDULE 7.1(f)
Properties

SCHEDULE 7.1(g)
Indebtedness and Guaranties

SCHEDULE 7.1(h)
Material Contracts

SCHEDULE 7.1(i)
Litigation

SCHEDULE 7.1(s)
Affiliate Transactions

SCHEDULE 10.10
Lease Terms

EXHIBIT A
Form of Assignment and Assumption Agreement

EXHIBIT B
Form of Borrowing Base Certificate

EXHIBIT C
Form of Hazardous Materials Indemnity Agreement

EXHIBIT D
Form of Guaranty

EXHIBIT E
Form of Notice of Borrowing

EXHIBIT F
Form of Notice of Continuation

EXHIBIT G
Form of Notice of Conversion

EXHIBIT H
Form of Property Management Contract Assignment

EXHIBIT I
Form of Revolving Note

EXHIBIT J
Form of Transfer Authorizer Designation Form

EXHIBIT K
Form of Compliance Certificate

EXHIBIT L
Form of Joinder Agreement

 
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THIS CREDIT AGREEMENT (this “Agreement”) dated as of June 29, 2012 by and among
CAPLEASE, LP, a Delaware limited partnership, PREFCO DIX-NEUF LLC, a Connecticut
limited liability company, PREFCO NINETEEN LIMITED PARTNERSHIP, a Connecticut
limited partnership, CLF CANE RUN MEMBER, LLC, a Delaware limited liability
company, CLF CANE RUN LOUISVILLE, LLC, a Delaware limited liability company, CLF
LANDMARK OMAHA LLC, a Delaware limited liability company, CLF DODGE OMAHA LLC, a
Delaware limited liability company, KDC BUSCH BOULEVARD LLC, a Delaware limited
liability company, and CLF 555 N DANIELS WAY LLC, a Delaware limited liability
company (each, a “Borrower” and collectively, the “Borrowers”), each of the
financial institutions initially a signatory hereto together with their
successors and assignees under Section 13.6 (the “Lenders”), WELLS FARGO BANK,
NATIONAL ASSOCIATION, as Administrative Agent (the “Administrative Agent”), and
WELLS FARGO SECURITIES, LLC, as sole lead arranger and bookrunner (in such
capacity, the “Lead Arranger”).
 
WHEREAS, the Administrative Agent, the Issuing Bank (as defined below) and the
Lenders desire to make available to the Borrowers a senior secured revolving
credit facility in the amount of $100,000,000.00, which will include a
$10,000,000.00 letter of credit 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
as follows:
 
ARTICLE I  DEFINITIONS
 
Section 1.1         Definitions.
 
In addition to terms defined elsewhere herein, the following terms shall have
the following meanings for the purposes of this Agreement:
 
“Abbott Property” means that certain real property located at 6480 Busch
Boulevard, Columbus, Ohio  43229.
 
“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 5.1(b).
 
“Adjusted EBITDA” means, for any given period, (a)  EBITDA, minus (b) Capital
Reserves.
 
“Administrative Agent” means Wells Fargo Bank, National Association as
contractual representative of the Lenders under this Agreement, or any successor
Administrative Agent appointed pursuant to Section 12.10.
 
“Administrative Questionnaire” means the Administrative Questionnaire completed
by each Lender and delivered to the Administrative Agent in a form supplied by
the Administrative Agent to the Lenders from time to time.
 
“Affected Lender” has the meaning given that term in Section 5.6.
 
“Affiliate” means, with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.  In no event
shall the Administrative Agent or any Lender be deemed to be an Affiliate of any
Borrower.
 
 
 

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“Agreement Date” means the date as of which this Agreement is dated.
 
“Applicable Facility Fee” means the percentage set forth in the table below
corresponding to the “Leverage Ratio” determined in accordance with the
definition thereof:
 
Leverage Ratio
Greater than or
equal to 70%
Facility Fee
0.50%
Less than 70%
0.25%

 
Any change in the Leverage Ratio shall result in a corresponding and
simultaneous change in the Applicable Facility Fee.  The provisions of this
definition shall be subject to Section 2.6(c).
 
“Applicable Law” means all international, foreign, federal, state and local
statutes, treaties, rules, guidelines, regulations, ordinances, codes, executive
orders, and administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of law.
 
“Applicable Margin” means 2.75% for LIBOR Loans and Base Rate Loans.
 
“Appraisal” means, with respect to any Property, an M.A.I. appraisal
commissioned by and addressed to the Administrative Agent (acceptable to the
Administrative Agent as to form, substance and appraisal date), prepared by a
professional appraiser acceptable to the Administrative Agent, having at least
the minimum qualifications required under Applicable Law governing the
Administrative Agent and the Lenders, including without limitation, FIRREA, and
determining both the As-Is Appraised Value of such Property as between a willing
buyer and a willing seller and in the case of the Kroger Portfolio, the Kroger
Portfolio Hypothetical As-Is Appraised Value of such Property.
 
“Approved Fund” means any Fund that is administered or managed by (a) a Lender,
(b) an Affiliate of a Lender, or (c) an entity or an Affiliate of any entity
that administers or manages a Lender.
 
“As-Is Appraised Value” means, with respect to any Property, the “as is” market
value of such Property as reflected in the most recent Appraisal of such
Property as the same may have been reasonably adjusted by the Administrative
Agent based upon its internal review of such Appraisal which is based on
criteria and factors then generally used and considered by the Administrative
Agent in determining the value of similar real estate Properties, which review
shall be conducted prior to acceptance of such Appraisal by the Administrative
Agent.
 
“Assignment and Assumption” means an Assignment and Assumption Agreement among a
Lender, an Eligible Assignee and the Administrative Agent, substantially in the
form of Exhibit A.
 
“Bankruptcy Code” means the Bankruptcy Code of 1978, as amended.
 
“Base Rate” means the LIBOR Market Index Rate; provided, that if for any reason
the LIBOR Market Index Rate is unavailable, Base Rate shall mean the per annum
rate of interest equal to the Federal Funds Rate plus one and one-half of one
percent (1.50%).
 
 
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“Base Rate Loan” means a Loan (other than a LIBOR Loan) bearing interest at a
rate based on the Base Rate.
 
“Baxter Property” means that certain real property located at 555 N. Daniels
Way, Bloomington, Indiana  47404.
 
“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.
 
“Bond Investments” means notes, bonds, debentures or other similar instruments,
including without limitation, CMBS, and CDO investments in senior, subordinate,
and interest-only classes of loan securitizations or pass-through trusts and
certificated mortgage loans.
 
“Borrower” and “Borrowers” has the meaning set forth in the introductory
paragraph hereof and shall include the Borrowers’ successors and permitted
assigns.
 
“Borrowers’ Information” has the meaning given that term in Section 2.6(c).
 
“Borrowing Base” means an amount equal to the sum of the Borrowing Base Values
of the Borrowing Base Properties as determined and adjusted from time to time in
accordance with Section 4.4.  To the extent that the aggregate Borrowing Base
Values of all Leasehold Properties exceeds (i) during the twenty-fifth (25th)
through thirty-sixth (36th) month following the Agreement Date, seventy-five
percent (75%) of the Borrowing Base or (ii) during any periods following the
expiration of the Initial Maturity Date where the Maturity Date has been
extended pursuant to Section 2.14, fifty percent (50%) of the Borrowing Base,
such excess shall be excluded from the Borrowing Base.  Additionally, the Dodge
Property and Landmark Property shall be excluded from the Borrowing Base if the
next 5-year ground lease option to extend (as set forth in the applicable Ground
Lease for each such Property) has not been exercised by January 1, 2015.
 
“Borrowing Base Certificate” means a report in substantially the form of Exhibit
B, certified by a Responsible Officer of the Parent, setting forth the
calculations required to establish the Borrowing Base Value for each Borrowing
Base Property and the Borrowing Base for all Borrowing Base Properties as of a
specified date, all in form and detail satisfactory to the Administrative Agent.
 
“Borrowing Base Property” means an Eligible Property that the Administrative
Agent and the Lenders have agreed to include in calculations of the Borrowing
Base pursuant to Section 4.1.  A Property shall be excluded from determinations
of the Borrowing Base if (a) at any time such Property shall cease to satisfy
clause (a) of the definition of an Eligible Property, (b) the Administrative
Agent shall cease to hold a valid and perfected first priority Lien in such
Property, or (c) there shall have occurred and be continuing a default under the
Security Deed or any other Security Document relating to such Property.
 
“Borrowing Base Value” means, with respect to a Borrowing Base Property, an
amount equal to (i) the Kroger Borrowing Base Value, (ii) the Michelin, Abbott
and Baxter Borrowing Base Value, (iii) the Dodge and Landmark Borrowing Base
Value, as applicable, or (iv) the value attributable to each additional Property
added to the Borrowing Base pursuant Section 4.1(b), such value to be set by the
Requisite Lenders or Lenders, as applicable, in their sole and absolute
discretion.  Additionally, Borrowing Base Value will be adjusted if and as
required under Sections 8.16(b) and 8.16(c).
 
 
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“Business Day” means (a) a day of the week (but not a Saturday, Sunday or
holiday) on which the offices of the Administrative Agent in San Francisco,
California are open to the public for carrying on substantially all of the
Administrative Agent’s business functions, and (b) if such day relates to a
LIBOR Loan, any such day that is also a day on which dealings in Dollars are
carried on in the London interbank market.  Unless specifically referenced in
this Agreement as a Business Day, all references to “days” shall be to calendar
days.
 
“Capital Reserves” means, for any period and with respect to any:  (i) retail,
industrial or office Property that is not less than ninety-five percent (95%)
leased to a single-tenant under a triple net lease, an amount equal to (a) $0.10
per square foot times, (b) a fraction, the numerator of which is the number of
days in such period and the denominator of which is 365; or (ii) Property
occupied by multiple tenants or a single-tenant under a lease other than a
triple net lease, an amount equal to (a) $0.25 per square foot times, (b) a
fraction, the numerator of which is the number of days in such period and the
denominator of which is 365.  If the term Capital Reserves is used without
reference to any specific Property, then the amount shall be determined on an
aggregate basis with respect to all Properties of the Borrowers and their
respective Subsidiaries and a proportionate share of all Properties of all
Unconsolidated Affiliates.
 
“Capitalization Rate” means 8%.
 
“Capitalized Lease Obligation” means obligations under a lease (to pay rent or
other amounts under any lease or other arrangement conveying the right to use)
that are required to be capitalized for financial reporting purposes in
accordance with GAAP.  The amount of a Capitalized Lease Obligation is the
capitalized amount of such obligation as would be required to be reflected on a
balance sheet of the applicable Person prepared in accordance with GAAP as of
the applicable date.
 
“Cash Collateralize” means, to pledge and deposit with or deliver to the
Administrative Agent, for the benefit of the Issuing Bank or the Lenders, as
collateral for Letter of Credit Liabilities or obligations of Lenders to fund
participations in respect of Letter of Credit Liabilities, cash or deposit
account balances or, if the Administrative Agent and the Issuing Bank shall
agree in their sole discretion, other credit support, in each case pursuant to
documentation in form and substance satisfactory to the Administrative Agent and
the Issuing Bank.  “Cash Collateral” shall have a meaning correlative to the
foregoing and shall include the proceeds of such cash collateral and other
credit support.
 
“Cash Equivalents” means:  (a) securities issued, guaranteed or insured by the
United States of America or any of its agencies with maturities of not more than
one year from the date acquired; (b) certificates of deposit with maturities of
not more than one year from the date acquired issued by a United States federal
or state chartered commercial bank of recognized standing, or a commercial bank
organized under the laws of any other country which is a member of the
Organisation for Economic Cooperation and Development, or a political
subdivision of any such country, acting through a branch or agency, which bank
has capital and unimpaired surplus in excess of $500,000,000 and which bank or
its holding company has a short-term commercial paper rating of at least A-2 or
the equivalent by S&P or at least P-2 or the equivalent by Moody’s; (c) reverse
repurchase agreements with terms of not more than seven days from the date
acquired, for securities of the type described in clause (a) above and entered
into only with commercial banks having the qualifications described in
clause (b) above; (d) commercial paper issued by any Person incorporated under
the laws of the United States of America or any State thereof and rated at least
A-2 or the equivalent thereof by S&P or at least P-2 or the equivalent thereof
by Moody’s, in each case with maturities of not more than one year from the date
acquired; and (e) investments in money market funds registered under the
Investment Company Act of 1940, as amended, which have net assets of at least
$500,000,000 and at least 85% of whose assets consist of securities and other
obligations of the type described in clauses (a) through (d) above.
 
 
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“Collateral” means any real or personal property directly or indirectly securing
any of the Obligations or any other obligation of a Person under or in respect
of any Loan Document or Specified Derivatives Contract to which it is a party,
and includes, without limitation, all “Mortgaged Property” under and as defined
in any Security Deed, all “Assigned Contracts” as defined in any Property
Management Contract Assignment, all “Leases” and “Payments” as defined in any
Security Deed and all other property subject to a Lien created by a Security
Document.
 
“Commitment” means, as to a Lender, such Lender’s Revolving Commitment.
 
“Commitment Percentage” means, as to each Lender, the ratio, expressed as a
percentage, of (a) the amount of such Lender’s Commitment to (b) the aggregate
amount of the Commitments of all Lenders; provided, however, that if at the time
of determination the Commitments have been terminated or been reduced to zero,
the “Commitment Percentage” of each Lender shall be the “Commitment Percentage”
of such Lender in effect immediately prior to such termination or reduction.
 
“Compliance Certificate” has the meaning given that term in Section 9.3.
 
“Construction-in-Process” or “CIP” means cash expenditures for land and
improvements (including indirect costs internally allocated and development
costs) determined in accordance with GAAP on all Properties that are under
development or are scheduled to commence development within twelve months.
 
“Continue”, “Continuation” and “Continued” each refers to the continuation of a
LIBOR Loan from one Interest Period to another Interest Period pursuant to
Section 2.10.
 
“Control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or
otherwise.  “Controlling” and “Controlled” have meanings correlative thereto.
 
“Convert”, “Conversion” and “Converted” each refers to the conversion of a Loan
of one Type into a Loan of another Type pursuant to Section 2.11.
 
“Credit Event” means any of the following:  (a) the making (or deemed making) of
any Loan, (b) the Conversion of a Loan, (c) the Continuation of a LIBOR Loan and
(d) the issuance of a Letter of Credit.
 
“Credit Rating” means the rating assigned by a Rating Agency to the senior
unsecured long term Indebtedness of a Person.
 
“Debt Yield” means, at any given time, (i) Total NOI divided by (ii) Total
Liabilities.
 
“Debt Yield Amount” means, with respect to each Property, the immediately prior
calendar quarter NOI annualized divided by the greatest of:  (i) 10%, (ii) the
applicable interest rate hereunder, and (iii) a debt constant based on the then
current 10-year Treasury Bond plus 2.50% and a 20-year amortization schedule.
 
“Debtor Relief Laws” means the Bankruptcy Code, and all other liquidation,
conservatorship, bankruptcy, assignment for the benefit of creditors,
moratorium, rearrangement, receivership, insolvency, reorganization, or similar
Applicable Laws relating to the relief of debtors in the United States of
America or other applicable jurisdictions from time to time in effect.
 
“Default” means any of the events specified in Section 11.1, whether or not
there has been satisfied any requirement for the giving of notice, the lapse of
time, or both.
 
 
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“Defaulting Lender” means, subject to Section 3.9(f), any Lender that (a) has
failed to (i) fund all or any portion of its Loans within two (2) Business Days
of the date such Loans were required to be funded hereunder unless such Lender
notifies the Administrative Agent and the Borrowers in writing that such failure
is the result of such Lender’s determination that one or more conditions
precedent to funding (each of which conditions precedent, together with any
applicable default, shall be specifically identified in such writing) has not
been satisfied, or (ii) pay to the Administrative Agent, the Issuing Bank or any
other Lender any other amount required to be paid by it hereunder (including in
respect of its participation in Letters of Credit) within two (2) Business Days
of the date when due, (b) has notified the Borrowers, the Administrative Agent
or the Issuing Bank in writing that it does not intend to comply with its
funding obligations hereunder, or has made a public statement to that effect
(unless such writing or public statement relates to such Lender’s obligation to
fund a Loan hereunder and states that such position is based on such Lender’s
determination that a condition precedent to funding (which condition precedent,
together with any applicable default, shall be specifically identified in such
writing or public statement) cannot be satisfied), (c) has failed, within 3
Business Days after written request by the Administrative Agent or the
Borrowers, to confirm in writing to the Administrative Agent and the Borrowers
that it will comply with its prospective funding obligations hereunder (provided
that such Lender shall cease to be a Defaulting Lender pursuant to this
clause (c) upon receipt of such written confirmation by the Administrative Agent
and the Borrowers), or (d) has, or has a direct or indirect parent company that
has, (i) become the subject of a proceeding under any Debtor Relief Law, or
(ii) had appointed for it a receiver, custodian, conservator, trustee,
administrator, assignee for the benefit of creditors or similar Person charged
with reorganization or liquidation of its business or assets, including the
Federal Deposit Insurance Corporation or any other state or federal regulatory
authority acting in such a capacity; provided that a Lender shall not be a
Defaulting Lender solely by virtue of the ownership or acquisition of any equity
interest in that Lender or any direct or indirect parent company thereof by a
Governmental Authority so long as such ownership interest does not result in or
provide such Lender with immunity from the jurisdiction of courts within the
United States of America or from the enforcement of judgments or writs of
attachment on its assets or permit such Lender (or such Governmental Authority)
to reject, repudiate, disavow or disaffirm any contracts or agreements made with
such Lender.  Any determination by the Administrative Agent that a Lender is a
Defaulting Lender under clauses (a) through (d) above shall be conclusive and
binding absent manifest error, and such Lender shall be deemed to be a
Defaulting Lender (subject to Section 3.9(f)) upon delivery of written notice of
such determination to the Borrowers, the Issuing Bank, and each Lender.
 
“Derivatives Contract” means (a) any transaction (including any master
agreement, confirmation or other agreement with respect to any such transaction)
now existing or hereafter entered into by the Parent or any of its Subsidiaries
(including the Borrowers), any and all rate swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, commodity swaps,
commodity options, forward commodity contracts, equity or equity index swaps or
options, bond or bond price or bond index swaps or options or forward bond or
forward bond price or forward bond index transactions, interest rate options,
forward foreign exchange transactions, cap transactions, floor transactions,
collar transactions, currency swap transactions, crosscurrency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement.  Not in limitation of the
foregoing, the term “Derivatives Contract” includes any and all transactions of
any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc., any International Foreign
Exchange Master Agreement, or any other master agreement, including any such
obligations or liabilities under any such master agreement.
 
 
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“Derivatives Termination Value” means, in respect of any one or more Derivatives
Contracts, after taking into account the effect of any legally enforceable
netting agreement or provision relating thereto, (a) for any date on or after
the date such Derivatives Contracts have been terminated or closed out, the
termination amount or value determined in accordance therewith, and (b) for any
date prior to the date such Derivatives Contracts have been terminated or closed
out, the then-current mark-to-market value for such Derivatives Contracts,
determined based upon one or more mid-market quotations or estimates provided by
any recognized dealer in Derivatives Contracts (which may include the
Administrative Agent, any Lender, any Specified Derivatives Provider or any
Affiliate of any of them).
 
“Dodge and Landmark Borrowing Base Value”, with respect to the Dodge Property or
Landmark Property, an amount equal to the sum of the lesser of (a) 60% of the
As-Is Appraised Value of such Borrowing Base Property and (b) the Debt Yield
Amount divided by 1.20.
 
“Dodge Property” means that certain real property located at 9394 West Dodge
Road, Omaha, Nebraska  68114.
 
“Dollars” or “$” means the lawful currency of the United States of America.
 
“EBITDA” means, with respect to a Person for any period and without duplication,
the sum of (a) net income (loss) of such Person for such period determined on a
consolidated basis, in accordance with GAAP, excluding the following (but only
to the extent included in determining net income (loss) for such
period):  (i) depreciation and amortization (including amortization of deferred
lease and loan costs and lease origination value); (ii) Interest Expense;
(iii) income tax expense; (iv) asset impairment and restructuring charges; (v)
Investment related lease termination income or expense; (vi) all non-cash
charges and non-cash expenses related to grants of Equity Interests to, the
exercise of options related to such Equity Interest by, and the purchase or
redemption of such Equity Interest of such options from, employees and directors
of Parent, Borrowers or their respective Subsidiaries or the general partner and
(vii) extraordinary or non-recurring gains and losses; plus (b) such Person’s
Ownership Share of EBITDA of its Unconsolidated Affiliates.  EBITDA shall be
adjusted to remove any impact from straight line rent leveling adjustments
required under GAAP and amortization of intangibles pursuant to FAS 141. For
purposes of this definition, nonrecurring items shall be deemed to include
(x) gains and losses on early extinguishment of Indebtedness, (y) non-cash
severance and other non-cash restructuring charges and (z) transaction costs of
acquisitions not permitted to be capitalized pursuant to 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 6.1 shall have been
fulfilled or waived by all of the Lenders.
 
“Eligible Assignee” means (a) a Lender, (b) an Affiliate of a Lender, (c) an
Approved Fund and (d) any other Person (other than a natural person) approved by
the Administrative Agent; provided that notwithstanding the foregoing, “Eligible
Assignee” shall not include the Borrowers or any of the Borrowers’ Affiliates or
Subsidiaries.
 
“Eligible Property” means (a) a Property which satisfies all of the following
requirements as confirmed by the Administrative Agent:  (i) such Property is
owned in fee simple, estate for years or leased under a Ground Lease by a
Borrower, is fully developed and is located in the United States of America,
(ii) such Property is unencumbered by any Indebtedness (including, for avoidance
of doubt, any intercompany mortgage, pledge or similar lien), (iii) such
Property is not subject to a Negative Pledge or similar encumbrance, (iv)
neither Borrowers nor Guarantor have encumbered in any manner their direct or
indirect ownership interest in the Property, (v) the Borrowers directly have the
right to take the following actions without the need to obtain the consent of
any Person:  (y) to sell, transfer or otherwise dispose of such Property and (z)
to create a lien on such Property as security for Indebtedness of the Borrowers,
and (vi) such Property is free of all structural defects or major architectural
deficiencies, title defects (including easements), environmental conditions or
other adverse matters except for defects, deficiencies, conditions or other
matters individually or collectively which are not material to the profitable
operation of such Property, and (b) any other Property for which approval of
Requisite Lenders and Administrative Agent has been obtained.
 
 
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“Environmental Laws” means any Applicable Law relating to environmental
protection or the manufacture, storage, remediation, disposal or clean-up of
Hazardous Materials including, without limitation, the following:  Clean Air
Act, 42 U.S.C. § 7401 et seq.; Federal Water Pollution Control Act, 33 U.S.C. §
1251 et seq.; Solid Waste Disposal Act, as amended by the Resource Conservation
and Recovery Act, 42 U.S.C. § 6901 et seq.; Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C. § 9601 et seq.; National
Environmental Policy Act, 42 U.S.C. § 4321 et seq.; regulations of the
Environmental Protection Agency, any applicable rule of common law and any
judicial interpretation thereof relating primarily to the environment or
Hazardous Materials, and any analogous or comparable state or local laws,
regulations or ordinances that concern Hazardous Materials or protection of the
environment.
 
“Equity Interest” means, with respect to any Person, any share of capital stock
of (or other ownership or profit interests in) such Person, any warrant, option
or other right for the purchase or other acquisition from such Person of any
share of capital stock of (or other ownership or profit interests in) such
Person whether or not certificated, 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
in such Person and shall in any event include the issuance of any Equity
Interest upon the conversion or exchange of any security constituting
Indebtedness that is convertible or exchangeable, or is being converted or
exchanged, for Equity Interests.
 
“ERISA” means the Employee Retirement Income Security Act of 1974, as in effect
and amended from time to time.
 
“ERISA Event” means, with respect to the ERISA Group, (a) any “reportable event”
as defined in Section 4043 of ERISA with respect to a Plan (other than an event
for which the 30-day notice period is waived); (b) the withdrawal of a member of
the ERISA Group from a Plan subject to Section 4063 of ERISA during a plan year
in which it was a “substantial employer” as defined in Section 4001(a)(2) of
ERISA or a cessation of operations that is treated as such a withdrawal under
Section 4062(e) of ERISA; (c) the incurrence by a member of the ERISA Group of
any liability with respect to the withdrawal or partial withdrawal from any
Multiemployer Plan; (d) the incurrence by any member of the ERISA Group of any
liability under Title IV of ERISA with respect to the termination of any Plan or
Multiemployer Plan; (e) the institution of proceedings to terminate a Plan or
Multiemployer Plan by the PBGC; (f) the failure by any member of the ERISA Group
to make when due required contributions to a Multiemployer Plan or Plan unless
such failure is cured within 30 days or the filing pursuant to Section 412(c) of
the Internal Revenue Code or Section 302(c) of ERISA of an application for a
waiver of the minimum funding standard; (g) any other event or condition that
might reasonably be expected to constitute grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any Plan
or Multiemployer Plan or the imposition of liability under Section 4069 or
4212(c) of ERISA; (h) the receipt by any member of the ERISA Group of any notice
or the  receipt by any Multiemployer Plan from any member of the ERISA Group of
any notice, concerning the imposition of Withdrawal Liability or a determination
that a Multiemployer Plan is, or is expected to be, insolvent (within the
meaning of Section 4245 of ERISA), in reorganization (within the meaning of
Section 4241 of ERISA), or in “critical” status (within the meaning of
Section 432 of the Internal Revenue Code or Section 305 of ERISA); (i)  the
imposition of any liability under Title IV of ERISA, other than for PBGC
premiums due but not delinquent under Section 4007 of ERISA, upon any member of
the ERISA Group or the imposition of any Lien in favor of the PBGC under Title
IV of ERISA; or (j) a determination that a Plan is, or is reasonably expected to
be, in “at risk” status (within the meaning of Section 430 of the Internal
Revenue Code or Section 303 of ERISA).
 
 
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“ERISA Group” means the Parent, Borrowers, 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 Borrowers 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 11.1, provided
that any requirement for notice or lapse of time or any other condition has been
satisfied.
 
“Excluded Subsidiary” means any Subsidiary (a) holding title to assets that are
or are to become collateral for any Secured Indebtedness of such Subsidiary and
(b) that is prohibited from Guaranteeing the Indebtedness of any other Person
pursuant to (i) any document, instrument, or agreement evidencing such Secured
Indebtedness or (ii) a provision of such Subsidiary’s organizational documents
which provision was included in such Subsidiary’s organizational documents as a
condition to the extension of such Secured Indebtedness.
 
“Extension Request” has the meaning given that term in Section 2.14.
 
“Fair Market Value” means, (a) with respect to a security listed on a national
securities exchange or the NASDAQ National Market, the price of such security as
reported on such exchange or market 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.
 
“FASB ASC” means the Accounting Standards Codification of the Financial
Accounting Standards Board.
 
“FATCA” has the meaning given to that term in Section 3.10(a).
 
“Federal Funds Rate” means, for any period, a fluctuating interest rate per
annum equal for each day during such period to the weighted average of the rates
on overnight Federal Funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day which
is a Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three Federal Funds
brokers of recognized standing selected by the Administrative Agent.
 
“Fee Letter” means that certain fee letter dated as of June 29, 2012, by and
between the Borrowers and the Administrative Agent.
 
“Fees” means the fees and commissions provided for or referred to in Section 3.5
and any other fees payable by the Borrowers hereunder, under any other Loan
Document or under the Fee Letter.
 
 
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“FIRREA” means the Financial Institution Recovery, Reform and Enforcement Act of
1989, as amended.
 
“Fixed Charges” means, with respect to a Person and for a given period, the sum
of (a) the Interest Expense of such Person for such period, plus (b) the
aggregate of all principal payments on Indebtedness made by such Person (net of
any principal payments on Loan Investments or Bond Investments received by such
Person) during such period (excluding balloon, bullet, early repayment or
similar payments of principal which, in ease case, repays Indebtedness in full),
plus (c) the aggregate of all Preferred Dividends paid or accrued by such Person
during such period.
 
“Fixed Charge Coverage Ratio” means, as of any date, the ratio of (a) Adjusted
EBITDA of the Loan Parties and their respective Subsidiaries determined on a
consolidated basis for the fiscal quarter most recently ended to (b) Fixed
Charges of the Loan Parties and their respective Subsidiaries determined on a
consolidated basis for such period.
 
“Foreign Lender” means any Lender that is organized under the laws of a
jurisdiction other than that in which a Borrower is resident for tax
purposes.  For purposes of this definition, the United States of America, each
State thereof and the District of Columbia shall be deemed to constitute a
single jurisdiction.
 
“Fronting Exposure” means, at any time there is a Defaulting Lender, with
respect to the Issuing Bank, such Defaulting Lender’s Commitment Percentage of
the outstanding Letter of Credit Liabilities other than Letter of Credit
Liabilities as to which such Defaulting Lender’s participation obligation has
been reallocated to other Lenders or Cash Collateralized in accordance with the
terms hereof.
 
“Fund” means any Person (other than a natural person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.
 
“Funded Debt” means the sum of the following of the Parent on a consolidated
basis:  (a) all outstanding real estate mortgage debt and (b) all other secured
or unsecured debt (including term loans, lines of credit, letters of credit,
notes, and convertible notes) other than Indebtedness issued in connection with
trust preferred securities (which have debt characteristics, if any, no less
favorable to Lenders as those contained in the Parent’s existing trust preferred
securities).
 
“Funded Intercompany Debt” means, mortgage loans or other loans that were both
made by and are due to an entity that is owned by the Parent or its Subsidiaries
(including the Borrowers).
 
“Funds From Operations” means, for the prior trailing twelve month period, with
respect to the Parent and its Subsidiaries:  (a) net income (loss) of the Parent
and its Subsidiaries on a consolidated basis for such period, excluding gains
(or losses) from debt restructuring and sales of property, plus (b) depreciation
with respect to the Parent and its Subsidiaries’ real estate assets and
amortization (other than amortization of deferred financing costs), plus (c)
non-cash charges for the impairment of real estate assets for such period, minus
(or plus) (d) extraordinary or non-recurring gains (and losses), all after
adjustment for unconsolidated partnerships and joint ventures.  Adjustments for
unconsolidated partnership and joint ventures will be calculated to reflect
Funds From Operations on the same basis.
 
“GAAP” means generally accepted accounting principles in the United States of
America set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board
(including Statement of Financial Accounting Standards No. 168, “The FASB
Accounting Standards Codification”) or in such other statements by such other
entity as may be approved by a significant segment of the accounting profession
in the United States of America, which are applicable to the circumstances as of
the date of determination.
 
 
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“Ground Lease” means a ground lease containing the following terms and
conditions: (a) a remaining term (exclusive of any unexercised extension
options) of 40 years or more from the Agreement Date; (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 agreement of such lessor that such lease will not be
terminated until such holder has had a reasonable opportunity to cure or
complete foreclosures, and fails to do so; (d) reasonable transferability of the
lessee’s interest under such lease, including ability to sublease; and (e) such
other rights customarily required by mortgagees making a loan secured by the
interest of the holder of the leasehold estate demised pursuant to a ground
lease or, to the extent all of the foregoing conditions are not satisfied,
otherwise approved by Lenders.
 
“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, administrative, public or statutory
instrumentality, authority, body, agency, bureau, commission, board, department
or other entity (including, without limitation, the Federal Deposit Insurance
Corporation, the Comptroller of the Currency or the Federal Reserve Board, any
central bank or any comparable authority) or any arbitrator with authority to
bind a party at law.
 
“Guarantor” means CapLease, Inc., a Maryland corporation.
 
“Guaranty”, “Guaranteed” or to “Guarantee” as applied to any obligation means
and includes:  (a) a guaranty (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), directly or
indirectly, in any manner, of any part or all of such obligation, or (b) an
agreement, direct or indirect, contingent or otherwise, and whether or not
constituting a guaranty, the practical effect of which is to assure the payment
or performance (or payment of damages in the event of nonperformance) of any
part or all of such obligation whether by:  (i) the purchase of securities or
obligations, (ii) the purchase, sale or lease (as lessee or lessor) of property
or the purchase or sale of services primarily for the purpose of enabling the
obligor with respect to such obligation to make any payment or performance (or
payment of damages in the event of nonperformance) of or on account of any part
or all of such obligation, or to assure the owner of such obligation against
loss, (iii) the supplying of funds to or in any other manner investing in the
obligor with respect to such obligation, (iv) repayment of amounts drawn down by
beneficiaries of letters of credit (including Letters of Credit), or (v) the
supplying of funds to or investing in a Person on account of all or any part of
such Person’s obligation under a Guaranty of any obligation or indemnifying or
holding harmless, in any way, such Person against any part or all of such
obligation.  As the context requires, “Guaranty” shall also mean the guaranty
executed and delivered pursuant to Section 6.1 and substantially in the form of
Exhibit D.
 
“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.
 
 
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“Hazardous Materials Indemnity Agreement” means a Hazardous Materials Indemnity
Agreement executed by the Borrowers and Parent in favor of the Administrative
Agent, the Lenders, the Issuing Bank and each Specified Derivatives Provider and
substantially in the form of Exhibit C.
 
“Indebtedness” means, with respect to a Person, at the time of computation
thereof, all of the following (without duplication):  (a) all obligations of
such Person in respect of money borrowed or for the deferred purchase price of
property or services including trade debt incurred in the ordinary course of
business); (b) all obligations of such Person, whether or not for money borrowed
(i) represented by notes payable, or drafts accepted, in each case representing
extensions of credit, (ii) evidenced by bonds, debentures, notes or similar
instruments, or (iii) constituting purchase money indebtedness, conditional
sales contracts, title retention debt instruments or other similar instruments,
upon which interest charges are customarily paid or that are issued or assumed
as full or partial payment for property or for services rendered;
(c) Capitalized Lease Obligations of such Person; (d) all reimbursement
obligations (contingent or otherwise) of such Person under or in respect of any
letters of credit or acceptances (whether or not the same have been presented
for payment); (e) all Off-Balance Sheet Obligations of such Person; (f) all
obligations of such Person to purchase, redeem, retire, defease or otherwise
make any payment in respect of any Mandatorily Redeemable Stock issued by such
Person or any other Person, valued at the greater of its voluntary or
involuntary liquidation preference plus accrued and unpaid dividends; (g) all
obligations of such Person in respect of any purchase obligation, repurchase
obligation, takeout commitment or forward equity commitment, in each case
evidenced by a binding agreement (excluding any such obligation to the extent
the obligation can be satisfied by the issuance of Equity Interests (other than
Mandatorily Redeemable Stock)); (h) net obligations under any Derivative
Contract (which shall be deemed to have an amount equal to the Derivatives
Termination Value thereof at such time but in no event shall be less than zero);
and (i) all Indebtedness of other Persons which such Person has Guaranteed or is
otherwise recourse to such Person (except for guaranties of customary exceptions
for fraud, misapplication of funds, environmental indemnities, voluntary
bankruptcy, collusive involuntary bankruptcy and other similar exceptions to
non-recourse liability) or (j) all Indebtedness of another Person secured by (or
for which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien on property or assets owned by such
Person, even though such Person has not assumed or become liable for the payment
of such Indebtedness or other payment obligation; and (k) such Person’s
Ownership Share of the Indebtedness of any Unconsolidated Affiliate of such
Person.  Indebtedness of any Person shall include Indebtedness of any
partnership or joint venture in which such Person is a general partner or joint
venturer to the extent of such Person’s Ownership Share of such partnership or
joint venture (except if such Indebtedness, or portion thereof, is recourse to
such Person, in which case the greater of such Person’s Ownership Share of such
Indebtedness or the amount of the recourse portion of the Indebtedness, shall be
included as Indebtedness of such Person).  All Loans and Letter of Credit
Liabilities shall constitute Indebtedness of the Borrowers.
 
“Indemnifiable Amounts” has the meaning given that term in Section 12.8.
 
“Indemnified Costs” has the meaning given that term in Section 13.10.
 
“Indemnified Party” has the meaning given that term in Section 13.10.
 
“Indemnity Proceeding” has the meaning given that term in Section 13.10.
 
 
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“Initial Maturity Date” means June 28, 2015.
 
“Intellectual Property” has the meaning given that term in Section 7.1(t).
 
“Interest Expense” means, with respect to a Person and for any period, without
duplication (a) total interest expense of such Person, including capitalized
interest not funded under a construction loan interest reserve account,
determined on a consolidated basis in accordance with GAAP for such period, plus
(b) such Person’s Ownership Share of total interest expense (including
capitalized interest not funded under a construction loan interest reserve
account) of Unconsolidated Affiliates of such Person for such period.
 
“Interest Period” means, with respect to each LIBOR Loan, each period commencing
on the date such LIBOR Loan is made, or in the case of the Continuation of a
LIBOR Loan the last day of the preceding Interest Period for such Loan, and
ending on the numerically corresponding day in the first, third or sixth
calendar month thereafter, as the Borrowers 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 (or on any day for which there is no numerically corresponding
day in the appropriate subsequent calendar month) shall end on the last Business
Day of the appropriate subsequent calendar month.  Notwithstanding the
foregoing:  (i) if any Interest Period would otherwise end after the Maturity
Date, such Interest Period shall end on the Maturity Date; and (ii) each
Interest Period that would otherwise end on a day which is not a Business Day
shall end on the immediately following Business Day (or, if such immediately
following Business Day falls in the next calendar month, on the immediately
preceding Business Day).
 
“Internal Revenue Code” means the Internal Revenue Code of 1986, as amended.
 
“Investment” means, with respect to any Person, any acquisition or investment
(whether or not of a controlling interest) by such Person, by means of any of
the following:  (a) the purchase or other acquisition of any Equity Interest in
another Person, (b) a loan, advance or extension of credit to, capital
contribution to, Guaranty of Indebtedness of, or purchase or other acquisition
of any Indebtedness of, another Person, including any partnership or joint
venture interest in such other Person, or (c) the purchase or other acquisition
(in one transaction or a series of transactions) of assets of another Person
that constitute the business or a division or operating unit of another
Person.  Any commitment to make an Investment in any other Person, as well as
any option of another Person to require an Investment in such Person, shall
constitute an Investment.  Except as expressly provided otherwise, for purposes
of determining compliance with any covenant contained in a Loan Document, the
amount of any Investment shall be the amount actually invested, without
adjustment for subsequent increases or decreases in the value of such
Investment.
 
“Issuing Bank” means Wells Fargo or any other Lender, each in its capacity as an
issuer of Letters of Credit pursuant to Section 2.4.
 
“Kroger” means The Kroger Co., an Ohio corporation.
 
“Kroger Borrowing Base Value” means, with respect to the Kroger Portfolio, an
amount equal to the lesser of the following:
 
 
(a)
65% of the then applicable Kroger Hypothetical As-Is Appraised Value,

 
 
(b)
$40,600,000,

 
 
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(c)
85% of the Kroger Lease Termination Payment, and

 
 
(d)
the sum of the Debt Yield Amount for each Property in the Kroger Portfolio
divided, in each case, by the following:

 
 
(i)
1.10, from the Agreement Date to and including June 30, 2013,

 
 
(ii)
1.20, from July 1, 2013 to and including June 30, 2014,

 
 
(iii)
1.30, from July 1, 2014 to and including June 30, 2015, and

 
 
(iv)
1.40 during any periods following the Initial Maturity Date, where the Maturity
Date has been validly extended pursuant to Section 2.14.

 
Notwithstanding the foregoing, if either (X) Kroger’s S&P long term credit
rating is less than BBB- or (Y) Kroger’s Moody’s long term credit rating is less
than Baa3 or (Z) Kroger is no longer rated by both S&P and Moody’s, then for
purposes of clause (d) preceding, the Debt Yield Amount for each Property in the
Kroger Portfolio shall be divided by 1.40.
 
“Kroger Lease Termination Payment” means the sum of Lease termination payments
to be received by Borrowers from Kroger as set forth in Schedule C-1 of those
Amended and Restated Leases between PREFCO Nineteen Limited Partnership, as
landlord, and The Kroger Co. as tenant, for each of the eleven properties
comprising the Kroger Portfolio, assuming Kroger had exercised its lease
termination rights as of the date of determination.
 
“Kroger Portfolio” means the Properties listed on Schedule 1.1(b) attached
hereto.
 
“Kroger Portfolio Hypothetical As-Is Appraised Value” means, with respect to the
Kroger Portfolio as of any date of determination, the “hypothetical” “as-is”
market value of the Kroger Portfolio as of the next occurring July 2 as
reflected in the most recent Appraisal of the Kroger Portfolio, as the same may
have been reasonably adjusted by the Administrative Agent based upon its
internal review of such Appraisal which is based on criteria and factors then
generally used and considered by the Administrative Agent in determining the
value of similar real estate Properties, which review shall be conducted prior
to acceptance of such Appraisal by the Administrative Agent.
 
“L/C Commitment Amount” has the meaning given to that term in Section 2.4(a).
 
“L/C Disbursement” has the meaning given to that term in Section 3.9(b).
 
“Landmark Property” means that certain real property located at 1200 Landmark
Center, 1299 Farnam Street, Omaha, Nebraska  68102.
 
“Leasehold Gross Asset Value” or “Leasehold GAV” means, for any period, NOI for
all Leasehold Properties divided by the Capitalization Rate.  Notwithstanding
the foregoing, any Leasehold Properties classified as Transitional Properties
shall be excluded from the calculation of NOI for purposes of Leasehold GAV;
provided, however, Leasehold GAV will be adjusted to reflect the following
valuation on an aggregate basis for any Leasehold Property classified as a
Transitional Property:
 
 
(A)
at all times prior to the Initial Maturity Date, the greater of (i) the “As-Is”
Appraised Value of such Transitional Property or (ii) if applicable, the funded
non-recourse debt amount of such Transitional Property; provided however, such
nonrecourse debt amount shall be limited to 120% of the “As-Is” Appraised Value,
and

 
 
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(B)
during any periods following the Initial Maturity Date where the Maturity Date
has been extended pursuant to Section 2.14, the “As-Is” Appraised Value.

 
A Property will cease to be a Transitional Property for purposes of calculating
Leasehold GAV upon the earlier to occur of: (i) such property no longer being a
Transitional Property or (ii) such property having been classified as a
Transitional Property for six (6) consecutive calendar quarters; thereafter, no
value shall be attributed to such Transitional Property for purposes of
calculating Leasehold GAV.  Additionally, Leasehold GAV for a Property shall be
zero if there is a default beyond the cure period, if any, under a Ground Lease
affecting such Property.
 
“Leasehold Properties” means, any Property owned by the Guarantor and its
Subsidiaries (including the Borrowers) that is owned on a leasehold rather than
a fee basis.  For the avoidance of doubt, this shall also include any Property
subject to an estate for years (with a remainderman) ownership structure.
 
“Lender” means each financial institution from time to time party hereto as a
“Lender” together with its respective successors and permitted assigns;
provided, however, that the term “Lender” except as otherwise expressly provided
herein, shall exclude any Lender (or its Affiliates) in its capacity as a
Specified Derivatives Provider.
 
“Lending Office” means, for each Lender and for each Type of Loan, the office of
such Lender specified in such Lender’s Administrative Questionnaire or in the
applicable Assignment and Assumption, or such other office of such Lender as
such Lender may notify the Administrative Agent in writing from time to time.
 
“Letter of Credit” has the meaning given that term in Section 2.4(a).
 
“Letter of Credit Collateral Account” means a special deposit account maintained
by the Administrative Agent, for the benefit of the Administrative Agent, the
Issuing Bank and the Lenders, and under its sole dominion and control.
 
“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 Borrowers at such time due and payable in respect of all
drawings made under such Letter of Credit.  For purposes of this Agreement, a
Lender (other than the Lender then acting as Issuing Bank) shall be deemed to
hold a Letter of Credit Liability in an amount equal to its participation
interest under Section 2.4 in the related Letter of Credit, and the Lender then
acting as the Issuing Bank shall be deemed to hold a Letter of Credit Liability
in an amount equal to its retained interest in the related Letter of Credit
after giving effect to the acquisition by the Lenders (other than the Lender
then acting as the Issuing Bank) of their participation interests under such
Section.
 
 
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“Leverage Ratio” means, as of any date, the ratio of (i) Funded Debt of the Loan
Parties and their respective Subsidiaries determined on a consolidated basis to
(ii) Total Gross Asset Value of the Loan Parties and their respective
Subsidiaries determined on a consolidated basis.
 
“LIBOR” means, for the Interest Period for any LIBOR Loan, the rate of interest,
rounded up to the nearest whole multiple of one-hundredth of one percent
(0.01%), obtained by dividing (i) the rate of interest, rounded upward to the
nearest whole multiple of one-sixteenth of one percent (0.00625%), referred to
as the BBA (British Bankers’ Association) LIBOR rate as set forth by any service
selected by the Administrative Agent that has been nominated by the British
Bankers’ Association as an authorized information vendor for the purpose of
displaying such rate for deposits in Dollars at approximately 12:00 p.m. Eastern
time, two (2) Business Days prior to the date of commencement of such Interest
Period for purposes of calculating effective rates of interest for loans or
obligations making reference thereto, for an amount approximately equal to the
applicable LIBOR Loan and for a period of time approximately equal to such
Interest Period by (ii) a percentage equal to 1 minus the stated maximum rate
(stated as a decimal) of all reserves, if any, required to be maintained with
respect to Eurocurrency funding (currently referred to as “Eurocurrency
liabilities”) as specified in Regulation D of the Board of Governors of the
Federal Reserve System (or against any other category of liabilities which
includes deposits by reference to which the interest rate on LIBOR Loans is
determined or any applicable category of extensions of credit or other assets
which includes loans by an office of any Lender outside of the United States of
America).  Any change in such maximum rate shall result in a change in LIBOR on
the date on which such change in such maximum rate becomes effective.
 
“LIBOR Loan” means a Loan (other than a Base Rate Loan) bearing interest at a
rate based on LIBOR.
 
“LIBOR Market Index Rate” means, for any day, LIBOR as of that day for one-month
deposits in Dollars determined at approximately 12:00 p.m. Eastern time for such
day (or if such day is not a Business Day, the immediately preceding Business
Day).  The LIBOR Market Index Rate shall be determined on a daily basis.
 
“Lien” as applied to the property of any Person means:  (a) any security
interest, encumbrance, mortgage, deed to secure debt, deed of trust, assignment
of leases and rents, pledge, lien, hypothecation, assignment, charge or lease
constituting a Capitalized Lease Obligation, conditional sale or other title
retention agreement, or other security title or encumbrance of any kind in
respect of any property of such Person, or upon the income, rents or profits
therefrom; (b) any arrangement, express or implied, under which any property of
such Person is transferred, sequestered or otherwise identified for the purpose
of subjecting the same to the payment of Indebtedness or performance of any
other obligation in priority to the payment of the general, unsecured creditors
of such Person; and (c) the filing of any financing statement under the UCC or
its equivalent in any jurisdiction, other than any precautionary filing not
otherwise constituting or giving rise to a Lien, including a financing statement
filed (i) in respect of a lease not constituting a Capitalized Lease Obligation
pursuant to Section 9-505 (or a successor provision) of the UCC or its
equivalent as in effect in an applicable jurisdiction or (ii) in connection with
a sale or other disposition of accounts or other assets not prohibited by this
Agreement in a transaction not otherwise constituting or giving rise to a Lien.
 
“Loan” means a Revolving Loan.
 
“Loan Document” means this Agreement, each Note, the Guaranty, each other
Security Document, each Letter of Credit Document and each other document or
instrument now or hereafter executed and delivered by a Loan Party in connection
with, pursuant to or relating to this Agreement (other than the Fee Letter and
any Specified Derivatives Contract).
 
 
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“Loan Investments” means, loans that the Parent has made, including without
limitation, loans that are generally secured by single-tenant, net-leased retail
drug stores, retail centers, warehouse, and office properties.
 
“Loan Party” means each Borrower, Parent, each other Person who guarantees all
or a portion of the Obligations and/or who pledges any Collateral to secure all
or a portion of the Obligations.  Schedule 1.1(a) sets forth the Loan Parties in
addition to the Borrowers as of the Agreement Date.
 
“Mandatorily Redeemable Stock” means, with respect to any Person, any Equity
Interest of such Person which by the terms of such Equity Interest (or by the
terms of any security into which it is convertible or for which it is
exchangeable or exercisable), upon the happening of any event or otherwise, (a)
matures or is mandatorily redeemable, pursuant to a sinking fund obligation or
otherwise (other than an Equity Interest to the extent redeemable in exchange
for common stock or other equivalent common Equity Interests at the option of
the issuer of such Equity Interest), (b) is convertible into or exchangeable or
exercisable for Indebtedness or Mandatorily Redeemable Stock, or (c) is
redeemable at the option of the holder thereof, in whole or part (other than an
Equity Interest which is redeemable solely in exchange for common stock or other
equivalent common Equity Interests), in each case on or prior to the Maturity
Date.
 
“Material Adverse Effect” means a materially adverse effect on (a) the assets,
liabilities, or financial condition of the Parent, Borrowers and their
respective Subsidiaries taken as a whole, (b) the ability of the Borrowers 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,
or (d) the rights and remedies of the Lenders, the Issuing Bank and the
Administrative Agent under any of the Loan Documents.
 
“Material Contract” means (a) each Property Management Agreement, if any, with
respect to a Borrowing Base Property, (b) any Tenant Lease with respect to a
Borrowing Base Property, (c) any Ground Lease with respect to a Borrowing Base
Property and (d) any contract or other arrangement (other than Loan Documents
and Specified Derivatives Contracts), whether written or oral, to which the
Borrowers, any Subsidiary or any other Loan Party is a party as to which the
breach, nonperformance, cancellation or failure to renew by any party thereto
could reasonably be expected to have a Material Adverse Effect.
 
“Material Subsidiary” means any Subsidiary of any Borrower with assets having a
fair market value of $1,000,000.00 or more.
 
“Maturity Date” means the Initial Maturity Date, or such later date to which the
Maturity Date may be extended pursuant to Section 2.14, or any earlier
acceleration thereof.
 
“Maximum Loan Availability” means, at any time, the lesser of (a)
$100,000,000.00, (b) the Borrowing Base, and (c) the amount, if any, by which
(i) the Borrowing Base exceeds (ii) the aggregate outstanding principal amount
of the Loans and the Letter of Credit Liabilities.
 
“Michelin, Abbott and Baxter Borrowing Base Value”, with respect to the Michelin
Property, Abbott Property or Baxter Property, an amount equal to the sum of the
lesser of (a) 65% of the As-Is Appraised Value of such Borrowing Base Property
and (b) the Debt Yield Amount for such Borrowing Base Property divided by 1.20.
 
“Michelin Property” means that certain real property located at 5600 Cane Run
Road, Louisville, Kentucky  40258.
 
 
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“Minimum Interest Coverage Ratio” means, as of any date, the ratio of (i)
Adjusted EBITDA of the Loan Parties and their respective Subsidiaries determined
on a consolidated basis for the fiscal quarter most recently ended to (ii)
Interest Expense of the Loan Parties and their respective Subsidiaries
determined on a consolidated basis for such period.
 
“Moody’s” means Moody’s Investors Service, Inc. and its successors.
 
“Multiemployer Plan” means at any time a multiemployer plan within the meaning
of Section 4001(a)(3) of ERISA to which any member of the ERISA Group is then
making or accruing an obligation to make contributions or has within the
preceding six plan years made contributions, including for these purposes any
Person which ceased to be a member of the ERISA Group during such six-year
period.
 
“Negative Pledge” means, with respect to a given asset, any provision of a
document, instrument or agreement (other than any Loan Document) which prohibits
or purports to prohibit the creation or assumption of any Lien on such asset as
security for Indebtedness of the Person owning such asset or any other Person;
provided, however, that an agreement that conditions a Person’s ability to
encumber its assets upon the maintenance of one or more specified ratios that
limit such Person’s ability to encumber its assets but that do not generally
prohibit the encumbrance of its assets, or the encumbrance of specific assets,
shall not constitute a Negative Pledge.
 
“Net Effective Rent” means, for any lease the base rent scheduled under a Tenant
Lease, as reduced for any amounts paid by the landlord to or on behalf of the
tenant for the purpose of inducing the tenant to enter into such Tenant Lease,
including, without limitation, an excessive tenant improvement allowance, moving
expenses, free rent periods or abatements or lease buyouts.

“Net Operating Income” or “NOI” means, for any Property and for a given period,
the sum of the following (without duplication and determined on a consistent
basis with prior periods):  (a) rents (recognized on a modified GAAP basis (no
straight-lining of rents)) and other revenues received in the ordinary course
from such Property (including expense recoveries and proceeds from rent loss or
business interruption insurance but excluding pre-paid rents and revenues and
security deposits except to the extent applied in satisfaction of tenants’
obligations for rent and also excluding rent and rents and revenues made by a
tenant (i) that is in default of its monetary or other material lease
obligations beyond the cure period, if any or (ii) that is subject to either a
voluntary or involuntary bankruptcy petition) minus (b) all expenses paid
(excluding interest but including an appropriate accrual for property taxes and
insurance) related to the ownership, operation or maintenance of such Property,
including but not limited to, property taxes, assessments and the like,
insurance, utilities, payroll costs, maintenance, repair and landscaping
expenses, marketing expenses, and general and administrative expenses (including
an appropriate allocation for legal, accounting, advertising, marketing and
other expenses incurred in connection with such Property, but specifically
excluding general overhead expenses of the Borrowers and their respective
Subsidiaries and any management fees) minus (c) the Capital Reserves for such
Property as of the end of such period minus (d) the greater of (i) the actual
property management fee paid during such period with respect to such Property
and (ii) an imputed management fee in an amount equal to 1% of the gross
revenues for such Property for such period.  Rental revenue for any Properties
that pay rent semi-annually, annually or in any intervals other than monthly
shall be adjusted to a monthly rent by dividing total calendar year rents by
twelve (12).  Notwithstanding the foregoing, when calculating NOI for purposes
of determining the Borrowing Base, NOI shall exclude rent payments made by a
tenant:  (i) that is no longer in occupancy; (ii) that vacated its space during
the three months prior to the date of determination (provided that the Borrowers
may include NOI from a tenant that took occupancy during the three month test
period as if such occurred on the first day of the test period); (iii) that has
given non-renewal notice, unless such notice is given more than three months
prior to its lease expiration in which case such tenant may be included in NOI
until three months prior to lease expiration; and (iv) that has less than three
months of lease term remaining.  For the avoidance of doubt, the adjustments in
the preceding sentence, however, shall not apply when calculating Property
Portfolio NOI in order to determine compliance with financial covenants
hereunder.
 
 
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“Net Proceeds” means with respect to an Equity Issuance by a Person, the
aggregate amount of all cash and the Fair Market Value of all other property
(other than securities of such Person being converted or exchanged in connection
with such Equity Issuance) received by such Person in respect of such Equity
Issuance net of investment banking fees, legal fees, accountants’ fees,
underwriting discounts and commissions and other customary fees and expenses
actually incurred by such Person in connection with such Equity Issuance.
 
“Non-Defaulting Lender” means, at any time, each Lender that is not a Defaulting
Lender at such time.
 
“Nonrecourse Indebtedness” means, with respect to a Person, Indebtedness for
borrowed money in respect of which recourse for payment (except for customary
exceptions for fraud, misapplication of funds, environmental indemnities,
voluntary bankruptcy, collusive involuntary bankruptcy and other similar
customary exceptions to nonrecourse liability in a form reasonably acceptable to
the Administrative Agent) is contractually limited to specific assets of such
Person encumbered by a Lien securing such Indebtedness.
 
“Note” means a Revolving Note.
 
“Notice of Borrowing” means a notice substantially in the form of Exhibit E (or
such other form reasonably acceptable to the Administrative Agent and containing
the information required in such Exhibit) to be delivered to the Administrative
Agent pursuant to Section 2.1(b) evidencing the Borrowers’ request for a
borrowing of Revolving Loans.
 
“Notice of Continuation” means a notice substantially in the form of Exhibit F
(or such other form reasonably acceptable to the Administrative Agent and
containing the information required in such Exhibit) to be delivered to the
Administrative Agent pursuant to Section 2.10 evidencing the Borrowers’ request
for the Continuation of a LIBOR Loan.
 
“Notice of Conversion” means a notice substantially in the form of Exhibit G (or
such other form reasonably acceptable to the Administrative Agent and containing
the information required in such Exhibit) to be delivered to the Administrative
Agent pursuant to Section 2.11 evidencing the Borrowers’ request for the
Conversion of a Loan from one Type to another Type.
 
“Obligations” means, individually and collectively:  (a) the aggregate principal
balance of, and all accrued and unpaid interest on, 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 Borrowers and the other Loan Parties owing to the Administrative Agent, the
Issuing Bank or any Lender of every kind, nature and description, under or in
respect of this Agreement or any of the other Loan Documents, including, without
limitation, the Fees and indemnification obligations, whether direct or
indirect, absolute or contingent, due or not due, contractual or tortious,
liquidated or unliquidated, and whether or not evidenced by any promissory
note.  For the avoidance of doubt, “Obligations” shall not include Specified
Derivatives Obligations.
 
 
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“Off-Balance Sheet Obligations” means liabilities and obligations of the Parent
or any other Person in respect of “off-balance sheet arrangements” (as defined
in Item 303(a)(4)(ii) of Regulation S-K promulgated under the Securities Act)
which the Parent would be required to disclose in the “Management’s Discussion
and Analysis of Financial Condition and Results of Operations” section of the
Parent’s report on Form 10-Q or Form 10-K (or their equivalents) which the
Parent is required to file with the Securities and Exchange Commission (or any
Governmental Authority substituted therefor).
 
“OFAC” has the meaning given that term in Section 7.1(y).
 
“Ownership Share” means, with respect to any Subsidiary of a Person (other than
a Wholly Owned Subsidiary) or any Unconsolidated Affiliate of a Person, the
greater of (a) such Person’s relative nominal direct and indirect ownership
interest (expressed as a percentage) in such Subsidiary or Unconsolidated
Affiliate, (b) such Person’s relative direct and indirect economic interest
(calculated as a percentage) in such Subsidiary or Unconsolidated Affiliate
determined in accordance with the applicable provisions of the declaration of
trust, articles or certificate of incorporation, articles of organization,
partnership agreement, joint venture agreement or other applicable
organizational document of such Subsidiary or Unconsolidated Affiliate, or (c)
such Person’s relative recourse interest (expressed as a percentage) in such
Subsidiary or Unconsolidated Affiliate.  For example, if the Parent owns 25% of
a Property but has structured a joint venture such that Parent receives 90% of
the economic benefits from the project then the Ownership Share shall be equal
to 90%.  Likewise if the Parent owns 25% of a Property but has recourse on the
debt equal to 90%, the Ownership Share shall be equal to 90%.  If the Parent
shall be acting as a general partner in any partnership, the Ownership Share
shall be equal to 100%.
 
“Parent” means CapLease, Inc., a Maryland corporation.
 
“Participant” has the meaning given that term in Section 13.6(d).
 
“PBGC” means the Pension Benefit Guaranty Corporation and any successor agency.
 
“Permitted Liens” means, with respect to any asset or property of a Person,
(a)(i) Liens securing taxes, assessments and other charges or levies imposed by
any Governmental Authority (excluding any Lien imposed pursuant to any of the
provisions of ERISA or pursuant to any Environmental Laws) or (ii) the claims of
materialmen, mechanics, carriers, warehousemen or landlords for labor,
materials, supplies or rentals incurred in the ordinary course of business,
which, in each case, are not at the time required to be paid or discharged under
Section 8.6; (b) Liens consisting of deposits or pledges made, in the ordinary
course of business, in connection with, or to secure payment of, obligations
under workers’ compensation, unemployment insurance or similar Applicable Laws;
(c) Liens consisting of encumbrances in the nature of zoning restrictions,
easements, and rights or restrictions of record on the use of real property,
which do not materially detract from the value of such property or impair the
intended use thereof in the business of such Person; (d) the rights of tenants
under leases or subleases not interfering with the ordinary conduct of business
of such Person; (e) Liens in favor of the Administrative Agent for its benefit
and the benefit of the Lenders, the Issuing Bank and each Specified Derivatives
Provider; (f) Liens in favor of any of the Borrowers or Guarantor securing
obligations owing by a Subsidiary to any of the Borrowers or Guarantor; and (g)
Liens in existence as of the Agreement Date as set forth on Schedule 1.1(c)
attached hereto.
 
“Person” means any natural person, corporation, limited partnership, general
partnership, joint stock company, limited liability company, limited liability
partnership, joint venture, association, company, trust, bank, trust company,
land trust, business trust or other organization, whether or not a legal entity,
or any other nongovernmental entity, or any Governmental Authority.
 
 
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“Plan” means at any time an employee pension benefit plan (other than a
Multiemployer Plan) which is covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Internal Revenue Code and
either (a) is maintained, or contributed to, by any member of the ERISA Group
for employees of any member of the ERISA Group or (b) has at any time within the
preceding six years been maintained, or contributed to, by any Person which was
at such time a member of the ERISA Group for employees of any Person which was
at such time a member of the ERISA Group.
 
“Post-Default Rate” means, in respect of any principal of any Loan or any
Reimbursement Obligation outstanding when the Post-Default Rate is applied in
accordance with Section 2, the rate otherwise applicable plus an additional four
percent (4%) per annum and with respect to 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 plus four percent (4%).
 
“Preferred Dividends” means, for any period and without duplication, all
Restricted Payments paid during such period on Preferred Equity issued by the
Parent, any Borrower or any of their respective Subsidiaries.  Preferred
Dividends shall not include dividends or distributions (a) paid or payable
solely in Equity Interests (other than Mandatorily Redeemable Stock) payable to
holders of such class of Equity Interests, (b) paid or payable to the Borrowers
or a Subsidiary, or (c) constituting or resulting in the redemption of Preferred
Equity, other than scheduled redemptions not constituting balloon, bullet or
similar redemptions in full.
 
“Preferred Equity” 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.
 
“Principal Office” means the office of the Administrative Agent located at One
West Fourth Street, 3rd Floor, Winston-Salem, North Carolina  27101, or any
other subsequent office that the Administrative Agent shall have specified as
the Principal Office by written notice to the Borrowers and the Lenders.
 
“Property” means any parcel of real property owned or leased (in whole or in
part and including estate for years interests) or operated by a Borrower, any
Subsidiary or any Unconsolidated Affiliate of such Borrower and which is located
in the continental United States of America.
 
“Property Management Agreements” means, collectively, all agreements entered
into by a Borrower or any other Loan Party pursuant to which such Borrower or
such other Loan Party engages a Person to advise it with respect to the
management of a given Property and/or to manage a given Property.
 
“Property Management Contract Assignment” means a Property Management Contract
Assignment executed by the Borrowers or any other Loan Party in favor of the
Administrative Agent for its benefit and the benefit of the Lenders, the Issuing
Bank and each Specified Derivatives Provider substantially in the form of
Exhibit H or otherwise in form and substance satisfactory to the Administrative
Agent.  Such document may, at the Administrative Agent’s election, constitute a
subordination of Property Management Agreement, rather than an assignment
thereof.
 
“Property Portfolio NOI” means, as of a given date, the Net Operating Income for
all Properties (including, fee, estate for years and leasehold interests) of the
Parent and its Subsidiaries (including, the Borrowers), but excluding
Transitional Properties and Properties acquired during the two (2) most recent
quarters.
 
 
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“Property Release” has the meaning given that term in Section 4.2.
 
“Protective Advance” means all sums expended as determined by the Administrative
Agent to be necessary or appropriate after the Borrowers fail to do so when
required:  (a) to protect the validity, enforceability, perfection or priority
of the Liens in any of the Collateral and the instruments evidencing the
Obligations; (b) to prevent the value of any Collateral from being materially
diminished (assuming the lack of such a payment within the necessary time frame
could potentially cause such Collateral to lose value); or (c) to protect any of
the Collateral from being materially damaged, impaired, mismanaged or taken,
including, without limitation, any amounts expended in connection therewith in
accordance with Section 13.2.
 
“Qualified Plan” means a Benefit Arrangement that is intended to be
tax-qualified under Section 401(a) of the Internal Revenue Code.
 
“Rating Agency” means S&P, Moody’s or any other nationally recognized securities
rating agency selected by the Borrowers and approved of by the Administrative
Agent in writing.
 
“Recourse Indebtedness” means any Indebtedness that is not Nonrecourse
Indebtedness.
 
“Recourse Secured Indebtedness” means, with respect to a Person as of a given
date, the aggregate principal amount of all Recourse Indebtedness of such Person
outstanding on such date that is secured in any manner by any Lien on any
property and, in the case of the Parent, shall include (without duplication) the
Parent’s Ownership Share of the Secured Indebtedness of any of its
Unconsolidated Affiliates.
 
“Register” has the meaning given that term in Section 13.6(c).
 
“Regulatory Change” means, with respect to any Lender, any change effective
after the Agreement Date in Applicable Law (including without limitation,
Regulation D of the Board of Governors of the Federal Reserve System) or the
adoption or making after such date of any interpretation, directive or request
applying to a class of banks, including such Lender, of or under any Applicable
Law (whether or not having the force of law and whether or not failure to comply
therewith would be unlawful) by any Governmental Authority or monetary authority
charged with the interpretation or administration thereof or compliance by any
Lender with any request or directive regarding capital
adequacy.  Notwithstanding anything herein to the contrary, (a) the Dodd-Frank
Wall Street Reform and Consumer Protection Act and all requests, rules,
guidelines or directives thereunder or issued in connection therewith and
(b) all requests, rules, guidelines or directives promulgated by the Bank for
International Settlements, the Basel Committee on Banking Supervision (or any
successor or similar authority) or the United States or foreign regulatory
authorities, in each case pursuant to Basel III, shall in each case be deemed to
be a “Regulatory Change”, regardless of the date enacted, adopted or issued.
 
“Reimbursement Obligation” means the absolute, unconditional and irrevocable
obligation of the Borrowers to reimburse the Issuing Bank for any drawing
honored by the Issuing Bank under a Letter of Credit.
 
“REIT” means a Person qualifying for treatment as a “real estate investment
trust” under the Internal Revenue Code.
 
“Related Parties” means, with respect to any Person, such Person’s Affiliates
and the partners, directors, officers, employees, agents and advisors of such
Person and of such Person’s Affiliates.
 
 
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 “Remainderman Trust” means THE KCRI TRUST, a New York Trust.
 
“Requisite Lenders” means, as of any date, (a) Lenders (which must include
Administrative Agent) having at least 66-2/3% of the aggregate amount of the
Revolving Commitments, or (b) if the Revolving Commitments have been terminated
or reduced to zero, Lenders (which must include Administrative Agent) holding at
least 66-2/3% of the principal amount of the aggregate outstanding Loans and
Letter of Credit Liabilities; provided that (i) in determining such percentage
at any given time, all then existing Defaulting Lenders will be disregarded and
excluded, and (ii) at all times when two or more Lenders (excluding Defaulting
Lenders) are party to this Agreement, the term “Requisite Lenders” shall in no
event mean less than two Lenders.
 
“Responsible Officer” means with respect to the Parent, the Borrowers or any
Subsidiary, the chief executive officer, the president, the chief financial
officer, the chief investment officer and the general counsel of the Parent, the
applicable Borrower or such Subsidiary.
 
“Restricted Payment” means (a) any dividend or other distribution, direct or
indirect, on account of any Equity Interest of the Borrowers or any of its
Subsidiaries now or hereafter outstanding, except a dividend payable solely in
shares of that class of Equity Interests 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 shares of
any Equity Interest of the Borrowers or any of its Subsidiaries now or hereafter
outstanding; (c) any payment or prepayment of principal of, premium, if any, or
interest on, redemption, conversion, exchange, purchase, retirement, defeasance,
sinking fund or similar payment with respect to, any subordinated debt; and
(d) 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
Borrowers or any of its Subsidiaries now or hereafter outstanding.
 
“Revolving 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
Issuing Bank) and to participate (in the case of the other Lenders) in Letters
of Credit pursuant to Section 2.4(i), in an amount up to, but not exceeding the
amount set forth for such Lender on Schedule 1 as such Lender’s “Revolving
Commitment Amount” or as set forth in any applicable Assignment and Assumption,
as the same may be reduced from time to time pursuant to Section 2.13 or
increased or reduced as appropriate to reflect any assignments to or by such
Lender effected in accordance with Section 13.6.
 
“Revolving Credit Exposure” means, as to any Lender at any time, the aggregate
principal amount at such time of its outstanding Revolving Loans and such
Lender’s participation in Letter of Credit Liabilities at such time.
 
“Revolving Lender” means a Lender having a Revolving Commitment.
 
“Revolving Loan” means a loan made by a Lender to the Borrowers pursuant to
Section 2.1(a).
 
“Revolving Note” means a promissory note of the Borrowers substantially in the
form of Exhibit I, payable to the order of a Lender in a principal amount equal
to the amount of such Lender’s Revolving Commitment.
 
“Secured Indebtedness” means, with respect to a Person as of a given date, the
aggregate principal amount of all Indebtedness of such Person outstanding on
such date that is secured in any manner by any Lien on any property and, in the
case of the Parent, shall include (without duplication) the Parent’s Ownership
Share of the Secured Indebtedness of any of its Unconsolidated Affiliates.
 
 
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“Securities Act” means the Securities Act of 1933, as amended from time to time,
together with all rules and regulations issued thereunder.
 
“Security Deed” means a mortgage, deed to secure debt, deed of trust or other
security interest executed by a Borrower or a Subsidiary of a Borrower in favor
of the Administrative Agent for its benefit and the benefit of the Lenders, the
Issuing Bank and each Specified Derivatives Provider in form and substance
satisfactory to the Administrative Agent.
 
“Security Document” means the Guaranty, any Security Deed, any Property
Management Contract Assignments, and any security agreement, pledge agreement,
financing statement, or other document, instrument or agreement creating,
evidencing or perfecting the Administrative Agent’s Liens in any of the
Collateral.  For the avoidance of doubt, “Security Document” shall not include
any Derivatives Support Document.
 
“Solvent” means, when used with respect to any Person, that (a) the fair value
and the fair salable value of its assets (excluding any Indebtedness due from
any Affiliate of such Person) are each in excess of the fair valuation of its
total liabilities (including all contingent liabilities computed at the amount
which, in light of all 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.
 
“Specified Derivatives Contract” means any Derivatives Contract, together with
any Derivatives Support Document relating thereto, that is made or entered into
at any time, or in effect at any time now or hereafter, whether as a result of
an assignment or transfer or otherwise, between the Borrowers or any Subsidiary
of the Borrowers and any Specified Derivatives Provider.
 
“Specified Derivatives Obligations” means all indebtedness, liabilities,
obligations, covenants and duties of the Borrowers or its Subsidiaries under or
in respect of any Specified Derivatives Contract, whether direct or indirect,
absolute or contingent, due or not due, liquidated or unliquidated, and whether
or not evidenced by any written confirmation.
 
“Specified Derivatives Provider” means any Lender, or any Affiliate of a Lender
that is a party to a Derivatives Contract at the time the Derivatives Contract
is entered into.
 
 
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“SPE Entity” means a legal entity thats sole purpose to be conducted is to
engage in the following activities:  (i) to acquire, own, hold, lease, operate,
manage, maintain, develop and improve, the Borrowing Base Property; (ii) to
enter into and perform its obligations under the Loan Documents; (iii) to sell,
transfer, service, convey, dispose of, pledge, assign, borrow money against,
finance, refinance or otherwise deal with the Borrowing Base Property to the
extent permitted under the Loan Documents; and (iv) to engage in any lawful act
or activity and to exercise any powers permitted to under Applicable Law that
are related or incidental to and necessary, convenient or advisable for the
accomplishment of the above mentioned purposes.  In the conduct of the SPE
Entity’s operations, it has and will continue to observe the following
covenants: (1) maintain books and records and bank accounts separate from those
of any other Person; (2) maintain its assets in such a manner that it is not
costly or difficult to segregate, identify or ascertain such assets; (3) comply
with all organizational formalities necessary to maintain its separate
existence; (4) hold itself out to creditors and the public as a legal entity
separate and distinct from any other entity; (5) maintain separate financial
statements, showing its assets and liabilities separate and apart from those of
any other Person and not have its assets listed on any financial statement of
any other Person except that SPE Entity’s assets may be included in a
consolidated financial statement of its Affiliate so long as appropriate
notation is made on such consolidated financial statements to indicate the
separateness of SPE Entity from such Affiliate and to indicate that SPE Entity’s
assets and credit are not available to satisfy the debts and other obligations
of such Affiliate or any other Person; (6) prepare and file its own tax returns
separate from those of any Person to the extent required by Applicable Law, and
pay any taxes required to be paid by Applicable Law; (7) allocate and charge
fairly and reasonably any common employee or overhead shared with Affiliates;
(8) not enter into any transaction with any Affiliate, except on an arm’s-length
basis on terms which are intrinsically fair and no less favorable than would be
available for unaffiliated third parties, and pursuant to written, enforceable
agreements; (9) conduct business in its own name, and use separate stationery,
invoices and checks bearing its own name; (10) not commingle its assets or funds
with those of any other Person; (11) not assume, guarantee or pay the debts or
obligations of any other Person; (12) correct any known misunderstanding as to
its separate identity; (13) not permit any Affiliate to guarantee or pay its
obligations (other than limited guarantees and indemnities set forth in the Loan
Documents); (14) not make loans or advances to any other Person; (15) pay its
liabilities and expenses out of and to the extent of its own funds and not from
the funds of third parties; (16) if applicable, maintain a sufficient number of
employees in light of its contemplated business purpose and pay the salaries of
its own employees, if any, only from its own funds; (17) maintain adequate
capital in light of its contemplated business purpose, transactions and
liabilities; provided, however, that the foregoing shall not require any equity
owner to make additional capital contributions to SPE Entity; and (18) cause the
managers, officers, employees, agents and other representatives of SPE Entity to
act at all times with respect to SPE Entity consistently and in furtherance of
the foregoing and in the best interests of the SPE Entity.
 
“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, limited
liability company or other entity of which at least a majority of the Equity
Interests having by the terms thereof ordinary voting power to elect a majority
of the board of directors or other individuals performing similar functions of
such corporation, partnership, limited liability company 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.
 
 “Tangible Net Worth” means, as of a given date, (a) the stockholders’ equity of
the Parent determined on a consolidated basis in accordance with GAAP, plus (b)
accumulated depreciation and amortization determined in accordance with GAAP,
minus (c) the following (to the extent reflected in determining stockholders’
equity of the Parent:  (i) the amount of any write-up in the book value of any
assets contained in any balance sheet resulting from revaluation thereof or any
write-up in excess of the cost of such assets acquired, and (ii) all amounts
appearing on the assets side of any such balance sheet for assets which would be
classified as intangible assets under GAAP, all determined on a consolidated
basis.
 
“Taxes” has the meaning given that term in Section 3.10.
 
“Tenant Lease” means any lease entered into by a Borrower, any Loan Party or any
Subsidiary with respect to any portion of a Property.
 
 
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“Tie-In Jurisdiction” means a jurisdiction in which a “tie-in” endorsement may
be obtained for a title insurance policy covering Property located in such
jurisdiction which endorsement effectively ties coverage to other title
insurance policies covering properties located in other jurisdictions.
 
“Total Gross Asset Value” or “Total GAV” means, at a given time, the sum
(without duplication) of all of the following of the Parent and its Subsidiaries
(including, the Borrowers) on a consolidated basis:
 
 
(a)
unencumbered and unrestricted cash;

 
 
(b)
Property Portfolio NOI divided by the Capitalization Rate;

 
 
(c)
GAAP book value of the following (before depreciation and amortization):  (i)
Properties acquired during the 2 most recent quarters, (ii) Unimproved Land,
(iii) Loan Investments, (iv) Bond Investments, and (v) Construction-in-Process
until the project is substantially complete which will be no longer than 18
months beyond commencement, and

 
 
(d)
Transitional Properties.

 
Notwithstanding the foregoing, to the extent the value of Transitional
Properties exceeds 10% of Total GAV, such excess shall be excluded in the
calculation of Total GAV.  Additionally, NOI from Properties disposed of by the
Parent during the fiscal quarter being tested shall be excluded from the
calculation of Total GAV; however, Properties acquired by the Parent during the
fiscal quarter being tested shall be included in the calculation of Total GAV in
accordance with item (c) above.
 
“Total NOI” means the sum of the following for the prior quarter
annualized:  (a) Property Portfolio NOI (without any adjustment for Transitional
Properties), (b) interest income from Loan Investments, and (c) interest income
from Bond Investments.
 
“Total Liabilities” means, as to any Person as of a given date, all liabilities
which would, in conformity with GAAP, be properly classified as a liability on a
consolidated balance sheet of such Person as of such date, and in any event
shall include (without duplication):  (a) all Indebtedness of such Person
(whether or not Nonrecourse Indebtedness and whether or not secured by a Lien),
including without limitation, Capitalized Lease Obligations and reimbursement
obligations with respect to any letter of credit; (b) all accounts payable and
accrued expenses of such Person; (c) all purchase and repurchase obligations and
forward commitments of such Person to the extent such obligations or commitments
are evidenced by a binding purchase agreement (forward commitments shall include
without limitation (i) forward equity commitments and (ii) commitments to
purchase any real property under development, redevelopment or renovation);
(d) all unfunded obligations of such Person; (e) all lease obligations of such
Person (including ground leases) to the extent required under GAAP to be
classified as a liability on a balance sheet of such Person; (f) all contingent
obligations of such Person including, without limitation, all Guarantees of
Indebtedness by such Person; (g) all liabilities of any Unconsolidated Affiliate
of such Person, which liabilities such Person has Guaranteed or is otherwise
obligated on a recourse basis; and (h) such Person’s Ownership Share of the
Total Liabilities of any Unconsolidated Affiliate of such Person, including
Nonrecourse Indebtedness of such Person but in any event shall not include
intangible liabilities on real estate investments under FASB ASC 805 (formerly
known as Statement of Financial Accounting Standards No. 141).  For purposes of
clauses (c) and (d) of this definition, the amount of Total Liabilities of a
Person at any given time in respect of (x) a contract to purchase or otherwise
acquire unimproved or fully developed real property shall be equal to (i) the
total purchase price payable by such Person under such contract if, at such
time, the seller of such real property would be entitled to specifically enforce
such contract against such Person, otherwise, (ii) the aggregate amount of due
diligence deposits, earnest money payments and other similar payments made by
such Person under such contract which, at such time, would be subject to
forfeiture upon termination of the contract and (y) a contract relating to the
acquisition of real property which the seller is required to develop or renovate
prior to, and as a condition precedent to, such acquisition, shall equal the
maximum amount reasonably estimated to be payable by such Person under such
contract assuming performance by the seller of its obligations under such
contract, which amount shall include, without limitation, any amounts payable
after consummation of such acquisition which may be based on certain performance
levels or other related criteria.  For purposes of this definition, if the
assets of a Subsidiary of a Person consist solely of Equity Interests in one
Unconsolidated Affiliate of such Person and such Person is not otherwise
obligated in respect of the Indebtedness of such Unconsolidated Affiliate, then
only such Person’s Ownership Share of the Indebtedness of such Unconsolidated
Affiliate shall be included as Total Liabilities of such Person.
 
 
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“Transfer Authorizer Designation Form” means a form substantially in the form of
Exhibit J to be delivered to the Administrative Agent pursuant to
Section 6.1(a), as the same may be amended, restated or modified from time to
time with the prior written approval of the Administrative Agent.
 
“Transitional Properties” means those Properties which are less than 50% leased
to tenants in occupancy, paying rent and not in default under their respective
Tenant Leases, which Properties shall each be valued as follows:
 
 
(a)
at all times prior to the Initial Maturity Date, in an amount equal to the
greater of (i) the As-Is Appraised Value or (ii) if applicable, the funded
Nonrecourse Indebtedness with respect to such Property; provided however, that
to the extent such Nonrecourse Indebtedness exceeds 120% of the As-Is Appraised
Value for any such Property, such excess shall be excluded, and

 
 
(b)
during any periods following the Initial Maturity Date where the Maturity Date
has been validly extended pursuant to Section 2.14, at the As-Is Appraised
Value.

 
Notwithstanding the foregoing, a Property shall cease to qualify as a
Transitional Property if such Property has been classified as a Transitional
Property for six (6) consecutive quarters, and thereafter no value shall be
attributed to such Property until such time as it is greater than 50% leased to
tenants in occupancy, paying rent and not in default under their respective
Tenant Leases.
 
“Type” with respect to any Revolving Loan refers to whether such Loan or portion
thereof is a LIBOR Loan or a Base Rate Loan.
 
“UCC” means the Uniform Commercial Code as in effect in any applicable
jurisdiction.
 
“Unconsolidated Affiliate” means, with respect to any Person, any other Person
in whom such Person 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.
 
“Unimproved land” means land on which no development (other than improvements
that are not material and are temporary in nature) has occurred and for which no
development is scheduled to occur during the following twelve (12) months.
 
“Wells Fargo” means Wells Fargo Bank, National Association, and its successors
and assigns.
 
 
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“Wells Fargo Repurchase Line of Credit” means that certain first amended and
restated credit agreement, dated as of July 16, 2010, among Caplease Debt
Funding, LP, as Borrower, PREFCO II Limited Partnership, Parent, Caplease, LP,
Caplease Services Corp., as Guarantors, and Wells Fargo, as Lender and
Administrative Agent.
 
“Wholly Owned Subsidiary” means any Subsidiary of a Person in respect of which
all of the Equity Interests (other than, in the case of a corporation,
directors’ qualifying shares) are at the time directly or indirectly owned or
controlled by such Person or one or more other Subsidiaries of such Person or by
such Person and one or more other Subsidiaries of such Person.
 
“Withdrawal Liability” means any liability as a result of a complete or partial
withdrawal from a Multiemployer Plan as such terms are defined in Part I of
Subtitle E of Title IV of ERISA.
 
Section 1.2         General; References to Eastern Time.
 
Unless otherwise indicated, all accounting terms, ratios and measurements shall
be interpreted or determined in accordance with GAAP as in effect as of the
Agreement Date; 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 Borrowers or the Requisite Lenders shall so request,
the Administrative Agent, the Lenders and the Borrowers 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 Borrowers shall, to the extent reasonably practicable,
provide to the Administrative Agent and the Lenders financial statements and
other documents required under this Agreement or as reasonably requested
hereunder setting forth a reconciliation between calculations of such ratio or
requirement made before and after giving effect to such change in
GAAP.  Notwithstanding the preceding sentence, the calculation of liabilities
shall not include any fair value adjustments to the carrying value of
liabilities to record such liabilities at fair value pursuant to electing the
fair value option election under FASB ASC 825-10-25 (formerly known as FAS 159,
The Fair Value Option for Financial Assets and Financial Liabilities) or other
FASB standards allowing entities to elect fair value option for financial
liabilities.  References in this Agreement to “Sections”, “Articles”, “Exhibits”
and “Schedules” are to sections, articles, exhibits and schedules herein and
hereto unless otherwise indicated.  References in this Agreement to any
document, instrument or agreement (a) shall include all exhibits, schedules and
other attachments thereto, (b) shall include all documents, instruments or
agreements issued or executed in replacement thereof, to the extent permitted
hereby and (c) shall mean such document, instrument or agreement, or replacement
or predecessor thereto, as amended, supplemented, restated or otherwise modified
from time to time to the extent not otherwise stated herein or prohibited hereby
and in effect at any given time.  Wherever from the context it appears
appropriate, each term stated in either the singular or plural shall include the
singular and plural, and pronouns stated in the masculine, feminine or neuter
gender shall include the masculine, the feminine and the neuter.  Unless
explicitly set forth to the contrary, a reference to “Subsidiary” means a
Subsidiary of the Borrowers or a Subsidiary of such Subsidiary and a reference
to an “Affiliate” means a reference to an Affiliate of the Borrowers.  Titles
and captions of Articles, Sections, subsections and clauses in this Agreement
are for convenience only, and neither limit nor amplify the provisions of this
Agreement.  Unless otherwise indicated, all references to time are references to
Eastern time.  Exhibits E, F and G attached hereto may be modified from time to
time by Administrative Agent and Borrowers as appropriate to facilitate the
borrowings contemplated thereby.
 
 
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Section 1.3           Financial Attributes of Non-Wholly Owned Subsidiaries.
 
When determining the compliance by the Parent or the Borrowers with any
financial covenant contained in any of the Loan Documents only the Ownership
Share of the Parent or the Borrowers, as applicable, of the financial attributes
of a Subsidiary that is not a Wholly Owned Subsidiary shall be included.
 
ARTICLE II  CREDIT FACILITY
Section 2.1           Revolving Loans.
 
(a)           Making of Revolving Loans.  Subject to the terms and conditions
set forth in this Agreement, including without limitation, Section 2.16, each
Lender severally and not jointly agrees to make Revolving Loans to the Borrowers
during the period from and including the Effective Date to but excluding the
Maturity Date, in an aggregate principal amount at any one time outstanding up
to, but not exceeding, such Lender’s Revolving Commitment.  Each borrowing of
Base Rate Loans shall be in an aggregate minimum amount of $1,000,000.00 and
integral multiples of $100,000.00 in excess thereof (or the remaining Revolving
Commitment, if less).  Each borrowing and Continuation under Section 2.10 of,
and each Conversion under Section 2.11 of Base Rate Loans into, LIBOR Loans
shall be in an aggregate minimum of $1,000,000.00 and integral multiples of
$100,000.00 in excess of that amount (or the remaining Revolving Commitment, if
less).  Notwithstanding the immediately preceding two sentences but subject to
Section 2.16, a borrowing of Revolving Loans may be in the aggregate amount of
the unused Revolving Commitments.  Within the foregoing limits and subject to
the terms and conditions of this Agreement, the Borrowers may borrow, repay and
reborrow Revolving Loans.
 
(b)           Requests for Revolving Loans.  Not later than 12:00 p.m. Eastern
time at least one (1) Business Day prior to a borrowing of Base Rate Loans and
not later than 12:00 p.m. Eastern time at least three (3) Business Days prior to
a borrowing of LIBOR Loans, the Borrowers shall deliver to the Administrative
Agent a Notice of Borrowing.  Each Notice of Borrowing shall specify the
aggregate principal amount of the Revolving Loans to be borrowed, the date such
Revolving Loans are to be borrowed (which must be a Business Day), the use of
the proceeds of such Revolving Loans, the Type of the requested Revolving Loans,
and if such Revolving Loans are to be LIBOR Loans, the initial Interest Period
for such Revolving Loans.  Each Notice of Borrowing shall be irrevocable once
given and binding on the Borrowers.  Prior to delivering a Notice of Borrowing,
the Borrowers may (without specifying whether a Revolving Loan will be a Base
Rate Loan or a LIBOR Loan) request that the Administrative Agent provide the
Borrowers with the most recent LIBOR available to the Administrative Agent.  The
Administrative Agent shall provide such quoted rate to the Borrowers on the date
of such request or as soon as possible thereafter.
 
(c)           Funding of Revolving Loans.  Promptly after receipt of a Notice of
Borrowing under the immediately preceding subsection (b), the Administrative
Agent shall notify each Lender of the proposed borrowing.  Each Lender shall
deposit an amount equal to the Revolving Loan to be made by such Lender to the
Borrowers with the Administrative Agent at the Principal Office, in immediately
available funds not later than 12:00 p.m. Eastern time on the date of such
proposed Revolving Loans.  Subject to fulfillment of all applicable conditions
set forth herein, the Administrative Agent shall make available to the Borrowers
in the account specified in the Transfer Authorizer Designation Form, not later
than 3:00 p.m. Eastern time on the date of the requested borrowing of Revolving
Loans, the proceeds of such amounts received by the Administrative Agent.
 
 
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(d)           Assumptions Regarding Funding by Lenders.  With respect to
Revolving Loans to be made after the Effective Date, unless the Administrative
Agent shall have been notified by any Lender that such Lender will not make
available to the Administrative Agent a Revolving Loan to be made by such Lender
in connection with any borrowing, the Administrative Agent may assume that such
Lender will make the proceeds of such Revolving Loan available to the
Administrative Agent in accordance with this Section, and the Administrative
Agent may (but shall not be obligated to), in reliance upon such assumption,
make available to the Borrowers the amount of such Revolving Loan to be provided
by such Lender.  In such event, if such Lender does not make available to the
Administrative Agent the proceeds of such Revolving Loan, then such Lender and
the Borrowers severally agree to pay to the Administrative Agent on demand the
amount of such Revolving Loan with interest thereon, for each day from and
including the date such Revolving Loan is made available to the Borrowers but
excluding the date of payment to the Administrative Agent, at (i) in the case of
a payment to be made by such Lender, the greater of the Federal Funds Rate and a
rate determined by the Administrative Agent in accordance with banking industry
rules on interbank compensation and (ii) in the case of a payment to be made by
the Borrowers, the interest rate applicable to Base Rate Loans.  If the
Borrowers and such Lender shall pay the amount of such interest to the
Administrative Agent for the same or overlapping period, the Administrative
Agent shall promptly remit to the Borrowers the amount of such interest paid by
the Borrowers for such period.  If such Lender pays to the Administrative Agent
the amount of such Revolving Loan, the amount so paid shall constitute such
Lender’s Revolving Loan included in the borrowing.  Any payment by the Borrowers
shall be without prejudice to any claim the Borrowers may have against a Lender
that shall have failed to make available the proceeds of a Revolving Loan to be
made by such Lender.
 
(e)           Effect of Revolving Loans on the Revolving Commitments.  While any
Revolving Loan remains outstanding, the Revolving 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) all outstanding Loans, plus (B) all Letter of Credit Liabilities.
 
Section 2.2           Reserved.
 
Section 2.3           Reserved.
 
Section 2.4           Letters of Credit.
 
(a)           Letters of Credit.  Subject to the terms and conditions of this
Agreement, including without limitation, Section 2.16, the Issuing Bank, on
behalf of the Lenders, agrees to issue for the account of the Borrowers during
the period from and including the Effective Date to, but excluding, the date
thirty (30) days prior to the Maturity 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 $10,000,000.00 as such amount may be
reduced from time to time in accordance with the terms hereof (the “L/C
Commitment Amount”).
 
(b)           Terms of Letters of Credit.  At the time of issuance, the amount,
form, terms and conditions of each Letter of Credit, and of any drafts or
acceptances thereunder, shall be subject to approval by the Issuing Bank and the
Borrowers.  Notwithstanding the foregoing, in no event may (i) the expiration
date of any Letter of Credit extend beyond the date that is one (1) year after
the Maturity Date, or (ii) any Letter of Credit have an initial duration in
excess of one year; provided, however, a Letter of Credit may contain a
provision providing for the automatic extension of the expiration date in the
absence of a notice of non-renewal from the Issuing Bank but in no event shall
any such provision permit the extension of the expiration date of such Letter of
Credit beyond the date that is one (1) year after the Maturity Date; provided,
however, in the case of any Letter of Credit that, either when initially issued
or renewed, has an expiration date beyond the Maturity Date, Borrowers shall be
obligated to cash collateralize such Letter of Credit in accordance with
Section 2.15(a) of this Agreement.  The initial Stated Amount of each Letter of
Credit shall be at least $25,000.00 (or such lesser amount as may be acceptable
to the Issuing Bank, the Administrative Agent and the Borrowers).
 
 
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(c)           Requests for Issuance of Letters of Credit.  The Borrowers shall
give the Issuing Bank and the Administrative Agent written notice at least five
(5) Business Days prior to the requested date of issuance of a Letter of Credit,
such notice to describe in reasonable detail the proposed terms of such Letter
of Credit and the nature of the transactions or obligations proposed to be
supported by such Letter of Credit, and in any event shall set forth with
respect to such Letter of Credit the proposed (i) initial Stated Amount,
(ii) beneficiary, and (iii) expiration date.  The Borrowers shall also execute
and deliver such customary applications and agreements for standby letters of
credit, and other forms as requested from time to time by the Issuing
Bank.  Provided the Borrowers have given the notice prescribed by the first
sentence of this subsection and delivered such applications and agreements
referred to in the preceding sentence, subject to the other terms and conditions
of this Agreement, including the satisfaction of any applicable conditions
precedent set forth in Section 6.2, the Issuing Bank shall issue the requested
Letter of Credit on the requested date of issuance for the benefit of the
stipulated beneficiary but in no event prior to the date five (5) Business Days
following the date after which the Issuing Bank has received all of the items
required to be delivered to it under this subsection.  The Issuing Bank shall
not at any time be obligated to issue any Letter of Credit if such issuance
would conflict with, or cause the Issuing Bank or any Lender to exceed any
limits imposed by, any Applicable Law.  References herein to “issue” and
derivations thereof with respect to Letters of Credit shall also include
extensions or modifications of any outstanding Letters of Credit, unless the
context otherwise requires.  Upon the written request of the Borrowers, the
Issuing Bank shall deliver to the Borrowers a copy of each issued Letter of
Credit within a reasonable time after the date of issuance thereof.  To the
extent any term of a Letter of Credit Document is inconsistent with a term of
any Loan Document, the term of such Loan Document shall control.
 
(d)           Reimbursement Obligations.  Upon receipt by the Issuing Bank from
the beneficiary of a Letter of Credit of any demand for payment under such
Letter of Credit, the Issuing Bank shall promptly notify the Borrowers and the
Administrative Agent of the amount to be paid by the Issuing Bank as a result of
such demand and the date on which payment is to be made by the Issuing Bank to
such beneficiary in respect of such demand; provided, however, that the Issuing
Bank’s failure to give, or delay in giving, such notice shall not discharge the
Borrowers in any respect from the applicable Reimbursement
Obligation.  Borrowers hereby absolutely, unconditionally and irrevocably agree
to pay and reimburse the Issuing Bank for the amount of each demand for payment
under such Letter of Credit at or prior to the date on which payment is to be
made by the Issuing Bank to the beneficiary thereunder, without presentment,
demand, protest or other formalities of any kind.  Upon receipt by the Issuing
Bank of any payment in respect of any Reimbursement Obligation, the Issuing Bank
shall promptly pay to each Lender that has acquired a participation therein
under the second sentence of the immediately following subsection (i) such
Lender’s Commitment Percentage of such payment.
 
(e)           Manner of Reimbursement.  Upon its receipt of a notice referred to
in the immediately preceding subsection (d), the Borrowers shall advise the
Administrative Agent and the Issuing Bank whether or not the Borrowers intend to
borrow hereunder to finance its obligation to reimburse the Issuing Bank for the
amount of the related demand for payment and, if it does, the Borrowers shall
submit a timely request for such borrowing as provided in the applicable
provisions of this Agreement.  If the Borrowers fail to so advise the
Administrative Agent and the Issuing Bank, or if the Borrowers fail to reimburse
the Issuing Bank for a demand for payment under a Letter of Credit by the date
of such payment, the failure of which the Issuing Bank shall promptly notify the
Administrative Agent, then (i) if the applicable conditions contained in
Article VI would permit the making of Revolving Loans, the Borrowers 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
Administrative Agent shall give each Revolving Lender prompt notice of the
amount of the Revolving Loan to be made available to the Administrative Agent
not later than 1:00 p.m. Eastern time and (ii) if such conditions would not
permit the making of Revolving Loans, the provisions of subsection (j) of this
Section shall apply.  The limitations set forth in the second sentence of
Section 2.1(a) shall not apply to any borrowing of Base Rate Loans under this
subsection.
 
 
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(f)           Effect of Letters of Credit on Revolving Commitments.  Upon the
issuance by the Issuing Bank of any Letter of Credit and until such Letter of
Credit shall have expired or been cancelled, the Revolving 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)           Issuing Bank’s Duties Regarding Letters of Credit; Unconditional
Nature of Reimbursement Obligations.  In examining documents presented in
connection with drawings under Letters of Credit and making payments under such
Letters of Credit against such documents, the Issuing Bank shall only be
required to use the same standard of care as it uses in connection with
examining documents presented in connection with drawings under letters of
credit in which it has not sold participations and making payments under such
letters of credit.  Borrowers assume all risks of the acts and omissions of, or
misuse of the Letters of Credit by, the respective beneficiaries of such Letters
of Credit.  In furtherance and not in limitation of the foregoing, none of the
Issuing Bank, Administrative Agent or any of the Lenders shall be responsible
for, and the Borrowers’ obligations in respect of Letters of Credit shall not be
affected in any manner by, (i) the form, validity, sufficiency, accuracy,
genuineness or legal effects of any document submitted by any party in
connection with the application for and issuance of or any drawing honored under
any Letter of Credit even if such document should in fact prove to be in any or
all respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any Letter of Credit, or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason; (iii) failure of the beneficiary of any
Letter of Credit to comply fully with conditions required in order to draw upon
such Letter of Credit; (iv) errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable, facsimile, electronic
mail, telecopy or otherwise, whether or not they be in cipher; (v) errors in
interpretation of technical terms; (vi) any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under any Letter
of Credit, or of the proceeds thereof; (vii) the misapplication by the
beneficiary of any Letter of Credit, or of the proceeds of any drawing under any
Letter of Credit; or (viii) any consequences arising from causes beyond the
control of the Issuing Bank, Administrative Agent or the Lenders.  None of the
above shall affect, impair or prevent the vesting of any of the Issuing Bank’s
or Administrative Agent’s rights or powers hereunder.  Any action taken or
omitted to be taken by the Issuing Bank under or in connection with any Letter
of Credit, if taken or omitted in the absence of gross negligence or willful
misconduct (as determined by a court of competent jurisdiction in a final,
non-appealable judgment), shall not create against the Issuing Bank any
liability to the Borrowers, the Administrative Agent or any Lender.  In this
connection, the obligation of the Borrowers to reimburse the Issuing Bank for
any drawing made under any Letter of Credit, and to repay any Revolving Loan
made pursuant to the second sentence of the immediately preceding subsection
(e), shall be absolute, unconditional and irrevocable and shall be paid strictly
in accordance with the terms of this Agreement and any other applicable Letter
of Credit Document under all circumstances whatsoever, including without
limitation, the following circumstances:  (A) any lack of validity or
enforceability of any Letter of Credit Document or any term or provisions
therein; (B) any amendment or waiver of or any consent to departure from all or
any of the Letter of Credit Documents; (C) the existence of any claim, setoff,
defense or other right which the Borrowers may have at any time against the
Issuing Bank, the Administrative Agent or any Lender, any beneficiary of a
Letter of Credit or any other Person, whether in connection with this Agreement,
the transactions contemplated hereby or in the Letter of Credit Documents or any
unrelated transaction; (D) any breach of contract or dispute between the
Borrowers, the Issuing Bank, the Administrative Agent, any Lender or any other
Person; (E) any demand, statement or any other document presented under a Letter
of Credit proving to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein or made in connection therewith being untrue or
inaccurate in any respect whatsoever; (F) any non-application or misapplication
by the beneficiary of a Letter of Credit or of the proceeds of any drawing under
such Letter of Credit; (G) payment by the Issuing Bank under any Letter of
Credit against presentation of a draft or certificate which does not strictly
comply with the terms of such Letter of Credit; and (H) any other act, omission
to act, delay or circumstance whatsoever that might, but for the provisions of
this Section, constitute a legal or equitable defense to or discharge of the
Borrowers’ Reimbursement Obligations.  Notwithstanding anything to the contrary
contained in this Section or Section 13.10, but not in limitation of the
Borrowers’ unconditional obligation to reimburse the Issuing Bank for any
drawing made under a Letter of Credit as provided in this Section and to repay
any Revolving Loan made pursuant to the second sentence of the immediately
preceding subsection (e), the Borrowers shall have no obligation to indemnify
the Administrative Agent, the Issuing Bank or any Lender in respect of any
liability incurred by the Administrative Agent, the Issuing Bank or such Lender
arising solely out of the gross negligence or willful misconduct of the
Administrative Agent, the Issuing Bank or such Lender in respect of a Letter of
Credit as determined by a court of competent jurisdiction in a final,
non-appealable judgment.  Except as otherwise provided in this Section, nothing
in this Section shall affect any rights the Borrowers may have with respect to
the gross negligence or willful misconduct of the Administrative Agent, the
Issuing Bank or any Lender with respect to any Letter of Credit.
 
 
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(h)           Amendments, Etc.  The issuance by the Issuing Bank of any
amendment, supplement or other modification to any Letter of Credit shall be
subject to the same conditions applicable under this Agreement to the issuance
of new Letters of Credit (including, without limitation, that the request
therefor be made through the Issuing Bank), and no such amendment, supplement or
other modification shall be issued unless either (i) the respective Letter of
Credit affected thereby would have complied with such conditions had it
originally been issued hereunder in such amended, supplemented or modified form
or (ii) the Administrative Agent and Requisite Lenders (or all of the Revolving
Lenders if required by Section 13.7) shall have consented thereto.  In
connection with any such amendment, supplement or other modification, the
Borrowers shall pay the fees, if any, payable under the last sentence of
Section 3.5(c).
 
(i)           Lenders’ Participation in Letters of Credit.  Immediately upon the
issuance by the Issuing Bank of any Letter of Credit each Lender shall be deemed
to have absolutely, irrevocably and unconditionally purchased and received from
the Issuing Bank, without recourse or warranty, an undivided interest and
participation to the extent of such Lender’s Commitment Percentage of the
liability of the Issuing Bank with respect to such Letter of Credit and each
Lender thereby shall absolutely, unconditionally and irrevocably assume, as
primary obligor and not as surety, and shall be unconditionally obligated to the
Issuing Bank to pay and discharge when due, such Lender’s Commitment Percentage
of the Issuing Bank’s liability under such Letter of Credit.  In addition, upon
the making of each payment by a Lender to the Administrative Agent for the
account of the Issuing Bank in respect of any Letter of Credit pursuant to the
immediately following subsection (j), such Lender shall, automatically and
without any further action on the part of the Issuing Bank, Administrative Agent
or such Lender, acquire (i) a participation in an amount equal to such payment
in the Reimbursement Obligation owing to the Issuing Bank by the Borrowers 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 Borrowers in respect of such Reimbursement Obligation (other than the
Fees payable to the Issuing Bank pursuant to the second and the last sentences
of Section 3.5(c)).
 
 
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(j)           Payment Obligation of Lenders.  Each Lender severally agrees to
pay to the Administrative Agent, for the account of the Issuing Bank, on demand
in immediately available funds in Dollars the amount of such Lender’s Commitment
Percentage of each drawing paid by the Issuing Bank under each Letter of Credit
to the extent such amount is not reimbursed by the Borrowers pursuant to the
immediately preceding subsection (d); provided, however, that in respect of any
drawing under any Letter of Credit, the maximum amount that any Lender shall be
required to fund, whether as a Revolving Loan or as a participation, shall not
exceed such Lender’s Commitment Percentage of such drawing.  If the notice
referenced in the second sentence of Section 2.4(e) is received by a Lender not
later than 12:00 p.m. Eastern time, then such Lender shall make such payment
available to the Administrative Agent not later than 3:00 p.m. Eastern time on
the date of demand therefor; otherwise, such payment shall be made available to
the Administrative Agent not later than 2:00 p.m. Eastern time on the next
succeeding Business Day.  Each Lender’s obligation to make such payments to the
Administrative Agent under this subsection, and the Administrative Agent’s right
to receive the same for the account of the Issuing Bank, shall be absolute,
irrevocable and unconditional and shall not be affected in any way by any
circumstance whatsoever, including without limitation, (i) the failure of any
other Lender to make its payment under this subsection, (ii) the financial
condition of the Borrowers or any other Loan Party, (iii) the existence of any
Default or Event of Default, including any Event of Default described in
Section 11.1(e) or (f), or (iv) the termination of the Revolving
Commitments.  Each such payment to the Administrative Agent for the account of
the Issuing Bank shall be made without any offset, abatement, withholding or
deduction whatsoever.
 
(k)           Information to Lenders.  Promptly following any change in Letters
of Credit outstanding, the Issuing Bank shall deliver to the Administrative
Agent, who shall promptly deliver the same to each Lender and the Borrowers, a
notice describing the aggregate amount of all Letters of Credit outstanding at
such time.  Upon the request of any Lender from time to time, the Issuing Bank
shall deliver any other information reasonably requested by such Lender with
respect to each Letter of Credit then outstanding.  Other than as set forth in
this subsection, the Issuing Bank shall have no duty to notify the Lenders
regarding the issuance or other matters regarding Letters of Credit issued
hereunder.  The failure of the Issuing Bank to perform its requirements under
this subsection shall not relieve any Lender from its obligations under the
immediately preceding subsection (j).
 
Section 2.5            Reserved.
 
Section 2.6            Rates and Payment of Interest on Loans.
 
(a)           Rates.  The Borrowers promise to pay to the Administrative Agent
for the account of each Lender interest on the unpaid principal amount of each
Loan made by such Lender for the period from and including the date of the
making of such Loan to but excluding the date such Loan shall be paid in full,
at the following per annum rates:
 
(i)           during such periods as such Loan is a Base Rate Loan, at the Base
Rate (as in effect from time to time), plus the Applicable Margin for Base Rate
Loans; and
 
(ii)           during such periods as such Loan is a LIBOR Loan, at LIBOR for
such Loan for the Interest Period therefor, plus the Applicable Margin for LIBOR
Loans;
 
Notwithstanding the foregoing, while an Event of Default exists, at the election
of Requisite Lenders the Borrowers shall pay to the Administrative Agent for the
account of each Lender and the Issuing Bank, as the case may be, interest at the
Post-Default Rate on the outstanding principal amount of any Loan made by such
Lender, on all Reimbursement Obligations and on any other amount payable by the
Borrowers 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).
 
 
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(b)           Payment of Interest.  All accrued and unpaid interest on the
outstanding principal amount of each Loan shall be payable (i) monthly in
arrears on the first day of each month, commencing with the first full calendar
month occurring after the Effective Date and (ii) on any date on which the
principal balance of such Loan is due and payable in full (whether at maturity,
due to acceleration or otherwise).  Interest payable at the Post-Default Rate
shall be payable from time to time on demand.  All determinations by the
Administrative Agent of an interest rate hereunder shall be conclusive and
binding on the Lenders and the Borrowers for all purposes, absent manifest
error.
 
(c)           Borrowers’ Information Used to Determine Applicable Interest
Rates.  The parties understand that the applicable interest rate for the
Obligations and certain fees set forth herein may be determined and/or adjusted
from time to time based upon certain financial ratios and/or other information
to be provided or certified to the Lenders by the Borrowers (the “Borrowers’
Information”).  If it is subsequently determined that any such Borrowers’
Information was incorrect (for whatever reason, including without limitation
because of a subsequent restatement of earnings by the Borrowers) at the time it
was delivered to the Administrative Agent, and if the applicable interest rate
or fees calculated for any period were lower than they should have been had the
correct information been timely provided, then, such interest rate and such fees
for such period shall be automatically recalculated using correct Borrowers’
Information.  The Administrative Agent shall promptly notify the Borrowers in
writing of any additional interest and fees due because of such recalculation,
and the Borrowers shall pay such additional interest or fees due to the
Administrative Agent, for the account of each Lender, within five (5) Business
Days of receipt of such written notice.  Any recalculation of interest or
fees required by this provision shall survive the termination of this Agreement,
and this provision shall not in any way limit any of the Administrative Agent’s,
the Issuing Bank’s, or any Lender’s other rights under this Agreement.
 
Section 2.7            Number of Interest Periods.
 
There may be no more than five (5) different Interest Periods for LIBOR Loans
outstanding at the same time.
 
Section 2.8            Repayment of Loans.
 
The Borrowers shall repay the entire outstanding principal amount of, and all
accrued but unpaid interest on, the Revolving Loans on the Maturity Date.
 
Section 2.9            Prepayments.
 
(a)           Optional.  Subject to Section 5.4, the Borrowers may prepay any
Loan at any time without premium or penalty.  The Borrowers shall give the
Administrative Agent at least three (3) Business Days prior written notice of
the prepayment of any Loan.  Each voluntary prepayment of Loans shall be in an
aggregate minimum amount of $1,000,000 and integral multiples of $100,000 in
excess thereof (or the remaining outstanding principal amount, if less).
 
(b)           Mandatory.
 
(i)           Revolving Commitment Overadvance.  If at any time the aggregate
principal amount of all outstanding Revolving Loans, together with the aggregate
amount of all Letter of Credit Liabilities, exceeds the aggregate amount of the
Revolving Commitments, the Borrowers shall immediately upon demand pay to the
Administrative Agent for the account of the Lenders then holding Revolving
Commitments (or if the Revolving Commitments have been terminated, then holding
outstanding Revolving Loans and/or Letter of Credit Liabilities), the amount of
such excess.
 
 
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(ii)           Maximum Loan Availability Overadvance.  If at any time the
aggregate principal amount of all outstanding Loans, together with the aggregate
amount of all Letter of Credit Liabilities, exceeds the Maximum Loan
Availability, the Borrowers shall within five (5) Business Days of the Borrowers
obtaining knowledge of the occurrence of any such excess, pay to the
Administrative Agent for the account of the Lenders then holding Revolving
Commitments (or if the Revolving Commitments have been terminated, then holding
outstanding Revolving Loans and/or Letter of Credit Liabilities), the amount of
such excess.  If such excess is not eliminated within five (5) Business Days of
the Borrowers obtaining knowledge of the occurrence thereof, then the entire
outstanding principal balance of all Loans, together with all accrued interest
thereon, and an amount equal to all Letter of Credit Liabilities for deposit
into the Letter of Credit Collateral Account, shall be immediately due and
payable in full.
 
(iii)           Application of Mandatory Prepayments.  Amounts paid under the
preceding subsections (b)(i) and (b)(ii) shall be applied to pay all amounts of
principal outstanding on the Loans and any Reimbursement Obligations pro rata in
accordance with Section 3.2 and if any Letters of Credit are outstanding at such
time, the remainder, if any, shall be deposited into the Letter of Credit
Collateral Account for application to any Reimbursement Obligations.  If the
Borrowers are required to pay any outstanding LIBOR Loans by reason of this
Section prior to the end of the applicable Interest Period therefor, the
Borrowers shall pay all amounts due under Section 5.4.
 
Section 2.10         Continuation.
 
So long as no Default or Event of Default exists, the Borrowers may on any
Business Day, with respect to any LIBOR Loan, elect to maintain such LIBOR Loan
or any portion thereof as a LIBOR Loan by selecting a new Interest Period for
such LIBOR Loan.  Each Continuation of a LIBOR Loan shall be in an aggregate
minimum amount of $1,000,000 and integral multiples of $100,000 in excess of
that amount (or the remaining outstanding principal amount of LIBOR Loans, if
less), and 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 Borrowers giving to the
Administrative Agent a Notice of Continuation not later than 12:00 p.m. Eastern
time on the third (3rd) Business Day prior to the date of any such
Continuation.  Such notice by the Borrowers of a Continuation shall be by
telecopy, electronic mail or other similar form of communication in the form of
a Notice of Continuation, specifying (a) the proposed date of such Continuation,
(b) the LIBOR Loans and portions thereof subject to such Continuation and
(c) the duration of the selected Interest Period, all of which shall be
specified in such manner as is necessary to comply with all limitations on Loans
outstanding hereunder.  Each Notice of Continuation shall be irrevocable by and
binding on the Borrowers once given.  Promptly after receipt of a Notice of
Continuation, the Administrative Agent shall notify each Lender of the proposed
Continuation.  If the Borrowers shall fail to provide a Notice of Continuation
or to select in a timely manner a new Interest Period for any LIBOR Loan in
accordance with this Section, such Loan will automatically, on the last day of
the current Interest Period therefor, continue as a LIBOR Loan with an Interest
Period of one month; provided, however that if a Default or Event of Default
exists, such Loan will automatically, on the last day of the current Interest
Period therefor, Convert into a Base Rate Loan notwithstanding the first
sentence of Section 2.11 or the Borrowers’ failure to comply with any of the
terms of such Section.
 
 
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Section 2.11         Conversion.
 
The Borrowers may on any Business Day, upon the Borrowers’ giving of a Notice of
Conversion to the Administrative Agent by telecopy, electronic mail or other
similar form of communication, Convert all or a portion of a Loan of one Type
into a Loan of another Type; provided, however, a Base Rate Loan may not be
Converted into a LIBOR Loan if a Default or Event of Default exists.  Each
Conversion of Base Rate Loans into LIBOR Loans shall be in an aggregate minimum
amount of $1,000,000 and integral multiples of $100,000 in excess of that amount
(or the remaining outstanding principal amount of such Loan Type, if
less).  Each such Notice of Conversion shall be given not later than 12:00 p.m.
Eastern time three (3) Business Days prior to the date of any proposed
Conversion.  Promptly after receipt of a Notice of Conversion, the
Administrative Agent shall notify each Lender of the proposed
Conversion.  Subject to the restrictions specified above, each Notice of
Conversion shall be by telecopy, electronic mail or other similar form of
communication in the form of a Notice of Conversion specifying (a) the requested
date of such Conversion, (b) the Type of Loan to be Converted, (c) the portion
of such Type of Loan to be Converted, (d) the Type of Loan such Loan is to be
Converted into and (e) if such Conversion is into a LIBOR Loan, the requested
duration of the Interest Period of such Loan.  Each Notice of Conversion shall
be irrevocable by and binding on the Borrowers once given.
 
Section 2.12         Notes.
 
(a)           Notes.  The Revolving Loans made by each Revolving Lender shall,
in addition to this Agreement, also be evidenced by a Revolving Note, payable to
the order of such Revolving Lender in a principal amount equal to the amount of
its Revolving Commitment as originally in effect and otherwise duly completed.
 
(b)           Records.  The date, amount, interest rate, Type and duration of
Interest Periods (if applicable) of each Loan made by each Lender to the
Borrowers, 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
Borrowers absent manifest error; provided, however, that (i) the failure of a
Lender to make any such record shall not affect the obligations of the Borrowers
under any of the Loan Documents and (ii) if there is a discrepancy between such
records of a Lender and the statements of accounts maintained by the
Administrative Agent pursuant to Section 3.8, in the absence of manifest error,
the statements of account maintained by the Administrative Agent pursuant to
Section 3.8 shall be controlling.
 
(c)           Lost, Stolen, Destroyed or Mutilated Notes.  Upon receipt by the
Borrowers 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 Borrowers, or (B) in the case of mutilation,
upon surrender and cancellation of such Note, the Borrowers shall at its own
expense execute and deliver to such Lender a new Note dated the date of such
lost, stolen, destroyed or mutilated Note.
 
Section 2.13         Voluntary Reductions of the Revolving Commitment.
 
The Borrowers shall have the right to terminate or reduce the aggregate unused
amount of the Revolving Commitments (for which purpose use of the Revolving
Commitments shall be deemed to include the aggregate amount of all Letter of
Credit Liabilities) at any time and from time to time without penalty or premium
upon not less than five (5) Business Days prior written notice to the
Administrative Agent of each such termination or reduction, which notice shall
specify the effective date thereof and the amount of any such reduction (which
in the case of any partial reduction of the Revolving Commitments shall not be
less than $5,000,000 and integral multiples of $1,000,000 in excess of that
amount in the aggregate) and shall be irrevocable once given and effective only
upon receipt by the Administrative Agent (“Commitment Reduction Notice”);
provided, however, the Borrowers may not reduce the aggregate amount of the
Revolving Commitments below $50,000,000 unless the Borrowers are terminating the
Revolving Commitments in full.  Promptly after receipt of a Commitment Reduction
Notice the Administrative Agent shall notify each Lender of the proposed
termination or Revolving Commitment reduction.  The Revolving Commitments, once
reduced or terminated pursuant to this Section, may not be increased or
reinstated.  The Borrowers shall pay all interest and fees on the Revolving
Loans accrued to the date of such reduction or termination of the Revolving
Commitments to the Administrative Agent for the account of the Revolving
Lenders, including but not limited to any applicable compensation due to each
Revolving Lender in accordance with Section 5.4.
 
 
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Section 2.14         Extension of Maturity Date.
 
The Borrowers shall have one (1) option to extend (the “Option to Extend”) the
Maturity Date by one (1) year upon satisfaction of each of the following
conditions precedent:
 
(a)           The Borrowers shall provide the Administrative Agent with written
notice of the Borrowers’ request to exercise the Option to Extend not more than
ninety (90) days but not less than sixty (60) days prior to the Initial Maturity
Date (the “Extension Request”);
 
(b)           As of the date of receipt by the Administrative Agent of written
notice of the Borrowers’ request to exercise the Option to Extend and as of the
Initial Maturity Date, no Default or Event of Default shall have occurred and be
continuing, and the Borrowers shall so certify in writing;
 
(c)           All representations and warranties of the Borrowers under this
Agreement shall be true and correct in all material respects as of the date of
receipt by the Administrative Agent of written notice of the Borrowers’ request
to exercise the Option to Extend and as of the Initial Maturity Date, and the
Borrowers shall so certify in writing;
 
(d)           Appraisals for all Borrowing Base Properties dated within sixty
(60) days of the Initial Maturity Date shall have received, reviewed and
approved by Administrative Agent;
 
(e)           The Borrowers shall execute or cause the execution of all
documents reasonably required by the Administrative Agent to effect the exercise
of the Option to Extend; and
 
(f)           The Borrowers shall have paid to the Administrative Agent (for the
account of the Lenders) the extension fee in accordance with, and as provided
for in, Section 3.5(d).
 
Section 2.15         Expiration Date of Letters of Credit Past Revolving
Commitment Termination.
 
(a)           If a Letter of Credit, either when initially issued or when
renewed, has an expiration date that is later than the Maturity Date, the
Borrowers shall, on or before the date that is thirty (30) days prior to the
Maturity Date, pay to the Administrative Agent, for its benefit and the benefit
of the Lenders and the Issuing Bank, an amount of money sufficient to cause the
balance of available funds on deposit in the Letter of Credit Collateral Account
to equal the Stated Amount of such Letter of Credit for deposit into the Letter
of Credit Collateral Account.
 
(b)           If on the date the Revolving Commitments are terminated or reduced
to zero (whether voluntarily, by reason of the occurrence of an Event of Default
or otherwise), there are any Letters of Credit outstanding hereunder, the
Borrowers shall, on such date, pay to the Administrative Agent, for its benefit
and the benefit of the Lenders and the Issuing Bank, an amount of money
sufficient to cause the balance of available funds on deposit in the Letter of
Credit Collateral Account to equal the aggregate Stated Amount of such Letters
of Credit for deposit into the Letter of Credit Collateral Account.
 
 
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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, the Issuing Bank shall not be required
to issue a Letter of Credit and no reduction of the Revolving Commitments
pursuant to Section 2.13 shall take effect, if immediately after the making of
such Loan, the issuance of such Letter of Credit or such reduction in the
Revolving Commitments:
 
(a)           the aggregate principal amount of all outstanding Revolving Loans,
together with the aggregate amount of all Letter of Credit Liabilities, would
exceed the aggregate amount of the Revolving Commitments at such time; or
 
(b)           the aggregate principal amount of all outstanding Loans, together
with aggregate amount of all Letter of Credit Liabilities, would exceed the
Maximum Loan Availability at such time.
 
Section 2.17         Reserved.
 
Section 2.18         Funds Transfer Disbursements.
 
(a)           Generally.  The Borrowers hereby authorize the Administrative
Agent to disburse the proceeds of any Loan made by the Lenders or any of their
Affiliates pursuant to the Loan Documents as requested by an authorized
representative of the Borrowers to any of the accounts designated in the
Transfer Authorizer Designation Form.  The Borrowers agree to be bound by any
transfer request:  (i) authorized or transmitted by the Borrowers; or (ii) made
in the Borrowers’ name and accepted by the Administrative Agent in good faith
and in compliance with these transfer instructions, even if not properly
authorized by the Borrowers.  The Borrowers further agree and acknowledge that
the Administrative Agent may rely solely on any bank routing number or
identifying bank account number or name provided by the Borrowers to effect a
wire or funds transfer even if the information provided by the Borrowers
identifies a different bank or account holder than named by the Borrowers.  The
Administrative Agent is not obligated or required in any way to take any actions
to detect errors in information provided by the Borrowers.  If the
Administrative Agent takes any actions in an attempt to detect errors in the
transmission or content of transfer requests or takes any actions in an attempt
to detect unauthorized funds transfer requests, the Borrowers agree that no
matter how many times the Administrative Agent takes these actions the
Administrative Agent will not in any situation be liable for failing to take or
correctly perform these actions in the future and such actions shall not become
any part of the transfer disbursement procedures authorized under this
provision, the Loan Documents, or any agreement between the Administrative Agent
and the Borrowers.  The Borrowers agree to notify the Administrative Agent of
any errors in the transfer of any funds or of any unauthorized or improperly
authorized transfer requests within fourteen (14) days after the Administrative
Agent’s confirmation to the Borrowers of such transfer.
 
(b)           Funds Transfer.  The Administrative Agent will, in its sole
discretion, determine the funds transfer system and the means by which each
transfer will be made.  The Administrative Agent may delay or refuse to accept a
funds transfer request if the transfer would:  (i) violate the terms of this
authorization, (ii) require use of a bank unacceptable to the Administrative
Agent or any Lender or prohibited by any Governmental Authority, (iii) cause the
Administrative Agent or any Lender to violate any Federal Reserve or other
regulatory risk control program or guideline or (iv) otherwise cause the
Administrative Agent or any Lender to violate any Applicable Law or regulation.
 
 
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(c)           Limitation of Liability.  Neither of the Administrative Agent, the
Issuing Bank nor any Lender shall be liable to the Borrowers or any other party
for (i) errors, acts or failures to act of others, including other entities,
banks, communications carriers or clearinghouses, through which the Borrowers’
transfers may be made or information received or transmitted, and no such entity
shall be deemed an agent of the Administrative Agent, the Issuing Bank or any
Lender, (ii) any loss, liability or delay caused by fires, earthquakes, wars,
civil disturbances, power surges or failures, acts of government, labor
disputes, failures in communications networks, legal constraints or other events
beyond Administrative Agent’s, Issuing Bank’s or any Lender’s control, or (iii)
any special, consequential, indirect or punitive damages, whether or not (x) any
claim for these damages is based on tort or contract or (y) the Administrative
Agent, the Issuing Bank, any Lender or the Borrowers knew or should have known
the likelihood of these damages in any situation.  Neither the Administrative
Agent, the Issuing Bank nor any Lender makes any representations or warranties
other than those expressly made in this Agreement.
 
ARTICLE III  PAYMENTS, FEES AND OTHER GENERAL PROVISIONS
 
Section 3.1            Payments.
 
(a)           Payments by Borrowers.  Except to the extent otherwise provided
herein, all payments of principal, interest, Fees and other amounts to be made
by the Borrowers under this Agreement, the Notes or any other Loan Document
shall be made in Dollars, in immediately available funds, without setoff,
deduction or counterclaim, to the Administrative Agent at the Principal Office,
not later than 2:00 p.m. Eastern time on the date on which such payment shall
become due (each such payment made after such time on such due date to be deemed
to have been made on the next succeeding Business Day).  Subject to
Section 11.5, the Borrowers shall, at the time of making each payment under this
Agreement or any other Loan Document, specify to the Administrative Agent the
amounts payable by the Borrowers hereunder to which such payment is to be
applied.  Each payment received by the Administrative Agent for the account of a
Lender under this Agreement or any Note shall be paid to such Lender by wire
transfer of immediately available funds in accordance with the wiring
instructions provided by such Lender to the Administrative Agent from time to
time, for the account of such Lender at the applicable Lending Office of such
Lender.  Each payment received by the Administrative Agent for the account of
the Issuing Bank under this Agreement shall be paid to the Issuing Bank by wire
transfer of immediately available funds in accordance with the wiring
instructions provided by the Issuing Bank to the Administrative Agent from time
to time, for the account of the Issuing Bank.  In the event the Administrative
Agent fails to pay such amounts to such Lender or the Issuing Bank, as the case
may be, within one Business Day of receipt of such amounts, the Administrative
Agent shall pay interest on such amount until paid at a rate per annum equal to
the Federal Funds Rate from time to time in effect.  If the due date of any
payment under this Agreement or any other Loan Document would otherwise fall on
a day which is not a Business Day such date shall be extended to the next
succeeding Business Day and interest shall continue to accrue at the rate, if
any, applicable to such payment for the period of such extension.
 
(b)           Presumptions Regarding Payments by Borrowers.  Unless the
Administrative Agent shall have received notice from the Borrowers prior to the
date on which any payment is due to the Administrative Agent for the account of
the Lenders or the Issuing Bank hereunder that the Borrowers will not make such
payment, the Administrative Agent may assume that the Borrowers has made such
payment on such date in accordance herewith and may (but shall not be obligated
to), in reliance upon such assumption, distribute to the Lenders or the Issuing
Bank, as the case may be, the amount due.  In such event, if the Borrowers have
not in fact made such payment, then each of the Lenders or the Issuing Bank, as
the case may be, severally agrees to repay to the Administrative Agent on demand
that amount so distributed to such Lender or the Issuing Bank, with interest
thereon, for each day from and including the date such amount is distributed to
it to but excluding the date of payment to the Administrative Agent, at the
greater of the Federal Funds Rate and a rate determined by the Administrative
Agent in accordance with banking industry rules on interbank compensation.
 
 
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Section 3.2            Pro Rata Treatment.
 
Except to the extent otherwise provided herein:  (a) each borrowing from the
Revolving Lenders under Sections 2.1(a) and 2.4(e) shall be made from the
Revolving Lenders, each payment of the fees under Sections 3.5(a), 3.5(b), the
first sentence of Section 3.5(c), and Section 3.5(e) shall be made for the
account of the Revolving Lenders, and each termination or reduction of the
amount of the Revolving Commitments under Section 2.13 shall be applied to the
respective Revolving Commitments of the Revolving Lenders, pro rata according to
the amounts of their respective Revolving Commitments; (b) each payment or
prepayment of principal of Revolving Loans shall be made for the account of the
Revolving Lenders pro rata in accordance with the respective unpaid principal
amounts of the Revolving Loans held by them, provided that, subject to
Section 3.9, if immediately prior to giving effect to any such payment in
respect of any Revolving Loans the outstanding principal amount of the Revolving
Loans shall not be held by the Revolving Lenders pro rata in accordance with
their respective Revolving Commitments in effect at the time such Revolving
Loans were made, then such payment shall be applied to the Revolving Loans in
such manner as shall result, as nearly as is practicable, in the outstanding
principal amount of the Revolving Loans being held by the Revolving Lenders pro
rata in accordance with their respective Revolving Commitments; (c) each payment
of interest on Revolving Loans shall be made for the account of the Revolving
Lenders pro rata in accordance with the amounts of interest on such Revolving
Loans then due and payable to the respective Lenders; (d) the making, Conversion
and Continuation of Revolving Loans of a particular Type (other than Conversions
provided for by Sections 5.1(c) and 5.5) shall be made pro rata among the
Revolving Lenders according to the amounts of their respective Revolving Loans
and the then current Interest Period for each Lender’s portion of each such Loan
of such Type shall be coterminous; and (e) the Revolving Lenders’ participation
in, and payment obligations in respect of, Letters of Credit under Section 2.4,
shall be in accordance with their respective Commitment Percentages.
 
Section 3.3            Sharing of Payments, Etc.
 
If a Lender shall obtain payment of any principal of, or interest on, any Loan
made by it to the Borrowers under this Agreement or shall obtain payment on any
other Obligation owing by the Borrowers or any other Loan Party through the
exercise of any right of set-off, banker’s lien, counterclaim or similar right
or otherwise or through voluntary prepayments directly to a Lender or other
payments made by or on behalf the Borrowers or any other Loan Party to a Lender
(other than any payment in respect of Specified Derivatives Obligations) not in
accordance with the terms of this Agreement and such payment should be
distributed to the Lenders in accordance with Section 3.2 or Section 11.5, as
applicable, such Lender shall promptly purchase from the other Lenders
participations in (or, if and to the extent specified by such Lender, direct
interests in) the Loans made by the other Lenders or other Obligations owed to
such other Lenders in such amounts, and make such other adjustments from time to
time as shall be equitable, to the end that all the Lenders shall share the
benefit of such payment (net of any reasonable expenses which may actually be
incurred by such Lender in obtaining or preserving such benefit) in accordance
with the requirements of Section 3.2 or Section 11.5, as applicable.  To such
end, all the Lenders shall make appropriate adjustments among themselves (by the
resale of participations sold or otherwise) if such payment is rescinded or must
otherwise be restored.  The Borrowers agree 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 Borrowers.
 
 
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Section 3.4            Several Obligations.
 
No Lender shall be responsible for the failure of any other Lender to make a
Loan or to perform any other obligation to be made or performed by such other
Lender hereunder, and the failure of any Lender to make a Loan or to perform any
other obligation to be made or performed by it hereunder shall not relieve the
obligation of any other Lender to make any Loan or to perform any other
obligation to be made or performed by such other Lender.
 
Section 3.5            Fees.
 
(a)           Closing Fee.  On the Effective Date, the Borrowers agree to pay to
the Administrative Agent and each Lender all loan fees as have been agreed to in
writing by the Borrowers and the Administrative Agent and Lead Arranger.
 
(b)           Facility Fees.  During the period from the Agreement Date to but
excluding the Maturity Date, the Borrowers agree to pay to the Administrative
Agent for the account of the Revolving Lenders a facility fee equal to the daily
aggregate amount of the Revolving Commitments (whether or not utilized) times a
rate per annum equal to the Applicable Facility Fee.  Such fee shall be payable
quarterly in arrears on the first day of each January, April, July and October
during the term of this Agreement and on the Maturity Date or any earlier date
of termination of the Revolving Commitments or reduction of the Revolving
Commitments to zero.  The Borrowers acknowledge that the fee payable hereunder
is a bona fide commitment fee and is intended as reasonable compensation to the
Lenders for committing to make funds available to the Borrowers as described
herein and for no other purposes.
 
(c)           Letter of Credit Fees.  The Borrowers agree to pay to the
Administrative Agent for the account of each Revolving Lender a letter of credit
fee 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) to and including the
date such Letter of Credit expires or is cancelled or (y) to but excluding the
date such Letter of Credit is drawn in full.  In addition to such fees, the
Borrowers shall pay to the Issuing Bank solely for its own account, a fronting
fee in respect of each Letter of Credit equal to one-eighth of one percent
(0.125%) of the initial Stated Amount of such Letter of Credit; provided,
however, in no event shall the aggregate amount of such fee in respect of any
Letter of Credit be less than $1,000.  The fees provided for in this subsection
shall be nonrefundable and payable, in the case of the fee provided for in the
first sentence, in arrears (i) quarterly on the first day of January, April,
July and October, (ii) on the Maturity Date, (iii) on the date the Revolving
Commitments are terminated or reduced to zero and (iv) thereafter from time to
time on demand of the Administrative Agent and in the case of the fee provided
for in the second sentence, at the time of issuance of such Letter of
Credit.  The Borrowers shall pay directly to the Issuing Bank from time to time
on demand all commissions, charges, costs and expenses in the amounts
customarily charged or incurred by the Issuing Bank from time to time in like
circumstances with respect to the issuance, amendment, renewal or extension of
any Letter of Credit or any other transaction relating thereto.
 
(d)           Revolving Credit Extension Fee.  If the Maturity Date is being
extended in accordance with Section 2.14, the Borrowers shall pay to the
Administrative Agent for the account of each Revolving Lender a fee equal to one
quarter of one percent (0.25%) of the amount of such Revolving Lender’s
Revolving Commitment (whether or not utilized).  Such fee shall be due and
payable in full on the date the Administrative Agent receives the Extension
Request pursuant to Section 2.14; provided, however, that such extension fee
shall be refunded to Borrowers if Borrowers do not satisfy the conditions
precedent to extension set forth in Section 2.14.
 
 
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(e)           Administrative and Other Fees.  The Borrowers agree to pay the
administrative and other fees of the Administrative Agent as provided in the Fee
Letter and as may be otherwise agreed to in writing from time to time by the
Borrowers and the Administrative Agent.
 
Section 3.6            Computations.
 
Unless otherwise expressly set forth herein, any accrued interest on any Loan,
any Fees or any other Obligations due hereunder shall be computed on the basis
of a year of 360 days and the actual number of days elapsed.
 
Section 3.7            Usury.
 
In no event shall the amount of interest due or payable on the Loans or other
Obligations exceed the maximum rate of interest allowed by Applicable Law and,
if any such payment is paid by the Borrowers or any other Loan Party or received
by any Lender, then such excess sum shall be credited as a payment of principal,
unless the Borrowers shall notify the respective Lender in writing that the
Borrowers elects to have such excess sum returned to it forthwith.  It is the
express intent of the parties hereto that the Borrowers 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 Borrowers under Applicable
Law.  The parties hereto hereby agree and stipulate that the only charge imposed
upon the Borrowers for the use of money in connection with this Agreement is and
shall be the interest specifically described in Section 2.6(a)(i) and
(ii).  Notwithstanding the foregoing, the parties hereto further agree and
stipulate that all agency fees, syndication fees, facility fees, closing fees,
letter of credit fees, underwriting fees, default charges, late charges, funding
or “breakage” charges, increased cost charges, attorneys’ fees and reimbursement
for costs and expenses paid by the Administrative Agent or any Lender to third
parties or for damages incurred by the Administrative Agent or any Lender, in
each case, in connection with the transactions contemplated by this Agreement
and the other Loan Documents, are charges made to compensate the Administrative
Agent or any such Lender for underwriting or administrative services and costs
or losses performed or incurred, and to be performed or incurred, by the
Administrative Agent and the Lenders in connection with this Agreement and shall
under no circumstances be deemed to be charges for the use of money.  All
charges other than charges for the use of money shall be fully earned and
nonrefundable when due.
 
Section 3.8            Statements of Account.
 
The Administrative Agent will account to the Borrowers monthly with a statement
of Loans, accrued interest and Fees, charges and payments made pursuant to this
Agreement and the other Loan Documents, and such account rendered by the
Administrative Agent shall be deemed conclusive upon the Borrowers absent
manifest error.  The failure of the Administrative Agent to deliver such a
statement of accounts shall not relieve or discharge the Borrowers from any of
its obligations hereunder.
 
Section 3.9            Defaulting Lenders.
 
Notwithstanding anything to the contrary contained in this Agreement, if any
Revolving Lender becomes a Defaulting Lender, then, until such time as such
Revolving Lender is no longer a Defaulting Lender, to the extent permitted by
Applicable Law:
 
(a)           Waivers and Amendments.  Such Defaulting Lender’s right to approve
or disapprove any amendment, waiver or consent with respect to this Agreement
shall be restricted as set forth in the definition of Requisite Lenders.
 
 
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(b)           Defaulting Lender Waterfall.  Any payment of principal, interest,
Fees or other amounts received by the Administrative Agent for the account of
such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to
Article XI or otherwise) or received by the Administrative Agent from a
Defaulting Lender pursuant to Section 3.3 shall be applied at such time or times
as may be determined by the Administrative Agent as follows:  first, to the
payment of any amounts owing by such Defaulting Lender to the Administrative
Agent hereunder; second, to the payment on a pro rata basis of any amounts owing
by such Defaulting Lender to the Issuing Bank hereunder; third, to Cash
Collateralize the Issuing Bank’s Fronting Exposure with respect to such
Defaulting Lender in accordance with subsection (e) below; fourth, as the
Borrowers may request (so long as no Default or Event of Default exists), to the
funding of any Loan in respect of which such Defaulting Lender has failed to
fund its portion thereof as required by this Agreement, as determined by the
Administrative Agent; fifth, if so determined by the Administrative Agent and
the Borrowers, to be held in a deposit account and released pro rata in order to
(x) satisfy such Defaulting Lender’s potential future funding obligations with
respect to Loans under this Agreement and (y) Cash Collateralize the Issuing
Bank’s future Fronting Exposure with respect to such Defaulting Lender with
respect to future Letters of Credit issued under this Agreement, in accordance
with subsection (e) below; sixth, to the payment of any amounts owing to the
Lenders, the Issuing Bank as a result of any judgment of a court of competent
jurisdiction obtained by any Lender, the Issuing Bank against such Defaulting
Lender as a result of such Defaulting Lender’s breach of its obligations under
this Agreement; seventh, so long as no Default or Event of Default exists, to
the payment of any amounts owing to the Borrowers as a result of any judgment of
a court of competent jurisdiction obtained by the Borrowers against such
Defaulting Lender as a result of such Defaulting Lender’s breach of its
obligations under this Agreement; and eighth, to such Defaulting Lender or as
otherwise directed by a court of competent jurisdiction; provided that if
(x) such payment is a payment of the principal amount of any Loans or amounts
owing by such Defaulting Lender under Section 2.4(j) in respect of Letters of
Credit (such amounts “L/C Disbursements”), in respect of which such Defaulting
Lender has not fully funded its appropriate share, and (y) such Loans were made
or the related Letters of Credit were issued at a time when the conditions set
forth in Article VI were satisfied or waived, such payment shall be applied
solely to pay the Loans of, and L/C Disbursements owed to, all Non-Defaulting
Lenders on a pro rata basis prior to being applied to the payment of any Loans
of, or L/C Disbursements owed to, such Defaulting Lender until such time as all
Loans and funded and unfunded participations in Letter of Credit Liabilities are
held by the Revolving Lenders pro rata in accordance with their respective
Commitment Percentages (determined without giving effect to the immediately
following subsection (d)).  Any payments, prepayments or other amounts paid or
payable to a Defaulting Lender that are applied (or held) to pay amounts owed by
a Defaulting Lender or to post Cash Collateral pursuant to this subsection shall
be deemed paid to and redirected by such Defaulting Lender, and each Lender
irrevocably consents hereto.
 
(c)           Certain Fees.
 
(i)           No Defaulting Lender shall be entitled to receive any Fee payable
under Sections 3.5(b) for any period during which that Lender is a Defaulting
Lender.
 
(ii)          No Defaulting Lender shall be entitled to receive any Fee payable
under Section 3.5.(c) for any period during which that Lender is a Defaulting
Lender.
 
(iii)         With respect to any Fee not required to be paid to any Defaulting
Lender pursuant to the immediately preceding clauses (i) or (ii), the Borrowers
shall (x) pay to each Non-Defaulting Lender that portion of any such Fee
otherwise payable to such Defaulting Lender with respect to such Defaulting
Lender’s participation in Letter of Credit Liabilities that has been reallocated
to such Non-Defaulting Lender pursuant to the immediately following
subsection (d), (y) pay to each Issuing Bank the amount of any such Fee
otherwise payable to such Defaulting Lender to the extent allocable to such
Issuing Bank’s Fronting Exposure to such Defaulting Lender, and (z) not be
required to pay the remaining amount of any such Fee.
 
 
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(d)           Reallocation of Participations to Reduce Fronting Exposure.  All
or any part of such Defaulting Lender’s participation in Letter of Credit
Liabilities shall be reallocated among the Non-Defaulting Lenders in accordance
with their respective Commitment Percentages (determined without regard to such
Defaulting Lender’s Revolving Commitment) but only to the extent that (x) the
conditions set forth in Article VI are satisfied at the time of such
reallocation (and, unless the Borrowers shall have otherwise notified the
Administrative Agent at such time, the Borrowers shall be deemed to have
represented and warranted that such conditions are satisfied at such time), and
(y) such reallocation does not cause the aggregate Revolving Credit Exposure of
any Non-Defaulting Lender to exceed such Non-Defaulting Lender’s Revolving
Commitment.  No reallocation hereunder shall constitute a waiver or release of
any claim of any party hereunder against a Defaulting Lender arising from that
Revolving Lender having become a Defaulting Lender, including any claim of a
Non-Defaulting Lender as a result of such Non-Defaulting Lender’s increased
exposure following such reallocation.
 
(e)           Cash Collateral.
 
(i)           If the reallocation described in the immediately preceding
subsection (d) above cannot, or can only partially, be effected, the Borrowers
shall, without prejudice to any right or remedy available to it hereunder or
under law, Cash Collateralize the Issuing Bank’s Fronting Exposure in accordance
with the procedures set forth in this subsection.
 
(ii)           At any time that there shall exist a Defaulting Lender, within
one (1) Business Day following the written request of the Administrative Agent
or the Issuing Bank (with a copy to the Administrative Agent), the Borrowers
shall Cash Collateralize the Issuing Bank’s Fronting Exposure with respect to
such Defaulting Lender (determined after giving effect to the immediately
preceding subsection (d) and any Cash Collateral provided by such Defaulting
Lender) in an amount not less than the aggregate Fronting Exposure of the
Issuing Bank with respect to Letters of Credit issued and outstanding at such
time.
 
(iii)           The Borrowers, and to the extent provided by any Defaulting
Lender, such Defaulting Lender, hereby grant to the Administrative Agent, for
the benefit of the Issuing Bank, and agree to maintain, a first priority
security interest in all such Cash Collateral as security for the Defaulting
Lenders’ obligation to fund participations in respect of Letter of Credit
Liabilities, to be applied pursuant to the immediately following
clause (iv).  If at any time the Administrative Agent determines that Cash
Collateral is subject to any right or claim of any Person other than the
Administrative Agent and the Issuing Bank as herein provided, or that the total
amount of such Cash Collateral is less than the aggregate Fronting Exposure of
the Issuing Bank with respect to Letters of Credit issued and outstanding at
such time, the Borrowers will, promptly upon demand by the Administrative Agent,
pay or provide to the Administrative Agent additional Cash Collateral in an
amount sufficient to eliminate such deficiency (after giving effect to any Cash
Collateral provided by the Defaulting Lender).
 
(iv)           Notwithstanding anything to the contrary contained in this
Agreement, Cash Collateral provided under this Section in respect of Letters of
Credit shall be applied to the satisfaction of the Defaulting Lender’s
obligation to fund participations in respect of Letter of Credit Liabilities
(including, as to Cash Collateral provided by a Defaulting Lender, any interest
accrued on such obligation) for which the Cash Collateral was so provided, prior
to any other application of such property as may otherwise be provided for
herein.
 
 
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(v)           Cash Collateral (or the appropriate portion thereof) provided to
reduce the Issuing Bank’s Fronting Exposure shall no longer be required to be
held as Cash Collateral pursuant to this subsection following (x) the
elimination of the applicable Fronting Exposure (including by the termination of
Defaulting Lender status of the applicable Revolving Lender), or (y) the
determination by the Administrative Agent and the Issuing Bank that there exists
excess Cash Collateral; provided that, subject to the immediately preceding
subsection (b), the Person providing Cash Collateral and the Issuing Bank may
agree that Cash Collateral shall be held to support future anticipated Fronting
Exposure or other obligations and provided further that to the extent that such
Cash Collateral was provided by the Borrowers, such Cash Collateral shall remain
subject to the security interest granted pursuant to the Loan Documents.
 
(f)           Defaulting Lender Cure.  If the Borrowers, the Administrative
Agent and the Issuing Bank agree in writing that a Revolving Lender is no longer
a Defaulting Lender, the Administrative Agent will so notify the parties hereto,
whereupon as of the effective date specified in such notice and subject to any
conditions set forth therein (which may include arrangements with respect to any
Cash Collateral), that Revolving Lender will, to the extent applicable, purchase
at par that portion of outstanding Loans of the other Lenders or take such other
actions as the Administrative Agent may determine to be necessary to cause the
Loans and funded and unfunded participations in Letters of Credit to be held pro
rata by the Revolving Lenders in accordance with their respective Commitment
Percentages (determined without giving effect to the immediately preceding
subsection (d)), whereupon such Revolving Lender will cease to be a Defaulting
Lender; provided that no adjustments will be made retroactively with respect to
Fees accrued or payments made by or on behalf of the Borrowers while that
Revolving Lender was a Defaulting Lender; and provided, further, that except to
the extent otherwise expressly agreed by the affected parties, no change
hereunder from Defaulting Lender to Revolving Lender will constitute a waiver or
release of any claim of any party hereunder arising from that Revolving Lender’s
having been a Defaulting Lender.
 
(g)           New Letters of Credit.  So long as any Revolving Lender is a
Defaulting Lender, the Issuing Bank shall not be required to issue, extend,
renew or increase any Letter of Credit unless it is satisfied that it will have
no Fronting Exposure after giving effect thereto.
 
Section 3.10         Taxes; Foreign Lenders.
 
(a)           Taxes Generally.  All payments by the Borrowers of principal of,
and interest on, the Loans and all other Obligations shall be made free and
clear of and without deduction for any present or future excise, stamp or other
taxes, fees, duties, levies, imposts, charges, deductions, withholdings or other
charges of any nature whatsoever imposed by any taxing authority, but excluding
(i) franchise taxes, (ii) any taxes (other than withholding taxes) that would
not be imposed but for a connection between the Administrative Agent, the
Issuing Bank or a Lender and the jurisdiction imposing such taxes (other than a
connection arising solely by virtue of the activities of the Administrative
Agent, the Issuing Bank or such Lender pursuant to or in respect of this
Agreement or any other Loan Document), (iii)  any taxes imposed on or measured
by the Issuing Bank’s or any Lender’s assets, net income, receipts or branch
profits, (iv) any taxes arising after the Agreement Date solely as a result of
or attributable to a Lender changing its designated Lending Office after the
date such Lender becomes a party hereto, and (v) any taxes imposed by Sections
1471 through Section 1474 of the Internal Revenue Code (including any official
interpretations thereof, collectively “FATCA”) on any “withholdable payment”
payable to such recipient as a result of the failure of such recipient to
satisfy the applicable requirements as set forth in FATCA after December 31,
2012 (such non-excluded items being collectively called “Taxes”).  If any
withholding or deduction from any payment to be made by the Borrowers hereunder
is required in respect of any Taxes pursuant to any Applicable Law, then the
Borrowers will:
 
 
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(i)           pay directly to the relevant Governmental Authority the full
amount required to be so withheld or deducted;
 
(ii)          promptly forward to the Administrative Agent an official receipt
or other documentation satisfactory to the Administrative Agent evidencing such
payment to such Governmental Authority; and
 
(iii)         pay to the Administrative Agent for its account or the account of
the applicable Lender or the Issuing Bank, as the case may be, such additional
amount or amounts as is necessary to ensure that the net amount actually
received by the Administrative Agent, the Issuing Bank or such Lender will equal
the full amount that the Administrative Agent, the Issuing Bank or such Lender
would have received had no such withholding or deduction been required.
 
(b)           Tax Indemnification.  If the Borrowers fail to pay any Taxes when
due to the appropriate Governmental Authority or fails to remit to the
Administrative Agent, for its account or the account of the Issuing Bank or
respective Lender, as the case may be, the required receipts or other required
documentary evidence, the Borrowers shall indemnify the Administrative Agent,
the Issuing Bank and the Lenders for any incremental Taxes, interest or
penalties that may become payable by the Administrative Agent, the Issuing Bank
or any Lender as a result of any such failure.  For purposes of this Section, a
distribution hereunder by the Administrative Agent or any Lender to or for the
account of any Lender shall be deemed a payment by the Borrowers.
 
(c)           Tax Forms.  Prior to the date that any Lender or Participant
organized under the laws of a jurisdiction other than that in which the
Borrowers are a resident for tax purposes becomes a party hereto, such Person
shall deliver to the Borrowers and the Administrative Agent such certificates,
documents or other evidence, as required by the Internal Revenue Code or
Treasury Regulations issued pursuant thereto (including Internal Revenue Service
Forms W-8ECI and W-8BEN, as applicable, or appropriate successor forms),
properly completed, currently effective and duly executed by such Lender 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, to the extent it may lawfully do
so, (x) deliver further copies of such forms or other appropriate certifications
on or before the date that any such forms expire or become obsolete and after
the occurrence of any event requiring a change in the most recent form delivered
to the Borrowers or the Administrative Agent and (y) obtain such extensions of
the time for filing, and renew such forms and certifications thereof, as may be
reasonably requested by the Borrowers or the Administrative Agent.  The
Borrowers shall not be required to pay any amount pursuant to the last sentence
of subsection (a) above to any Lender or Participant that is organized under the
laws of a jurisdiction other than that in which the Borrowers are a resident for
tax purposes or the Administrative Agent, if it is organized under the laws of a
jurisdiction other than that in which the Borrowers are a resident for tax
purposes, if such Lender, such Participant or the Administrative Agent, as
applicable, fails to comply with the requirements of this subsection.  If any
such Lender or Participant, to the extent it may lawfully do so, fails to
deliver the above forms or other documentation, then the Administrative Agent
may withhold from such payment to such Lender such amounts as are required by
the Internal Revenue Code.  If any Governmental Authority asserts that the
Administrative Agent did not properly withhold or backup withhold, as the case
may be, any tax or other amount from payments made to or for the account of any
Lender, such Lender shall indemnify the Administrative Agent therefor, including
all penalties and interest, any taxes imposed by any jurisdiction on the amounts
payable to the Administrative Agent under this Section, and costs and expenses
(including all reasonable fees and disbursements of any law firm or other
external counsel and the allocated cost of internal legal services and all
disbursements of internal counsel) of the Administrative Agent.  The obligation
of the Lenders under this Section shall survive the termination of the
Commitments, repayment of all Obligations and the resignation or replacement of
the Administrative Agent.
 
 
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(d)           USA Patriot Act Notice; Compliance.  In order for the
Administrative Agent to comply with the USA Patriot Act of 2001 (Public Law
107-56), prior to any Lender or Participant that is organized under the laws of
a jurisdiction outside of the United States of America becoming a party hereto,
the Administrative Agent may request, and such Lender or Participant shall
provide to the Administrative Agent, its name, address, tax identification
number and/or such other identification information as shall be necessary for
the Administrative Agent to comply with federal law.
 
ARTICLE IV  BORROWING BASE PROPERTIES
 
Section 4.1            Eligibility of Properties.
 
(a)           Initial Borrowing Base Properties.  The Properties identified on
Schedule 4.1 shall, on the Effective Date, be Borrowing Base Properties, and the
Borrowing Base Value initially attributable to such Borrowing Base Properties
shall be as approved by the Lenders and set forth on Schedule 4.1.
 
(b)           Additional Borrowing Base Properties.  If after the Effective Date
the Borrowers desire that the Lenders include any additional Property in
calculations of the Borrowing Base, the Borrowers shall so notify the
Administrative Agent in writing.  No Property will be evaluated by the Lenders
unless it is an Eligible Property and unless and until the Borrowers deliver to
the Administrative Agent the following, in form and substance satisfactory to
the Administrative Agent:
 
(i)           An executive summary of the Property including, at a minimum, the
following information relating to such Property:  (A) a description of such
Property, such description to include the age, location, site plan, current
occupancy rate and physical condition of such Property; (B) the purchase price
paid or to be paid for such Property; (C) the current and projected condition of
the regional market and specific submarket in which such Property is located;
and (D) the current projected capital plans and, if applicable, current
renovation plans for such Property;
 
(ii)           An operating statement for such Property audited or certified by
a Responsible Officer of the Borrowers as being true and correct in all material
respects and prepared in accordance with GAAP for the previous three fiscal
years, provided that, with respect to any period such Property was owned by the
Borrowers or a Subsidiary for less than three years, such information shall only
be required to be delivered to the extent reasonably available to the Borrowers
and such certification may be based upon the best of the Borrowers’ knowledge
and provided further, that if such Property has been operating for less than
three years, the Borrowers shall provide such projections and other information
concerning the anticipated operation of such Property as the Administrative
Agent may reasonably request;
 
(iii)           A current rent roll (including Argus or similar information if
available) for such Property certified by a Responsible Officer of the Borrowers
as being true and correct in all material respects, and three-year occupancy
history of such Property certified by a Responsible Officer of the Borrowers to
be true and correct, provided that, with respect to any period such Property was
owned by the Borrowers or a Subsidiary for less than three years, such
information shall only be required to be delivered to the extent reasonably
available to the Borrowers and such certification may be based upon the best of
the Borrowers’ knowledge;
 
 
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(iv)          A copy of a recent ALTA Owner’s Policy of Title Insurance
(“Owner’s Policy”) covering such Property showing the identity of the fee
titleholder thereto and all matters of record;
 
(v)           Copies of all documents of record reflected in Schedule A and
Schedule B of the Owner’s Policy and a copy of the most recent real estate tax
bill and notice of assessment;
 
(vi)          A current or currently certified survey of such Property certified
by a surveyor licensed in the applicable jurisdiction to have been prepared in
accordance with the then effective Minimum Standard Detail Requirements for
ALTA/ACSM Land Title Surveys;
 
(vii)         If not adequately covered by the survey certification provided for
above, a certificate from a licensed engineer or other professional satisfactory
to the Administrative Agent that such Property is not located in a Special Flood
Hazard Area as defined by the Federal Insurance Administration;
 
(viii)        A “Phase I” environmental assessment of such Property not more
than 12 months old, which report (1) has been prepared by an environmental
engineering firm acceptable to the Administrative Agent and (2) complies with
the requirements contained in the Administrative Agent’s guidelines adopted from
time to time by the Administrative Agent to be used in its lending practice
generally and any other environmental assessments or other reports relating to
such Property, including any “Phase II” environmental assessment prepared or
recommended by such environmental engineering firm to be prepared for such
Property;
 
(ix)           An engineering report for such Property not more than six (6)
months old and prepared by an engineering firm acceptable to the Administrative
Agent;
 
(x)           Copies of (1) all Property Management Agreements and all Material
Contracts relating to the use, occupancy, operation, maintenance, enjoyment or
ownership of such Property, if any, and (2) in any event copies of all Tenant
Leases with respect to such Property (or, if acceptable to the Administrative
Agent, a summary of the terms thereof);
 
(xi)          Evidence that such Property complies with applicable zoning and
land use laws, which evidence shall not be more than six (6) months old;
 
(xii)         UCC, tax, judgment and lien search reports with respect to the
Borrowers (or a Subsidiary if such Property is owned by a Subsidiary) and such
Property in all necessary or appropriate jurisdictions indicating that there are
no Liens of record on such Property other than Permitted Liens;
 
(xiii)        Plans and specifications for such Property, provided the same
shall only be required to the extent reasonably available to the Borrowers;
 
(xiv)        Final certificates of occupancy and any other Governmental
Approvals relating to such Property;
 
(xv)         Copies of all policies of insurance required by Section 8.5;
 
(xvi)        An inspection of such Property by Administrative Agent and its
engineers and consultants; and
 
 
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(xvii)           Such other information the Administrative Agent may reasonably
request in order to evaluate the Property.
 
If, after receipt and review of the foregoing documents and information, the
Administrative Agent is prepared to recommend acceptance of such Property as a
Borrowing Base Property, the Administrative Agent will so notify the Borrowers
and each Lender within ten (10) Business Days after receipt and review of all of
such documents and information.  Within five (5) Business Days of the
Administrative Agent’s giving such notice to the Lenders, the Administrative
Agent will send the foregoing documents and information to each of the Lenders.
 
(c)           Appraisal; Final Approval.  Promptly upon giving notice to the
Lenders under the immediately preceding subsection (b) that the Administrative
Agent is prepared to recommend acceptance of such Property as a Borrowing Base
Property, the Administrative Agent shall commission, at the Administrative
Agent’s discretion and the Borrowers’ expense, an Appraisal of such Property, to
be in form and substance satisfactory to the Administrative Agent.  Within ten
(10) Business Days of receipt of such Appraisal, the Administrative Agent shall
review such Appraisal and shall determine the As-Is Appraised Value of such
Property.  If after such review and determination the Administrative Agent is
unwilling to recommend acceptance of such Property as a Borrowing Base Property,
the Administrative Agent shall promptly notify the Borrowers and the Lenders and
the consideration by the Administrative Agent and the Lenders of such Property
shall cease.  If after such review and determination the Administrative Agent
remains prepared to recommend acceptance of such Property as a Borrowing Base
Property, the Administrative Agent shall forward a copy of such Appraisal to the
Lenders together with notice of such As-Is Appraised Value and Administrative
Agent’s recommendation as to Borrowing Base Value to be attributed to such
Property.  Within ten (10) Business Days of the date on which a Lender has
received all of the items referred to in this subsection and the immediately
preceding subsection (b), such Lender shall notify the Administrative Agent in
writing whether or not such Lender accepts such Property as a Borrowing Base
Property, which approval will be in such Lender’s sole and absolute
discretion.  If a Lender fails to give such notice within such time period, such
Lender shall be deemed to have approved such Property as a Borrowing Base
Property.  Such Property shall become a Borrowing Base Property upon written or
deemed approval of the Requisite Lenders, or all Lenders to the extent the
Borrowing Base Value is greater than $15,000,000, and upon execution and
delivery to the Administrative Agent of (i) a Borrowing Base Certificate showing
the Borrowing Base after inclusion of such Property as a Borrowing Base
Property, (ii) if such property is owned by a Subsidiary of a Loan Party that is
not then a Borrower, all of the items required to be delivered to the
Administrative Agent under Section 8.14 if not previously delivered, (iii) the
documents and items described in Section 6.3, and (iv) such other items or
documents as may be appropriate under the circumstances, including updates of
the documents described in the immediately preceding subsections (b)(i),
(b)(ii), (b)(vi), and (b)(viii), and satisfaction of all other closing
requirements reasonably imposed by the Administrative Agent.
 
Section 4.2            Release of Properties.
 
From time to time the Borrowers may request, upon not less than thirty (30) days
prior written notice to the Administrative Agent or such shorter period as may
be acceptable to the Administrative Agent, that any Property (if then a
Borrowing Base Property) be released from the Liens created by the Security
Documents applicable thereto, which release (the “Property Release”) shall be
effected by the Administrative Agent if the Administrative Agent determines all
of the following conditions are satisfied as of the date of such Property
Release:
 
(a)           No Default or Event of Default exists or will exist immediately
after giving effect to such Property Release and the reduction in the Borrowing
Base by reason of the release of such Property;
 
 
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(b)           The Borrowers shall have delivered to the Administrative Agent a
Borrowing Base Certificate demonstrating on a pro forma basis, and the
Administrative Agent shall have determined to its satisfaction that the
outstanding principal balance of the Loans, together with the Letter of Credit
Liabilities and the Derivatives Termination Value of all Specified Derivatives
Contracts, will not exceed the Borrowing Base after giving effect to such
request and any prepayment to be made and/or the acceptance of any Property as
an additional or replacement Borrowing Base Property to be given concurrently
with such request;
 
(c)           The Borrowers shall have delivered to the Administrative Agent all
documents and instruments reasonably requested by the Administrative Agent in
connection with such Property Release; and
 
(d)           Prior written approval of the Requisite Lenders shall be required
prior to the release of (i) any Property constituting part of the Kroger
Portfolio or (ii) the Michelin Property.
 
Except as set forth in this Section 4.2, no Borrowing Base Property shall be
released from the Liens created by the Security Documents applicable thereto.
 
Section 4.3            Frequency of Appraisals.
 
The As-Is Appraised Value of a Borrowing Base Property (or in the case of a
Borrowing Base Property that is part of the Kroger Portfolio, the Kroger
Portfolio Hypothetical As-Is Appraised Value)  shall be determined or
redetermined, as applicable, under each of the following circumstances:
 
(a)           In connection with the acceptance of a Property as a Borrowing
Base Property the Administrative Agent will determine the As-Is Appraised Value
thereof (or in the case of a Borrowing Base Property that is part of the Kroger
Portfolio, the Kroger Portfolio Hypothetical As-Is Appraised Value thereof) as
provided in Section 4.1, all at the Borrowers’ expense; or
 
(b)           In connection with any Extension Request, the Administrative Agent
will determine the As-Is Appraised Value of the Borrowing Base Properties (or in
the case of a Borrowing Base Property that is part of the Kroger Portfolio, the
Kroger Portfolio Hypothetical As-Is Appraised Value) as provided in
Section 2.14, all at the Borrowers’ expense; or
 
(c)           At any time and from time to time but no more than once during the
initial term of the Loan, the Administrative Agent may redetermine the As-Is
Appraised Value of a Borrowing Base Property (or in the case of a Borrowing Base
Property that is part of the Kroger Portfolio, the Kroger Portfolio Hypothetical
As-Is Appraised Value) based on a new Appraisal obtained by the Administrative
Agent in any of the following circumstances, all at the Borrowers’ expense:
 
(i)           if a material adverse change occurs with respect to such Borrowing
Base Property, including, without limitation, a material deterioration in the
Net Operating Income of such Property, a major casualty at such Property that is
not fully covered by insurance, a material condemnation of any part of such
Property, a material change in the market conditions affecting such Property or
a material decrease in the leasing level of such Property; or
 
(ii)           if necessary in order to comply with FIRREA or other Applicable
Law relating to the Administrative Agent or the Lenders; or
 
 
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(iii)           if the Administrative Agent determines an Appraisal of such
Property is necessary in connection with its determination under Section 4.2(b)
regarding the release of a Borrowing Base Property; or
 
(d)           At any time while a Default or Event of Default exists, the
Administrative Agent may (and shall at the written direction of the Requisite
Lenders) redetermine the As-Is Appraised Value of a Borrowing Base Property (or
in the case of a Borrowing Base Property that is part of the Kroger Portfolio,
the Kroger Portfolio Hypothetical As-Is Appraised Value) based on a new
Appraisal obtained by the Administrative Agent, all at the Borrowers’ expense;
or
 
(e)           At any time and from time to time, the Administrative Agent may
(and shall at the written direction of the Requisite Lenders) redetermine the
As-Is Appraised Value of a Borrowing Base Property (or in the case of a
Borrowing Base Property that is part of the Kroger Portfolio, the Kroger
Portfolio Hypothetical As-Is Appraised Value) based on a new Appraisal obtained
by the Administrative Agent, all at the Lenders’ expense.
 
Section 4.4            Frequency of Calculations of Borrowing Base.
 
Initially, the Borrowing Base shall be the amount set forth as such in the
Borrowing Base Certificate delivered under Section 6.1.  Thereafter, the
Borrowing Base shall be the amount set forth as such in the Borrowing Base
Certificate delivered from time to time under Article IX.  Any increase in the
Borrowing Base Value of a Borrowing Base Property shall become effective as of
the next determination of the Borrowing Base as provided in this Section,
provided that prior to such date of determination (a) if such increase is the
result of an increase in the As-Is Appraised Value of such Borrowing Base
Property, the Requisite Lenders shall have given their written approval of such
increase and (b) the Borrowers deliver to the Administrative Agent the
following:  (i) if the Property is not located in a Tie-In Jurisdiction, an
endorsement to the title insurance policy in favor of the Administrative Agent
with respect to such Property increasing the coverage amount thereof as related
to such Property to not less than 110% of the As-Is Appraised Value (based on
the “as-is value” of such Property and excluding the value of personal property)
for such Property and (ii) if the Property is located in a Tie-In Jurisdiction,
an endorsement to the title insurance policy in favor of the Administrative
Agent with respect to such Property increasing the coverage amount thereof as
related to such Property to not less than the portion of the Borrowing Base
attributable to such Property, as well as endorsements to all other existing
title insurance policies issued to the Administrative Agent with respect to all
other Properties located in Tie-In Jurisdictions reflecting an increase in the
aggregate insured amount under the “tie-in” endorsements to an amount equal to
the Borrowing Base (including the Property which experienced the increase in
Borrowing Base Value) but in no event in an amount in excess of the aggregate
amount of the Commitments.
 
ARTICLE V  YIELD PROTECTION, ETC.
 
Section 5.1            Additional Costs; Capital Adequacy.
 
(a)           Capital Adequacy.  If any Lender or any Participant determines
that compliance with any law or regulation or with any guideline or request from
any central bank or other Governmental Authority (whether or not having the
force of law), including, without limitation, any Regulatory Change, affects or
would affect the amount of capital required or expected to be maintained by such
Lender or such Participant, or any corporation controlling such Lender or such
Participant, as a consequence of, or with reference to, such Lender’s
Commitments or its making or maintaining Loans or participating in Letters of
Credit below the rate which such Lender or such Participant or such corporation
controlling such Lender or such Participant could have achieved but for such
compliance (taking into account the policies of such Lender or such Participant
or such corporation with regard to capital), then the Borrowers shall, from time
to time, within thirty (30) days after written demand by such Lender or such
Participant, pay to such Lender or such Participant additional amounts
sufficient to compensate such Lender or such Participant or such corporation
controlling such Lender or such Participant to the extent that such Lender or
such Participant determines such increase in capital is allocable to such
Lender’s or such Participant’s obligations hereunder.
 
 
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(b)           Additional Costs.  In addition to, and not in limitation of the
immediately preceding subsection, the Borrowers shall promptly pay to the
Administrative 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 LIBOR
Loans or such obligation or the maintenance by such Lender of capital in respect
of its LIBOR Loans or its Commitments (such increases in costs and reductions in
amounts receivable being herein called “Additional Costs”), resulting from any
Regulatory Change that:  (i) changes the basis of taxation of any amounts
payable to such Lender under this Agreement or any of the other Loan Documents
in respect of any of such LIBOR Loans or its Commitments (other than taxes
imposed on or measured by the overall net income of such Lender or of its
Lending Office for any of such LIBOR Loans by the jurisdiction in which such
Lender has its principal office or such Lending Office), or (ii) imposes or
modifies any reserve, special deposit or similar requirements (other than
Regulation D of the Board of Governors of the Federal Reserve System or other
similar reserve requirement applicable to any other category of liabilities or
category of extensions of credit or other assets by reference to which the
interest rate on LIBOR Loans is determined to the extent utilized when
determining LIBOR for such Loans) relating to any extensions of credit or other
assets of, or any deposits with or other liabilities of, or other credit
extended by, or any other acquisition of funds by such Lender (or its parent
corporation), or any commitment of such Lender (including, without limitation,
the Commitments of such Lender hereunder) or (iii) has or would have the effect
of reducing the rate of return on capital of such Lender to a level below that
which such Lender could have achieved but for such Regulatory Change (taking
into consideration such Lender’s policies with respect to capital adequacy).
 
(c)           Lender’s Suspension of LIBOR Loans.  Without limiting the effect
of the provisions of the immediately preceding subsection (a) and (b), if by
reason of any Regulatory Change, any Lender either (i) incurs Additional Costs
based on or measured by the excess above a specified level of the amount of a
category of deposits or other liabilities of such Lender that includes deposits
by reference to which the interest rate on LIBOR Loans is determined as provided
in this Agreement or a category of extensions of credit or other assets of such
Lender that includes LIBOR Loans or (ii) becomes subject to restrictions on the
amount of such a category of liabilities or assets that it may hold, then, if
such Lender so elects by notice to the Borrowers (with a copy to the
Administrative Agent), the obligation of such Lender to make or Continue, or to
Convert Base Rate Loans into, LIBOR Loans hereunder shall be suspended until
such Regulatory Change ceases to be in effect (in which case the provisions of
Section 5.5 shall apply).
 
(d)           Additional Costs in Respect of Letters of Credit.  Without
limiting the obligations of the Borrowers under the preceding subsections of
this Section (but without duplication), if as a result of any Regulatory Change
or any risk-based capital guideline or other requirement heretofore or hereafter
issued by any Governmental Authority there shall be imposed, modified or deemed
applicable any tax, reserve, special deposit, capital adequacy or similar
requirement against or with respect to or measured by reference to Letters of
Credit and the result shall be to increase the cost to the Issuing Bank of
issuing (or any Lender of purchasing participations in) or maintaining its
obligation hereunder to issue (or purchase participations in) any Letter of
Credit or reduce any amount receivable by the Issuing Bank or any Lender
hereunder in respect of any Letter of Credit, then, upon demand by the Issuing
Bank or such Lender, the Borrowers shall pay immediately to the Issuing Bank or,
in the case of such Lender, to the Administrative Agent for the account of such
Lender, from time to time as specified by the Issuing Bank or such Lender, such
additional amounts as shall be sufficient to compensate the Issuing Bank or such
Lender for such increased costs or reductions in amount.
 
 
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(e)           Notification and Determination of Additional Costs.  Each of the
Administrative Agent, Issuing Bank, each Lender, and each Participant, as the
case may be, agrees to notify the Borrowers of any event occurring after the
Agreement Date entitling the Administrative Agent, the Issuing Bank, such Lender
or such Participant to compensation under any of the preceding subsections of
this Section as promptly as practicable; provided, however, that the failure of
the Administrative Agent, the Issuing Bank, any Lender or any Participant to
give such notice shall not release the Borrowers from any of its obligations
hereunder (and in the case of a Lender, to the Administrative Agent).  The
Administrative Agent, the Issuing Bank, each Lender and each Participant, as the
case may be, agrees to furnish to the Borrowers (and in the case of the Issuing
Bank, a Lender or a Participant to the Administrative Agent as well) a
certificate setting forth the basis and amount of each request for compensation
under this Section.  Determinations by the Administrative Agent, the Issuing
Bank, such Lender, or such Participant, as the case may be, of the effect of any
Regulatory Change shall be conclusive and binding for all purposes, absent
manifest error.
 
Section 5.2            Suspension of LIBOR Loans.
 
Anything herein to the contrary notwithstanding, if, on or prior to the
determination of LIBOR for any Interest Period:
 
(a)           the Administrative Agent reasonably determines (which
determination shall be conclusive) that quotations of interest rates for the
relevant deposits referred to in the definition of LIBOR are not being provided
in the relevant amounts or for the relevant maturities for purposes of
determining rates of interest for LIBOR Loans as provided herein or is otherwise
unable to determine LIBOR; or
 
(b)           the Administrative Agent reasonably determines (which
determination shall be conclusive) that the relevant rates of interest referred
to in the definition of LIBOR upon the basis of which the rate of interest for
LIBOR Loans for such Interest Period is to be determined are not likely to
adequately cover the cost to any Lender of making or maintaining LIBOR Loans for
such Interest Period;
 
then the Administrative Agent shall give the Borrowers 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 Borrowers shall,
on the last day of each current Interest Period for each outstanding LIBOR Loan,
either prepay such Loan or Convert such Loan into a Base Rate Loan.
 
Section 5.3            Illegality.
 
Notwithstanding any other provision of this Agreement, if any Lender shall
determine (which determination shall be conclusive and binding) that it is
unlawful for such Lender to honor its obligation to make or maintain LIBOR Loans
hereunder, then such Lender shall promptly notify the Borrowers thereof (with a
copy of such notice to the Administrative 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 5.5 shall be applicable).
 
 
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Section 5.4            Compensation.
 
The Borrowers shall pay to the Administrative Agent for the account of each
Lender, upon the request of the Administrative Agent, such amount or amounts as
the Administrative Agent shall determine in its reasonable discretion shall be
sufficient to compensate such Lender for any loss, cost or expense attributable
to:
 
(a)           any payment or prepayment (whether mandatory or optional) of a
LIBOR Loan, 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 Borrowers for any reason (including, without
limitation, the failure of any of the applicable conditions precedent specified
in Section 6.2 to be satisfied) to borrow a LIBOR Loan from such Lender on the
date for such borrowing, or to Convert a Base Rate Loan into a LIBOR Loan or
Continue a LIBOR Loan on the requested date of such Conversion or Continuation.
 
Not in limitation of the foregoing, such compensation shall include, without
limitation, in the case of a LIBOR Loan, an amount equal to the then present
value of (A) the amount of interest that would have accrued on such LIBOR Loan
for the remainder of the Interest Period at the rate applicable to such LIBOR
Loan, less (B) the amount of interest that would accrue on the same LIBOR Loan
for the same period if LIBOR were set on the date on which such LIBOR Loan was
repaid, prepaid or Converted or the date on which the Borrowers failed to
borrow, Convert or Continue such LIBOR Loan, as applicable, calculating present
value by using as a discount rate LIBOR quoted on such date.  Upon the
Borrowers’ request, the Administrative Agent shall provide the Borrowers with a
statement setting forth the basis for requesting such compensation and the
method for determining the amount thereof.  Any such statement shall be
conclusive absent manifest error.
 
Section 5.5            Treatment of Affected Loans.
 
If the obligation of any Lender to make LIBOR Loans or to Continue, or to
Convert Base Rate Loans into, LIBOR Loans shall be suspended pursuant to
Section 5.1(c), Section 5.2 or Section 5.3 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 5.1(c), Section 5.2 or Section 5.3 on such earlier date as
such Lender may specify to the Borrowers with a copy to the Administrative
Agent) and, unless and until such Lender gives notice as provided below that the
circumstances specified in Section 5.1, Section 5.2 or Section 5.3 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 Borrowers (with a copy to the Administrative
Agent) that the circumstances specified in Section 5.1(c) or Section 5.3 that
gave rise to the Conversion of such Lender’s LIBOR Loans pursuant to this
Section no longer exist (which such Lender agrees to do promptly upon such
circumstances ceasing to exist) at a time when LIBOR Loans made by other Lenders
are outstanding, then such Lender’s Base Rate Loans shall be automatically
Converted, on the first day(s) of the next succeeding Interest Period(s) for
such outstanding LIBOR Loans, to the extent necessary so that, after giving
effect thereto, all Loans held by the Lenders holding LIBOR Loans and by such
Lender are held pro rata (as to principal amounts, Types and Interest Periods)
in accordance with their respective Commitments.
 
 
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Section 5.6            Affected Lenders.
 
If (a) a Lender requests compensation pursuant to Section 3.10 or 5.1, and the
Requisite Lenders are not also doing the same, or (b) the obligation of any
Lender to make LIBOR Loans or to Continue, or to Convert Base Rate Loans into,
LIBOR Loans shall be suspended pursuant to Section 5.1(b) or 5.3 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 Borrowers 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 13.6(b) for a purchase price equal to (x) the aggregate principal
balance of all Loans then owing to the Affected Lender, plus (y) the aggregate
amount of payments previously made by the Affected Lender under Section 2.4(j)
that have not been repaid, plus (z) any accrued but unpaid interest thereon and
accrued but unpaid fees owing to the Affected Lender, or any other amount as may
be mutually agreed upon by such Affected Lender and Eligible Assignee.  Each of
the Administrative Agent and the Affected Lender shall reasonably cooperate in
effectuating the replacement of such Affected Lender under this Section, but at
no time shall the Administrative Agent, such Affected Lender nor any other
Lender nor any Titled Agent be obligated in any way whatsoever to initiate any
such replacement or to assist in finding an Eligible Assignee.  The exercise by
the Borrowers of its rights under this Section shall be at the Borrowers’ sole
cost and expense and at no cost or expense to the Administrative Agent, the
Affected Lender or any of the other Lenders.  The terms of this Section shall
not in any way limit the Borrowers’ obligation to pay to any Affected Lender
compensation owing to such Affected Lender pursuant to this Agreement
(including, without limitation, pursuant to Sections 3.10, 5.1 or 5.4) with
respect to any period up to the date of replacement.
 
Section 5.7            Change of Lending Office.
 
Each Lender agrees that it will use reasonable efforts (consistent with its
internal policy and legal and regulatory restrictions) to designate an alternate
Lending Office with respect to any of its Loans affected by the matters or
circumstances described in Sections 3.10, 5.1 or 5.3 to reduce the liability of
the Borrowers 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 5.8            Assumptions Concerning Funding of LIBOR Loans.
 
Calculation of all amounts payable to a Lender under this Article shall be made
as though such Lender had actually funded LIBOR Loans through the purchase of
deposits in the relevant market bearing interest at the rate applicable to such
LIBOR Loans in an amount equal to the amount of the LIBOR Loans and having a
maturity comparable to the relevant Interest Period; provided, however, that
each Lender may fund each of its LIBOR Loans in any manner it sees fit and the
foregoing assumption shall be used only for calculation of amounts payable under
this Article.
 
 
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ARTICLE VI  CONDITIONS PRECEDENT
 
Section 6.1            Initial Conditions Precedent.
 
The obligation of the Lenders to effect or permit the occurrence of the first
Credit Event hereunder, whether as the making of a Loan or the issuance of a
Letter of Credit, is subject to the satisfaction or waiver of the following
conditions precedent:
 
(a)           The Administrative Agent shall have received each of the
following, in form and substance satisfactory to the Administrative Agent:
 
(i)           counterparts of this Agreement executed by each of the parties
hereto;
 
(ii)          Revolving Notes executed by the Borrowers, payable to each Lender
and complying with the terms of Section 2.12(a);
 
(iii)         the Guaranty executed by the Guarantor initially to be a party
thereto;
 
(iv)         an opinion of counsel to the Borrowers and such other Loan Parties
as Administrative Agent may request, addressed to the Administrative Agent and
the Lenders in a form and substance satisfactory to Administrative Agent;
 
(v)          the certificate or articles of incorporation or formation, articles
of organization, certificate of limited partnership, declaration of trust or
other comparable organizational instrument (if any) of each Loan Party certified
as of a recent date by the Secretary of State of the state of formation of such
Loan Party;
 
(vi)         a certificate of good standing (or certificate of similar meaning)
with respect to each Loan Party issued as of a recent date by the Secretary of
State of the state of formation of each such Loan Party and certificates of
qualification to transact business or other comparable certificates issued as of
a recent date by each Secretary of State (and any state department of taxation,
as applicable) of each state in which such Loan Party is required to be so
qualified and where failure to be so qualified could reasonably be expected to
have a Material Adverse Effect;
 
(vii)        a certificate of incumbency signed by the Secretary or Assistant
Secretary (or other individual performing similar functions) of each Loan Party
with respect to each of the officers of such Loan Party authorized to execute
and deliver the Loan Documents to which such Loan Party is a party, and in the
case of the Borrowers, authorized to execute and deliver on behalf of the
Borrowers Notices of Borrowing, requests for Letters of Credit, Notices of
Conversion and Notices of Continuation;
 
(viii)       copies certified by the Secretary or Assistant Secretary (or other
individual performing similar functions) of each Loan Party of (A) the by-laws
of such Loan Party, if a corporation, the operating agreement, if a limited
liability company, the partnership agreement, if a limited or general
partnership, or other comparable document in the case of any other form of legal
entity and (B) all corporate, partnership, member or other necessary action
taken by such Loan Party to authorize the execution, delivery and performance of
the Loan Documents to which it is a party;
 
(ix)          a Borrowing Base Certificate calculated as of the Agreement Date;
 
 
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(x)           a Compliance Certificate calculated on a pro forma basis for the
Borrowers’ fiscal quarter ending March 31, 2012;
 
(xi)          with respect to each Property identified on Schedule 4.1, each of
the items referred to in Section 6.3 required to be delivered in connection with
any Borrowing Base Property;
 
(xii)         a Transfer Authorizer Designation Form effective as of the
Agreement Date;
 
(xiii)        UCC, tax, judgment and lien search reports with respect to the
Borrowers (or a Subsidiary if any Borrowing Base Property is owned by a
Subsidiary) and each Borrowing Base Property in all necessary or appropriate
jurisdictions indicating that there are no Liens of record on such Property
other than Permitted Liens;
 
(xiv)        copies of all Material Contracts and Specified Derivatives
Contracts in existence on the Agreement Date;
 
(xv)         copies of the form of Tenant Lease (if any) to be used for each
Borrowing Base Property from the Agreement Date until the Maturity Date and each
Tenant Lease entered into as of the Agreement Date with respect to such
Property;
 
(xvi)        the Fee Letter;
 
(xvii)       evidence that the Fees, if any, then due and payable under
Section 3.5, together with all other fees, expenses and reimbursement amounts
due and payable to the Administrative Agent and any of the Lenders, including
without limitation, the fees and expenses of counsel to the Administrative
Agent, have been paid;
 
(xviii)      insurance certificates, or other evidence, providing that the
insurance coverage required under Section 8.5 (including, without limitation,
both property and liability insurance) is in full force and effect and stating
that the coverage shall not be cancelable or materially changed without ten (10)
days prior written notice to the Administrative Agent of any cancellation for
nonpayment or premiums, and not less than thirty (30) days prior written notice
to the Administrative Agent of any other cancellation or any modification
(including a reduction in coverage), together with appropriate evidence that the
Administrative Agent, for its benefit and the benefit of the Lenders, the
Issuing Bank, and the Specified Derivatives Providers is named as a lender’s
loss payee and additional insured, as appropriate, on all insurance policies
that the Borrowers, any Loan Party or any other Subsidiary actually maintains
with respect to any Property and improvements on such Property; and
 
(xix)         such other documents, agreements and instruments as the
Administrative Agent, or any Lender through the Administrative Agent, may
reasonably request; and
 
(b)           In the good faith judgment of the Administrative Agent:
 
(i)            there shall not have occurred or become known to the
Administrative 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 Borrowers and
their Subsidiaries delivered to the Administrative Agent and the Lenders prior
to the Agreement Date that has had or could reasonably be expected to result in
a Material Adverse Effect;
 
 
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(ii)           no litigation, action, suit, investigation or other arbitral,
administrative or judicial proceeding shall be pending or, to Borrower’s
knowledge, threatened which could reasonably be expected to (A) result in a
Material Adverse Effect or (B) restrain or enjoin, impose materially burdensome
conditions on, or otherwise materially and adversely affect, the ability of the
Borrowers or any other Loan Party to fulfill its obligations under the Loan
Documents to which it is a party;
 
(iii)           the Borrowers and the other Loan Parties shall have received all
approvals, consents and waivers, and shall have made or given all necessary
filings and notices as shall be required to consummate the transactions
contemplated hereby without the occurrence of any default under, conflict with
or violation of (A) any Applicable Law or (B) any agreement, document or
instrument to which any Loan Party is a party or by which any of them or their
respective properties is bound;
 
(iv)           the Borrowers and each other Loan Party shall have provided all
information requested by the Administrative Agent and each Lender in order to
comply with the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law
October 26, 2001));
 
(v)           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; and
 
(vi)           the Parent, Borrowers and their Subsidiaries and Affiliates shall
have permanently reduced any and all commitments available under the Wells Fargo
Repurchase Line of Credit to an aggregate amount not to exceed $12,000,000.
 
Section 6.2            Conditions Precedent to All Loans and Letters of Credit.
 
The obligations of (i) Lenders to make any Loans and (ii) the Issuing Bank to
issue Letters of Credit are each subject to the further conditions precedent
that:  (a) no Default or Event of Default shall exist as of the date of the
making of such Loan or date of issuance of such Letter of Credit or would exist
immediately after giving effect thereto, and no violation of the limits
described in Section 2.16 would occur after giving effect thereto; (b) the
representations and warranties made or deemed made by the Borrowers and each
other Loan Party in the Loan Documents to which any of them is a party, shall be
true and correct in all material respects (except in the case of a
representation or warranty qualified by materiality, in which case such
representation or warranty shall be true and correct in all respects) on and as
of the date of the making of such Loan 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 correct in all material respects (except in the case of a
representation or warranty qualified by materiality, in which case such
representation or warranty shall be true and correct in all respects) on and as
of such earlier date) and except for changes in factual circumstances
specifically and expressly permitted hereunder and (c) in the case of the
borrowing of Revolving Loans, the Administrative Agent shall have received a
timely Notice of Borrowing.  Each Credit Event shall constitute a certification
by the Borrowers 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
Borrowers otherwise notifies the Administrative Agent prior to the date of such
Credit Event, as of the date of the occurrence of such Credit Event).  In
addition, the Borrowers shall be deemed to have represented to the
Administrative Agent and the Lenders at the time any Loan is made or any Letter
of Credit is issued that all conditions to the making of such Loan or issuing of
such Letter of Credit contained in this Article V have been satisfied.  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 Administrative Agent and
the other Lenders that the conditions precedent for initial Loans set forth in
Sections 6.1 and 6.2 that have not previously been waived by the Lenders in
accordance with the terms of this Agreement have been satisfied.
 
 
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Section 6.3            Conditions Precedent to a Property Becoming a Borrowing
Base Property.
 
No Property shall become a Borrowing Base Property until the Borrowers shall
have (or shall have caused to be) executed and delivered to the Administrative
Agent all documents and instruments required under Section 4.1, and the
Requisite Lenders shall have approved of such Property as provided in such
Section, and the Borrowers shall have (or shall cause to be) executed and
delivered to the Administrative Agent the following instruments, documents and
agreements in respect of such Property, each to be in form and substance
satisfactory to the Administrative Agent:
 
(a)           A Security Deed encumbering such Property in favor of the
Administrative Agent for its benefit and the benefit of the Lenders, the Issuing
Bank, and each Specified Derivatives Provider, the form of such Security Deed to
be modified as appropriate to conform to the Applicable Laws of the jurisdiction
in which such Property is located;
 
(b)           If requested by Administrative Agent, an assignment of leases and
rents, in form and substance satisfactory to the Administrative Agent and
modified as appropriate to conform to the Applicable Laws of the jurisdiction in
which such Property is located;
 
(c)           A Hazardous Materials Indemnity Agreement;
 
(d)           A Property Management Contract Assignment covering the Property
Management Agreement, if any, for such Property;
 
(e)           If requested by the Administrative Agent, collateral assignments
executed by the Borrowers or any other Loan Party in favor of the Administrative
Agent for its benefit and the benefit of the Lenders, the Issuing Bank and each
Specified Derivatives Provider of the other Material Contracts relating to the
use, occupancy, operation, maintenance, enjoyment or ownership of such Property;
 
(f)           An ALTA 2006 Form mortgagee’s Policy of Title Insurance (without
any creditor’s rights exclusion) or other form acceptable to the Administrative
Agent in favor of the Administrative Agent for its benefit and the benefit of
the Lenders, the Issuing Bank and each Specified Derivatives Provider with
respect to such Property, including endorsements with respect to such items of
coverage as the Administrative Agent may request and which endorsements are
available, in the amount of coverage required in the following sentence, issued
by a title insurance company acceptable to the Administrative Agent and with
reinsurance (with direct access agreements) with title insurance companies
acceptable to the Administrative Agent, showing the fee simple, estate for years
or leasehold title, as the case may be, to the land and improvements described
in the applicable Security Deed as vested in the Borrowers or a Wholly Owned
Subsidiary, and insuring that the Lien granted by such Security Deed is a valid
Lien against said property, subject only to such restrictions, encumbrances,
easements and reservations as are acceptable to the Administrative Agent.  The
amount of coverage under such policy must equal (i) to the greater of 110%
of:  (x) the As-Is Appraised Value of such Property (excluding the value of any
personal property located at such Property) and (y) the Borrowing Base Value of
such Property at such time, if such Property is not located in a Tie-In
Jurisdiction or (ii) the Borrowing Base Value of such Property at such time if
such Property is located in a Tie-In Jurisdiction.  With respect to the Kroger
Portfolio such policy shall (i) insure Borrowers’ option to (A) purchase the fee
simple title to the Property or (B) enter into a ground lease and (ii) insure
that the lien granted by the applicable Security Deed remains valid if Borrowers
elect to exercise their option to purchase the fee simple title or to enter into
a ground lease;
 
 
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(g)           Copies of all documents of record reflected in Schedule A and
Schedule B of such Policy of Title Insurance;
 
(h)           If such Property is located in a Tie-In Jurisdiction, endorsements
to all other existing title insurance policies issued to the Administrative
Agent with respect to all other Properties located in Tie-In Jurisdictions
reflecting an increase in the aggregate insured amount under the “tie-in”
endorsements to an amount equal to the aggregate amount of the Borrowing Base
Values of all such Properties (including the Property to be included as a
Borrowing Base Property) but in no event in an amount in excess of the aggregate
amount of the Commitments;
 
(i)           A current or currently certified survey of such Property certified
by a surveyor licensed in the applicable jurisdiction to have been prepared in
accordance with the then effective Minimum Standard Detail Requirements for
ALTA/ACSM Land Title Surveys;
 
(j)           Estoppel certificates and subordination, non-disturbance and
attornment agreements from each tenant leasing any of such Property as may be
reasonably requested by the Administrative Agent;
 
(k)           Estoppel certificates and ground lessor agreements from each
ground lessor leasing any of such Property to a Borrower in form and substance
as may be reasonably requested by the Administrative Agent;
 
(l)           An estoppel certificate with respect to the option and
subordination agreements affecting the Property in the Kroger Portfolio from the
Remainderman Trust in form and substance as may be reasonably requested by the
Administrative Agent, which shall include, without limitation, confirmation that
such Remainderman Trust is an owner-trust;
 
(m)         An estoppel certificate with respect to the tripartite agreements
affecting the Property in the Kroger Portfolio from the Remainderman Trust,
Kroger and the applicable Borrower in form and substance as may be reasonably
requested by the Administrative Agent;
 
(n)          An opinion of counsel admitted to practice law in the jurisdiction
in which such Property is located and acceptable to the Administrative Agent,
addressed to the Administrative Agent, each Lender, the Issuing Bank and each
Specified Derivatives Provider covering such legal matters relating to the
transactions contemplated hereby as the Administrative Agent may reasonably
request; and
 
(o)          Such other instruments, documents, agreements, financing
statements, certificates, opinions and other Security Documents as the
Administrative agent may reasonably request.
 
ARTICLE VII  REPRESENTATIONS AND WARRANTIES
 
Section 7.1           Representations and Warranties.
 
In order to induce the Administrative Agent and each Lender to enter into this
Agreement and to make Loans and, in the case of the Issuing Bank, to issue
Letters of Credit, each Borrower and Parent represents and warrants to the
Administrative Agent, the Issuing Bank and each Lender as follows:
 
(a)           Organization; Power; Qualification.  Each of the Borrowers, the
other Loan Parties and the other Subsidiaries is a corporation, partnership or
other legal entity, duly organized or formed, validly existing and in good
standing under the jurisdiction of its incorporation or formation, has the power
and authority to own or lease its respective properties and to carry on its
respective business as now 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 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.
 
 
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(b)           Ownership Structure.  Part I of Schedule 7.1(b) is, as of the
Agreement Date, a complete and correct list of all Subsidiaries of the Parent
setting forth for each such Subsidiary, (i) the jurisdiction of organization of
such Subsidiary, (ii) each Person holding any Equity Interest in such
Subsidiary, (iii) the nature of the Equity Interests held by each such Person
and (iv) the percentage of ownership of such Subsidiary represented by such
Equity Interests.  Each of the Parent and its Subsidiaries owns, free and clear
of all Liens (other than Permitted Liens), and has the unencumbered right to
vote, all outstanding Equity Interests in each Person shown to be held by it on
such Schedule, (B) all of the issued and outstanding capital stock of each such
Person organized as a corporation is validly issued, fully paid and
nonassessable and (C) there are no outstanding subscriptions, options, warrants,
commitments, preemptive rights or agreements of any kind (including, without
limitation, any stockholders’ or voting trust agreements) for the issuance,
sale, registration or voting of, or outstanding securities convertible into, any
additional shares of capital stock of any class, or partnership or other
ownership interests of any type in, any such Person.  As of the Agreement Date,
Part II of Schedule 7.1(b) correctly sets forth all Unconsolidated Affiliates of
the Borrowers, 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 Borrowers.
 
(c)           Authorization of Loan Documents and Borrowings.  The Borrowers
have the right and power, and have taken all necessary action to authorize it,
to borrow and obtain other extensions of credit hereunder.  Each 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 and the Fee Letter to which it is a party in accordance with their
respective terms and to consummate the transactions contemplated hereby and
thereby.  The Loan Documents and the Fee Letter to which the Borrowers or any
other Loan Party is a party have been duly executed and delivered by the duly
authorized officers of such Person and each is a legal, valid and binding
obligation of such Person enforceable against such Person in accordance with its
respective terms, except as the same may be limited by bankruptcy, insolvency,
and other similar laws affecting the rights of creditors generally and the
availability of equitable remedies for the enforcement of certain obligations
(other than the payment of principal) contained herein or therein and as may be
limited by equitable principles generally.
 
(d)           Compliance of Loan Documents with Laws.  The execution, delivery
and performance of this Agreement, the other Loan Documents to which any Loan
Party is a party and of the Fee Letter 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 Borrowers or any other Loan Party; (ii) conflict with,
result in a breach of or constitute a default under the organizational documents
of any Loan Party, or any indenture, agreement or other instrument to which any
Loan Party is a party or by which it or any of its respective properties may be
bound; or (iii) result in or require the creation or imposition of any Lien upon
or with respect to any property now owned or hereafter acquired by any Loan
Party other than in favor of the Administrative Agent for its benefit and the
benefit of the Lenders and the Issuing Bank.
 
(e)           Compliance with Law; Governmental Approvals.  Each Borrower, the
other Loan Parties and their respective Subsidiaries is in compliance with each
Governmental Approval and all other Applicable Laws relating to it except for
noncompliances which, and Governmental Approvals the failure to possess which,
could not, individually or in the aggregate, reasonably be expected to cause a
Default or Event of Default or have a Material Adverse Effect.
 
(f)           Title to Properties; Liens.  Schedule 7.1(f) is, as of the
Agreement Date, a complete and correct listing of all real estate assets of the
Borrowers, each other Loan Party and each of their respective Subsidiaries,
setting forth, for each such Property, the current occupancy status of such
Property and the status of completion of such Property.  Schedule 4.1 is, as of
the Agreement Date, a complete and correct listing of all Borrowing Base
Properties.  Each Borrower, each other Loan Party and each of their respective
Subsidiaries has good, marketable and legal title to, or a valid leasehold
interest in, its respective assets.  None of the Collateral is subject to any
Lien other than Permitted Liens. Each Property included in the calculation of
the Borrowing Base satisfies all requirements under the Loan Documents for being
an Eligible Property.
 
(g)           Existing Indebtedness; Total Liabilities.  Part I of
Schedule 7.1(g) is, as of the Agreement Date, a complete and correct listing of
all Indebtedness (including all Guarantees) of the Borrowers, the other Loan
Parties and their respective Subsidiaries, and if such Indebtedness is secured
by any Lien, a description of all of the property subject to such Lien.  As of
the Agreement Date, the Borrowers, the other Loan Parties and their respective
Subsidiaries have performed and are in compliance with all of the terms of such
Indebtedness and all instruments and agreements relating thereto, and no default
or event of default, or event or condition which with the giving of notice, the
lapse of time, or both, would constitute a default or event of default, exists
with respect to any such Indebtedness.  Part II of Schedule 7.1(g) is, as of the
Agreement Date, a complete and correct listing of all Total Liabilities of the
Borrowers, the other Loan Parties and their respective Subsidiaries (excluding
any Indebtedness set forth on Part I of such Schedule).
 
(h)           Material Contracts.  Schedule 7.1(h) is, as of the Agreement Date,
a true, correct and complete listing of all Material Contracts.  Each Borrower,
the other Loan Parties and their respective Subsidiaries that is party to any
Material Contract has performed and is in compliance with all of the terms of
such Material Contract, and no default or event of default, or event or
condition which with the giving of notice, the lapse of time, or both, would
constitute such a default or event of default, exists with respect to any such
Material Contract.
 
(i)           Litigation.  Except as set forth on Schedule 7.1(i), there are no
actions, suits or proceedings pending (nor, to the knowledge of any Loan Party,
are there any actions, suits or proceedings threatened, nor is there any basis
therefor) against or in any other way relating adversely to or affecting the
Borrowers, any other Loan Party, any of their respective Subsidiaries or any of
their respective property in any court or before any arbitrator of any kind or
before or by any other Governmental Authority which, (i) could reasonably be
expected to have a Material Adverse Effect or (ii) in any manner draws into
question the validity or enforceability of any Loan Document or the Fee
Letter.  There are no strikes, slow downs, work stoppages or walkouts or other
labor disputes in progress or threatened relating to, any Loan Party or any of
their respective Subsidiaries.
 
(j)           Taxes.  All federal, state and other tax returns of the Borrowers,
each other Loan Party and each of their respective Subsidiaries required by
Applicable Law to be filed have been duly filed, and all federal, state and
other taxes, assessments and other governmental charges or levies upon, each
Loan Party, each of their respective Subsidiaries and their respective
properties, income, profits and assets which are due and payable have been paid,
except any such nonpayment or non-filing which is at the time permitted under
Section 8.6.  As of the Agreement Date, none of the United States income tax
returns of the Borrowers, any other Loan Party or any of their respective
Subsidiaries is under audit.  All charges, accruals and reserves on the books of
the Borrowers, the other Loan Parties and the other Subsidiaries in respect of
any taxes or other governmental charges are in accordance with GAAP.
 
 
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(k)           Financial Statements.  The Borrowers have furnished to each Lender
copies of (i) the audited consolidated balance sheet of the Parent, Borrowers,
and their consolidated Subsidiaries for the fiscal years ended December 31, 2010
and December 31, 2011, and the related audited consolidated statements of
operations, shareholders’ equity and cash flow for the fiscal years ended on
such dates, with the opinion thereon of McGladrey & Pullen, LLP, and (ii) the
unaudited consolidated balance sheet of the Parent, Borrowers and their
consolidated Subsidiaries for the fiscal quarter ended March 31, 2012, and the
related unaudited consolidated statements of operations, shareholders’ equity
and cash flow of the Parent, Borrowers and their consolidated Subsidiaries for
the fiscal quarter period ended on such date.  Such financial statements
(including in each case related schedules and notes) are complete and correct in
all material respects and present fairly, in accordance with GAAP consistently
applied throughout the periods involved, the consolidated financial position of
the Parent, Borrowers and their consolidated Subsidiaries as at their respective
dates and the results of operations and the cash flow for such periods (subject,
as to interim statements, to changes resulting from normal year-end audit
adjustments).  Neither the Parent, any Borrower nor any of their respective
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 that
would be required to be set forth in its financial statements or notes thereto,
except as referred to or reflected or provided for in said financial statements.
 
(l)           No Material Adverse Change.  Since March 31, 2012, there has been
no event, change, circumstance or occurrence that could reasonably be expected
to have a Material Adverse Effect.  Each Borrower, the other Loan Parties and
their respective Subsidiaries is Solvent.
 
(m)         Operating Statements.  Each of the operating statements pertaining
to each of the Borrowing Base Properties then included in calculations of the
Borrowing Base Value delivered by the Borrowers to the Administrative Agent in
accordance with Section 9.4(e) fairly presents the Net Operating Income of each
such Borrowing Base Property for the period then ended.
 
(n)          ERISA.
 
(i)           Each Benefit Arrangement is in compliance with the applicable
provisions of ERISA, the Internal Revenue Code and other Applicable Laws in all
material respects.  Except with respect to Multiemployer Plans, each Qualified
Plan (A) has received a favorable determination from the Internal Revenue
Service applicable to such Qualified Plan’s current remedial amendment cycle (as
defined in Revenue Procedure 2007-44 or “2007-44” for short), (B) has timely
filed for a favorable determination letter from the Internal Revenue Service
during its staggered remedial amendment cycle (as defined in 2007-44) and such
application is currently being processed by the Internal Revenue Service,
(C) had filed for a determination letter prior to its “GUST remedial amendment
period” (as defined in 2007-44) and received such determination letter and the
staggered remedial amendment cycle first following the GUST remedial amendment
period for such Qualified Plan has not yet expired, or (D) is maintained under a
prototype plan and may rely upon a favorable opinion letter issued by the
Internal Revenue Service with respect to such prototype plan.  To the best
knowledge of the Borrowers, nothing has occurred which would cause the loss of
its reliance on each Qualified Plan’s favorable determination letter or opinion
letter.
 
(ii)           With respect to any Benefit Arrangement that is a retiree welfare
benefit arrangement, all amounts have been accrued on the applicable ERISA
Group’s financial statements in accordance with FASB ASC 715.  The “benefit
obligation” of all Plans does not exceed the “fair market value of plan assets”
for such Plans by more than $10,000,000 all as determined by and with such terms
defined in accordance with FASB ASC 715.
 
 
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(iii)           Except as could not reasonably be expected, individually or in
the aggregate, to have a Material Adverse Effect:  (i) no ERISA Event has
occurred or is expected to occur; (ii) there are no pending, or to the best
knowledge of the Borrowers, threatened, claims, actions or lawsuits or other
action by any Governmental Authority, plan participant or beneficiary with
respect to a Benefit Arrangement; (iii) there are no violations of the fiduciary
responsibility rules with respect to any Benefit Arrangement; and (iv) no member
of the ERISA Group has engaged in a non-exempt “prohibited transaction,” as
defined in Section 406 of ERISA and Section 4975 of the Internal Revenue Code,
in connection with any Plan, that would subject any member of the ERISA Group to
a tax on prohibited transactions imposed by Section 502(i) of ERISA or
Section 4975 of the Internal Revenue Code.
 
(o)           Absence of Default.  None of the Borrowers or any other Loan
Parties or any of their respective Subsidiaries is in default under its
certificate or articles of incorporation or formation, bylaws, partnership
agreement or other similar organizational documents, and no event has occurred,
which has not been remedied, cured or waived:  (i) which constitutes a Default
or an Event of Default; or (ii) which constitutes, or which with the passage of
time, the giving of notice, or both, would constitute, a default or event of
default by, any Loan Party or any of their respective Subsidiaries under any
agreement (other than this Agreement) or judgment, decree or order to which any
such Person is a party or by which any such Person or any of its respective
properties may be bound where such default or event of default could,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
 
(p)           Environmental Laws.  In the ordinary course of business and from
time to time each Borrower, each other Loan Party and each of their respective
Subsidiaries conducts reviews of the effect of Environmental Laws on its
respective business, operations and properties, including without limitation,
its respective Properties, in the course of which the Borrowers, such other Loan
Party or their respective Subsidiaries identifies and evaluates associated
actual and potential liabilities and costs (including, without limitation,
determining whether any capital or operating expenditures are required for
clean-up or closure of properties presently or previously owned, determining
whether any capital or operating expenditures are required to achieve or
maintain compliance in all material respects with Environmental Laws or required
as a condition of any Governmental Approval, any contract, or any related
constraints on operating activities, determining whether any costs or
liabilities exist in connection with on-site or off-site treatment, storage,
handling and disposal of wastes or Hazardous Materials, and determining whether
any actual or potential liabilities to third parties, including employees, and
any related costs and expenses exist).  Each Borrower, each other Loan Party and
their respective Subsidiaries:  (i) is in compliance with all Environmental Laws
applicable to its business, operations and the Properties, (ii) has obtained all
Governmental Approvals which are required under Environmental Laws, and each
such Governmental Approval is in full force and effect, and (iii) is in
compliance with all terms and conditions of such Governmental Approvals, where
with respect to each of the immediately preceding clauses (i) through (iii) the
failure to obtain or to comply with could reasonably be expected to have a
Material Adverse Effect.  Except for any of the following matters that could not
reasonably be expected to have a Material Adverse Effect, no Loan Party has any
knowledge of, or has received notice of, any past, present, or pending releases,
events, conditions, circumstances, activities, practices, incidents, facts,
occurrences, actions, or plans that, with respect to any Loan Party or any of
their respective Subsidiaries, their respective businesses, operations or with
respect to the Properties, may:  (x) cause or contribute to an actual or alleged
violation of or noncompliance with Environmental Laws, (y) cause or contribute
to any other potential common-law or legal claim or other liability, or
(z) cause any of the Properties to become subject to any restrictions on
ownership, occupancy, use or transferability under any Environmental Law or
require the filing or recording of any notice, approval or disclosure document
under any Environmental Law and, with respect to the immediately preceding
clauses (x) through (z) is based on or related to the on-site or off-site
manufacture, generation, processing, distribution, use, treatment, storage,
disposal, transport, removal, clean up or handling, or the emission, discharge,
release or threatened release of any wastes or Hazardous Material, or any other
requirement under Environmental Law.  There is no civil, criminal, or
administrative action, suit, demand, claim, hearing, notice, or demand letter,
mandate, order, lien, request, investigation, or proceeding pending or, to the
Borrowers’ knowledge after due inquiry, threatened, against the Borrowers, any
other Loan Party or any of their respective Subsidiaries relating in any way to
Environmental Laws which, reasonably could be expected to have a Material
Adverse Effect.  None of the Properties is listed on or proposed for listing on
the National Priority List promulgated pursuant to the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 and its
implementing regulations, or any state or local priority list promulgated
pursuant to any analogous state or local law.  To the Borrowers’ knowledge, no
Hazardous Materials generated at or transported from any of the Properties is or
has been transported to, or disposed of at, any location that is listed or
proposed for listing on the National Priority List or any analogous state or
local priority list, or any other location that is or has been the subject of a
clean-up, removal or remedial action pursuant to any Environmental Law, except
to the extent that such transportation or disposal could not reasonably be
expected to result in a Material Adverse Effect.
 
 
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(q)           Investment Company.  None of the Borrowers, any other Loan Party
or any of their respective Subsidiaries is (i) an “investment company” or a
company “controlled” by an “investment company” within the meaning of the
Investment Company Act of 1940, as amended, or (ii) subject to any other
Applicable Law which purports to regulate or restrict its ability to borrow
money or obtain other extensions of credit or to consummate the transactions
contemplated by this Agreement or to perform its obligations under any Loan
Document to which it is a party.
 
(r)           Margin Stock.  None of the Borrowers, any other Loan Party or any
of their respective Subsidiaries 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.
 
(s)          Affiliate Transactions.  Except for Funded Intercompany Debt or as
permitted by Section 10.8 or as otherwise set forth on Schedule 7.1(s), none of
the Borrowers, any other Loan Party or any of their respective Subsidiaries is a
party to or bound by any agreement or arrangement (whether oral or written) with
any Affiliate.
 
(t)           Intellectual Property.  Each of the Loan Parties and each of their
respective Subsidiaries owns or has the right to use, under valid license
agreements or otherwise, all patents, licenses, franchises, trademarks,
trademark rights, service marks, service mark rights,  trade names, trade name
rights, trade secrets and copyrights (collectively, “Intellectual Property”)
necessary to the conduct of its businesses, without known conflict with any
patent, license, franchise, trademark, trademark right, service mark, service
mark right, trade secret, trade name, copyright, or other proprietary right of
any other Person.  All such Intellectual Property is fully protected and/or duly
and properly registered, filed or issued in the appropriate office and
jurisdictions for such registrations, filing or issuances.  No material claim
has been asserted by any Person with respect to the use of any such Intellectual
Property by the Borrowers, any other Loan Party or any of their respective
Subsidiaries, or challenging or questioning the validity or effectiveness of any
such Intellectual Property.  The use of such Intellectual Property by the
Borrowers, the other Loan Parties and their respective Subsidiaries does not
infringe on the rights of any Person.
 
(u)           Business.  As of the Agreement Date, the business of the Loan
Parties and their respective Subsidiaries is limited to acquiring income
producing real estate properties and investments incidental thereto.
 
(v)           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 Borrowers, any other Loan Party or any of
their respective Subsidiaries ancillary to the transactions contemplated hereby.
 
 
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(w)           Accuracy and Completeness of Information.  All written
information, reports and other papers and data (other than financial projections
and other forward looking statements) furnished to the Administrative Agent or
any Lender by, on behalf of, or at the direction of, the Borrowers, any other
Loan Party or any of their respective Subsidiaries were, at the time the same
were so furnished, complete and correct in all material respects, to the extent
necessary to give the recipient a true and accurate knowledge of the subject
matter, or, in the case of financial statements, present fairly, in accordance
with GAAP consistently applied throughout the periods involved, the financial
position of the Persons involved as at the date thereof and the results of
operations for such periods (subject, as to interim statements, to changes
resulting from normal year end audit adjustments and absence of full footnote
disclosure).  All financial projections and other forward looking statements
prepared by or on behalf of the Borrowers, any other Loan Party or any of their
respective Subsidiaries that have been or may hereafter be made available to the
Administrative Agent or any Lender were or will be prepared in good faith based
on reasonable assumptions.  No fact is known to any Loan Party which has had, or
may in the future have (so far as any Loan Party can reasonably foresee), a
Material Adverse Effect which has not been set forth in the financial statements
referred to in Section 7.1(k) or in such information, reports or other papers or
data or otherwise disclosed in writing to the Administrative Agent and the
Lenders.  No document furnished or written statement made to the Administrative
Agent or any Lender in connection with the negotiation, preparation or execution
of, or pursuant to, this Agreement or any of the other Loan Documents contains
or will contain any untrue statement of a material fact, or omits or will omit
to state a material fact necessary in order to make the statements contained
therein not misleading.
 
(x)           Not Plan Assets; No Prohibited Transactions.  None of the assets
of the Borrowers, any other Loan Party or any of their respective Subsidiaries
constitutes “plan assets” within the meaning of ERISA, the Internal Revenue Code
and the respective regulations promulgated thereunder.  Assuming that no Lender
funds any amount payable by it hereunder with “plan assets,” as that term is
defined in 29 C.F.R. 2510.3-101, the execution, delivery and performance of this
Agreement and the other Loan Documents and the Fee Letter, and the extensions of
credit and repayment of amounts hereunder, do not and will not constitute
“prohibited transactions” under ERISA or the Internal Revenue Code.
 
(y)           OFAC.  None of the Borrowers, any of the other Loan Parties, any
of their respective Subsidiaries, or any other Affiliate of the Borrowers: (i)
is a person named on the list of Specially Designated Nationals or Blocked
Persons maintained by the U.S. Department of the Treasury’s Office of Foreign
Assets Control (“OFAC”) available at
 
http://www.treas.gov/offices/enforcement/ofac/index.shtml or as otherwise
published from time to time; (ii) is (A) an agency of the government of a
country, (B) an organization controlled by a country, or (C) a person resident
in a country that is subject to a sanctions program identified on the list
maintained by OFAC and available at
http://www.treas.gov/offices/enforcement/ofac/index.shtml, or as otherwise
published from time to time, as such program may be applicable to such agency,
organization or person; or (iii) derives any of its assets or operating income
from investments in or transactions with any such country, agency, organization
or person; and none of the proceeds from any Loan, and no Letter of Credit, will
be used to finance any operations, investments or activities in, or make any
payments to, any such country, agency, organization, or person.
 
(z)           REIT Status.  The Parent qualifies as, and has elected to be
treated as, a REIT and is in compliance with all requirements and conditions
imposed under the Internal Revenue Code to allow the Parent to maintain its
status as a REIT.
 
 
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(aa)           Security Interests.  Each of the Security Documents creates, as
security for the Obligations and the Specified Derivatives Obligations, a valid
and enforceable Lien on all of the Collateral, superior to and prior to the
rights of all third Persons and subject to no other Liens (except for Permitted
Liens), in favor of the Administrative Agent for its benefit and the benefit of
the Lenders, the Issuing Bank and each Specified Derivatives Provider.
 
Section 7.2             Survival of Representations and Warranties, Etc.
 
All statements contained in any certificate, financial statement or other
instrument delivered by or on behalf of any Loan Party or any of their
respective Subsidiaries to the Administrative Agent or any Lender pursuant to or
in connection with this Agreement or any of the other Loan Documents (including,
but not limited to, any such statement made in or in connection with any
amendment thereto or any statement contained in any certificate, financial
statement or other instrument delivered by or on behalf of any Loan Party prior
to the Agreement Date and delivered to the Administrative Agent or any Lender in
connection with the underwriting or closing the transactions contemplated
hereby) shall constitute representations and warranties made by the Borrowers
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 date on which any extension of the Maturity Date is
effectuated pursuant to Section 2.14 and at and as of the date of the occurrence
of each Credit Event, except to the extent that such representations and
warranties expressly relate solely to an earlier date (in which case such
representations and warranties shall have been true and correct in all material
respects (except in the case of a representation or warranty qualified by
materiality, in which case such representation or warranty shall be true and
correct in all respects) on and as of such earlier date) and except for changes
in factual circumstances expressly and 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.
 
ARTICLE VIII  AFFIRMATIVE COVENANTS
 
For so long as this Agreement is in effect, unless the Requisite Lenders (or, if
required pursuant to Section 13.7, all of the Lenders) shall otherwise consent
in the manner provided for in Section 13.7, each Borrower and Parent shall
comply with the following covenants:
 
Section 8.1             Preservation of Existence and Similar Matters.
 
Except as otherwise permitted under Section 10.4, the Borrowers and Parent
shall, and shall cause each other Loan Party to, preserve and maintain its
respective existence, rights, franchises, licenses and privileges in the
jurisdiction of its incorporation or formation and qualify and remain qualified
and authorized to do business in each jurisdiction in which the character of its
properties or the nature of its business requires such qualification and
authorization and where the failure to be so authorized and qualified could
reasonably be expected to have a Material Adverse Effect.
 
Section 8.2             Compliance with Applicable Law.
 
The Borrowers and Parent shall, and shall cause each other Loan Party and each
other Subsidiary to, comply with all Applicable Law, including the obtaining of
all Governmental Approvals, the failure with which to comply could reasonably be
expected to have a Material Adverse Effect.
 
 
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Section 8.3             Maintenance of Property.
 
In addition to the requirements of any of the other Loan Documents, the
Borrowers and Parent shall, and shall cause each other Loan Party to,
(a) protect and preserve all of its respective material properties, including,
but not limited to, all Intellectual Property necessary to the conduct of its
respective business, and maintain in good repair, working order and condition
all tangible properties, ordinary wear and tear excepted, and (b) from time to
time make or cause to be made all needed and appropriate repairs, renewals,
replacements and additions to such properties, so that the business carried on
in connection therewith may be properly and advantageously conducted at all
times.
 
Section 8.4             Conduct of Business.
 
The Borrowers and Parent shall, and shall cause each other Loan Party and each
other Subsidiary to, carry on its respective businesses as described in
Section 7.1(u).
 
Section 8.5             Insurance.
 
In addition to the requirements of any of the other Loan Documents, the
Borrowers and Parent shall, and shall cause each other Loan Party to, maintain
insurance (on a 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.  The Borrowers shall from time to time deliver to the
Administrative Agent upon request a detailed list, together with copies of all
policies of the insurance then in effect, stating the names of the insurance
companies, the amounts and rates of the insurance, the dates of the expiration
thereof and the properties and risks covered thereby.  Such insurance shall, in
any event, include terrorism coverage (on those Borrowing Base Properties where
customarily required by Administrative Agent or any Lender for comparable
properties in the same geographic area) and all of the following:
 
(a)           Except for self-insurance provided by the tenant at the Abbott
Property, the Baxter Property, the Kroger Portfolio and the Michelin Property as
permitted under the applicable Tenant Lease, insurance against loss to the
Borrowing Base Properties on an “all risk” policy form, covering insurance risks
no less broad than those covered under a Special Multi Peril (SMP) policy form,
which contains a Commercial ISO “Causes of Loss-Special Form,” in the then
current form, and such other risks as Administrative Agent may reasonably
require, in amounts equal to the full replacement cost of such Borrowing Base
Properties including fixtures and equipment, Borrowers’ interest in leasehold
improvements, and the cost of debris removal, with, if required by the
Administrative Agent, an agreed amount endorsement, and with deductibles of not
more than $25,000, except that any deductibles for any insurance covering damage
by windstorm may be in amounts up to 5% of the value of such Borrowing Base
Property insured;
 
(b)           Business income insurance in amounts sufficient to pay during any
period in which a Borrowing Base Property may be damaged or destroyed, for a
period of twelve (12) months; (i) at least 100% of all rents and (ii) all
amounts (including, but not limited to, all taxes, assessments, utility charges
and insurance premiums) required to be paid by tenants of such Borrowing Base
Property;
 
(c)           During the making of any alterations or improvements to a
Borrowing Base Property, carry or cause to be carried builder’s completed value
risk insurance against “all risks of physical loss” for the full replacement
cost of the construction of such Borrowing Base Properties;
 
(d)           Insurance against loss or damage by flood or mud slide in
compliance with the Flood Disaster Protection Act of 1973, as amended from time
to time, if the Borrowing Base Properties are now, or at any time while the
Obligations or any portion thereof remains unpaid shall be, situated in any area
which an appropriate Governmental Authority designates as a special flood hazard
area, in amounts equal to the full replacement value of all above grade
structures on the Borrowing Base Properties, or as such lesser amounts as may be
available under Federal flood insurance programs;
 
 
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(e)           Commercial general public liability insurance, with the location
of the Borrowing Base Properties designated thereon, against death, bodily
injury and property damage arising on, about or in connection with such
Borrowing Base Properties, with the applicable Borrower listed as the named
insured, with such limits as the applicable Borrower may reasonably require (but
in no event less than $5,000,000);
 
(f)           Insurance which complies with the workers’ compensation and
employers’ liability laws of all states in which Borrowers and Parent shall be
required to maintain such insurance; and
 
(g)          Such other insurance, including, without limitation, earthquake and
environmental coverages, relating to the Borrowing Base Properties and the uses
and operation thereof as administrative Agent may, from time to time, reasonably
require.
 
Section 8.6           Payment of Taxes and Claims.
 
The Borrowers and Parent shall, and shall cause each 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 such Person in
accordance with GAAP.
 
Section 8.7           Books and Records; Inspections.
 
The Borrowers and Parent shall, and shall cause each other Loan Party and each
of their respective Subsidiaries to, keep proper books of record and account in
which full, true and correct entries shall be made of all dealings and
transactions in relation to its business and activities.  The Borrowers and
Guarantor shall, and shall cause each other Loan Party and each of their
respective Subsidiaries to, permit representatives of the Administrative Agent
or any Lender to visit and inspect any of their respective properties, to
examine and make abstracts from any of their respective books and records and to
discuss their respective affairs, finances and accounts with their respective
officers, employees and independent public accountants (in the presence of an
officer of the Borrowers if an Event of Default does not then exist), all at
such reasonable times during business hours and as often as may reasonably be
requested and so long as no Event of Default exists, with reasonable prior
notice.  The Borrowers and Parent shall be obligated to reimburse the
Administrative Agent and the Lenders for their costs and expenses incurred in
connection with the exercise of their rights under this Section only if such
exercise occurs while a Default or Event of Default exists.  If requested by the
Administrative Agent, the Borrowers and Parent shall execute an authorization
letter addressed to its accountants authorizing the Administrative Agent or any
Lender to discuss the financial affairs of the Borrowers and/or Parent, any
other Loan Party or any of their respective Subsidiaries with the Borrowers’
and/or Parent’s accountants.
 
 
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Section 8.8           Use of Proceeds.
 
The Borrowers will use the proceeds of Loans only to provide for the general
working capital needs of the Borrowers and its Subsidiaries and for other
general corporate purposes of the Borrowers and its Subsidiaries, including to
finance acquisitions otherwise permitted under this Agreement and repayment of
the existing Wells Fargo Repurchase Line of Credit.  The Borrowers shall only
use Letters of Credit for the same purposes for which it may use the proceeds of
Loans.  The Borrowers shall not, and shall not permit any other Loan Party or
any of their respective Subsidiaries to, use any part of such proceeds to
purchase or carry, or to reduce or retire or refinance any credit incurred to
purchase or carry, any margin stock (within the meaning of Regulation U or
Regulation X of the Board of Governors of the Federal Reserve System) or to
extend credit to others for the purpose of purchasing or carrying any such
margin stock.
 
Section 8.9           Environmental Matters.
 
The Borrowers and Parent shall, and shall cause each other Loan Party and each
of their respective Subsidiaries to, comply with all Environmental Laws the
failure with which to comply could reasonably be expected to have a Material
Adverse Effect.  The Borrowers and Parent shall comply, and shall cause each
other Loan Party to comply, and the Borrowers and Guarantor shall use, and shall
cause each other Loan Party to use, commercially reasonable efforts to cause all
other Persons occupying, using or present on the Properties to comply, with all
Environmental Laws in all material respects.  The Borrowers and Parent shall,
and shall cause each other Loan Party to, promptly take all actions and pay or
arrange to pay all costs necessary for it and for the Properties to comply in
all material respects with all Environmental Laws and all Governmental
Approvals, including actions to remove and dispose of all Hazardous Materials
and to clean up the Properties as required under Environmental Laws.  The
Borrowers and Parent shall, and shall cause each other Loan Party to, promptly
take all actions necessary to prevent the imposition of any Liens on any of
their respective properties arising out of or related to any Environmental
Laws.  Nothing in this Section shall impose any obligation or liability
whatsoever on the Administrative Agent or any Lender.
 
Section 8.10         Further Assurances.
 
At the Borrowers’ cost and expense and upon request of the Administrative Agent,
the Borrowers and Parent shall, and shall cause each other Loan Party to, duly
execute and deliver or cause to be duly executed and delivered, to the
Administrative Agent such further instruments, documents and certificates, and
do and cause to be done such further acts that may be reasonably necessary or
advisable in the reasonable opinion of the Administrative Agent to carry out
more effectively the provisions and purposes of this Agreement and the other
Loan Documents.
 
Section 8.11         Material Contracts.
 
The Borrowers and Parent shall, and shall cause each other Loan Party and each
of their respective Subsidiaries to, duly and punctually perform and comply with
any and all material representations, warranties, covenants and agreements
expressed as binding upon any such Person under any Material Contract.  The
Borrowers and Parent shall not, and shall not permit any other Loan Party or any
of their respective Subsidiaries to, do or knowingly permit to be done anything
to impair materially the value of any of the Material Contracts.
 
Section 8.12         REIT Status.
 
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The Parent shall, and Borrowers shall cause Parent to, maintain its status as,
and election to be treated as, a REIT under the Internal Revenue Code.
 
Section 8.13         Exchange Listing.
 
The Parent shall, and Borrowers shall cause Parent to, maintain at least one
class of common shares of the Parent having trading privileges on the New York
Stock Exchange or the American Stock Exchange or which is subject to price
quotations on The NASDAQ Stock Market’s National Market System.
 
Section 8.14         Additional Borrowers.
 
(a)           Concurrently with any Property being added to the Borrowing Base,
to the extent that such Property is owned by a Person that is not yet a
Borrower, the Borrowers shall deliver to the Administrative Agent each of the
following in form and substance satisfactory to the Administrative Agent:  (i) 
a Joinder Agreement executed by such Person in the form attached as Exhibit L
and (ii) the items that would have been delivered under subsections (iv) through
(viii), (xiii) and (xviii) of Section 6.1(a) if such Subsidiary had been a
Material Subsidiary on the Agreement Date.  Nothing contained in this
Section shall supersede, modify or otherwise affect the provisions of
Section 4.1.
 
(b)           The Borrowers may request in writing that the Administrative Agent
release, and upon receipt of such request the Administrative Agent shall
release, a Borrower (other than (1) Caplease, LP, (2) Prefco Dix-Neuf LLC so
long as Prefco Nineteen Limited Partnership is a Borrower or (3) CLF Cane Run
Member, LLC so long as CLF Cane Run Louisville, LLC is a Borrower) from the
obligations under the Loan Documents so long as:  (i) such Borrower owns no
Borrowing Base Property; (ii)  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 10.1; (iii) the representations and
warranties made or deemed made by the Borrowers and each other Loan Party in the
Loan Documents to which any of them is a party, shall be true and correct on and
as of the date of such release with the same force and effect as if made on and
as of such date except to the extent that such representations and warranties
expressly relate solely to an earlier date (in which case such representations
and warranties shall have been true and correct on and as of such earlier date)
and except for changes in factual circumstances expressly permitted under the
Loan Documents; and (iv) the Administrative Agent shall have received such
written request at least 10 Business Days (or such shorter period as may be
acceptable to the Administrative Agent) prior to the requested date of
release.  Delivery by the Borrowers to the Administrative Agent of any such
request shall constitute a representation by the Borrowers 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 8.15          SPE Entities.
 
The Parent and Borrowers shall cause each Borrower owning Borrowing Base
Property to at all times be an SPE Entity.
 
Section 8.16          Post Closing Deliverables.
 
Borrowers hereby agree that they will deliver the items set forth below within
the time periods set forth therein:
 
 
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(a)           Promptly after the Agreement Date, and in any event not later than
the fourteenth (14th) day following the Agreement Date, deliver recertified
surveys in favor of Wells Fargo Bank, National Association, as Administrative
Agent, of the Borrowing Base Properties located at 9501 Northshore Drive,
Knoxville, TN and 2020 Mallory Lane, Franklin, TN.
 
(b)           Promptly after the Agreement Date, and in any event not later than
the ninetieth (90th) day following the Agreement Date, deliver a current Phase
II environmental assessment of the Property located at 555 North Daniels Way,
Bloomington, IN, which report (1) has been prepared by an environmental
engineering firm acceptable to the Administrative Agent and (2) complies with
the requirements contained in the Administrative Agent’s guidelines adopted from
time to time by the Administrative Agent to be used in its lending practice
generally and any other environmental assessments or other reports relating to
such Property, together with the completion of any remediation or cleanup
recommended therein.  In the event that Borrower fails to comply with this
clause (b), (i) on or before the ninetieth (90th) day following the Agreement
Date, the Borrowing Base Value allocated to such Borrowing Base Property shall
be fifty percent (50%) of the Borrowing Base Value otherwise allocated such
Borrowing Base Property from and after the ninety-first (91st) day following the
Agreement Date until such time as Borrower complies with this clause (b), and
(ii) on or before the one hundred and twentieth (120th) day following the
Agreement Date, then Administrative Agent shall have the right to remove such
Borrowing Base Property from the Borrowing Base.  Borrower shall promptly repay
any amounts required pursuant to Section 2.9(b)(ii) of this Agreement (A) within
five (5) Business Days after the ninety-first (91st) day following the Agreement
Date in the case of (i) above, and (B) within five (5) Business Days after
Administrative Agent gives Borrower notice of its election to remove such
Property from the Borrowing Base in the case of (ii) above.
 
(c)           Promptly after the Agreement Date, and in any event not later than
the ninetieth (90th) day following the Agreement Date, deliver copies of tank
and pipeline integrity testing (i.e. “tightness” testing) conducted in past 12
months, copies of UST registration, financial insurance, assurance and LUST Fund
status (if any), and copies of all UST repair records with respect to the
Borrowing Base Properties located at (1) 849 North 12th Street, Murray, KY, (2)
302 Brighton Park Blvd., Frankfort, KY and (3) 1670 Starlite Drive, Owensboro,
KY, which information shall be in form and substance acceptable to the
Administrative Agent.  In the event that Borrower fails to comply with this
clause (c), (i) on or before the ninetieth (90th) day following the Agreement
Date, the Borrowing Base Value allocated to such Borrowing Base Properties shall
be fifty percent (50%) of the Borrowing Base Value otherwise allocated such
Borrowing Base Properties from and after the ninety-first (91st) day following
the Agreement Date until such time as Borrower complies with this clause (c),
and (ii) on or before the one hundred and twentieth (120th) day following the
Agreement Date, then Administrative Agent shall have the right to remove such
Borrowing Base Properties from the Borrowing Base.  Borrower shall promptly
repay any amounts required pursuant to Section 2.9(b)(ii) of this Agreement (A)
within five (5) Business Days after the ninety-first (91st) day following the
Agreement Date in the case of (i) above, and (B) within five (5) Business Days
after Administrative Agent gives Borrower notice of its election to remove any
such Property from the Borrowing Base in the case of (ii) above.
 
ARTICLE IX  INFORMATION
 
For so long as this Agreement is in effect, unless the Requisite Lenders (or, if
required pursuant to Section 13.7, all of the Lenders) shall otherwise consent
in the manner set forth in Section 13.7, each Borrower and Parent shall furnish
to the Administrative Agent for distribution to each of the Lenders:
 
 
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Section 9.1            Quarterly Financial Statements.
 
As soon as available and in any event within five (5) days after the same is
required to be filed with the Securities and Exchange Commission (but in no
event later than forty-five (45) days after the end of each of the first, second
and third fiscal quarters of the Parent), the unaudited consolidated balance
sheet of the Parent and its Subsidiaries as at the end of such period and the
related unaudited consolidated statements of operations and cash flows of the
Parent 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 Parent, in his or her
opinion, to present fairly, in accordance with GAAP and in all material
respects, the consolidated financial position of the Parent and its Subsidiaries
as at the date thereof and the results of operations for such period (subject to
normal year-end audit adjustments).
 
Section 9.2            Year-End Statements.
 
As soon as available and in any event within five (5) days after the same is
required to be filed with the Securities and Exchange Commission (but in no
event later than one hundred twenty (120) days after the end of each fiscal year
of the Parent), the audited consolidated balance sheet of the Parent and its
Subsidiaries as at the end of such fiscal year and the related audited
consolidated statements of operations, stockholders’ equity and cash flows of
the Parent and its Subsidiaries for such fiscal year, setting forth in
comparative form the figures as at the end of and for the previous fiscal year,
all of which shall be (a) certified by the chief executive officer or chief
financial officer of the Parent, in his or her opinion, to present fairly, in
accordance with GAAP and in all material respects, the financial position of the
Parent and its Subsidiaries as at the date thereof and the result of operations
for such period and (b) accompanied by the report thereon of independent
certified public accountants of recognized national standing reasonably
acceptable to the Administrative Agent, whose report shall be unqualified and in
scope and substance satisfactory to the Requisite Lenders and who shall have
authorized the Parent to deliver such financial statements and report thereon to
the Administrative Agent and the Lenders pursuant to this Agreement.
 
Section 9.3            Compliance Certificate.
 
At the time the financial statements are furnished pursuant to Sections 9.1 and
9.2, a certificate substantially in the form of Exhibit K (a “Compliance
Certificate”) executed on behalf of the Parent by the chief financial officer of
the Parent (a) setting forth in reasonable detail as of the end of such
quarterly accounting period or fiscal year, as the case may be, the calculations
required to establish whether the Loan Parties were in compliance with the
covenants contained in Section 10.1; (b) stating that no Default or Event of
Default exists, or, if such is not the case, specifying such Default or Event of
Default and its nature, when it occurred and the steps being taken by the
Borrowers with respect to such event, condition or failure; (c) setting forth a
statement of Funds From Operations (to the extent not included with the
information provided pursuant to Sections 9.1 and 9.2 above); and (d) setting
forth a report of newly acquired Properties, including their Net Operating
Income, cost and mortgage debt, if any.
 
Section 9.4            Other Information.
 
(a)           Promptly upon receipt thereof, copies of all reports, if any,
submitted to the Parent or its Board of Directors by its independent public
accountants including, without limitation, any management report;
 
(b)           Within five (5) Business Days of the filing thereof, copies of all
registration statements (excluding the exhibits thereto (unless requested by the
Administrative Agent) and any registration statements on Form S-8 or its
equivalent), reports on Forms 10-K, 10-Q and 8-K (or their equivalents) and all
other periodic reports which any Loan Party or any other Subsidiary shall file
with the Securities and Exchange Commission (or any Governmental Authority
substituted therefor) or any national securities exchange;
 
 
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(c)           Promptly upon the mailing thereof to the shareholders of the
Parent 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 Parent, any Subsidiary or any other Loan Party;
 
(d)           Within forty-five (45) days after the end of each fiscal quarters
of the Parent, a Borrowing Base Certificate setting forth the information to be
contained therein, as of the last day of such fiscal quarter.  The Borrowers
shall also deliver a Borrowing Base Certificate (i) as required pursuant to
Sections 4.1(c) and 4.2(b) and (ii) within five (5) Business Days following a
default, beyond any applicable cure period, under a Ground Lease affecting a
Borrowing Base Property
 
(e)           Within forty-five (45) days after the end of each fiscal quarter
of the Parent, all material financial information maintained on each Borrowing
Base Property, including, but not limited to, operating statements, leasing
status reports, rent rolls and cash flow and property level budgets;
 
(f)           No later than November 30th of each calendar year, balance sheets
and cash flow forecasts of the Parent and its Subsidiaries on a consolidated
basis for each quarter of the next succeeding fiscal year, all itemized in
reasonable detail.  The foregoing shall be accompanied by pro forma
calculations, together with detailed assumptions, required to establish whether
or not the Loan Parties, and when appropriate its consolidated Subsidiaries,
will be in compliance with the covenants contained in Sections 10.1 and at the
end of each fiscal quarter of the next succeeding fiscal year;
 
(g)           No later than thirty (30) days before the end of each fiscal year
of the Parent ending prior to the Maturity Date, a property budget for each
Borrowing Base Property for the coming fiscal year of the Borrower, together
with applicable investment memoranda, if any;
 
(h)           If any ERISA Event shall occur that individually, or together with
any other ERISA Event that has occurred, could reasonably be expected to have a
Material Adverse Effect, a certificate of the chief executive officer or chief
financial officer of the Parent setting forth details as to such occurrence and
the action, if any, which the Parent or applicable member of the ERISA Group is
required or proposes to take;
 
(i)           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 to, or affecting, any Loan Party or any of their
respective Subsidiaries or any of their respective properties, assets or
businesses which could reasonably be expected to have a Material Adverse Effect,
and prompt notice of the receipt of notice that any United States income tax
returns of any Loan Party are being audited;
 
(j)           A copy of any amendment to the certificate or articles of
incorporation or formation, bylaws, partnership agreement or other similar
organizational documents of any Borrower or any other Loan Party within five
(5) Business Days after the effectiveness thereof;
 
(k)          Prompt notice of any change in the senior management of any Loan
Party;
 
 
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(l)           Prompt notice of any change in the business, assets, liabilities,
financial condition, results of operations or business prospects of any Loan
Party or any of their respective Subsidiaries which has had or could reasonably
be expected to have a Material Adverse Effect;
 
(m)         Prompt notice of any disposition of any material assets of any Loan
Party;
 
(n)          Prompt notice of (i) any order, judgment or decree having been
entered against any Loan Party or any of their respective properties or assets,
(ii) the institution of, or threat of, any material action, suit, proceeding or
arbitration against or affecting, any Loan Party, or (iii) any material
development in any action, suit, proceeding, governmental investigation or
arbitration already disclosed;
 
(o)          Prompt notice of the occurrence of any Default or Event of Default
or any event which constitutes or which with the passage of time, the giving of
notice, or otherwise, a Loan Party reasonably expects to constitute a default or
event of default by any Loan Party or any of their respective Subsidiaries under
any Material Contract to which any such Person is a party or by which any such
Person or any of its respective properties may be bound;
 
(p)           Promptly upon entering into any Material Contract or Specified
Derivatives Contract after the Agreement Date, a copy of such contract;
 
(q)           Prompt notice of any order, judgment or decree in excess of (i)
$100,000 having been entered against any Borrower or any of its respective
properties or assets, or (ii) $1,000,000 having been entered against Parent or
any of its respective properties or assets;
 
(r)           Any notification of a material violation of any Applicable Law or
any inquiry shall have been received by any Loan Party from any Governmental
Authority;
 
(s)           Promptly upon the request of the Administrative Agent, evidence of
the Parent’s calculation of the Ownership Share with respect to Borrowers, a
Subsidiary or an Unconsolidated Affiliate, such evidence to be in form and
detail satisfactory to the Administrative Agent;
 
(t)           Promptly, upon any change in the Parent’s Credit Rating, a
certificate stating that the Parent’s Credit Rating has changed and the new
Credit Rating that is in effect;
 
(u)           Promptly, upon each request, information identifying the Loan
Parties as a Lender may request in order to comply with the USA Patriot Act
(Title III of Pub. L. 107-56 (signed into law October 26, 2001));
 
(v)           Promptly, and in any event within 3 Business Days after the
Borrowers and/or Parent obtains knowledge thereof, written notice of the
occurrence of any of the following:  (i) the Borrowers or any Loan Party shall
receive notice that any violation of or noncompliance with any Environmental Law
has or may have been committed or is threatened; (ii) the Borrowers or any Loan
Party shall receive notice that any administrative or judicial complaint, order
or petition has been filed or other proceeding has been initiated, or is about
to be filed or initiated against any such Person alleging any violation of or
noncompliance with any Environmental Law or requiring any such Person to take
any action in connection with the release or threatened release of Hazardous
Materials; (iii) the Borrowers or any Loan Party shall receive any notice from a
Governmental Authority or private party alleging that any such Person may be
liable or responsible for any costs associated with a response to, or
remediation or cleanup of, a release or threatened release of Hazardous
Materials or any damages caused thereby; or (iv) the Borrowers or any Loan Party
shall receive notice of any other fact, circumstance or condition that could
reasonably be expected to form the basis of an environmental claim, and the
matters covered by notices referred to in any of the immediately preceding
clauses (i) through (iv), whether individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect;
 
 
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(w)          Promptly upon the request of the Administrative Agent, the
Derivatives Termination Value in respect of any Specified Derivatives Contract
from time to time outstanding; and
 
(x)           From time to time and promptly upon each request, such data,
certificates, reports, statements, opinions of counsel, documents or further
information regarding any Property or the business, assets, liabilities,
financial condition, results of operations or business prospects of any Loan
Party or any of their respective Subsidiaries as the Administrative Agent or any
Lender may reasonably request.
 
Section 9.5            Electronic Delivery of Certain Information.
 
(a)           Documents required to be delivered pursuant to the Loan Documents
shall be delivered by electronic communication and delivery, including, the
Internet, e-mail or intranet websites to which the Administrative Agent and each
Lender have access (including a commercial, third-party website such as
www.sec.gov <http://www.sec.gov> or a website sponsored or hosted by the
Administrative Agent or the Borrowers) provided that the foregoing shall not
apply to (i) notices to any Lender (or the Issuing Bank) pursuant to Article II
and (ii) any Lender that has notified the Administrative Agent and the Borrowers
that it cannot or does not want to receive electronic communications.  The
Administrative Agent or the Borrowers may, in its discretion, agree to accept
notices and other communications to it hereunder by electronic delivery pursuant
to procedures approved by it for all or particular notices or
communications.  Documents or notices delivered electronically shall be deemed
to have been delivered twenty-four (24) hours after the date and time on which
the Administrative Agent or the Borrowers posts such documents or the documents
become available on a commercial website and the Administrative Agent or
Borrowers notifies each Lender of said posting and provides a link thereto
provided if such notice or other communication is not sent or posted during the
normal business hours of the recipient, said posting date and time shall be
deemed to have commenced as of 12:00 p.m. Eastern time on the opening of
business on the next business day for the recipient.  If requested by
Administrative Agent or any Lender, the Borrowers shall deliver paper copies of
the certificate required by Section 9.3 to the Administrative Agent and shall
deliver paper copies of any documents to the Administrative Agent or to any
Lender that requests such paper copies until a written request to cease
delivering paper copies is given by the Administrative Agent or such
Lender.  Except for the certificates required by Section 9.3, the Administrative
Agent shall have no obligation to request the delivery of or to maintain paper
copies of the documents delivered electronically, and in any event shall have no
responsibility to monitor compliance by the Borrowers with any such request for
delivery.  Each Lender shall be solely responsible for requesting delivery to it
of paper copies and maintaining its paper or electronic documents.
 
(b)           Documents required to be delivered pursuant to Article II may be
delivered electronically to a website provided for such purpose by the
Administrative Agent pursuant to the procedures provided to the Borrowers by the
Administrative Agent.
 
Section 9.6            Public/Private Information.
 
The Borrowers and Parent shall cooperate with the Administrative Agent in
connection with the publication of certain materials and/or information provided
by or on behalf of the Borrowers and/or Parent.  Documents required to be
delivered pursuant to the Loan Documents shall be delivered by or on behalf of
the Borrowers and/or Parent, as applicable, to the Administrative Agent and the
Lenders (collectively, “Information Materials”) pursuant to this Article and the
Borrowers and/or Parent shall designate Information Materials (a) that are
either available to the public or not material with respect to the Parent,
Borrowers and their respective Subsidiaries or any of their respective
securities for purposes of United States federal and state securities laws, as
“Public Information” and (b) that are not Public Information as “Private
Information”.
 
 
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Section 9.7            USA Patriot Act Notice; Compliance.
 
The USA Patriot Act of 2001 (Public Law 107-56) and federal regulations issued
with respect thereto require all financial institutions to obtain, verify and
record certain information that identifies individuals or business entities
which open an “account” with such financial institution.  Consequently, a Lender
(for itself and/or as Administrative Agent for all Lenders hereunder) may from
time-to-time request, and the Borrowers shall, and shall cause the other Loan
Parties to, provide to such Lender, such Loan Party’s name, address, tax
identification number and/or such other identification information as shall be
necessary for such Lender to comply with federal law.  An “account” for this
purpose may include, without limitation, a deposit account, cash management
service, a transaction or asset account, a credit account, a loan or other
extension of credit, and/or other financial services product.
 
ARTICLE X  NEGATIVE COVENANTS
 
For so long as this Agreement is in effect, unless the Requisite Lenders (or, if
required pursuant to Section 13.7, all of the Lenders) shall otherwise consent
in the manner set forth in Section 13.7, each Borrower and Parent shall comply
with the following covenants:
 
Section 10.1          Financial Covenants.
 
(a)           Maximum Leverage Ratio.  The Borrowers and Parent shall not permit
the Leverage Ratio (as determined on the last day of each fiscal quarter) to
exceed (i) 77% from the Agreement Date through and including December 31, 2012,
(ii) 75% from January 1, 2013 through and including December 31, 2013, (iii)
72.5% from January 1, 2014 through and including December 31, 2014, or (iv) 70%
thereafter.  Notwithstanding the foregoing, if the Leverage Ratio is less than
65% at any time after December 31, 2012, then the Leverage Ratio shall not
thereafter exceed 70% (the “Maximum Reset Leverage Ratio”).
 
(b)           Minimum Fixed Charge Coverage Ratio.  The Borrowers and Parent
shall not permit the Fixed Charge Coverage Ratio to be less than (i) 1.00 to
1.00 from the Agreement Date through and including December 31, 2013, (ii) 1.05
to 1.00 from January 1, 2014 through and including June 30, 2015, and (iii) 1.10
to 1.00 thereafter ((i), (ii) and (iii) are each, a “Minimum Fixed Charge
Coverage Ratio”).
 
At all times prior to the Initial Maturity Date and provided the Maximum Reset
Leverage Ratio has not been initiated, it shall not be an Event of Default if
the Fixed Charge Coverage Ratio is less than the applicable Minimum Fixed Charge
Coverage Ratio for up to two quarters so long as the Fixed Charge Coverage Ratio
is not more than 0.1x below the then applicable Minimum Fixed Charge Coverage
Ratio.
 
(c)           Minimum Debt Yield.  The Borrowers and Parent shall not permit the
Debt Yield of the Loan Parties and their respective Subsidiaries determined on a
consolidated basis for the fiscal quarter most recently ended to be less than
(i) 9% from the Agreement Date through and including December 31, 2013, (ii)
9.75% from January 1, 2014 through and including June 30, 2015, and (iii) 11%
thereafter.
 
(d)           Minimum Interest Coverage Ratio.  The Borrowers and Parent shall
not permit the Minimum Interest Coverage Ratio to be less than (i) 1.40 to 1.00
from the Agreement Date through and including December 31, 2013, (ii) 1.50 to
1.00 from January 1, 2014 through and including June 30, 2015, or (iii) 1.60 to
1.00 thereafter.
 
 
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(e)           Minimum Tangible Net Worth.  The Borrowers and Parent shall not
permit Tangible Net Worth at any time to be less than (i) 85% of the Tangible
Net Worth as of the Agreement Date plus (ii) 80% of the Net Proceeds of all
Equity Issuances effected at any time after the Agreement Date (other than Net
Proceeds received in connection with any dividend reinvestment program).
 
(f)           Borrowers/Parent GAV Ownership Threshold.  The Borrowers and
Parent shall not permit the Total Gross Asset Value owned by Borrowers and
Parent to be less than 95% of Total Gross Asset Value.
 
(g)          Recourse Secured Indebtedness Limitation.  The Borrowers and Parent
shall not permit there to be any Recourse Secured Indebtedness by any Loan Party
or their respective Subsidiaries, other than the Loan and the Wells Fargo
Repurchase Line of Credit or any recourse facility that refinances the Wells
Fargo Repurchase Line of Credit for an aggregate principal amount of
Indebtedness not in excess of $10,000,000.
 
(h)          Intercompany Indebtedness Limitation.  The Borrowers and Parent
shall not permit the Funded Intercompany Debt of the Loan Parties and their
respective Subsidiaries to exceed 5% of Funded Debt.
 
(i)           Permitted Investments.
 
(i)           The business of the Loan Parties and their respective Subsidiaries
shall be limited to acquiring income producing real estate properties and
investments incidental thereto; and
 
(ii)           The Borrowers shall not, and shall not permit any Loan Party or
other Subsidiary to, make an Investment in or otherwise own the following items
which would cause the aggregate value of such holdings of such Persons to exceed
the following percentages of Total Gross Asset Value at any time:
 
(A)           Loan Investments and Bond Investments, such that the aggregate
value of such Investments exceeds 6% of Total Gross Asset Value; and
 
(B)           Investments in Leasehold Properties, such that Leasehold Gross
Asset Value exceeds 25% of Total Gross Asset Value.
 
(j)           Dividends and Other Restricted Payments.  The Borrowers shall not,
and shall not permit any of its Subsidiaries to, declare or make any Restricted
Payment; provided, however, that so long as no Default or Event of Default would
result therefrom the Borrowers and its Subsidiaries may pay cash dividends to
the Parent and other holders of partnership interests in CapLease, LP with
respect to any fiscal year ending during the term of this Agreement to the
extent necessary for the Parent to distribute, and the Parent may so distribute,
cash dividends to its shareholders in an aggregate amount not to exceed the
greater of (i) the amount required to be distributed for the Parent to remain in
compliance with Section 8.12 and avoid the payment of federal or state income or
excise tax or (ii) 95% of Funds From Operations.  Notwithstanding the foregoing,
but subject to the following sentence, if a Default or Event of Default exists,
the Borrowers may only declare and make cash distributions to the Parent and
other holders of partnership interests in Caplease, LP with respect to any
fiscal year to the extent necessary for the Parent to distribute, and the Parent
may so distribute, an aggregate amount not to exceed the minimum amount
necessary for the Parent to remain in compliance with Section 8.12.  If a
Default or Event of Default specified in Section 11.1(a), Section 11.1(e), or
Section 11.1(f) 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 11.2(a), the Borrowers shall not, and shall not permit any Subsidiary
to, make any Restricted Payments to any Person other than to the Borrowers or
any Subsidiary.
 
 
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Section 10.2          Negative Pledge.
 
The Borrowers and Parent shall not, and shall not permit any other Loan Party or
Subsidiary to, (a) create, assume, incur, permit or suffer to exist any Lien on
any Borrowing Base Property or any direct or indirect ownership interest of the
Borrowers in any Person owning any Borrowing Base Property, now owned or
hereafter acquired, except for Permitted Liens, (b) permit any Borrowing Base
Property or any direct or indirect ownership interest of the Borrowers or in any
Person owning a Borrowing Base Property, to be subject to a Negative Pledge , or
(c) create, assume, incur, permit or suffer to exist any Lien on other
Collateral, or any direct or indirect ownership interest of the Borrowers in any
Person owning any other Collateral, except for Permitted Liens.
 
Section 10.3          Restrictions on Intercompany Transfers.
 
The Borrowers and Parent shall not, and shall not permit any other Loan Party or
any of their respective Subsidiaries (other than an Excluded Subsidiary) to,
create or otherwise cause or suffer to exist or become effective any consensual
encumbrance or restriction of any kind on the ability of any Subsidiary to:  (a)
pay dividends or make any other distribution on any of such Subsidiary’s capital
stock or other Equity Interests owned by the Borrowers or any Subsidiary to the
extent that it would cause a violation of Section 8.12,; (b) pay any
Indebtedness owed to the Borrowers or any Subsidiary; (c) make loans or advances
to the Borrowers or any Subsidiary; or (d) transfer any of its property or
assets to the Borrowers or any Subsidiary; other than (i) with respect to
clauses (a) through (d) those encumbrances or restrictions contained in any Loan
Document or, (ii) with respect to clause (d), customary provisions restricting
assignment of any agreement entered into by the Borrowers, any other Loan Party
or any Subsidiary in the ordinary course of business.
 
Section 10.4          Merger, Consolidation, Sales of Assets and Other
Arrangements.
 
The Borrowers and Parent shall not, and shall not permit any other Loan Party
to, (a) enter into any transaction of merger or consolidation; (b) liquidate,
windup or dissolve itself (or suffer any liquidation or dissolution); or
(c) convey, sell, lease, sublease, transfer or otherwise dispose of, in one
transaction or a series of transactions, all or any substantial part of its
business or assets, whether now owned or hereafter acquired; provided, however,
that:
 
(i)           any Loan Party may merge with another Loan Party;
 
(ii)          any Loan Party may sell, transfer or dispose of its assets to
another Loan Party; and
 
(iii)         the Borrowers 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.
 
Section 10.5         Plans.
 
The Borrowers and Parent shall not, and shall not permit any other Loan Party or
any of their respective Subsidiaries to, permit any of its respective assets to
become or be deemed to be “plan assets” within the meaning of ERISA, the
Internal Revenue Code and the respective regulations promulgated
thereunder.  The Borrowers shall not cause or permit to occur, and shall not
permit any other member of the ERISA Group to cause or permit to occur, any
ERISA Event if such ERISA Event could reasonably be expected to have a Material
Adverse Effect.
 
 
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Section 10.6         Fiscal Year.
 
The Borrowers and Parent shall not, and shall not permit any other Loan Party or
their respective Subsidiaries to, change its fiscal year from that in effect as
of the Agreement Date.
 
Section 10.7        Modifications of Organizational Documents and Material
Contracts.
 
The Borrowers and Parent shall not, and shall not permit any other Loan Party
to, amend, supplement, restate or otherwise modify its certificate or articles
of incorporation or formation, by-laws, operating agreement, declaration of
trust, partnership agreement or other applicable organizational document if such
amendment, supplement, restatement or other modification (a) is adverse to the
interest of the Administrative Agent, the Issuing Bank or the Lenders or
(b) could reasonably be expected to have a Material Adverse Effect.  The
Borrowers shall not enter into, and shall not permit any Subsidiary or other
Loan Party to enter into, any amendment or modification to any Material Contract
which could reasonably be expected to have a Material Adverse Effect or default
in the performance of any obligations of any Loan Party or other Subsidiary in
any Material Contract or permit any Material Contract to be canceled or
terminated prior to its stated maturity.
 
Section 10.8        Transactions with Affiliates.
 
The Borrowers and Parent shall not permit to exist or enter into, and shall not
permit any other Loan Party or any of their respective Subsidiaries 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) as set forth on Schedule 7.1(s) or (b) transactions in the ordinary
course of and pursuant to the reasonable requirements of the business of the
Borrowers, such other Loan Party or such other Subsidiary and upon fair and
reasonable terms which are no less favorable to the Borrowers, such other Loan
Party or such other Subsidiary than would be obtained in a comparable arm’s
length transaction with a Person that is not an Affiliate.  Notwithstanding the
foregoing, no payments may be made with respect to any items set forth on such
Schedule 7.1(s) if a Default or Event of Default exists or would result
therefrom.
 
Section 10.9        Environmental Matters.
 
The Borrowers and Parent shall not, and shall not permit any other Loan Party,
any of their respective Subsidiaries or any other Person to, use, generate,
discharge, emit, manufacture, handle, process, store, release, transport,
remove, dispose of or clean up any Hazardous Materials on, under or from the
Borrowing Base Properties in material violation of any Environmental Law or in a
manner that could reasonably be expected to lead to any material environmental
claim or pose a material risk to human health, safety or the
environment.  Nothing in this Section shall impose any obligation or liability
whatsoever on the Administrative Agent or any Lender.
 
 
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Section 10.10      Tenant Leases.
 
Without the prior consent of Administrative Agent or Requisite Lenders,
Borrowers are permitted to enter into any Tenant Lease (a) for less than 5,000
square feet of a Borrowing Base Property so long as the Net Effective Rent is
equal to or greater than 90% of the proforma rent for such Borrowing Base
Property, as applicable, as set forth in the most recent Appraisal for such
Borrowing Base Property, as the case may be, and, with respect to the Dodge
Property and Landmark Property, such Tenant Lease is consistent with the terms
set forth on Schedule 10.10, and (b) for between 5,000 and 10,000 square feet of
a Borrowing Base Property so long as the Net Effective Rent is equal to or
greater than 95% of the proforma rent for such Borrowing Base Property, as
applicable, as set forth in the most recent Appraisal for such Borrowing Base
Property, as the case may be, and, with respect to the Dodge Property and
Landmark Property, such Tenant Lease is consistent with the terms set forth on
Schedule 10.10.  The Borrowers and Parent shall not, and shall not permit any
other Loan Party to enter into any Tenant Lease other than as set forth above
without the prior consent of (i) Administrative Agent to the extent the
Borrowing Base Value for the applicable Borrowing Base Property is less than
$20,000,000 or (ii) Requisite Lenders to the extent the Borrowing Base Value for
the applicable Borrowing Base Property is greater than or equal to $20,000,000
 
Section 10.11      Derivatives Contracts.
 
The Borrowers and Parent shall not, and shall not permit any other Loan Party or
any of their respective Subsidiaries to, enter into or become obligated in
respect of Derivatives Contracts other than Derivatives Contracts entered into
by the Borrowers, any such Loan Party or any such Subsidiary in the ordinary
course of business and which establish an effective hedge in respect of
liabilities, commitments or assets held or reasonably anticipated by the
Borrowers, such other Loan Party or such other Subsidiary.
 
ARTICLE XI  DEFAULT
 
Section 11.1         Events of Default.
 
Each of the following shall constitute an Event of Default, whatever the reason
for such event and whether it shall be voluntary or involuntary or be effected
by operation of Applicable Law or pursuant to any judgment or order of any
Governmental Authority:
 
(a)           Default in Payment.  (i) The Borrowers shall fail to pay when due
under this Agreement or any other Loan Document (whether upon demand, at
maturity, by reason of acceleration or otherwise) the principal of any of the
Loans or any Reimbursement Obligation, or (ii) the Borrowers shall fail to pay
interest on the Loans or any of the other payment Obligations owing by the
Borrowers or any other Loan Party under this Agreement, any other Loan Document
or the Fee Letter within five (5) Business Days of the same being due.
 
(b)           Default in Performance.
 
(i)           Any Loan Party shall fail to perform or observe any term,
covenant, condition or agreement on its part to be performed or observed and
contained in Article X; or
 
(ii)           Any Loan Party shall fail to perform or observe any term,
covenant, condition or agreement on its part to be performed or observed and
contained in Article IX, and in the case of this subsection (b)(ii) only, such
failure shall continue for a period of five (5) days after the earlier of
(x) the date upon which a Responsible Officer of the Borrowers or such other
Loan Party obtains knowledge of such failure or (y) the date upon which the
Borrowers has received written notice of such failure from the Administrative
Agent.
 
(iii)           Any Loan Party shall fail to perform or observe any term,
covenant, condition or agreement contained in this Agreement or any other Loan
Document to which it is a party and not otherwise mentioned in this Section, and
in the case of this subsection (b)(iii) only, such failure shall continue for a
period of thirty (30) days after the earlier of (x) the date upon which a
Responsible Officer of the Borrowers or such other Loan Party obtains knowledge
of such failure or (y) the date upon which the Borrowers has received written
notice of such failure from the Administrative Agent.
 
 
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(c)           Misrepresentations.  Any statement (written or oral),
representation or warranty made or deemed made by or on behalf of any Loan Party
under this Agreement or under any other Loan Document, or any amendment hereto
or thereto, or in any other writing or statement at any time furnished by, or at
the direction of, any Loan Party to the Administrative Agent, the Issuing Bank
or any Lender, shall at any time prove to have been incorrect or misleading in
any material respect when furnished or made or deemed made.
 
(d)           Indebtedness Cross-Default.
 
(i)           The Borrowers or any other Loan Party shall permit there to exist
any default, event or condition resulting in (or permitting the) acceleration,
mandatory repurchase or mandatory prepayment of, or any failure to pay at
maturity, (x) any Recourse Indebtedness in excess of $10,000,000 in the
aggregate, or (y) any Nonrecourse Indebtedness in excess of $15,000,000 in the
aggregate.
 
(ii)           The Borrowers or any other Loan Party shall permit there to exist
a default in, or resulting in, the payment of amounts in excess of $5,000,000 in
the aggregate in respect of Derivatives Contracts.
 
(iii)           The Borrowers or any other Loan Party shall permit there to
exist a default, event or condition resulting in (or permitting the)
acceleration, mandatory repurchase or mandatory prepayment of, or any failure to
pay at maturity, the Wells Fargo Repurchase Line of Credit.
 
(e)           Voluntary Bankruptcy Proceeding.  The Parent, Borrowers or any
other Loan Party shall:  (i) commence a voluntary case under the Bankruptcy Code
or other federal bankruptcy laws (as now or hereafter in effect); (ii) file a
petition seeking to take advantage of any other Applicable Laws, domestic or
foreign, relating to bankruptcy, insolvency, reorganization, winding-up, or
composition or adjustment of debts; (iii) consent to, or fail to contest in a
timely and appropriate manner, any petition filed against it in an involuntary
case under such bankruptcy laws or other Applicable Laws or consent to any
proceeding or action described in the immediately following subsection (f);
(iv) apply for or consent to, or fail to contest in a timely and appropriate
manner, the appointment of, or the taking of possession by, a receiver,
custodian, trustee, or liquidator of itself or of a substantial part of its
property, domestic or foreign; (v) admit in writing its inability to pay its
debts as they become due; (vi) make a general assignment for the benefit of
creditors; (vii) make a conveyance fraudulent as to creditors under any
Applicable Law; or (viii) take any corporate or partnership action for the
purpose of effecting any of the foregoing.
 
(f)           Involuntary Bankruptcy Proceeding.  A case or other proceeding
shall be commenced against the Parent, Borrowers or any other Loan Party in any
court of competent jurisdiction seeking:  (i) relief under the Bankruptcy Code
or other federal bankruptcy laws (as now or hereafter in effect) or under any
other Applicable Laws, domestic or foreign, relating to bankruptcy, insolvency,
reorganization, winding-up, or composition or adjustment of debts; or (ii) the
appointment of a trustee, receiver, custodian, liquidator or the like of such
Person, or of all or any substantial part of the assets, domestic or foreign, of
such Person, and in the case of either clause (i) or (ii) such case or
proceeding shall continue undismissed or unstayed for a period of 60 consecutive
days, or an order granting the remedy or other relief requested in such case or
proceeding (including, but not limited to, an order for relief under such
Bankruptcy Code or such other federal bankruptcy laws) shall be entered.
 
 
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(g)           Revocation of Loan Documents.  Any Loan Party shall (or shall
attempt to) disavow, revoke or terminate any Loan Document or the Fee Letter to
which it is a party or shall otherwise challenge or contest in any action, suit
or proceeding in any court or before any Governmental Authority the validity or
enforceability of any Loan Document or the Fee Letter or any Loan Document or
the Fee Letter shall cease to be in full force and effect (except as a result of
the express terms thereof).
 
(h)           Judgment.  A judgment or order for the payment of money or for an
injunction or other non-monetary relief shall be entered against the Parent,
Borrowers, any other Loan Party, or any of their respective Subsidiaries by any
court or other tribunal and (i) such judgment or order shall continue for a
period of thirty (30) 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
judgments or orders entered against the Loan Parties, $10,000,000.00 or (B) in
the case of an injunction or other non-monetary relief, such injunction or
judgment or order could reasonably be expected to have a Material Adverse
Effect.  The preceding sentence does not include a foreclosure judgment on
Nonrecourse Indebtedness by a non-Loan Party; provided, however, the preceding
sentence shall include any deficiency judgment entered into in connection with
any such foreclosure judgment.
 
(i)           Attachment.  A warrant, writ of attachment, execution or similar
process shall be issued against any property of the Parent, Borrowers, any other
Loan Party or any of their respective Subsidiaries, 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
paid, discharged, vacated, stayed or bonded for a period of thirty (30) days;
provided, however, that if a bond has been issued in favor of the claimant or
other Person obtaining such warrant, writ, execution or process, the issuer of
such bond shall execute a waiver or subordination agreement in form and
substance satisfactory to the Administrative Agent pursuant to which the issuer
of such bond subordinates its right of reimbursement, contribution or
subrogation to the Obligations and waives or subordinates any Lien it may have
on the assets of the Borrowers or any or its Subsidiaries.  The preceding
sentence does not include a receiver appointed or similar process on a Property
owned  by a non-Loan Party securing Nonrecourse Indebtedness.
 
(j)             ERISA.
 
(i)           Any ERISA Event shall have occurred that results or could
reasonably be expected to result in liability to any member of the ERISA Group
aggregating in excess of $1,000,000; or
 
(ii)           The “benefit obligation” of all Plans exceeds the “fair market
value of plan assets” for such Plans by more than $1,000,000, all as determined,
and with such terms defined, in accordance with FASB ASC 715.
 
(k)           Loan Documents.  An Event of Default (as defined therein) shall
occur under any of the other Loan Documents.
 
(l)           Change of Control/Change in Management.
 
(i)           Unless otherwise approved by Requisite Lenders, 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 25% of the total voting power of the then outstanding
voting stock of the Parent; or
 
 
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(ii)           During any period of twelve (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 Parent cease for any reason to
constitute a majority of the Board of Directors of the Parent then in office,
excluding any change in directors resulting from (a) the death or disability of
any director, (b) satisfaction of any requirement for the members of the Board
of Directors of the Parent to qualify under applicable law as independent
directors, (c) the replacement of any director who is an officer or employee of
the Parent or a Subsidiary of the Parent, (d) the election of any director if
such director’s nomination for election to the Board of Directors of the Parent
was recommended by a majority of the then existing Board of Directors of the
Parent or by a majority of any nominating committee appointed by the then
existing Board of Directors of the Parent for the purpose of nominating
directors for election to the Board of Directors of the Parent, or (e) the
election of any director reasonably approved by the Requisite Lenders.
 
(m)           Damage; Strike; Casualty.  Any material damage to, or loss, theft
or destruction of, any Collateral, whether or not insured, or any strike,
lockout, labor dispute, embargo, condemnation, act of God or public enemy, or
other casualty which causes, for more than thirty (30) consecutive days beyond
the coverage period of any applicable business interruption insurance, the
cessation or substantial curtailment of revenue producing activities of the
Borrowers, any other Loan Party, or any other Subsidiary taken as a whole and
only if any such event or circumstance could reasonably be expected to have a
Material Adverse Effect.
 
(n)           Security Documents.  Any provision of any Security Documents shall
for any reason cease to be valid and binding on, enforceable against, any Loan
Party, or any Lien created under any Security Document ceases to be a valid and
perfected first priority Lien in any of the Collateral purported to be covered
thereby.
 
Section 11.2         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 11.1(e) or 11.1(f), (1)(A) the principal of, and all accrued
interest on, the Loans and the Notes at the time outstanding, (B) an amount
equal to the Stated Amount of all Letters of Credit outstanding as of the date
of the occurrence of such Event of Default for deposit into the Letter of Credit
Collateral Account and (C) all of the other Obligations, including, but not
limited to, the other amounts owed to the Lenders and the Administrative Agent
under this Agreement, the Notes or any of the other Loan Documents shall become
immediately and automatically due and payable without presentment, demand,
protest, or other notice of any kind, all of which are expressly waived by the
Borrowers on behalf of itself and the other Loan Parties, and (2) the
Commitments and the obligation of the Issuing Bank to issue Letters of Credit
hereunder, shall all immediately and automatically terminate.
 
 
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(ii)           Optional.  If any other Event of Default shall exist, the
Administrative Agent may, and at the direction of the Requisite Lenders
shall:  (1) declare (A) the principal of, and accrued interest on, the Loans and
the Notes at the time outstanding, (B) an amount equal to the Stated Amount of
all Letters of Credit outstanding as of the date of the occurrence of such Event
of Default for deposit into the Letter of Credit Collateral Account and (C) all
of the other Obligations, including, but not limited to, the other amounts owed
to the Lenders and the Administrative Agent under this Agreement, the Notes or
any of the other Loan Documents to be forthwith due and payable, whereupon the
same shall immediately become due and payable without presentment, demand,
protest or other notice of any kind, all of which are expressly waived by the
Borrowers on behalf of itself and the other Loan Parties, and (2) terminate the
Commitments and the obligation of the Issuing Bank to issue Letters of Credit
hereunder.
 
(b)           Loan Documents.  The Requisite Lenders may direct the
Administrative Agent to, and the Administrative Agent if so directed shall,
exercise any and all of its rights under any and all of the other Loan
Documents.
 
(c)           Applicable Law.  The Requisite Lenders may direct the
Administrative Agent to, and the Administrative Agent if so directed shall,
exercise all other rights and remedies it may have under any Applicable Law.
 
(d)           Appointment of Receiver.  To the extent permitted by Applicable
Law, the Administrative Agent and the Lenders shall be entitled to the
appointment of a receiver for the assets and properties of the Borrowers,
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 Collateral, the property and/or
the business operations of the Borrowers and to exercise such power as the court
shall confer upon such receiver.
 
(e)           Specified Derivatives Contract Remedies.  Notwithstanding any
other provision of this Agreement or other Loan Document, each Specified
Derivatives Provider shall have the right, with prompt notice to the
Administrative Agent, but without the approval or consent of or other action by
the Administrative Agent or the Lenders, and without limitation of other
remedies available to such Specified Derivatives Provider under contract or
Applicable Law, to undertake any of the following:  (a) to declare an event of
default, termination event or other similar event under any Specified
Derivatives Contract and to create an “Early Termination Date” (as defined
therein) in respect thereof, (b) to determine net termination amounts in respect
of any and all Specified Derivatives Contracts in accordance with the terms
thereof, and to set off amounts among such contracts, (c) to set off or proceed
against deposit account balances, securities account balances and other property
and amounts held by such Specified Derivatives Provider pursuant to any
Derivatives Contract, including any “Posted Collateral” (as defined in any
credit support annex included in any such Derivatives Contract to which such
Specified Derivatives Provider may be a party), and (d) to prosecute any legal
action against the Borrowers, any Loan Party or other Subsidiary to enforce or
collect net amounts owing to such Specified Derivatives Provider pursuant to any
Specified Derivatives Contract.
 
Section 11.3         Remedies Upon Default.
 
Upon the occurrence of a Default specified in Section 11.1(f), the Commitments
shall immediately and automatically terminate.
 
Section 11.4         Marshaling; Payments Set Aside.
 
None of the Administrative Agent, the Issuing Bank, any Lender or any Specified
Derivatives Provider shall be under any obligation to marshal any assets in
favor of any Loan Party or any other party or against or in payment of any or
all of the Obligations or the Specified Derivatives Obligations.  To the extent
that any Loan Party makes a payment or payments to the Administrative Agent, the
Issuing Bank, any Lender and/or any Specified Derivatives Provider, or the
Administrative Agent, the Issuing Bank, any Lender and/or any Specified
Derivatives Provider enforce their security interests or exercise their rights
of setoff, and such payment or payments or the proceeds of such enforcement or
setoff or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside and/or required to be repaid to a trustee,
receiver or any other party under any bankruptcy law, state or federal law,
common law or equitable cause, then to the extent of such recovery, the
Obligations or Specified Derivatives Obligations, or part thereof originally
intended to be satisfied, and all Liens, rights and remedies therefor, shall be
revived and continued in full force and effect as if such payment had not been
made or such enforcement or setoff had not occurred.
 
 
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Section 11.5         Allocation of Proceeds.
 
If an Event of Default exists, all payments received by the Administrative Agent
under any of the Loan Documents, in respect of any principal of or interest on
the Obligations or any other amounts payable by the Borrowers hereunder or
thereunder, shall be applied in the following order and priority:
 
(a)           amounts due to the Administrative Agent, the Issuing Bank and the
Lenders in respect of expenses due under Section 13.2 until paid in full, and
then Fees;
 
(b)           amounts due to the Administrative Agent and the Lenders in respect
of Protective Advances;
 
(c)           payments of interest on all other Loans and Reimbursement
Obligations to be applied for the ratable benefit of the Lenders and the Issuing
Bank;
 
(d)           payments of principal of all other Loans, Reimbursement
Obligations and other Letter of Credit Liabilities and payments of the
Derivatives Termination Value in respect of any and all Specified Derivatives
Contracts, to be applied for the ratable benefit of the Lenders and the Issuing
Bank or Specified Derivatives Providers, as the case may be, in such order and
priority as the Lenders and the Issuing Bank or Specified Derivatives Providers,
as the case may be, may determine in their sole discretion; provided, however,
to the extent that any amounts available for distribution pursuant to this
subsection are attributable to the issued but undrawn amount of an outstanding
Letter of Credit, such amounts shall be paid to the Administrative Agent for
deposit into the Letter of Credit Collateral Account;
 
(e)           amounts due to the Administrative Agent and the Lenders pursuant
to Sections 12.8 and 13.10;
 
(f)           payments of all other Obligations and other amounts due under any
of the Loan Documents and Specified Derivatives Contracts, if any, to be applied
for the ratable benefit of the Lenders and the applicable Specified Derivatives
Providers; and
 
(g)           any amount remaining after application as provided above, shall be
paid to the Borrowers or whomever else may be legally entitled thereto.
 
 
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Section 11.6          Letter of Credit Collateral Account.
 
(a)           As collateral security for the prompt payment in full when due of
all Letter of Credit Liabilities and the other Obligations, the Borrowers hereby
pledge and grant to the Administrative Agent, for the ratable benefit of the
Administrative Agent, the Issuing Bank and the Lenders as provided herein, a
security interest in all of its right, title and interest in and to the Letter
of Credit Collateral Account and the balances from time to time in the Letter of
Credit Collateral Account (including the investments and reinvestments therein
provided for below).  The balances from time to time in the Letter of Credit
Collateral Account shall not constitute payment of any Letter of Credit
Liabilities until applied by the Issuing Bank or Administrative Agent, as
applicable, as provided herein.  Anything in this Agreement to the contrary
notwithstanding, funds held in the Letter of Credit Collateral Account shall be
subject to withdrawal only as provided in this Section.
 
(b)           Amounts on deposit in the Letter of Credit Collateral Account
shall be invested and reinvested by the Administrative Agent in such Cash
Equivalents as the Administrative Agent shall determine in its sole
discretion.  All such investments and reinvestments shall be held in the name of
and be under the sole dominion and control of the Administrative Agent for the
ratable benefit of the Administrative Agent, the Issuing Bank and the Lenders;
provided, that all earnings on such investments will be credited to and retained
in the Letter of Credit Collateral Account.  The Administrative Agent shall
exercise reasonable care in the custody and preservation of any funds held in
the Letter of Credit Collateral Account and shall be deemed to have exercised
such care if such funds are accorded treatment substantially equivalent to that
which the Administrative Agent accords other funds deposited with the
Administrative Agent, it being understood that the Administrative Agent shall
not have any responsibility for taking any necessary steps to preserve rights
against any parties with respect to any funds held in the Letter of Credit
Collateral Account.
 
(c)           If a drawing pursuant to any Letter of Credit occurs on or prior
to the expiration date of such Letter of Credit, the Borrowers and the Lenders
authorize the Administrative Agent to use the monies deposited in the Letter of
Credit Collateral Account to reimburse the Issuing Bank for the payment made by
the Issuing Bank to the beneficiary with respect to such drawing or the payee
with respect to such presentment.
 
(d)           If an Event of Default exists, the Administrative Agent may (and,
if instructed by the Requisite Lenders, shall) in its (or their) discretion at
any time and from time to time elect to liquidate any such investments and
reinvestments and apply the proceeds thereof to the Obligations in accordance
with Section 11.5.
 
(e)           So long as no Default or Event of Default exists, and to the
extent amounts on deposit in or credited to the Letter of Credit Collateral
Account exceed the aggregate amount of the Letter of Credit Liabilities then due
and owing, the Administrative Agent shall, from time to time, at the request of
the Borrowers, deliver to the Borrowers within 10 Business Days after the
Administrative Agent’s receipt of such request from the Borrowers, against
receipt but without any recourse, warranty or representation whatsoever, such
amount of the credit balances in the Letter of Credit Collateral Account as
exceeds the aggregate amount of Letter of Credit Liabilities at such time.  When
all of the Obligations shall have been indefeasibly paid in full and no Letters
of Credit remain outstanding, the Administrative Agent shall deliver to the
Borrowers, against receipt but without any recourse, warranty or representation
whatsoever, the balances remaining in the Letter of Credit Collateral Account.
 
(f)           The Borrowers shall pay to the Administrative Agent from time to
time such fees as the Administrative Agent normally charges for similar services
in connection with the Administrative Agent’s administration of the Letter of
Credit Collateral Account and investments and reinvestments of funds therein.
 
 
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Section 11.7         Rescission of Acceleration by Requisite Lenders.
 
If at any time after acceleration of the maturity of the Loans and the other
Obligations, the Borrowers shall pay all arrears of interest and all payments on
account of principal of the Obligations which shall have become due otherwise
than by acceleration (with interest on principal and, to the extent permitted by
Applicable Law, on overdue interest, at the rates specified in this Agreement)
and all Events of Default and Defaults (other than nonpayment of principal of
and accrued interest on the Obligations due and payable solely by virtue of
acceleration) shall become remedied or waived to the satisfaction of the
Requisite Lenders, then by written notice to the Borrowers, the Requisite
Lenders may elect, in the sole discretion of such Requisite Lenders, to rescind
and annul the acceleration and its consequences.  The provisions of the
preceding sentence are intended merely to bind all of the Lenders to a decision
which may be made at the election of the Requisite Lenders, and are not intended
to benefit the Borrowers and do not give the Borrowers the right to require the
Lenders to rescind or annul any acceleration hereunder, even if the conditions
set forth herein are satisfied.
 
Section 11.8         Performance by Administrative Agent.
 
If the Borrowers or any other Loan Party shall fail to perform any covenant,
duty or agreement contained in any of the Loan Documents, the Administrative
Agent may, after notice to the Borrowers, perform or attempt to perform such
covenant, duty or agreement on behalf of the Borrowers or such other Loan Party
after the expiration of any cure or grace periods set forth herein.  In such
event, the Borrowers shall, at the request of the Administrative Agent, promptly
pay any amount reasonably expended by the Administrative Agent in such
performance or attempted performance to the Administrative Agent, together with
interest thereon at the applicable Post-Default Rate from the date of such
expenditure until paid.  Notwithstanding the foregoing, neither the
Administrative Agent nor any Lender shall have any liability or responsibility
whatsoever for the performance of any obligation of the Borrowers under this
Agreement or any other Loan Document.
 
Section 11.9         Rights Cumulative.
 
The rights and remedies of the Administrative Agent, the Issuing Bank, the
Lenders and the Specified Derivatives Providers under this Agreement, each of
the other Loan Documents, the Fee Letter and Specified Derivatives Contracts
shall be cumulative and not exclusive of any rights or remedies which any of
them may otherwise have under Applicable Law.  In exercising their respective
rights and remedies the Administrative Agent, the Issuing Bank, the Lenders and
the Specified Derivatives Providers may be selective and no failure or delay by
the Administrative Agent, the Issuing Bank, any of the Lenders and/or any of the
Specified Derivatives Providers in exercising any right shall operate as a
waiver of it, nor shall any single or partial exercise of any power or right
preclude its other or further exercise or the exercise of any other power or
right.
 
 
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ARTICLE XII  THE ADMINISTRATIVE AGENT
Section 12.1         Appointment and Authorization.
 
Each Lender hereby irrevocably appoints and authorizes the Administrative Agent
to take such action as contractual representative on such Lender’s behalf and to
exercise such powers under this Agreement and the other Loan Documents as are
specifically delegated to the Administrative Agent by the terms hereof and
thereof, together with such powers as are reasonably incidental thereto.  Not in
limitation of the foregoing, each Lender authorizes and directs the
Administrative Agent to enter into the Loan Documents for the benefit of the
Lenders.  Each Lender hereby agrees that, except as otherwise set forth herein,
any action taken by the Requisite Lenders in accordance with the provisions of
this Agreement or the Loan Documents, and the exercise by the Requisite Lenders
of the powers set forth herein or therein, together with such other powers as
are reasonably incidental thereto, shall be authorized and binding upon all of
the Lenders.  Nothing herein shall be construed to deem the Administrative Agent
a trustee or fiduciary for any Lender or to impose on the Administrative Agent
duties or obligations other than those expressly provided for herein.  Without
limiting the generality of the foregoing, the use of the terms “Agent”,
“Administrative Agent”, “agent” and similar terms in the Loan Documents with
reference to the Administrative Agent is not intended to connote any fiduciary
or other implied (or express) obligations arising under agency doctrine of any
Applicable Law.  Instead, use of such terms is merely a matter of market custom,
and is intended to create or reflect only an administrative relationship between
independent contracting parties.  The Administrative Agent shall deliver to each
Lender, promptly upon receipt thereof by the Administrative Agent, copies of
each of the financial statements, certificates, notices and other documents
delivered to the Administrative Agent pursuant to Article IX that the Borrowers
are not otherwise required to deliver directly to the Lenders.  The
Administrative Agent will furnish to any Lender, upon the request of such
Lender, a copy (or, where appropriate, an original) of any document, instrument,
agreement, certificate or notice furnished to the Administrative Agent by the
Borrowers, any other Loan Party or any other Affiliate of the Borrowers,
pursuant to this Agreement or any other Loan Document not already delivered to
such Lender pursuant to the terms of this Agreement or any such other Loan
Document.  As to any matters not expressly provided for by the Loan Documents
(including, without limitation, enforcement or collection of any of the
Obligations), the Administrative Agent shall not be required to exercise any
discretion or take any action, but shall be required to act or to refrain from
acting (and shall be fully protected in so acting or refraining from acting)
upon the instructions of the Requisite Lenders (or all of the Lenders if
explicitly required under any other provision of this Agreement), and such
instructions shall be binding upon all Lenders and all holders of any of the
Obligations; provided, however, that, notwithstanding anything in this Agreement
to the contrary, the Administrative Agent shall not be required to take any
action which exposes the Administrative Agent to personal liability or which is
contrary to this Agreement or any other Loan Document or Applicable Law.  Not in
limitation of the foregoing, the Administrative Agent may exercise any right or
remedy it or the Lenders may have under any Loan Document upon the occurrence of
a Default or an Event of Default unless the Requisite Lenders have directed the
Administrative Agent otherwise.  Without limiting the foregoing, no Lender shall
have any right of action whatsoever against the Administrative Agent as a result
of the Administrative Agent acting or refraining from acting under this
Agreement or any of the other Loan Documents in accordance with the instructions
of the Requisite Lenders, or where applicable, all the Lenders.
 
Section 12.2         Wells Fargo as Lender.
 
Wells Fargo, as a Lender or as a Specified Derivatives Provider, as the case may
be, shall have the same rights and powers under this Agreement and any other
Loan Document and under any Specified Derivatives Contract, as the case may be,
as any other Lender or Specified Derivatives Provider and may exercise the same
as though it were not the Administrative Agent; and the term “Lender” or
“Lenders” shall, unless otherwise expressly indicated, include Wells Fargo in
each case in its individual capacity.  Wells Fargo 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 Borrowers, any other Loan
Party or any other Affiliate thereof as if it were any other bank and without
any duty to account therefor to the Issuing Bank, other Lenders, or any other
Specified Derivatives Providers.  Further, the Administrative Agent and any
Affiliate may accept fees and other consideration from the Borrowers for
services in connection with this Agreement or any Specified Derivatives
Contract, or otherwise without having to account for the same to the Issuing
Bank, the other Lenders or any other Specified Derivatives Providers.  The
Issuing Bank and the Lenders acknowledge that, pursuant to such activities,
Wells Fargo or its Affiliates may receive information regarding the Borrowers,
other Loan Parties, other Subsidiaries and other Affiliates (including
information that may be subject to confidentiality obligations in favor of such
Person) and acknowledge that the Administrative Agent shall be under no
obligation to provide such information to them.
 
 
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Section 12.3         Collateral Matters; Protective Advances.
 
(a)           Each Lender hereby authorizes the Administrative Agent, without
the necessity of any notice to or further consent from any Lender, from time to
time prior to an Event of Default, to take any action with respect to any
Collateral or Loan Documents which may be necessary to perfect and maintain
perfected the Liens upon the Collateral granted pursuant to any of the Loan
Documents.
 
(b)           The Lenders hereby authorize the Administrative Agent, at its
option and in its discretion, to release any Lien granted to or held by the
Administrative Agent upon any Collateral (i) upon termination of the Commitments
and indefeasible payment and satisfaction in full of all of the Obligations and
Specified Derivatives Obligations; (ii) as expressly permitted by, but only in
accordance with, the terms of the applicable Loan Document; or (iii) if
approved, authorized or ratified in writing by the Requisite Lenders (or such
greater number of Lenders as this Agreement or any other Loan Document may
expressly provide).  Upon request by the Administrative Agent at any time, the
Lenders will confirm in writing the Administrative Agent’s authority to release
particular types or items of Collateral pursuant to this Section.
 
(c)           Upon any sale and transfer of Collateral which is expressly
permitted pursuant to the terms of this Agreement, and upon at least five (5)
Business Days’ prior written request by the Borrowers, the Administrative Agent
shall (and is hereby irrevocably authorized by the Lenders to) execute such
documents as may be necessary to evidence the release of the Liens granted to
the Administrative Agent for its benefit and the benefit of the Lenders, the
Issuing Bank and the Specified Derivatives Providers herein or pursuant hereto
upon the Collateral that was sold or transferred; provided, however, that
(i) the Administrative Agent shall not be required to execute any such document
on terms which, in the Administrative Agent’s opinion, would expose the
Administrative Agent to liability or create any obligation or entail any
consequence other than the release of such Liens without recourse or warranty
and (ii) such release shall not in any manner discharge, affect or impair the
Obligations or Specified Derivatives Obligations or any Liens upon (or
obligations of the Borrowers or any other Loan Party in respect of) all
interests retained by the Borrowers or any other Loan Party, including (without
limitation) the proceeds of such sale or transfer, all of which shall continue
to constitute part of the Collateral.  In the event of any sale or transfer of
Collateral, or any foreclosure with respect to any of the Collateral, the
Administrative Agent shall be authorized to deduct all of the expenses
reasonably incurred by the Administrative Agent from the proceeds of any such
sale, transfer or foreclosure.
 
(d)           The Administrative Agent shall have no obligation whatsoever to
the Lenders, the Issuing Bank or the Specified Derivatives Providers or to any
other Person to assure that the Collateral exists or is owned by the Borrowers,
any other Loan Party or any other Subsidiary or is cared for, protected or
insured or that the Liens granted to the Administrative Agent herein or pursuant
hereto have been properly or sufficiently or lawfully created, perfected,
protected or enforced or are entitled to any particular priority, or to exercise
or to continue exercising at all or in any manner or under any duty of care,
disclosure or fidelity any of the rights, authorities and powers granted or
available to the Administrative Agent in this Section or in any of the Loan
Documents, it being understood and agreed that in respect of the Collateral, or
any act, omission or event related thereto, the Administrative Agent may act in
any manner it may deem appropriate, in its sole discretion, and that the
Administrative Agent shall have no duty or liability whatsoever to the Lenders,
except to the extent resulting from its gross negligence or willful misconduct.
 
 
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(e)           The Administrative Agent may make, and shall be reimbursed by the
Lenders (in accordance with their Commitment Percentages) to the extent not
reimbursed by the Borrowers for, Protective Advances during any one calendar
year with respect to each Property that is Collateral up to the sum of (i)
amounts expended to pay real estate taxes, assessments and governmental charges
or levies imposed upon such Property; (ii) amounts expended to pay insurance
premiums for policies of insurance related to such Property; and (iii) $250,000
per Property.  Protective Advances in excess of said sum during any calendar
year for any Property that is Collateral shall require the consent of the
Requisite Lenders.  The Borrowers agrees to pay on demand all Protective
Advances.
 
(f)           By their acceptance of the benefits of the Security Documents,
each Lender that is at any time itself a Specified Derivatives Provider, or
having an Affiliate that is a Specified Derivatives Provider, hereby, for
itself, and on behalf of any such Affiliate, in its capacity as a Specified
Derivatives Provider, irrevocably appoints and authorizes the Administrative
Agent as its collateral agent, to take such action as contractual representative
on such Specified Derivatives Provider’s behalf and to exercise such powers
under the Security Documents as are specifically delegated to the Administrative
Agent by the terms of this Section 12.3, Section 12.4 and any Security Document,
together with such powers as are reasonably incidental thereto; provided, that
this subsection (f) shall not affect any of the terms of a Specified Derivatives
Contract or restrict a Specified Derivatives Provider from taking any action
permitted by a Specified Derivatives Contract.  For the avoidance of doubt, all
references in this Section 12.3 to “Lender” or “Lenders” shall be deemed to
include each Lender (and Affiliate thereof) in its capacity as a Specified
Derivatives Provider.
 
Section 12.4      Post-Foreclosure Plans.
 
If all or any portion of the Collateral is acquired by the Administrative Agent
as a result of a foreclosure or the acceptance of a deed or assignment in lieu
of foreclosure, or is retained in satisfaction of all or any part of the
Obligations and/or Specified Derivatives Obligations, the title to any such
Collateral, or any portion thereof, shall be held in the name of the
Administrative Agent or a nominee or Subsidiary of the Administrative Agent, as
administrative agent, for the ratable benefit of all Lenders, the Issuing Bank
and the Specified Derivatives Providers.  The Administrative Agent shall prepare
a recommended course of action for such Collateral (a “Post-Foreclosure Plan”),
which shall be subject to the approval of the Requisite Lenders.  In accordance
with the approved Post-Foreclosure Plan, the Administrative Agent shall manage,
operate, repair, administer, complete, construct, restore or otherwise deal with
the Collateral acquired, and shall administer all transactions relating thereto,
including, without limitation, employing a management agent, leasing agent and
other agents, contractors and employees, including agents for the sale of such
Collateral, and the collecting of rents and other sums from such Collateral and
paying the expenses of such Collateral.  Actions taken by the Administrative
Agent with respect to the Collateral, which are not specifically provided for in
the approved Post-Foreclosure Plan or reasonably incidental thereto, shall
require the written consent of the Requisite Lenders by way of supplement to
such Post-Foreclosure Plan.  Upon demand therefor from time to time, each Lender
will contribute its share (based on its Commitment Percentage) of all reasonable
costs and expenses incurred by the Administrative Agent pursuant to the approved
Post-Foreclosure Plan in connection with the construction, operation,
management, maintenance, leasing and sale of such Collateral.  In addition, the
Administrative Agent shall render or cause to be rendered to each Lender, the
Issuing Bank and each Specified Derivatives Provider, on a monthly basis, an
income and expense statement for such Collateral, and each Lender shall promptly
contribute its Commitment Percentage of any operating loss for such Collateral,
and such other expenses and operating reserves as the Administrative Agent shall
deem reasonably necessary pursuant to and in accordance with the approved
Post-Foreclosure Plan.  To the extent there is Net Operating Income from such
Collateral, the Administrative Agent shall, in accordance with the approved
Post-Foreclosure Plan, determine the amount and timing of distributions to the
Lenders, the Issuing Bank and the Specified Derivatives Providers.  All such
distributions shall be made to the Lenders in accordance with their respective
Commitment Percentages.  The Lenders, the Issuing Bank and the Specified
Derivatives Providers acknowledge and agree that if title to any Collateral is
obtained by the Administrative Agent or its nominee, such Collateral will not be
held as a permanent investment but will be liquidated and the proceeds of such
liquidation will be distributed in accordance with Section 11.5 as soon as
practicable.  The Administrative Agent shall undertake to sell such Collateral,
at such price and upon such terms and conditions as the Requisite Lenders
reasonably shall determine to be most advantageous to the Lenders, the Issuing
Bank and the Specified Derivatives Providers.  Any purchase money mortgage or
deed of trust taken in connection with the disposition of such Collateral in
accordance with the immediately preceding sentence shall name the Administrative
Agent, as Administrative Agent for the Lenders, as the beneficiary or
mortgagee.  In such case, the Administrative Agent and the Lenders shall enter
into an agreement with respect to such purchase money mortgage or deed of trust
defining the rights of the Lenders in the same Commitment Percentages as
provided hereunder, which agreement shall be in all material respects similar to
this Article insofar as the same is appropriate or applicable.
 
 
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Section 12.5         Approvals of Lenders.
 
All communications from the Administrative Agent to any Lender requesting such
Lender’s determination, consent, approval or disapproval (a) shall be given in
the form of a written notice to such Lender, (b) shall be accompanied by a
description of the matter or issue as to which such determination, approval,
consent or disapproval is requested, or shall advise such Lender where
information, if any, regarding such matter or issue may be inspected, or shall
otherwise describe the matter or issue to be resolved, (c) shall include, if
reasonably requested by such Lender and to the extent not previously provided to
such Lender, written materials and, as appropriate, a brief summary of all oral
information provided to the Administrative Agent by the Borrowers in respect of
the matter or issue to be resolved, and (d) shall include the Administrative
Agent’s recommended course of action or determination in respect
thereof.  Unless a Lender shall give written notice to the Administrative Agent
that it specifically objects to the recommendation or determination of the
Administrative Agent (together with a reasonable written explanation of the
reasons behind such objection) within ten (10) Business Days (or such lesser or
greater period as may be specifically required under the express terms of the
Loan Documents) of receipt of such communication, such Lender shall be deemed to
have conclusively approved of or consented to such recommendation or
determination.
 
Section 12.6         Notice of Events of Default.
 
The Administrative Agent shall not be deemed to have knowledge or notice of the
occurrence of a Default or Event of Default unless the Administrative Agent has
received notice from a Lender or the Borrowers referring to this Agreement,
describing with reasonable specificity such Default or Event of Default and
stating that such notice is a “notice of default.”  If any Lender (excluding the
Lender which is also serving as the Administrative Agent) becomes aware of any
Default or Event of Default, it shall promptly send to the Administrative Agent
such a “notice of default”.  Further, if the Administrative Agent receives such
a “notice of default,” the Administrative Agent shall give prompt notice thereof
to the Lenders.
 
 
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Section 12.7         Administrative Agent’s Reliance.
 
Notwithstanding any other provisions of this Agreement or any other Loan
Documents, neither the Administrative Agent nor any of its directors, officers,
agents, employees or counsel shall be liable for any action taken or not taken
by it under or in connection with this Agreement or any other Loan Document,
except for its or their own gross negligence or willful misconduct in connection
with its duties expressly set forth herein or therein as determined by a court
of competent jurisdiction in a final non-appealable judgment.  Without limiting
the generality of the foregoing, the Administrative Agent may consult with legal
counsel (including its own counsel or counsel for the Borrowers or any other
Loan Party), independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken in good faith by
it in accordance with the advice of such counsel, accountants or
experts.  Neither the Administrative Agent nor any of its directors, officers,
agents, employees or counsel:  (a) makes any warranty or representation to any
Lender, the Issuing Bank or any other Person, or shall be responsible to any
Lender, the Issuing Bank or any other Person for any statement, warranty or
representation made or deemed made by the Borrowers, any other Loan Party or any
other Person in or in connection with this Agreement or any other Loan Document;
(b) shall have any duty to ascertain or to inquire as to the performance or
observance of any of the terms, covenants or conditions of this Agreement or any
other Loan Document or the satisfaction of any conditions precedent under this
Agreement or any Loan Document on the part of the Borrowers or other Persons, or
to inspect the property, books or records of the Borrowers or any other Person;
(c) shall be responsible to any Lender or the Issuing Bank for the due
execution, legality, validity, enforceability, genuineness, sufficiency or value
of this Agreement or any other Loan Document, any other instrument or document
furnished pursuant thereto or any Collateral covered thereby or the perfection
or priority of any Lien in favor of the Administrative Agent on behalf of the
Lenders, the Issuing Bank and the Specified Derivatives Providers in any such
Collateral; (d) shall have any liability in respect of any recitals, statements,
certifications, representations or warranties contained in any of the Loan
Documents or any other document, instrument, agreement, certificate or statement
delivered in connection therewith; and (e) shall incur any liability under or in
respect of this Agreement or any other Loan Document by acting upon any notice,
consent, certificate or other instrument or writing (which may be by telephone,
telecopy or electronic mail) believed by it to be genuine and signed, sent or
given by the proper party or parties.  The Administrative Agent may execute any
of its duties under the Loan Documents by or through agents, employees or
attorneys-in-fact and shall not be responsible for the negligence or misconduct
of any agent or attorney-in-fact that it selects in the absence of gross
negligence or willful misconduct as determined by a court of competent
jurisdiction in a final non-appealable judgment.
 
 
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Section 12.8         Indemnification of Administrative Agent.
 
Each Lender agrees to indemnify the Administrative Agent (to the extent not
reimbursed by the Borrowers and without limiting the obligation of the Borrowers
to do so) pro rata in accordance with such Lender’s respective Commitment
Percentage, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, reasonable out-of-pocket costs
and expenses of any kind or nature whatsoever which may at any time be imposed
on, incurred by, or asserted against the Administrative Agent (in its capacity
as Administrative Agent but not as a Lender) in any way relating to or arising
out of the Loan Documents, any transaction contemplated hereby or thereby or any
action taken or omitted by the Administrative Agent under the Loan Documents
(collectively, “Indemnifiable Amounts”); provided, however, that no Lender shall
be liable for any portion of such Indemnifiable Amounts to the extent resulting
from the Administrative Agent’s gross negligence or willful misconduct as
determined by a court of competent jurisdiction in a final, non-appealable
judgment; provided, however, that no action taken in accordance with the
directions of the Requisite Lenders (or all of the Lenders, if expressly
required hereunder) shall be deemed to constitute gross negligence or willful
misconduct for purposes of this Section.  Without limiting the generality of the
foregoing, each Lender agrees to reimburse the Administrative Agent (to the
extent not reimbursed by the Borrowers and without limiting the obligation of
the Borrowers to do so) promptly upon demand for its ratable share of any
out-of-pocket expenses (including the reasonable fees and expenses of the
counsel to the Administrative Agent) incurred by the Administrative Agent in
connection with the preparation, negotiation, execution, administration, or
enforcement (whether through negotiations, legal proceedings, or otherwise) of,
or legal advice with respect to the rights or responsibilities of the parties
under, the Loan Documents, any suit or action brought by the Administrative
Agent to enforce the terms of the Loan Documents and/or collect any Obligations,
any “lender liability” suit or claim brought against the Administrative Agent
and/or the Lenders, and any claim or suit brought against the Administrative
Agent and/or the Lenders arising under any Environmental Laws.  Such
out-of-pocket expenses (including counsel fees) shall be advanced by the Lenders
on the request of the Administrative Agent notwithstanding any claim or
assertion that the Administrative Agent is not entitled to indemnification
hereunder upon receipt of an undertaking by the Administrative Agent that the
Administrative Agent will reimburse the Lenders if it is actually and finally
determined by a court of competent jurisdiction that the Administrative Agent is
not so entitled to indemnification.  The agreements in this Section shall
survive the payment of the Loans and all other amounts payable hereunder or
under the other Loan Documents and the termination of this Agreement.  If the
Borrowers shall reimburse the Administrative Agent for any Indemnifiable Amount
following payment by any Lender to the Administrative Agent in respect of such
Indemnifiable Amount pursuant to this Section, the Administrative Agent shall
share such reimbursement on a ratable basis with each Lender making any such
payment.
 
 
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Section 12.9         Lender Credit Decision, Etc.
 
Each of the Lenders and the Issuing Bank expressly acknowledges and agrees that
neither the Administrative Agent nor any of its officers, directors, employees,
agents, counsel, attorneys-in-fact or other Affiliates has made any
representations or warranties to the Issuing Bank or such Lender and that no act
by the Administrative Agent hereafter taken, including any review of the affairs
of the Borrowers, any other Loan Party or any other Subsidiary or Affiliate,
shall be deemed to constitute any such representation or warranty by the
Administrative Agent to the Issuing Bank or any Lender.  Each of the Lenders and
the Issuing Bank acknowledges that it has made its own credit and legal analysis
and decision to enter into this Agreement and the transactions contemplated
hereby, independently and without reliance upon the Administrative Agent, any
other Lender or counsel to the Administrative Agent, or any of their respective
officers, directors, employees, agents or counsel, and based on the financial
statements of the Borrowers, the other Loan Parties, the other Subsidiaries and
other Affiliates, and inquiries of such Persons, its independent due diligence
of the business and affairs of the Borrowers, the other Loan Parties, the other
Subsidiaries and other Persons, its review of the Loan Documents, the legal
opinions required to be delivered to it hereunder, the advice of its own counsel
and such other documents and information as it has deemed appropriate.  Each of
the Lenders and the Issuing Bank also acknowledges that it will, independently
and without reliance upon the Administrative Agent, any other Lender or counsel
to the Administrative Agent or any of their respective officers, directors,
employees and agents, and based on such review, advice, documents and
information as it shall deem appropriate at the time, continue to make its own
decisions in taking or not taking action under the Loan Documents.  The
Administrative Agent shall not be required to keep itself informed as to the
performance or observance by the Borrowers or any other Loan Party of the Loan
Documents or any other document referred to or provided for therein or to
inspect the properties or books of, or make any other investigation of, the
Borrowers, any other Loan Party or any other Subsidiary.  Except for notices,
reports and other documents and information expressly required to be furnished
to the Lenders and the Issuing Bank by the Administrative Agent under this
Agreement or any of the other Loan Documents, the Administrative Agent shall
have no duty or responsibility to provide any Lender or the Issuing Bank with
any credit or other information concerning the business, operations, property,
financial and other condition or creditworthiness of the Borrowers, any other
Loan Party or any other Affiliate thereof which may come into possession of the
Administrative Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or other Affiliates.  Each of the Lenders and the Issuing Bank
acknowledges that the Administrative Agent’s legal counsel in connection with
the transactions contemplated by this Agreement is only acting as counsel to the
Administrative Agent and is not acting as counsel to any Lender or the Issuing
Bank.
 
 
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Section 12.10       Successor Administrative Agent.
 
The Administrative Agent may resign at any time as Administrative Agent under
the Loan Documents by giving written notice thereof to the Lenders and the
Borrowers.  Upon any such resignation, the Requisite Lenders shall have the
right to appoint a successor Administrative Agent which appointment shall,
provided no Default or Event of Default exists, be subject to the Borrowers’
approval, which approval shall not be unreasonably withheld or delayed (except
that the Borrowers shall, in all events, be deemed to have approved each Lender
and any of its Affiliates as a successor Administrative Agent).  If no successor
Administrative Agent shall have been so appointed in accordance with the
immediately preceding sentence, and shall have accepted such appointment, within
30 days after the current Administrative Agent’s giving of notice of
resignation, then the current Administrative Agent may, on behalf of the Lenders
and the Issuing Bank, appoint a successor Administrative Agent, which shall be a
Lender, if any Lender shall be willing to serve, and otherwise shall be an
Eligible Assignee.  Upon the acceptance of any appointment as Administrative
Agent hereunder by a successor Administrative Agent, such successor
Administrative Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the current Administrative Agent, and
the current Administrative Agent shall be discharged from its duties and
obligations under the Loan Documents.  Such successor Administrative Agent shall
issue letters of credit in substitution for the Letters of Credit, if any,
outstanding at the time of such succession or shall make other arrangements
satisfactory to the current Administrative Agent, in either case, to assume
effectively the obligations of the current Administrative Agent with respect to
such Letters of Credit.  After any Administrative Agent’s resignation hereunder
as Administrative Agent, the provisions of this Article XII shall continue to
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Administrative Agent under the Loan Documents.  Notwithstanding anything
contained herein to the contrary, the Administrative Agent may assign its rights
and duties under the Loan Documents to any of its Affiliates by giving the
Borrowers and each Lender prior written notice.
 
 
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Section 12.11       Titled Agents.
 
The Lead Arranger (“Titled Agent”) in each such respective capacity, assumes no
responsibility or obligation hereunder, including, without limitation, for
servicing, enforcement or collection of any of the Loans, nor any duties as an
agent hereunder for the Lenders.  The titles given to the Titled Agent are
solely honorific and imply no fiduciary responsibility on the part of the Titled
Agent to the Administrative Agent, any Lender, the Issuing Bank, the Borrowers
or any other Loan Party and the use of such titles does not impose on the Titled
Agent any duties or obligations greater than those of any other Lender or
entitle the Titled Agent to any rights other than those to which any other
Lender is entitled.
 
ARTICLE XIII  MISCELLANEOUS
 
Section 13.1          Notices.
 
Unless otherwise provided herein (including without limitation as provided in
Section 9.5), communications provided for hereunder shall be in writing and
shall be mailed by a nationally recognized carrier, telecopied, or
hand-delivered as follows:
 
If to the Borrowers:

c/o Caplease, LP
1065 Avenue of the Americas
New York, NY 10018
Attention:  General Counsel
Telecopy Number:                                (212) 217-6301
Telephone Number:                                (212) 217-6300

 
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If to the Administrative Agent:

Wells Fargo Bank, National Association
123 South Broad Street, 9th Floor
Philadelphia, PA 19109
Attn:  Robert S. Dransite
Telecopier:                      215-670-6456
Telephone:                      215-670-6438

If to the Administrative Agent under Article II:

Wells Fargo Bank, National Association
Winston-Salem Loan Center
One West Fourth Street, 3rd Floor
Winston-Salem, North Carolina  27101
 Attn: Tangula H. Graham
Telecopier:                      866-588-0565
Telephone:                      336-747-8115

If to the Issuing Bank:

Wells Fargo Bank, National Association
123 South Broad Street, 9th Floor
Philadelphia, PA 19109
Attn:  Robert S. Dransite
Telecopier:                      215-670-6456
Telephone:                      215-670-6438

If to any other Lender:

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

or, as to each party at such other address as shall be designated by such party
in a written notice to the other parties delivered in compliance with this
Section; provided, a Lender or the Issuing Bank shall only be required to give
notice of any such other address to the Administrative Agent and the
Borrowers.  All such notices and other communications shall be effective (i) if
mailed, upon the first to occur of receipt or the expiration of three (3)
Business Days after the deposit in the United States Postal Service mail,
postage prepaid and addressed to the address of the Borrowers or the
Administrative Agent, the Issuing Bank and Lenders at the addresses specified;
(ii) if telecopied, when transmitted; (iii) if hand delivered or sent by
overnight courier, when delivered; or (iv) if delivered in accordance with
Section 9.5 to the extent applicable; provided, however, that, in the case of
the immediately preceding clauses (i), (ii) and (iii), non-receipt of any
communication as of the result of any change of address of which the sending
party was not notified or as the result of a refusal to accept delivery shall be
deemed receipt of such communication.  Notwithstanding the immediately preceding
sentence, all notices or communications to the Administrative Agent, the Issuing
Bank or any Lender under Article II shall be effective only when actually
received.  None of the Administrative Agent, the Issuing Bank or any Lender
shall incur any liability to any Loan Party (nor shall the Administrative Agent
incur any liability to the Issuing Bank or the Lenders) for acting upon any
telephonic notice referred to in this Agreement which the Administrative Agent,
the Issuing Bank or such Lender, as the case may be, believes in good faith to
have been given by a Person authorized to deliver such notice or for otherwise
acting in good faith hereunder.  Failure of a Person designated to get a copy of
a notice to receive such copy shall not affect the validity of notice properly
given to another Person.
 
 
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Section 13.2          Expenses.
 
The Borrowers agree (a) to pay or reimburse the Administrative Agent for all of
its reasonable out-of-pocket costs and expenses incurred in connection with the
preparation, negotiation and execution of, and any amendment, supplement or
modification to, any of the Loan Documents (including due diligence expense and
reasonable travel expenses related to closing), and the consummation of the
transactions contemplated hereby and thereby, including the reasonable fees and
disbursements of counsel to the Administrative Agent and all costs and expenses
of the Administrative Agent in connection with the use of IntraLinks, SyndTrak
or other similar information transmission systems in connection with the Loan
Documents and of the Administrative Agent in connection with the review of
Properties for inclusion in calculations of the Borrowing Base and the
Administrative Agent’s other activities under Article IV, including the cost of
all Appraisals (except for Appraisals ordered under Section 4.3(e)) and the
reasonable fees and disbursements of counsel to the Administrative Agent
relating to all such activities, (b) to pay or reimburse the Administrative
Agent, the Issuing Bank and the Lenders for all their reasonable out of pocket
costs and expenses incurred in connection with the enforcement or preservation
of any rights under the Loan Documents and the Fee Letter, including the
reasonable fees and disbursements of their respective counsel (including the
allocated fees and expenses of in-house counsel) and any payments in
indemnification or otherwise payable by the Lenders to the Administrative Agent
pursuant to the Loan Documents, (c) to pay, and indemnify and hold harmless the
Administrative Agent, the Issuing Bank 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 reasonable out of pocket fees and disbursements of counsel to the
Administrative Agent, the Issuing Bank and any Lender incurred in connection
with the representation of the Administrative Agent, the Issuing Bank or such
Lender in any matter relating to or arising out of any bankruptcy or other
proceeding of the type described in Sections 11.1(e) or 11.1(f), including,
without limitation (i) any motion for relief from any stay or similar order,
(ii) the negotiation, preparation, execution and delivery of any document
relating to the Obligations and (iii) the negotiation and preparation of any
debtor-in-possession financing or any plan of reorganization of the Borrowers or
any other Loan Party, whether proposed by the Borrowers, such Loan Party, the
Lenders or any other Person, and whether such fees and expenses are incurred
prior to, during or after the commencement of such proceeding or the
confirmation or conclusion of any such proceeding.  If the Borrowers shall fail
to pay any amounts required to be paid by it pursuant to this Section, the
Administrative Agent and/or the Lenders may pay such amounts on behalf of the
Borrowers and such amounts shall be deemed to be Obligations owing hereunder.
 
Section 13.3          Stamp, Intangible and Recording Taxes.
 
The Borrowers will pay any and all stamp, excise, intangible, registration,
recordation and similar taxes, fees or charges and shall indemnify the
Administrative Agent and each Lender against any and all liabilities with
respect to or resulting from any delay in the payment or omission to pay any
such taxes, fees or charges, which may be payable or determined to be payable in
connection with the execution, delivery, recording, performance or enforcement
of this Agreement, the Notes and any of the other Loan Documents, the amendment,
supplement, modification or waiver of or consent under this Agreement, the Notes
or any of the other Loan Documents or the perfection of any rights or Liens
under this Agreement, the Notes or any of the other Loan Documents.
 
 
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Section 13.4          Setoff.
 
Subject to Section 3.3 and in addition to any rights now or hereafter granted
under Applicable Law and not by way of limitation of any such rights, the
Borrowers hereby authorize the Administrative Agent, the Issuing Bank, each
Lender, each Affiliate of the Administrative Agent, the Issuing Bank or any
Lender, and each Participant, at any time or from time to time while an Event of
Default exists, without notice to the Borrowers or to any other Person, any such
notice being hereby expressly waived, but in the case of the Issuing Bank, a
Lender, an Affiliate of the Issuing Bank or a Lender, or a Participant, subject
to receipt of the prior written consent of the Requisite Lenders exercised in
their sole discretion, to set off and to appropriate and to apply any and all
deposits (general or special, including, but not limited to, indebtedness
evidenced by certificates of deposit, whether matured or unmatured) and any
other indebtedness at any time held or owing by the Administrative Agent, the
Issuing Bank, such Lender, any Affiliate of the Administrative Agent, the
Issuing Bank or such Lender, or such Participant, to or for the credit or the
account of the Borrowers 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 11.2, and although such Obligations shall be contingent or unmatured.
 
Section 13.5          Litigation; Jurisdiction; Other Matters; Waivers.
 
(a)           EACH PARTY HERETO ACKNOWLEDGES THAT ANY DISPUTE OR CONTROVERSY
BETWEEN OR AMONG THE BORROWERS, THE ADMINISTRATIVE AGENT, THE ISSUING BANK OR
ANY OF THE LENDERS WOULD BE BASED ON DIFFICULT AND COMPLEX ISSUES OF LAW AND
FACT AND WOULD RESULT IN DELAY AND EXPENSE TO THE PARTIES.  ACCORDINGLY, TO THE
EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE LENDERS, THE ADMINISTRATIVE
AGENT, THE ISSUING BANK AND EACH BORROWERS HEREBY WAIVES ITS RIGHT TO A TRIAL BY
JURY IN ANY ACTION OR PROCEEDING OF ANY KIND OR NATURE IN ANY COURT OR TRIBUNAL
IN WHICH AN ACTION MAY BE COMMENCED BY OR AGAINST ANY PARTY HERETO ARISING OUT
OF THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE FEE LETTER OR IN CONNECTION
WITH ANY COLLATERAL OR BY REASON OF ANY OTHER SUIT, CAUSE OF ACTION OR DISPUTE
WHATSOEVER BETWEEN OR AMONG THE BORROWERS, THE ADMINISTRATIVE AGENT, THE ISSUING
BANK OR ANY OF THE LENDERS OF ANY KIND OR NATURE RELATING TO ANY OF THE LOAN
DOCUMENTS.
 
(b)           EACH BORROWER AND EACH OTHER LOAN PARTY IRREVOCABLY AND
UNCONDITIONALLY AGREES THAT IT WILL NOT COMMENCE ANY ACTION, LITIGATION OR
PROCEEDING OF ANY KIND OR DESCRIPTION, WHETHER IN LAW OR EQUITY, WHETHER IN
CONTRACT OR IN TORT OR OTHERWISE, AGAINST THE ADMINISTRATIVE AGENT, ANY LENDER,
THE ISSUING BANK, OR ANY RELATED PARTY OF THE FOREGOING IN ANY WAY RELATING TO
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS RELATING HERETO OR
THERETO, IN ANY FORUM OTHER THAN THE COURTS OF THE STATE OF NEW YORK SITTING IN
NEW YORK COUNTY, AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN
DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, AND EACH OF THE
PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE JURISDICTION OF
SUCH COURTS AND AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION, LITIGATION
OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT.  EACH OF
THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION, LITIGATION
OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY
SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.  NOTHING IN THIS
AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE
ADMINISTRATIVE AGENT, ANY LENDER OR THE ISSUING BANK MAY OTHERWISE HAVE TO BRING
ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
AGAINST THE BORROWERS OR ANY OTHER LOAN PARTY OR ITS PROPERTIES IN THE COURTS OF
ANY JURISDICTION.  EACH PARTY FURTHER WAIVES ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT
OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT FORUM AND EACH
AGREES NOT TO PLEAD OR CLAIM THE SAME.  THE CHOICE OF FORUM SET FORTH IN THIS
SECTION SHALL NOT BE DEEMED TO PRECLUDE THE BRINGING OF ANY ACTION BY THE
ADMINISTRATIVE AGENT, THE ISSUING BANK OR ANY LENDER OR THE ENFORCEMENT BY THE
ADMINISTRATIVE AGENT, THE ISSUING BANK OR ANY LENDER OF ANY JUDGMENT OBTAINED IN
SUCH FORUM IN ANY OTHER APPROPRIATE JURISDICTION.
 
 
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(c)           EACH BORROWER HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS AND
COMPLAINT, OR OTHER PROCESS OR PAPERS ISSUED THEREIN, AND AGREES THAT SERVICE OF
SUCH SUMMONS AND COMPLAINT, OR OTHER PROCESS OR PAPERS MAY BE MADE BY REGISTERED
OR CERTIFIED MAIL ADDRESSED TO THE BORROWERS AT ITS ADDRESS FOR NOTICES PROVIDED
FOR HEREIN.  SHOULD THE BORROWERS FAIL TO APPEAR OR ANSWER ANY SUMMONS,
COMPLAINT, PROCESS OR PAPERS SO SERVED WITHIN THIRTY (30) DAYS AFTER THE MAILING
THEREOF, THE BORROWERS SHALL BE DEEMED IN DEFAULT AND AN ORDER AND/OR JUDGMENT
MAY BE ENTERED AGAINST IT AS DEMANDED OR PRAYED FOR IN SUCH SUMMONS, COMPLAINT,
PROCESS OR PAPERS.
 
(d)           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 13.6          Successors and Assigns.
 
(a)           Successors and Assigns Generally.  The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns permitted hereby, except that
neither the Borrowers nor any other Loan Party may assign or otherwise transfer
any of its rights or obligations hereunder without the prior written consent of
the Administrative Agent and each Lender and no Lender may assign or otherwise
transfer any of its rights or obligations hereunder except (i) to an Eligible
Assignee in accordance with the provisions of the immediately following
subsection (b), (ii) by way of participation in accordance with the provisions
of the immediately following subsection (d) or (iii) by way of pledge or
assignment of a security interest subject to the restrictions of the immediately
following subsection (f) (and, subject to the last sentence of the immediately
following subsection (b), any other attempted assignment or transfer by any
party hereto shall be null and void).  Nothing in this Agreement, expressed or
implied, shall be construed to confer upon any Person (other than the parties
hereto, their respective successors and assigns permitted hereby, Participants
to the extent provided in the immediately following subsection (d) and, to the
extent expressly contemplated hereby, the Related Parties of the Administrative
Agent and the Lenders) any legal or equitable right, remedy or claim under or by
reason of this Agreement.
 
 
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(b)           Assignments by Lenders.  Any Lender may at any time assign to one
or more Eligible Assignees all or a portion of its rights and obligations under
this Agreement (including all or a portion of its Commitment and the Loans at
the time owing to it); provided that any such assignment shall be subject to the
following conditions:
 
(i)           Minimum Amounts.
 
(A)           in the case of an assignment of the entire remaining amount of
an  assigning Revolving Lender’s Revolving Commitment and the Loans at the time
owing to it, or in the case of an assignment to a Lender, an Affiliate of a
Lender or an Approved Fund, no minimum amount need be assigned; and
 
(B)           in any case not described in the immediately preceding
subsection (A), the aggregate amount of the Revolving Commitment (which for this
purpose includes Loans outstanding thereunder) or, if the applicable Revolving
Commitment is not then in effect, the principal outstanding balance of the Loans
of the assigning Lender subject to each such assignment (determined as of the
date the Assignment and Assumption with respect to such assignment is delivered
to the Administrative Agent or, if “Trade Date” is specified in the Assignment
and Assumption, as of the Trade Date) shall not be less than $5,000,000 in the
case of any assignment of a Revolving Commitment, unless each of the
Administrative Agent and, so long as no Default or Event of Default shall exist,
the Borrowers otherwise consent (each such consent not to be unreasonably
withheld or delayed); provided, however, that if, after giving effect to such
assignment, the amount of the Commitment held by such assigning Lender or the
outstanding principal balance of the Loans of such assigning Lender would be
less than $5,000,000 in the case of a Commitment or Revolving Loans, then such
assigning Lender shall assign the entire amount of its Commitment and the Loans
at the time owing to it.
 
(ii)           Proportionate Amounts.  Each partial assignment shall be made as
an assignment of a proportionate part of all the assigning Lender’s rights and
obligations under this Agreement with respect to the Loan or the Revolving
Commitment assigned.
 
(iii)           Required Consents.  No consent shall be required for any
assignment except to the extent required by clause (i)(B) of this subsection (b)
and, in addition:
 
(A)           the consent of the Borrowers (such consent not to be unreasonably
withheld or delayed) shall be required unless (x) a Default or Event of Default
shall exist at the time of such assignment or (y) such assignment is to a
Lender, an Affiliate of a Lender or an Approved Fund; provided that the
Borrowers shall be deemed to have consented to any such assignment unless it
shall object thereto by written notice to the Administrative Agent within five
(5) Business Days after having received notice thereof; and
 
(B)           the consent of the Administrative Agent (such consent not to be
unreasonably withheld or delayed) shall be required for assignments in respect
of a Revolving Commitment if such assignment is to a Person that is not already
a Lender with a Commitment, an Affiliate of such a Lender or an Approved Fund
with respect to such a Lender.
 
 
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(iv)           Assignment and Assumption; Notes.  The parties to each assignment
shall execute and deliver to the Administrative Agent an Assignment and
Assumption, together with a processing and recordation fee of $4,500 ($7,500 if
such Lender is a Defaulting Lender at such time) for each assignment, and the
assignee, if it is not a Lender, shall deliver to the Administrative Agent an
Administrative Questionnaire.  If requested by the transferor Lender or the
Assignee, upon the consummation of any assignment, the transferor Lender, the
Administrative Agent and the Borrowers shall make appropriate arrangements so
that new Notes are issued to the Assignee and such transferor Lender, as
appropriate.
 
(v)           No Assignment to Borrowers.  No such assignment shall be made to
the Borrowers or any of the Borrowers’ Affiliates, any other Loan Parties, or
any of their respective Subsidiaries.
 
(vi)           No Assignment to Natural Persons.  No such assignment shall be
made to a natural person.
 
(vii)           Assignments by Specified Derivatives Provider.  If the assigning
Lender (or its Affiliate) is a Specified Derivatives Provider and if after
giving effect to such assignment such Lender will hold no further Loans or
Revolving Commitments under this Agreement, such Lender shall undertake such
assignment only contemporaneously with an assignment by such Lender (or its
Affiliate, as the case may be) of all of its Specified Derivatives Contracts to
the Assignee or another Lender (or Affiliate thereof).
 
(viii)           Amendments to Schedule 1.1.  The Administrative Agent may
unilaterally amend Schedule 1.1 attached hereto to reflect any assignment
effected hereunder.
 
Subject to acceptance and recording thereof by the Administrative Agent pursuant
to the immediately following subsection (c), from and after the effective date
specified in each Assignment and Assumption, the assignee thereunder shall be a
party to this Agreement and, to the extent of the interest assigned by such
Assignment and Assumption, have the rights and obligations of a Lender under
this Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Assumption, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender’s rights and obligations under
this Agreement, such Lender shall cease to be a party hereto) but shall continue
to be entitled to the benefits of Sections 5.4, 13.2 and 13.10 and the other
provisions of this Agreement and the other Loan Documents as provided in
Section 13.11 with respect to facts and circumstances occurring prior to the
effective date of such assignment.  Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this
paragraph shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with the
immediately following subsection (d).
 
(c)           Register.  The Administrative Agent, acting solely for this
purpose as an agent of the Borrowers, shall maintain at the Principal Office a
copy of each Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitments of,
and principal amounts of the Loans owing to, each Lender pursuant to the terms
hereof from time to time (the “Register”).  The entries in the Register shall be
conclusive, and the Borrowers, the Administrative Agent and the Lenders may
treat each Person whose name is recorded in the Register pursuant to the terms
hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding
notice to the contrary.  The Register shall be available for inspection by the
Borrowers and any Lender, at any reasonable time and from time to time upon
reasonable prior notice.
 
 
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(d)           Participations.  Any Lender may at any time, without the consent
of, or notice to, the Borrowers or the Administrative Agent, sell participations
to any Person (other than a natural person or the Borrowers or any of the
Borrowers’ Affiliates or Subsidiaries) (each, a “Participant”) in all or a
portion of such Lender’s rights and/or obligations under this Agreement
(including all or a portion of its Commitment and/or the Loans owing to it);
provided that (i) such Lender’s obligations under this Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations and (iii) the Borrowers, the
Administrative Agent and the Lenders shall continue to deal solely and directly
with such Lender in connection with such Lender’s rights and obligations under
this Agreement.  Any agreement or instrument pursuant to which a Lender sells
such a participation shall provide that such Lender shall retain the sole right
to enforce this Agreement and to approve any amendment, modification or waiver
of any  provision of this Agreement; provided that such agreement or instrument
may provide that such Lender will not, without the consent of the Participant,
agree to (w) increase such Lender’s Commitment, (x) extend the date fixed for
the payment of principal on the Loans or portions thereof owing to such Lender,
(y) reduce the rate at which interest is payable thereon or (z) release any
Guarantor from its Obligations under the Guaranty.  Subject to the immediately
following subsection (e), the Borrowers agree that each Participant shall be
entitled to the benefits of Sections 3.10, 5.1, 5.4 to the same extent as if it
were a Lender and had acquired its interest by assignment pursuant to paragraph
(b) of this Section.  To the extent permitted by Applicable Law, each
Participant also shall be entitled to the benefits of Section 13.4 as though it
were a Lender, provided such Participant agrees to be subject to Section 3.3 as
though it were a Lender.
 
(e)           Limitations upon Participant Rights.  A Participant shall not be
entitled to receive any greater payment under Sections 3.10 and 5.1 than the
applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to
such Participant is made with the Borrowers’ prior written consent.  A
Participant that would be a Foreign Lender if it were a Lender shall not be
entitled to the benefits of Section 3.10 unless the Borrowers are notified of
the participation sold to such Participant and such Participant agrees, for the
benefit of the Borrowers and the Administrative Agent, to comply with
Section 3.10.(c) as though it were a Lender.
 
(f)           Certain Pledges.  Any Lender may at any time pledge or assign a
security interest in all or any portion of its rights under this Agreement to
secure obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank; provided that no such pledge or
assignment shall release such Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.
 
(g)           No Registration.  Each Lender agrees that, without the prior
written consent of the Borrowers and the Administrative Agent, it will not make
any assignment hereunder in any manner or under any circumstances that would
require registration or qualification of, or filings in respect of, any Loan or
Note under the Securities Act or any other securities laws of the United States
of America or of any other jurisdiction.
 
Section 13.7          Amendments and Waivers.
 
(a)           Generally.  Except as otherwise expressly provided in this
Agreement, (i) any consent or approval required or permitted by this Agreement
or any other Loan Document to be given by the Lenders may be given, (ii) any
term of this Agreement or of any other Loan Document (other than any Fee Letter)
may be amended, (iii) the performance or observance by the Borrowers, any other
Loan Party or any other Subsidiary of any terms of this Agreement or such other
Loan Document (other than any Fee Letter) may be waived, and (iv) the
continuance of any Default or Event of Default may be waived (either generally
or in a particular instance and either retroactively or prospectively) with, but
only with, the written consent of the Requisite Lenders (or the Administrative
Agent at the written direction of the Requisite Lenders), and, in the case of an
amendment to any Loan Document, the written consent of each Loan Party which is
party thereto.  Subject to the immediately following subsection (b), any term of
this Agreement or of any other Loan Document relating to the rights or
obligations of the Revolving Lenders, and not any other Lenders, may be amended,
and the performance or observance by the Borrowers or any other Loan Party or
any Subsidiary of any such terms may be waived (either generally or in a
particular instance and either retroactively or prospectively) with, and only
with, the written consent of the Requisite Lenders (and, in the case of an
amendment to any Loan Document, the written consent of each Loan Party a party
thereto).
 
 
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(b)           Consent of Lenders Directly Affected.  In addition to the
foregoing requirements, no amendment, waiver or consent shall, unless in
writing, and signed by each of the Lenders directly and adversely affected
thereby (or the Administrative Agent at the written direction of such Lenders),
do any of the following:
 
(i)           increase the Commitments of the Lenders (excluding any increase as
a result of an assignment of Commitments permitted under Section 13.6) or
subject the Lenders to any additional obligations;
 
(ii)          reduce the principal of, or interest that has accrued or the rates
of interest that will be charged on the outstanding principal amount of, any
Loans or other Obligations;
 
(iii)         reduce the amount of any Fees payable to the Lenders hereunder,
other than Fees payable under any Fee Letter;
 
(iv)         modify the definition of “Maturity Date” (except in accordance with
Section 2.14), otherwise postpone any date fixed for any payment of principal
of, or interest on, any Loans or for the payment of Fees or any other
Obligations, or extend the expiration date of any Letter of Credit beyond the
Maturity Date;
 
(v)          modify the definition of “Commitment Percentage” or amend of
otherwise modify the provisions of Section 3.2;
 
(vi)         amend this Section or amend the definitions of the terms used in
this Agreement or the other Loan Documents insofar as such definitions affect
the substance of this Section;
 
(vii)        modify the definition of the term “Requisite Lenders” or modify in
any other manner the number or percentage of the Lenders required to make any
determinations or waive any rights hereunder or to modify any provision hereof;
or
 
(viii)       release any Guarantor from its obligations under the Guaranty;
 
(ix)          release any Borrower from its obligations under the Loan Documents
except as contemplated by Section 8.14(b);
 
(x)           waive a Default or Event of Default under Section 11.1(a), except
as provided in Section 11.7; or
 
(xi)          amend, or waive the Borrower’s compliance with, Section 2.16.
 
Notwithstanding the foregoing, modifications to provisions requiring pro rata
payments, distributions or commitment reductions or sharing of payments in
connection with “amend and extend” transactions shall only require approval of
the Requisite Lenders, provided, that all approving Lenders shall be treated on
a pro rata basis and shall otherwise be on customary terms.
 
 
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(c)           Amendment of Administrative Agent’s Duties, Etc.  No amendment,
waiver or consent unless in writing and signed by the Administrative Agent, in
addition to the Lenders required hereinabove to take such action, shall affect
the rights or duties of the Administrative Agent under this Agreement or any of
the other Loan Documents.  Any amendment, waiver or consent relating to
Section 2.4 or the obligations of the Issuing Bank under this Agreement or any
other Loan Document shall, in addition to the Lenders required hereinabove to
take such action, require the written consent of the Issuing Bank.  Any
amendment, waiver or consent with respect to any Loan Document that (i)
diminishes the rights of a Specified Derivatives Provider in a manner or to an
extent dissimilar to that affecting the Lenders or (ii) increases the
liabilities or obligations of a Specified Derivatives Provider shall, in
addition to the Lenders required hereinabove to take such action, require the
consent of the Lender that is (or having an Affiliate that is) such Specified
Derivatives Provider.  No waiver shall extend to or affect any obligation not
expressly waived or impair any right consequent thereon and any amendment,
waiver or consent shall be effective only in the specific instance and for the
specific purpose set forth therein.  No course of dealing or delay or omission
on the part of the Administrative Agent or any Lender in exercising any right
shall operate as a waiver thereof or otherwise be prejudicial thereto.  Any
Event of Default occurring hereunder shall continue to exist until such time as
such Event of Default is waived in writing in accordance with the terms of this
Section, notwithstanding any attempted cure or other action by the Borrowers,
any other Loan Party or any other Person subsequent to the occurrence of such
Event of Default.  Except as otherwise explicitly provided for herein or in any
other Loan Document, no notice to or demand upon the Borrowers shall entitle the
Borrowers to other or further notice or demand in similar or other
circumstances.
 
Section 13.8         Nonliability of Administrative Agent and Lenders.
 
The relationship between the Borrowers, on the one hand, and the Lenders, the
Issuing Bank and the Administrative Agent, on the other hand, shall be solely
that of Borrowers and lender.  None of the Administrative Agent, the Issuing
Bank or any Lender shall have any fiduciary responsibilities to the Borrowers
and no provision in this Agreement or in any of the other Loan Documents, and no
course of dealing between or among any of the parties hereto, shall be deemed to
create any fiduciary duty owing by the Administrative Agent, the Issuing Bank or
any Lender to any Lender, the Borrowers, any Subsidiary or any other Loan
Party.  None of the Administrative Agent, the Issuing Bank or any Lender
undertakes any responsibility to the Borrowers to review or inform the Borrowers
of any matter in connection with any phase of the Borrowers’ business or
operations.
 
 
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Section 13.9         Confidentiality.
 
Except as otherwise provided by Applicable Law, the Administrative Agent, the
Issuing Bank and each Lender shall maintain the confidentiality of all
Information (as defined below) in accordance with its customary procedure for
handling confidential information of this nature and in accordance with safe and
sound banking practices but in any event may make disclosure:  (a) to its
Affiliates and to its and its Affiliates’ respective partners, directors,
officers, employees, agents, advisors and other representatives (it being
understood that the Persons to whom such disclosure is made will be informed of
the confidential nature of such Information and instructed to keep such
Information confidential in accordance with this Section 13.9); (b) subject to
an agreement containing provisions substantially the same as those of this
Section, to (i) any actual or proposed Assignee, Participant or other transferee
in connection with a potential transfer of any Commitment or participation
therein as permitted hereunder, or (ii) any actual or prospective counterparty
(or its advisors) to any swap or derivative transaction relating to the
Borrowers and its obligations; (c) as required or requested by any Governmental
Authority or representative thereof or pursuant to legal process or in
connection with any legal proceedings, or as otherwise required by Applicable
Law; (d) to the Administrative Agent’s, Issuing Bank’s or such Lender’s
independent auditors and other professional advisors (provided they shall be
notified of the confidential nature of the information); (e) in connection with
the exercise of any remedies under any Loan Document (or any Specified
Derivatives Contract) or any action or proceeding relating to any Loan Document
(or any such Specified Derivatives Contract) or the enforcement of rights
hereunder or thereunder; (f) to the extent such Information (i) becomes publicly
available other than as a result of a breach of this Section actually known by
the Administrative Agent, the Issuing Bank or such Lender to be a breach of this
Section or (ii) becomes available to the Administrative Agent, the Issuing Bank,
any Lender or any Affiliate of the Administrative Agent, the Issuing Bank or any
Lender on a nonconfidential basis from a source other than the Borrowers or any
Affiliate of the Borrowers; (g) to the extent requested by, or required to be
disclosed to, any nationally recognized rating agency or regulatory or similar
authority (including any self-regulatory authority, such as the National
Association of Insurance Commissioners) having or purporting to have
jurisdiction over it; (h) to bank trade publications, such information to
consist of deal terms and other information customarily found in such
publications; (i) to any other party hereto; and (j) with the consent of the
Borrowers.  Notwithstanding the foregoing, the Administrative Agent, the Issuing
Bank and each Lender may disclose any such confidential information, without
notice to the Borrowers or any other Loan Party, to Governmental Authorities in
connection with any regulatory examination of the Administrative Agent, the
Issuing Bank or such Lender or in accordance with the regulatory compliance
policy of the Administrative Agent, the Issuing Bank or such Lender.  As used in
this Section, the term “Information” means all information received from the
Borrowers, any other Loan Party, any other Subsidiary or Affiliate relating to
any Loan Party or any of their respective businesses, other than any such
information that is available to the Administrative Agent, any Lender or the
Issuing Bank on a nonconfidential basis prior to disclosure by the Borrowers,
any other Loan Party, any other Subsidiary or any Affiliate, provided that, in
the case of any such information received from the Borrowers, any other Loan
Party, any other Subsidiary or any Affiliate after the date hereof, such
information is clearly identified at the time of delivery as confidential.  Any
Person required to maintain the confidentiality of Information as provided in
this Section shall be considered to have complied with its obligation to do so
if such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.
 
Section 13.10       Indemnification.
 
(a)           Each Borrower shall and hereby agrees to indemnify, defend and
hold harmless the Administrative Agent, the Issuing Bank, the Lenders, all of
the Affiliates of each of the Administrative Agent, the Issuing Bank or any of
the Lenders, and their respective directors, officers, shareholders, agents,
employees and counsel (each referred to herein as an “Indemnified Party”) from
and against any and all of the following (collectively, the “Indemnified
Costs”):  out of pocket losses, costs, claims, penalties, damages, liabilities,
deficiencies, judgments or expenses of every kind and nature (including, without
limitation, amounts paid in settlement, court costs and the reasonable fees and
disbursements of counsel incurred in connection with any litigation,
investigation, claim or proceeding or any advice rendered in connection
therewith, but excluding Indemnified Costs indemnification in respect of which
is specifically covered by Section 3.10 or 5.1 or expressly excluded from the
coverage of such Sections) incurred by an Indemnified Party in connection with,
arising out of, or by reason of, any suit, cause of action, claim, arbitration,
investigation or settlement, consent decree or other proceeding (the foregoing
referred to herein as an “Indemnity Proceeding”) which is in any way related
directly or indirectly to:  (i) this Agreement or any other Loan Document or the
transactions contemplated thereby; (ii) the making of any Loans or issuance of
Letters of Credit hereunder; (iii) any actual or proposed use by the Borrowers
of the proceeds of the Loans or Letters of Credit; (iv) the Administrative
Agent’s, the Issuing Bank’s or any Lender’s entering into this Agreement;
(v) the fact that the Administrative Agent, the Issuing Bank and the Lenders
have established the credit facility evidenced hereby in favor of the Borrowers;
(vi) the fact that the Administrative Agent, the Issuing Bank and the Lenders
are creditors of the Borrowers and have or are alleged to have information
regarding the financial condition, strategic plans or business operations of the
Borrowers and the Subsidiaries; (vii) the fact that the Administrative Agent,
the Issuing Bank and the Lenders are material creditors of the Borrowers and are
alleged to influence directly or indirectly the business decisions or affairs of
the Borrowers and the Subsidiaries or their financial condition; (viii) the
exercise of any right or remedy the Administrative Agent, the Issuing Bank or
the Lenders may have under this Agreement or the other Loan Documents including,
but not limited to, the foreclosure upon, or seizure of, any Collateral or the
exercise of any other rights of a secured party; (ix) any civil penalty or fine
assessed by the OFAC against, and all costs and expenses (including counsel fees
and disbursements) incurred in connection with defense thereof by, the
Administrative Agent, the Issuing Bank or any Lender as a result of conduct of
the Borrowers, any other Loan Party or any other Subsidiary that violates a
sanction administered or enforced by the OFAC; or (x) any violation or
non-compliance by the Borrowers 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 Borrowers or its Subsidiaries (or its respective properties) (or the
Administrative Agent and/or the Lenders and/or the Issuing Bank as successors to
the Borrowers) to be in compliance with such Environmental Laws; provided,
however, that the Borrowers 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 subsection to the extent arising from the gross
negligence or willful misconduct of such Indemnified Party, as determined by a
court of competent jurisdiction in a final, non-appealable judgment.
 
 
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(b)           The Borrowers’ indemnification obligations under this
Section shall apply to all Indemnity Proceedings arising out of, or related to,
the foregoing whether or not an Indemnified Party is a named party in such
Indemnity Proceeding.  In this connection, this indemnification shall cover all
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 Borrowers or any Subsidiary, any shareholder of the Borrowers or any
Subsidiary (whether such shareholder(s) are prosecuting such Indemnity
Proceeding in their individual capacity or derivatively on behalf of the
Borrowers), any account debtor of the Borrowers or any Subsidiary or by any
Governmental Authority.
 
(c)           This indemnification shall apply to any Indemnity Proceeding
arising during the pendency of any bankruptcy proceeding filed by or against the
Borrowers 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 Borrowers at the
request of such Indemnified Party notwithstanding any claim or assertion by the
Borrowers 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 Borrowers if it is actually and finally
determined by a court of competent jurisdiction that such Indemnified Party is
not so entitled to indemnification hereunder.
 
(e)           An Indemnified Party may conduct its own investigation and defense
of, and may formulate its own strategy with respect to, any Indemnity Proceeding
covered by this Section and, as provided above, all Indemnified Costs incurred
by such Indemnified Party shall be reimbursed by the Borrowers.  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 Borrowers hereunder to indemnify and hold harmless
each such Indemnified Party; provided, however, that if (i) the Borrowers are
required to indemnify an Indemnified Party pursuant hereto and (ii) the
Borrowers have provided evidence reasonably satisfactory to such Indemnified
Party that the Borrowers 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 Borrowers
(which consent shall not be unreasonably withheld or delayed).  Notwithstanding
the foregoing, an Indemnified Party may settle or compromise any such Indemnity
Proceeding without the prior written consent of the Borrowers where (x) no
monetary relief is sought against such Indemnified Party in such Indemnity
Proceeding or (y) there is an allegation of a violation of law by such
Indemnified Party.
 
 
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(f)           If and to the extent that the obligations of the Borrowers under
this Section are unenforceable for any reason, the Borrowers hereby agree to
make the maximum contribution to the payment and satisfaction of such
obligations which is permissible under Applicable Law.
 
(g)           The Borrowers’ obligations under this Section shall survive any
termination of this Agreement and the other Loan Documents and the payment in
full in cash of the Obligations, and are in addition to, and not in substitution
of, any of the other obligations set forth in this Agreement or any other Loan
Document to which it is a party.
 
References in this Section 13.10 to “Lender” or “Lenders” shall be deemed to
include such Persons (and their Affiliates) in their capacity as Specified
Derivatives Providers.
 
Section 13.11       Termination; Survival.
 
This Agreement shall terminate at such time as (a) all of the Commitments have
been terminated, (b) all Letters of Credit have terminated or expired or been
canceled, (c) none of the Lenders is obligated any longer under this Agreement
to make any Loans and the Issuing Bank is no longer obligated under this
Agreement to issue Letters of Credit and (d) all Obligations (other than
obligations which survive as provided in the following sentence) have been paid
and satisfied in full.  The indemnities to which the Administrative Agent, the
Issuing Bank and the Lenders are entitled under the provisions of Sections 3.10,
5.1, 5.4, 12.8, 13.2 and 13.10 and any other provision of this Agreement and the
other Loan Documents, and the provisions of Section 13.5, shall continue in full
force and effect and shall protect the Administrative Agent, the Issuing Bank
and the Lenders (i) notwithstanding any termination of this Agreement, or of the
other Loan Documents, against events arising after such termination as well as
before and (ii) at all times after any such party ceases to be a party to this
Agreement with respect to all matters and events existing on or prior to the
date such party ceased to be a party to this Agreement.
 
Section 13.12       Severability of Provisions.
 
If any provision of this Agreement or the other Loan Documents shall be
determined by a court of competent jurisdiction to be invalid or unenforceable,
that provision shall be deemed severed from the Loan Documents, and the
validity, legality and enforceability of the remaining provisions shall remain
in full force as though the invalid, illegal, or unenforceable provision had
never been part of the Loan Documents.
 
Section 13.13       GOVERNING LAW.
 
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY
PERFORMED, IN SUCH STATE.
 
 
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Section 13.14       Counterparts.
 
To facilitate execution, this Agreement and any amendments, waivers, consents or
supplements may be executed in any number of counterparts as may be convenient
or required (which may be effectively delivered by facsimile, in portable
document format (“PDF”) or other similar electronic means).  It shall not be
necessary that the signature of, or on behalf of, each party, or that the
signature of all persons required to bind any party, appear on each
counterpart.  All counterparts shall collectively constitute a single
document.  It shall not be necessary in making proof of this document to produce
or account for more than a single counterpart containing the respective
signatures of, or on behalf of, each of the parties hereto.
 
Section 13.15       Obligations with Respect to Loan Parties.
 
The obligations of the Borrowers 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 Borrowers may have that the Borrowers does not
control such Loan Parties.
 
Section 13.16       Independence of Covenants.
 
All covenants hereunder shall be given in any jurisdiction independent effect so
that if a particular action or condition is not permitted by any of such
covenants, the fact that it would be permitted by an exception to, or be
otherwise within the limitations of, another covenant shall not avoid the
occurrence of a Default or an Event of Default if such action is taken or
condition exists.
 
Section 13.17       Limitation of Liability.
 
None of the Administrative Agent, the Issuing Bank or any Lender, or any
Affiliate, officer, director, employee, attorney, or agent of the Administrative
Agent, the Issuing Bank or any Lender shall have any liability with respect to,
and the Borrowers 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 Borrowers in connection with, arising out of, or in
any way related to, this Agreement, any of the other Loan Documents or the Fee
Letter, or any of the transactions contemplated by this Agreement or any of the
other Loan Documents.  The Borrowers hereby waives, releases, and agrees not to
sue the Administrative Agent, the Issuing Bank or any Lender or any of the
Administrative Agent’s, the Issuing Bank’s or any Lender’s Affiliates, officers,
directors, employees, attorneys, or agents for punitive damages in respect of
any claim in connection with, arising out of, or in any way related to, this
Agreement, any of the other Loan Documents, the Fee Letter, or any of the
transactions contemplated by this Agreement or financed hereby.
 
Section 13.18       Entire Agreement.
 
This Agreement, the Notes, the other Loan Documents and the Fee Letter 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.
 
 
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Section 13.19       Construction.
 
The Administrative Agent, the Issuing Bank, the Borrowers and each Lender
acknowledge that each of them has had the benefit of legal counsel of its own
choice and has been afforded an opportunity to review this Agreement and the
other Loan Documents with its legal counsel and that this Agreement and the
other Loan Documents shall be construed as if jointly drafted by the
Administrative Agent, the Issuing Bank, the Borrowers and each Lender.
 
Section 13.20       Headings.
 
The paragraph and section headings in this Agreement are provided for
convenience of reference only and shall not affect its construction or
interpretation.
 
Section 13.21       Joint Borrower Provisions.
 
Each Borrower acknowledges and agrees that it shall be jointly and severally
liable for the Loan and all other Obligations arising under this Agreement
and/or any of the other Loan Documents.  In furtherance thereof, each Borrower
acknowledges and agrees as follows:
 
(a)           For the purpose of implementing the joint borrower provisions of
the Loan Documents, each Borrower hereby irrevocably appoints each other
Borrower as its agent and attorney-in-fact for all purposes of the Loan
Documents, including the giving and receiving of notices and other
communications.
 
(b)           To induce Lenders to make the Loan, and in consideration thereof,
each Borrower hereby agrees to indemnify Administrative Agent, Lenders and the
other Indemnified Parties against, and hold Administrative Agent, Lenders and
the other Indemnified Parties harmless from, any and all out of pocket
liabilities, expenses, losses, damages and/or claims of damage or injury
asserted against Administrative Agent and/or Lenders by any Borrower or by any
other Person arising from or incurred by reason of reliance by Administrative
Agent and/or Lenders on any requests or instructions from any Borrower.
 
(c)           Each Borrower acknowledges that the liens and security interests
created or granted herein and by the other Loan Documents will secure the
Obligations of each Borrower under the Loan Documents and, in full recognition
of that fact, each Borrower consents and agrees that the Administrative Agent
and/or Lenders may, at any time and from time to time, without notice or demand,
and without affecting the enforceability or security hereof or of any other Loan
Document:
 
(i)           agree with any Borrower to supplement, modify, amend, extend,
renew, accelerate, or otherwise change the time for payment or the terms of the
Obligations or any part thereof, including any increase or decrease of the
rate(s) of interest thereon;
 
(ii)          agree with any Borrower to supplement, modify, amend or waive, or
enter into or give any agreement, approval or consent with respect to, the
Obligations or any part thereof or any of the Loan Documents or any additional
security or guaranties, or any condition, covenant, default, remedy, right,
representation or term thereof or thereunder;
 
(iii)         accept new or additional instruments, documents or agreements in
exchange for or relative to any of the Loan Documents or the Obligations or any
part thereof;
 
(iv)         accept partial payments on the Obligations;
 
(v)          receive and hold additional security or guaranties for the
Obligations or any part thereof;
 
 
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(vi)         release, reconvey, terminate, waive, abandon, subordinate,
exchange, substitute, transfer and enforce any security for or guaranties of the
Obligations, and apply any security and direct the order or manner of sale
thereof as Administrative Agent, in its sole and absolute discretion may
determine;
 
(vii)        release any Person or any guarantor from any personal liability
with respect to the Obligations or any part thereof; or
 
(viii)       settle, release on terms satisfactory to Administrative Agent or by
operation of applicable laws or otherwise liquidate or enforce any Obligations
and any security therefor or guaranty thereof in any manner, consent to the
transfer of any such security and bid and purchase at any sale; and consent to
the merger, change or any other restructuring or termination of the corporate
existence of any Borrower or any other Person, and correspondingly restructure
the obligations of such Borrower or other Person, and any such merger, change,
restructuring or termination shall not affect the liability of any Borrower or
the continuing existence of any lien or security interest hereunder, under any
other Loan Document to which any Borrower is a party or the enforceability
hereof or thereof with respect to all or any part of the Obligations.
 
(d)           Upon the occurrence of and during the continuance of any Default,
Administrative Agent may enforce this Agreement and the other Loan Documents
independently as to each Borrower and independently of any other remedy or
security Administrative Agent and/or Lenders at any time may have or hold in
connection with the Obligations, and in collecting on the Loan it shall not be
necessary for Administrative Agent to marshal assets in favor of any Borrower or
any other Person or to proceed upon or against and/or exhaust any other security
or remedy before proceeding to enforce this Agreement and the other Loan
Documents.  Each Borrower expressly waives any right to require Administrative
Agent and/or Lenders, in connection with Administrative Agent’s and/or Lenders’
efforts to obtain repayment of the Loan and other Obligations, to marshal assets
in favor of any Borrower or any other Person or to proceed against any other
Person or any collateral provided by any other Person, and agrees that
Administrative Agent and/or Lenders may proceed against any Persons and/or
collateral in such order as it shall determine in its sole and absolute
discretion in connection with Administrative Agent’s efforts to obtain repayment
of the Loan and other Obligations.  Administrative Agent may file a separate
action or actions against each Borrower to enforce the Obligations, whether
action is brought or prosecuted with respect to any other security or against
any other Person, or whether any other Person is joined in any such action or
actions.  Each Borrower agrees that Administrative Agent, Lenders, the other
Borrowers and/or any other Person may deal with the Administrative Agent and
Lenders in connection with the Obligations or otherwise, or alter any contracts
or agreements now or hereafter existing between any of them or between the
Borrowers and/or any other Person, in any manner whatsoever, all without in any
way altering or affecting the security of this Agreement or the other Loan
Documents.  The rights of Administrative Agent and/or Lenders hereunder and
under the other Loan Documents shall be reinstated and revived, and the
enforceability of this Agreement and the other Loan Documents shall continue,
with respect to any amount at any time paid on account of the Obligations which
thereafter shall be required to be restored or returned by Administrative Agent
and/or Lenders as a result of the bankruptcy, insolvency or reorganization of
any Borrower or any other Person, or otherwise, all as though such amount had
not been paid.  The enforceability of this Agreement and the other Loan
Documents at all times shall remain effective even though any or all
Obligations, or any other security or guaranty therefor, may be or hereafter may
become invalid or otherwise unenforceable as against any Borrower or any other
Person and whether or not any Borrower or any other Person shall have any
personal liability with respect thereto.  Each Borrower expressly waives any and
all defenses to the enforcement of its Obligations under the Loan Documents now
or hereafter arising or asserted by reason of (i) any disability or other
defense of any Borrower or any other Person with respect to the Obligations,
(ii) the unenforceability or invalidity of any security or guaranty for the
Obligations or the lack of perfection or continuing perfection or failure of
priority of any security for the Obligations, (iii) the cessation for any cause
whatsoever of the liability of any Borrower or any other Person (other than by
reason of the full and final payment and performance of all Obligations), (iv)
any failure of Administrative Agent and/or Lenders to marshal assets in favor of
any of the Borrowers or any other Person, (v) any failure of Administrative
Agent and/or Lenders to give notice of sale or other disposition of any
Collateral for the Obligations to any Borrower or to any other Person or any
defect in any notice that may be given in connection with any such sale or
disposition, (vi) any failure of Administrative Agent and/or Lenders to comply
in any non-material respect with applicable laws in connection with the sale or
other disposition of any Collateral or other security for any Obligation, (vii)
any act or omission of Administrative Agent and/or Lenders or others that
directly or indirectly results in or aids the discharge or release of any
Borrower or of any other Person or of any of the Obligations or any other
security or guaranty therefor by operation of law or otherwise, (viii) any law
which provides that the obligation of a surety or guarantor must neither be
larger in amount nor in other respects more burdensome than that of the
principal or which reduces a surety’s or guarantor’s obligation in proportion to
the principal obligation, (ix) any failure of Administrative Agent and/or
Lenders to file or enforce a claim in any Bankruptcy Proceeding with respect to
any Person, (x) the election by Administrative Agent, in any Bankruptcy
Proceeding of any Person, of the application or non-application of Section
1111(b)(2) of the United States Bankruptcy Code, (xi) any extension of credit or
the grant of any lien under Section 364 of the United States Bankruptcy Code
except to the extent otherwise provided in this Agreement, (xii) any use of cash
collateral under Section 363 of the United States Bankruptcy Code, (xiii) any
agreement or stipulation with respect to the provision of adequate protection in
any Bankruptcy Proceeding of any Person, (xiv) the avoidance of any lien or
security interest in favor of Administrative Agent securing the Obligations for
any reason, or (xv) any Bankruptcy Proceeding commenced by or against any
Person, including any discharge of, or bar or stay against collecting, all or
any of the Obligations (or any interest thereon) in or as a result of any such
proceeding.
 
 
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(e)           Borrowers represent and warrant to Administrative Agent and
Lenders that they have established adequate means of obtaining from each other,
on a continuing basis, financial and other information pertaining to their
respective businesses, operations and condition (financial and otherwise) and
their respective properties, and each now is and hereafter will be completely
familiar with the businesses, operations and condition (financial and otherwise)
of the other and their respective properties.  Each Borrower hereby expressly
waives and relinquishes any duty on the part of Administrative Agent and/or
Lenders to disclose to such Borrower any matter, fact or thing related to the
businesses, operations or condition (financial or otherwise) of the other
Borrowers or the other Borrowers’ properties, whether now known or hereafter
known by Administrative Agent and/or Lenders during the life of this
Agreement.  With respect to any of the Obligations, Administrative Agent and/or
Lenders need not inquire into the powers of any Borrower or the officers,
employees or other Persons acting or purporting to act on such Borrower’s
behalf.
 
(f)           Without limiting the foregoing, or anything else contained in this
Agreement, each Borrower waives all rights and defenses that it may have because
the Obligations are secured by real property.  This means, among other things:
 
(i)           Administrative Agent and/or Lenders may collect on the Obligations
from any Borrower without first foreclosing on any real or personal property
collateral pledged by the other Borrowers; and
 
(ii)           If Administrative Agent and/or Lenders foreclose on any real
property collateral pledged by any Borrower for the Obligations:  (A) the amount
of the indebtedness owed by the other Borrowers may be reduced only by the price
for which that collateral is sold at the foreclosure sale, even if the
collateral is worth more than the sale price; and (B) Administrative Agent and
Lenders may collect from any Borrower even if Administrative Agent and/or
Lenders, by foreclosing on the real property collateral, has destroyed any right
any Borrower may have to collect from the other Borrowers.
 
 
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(iii)           This is an unconditional and irrevocable waiver of any rights
and defenses each Borrower may have because the Obligations are secured by real
property.
 
Each Borrower warrants and agrees that each of the waivers and consents set
forth herein is made with full knowledge of its significance and consequences,
with the understanding that events giving rise to any defense waived may
diminish, destroy or otherwise adversely affect rights which each otherwise may
have against the other, against Administrative Agent and Lenders or others, or
against any collateral.  If any of the waivers or consents herein are determined
to be contrary to any applicable law or public policy, such waivers and consents
shall be effective to the maximum extent permitted by law.
 
Section 13.22       Time.  Time is of the essence with respect to each provision
of this Agreement.
 

[Signatures on Following Pages]
 
 
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IN WITNESS WHEREOF, the parties hereto have caused this Credit Agreement to be
executed by their authorized officers all as of the day and year first above
written.
 

  [Borrowers]                  
 
By:
/s/ Robert Blanz     Name: Robert Blanz     Title: Senior Vice President        
 

 

  [Parent]                  
 
By:
/s/ Robert Blanz     Name: Robert Blanz     Title: Senior Vice President        
 

 

 

 

[Signatures Continued on Next Page]
 
 
 

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[Signature Page to Credit Agreement]
 

 
WELLS FARGO BANK, NATIONAL ASSOCIATION, as
Administrative Agent and as a Lender
             
 
By:
/s/ David Pioch     Name: David Pioch     Title: Senior Vice President          

 
 
 

[Signatures Continued on Next Page]
 

 
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[Signature Page to Credit Agreement]

  [LENDER]                  
 
By:
      Name:       Title:            

 
 
 
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EXHIBIT A
 
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
 
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT dated as of _______, 201__ (the
“Agreement”) by and among _________________________ (the “Assignor”),
_________________________ (the “Assignee”), CAPLEASE, LP, a Delaware limited
partnership, PREFCO DIX-NEUF LLC, a Connecticut limited liability company,
PREFCO NINETEEN LIMITED PARTNERSHIP, a Connecticut limited partnership, CLF CANE
RUN MEMBER, LLC, a Delaware limited liability company, CLF CANE RUN LOUISVILLE,
LLC, a Delaware limited liability company, CLF LANDMARK OMAHA LLC, a Delaware
limited liability company, CLF DODGE OMAHA LLC, a Delaware limited liability
company, KDC BUSCH BOULEVARD LLC, a Delaware limited liability company, and CLF
555 N DANIELS WAY LLC, a Delaware limited liability company (each a “Borrower”
and collectively, the “Borrowers”), and WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Administrative Agent (the “Administrative Agent”).
 
WHEREAS, the Assignor is a Lender under that certain Credit Agreement dated as
of June 29, 2012 (as amended, restated, supplemented or otherwise modified from
time to time, the “Credit Agreement”), by and among the Borrowers, Parent (as
defined in the Credit Agreement), the financial institutions party thereto and
their assignees under Section 13.6 thereof, the Administrative Agent, and the
other parties thereto;
 
WHEREAS, the Assignor desires to assign to the Assignee all or a portion of the
Assignor’s Revolving Commitment under the Credit Agreement, all on the terms and
conditions set forth herein; and
 
WHEREAS, the [Borrowers and the] Administrative Agent consent[s] 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 ____________, 201__ (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 Revolving 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’
Revolving Commitments, including without limitation, a principal amount of
outstanding Revolving Loans equal to $_________, all voting rights of the
Assignor associated with the Assigned Commitment all rights to receive interest
on such amount of Loans and all 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
Revolving 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 Revolving 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 Borrowers with respect to the Assigned
Commitment and the obligation to indemnify the Administrative Agent as provided
in the Credit Agreement (the foregoing obligations, together with all other
similar obligations more particularly set forth in the Credit Agreement and the
other Loan Documents, shall be referred to hereinafter, collectively, as the
“Assigned Obligations”).  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.
 
 
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(b)           The assignment by the Assignor to the Assignee hereunder is
without recourse to the Assignor.  The Assignee makes and confirms to the
Administrative Agent, the Assignor, and the other Lenders all of the
representations, warranties and covenants of a Lender under Article XII 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 any Borrower,
any other Loan Party or any other Subsidiary, (ii) any representations,
warranties, statements or information made or furnished by any Borrower, any
other Loan Party or any other Subsidiary in connection with the Credit Agreement
or otherwise, (iii) the validity, efficacy, sufficiency, or enforceability of
the Credit Agreement, any 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 any Borrower or any other Loan Party of any obligation
under the Credit Agreement or any other Loan Document or any document or
instrument executed in connection therewith.  Further, the Assignee acknowledges
that it has, independently and without reliance upon the Administrative Agent or
any affiliate of subsidiary thereof, any other Lender or counsel to the
Administrative Agent or any of their respective officers, directors, employees
and agents and based on the financial statements supplied by the Borrowers 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 Administrative Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Credit Agreement or
any Note or pursuant to any other obligation.  The Administrative 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 Borrowers, any other Loan Party or any other Subsidiary or to notify the
undersigned of any Default or Event of Default except as expressly provided in
the Credit Agreement.  The Assignee has not relied on the Administrative Agent
as to any legal or factual matter in connection therewith or in connection with
the transactions contemplated thereunder.
 
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 the
aggregate principal amount outstanding of the Revolving Loans owing to the
Assignor under the Credit Agreement and the other Loan Documents being assigned
hereby.
 
Section 3.  Payments by Assignor.  The Assignor agrees to pay to the
Administrative Agent on the Assignment Date the administrative fee payable under
Section 13.6(b)(iv) 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 Revolving
Commitment under the Credit Agreement immediately prior to the Assignment Date,
equal to $____________ 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.
 
 
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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 Administrative 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 Administrative
Agent by the terms thereof together with such powers as are reasonably
incidental thereto; (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; and
(e) is either (i) not organized under the laws of a jurisdiction outside the
United States of America or (ii) has delivered to the Administrative Agent (with
an additional copy for the Borrowers) such items required under Section 3.10 of
the Credit Agreement.
 
Section 6.  Recording and Acknowledgment by the Administrative Agent.  Following
the execution of this Agreement, the Assignor will deliver to the Administrative
Agent (a) a duly executed copy of this Agreement for acknowledgment and
recording by the Administrative Agent and (b) the Assignor’s Revolving
Note.  The Borrowers agree to exchange such Note[s] for [a] new Note[s] as
provided in Section 13.6(b) of the Credit Agreement, provided that the original
note shall be destroyed by the Administrative Agent and considered null and
void.  From and after the Assignment Date, the Administrative 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.
 
Section 7.  Addresses.  The Assignee specifies as its address for notices and
its Lending Office for all Loans, the offices set forth below:
 

            Attention:     Telephone:     Telecopy:        

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:

                               

 
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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
Administrative Agent and if required by Section 13.6(b) of the Credit Agreement,
the Borrowers, and (b) the payment to the Assignor of the amounts owing by the
Assignee pursuant to Section 2 hereof and (c) the payment to the Administrative
Agent of the amounts owing by the Assignor pursuant to Section 3 hereof, and (d)
written notice from Assignor to each of the Administrative Agent, Assignee, and
the Borrowers notifying each of the foregoing that of an effective date for such
assignment (the “Assignment Effective Date”).  Upon acknowledgment of this
Agreement by the Administrative 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 13.11
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 NEW YORK 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.
 
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.
 
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.
 
Section 17.  Time.  Time is of the essence with respect to each and every
provision of this Agreement.
 
[Include this Section only if the Borrowers’ consent is required under Section
13.6(c) of the Credit Agreement] Section 17.  Agreements of the Borrowers.  Each
Borrower hereby agrees that the Assignee shall be a Lender under the Credit
Agreement having a Revolving Commitment equal to the Assigned Commitment.  Each
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, if any, and to
the Revolving Loans made by the Lenders after the date hereof and to receive the
Fees payable to the Lenders as provided in the Credit Agreement.  Further, the
Assignee shall be entitled to the benefit of the indemnification provisions from
the Borrowers in favor of the Lenders as provided in the Credit Agreement and
the other Loan Documents.  Each Borrower further agrees, upon the execution and
delivery of this Agreement, to execute in favor of the Assignee a Revolving Note
in an initial amount equal to the Assigned Commitment.  Further, each Borrower
agrees that, upon the execution and delivery of this Agreement, the Borrowers
shall owe the Assigned Obligations to the Assignee as if the Assignee were the
Lender originally making such Loans and entering into such other obligations.
 
[Signatures on Following Page]
 
 
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IN WITNESS WHEREOF, the parties hereto have duly executed this Assignment and
Assumption Agreement as of the date and year first written above.

        ASSIGNOR:           [NAME OF ASSIGNOR]                  
 
By:
      Name:       Title:                       Payment Instructions          
[Bank]     [Address]     ABA No. :     Account No.:     Account Name:    
Reference:        

        ASSIGNEE:           [NAME OF ASSIGNEE]          
 
By:
      Name:       Title:                       Payment Instructions          
[Bank]     [Address]     ABA No. :     Account No.:     Account Name:    
Reference:        

[Signatures continued on Following Page]
 
A-5

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Agreed and Consented to as of the date first written above.
         
[Include signature of the Borrower only if required under Section 13.6(b) of the
Credit Agreement]
         
BORROWERS:
         
[NAME OF BORROWERS]
               
 
By:
        Name:         Title:            

 
Accepted as of the date first written above.
 
ADMINISTRATIVE AGENT:
 
WELLS FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent

         
By:
       
Name:
       
Title:
   
 
 

 

 
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EXHIBIT B
 
FORM OF BORROWING BASE CERTIFICATE
 
Reference is made to the Credit Agreement dated as of June 29, 2012 (as amended,
restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”), by and among CAPLEASE, LP, a Delaware limited partnership, PREFCO
DIX-NEUF LLC, a Connecticut limited liability company, PREFCO NINETEEN LIMITED
PARTNERSHIP, a Connecticut limited partnership, CLF CANE RUN MEMBER, LLC, a
Delaware limited liability company, CLF CANE RUN LOUISVILLE, LLC, a Delaware
limited liability company, CLF LANDMARK OMAHA LLC, a Delaware limited liability
company, CLF DODGE OMAHA LLC, a Delaware limited liability company, KDC BUSCH
BOULEVARD LLC, a Delaware limited liability company, and CLF 555 N DANIELS WAY
LLC, a Delaware limited liability company (each a “Borrower” and collectively,
the “Borrowers”), Parent (as defined in the Credit Agreement), the financial
institutions party thereto and their assignees under Section 13.6 thereof (the
“Lenders”), Wells Fargo Bank, National Association, as Administrative Agent (the
“Administrative Agent”), and the other parties thereto.  Capitalized terms used
herein, and not otherwise defined herein, have their respective meanings given
to them in the Credit Agreement.
 
Pursuant to Section [9.4(d)][4.1(c)][4.2][6.1(a)(ix)] of the Credit Agreement,
the undersigned hereby certifies to the Lenders and the Administrative Agent
that:
 
1.           With respect to each of the Properties listed on Schedule [_]
attached hereto, that either:
 
(a)           such Property is owned in fee simple, estate for years or leased
under a Ground Lease by a Borrower;
 
(b)           such Property is fully developed;
 
(c)           such Property is located in a State of the United States of
America;
 
(d)           regardless of whether such Property is owned or leased by the
Borrowers, the Borrowers have the right directly to take the following actions
without the need to obtain the consent of any Person:
 
(i)           to create Liens on such Property as security for Indebtedness of
the Borrowers; and
 
(ii)           to sell, transfer or otherwise dispose of such Property;
 
(d)           such Property is unencumbered by any Indebtedness (including, for
avoidance of doubt, any intercompany mortgage, pledge or similar lien);
 
(e)           such Property is not subject to a Negative Pledge or similar
encumbrance;
 
(f)           neither Borrowers nor Guarantor have encumbered in any manner
their direct or indirect ownership interest in the Property; and
 
(g)           such Property is free of all structural defects or major
architectural deficiencies, title defects (including easements), environmental
conditions or other adverse matters except for defects, deficiencies, conditions
or other matters individually or collectively which are not material to the
profitable operation of such Property.
 
 
B-1

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2.           Schedule [_] attached hereto accurately and completely sets forth
for each Borrowing Base Property as of ___________, 201___:
 
(a)           As-Is Appraised Value for such Property and/or the Kroger
Portfolio Hypothetical As-Is Appraised Value, as applicable;
 
(c)           The Borrowing Base Value, which is the amount equal to (i) the
Kroger Borrowing Base Value, (ii) the Michelin, Abbott and Baxter Borrowing Base
Value, (iii) the Dodge and Landmark Borrowing Base Value, as applicable, or (iv)
the value attributable to each additional Property added to the Borrowing Base
pursuant Section 4.1(b) of the Credit Agreement, such value to be set by the
Requisite Lenders or Lenders, as applicable, in their sole and absolute
discretion.
 
3.           Schedule [_] attached hereto accurately and completely sets forth,
in reasonable detail, the information required by the Administrative Agent and
Lenders in determining the Borrowing Base and Maximum Loan Availability as of
___________, 201__, the current outstanding Loans, the Letter of Credit
Liabilities and the aggregate amount of the Commitments.
 
4.           As of the date hereof (a) no Default or Event of Default exists,
and (b) the representations and warranties of each Borrower and the other Loan
Parties contained in the Credit Agreement and the other Loan Documents are true
and correct in all material respects, except to the extent such representations
or warranties specifically relate to an earlier date or such representations or
warranties become untrue by reason of events or conditions otherwise permitted
under the Credit Agreement or the other Loan Documents.
 
IN WITNESS WHEREOF, the undersigned has signed this Borrowing Base Certificate
on and as of ___________, 201__.
 

                 
 
  Name:
 
 
 
 
Title:
Chief Financial Officer
 

 
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Schedule 1
[ex10-10.jpg]
 

 
B-3

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Schedule 2
 
[ex10-11.jpg]
 
B-4

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EXHIBIT C
 
FORM OF HAZARDOUS MATERIALS INDEMNITY AGREEMENT
 
(Unsecured)
 
THIS HAZARDOUS MATERIALS INDEMNITY AGREEMENT (Unsecured) (“Indemnity”) is given
_____ ____, 201__ by CAPLEASE, INC., a Maryland corporation, CAPLEASE, LP, a
Delaware limited partnership, PREFCO DIX-NEUF LLC, a Connecticut limited
liability company, PREFCO NINETEEN LIMITED PARTNERSHIP, a Connecticut limited
partnership, CLF CANE RUN MEMBER, LLC, a Delaware limited liability company, CLF
CANE RUN LOUISVILLE, LLC, a Delaware limited liability company, CLF LANDMARK
OMAHA LLC, a Delaware limited liability company, CLF DODGE OMAHA LLC, a Delaware
limited liability company, KDC BUSCH BOULEVARD LLC, a Delaware limited liability
company, and CLF 555 N DANIELS WAY LLC, a Delaware limited liability company
(sometimes referred to herein individually as “Indemnitor” and collectively as
the “Indemnitors”) to Wells Fargo Bank, National Association, as contractual
representative for the Indemnified Parties (as defined below) (in such capacity,
the “Administrative Agent”) for the benefit of the Indemnified Parties on the
basis of the following facts and understandings:
 
A.           Pursuant to the terms of the Credit Agreement dated as of June 29,
2012, by and among the Indemnitors, the financial institutions party thereto and
their assignees under Section 13.6 (the “Lenders”), the Administrative Agent and
the other parties thereto (“Credit Agreement”), the Lenders are making loans
(“Loans”) and other financial accommodations, and the Issuing Bank (as defined
in the Credit Agreement) may issue letters of credit (“Letters of Credit”) to,
or for the account of, the Borrowers (as defined in the Credit Agreement) in the
aggregate principal amount of ONE HUNDRED MILLION AND NO/100THS DOLLARS
($100,000,000.00).  The Loans are evidenced by promissory notes (“Notes”)
executed by the Borrowers in favor of each Lender, and are further evidenced by
the documents described in the Credit Agreement as the “Loan Documents”.
 
B.           The Borrowers and/or its Subsidiaries may from time to time enter
into Specified Derivatives Contracts (as defined in the Credit Agreement) with
one or more Specified Derivatives Providers (as defined in the Credit
Agreement).  The Specified Derivatives Providers, together with the Lenders, the
Issuing Bank and the Administrative Agent are referred to herein individually as
an “Indemnified Party” and collectively as “Indemnified Parties”.
 
C.           The “Obligations” and the “Specified Derivatives Obligations” (as
each is defined in the Credit Agreement) are secured by, among other things,
various mortgages, deeds of trust and deeds to secure debt (each a “Security
Instrument” and collectively, the “Security Instruments”), executed by Borrowers
in favor of the Administrative Agent as Beneficiary.  The Security Instruments
encumber the real property, and any and all improvements thereon, leasehold
interest and estate for years interest described on Annex I attached hereto and
incorporated herein by this reference (“Property”)
 
D.           The Administrative Agent and the other Indemnifed Parties are
willing to make the Loans, issue Letters of Credit and enter into Specified
Derivatives Contracts only on the condition, among others, that Indemnitors
defend, indemnify and hold harmless the Indemnified Parties from and against any
and all claims, loss, damage, cost, expense or liability arising out of the
presence or release of Hazardous Materials (as defined below) on or from the
Property.
 
E.           _______________ is the _______________ of the Borrowers, and has a
direct financial interest in the Property and will benefit from the Lenders
making Loans to the Borrowers and the Specified Derivatives Providers entering
into Specified Derivatives Contracts with the Borrowers and/or any of their
Subsidiaries.
 
 
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F.           Since the presence of Hazardous Materials on or from the Property
may reduce the value of the Property to an extent that is unforeseeable and
indeterminable and may, in fact, cause the value of the Property to be
substantially less than the claims against the Administrative Agent or any other
Indemnified Party or the liabilities associated with ownership of such Property,
the Administrative Agent and the other Indemnified Parties, as applicable, also
are willing to make the Loans, issue the Letters of Credit and enter into
Specified Derivatives Contracts only on the condition that this Indemnity be and
remain an unsecured personal obligation of each Indemnitor.
 
G.           This Indemnity is not one of the “Loan Documents” as defined in the
Credit Agreement.
 
NOW, THEREFORE, in consideration of Administrative Agent and the other
Indemnified Parties contemporaneously herewith making the Loans, issuing Letters
of Credit or entering into Specified Derivatives Contracts as requested by the
Borrowers, and for other good, valuable and adequate consideration, receipt of
which is hereby acknowledged, Indemnitors jointly and severally agrees as
follows:
 
1.           INDEMNITY.  INDEMNITORS HEREBY AGREE TO DEFEND, INDEMNIFY AND HOLD
HARMLESS THE ADMINISTRATIVE AGENT, EACH OTHER INDEMNIFIED PARTY, ANY CORPORATION
CONTROLLED BY THE ADMINISTRATIVE AGENT OR ANY OTHER INDEMNIFIED PARTY, AND EACH
OF THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, SUCCESSORS AND
ASSIGNS (INCLUDING, WITHOUT LIMITATION, ANY PARTICIPANTS IN THE LOANS (PROVIDED,
HOWEVER, SUCCESSORS AND ASSIGNS SHALL NOT INCLUDE THIRD PARTY PURCHASERS OF
COLLATERAL AT FORECLOSURE OR THROUGH A DEED-IN-LIEU OF FORECLOSURE) FROM AND
AGAINST ANY AND ALL OUT-OF-POCKET LOSSES, DAMAGES, LIABILITIES, CLAIMS, ACTIONS,
JUDGMENTS, COURT COSTS AND LEGAL OR OTHER REASONABLE EXPENSES (INCLUDING,
WITHOUT LIMITATION, ATTORNEYS’ FEES AND EXPENSES) WHICH ADMINISTRATIVE AGENT OR
ANY OTHER INDEMNIFIED PARTY MAY INCUR AS A DIRECT OR INDIRECT CONSEQUENCE OF:
(A) THE USE, GENERATION, MANUFACTURE, STORAGE, TREATMENT, RELEASE, THREATENED
RELEASE, DISCHARGE, DISPOSAL, TRANSPORTATION OR PRESENCE OF ANY HAZARDOUS
MATERIALS, WHICH ARE RELEASED FROM OR FOUND IN, ON, UNDER OR ABOUT THE PROPERTY;
OR (B) THE BREACH OF ANY COVENANTS (OR REPRESENTATION AND WARRANTY) OF ANY
INDEMNITOR UNDER THIS INDEMNITY.  SUCH INDEMNITY SHALL INCLUDE, WITHOUT
LIMITATION:  (i) THE COSTS, WHETHER FORESEEABLE OR UNFORESEEABLE, OF ANY REPAIR,
REMEDIATION, RESPONSE ACTION, CLEANUP OR DETOXIFICATION OF THE PROPERTY WHICH IS
REQUIRED BY ANY GOVERNMENTAL ENTITY OR IS OTHERWISE NECESSARY TO RENDER THE
PROPERTY IN COMPLIANCE WITH ALL LAWS AND REGULATIONS PERTAINING TO HAZARDOUS
MATERIALS; (ii) ALL OTHER DIRECT OR INDIRECT CONSEQUENTIAL DAMAGES (INCLUDING,
WITHOUT LIMITATION, ANY THIRD PARTY TORT CLAIMS OR GOVERNMENTAL CLAIMS, FINES OR
PENALTIES AGAINST THE ADMINISTRATIVE AGENT, ANY OTHER INDEMNIFIED PARTY, ANY
CORPORATION CONTROLLED BY THE ADMINISTRATIVE AGENT OR ANY OTHER INDEMNIFIED
PARTY, OR ANY OF THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, AGENTS,
SUCCESSORS OR ASSIGNS (PROVIDED, HOWEVER, SUCCESSORS AND ASSIGNS SHALL NOT
INCLUDE THIRD PARTY PURCHASERS OF COLLATERAL AT FORECLOSURE OR THROUGH A
DEED-IN-LIEU OF FORECLOSURE); AND (iii) ALL COURT COSTS AND REASONABLE
ATTORNEYS’ FEES AND EXPENSES PAID OR INCURRED BY THE ADMINISTRATIVE AGENT OR ANY
OTHER INDEMNIFIED PARTY, ANY CORPORATION CONTROLLED BY THE ADMINISTRATIVE AGENT
OR ANY OTHER INDEMNIFIED PARTY, OR ANY OF THEIR RESPECTIVE DIRECTORS, OFFICERS,
EMPLOYEES, AGENTS, SUCCESSORS OR ASSIGNS (PROVIDED, HOWEVER, SUCCESSORS AND
ASSIGNS SHALL NOT INCLUDE THIRD PARTY PURCHASERS OF COLLATERAL AT FORECLOSURE OR
THROUGH A DEED-IN-LIEU OF FORECLOSURE).
 
 
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2.           HAZARDOUS MATERIALS.
 
2.1           Representations and Warranties.  After reasonable investigation
and inquiry, each Indemnitor hereby specially represents and warrants to the
best of such Indemnitor’s knowledge as of the date of this Indemnity as follows:
 
 
(a)
Hazardous Materials.  Except as previously disclosed to the Administrative Agent
and the Lenders in that certain Phase I Environmental Site Assessment dated
_______________, prepared by __________________, the Property is not and has not
been a site for the use, generation, manufacture, storage, treatment, release,
threatened release, discharge, disposal, transportation or presence of any oil,
flammable explosives, asbestos, urea formaldehyde insulation, radioactive
materials, hazardous wastes, toxic or contaminated substances or similar
materials, including, without limitation, any substances which are  “hazardous
substances,” “hazardous wastes,” “hazardous materials,” “toxic substances,”
“wastes,” “regulated substances,” “industrial solid wastes,” or “pollutants”
under the Hazardous Materials Laws, as described below, and/or other applicable
environmental laws, ordinances and regulations (collectively, the “Hazardous
Materials”).  “Hazardous Materials” shall not include commercially reasonable
amounts of such materials used in the ordinary course of operation of the
Property which are used and stored in accordance with all applicable Hazardous
Materials Laws.

 
 
(b)
Hazardous Materials Laws.  The Property is in compliance with all laws,
ordinances and regulations relating to Hazardous Materials (“Hazardous Materials
Laws”), including, without limitation:  the Clean Air Act, as amended, 42 U.S.C.
Section 7401 et seq.; the Federal Water Pollution Control Act, as amended, 33
U.S.C. Section 1251 et seq.; the Resource Conservation and Recovery Act of 1976,
as amended, 42 U.S.C. Section 6901 et seq.; the Comprehensive Environment
Response, Compensation and Liability Act of 1980, as amended (including the
Superfund Amendments and Reauthorization Act of 1986, “CERCLA”), 42 U.S.C.
Section 9601 et seq.; the Toxic Substances Control Act, as amended, 15 U.S.C.
Section 2601 et seq.; the Occupational Safety and Health Act, as amended, 29
U.S.C. Section 651, the Emergency Planning and Community Right-to-Know Act of
1986, 42 U.S.C. Section 11001 et seq.; the Mine Safety and Health Act of 1977,
as amended, 30 U.S.C. Section 801 et seq.; the Safe Drinking Water Act, as
amended, 42 U.S.C. Section 300f et seq.; and all comparable state and local
laws, laws of other jurisdictions or orders and regulations.

 
 
(c)
Hazardous Materials Claims.  There are no claims or actions (“Hazardous
Materials Claims”) pending or threatened against such Indemnitor or the Property
by any governmental entity or agency or by any other person or entity relating
to Hazardous Materials or pursuant to the Hazardous Materials Laws.

 
2.2           Hazardous Materials Covenants.  Indemnitors agree as follows:
 
 
(a)
No Hazardous Activities.  Indemnitors shall not cause or permit the Property to
be used as a site for the use, generation, manufacture, storage, treatment,
release, discharge, disposal, transportation or presence of any Hazardous
Materials.

 
 
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(b)
Compliance.  Indemnitors shall comply and cause the Property to comply with all
Hazardous Materials Laws.

 
 
(c)
Notices.  Indemnitors shall immediately notify the Administrative Agent in
writing of:  (1) the discovery of any Hazardous Materials on, under or about, or
released on or from, the Property; (2) any knowledge by any Indemnitor that the
Property does not comply with any Hazardous Materials Laws; and (3) any
Hazardous Materials Claims.

 
 
(d)
Remedial Action.  In response to the presence of any Hazardous Materials on,
under or about, or released on or from, the Property, Indemnitors shall
immediately take, at Indemnitors’ sole expense, all remedial action required by
any Hazardous Materials Laws or any judgment, consent decree, settlement or
compromise in respect to any Hazardous Materials Claims.

 
3.             TERM.  The term of the indemnity provided for herein will
commence on the date hereof and continue until such time as no legal action can
be successfully brought against the Administrative Agent or any other
Indemnified Party due to applicable statutes of limitation.  WITHOUT IN ANY WAY
LIMITING THE ABOVE, IT IS EXPRESSLY UNDERSTOOD THAT INDEMNITORS’ DUTY TO
INDEMNIFY THE ADMINISTRATIVE AGENT AND EACH OTHER INDEMNIFED PARTY SHALL
SURVIVE:  (a) ANY JUDICIAL OR NON-JUDICIAL FORECLOSURE UNDER THE SECURITY
INSTRUMENTS, OR TRANSFER OF THE PROPERTY IN LIEU THEREOF; (b) THE RELEASE AND
RECONVEYANCE OR CANCELLATION OF THE SECURITY INSTRUMENTS; AND (c) THE
SATISFACTION OF ALL OF THE BORROWERS’ OBLIGATIONS UNDER THE LOAN DOCUMENTS.
 
4.             INDEPENDENT AND UNSECURED OBLIGATIONS.  Each Indemnitor
acknowledges that, notwithstanding any other provision of this Indemnity or any
of the Loan Documents to the contrary (including, without limitation, any
non-recourse provision under the Loan Documents) the obligations of each
Indemnitor under this Indemnity are unlimited personal obligations of such
Indemnitor which are not secured by the Security Instruments or any other
security instrument.  In this regard, the Administrative Agent’s appraisal of
the value of the Property is such that the Administrative Agent is not willing
to accept the consequences, if any, of inclusion of this Indemnity among the
obligations secured by the Security Instruments.  Each Indemnitor acknowledges
that neither the Administrative Agent nor any Lender is willing to accept such
consequences and that the neither the Administrative nor any Lender would make
the Loans but for the personal unsecured liability undertaken by such
Indemnitor.
 
5.             SETTLEMENTS; CLAIMS; JUDGMENTS.  Indemnitors shall not, without
the prior written consent of the Administrative Agent: (a) settle or compromise
any action, suit, proceeding, or claim in which the Administrative Agent or any
other Indemnified Party is named as a party or consent to the entry of any
judgment in such a matter that does not include as an unconditional term thereof
the delivery by the claimant or plaintiff to the Administrative Agent or such
other Indemnified Party of a written release of the Administrative Agent or such
other Indemnified Party (in form, scope and substance satisfactory to the
Administrative Agent or such other Indemnified Party, in each case, in its sole
discretion) from all liability in respect of such action, suit, or proceeding;
or (b) settle or compromise any action, suit, proceeding, or claim in which the
Administrative Agent or such other Indemnified Party is named as a party in any
manner that may materially and adversely affect the Administrative Agent or such
Lender, in each case, as determined by the Administrative or such other
Indemnified Party in its sole discretion.
 
 
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6.             INTEREST.  Indemnitors shall pay the Administrative Agent, for
its benefit and the benefit of the other Indemnified Parties, on demand,
interest, at the rate applicable to the principal balance of the Loans as
specified in the Credit Agreement on any costs or expenses incurred by the
Administrative Agent or any other Indemnified Party in the enforcement of this
Indemnity or on any sums the Administrative Agent or any other Indemnified Party
is obligated to pay in respect to the matters with respect to which this
Indemnity is given, from the date of the Administrative Agent’s demand.
 
7.             RIGHTS NOT EXCLUSIVE.  The rights of the Administrative Agent and
the other Indemnified Parties under this Indemnity shall be in addition to any
other rights and remedies of the Administrative Agent and the other Indemnified
Parties against the Indemnitors under any other document or instrument now or
hereafter executed by the Indemnitors, or at law or in equity (including,
without limitation, any right of reimbursement or contribution pursuant to the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
42 U.S.C. Section 9601 et seq., as heretofore or hereafter amended from time to
time).
 
8.             RIGHTS OF INDEMNIFIED PARTIES.  Each Indemnitor authorizes the
Administrative Agent and the other Indemnified Parties, without giving notice to
such Indemnitor or obtaining such Indemnitor’s consent and without affecting the
liability of the Indemnitors, from time to time to:  (a) to renew or extend all
or any portion of any Borrower’s obligations under the Credit Agreement or any
of the other Loan Documents or the Specified Derivatives Contracts; (b) to
declare all sums owing to the Administrative Agent and the other Indemnified
Parties under the Credit Agreement, the other Loan Documents and the Specified
Derivatives Contracts due and payable in accordance with the terms of the Loan
Documents or the Specified Derivatives Contracts; (c) to make nonmaterial
changes in the dates specified for payments of any item payable in periodic
installments under the Credit Agreement, any of the other Loan Documents or any
Specified Derivatives Contracts; (d) to otherwise modify the terms of any of the
Loan Documents or the Specified Derivatives Contracts; (e) take and hold
security for the performance of the Borrowers’ obligations under the Credit
Agreement, the other Loan Documents or the Specified Derivatives Contracts and
exchange, enforce, waive and release any such security; (f) apply such security
and direct the order or manner of sale thereof as the Administrative Agent in
its discretion may determine; (g) release, substitute or add any one or
guarantors of the Borrowers’ obligations under the Credit Agreement, the other
Loan Documents or any Specified Derivatives Contracts; (h) apply payments
received by the Administrative Agent from any Borrower to any obligations of the
Borrowers to the Administrative Agent and the other Indemnified Parties, in such
order as provided in the Credit Agreement, whether or not any such obligations
are covered by this Indemnity; and (i) assign this Indemnity in whole or in
part.
 
 
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9.             INDEMNITORS’ WAIVERS.  Each Indemnitor waives:  (a) any defense
based upon any legal disability to enter into the Credit Agreement or any
Specified Derivatives Contract or other defense of the Borrowers; (b) any
defense based on any lack of authority of the officers, directors, partners or
agents acting or purporting to act on behalf of any Indemnitor or any principal
of any Indemnitor, or any defect in the formation of any Indemnitor or any
principal of any Indemnitor; (c) any defense based upon the application of the
proceeds of the Loans, Letters of Credit or Specified Derivatives Contracts by
the Borrowers for purposes other than the purposes represented by such Borrowers
to the Administrative Agent or other Indemnified Parties or intended or
understood by the Administrative Agent or any other Indemnifed Parties or any
Indemnitor; (d) any and all rights and defenses arising out of an election of
remedies by the Administrative Agent or any other Indemnified Party even though
that election of remedies, such as a nonjudicial foreclosure with respect to
security for a guaranteed obligation, may adversely affect Indemnitors’ rights
of subrogation and reimbursement against the principal; (e) any defense based
upon the Administrative Agent’s or any other Indemnified Party’s failure to
disclose to any Indemnitor any information concerning the Borrowers’ financial
condition or any other circumstances bearing on the Borrowers’ ability to
perform its obligations under the Credit Agreement, any of the Loan Documents or
Specified Derivatives Contracts; (f) any defense based upon any statute or rule
of law which provides that the obligation of a surety must be neither larger in
amount nor in any other respects more burdensome than that of a principal; (g)
any defense based upon the Administrative Agent’s or any other Indemnified
Party’s election, in any proceeding instituted under the Federal Bankruptcy
Code, of the application of Section 1111(b) (2) of the Federal Bankruptcy Code
or any successor statute; (h) any defense based upon any borrowing or any grant
of a security interest under Section 364 of the Federal Bankruptcy Code; (i) any
right of subrogation, any right to enforce any remedy which the Administrative
Agent or any other Indemnified Party may have against the Borrowers and any
right to participate in, or benefit from, any security for the Credit Agreement,
the other Loan Documents or the Specified Derivative Contracts now or hereafter
held by the Administrative Agent or any other Indemnified Party; (j)
presentment, demand, protest and notice of any kind; and (k) the benefit of any
statute of limitations affecting the liability of any Indemnitor hereunder or
the enforcement hereof.  Each Indemnitor further waives any and all rights and
defenses that any Indemnitor may have because the Borrowers’ debt is secured by
real property; this means, among other things, that: (1) the Administrative
Agent, for its benefit and the benefit of the other Indemnified Parties, may
collect from Indemnitors without first foreclosing on any real or personal
property collateral pledged by a Borrower; (2) if the Administrative Agent, for
its benefit and the benefit of the other Indemnified Parties, forecloses on any
real property collateral pledged by a Borrower, then (A) the amount of the debt
may be reduced only by the price for which that collateral is sold at the
foreclosure sale, even if the collateral is worth more than the sale price, and
(B) the Administrative Agent, for its benefit and the benefit of the other
Indemnified Parties, may collect from Indemnitors even if the Administrative
Agent, by foreclosing on the real property collateral, has destroyed any right
any Indemnitor may have to collect from such Borrower.  The foregoing sentence
is an unconditional and irrevocable waiver of any rights and defenses Indemnitor
may have because the Borrowers’ debt is secured by real property.  Without
limiting the generality of the foregoing or any other provision hereof, each
Indemnitor further expressly waives to the extent permitted by law any and all
rights and defenses, including without limitation any rights of subrogation,
reimbursement, indemnification and contribution, which might otherwise be
available to Indemnitors.  Finally, each Indemnitor agrees that the performance
of any act or any payment which tolls any statute of limitations applicable to
the Loan Documents shall similarly operate to toll the statute of limitations
applicable to Indemnitors’ liability hereunder.  In addition, each Indemnitor
understands that Indemnitors’ duties, obligations and liabilities under this
Indemnity are not limited in any way by any information (whether obtained from
the Borrowers, from any Indemnitor, or from the Administrative Agent’s or any
other Indemnified Party’s own investigations) which the Administrative Agent or
any other Indemnified Party may have concerning the Property and the presence of
any Hazardous Materials on the Property.
 
10.           LOAN SALES AND PARTICIPATIONS; DISCLOSURE OF INFORMATION.  Each
Indemnitor agrees that any Indemnified Party may elect, at any time, to sell,
assign or grant participations in all or any portion of its rights and
obligations under the Loan Documents, the Specified Derivatives Contracts and
this Indemnity, and that any such sale, assignment or participation may be to
one or more financial institutions, private investors, and/or other entities, at
such Indemnified Party’s sole discretion, in accordance with Section 13.6 of the
Credit Agreement. Indemnitor further agrees that any Indemnified Party may
disseminate to any such actual or potential purchaser(s), assignee(s) or
participant(s) all documents and information (including, without limitation, all
financial information) which has been or is hereafter provided to or known to
such Indemnified Party with respect to:  (a) the Property and its operation; (b)
any party connected with the Loans (including, without limitation, the
Indemnitors, the Borrowers, any partner of a Borrower, any constituent partner
of a Borrower, any guarantor and any non-borrower grantor); and/or (c) any
lending relationship other than the Loans which such Indemnified Party may have
with any party connected with the Loans. In the event of any such sale,
assignment or participation, such Indemnified Party and the parties to such
transaction shall share in the rights and obligations of such Indemnified Party
as set forth in the Loan Documents only as and to the extent they agree among
themselves.  In connection with any such sale, assignment or participation, each
Indemnitor further agrees that this Indemnity shall be sufficient evidence of
the obligations of Indemnitors to each purchaser, assignee, or participant, and
upon written request by such Indemnified Party, Indemnitors shall consent to
such amendments or modifications to the Loan Documents and Specified Derivatives
Contract, as applicable, as may be reasonably required in order to evidence any
such sale, assignment or participation.
 
 
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Anything in this Agreement to the contrary notwithstanding, and without the need
to comply with any of the formal or procedural requirements of this Agreement,
including this Section, any Lender may at any time and from time to time pledge
and assign all or any portion of its rights under all or any of the Loan
Documents to a Federal Reserve Bank; provided that no such pledge or assignment
shall release such Lender from its obligations thereunder.
 
11.           ATTORNEYS’ FEES.  If any attorney is engaged by the Administrative
Agent or any other Indemnified Party to enforce or defend any provision of this
Indemnity, or as a consequence of any default under the Indemnity, with or
without the filing of any legal action or proceeding, Indemnitor shall
immediately pay to the Administrative Agent or such other Indemnified Party,
upon demand, the amount of all reasonable attorneys’ fees and expenses and all
reasonable costs incurred by the Administrative Agent or such other Indemnified
Party in connection therewith, together with interest thereon from the date of
such demand until paid at the rate of interest applicable to the Loans as
specified in the Credit Agreement.
 
12.           ENFORCEABILITY.  Indemnitors hereby acknowledges that: (a) the
obligations undertaken by Indemnitors in this Indemnity are complex in nature,
and (b) numerous possible defenses to the enforceability of these obligations
may presently exist and/or may arise hereafter, and (c) as part of the
Administrative Agent’s and each other Indemnified Party’s consideration for
entering into this transaction, the Administrative Agent and each other
Indemnified Party have specifically bargained for the waiver and relinquishment
by Indemnitor of all such defenses, and (d) Indemnitors have had the opportunity
to seek and receive legal advice from skilled legal counsel in the area of
financial transactions of the type contemplated herein.  Given all of the above,
Indemnitors do hereby represent and confirm to the Administrative Agent and each
other Indemnified Party that Indemnitors are fully informed regarding, and that
Indemnitors do thoroughly understand: (i) the nature of all such possible
defenses, and (ii) the circumstances under which such defenses may arise, and
(iii) the benefits which such defenses might confer upon Indemnitors, and (iv)
the legal consequences to Indemnitors of waiving such defenses.  Indemnitors
acknowledge that Indemnitors make this Indemnity with the intent that this
Indemnity and all of the informed waivers herein shall each and all be fully
enforceable by the Administrative Agent and each other Indemnified Party, and
that the Administrative Agent and each other Indemnified Party is induced to
enter into this transaction in material reliance upon the presumed full
enforceability thereof.
 
13.           ENTIRE AGREEMENT.  THIS INDEMNITY REPRESENTS THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.  THIS INSTRUMENT MAY BE AMENDED
ONLY BY AN INSTRUMENT IN WRITING EXECUTED BY THE PARTIES HERETO.
 
14.           SUCCESSORS AND ASSIGNS.  All terms of this Indemnity shall be
binding upon and inure to the benefit of and be enforceable by the parties
hereto and their respective legal representatives, successors and assigns.
 
15.           GOVERNING LAW.  This Indemnity shall be governed by, and construed
in accordance with, the laws of the State of New York, except to the extent
preempted by federal laws.
 
 
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16.           MISCELLANEOUS.  The liability of all persons and entities who are
in any manner obligated hereunder to the Administrative Agent and the other
Indemnified Parties as an Indemnitor shall be joint and several.  If any
provision of this Indemnity shall be determined by a court of competent
jurisdiction to be invalid, illegal or unenforceable, that portion shall be
deemed severed from this Indemnity and the remaining parts shall remain in full
force as though the invalid, illegal or unenforceable portion had never been
part of this Indemnity.
 
17.           WAIVER OF RIGHT TO TRIAL BY JURY.  EACH PARTY TO THIS INDEMNITY
HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION
OR CAUSE OF ACTION (a) ARISING UNDER THE LOAN DOCUMENTS, INCLUDING, WITHOUT
LIMITATION, ANY PRESENT OR FUTURE MODIFICATION THEREOF OR (b) IN ANY WAY
CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR
ANY OF THEM WITH RESPECT TO THE LOAN DOCUMENTS (AS NOW OR HEREAFTER MODIFIED) OR
ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION
HEREWITH, OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER
NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR
OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY PARTY TO THIS
INDEMNITY MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY
COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF
THEIR RIGHT TO TRIAL BY JURY.
 
[Signatures on Following Page]
 
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IN WITNESS WHEREOF, this Indemnity has been executed as of the date first set
forth above.

       
“Administrative Agent”
         
WELLS FARGO BANK,
   
NATIONAL ASSOCIATION, as Administrative Agent
               
 
By:
                Title:                 "INDEMNITOR"                 , a    

     
 
By:
      Name:       Title:            

 

  "INDEMNITOR"                 , a    

       
 
By:
      Name:       Title:            

 
 
 
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DESCRIPTION OF PROPERTY
 
Annex I to Hazardous Materials Indemnity Agreement (Unsecured) executed by and
______________ and ____________________, collectively, “Indemnitor” to Wells
Fargo Bank, National Association, “Administrative Agent”, dated as of
_________ __, 201__.
 
All that certain real property located in the County of _____________, State of
_____________, described as follows:
 
 
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EXHIBIT D
 
FORM OF GUARANTY
 
THIS GUARANTY dated as of __________________ ___, 201__ executed and delivered
by CAPLEASE, INC., a Maryland corporation (“Guarantor”) in favor of WELLS FARGO
BANK, NATIONAL ASSOCIATION, in its capacity as Administrative Agent (the
“Administrative Agent”) for the Lenders under that certain Credit Agreement
dated as of June 29, 2012 (as amended, restated, supplemented or otherwise
modified from time to time, the “Credit Agreement”), by and among CAPLEASE, LP,
a Delaware limited partnership, PREFCO DIX-NEUF LLC, a Connecticut limited
liability company, PREFCO NINETEEN LIMITED PARTNERSHIP, a Connecticut limited
partnership, CLF CANE RUN MEMBER, LLC, a Delaware limited liability company, CLF
CANE RUN LOUISVILLE, LLC, a Delaware limited liability company, CLF LANDMARK
OMAHA LLC, a Delaware limited liability company, CLF DODGE OMAHA LLC, a Delaware
limited liability company, KDC BUSCH BOULEVARD LLC, a Delaware limited liability
company, and CLF 555 N DANIELS WAY LLC, a Delaware limited liability company
(each a “Borrower” and collectively, the “Borrowers”), Parent (as defined in the
Credit Agreement), the financial institutions party thereto and their assignees
under Section 13.6 thereof (the “Lenders”), the Administrative Agent, and the
other parties thereto, for its benefit and the benefit of the Lenders, the
Issuing Bank and the Specified Derivatives Providers (the Administrative Agent,
the Lenders, the Issuing Bank, and the Specified Derivatives Providers, each
individually a “Guarantied Party” and collectively, the “Guarantied Parties”).
 
WHEREAS, pursuant to the Credit Agreement, the Administrative Agent and the
Lenders have agreed to make available to the Borrowers certain financial
accommodations on the terms and conditions set forth in the Credit Agreement;
 
WHEREAS, the Specified Derivatives Providers may from time to time enter into
Specified Derivatives Contracts with the Borrowers and/or any of their
Subsidiaries;
 
WHEREAS, Guarantor owns or controls the Borrowers,
 
WHEREAS, the Borrowers, Guarantor and the other Subsidiaries of the Borrowers,
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
Administrative Agent, the Lenders and the Issuing Bank, and to enter into
Specified Derivatives Contracts, through their collective efforts;
 
WHEREAS, Guarantor acknowledges that it will receive direct and indirect
benefits from the Administrative Agent, the Lenders and the Issuing Bank making
such financial accommodations available to the Borrowers under the Credit
Agreement and from the Specified Derivatives Providers entering into Specified
Derivatives Contracts and, accordingly, Guarantor is willing to guarantee the
Borrowers’ obligations to the Administrative Agent, the Lenders and the Issuing
Bank and the Borrowers’ and/or any Subsidiary’s obligations to the Specified
Derivatives Providers on the terms and conditions contained herein; and
 
WHEREAS, Guarantor’s execution and delivery of this Guaranty is a condition to
the Administrative Agent and the other Guarantied Parties’ making, and
continuing to make, such financial accommodations to the Borrowers.
 
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged by Guarantor, Guarantor agrees as follows:
 
 
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Section 1.  Guaranty.  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 Borrowers or any other Loan Party to
any Lender or the Administrative Agent under or in connection with the Credit
Agreement and any other Loan Document to which the Borrowers or such other Loan
Party is a party, including without limitation, the repayment of all principal
of the Revolving Loans, all Letter of Credit Liabilities, and the payment of all
interest, fees, charges, reasonable attorneys’ fees and other amounts payable to
any Lender, the Issuing Bank or the Administrative Agent thereunder or in
connection therewith; (b) all Specified Derivatives Obligations, (c) any and all
extensions, renewals, modifications, amendments or substitutions of the
foregoing; (d) all out-of-pocket expenses, including, without limitation,
reasonable attorneys’ fees and disbursements, that are incurred by the
Administrative Agent or any other Guarantied Party in the enforcement of any of
the foregoing or any obligation of Guarantor hereunder and (e) 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 Guarantor for its own
account.  Accordingly, the Guarantied Parties shall not be obligated or required
before enforcing this Guaranty against Guarantor: (a) to pursue any right or
remedy the Guarantied Parties may have against any Borrower, any other Loan
Party or any other Person or commence any suit or other proceeding against any
Borrower, any other Loan Party or any other Person in any court or other
tribunal; (b) to make any claim in a liquidation or bankruptcy of any Borrower,
any other Loan Party or any other Person; or (c) to make demand of any Borrower,
any other Loan Party or any other Person or to enforce or seek to enforce or
realize upon any collateral security held by the Guarantied Parties which may
secure any of the Guarantied Obligations.
 
Section 3.  Guaranty Absolute.  Guarantor guarantees that the Guarantied
Obligations will be paid strictly in accordance with the terms of the documents
evidencing the same, regardless of any Applicable Law now or hereafter in effect
in any jurisdiction affecting any of such terms or the rights of the Guarantied
Parties with respect thereto.  The liability of 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 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, any Specified
Derivatives Contract 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 Specified Derivatives Contracts (the “Credit
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;
 
 
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(c)           any furnishing to the Guarantied Parties of any security for the
Guarantied Obligations, or any sale, exchange, release or surrender of, or
realization on, any collateral securing any of the Guarantied Obligations;
 
(d)           any settlement or compromise of any of the Guarantied Obligations,
any security therefor, or any liability of any other party with respect to the
Guarantied Obligations, or any subordination of the payment of the Guarantied
Obligations to the payment of any other liability of any Borrower or any other
Loan Party;
 
(e)           any bankruptcy, insolvency, reorganization, composition,
adjustment, dissolution, liquidation or other like proceeding relating to
Guarantor, any 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 any Borrower, any other Loan Party or
any other Person which may adversely affect Guarantor’s subrogation rights, if
any, against any 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 Guarantied
Obligations;
 
(h)           any application of sums paid by any Borrower, Guarantor or any
other Person with respect to the liabilities of the Borrowers to the Guarantied
Parties, regardless of what liabilities of the Borrowers remain unpaid;
 
(i)           any defect, limitation or insufficiency in the borrowing powers of
the Borrowers 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 Guaranteed
Parties may, at any time and from time to time, without the consent of, or
notice to, Guarantor, and without discharging 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 Credit Document; (c) sell,
exchange, release or otherwise deal with all, or any part, of any collateral
securing any of the Guarantied Obligations; (d) release any Loan Party or other
Person liable in any manner for the payment or collection of the Guarantied
Obligations; (e) exercise, or refrain from exercising, any rights against the
Borrower, any other Loan Party or any other Person; and (f) apply any sum, by
whomsoever paid or however realized, to the Guarantied Obligations in such order
as the Guarantied Parties shall elect.
 
Section 5.  Representations and Warranties.  Guarantor hereby makes to the
Administrative Agent and the other Guarantied Parties all of the representations
and warranties made by the Borrowers with respect to or in any way relating to
Guarantor in the Credit Agreement and the other Credit Documents, as if the same
were set forth herein in full.
 
Section 6.  Covenants.  Guarantor will comply with all covenants with which the
Borrowers are to cause Guarantor to comply under the terms of the Credit
Agreement or any of the other Loan Documents.
 
 
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Section 7.  Waiver.  Guarantor, to the fullest extent permitted by Applicable
Law, hereby waives:  (a) any defense based upon any legal disability or other
defense of any Borrower, any other guarantor or other person, or by reason of
the cessation or limitation of the liability of any Borrower from any cause
other than full payment of all sums payable under the Notes or any of the other
Loan Documents; (b) any defense based upon any lack of authority of the
officers, directors, partners or agents acting or purporting to act on behalf of
any Borrower or any principal of a Borrower or any defect in the formation of
any Borrower or any principal of a Borrower; (c) any defense based upon the
application by any Borrower of the proceeds of the Loan for purposes other than
the purposes represented by a Borrower to Lenders or intended or understood by
Lenders or Guarantor; (d) any and all rights and defenses arising out of an
election of remedies by Lenders, such as non-judicial foreclosure with respect
to security for a guaranteed obligation, even though that election of remedies
has destroyed Guarantor’s rights of subrogation and reimbursement against any
principal by the operation of law; (e) any defense based upon Lenders’ or
Administrative Agent’s failure to disclose to Guarantor any information
concerning Borrowers’ financial condition or any other circumstances bearing on
Borrowers’ ability to pay all sums payable under the Notes or any of the other
Loan Documents; (f) any defense based upon any statute or rule of law which
provides that the obligation of a surety must be neither larger in amount nor in
any other respects more burdensome than that of a principal; (g) any defense
based upon Lenders’ election, in any proceedings instituted under the Federal
Bankruptcy Code, of the application of Section 1111(b)(2) of the Federal
Bankruptcy Code or any successor statute; (h) any defense based upon any
borrowing or any grant of a security interest under Section 364 of the Federal
Bankruptcy Code; (i) any right of subrogation, any right to enforce any remedy
which Lenders may have against nay Borrower and any right to participate in, or
benefit from, any security for the Notes or the other Loan documents now or
hereafter held by Lenders; and (j) notice of acceptance hereof or any
presentment, demand, protest or notice of any kind (except to the extent
expressly required under the Credit Agreement or the other Loan Documents, as
applicable), 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
Guarantor or which otherwise might operate to discharge Guarantor from its
obligations hereunder.
 
Section 8.  Inability to Accelerate Loan.  If the Guarantied Parties or any of
them are prevented under Applicable Law or otherwise from demanding or
accelerating payment of any of the Guarantied Obligations by reason of any
automatic stay or otherwise, the Administrative Agent and/or the other
Guarantied Parties shall be entitled to receive from 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 Administrative Agent or any other Guarantied Party for repayment or recovery
of any amount or amounts received in payment or on account of any of the
Guarantied Obligations, and the Administrative Agent or such other Guarantied
Party repays all or part of said amount by reason of (a) any judgment, decree or
order of any court or administrative body of competent jurisdiction, or (b) any
settlement or compromise of any such claim effected by the Administrative Agent
or such other Guarantied Party with any such claimant (including any Borrower or
a trustee in bankruptcy for any Borrower), then and in such event 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 Borrowers, and Guarantor shall be and remain
liable to the Administrative Agent or such other Guarantied Party for the
amounts so repaid or recovered to the same extent as if such amount had never
originally been paid to the Administrative Agent or such other Guarantied Party.
 
 
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Section 10.  Subrogation.  Upon the making by Guarantor of any payment hereunder
for the account of the Borrowers, Guarantor shall be subrogated to the rights of
the payee against the Borrowers; provided, however, that 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 Guarantor may have
against any Borrower arising by reason of any payment or performance by
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 Guarantor on account of or in respect of such subrogation
rights or other claims or causes of action, Guarantor shall hold such amount in
trust for the benefit of the Guarantied Parties and shall forthwith pay such
amount to the Administrative Agent to be credited and applied against the
Guarantied Obligations, whether matured or unmatured, in accordance with the
terms of the Credit Agreement or to be held by the Administrative Agent as
collateral security for any Guarantied Obligations existing.  Until the
Guarantied Obligations have been repaid in full, Guarantor hereby forever waives
to the fullest extent possible any and all claims such Guarantor may have
against any Loan Party arising out of any payment by such Guarantor to the
Administrative Agent and the Lenders of any of the obligations pursuant to this
Guaranty, including, but not limited to, all such claims of Guarantor arising
out of any right of subrogation, indemnity, reimbursement, contribution,
exoneration, payment or any other claim, cause of action, right or remedy
against any Borrower, whether such claim arising at law, in equity, or out of
any written or oral agreement between or among Guarantor, any Borrower or
otherwise.  The waivers set forth above are intended by each Guarantor, the
Administrative Agent and the Lenders to be for the benefit of each Loan Party,
and such waivers shall be enforceable by such Loan Party or the assets of such
Loan Party, which action arises out of any payment by Guarantor to the
Administrative Agent or Lenders upon any of these obligations.  The waivers set
forth herein may not be revoked by Guarantor without the prior written consent
of the Administrative Agent and each Loan Party.
 
Section 11.  Payments Free and Clear.  All sums payable by 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 Guarantor is required by Applicable Law
or by any Governmental Authority to make any such deduction or withholding
Guarantor shall pay to the Administrative Agent and the Lenders such additional
amount as will result in the receipt by the Administrative Agent and the Lenders
of the full amount payable hereunder had such deduction or withholding not
occurred or been required.
 
Section 12.  Set-off.  In addition to any rights now or hereafter granted under
any of the other Credit Documents or Applicable Law and not by way of limitation
of any such rights, Guarantor hereby authorizes each Guarantied Party and their
respective affiliates and each Participant, at any time while an Event of
Default exists, without any prior notice to Guarantor or to any other Person,
any such notice being hereby expressly waived, but in the case of a Lender, a
Specified Derivatives Provider, the Issuing Bank, an affiliate of any of the
foregoing, or a Participant subject to receipt of the prior written consent of
the Administrative Agent and Requisite Lenders, exercised in their sole
discretion, to set-off and to appropriate and to apply any and all deposits
(general or special, including, but not limited to, indebtedness evidenced by
certificates of deposit, whether matured or unmatured) and any other
indebtedness at any time held or owing by the Administrative Agent, the Issuing
Bank, such Lender, such Specified Derivatives Provider or such Participant or
any affiliate of the Administrative Agent, the Issuing Bank, or such Lender to
or for the credit or the account of the Borrower against and on account of any
of the Guarantied Obligations, although such obligations shall be contingent or
unmatured.  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 Guarantor in the amount of such participation.
 
Section 13.  Subordination.  Guarantor hereby expressly covenants and agrees for
the benefit of the Guarantied Parties that all obligations and liabilities of
the Borrowers to Guarantor of whatever description, including without
limitation, all intercompany receivables of Guarantor from the Borrowers
(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 any 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.
 
 
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Section 14.  Avoidance Provisions.  It is the intent of Guarantor, the
Administrative Agent and the other Guarantied Parties that in any Proceeding,
Guarantor’s maximum obligation hereunder shall equal, but not exceed, the
maximum amount which would not otherwise cause the obligations of Guarantor
hereunder (or any other obligations of Guarantor to the Guarantied Parties) to
be avoidable or unenforceable against Guarantor in such Proceeding as a result
of Applicable Law, including without limitation, (a) Section 548 of the
Bankruptcy Code of 1978, as amended (the “Bankruptcy Code”) and (b) any state
fraudulent transfer or fraudulent conveyance act or statute applied in such
Proceeding, whether by virtue of Section 544 of the Bankruptcy Code or
otherwise.  The Applicable Laws under which the possible avoidance or
unenforceability of the obligations of Guarantor hereunder (or any other
obligations of Guarantor to the Guarantied Parties) shall be determined in any
such Proceeding are referred to as the “Avoidance Provisions”.  Accordingly, to
the extent that the obligations of Guarantor hereunder would otherwise be
subject to avoidance under the Avoidance Provisions, the maximum Guarantied
Obligations for which 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 Guarantor hereunder (or any other obligations of Guarantor to the
Guarantied Parties), to be subject to avoidance under the Avoidance
Provisions.  This Section is intended solely to preserve the rights of the
Administrative Agent and the other Guarantied Parties hereunder to the maximum
extent that would not cause the obligations of Guarantor hereunder to be subject
to avoidance under the Avoidance Provisions, and no Guarantor or any other
Person shall have any right or claim under this Section as against the
Guarantied Parties that would not otherwise be available to such Person under
the Avoidance Provisions.
 
Section 15.  Information.  Guarantor assumes all responsibility for being and
keeping itself informed of the financial condition of the Borrowers and the
other Loan Parties, and of all other circumstances bearing upon the risk of
nonpayment of any of the Guarantied Obligations and the nature, scope and extent
of the risks that Guarantor assumes and incurs hereunder, and agrees that
neither of the Administrative Agent nor any other Guarantied Party shall have
any duty whatsoever to advise Guarantor of information regarding such
circumstances or risks.
 
Section 16.  Governing Law.  THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS
EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH STATE.
 
SECTION 17.  WAIVER OF JURY TRIAL.
 
(a)           GUARANTOR, AND EACH OF THE ADMINISTRATIVE AGENT AND THE OTHER
GUARANTIED PARTIES BY ACCEPTING THE BENEFITS HEREOF, ACKNOWLEDGES THAT ANY
DISPUTE OR CONTROVERSY BETWEEN GUARANTOR, THE ADMINISTRATIVE AGENT OR ANY OF THE
OTHER GUARANTIED PARTIES WOULD BE BASED ON DIFFICULT AND COMPLEX ISSUES OF LAW
AND FACT AND WOULD RESULT IN DELAY AND EXPENSE TO THE PARTIES.  ACCORDINGLY, TO
THE EXTENT PERMITTED BY APPLICABLE LAW, GUARANTOR, THE ADMINISTRATIVE AGENT AND
THE OTHER GUARANTIED PARTIES HEREBY WAIVES ITS RIGHT TO A TRIAL BY JURY IN ANY
ACTION OR PROCEEDING OF ANY KIND OR NATURE IN ANY COURT OR TRIBUNAL IN WHICH AN
ACTION MAY BE COMMENCED BY OR AGAINST ANY PARTY HERETO ARISING OUT OF THIS
GUARANTY.
 
 
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(b)           GUARANTOR, AND EACH OF THE ADMINISTRATIVE AGENT AND THE OTHER
GUARANTIED PARTIES BY ACCEPTING THE BENEFITS HEREOF, HEREBY AGREES THAT THE
COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED
STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK AND ANY APPELLATE
COURT FROM ANY THEREOF, SHALL HAVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS
OR DISPUTES BETWEEN OR AMONG THE GUARANTOR, THE ADMINISTRATIVE AGENT OR ANY OF
THE OTHER GUARANTIED PARTIES, PERTAINING DIRECTLY OR INDIRECTLY TO THIS
GUARANTY.  GUARANTOR AND EACH OF THE GUARANTIED PARTIES EXPRESSLY SUBMITS AND
CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR PROCEEDING COMMENCED
IN SUCH COURTS.  GUARANTOR HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS AND
COMPLAINT, OR OTHER PROCESS OR PAPERS ISSUED THEREIN, AND AGREES THAT SERVICE OF
SUCH SUMMONS AND COMPLAINT, OR OTHER PROCESS OR PAPERS MAY BE MADE BY REGISTERED
OR CERTIFIED MAIL ADDRESSED TO GUARANTOR AT ITS ADDRESS FOR NOTICES PROVIDED FOR
HEREIN.  SHOULD A GUARANTOR FAIL TO APPEAR OR ANSWER ANY SUMMONS, COMPLAINT,
PROCESS OR PAPERS SO SERVED WITHIN THIRTY DAYS AFTER THE MAILING THEREOF,
GUARANTOR SHALL BE DEEMED IN DEFAULT AND AN ORDER AND/OR JUDGMENT MAY BE ENTERED
AGAINST IT AS DEMANDED OR PRAYED FOR IN SUCH SUMMONS, COMPLAINT, PROCESS OR
PAPERS.  EACH PARTY FURTHER WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER
HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT
SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT FORUM AND EACH AGREES
NOT TO PLEAD OR CLAIM THE SAME.  THE CHOICE OF FORUM SET FORTH IN THIS SECTION
SHALL NOT BE DEEMED TO PRECLUDE THE BRINGING OF ANY ACTION BY THE ADMINISTRATIVE
AGENT OR ANY OTHER GUARANTIED PARTY OR THE ENFORCEMENT BY THE ADMINISTRATIVE
AGENT OR ANY OTHER GUARANTIED PARTY OF ANY JUDGMENT OBTAINED IN SUCH FORUM IN
ANY OTHER APPROPRIATE JURISDICTION.
 
(c)           THE 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 GUARANTY.
 
Section 18.  Loan Accounts.  The Administrative Agent and each Lender may
maintain books and accounts setting forth the amounts of principal, interest and
other sums paid and payable with respect to the Guarantied Obligations arising
under or in connection with the Credit Agreement, and in the case of any dispute
relating to any of the outstanding amount, payment or receipt of any of the
Guarantied Obligations or otherwise, the entries in such books and accounts
shall constitute prima facie evidence of the outstanding amount of such
Guaranties Obligations and the amounts paid and payable with respect thereto and
the other matters set forth therein.  The failure of the Administrative Agent or
any Lender to maintain such books and accounts shall not in any way relieve or
discharge Guarantor of any of its obligations hereunder.
 
Section 19.  Waiver of Remedies.  No delay or failure on the part of the
Administrative Agent or any other Guarantied Party in the exercise of any right
or remedy it may have against Guarantor hereunder or otherwise shall operate as
a waiver thereof, and no single or partial exercise by the Administrative Agent
or any other Guarantied Party of any such right or remedy shall preclude any
other or further exercise thereof or the exercise of any other such right or
remedy.
 
 
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Section 20.  Termination.  This Guaranty shall remain in full force and effect
with respect to Guarantor until indefeasible payment in full of the Guarantied
Obligations and the other Obligations and the termination or cancellation of the
Credit Agreement and all Specified Derivatives Contracts in accordance with
their respective terms.
 
Section 21.  Successors and Assigns.  Each reference herein to the
Administrative Agent or any other Guarantied Party shall be deemed to include
such Person’s respective successors and assigns (including, but not limited to,
any holder of the Guarantied Obligations) in whose favor the provisions of this
Guaranty also shall inure, and each reference herein to Guarantor shall be
deemed to include Guarantor’s successors and assigns, upon whom this Guaranty
also shall be binding.  The Guarantied Parties may, in accordance with the
applicable provisions of the Credit Agreement and Specified Derivatives
Contracts, 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, Guarantor and without releasing, discharging or modifying
Guarantor’s obligations hereunder.  Guarantor hereby consents to the delivery by
the Administrative Agent and any other Guarantied Party to any Assignee or
Participant (or any prospective Assignee or Participant) of any financial or
other information regarding the Borrower or 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.  Reserved.
 
Section 23.  Amendments.  This Guaranty may not be amended except in writing
signed by the Administrative Agent and Guarantor, subject to Section 13.7 of the
Credit Agreement.
 
Section 24.  Payments.  All payments to be made by Guarantor pursuant to this
Guaranty shall be made in Dollars, in immediately available funds to the
Administrative Agent at its Principal Office, not later than 2:00 p.m. Eastern
time, on the date one Business Day after 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 Guarantor at its address set forth below its signature
hereto, (b) to the Administrative Agent or any other Guarantied Party at its
address for notices provided for in the Credit Agreement or Specified
Derivatives Contract, as applicable, or (c) as to each such party at such other
address as such party shall designate in a written notice to the other
parties.  Each such notice, request or other communication shall be effective
(i) if mailed, when received; (ii) if telecopied, when transmitted; or (iii) if
hand delivered, when delivered; provided, however, that any notice of a change
of address for notices shall not be effective until received.
 
Section 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 Administrative Agent nor any
other Guarantied Party, nor any affiliate, officer, director, employee,
attorney, or agent of the Administrative Agent or any other Guarantied Party,
shall have any liability with respect to, and 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 Credit Documents, the Fee Letter, or any of the transactions
contemplated by this Guaranty, the Credit Agreement or any of the other Loan
Documents.  Guarantor hereby waives, releases, and agrees not to sue the
Administrative Agent or any other Guarantied Party or any of the Administrative
Agent’s or any other Guarantied Party’s affiliates, officers, directors,
employees, attorneys, or agents for punitive damages in respect of any claim in
connection with, arising out of, or in any way related to, this Guaranty, the
Credit Agreement or any of the other Credit Documents, the Fee Letter, or any of
the transactions contemplated by thereby.
 
 
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Section 29.  Electronic Delivery of Certain Information.  Guarantor acknowledges
and agrees that information regarding the Guarantor may be delivered
electronically pursuant to Section 9.5 of the Credit Agreement.
 
Section 30.  Time.  Time is of the essence with respect to each and every
provision of this Guaranty.
 
Section 31.  Definitions.  (a) For the purposes of this Guaranty:
 
“Proceeding” means any of the following:  (i) a voluntary or involuntary case
concerning 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 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 Guarantor; (iv) 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) Guarantor makes a general assignment for the benefit of
creditors; (vii) 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) Guarantor shall call a meeting of its creditors with a view to arranging
a composition or adjustment of its debts; (ix) 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 Guarantor for the
purpose of effecting any of the foregoing.
 
(b)           Terms not otherwise defined herein are used herein with the
respective meanings given them in the Credit Agreement.
 
[Signatures on Following Page]
 
 
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IN WITNESS WHEREOF, Guarantor has duly executed and delivered this Guaranty as
of the date and year first written above.

             
CAPLEASE, INC., a Maryland corporation
       
 
By:
      Name:       Title:                          
Address for Notices for Guarantor:
           
c/o [NAME OF BORROWER]
                 
Attention:
     
Telecopier: ()
      Telephone: ()    

 
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EXHIBIT E
 
FORM OF NOTICE OF BORROWING
 

          , 201        

 
Wells Fargo Bank, National Association
Winston-Salem Loan Center
One West Fourth Street, 3rd Floor
Winston-Salem, North Carolina  27101
Attn: Tangula H. Graham
 
Ladies and Gentlemen:
 
Reference is made to that certain Credit Agreement dated as of June 29, 2012 (as
amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”), by and among CAPLEASE, LP, a Delaware limited partnership,
PREFCO DIX-NEUF LLC, a Connecticut limited liability company, PREFCO NINETEEN
LIMITED PARTNERSHIP, a Connecticut limited partnership, CLF CANE RUN MEMBER,
LLC, a Delaware limited liability company, CLF CANE RUN LOUISVILLE, LLC, a
Delaware limited liability company, CLF LANDMARK OMAHA LLC, a Delaware limited
liability company, CLF DODGE OMAHA LLC, a Delaware limited liability company,
KDC BUSCH BOULEVARD LLC, a Delaware limited liability company, and CLF 555 N
DANIELS WAY LLC, a Delaware limited liability company (each a “Borrower” and
collectively, the “Borrowers”), Parent (as defined in the Credit Agreement), the
financial institutions party thereto and their assignees under Section 13.6
thereof (the “Lenders”), Wells Fargo Bank, National Association, as
Administrative Agent (the “Administrative Agent”), and the other parties
thereto.  Capitalized terms used herein, and not otherwise defined herein, have
their respective meanings given them in the Credit Agreement.
 
 
1.
Pursuant to Section 2.1(b) of the Credit Agreement, the Borrowers hereby request
that the Lenders make Revolving Loans to the Borrowers in an aggregate amount
equal to $___________________.

 
 
2.
The Borrowers request that such Revolving Loans be made available to the
Borrowers on ____________, 201__.

 
 
3.
The Borrowers hereby request that such Revolving Loans be of the following Type:

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

 
 

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Each Borrower hereby certifies to the Administrative Agent and the Lenders that
as of the date hereof, as of the date of the making of the requested Revolving
Loans, and after making such Revolving Loans, (a) no Default or Event of Default
exists or would exist, and none of the limits specified in Section 2.16 would be
violated; and (b) the representations and warranties made or deemed made by each
Borrower and each other Loan Party in the Loan Documents to which any of them is
a party, are and shall be true and correct with the same force and effect as if
made on and as of such date except to the extent that such representations and
warranties expressly relate solely to an earlier date (in which case such
representations and warranties shall have been true and accurate on and as of
such earlier date) and except for changes in factual circumstances specifically
and expressly permitted under the Loan Documents.  In addition, each Borrower
certifies to the Administrative Agent and the Lenders that all conditions to the
making of the requested Revolving Loans contained in Article VI of the Credit
Agreement will have been satisfied at the time such Revolving Loans are made.

       
[NAME OF BORROWER]
             
 
By:
        Name:       Title:  

 
 
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EXHIBIT F
 
FORM OF NOTICE OF CONTINUATION
 

          , 201        

 
Wells Fargo Bank, National Association
Winston-Salem Loan Center
One West Fourth Street, 3rd Floor
Winston-Salem, North Carolina  27101
Attn: Tangula H. Graham
 
Ladies and Gentlemen:
 
Reference is made to that certain Credit Agreement dated as of June 29, 2012 (as
amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”), by and among CAPLEASE, LP, a Delaware limited partnership,
PREFCO DIX-NEUF LLC, a Connecticut limited liability company, PREFCO NINETEEN
LIMITED PARTNERSHIP, a Connecticut limited partnership, CLF CANE RUN MEMBER,
LLC, a Delaware limited liability company, CLF CANE RUN LOUISVILLE, LLC, a
Delaware limited liability company, CLF LANDMARK OMAHA LLC, a Delaware limited
liability company, CLF DODGE OMAHA LLC, a Delaware limited liability company,
KDC BUSCH BOULEVARD LLC, a Delaware limited liability company, and CLF 555 N
DANIELS WAY LLC, a Delaware limited liability company (each a “Borrower” and
collectively, the “Borrowers”), Parent (as defined in the Credit Agreement), the
financial institutions party thereto and their assignees under Section 13.6
thereof (the “Lenders”), Wells Fargo Bank, National Association, as
Administrative Agent (the “Administrative Agent”), and the other parties
thereto.  Capitalized terms used herein, and not otherwise defined herein, have
their respective meanings given them in the Credit Agreement.
 
Pursuant to Section 2.10 of the Credit Agreement, the Borrowers hereby request a
Continuation 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 requested date of such Continuation is ____________, 201__.

 
 
2.
The aggregate principal amount of the Loans subject to the requested
Continuation is $________________________ and the portion of such principal
amount subject to such Continuation is $__________________________.

 
 
3.
The current Interest Period of the Loans subject to such Continuation ends on
________________, 201__.

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

 
[Check one box only]
 
 
 
one month

 
 
three months

 
 
six months

 
[Continued on next page]
 
 
F-1

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Each Borrower hereby certifies to the Administrative Agent and the Lenders that
as of the date hereof, as of the proposed date of the requested Continuation,
and after giving effect to such Continuation, no Default or Event of Default
exists or will exist.

       
[NAME OF BORROWER]
             
 
By:
        Name:         Title:            

 
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EXHIBIT G
 
FORM OF NOTICE OF CONVERSION
 

          , 201        

 
Wells Fargo Bank, National Association
Winston-Salem Loan Center
One West Fourth Street, 3rd Floor
Winston-Salem, North Carolina  27101
 
Attn: Tangula H. Graham
 
Ladies and Gentlemen:
 
Reference is made to the Credit Agreement dated as of June 29, 2012 (as amended,
restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”), by and among CAPLEASE, LP, a Delaware limited partnership, PREFCO
DIX-NEUF LLC, a Connecticut limited liability company, PREFCO NINETEEN LIMITED
PARTNERSHIP, a Connecticut limited partnership, CLF CANE RUN MEMBER, LLC, a
Delaware limited liability company, CLF CANE RUN LOUISVILLE, LLC, a Delaware
limited liability company, CLF LANDMARK OMAHA LLC, a Delaware limited liability
company, CLF DODGE OMAHA LLC, a Delaware limited liability company, KDC BUSCH
BOULEVARD LLC, a Delaware limited liability company, and CLF 555 N DANIELS WAY
LLC, a Delaware limited liability company (each a “Borrower” and collectively,
the “Borrowers”), Parent (as defined in the Credit Agreement), the financial
institutions party thereto and their assignees under Section 13.6 thereof (the
“Lenders”), Wells Fargo Bank, National Association, as Administrative Agent (the
“Administrative Agent”), and the other parties thereto.  Capitalized terms used
herein, and not otherwise defined herein, have their respective meanings given
them in the Credit Agreement.
 
Pursuant to Section 2.11 of the Credit Agreement, the Borrowers hereby request a
Conversion 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 requested date of such Conversion is ______________, 201__.

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

 
[Check one box only]
 
 
 
Base Rate Loan

 
 
LIBOR Loan

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

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

 
[Check one box only]
 
 
G-1

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

 
 
 
Base Rate Loan

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

 
[Check one box only]
 
one month
three months
six months
 
Each Borrower hereby certifies to the Administrative Agent and the Lenders that
as of the date hereof, as of the proposed date of the requested Conversion, and
after giving effect to such Conversion, no Default or Event of Default exists or
will exist.

       
[NAME OF BORROWER]
             
 
By:
        Name:         Title:            

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

 
EXHIBIT H
 
FORM OF PROPERTY MANAGEMENT CONTRACT ASSIGNMENT
 
FOR VALUE RECEIVED, the undersigned______________________, a [insert state of
formation] [insert type of entity] (the “Borrower”), assigns to WELLS FARGO
BANK, NATIONAL ASSOCIATION, as contractual representative for, and for the
benefit of, the Lenders, the Issuing Bank, and the Specified Derivatives
Providers (in such capacity, the “Administrative Agent”), its rights under all
existing and future agreements and contracts, as amended, between Borrower and
any other person or entity (collectively, “the Property Management Contracts”)
relating to the management of the property described in Annex I attached hereto
(the “Property”). The Property Management Contracts include, but are not limited
to, the property management agreement or contract between Borrower and
_________________________________(the “Manager”) dated ________, ____, as
amended.
 
1.           Capitalized terms used but not otherwise defined herein shall have
the respective meanings given thereto in the Credit Agreement, dated as of June
29, 2012 (the “Credit Agreement”), by and among the Borrower, the other
borrowers and financial institutions party thereto and their assignees under
Section 13.6 (the “Lenders”), the Administrative Agent and the other parties
thereto unless otherwise expressly provided herein.
 
2.           The Administrative Agent shall not exercise any rights under the
Property Management Contract herein assigned to the Administrative Agent unless
there shall be an Event of Default.
 
3.           Upon the occurrence of an Event of Default, without further notice
or demand and at the Borrower’s sole cost and expense, the Administrative Agent
shall, upon its election to such effect, be entitled to exercise all rights of
the Borrower arising under the Property Management Contract or to cause the
Borrower to exercise all rights of the Property Manager in accordance with
instructions from the Administrative Agent.
 
4.           The Administrative Agent is hereby given the right, but not the
obligation, to exercise, enforce, perform, and protect the rights, title and
interests herein contained upon the occurrence of an Event of Default.  The
Administrative Agent shall not be held responsible for the failure to exercise
diligence in taking any such actions.
 
5.           (a)           The Borrower and the Property Manager hereby agree
that, upon the occurrence of an Event of Default, the Administrative Agent shall
have the right at any time thereafter to require, without any liability
therefor, that the Property Manager shall have no further role in the property
management of the Property, by delivery of a written notice to such effect to
the Property Manager (the “Termination Notice”).
 
(b)           Within 10 days after the Termination Notice is given following any
Event of Default, the Borrower and the Property Manager shall deliver or cause
to be delivered to the Administrative Agent or its designee, free of charge,
true copies of all books, correspondence, files, records, invoices, tapes,
cards, computer runs and other papers and documents relating to the Property as
to which Termination Notice has been given (collectively, the “Books and
Records”) in its possession or under its control, or in the possession of any
computer bureau or service company acting for it from which it is contractually
entitled to obtain the Books and Records.  After the Termination Notice is given
and until the Books and Records are delivered to the Administrative Agent or its
designee as set forth above, each of the Borrower and the Property Manager shall
hold the Books and Records in its possession or under its control in trust for
the benefit of the Administrative Agent.  All costs incurred by the Borrower or
the Property Manager in connection with the delivery of the Books and Records to
the Administrative Agent or its designee as set forth above shall be for the
Property Manager’s own account or for the account of the Borrower.
 
 
H-1

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(c)           Upon giving of the Termination Notice by the Administrative Agent,
the Borrower and the Property Manager shall render a final accounting to the
Administrative Agent and cooperate with the Administrative Agent in a
commercially reasonable manner with respect to the preservation of the value of
the Property, and the efficient and effective transfer of the duties the
Property Manager had been performing under the Property Management Contract with
respect to the Property from the Property Manager to such party as the
Administrative Agent may designate.
 
6.           In the event that the Administrative Agent acquires or succeeds to
the interests of the Borrower by reason of a foreclosure, deed-in-lieu of
foreclosure or by exercise of some similar doctrine, the Property Manager agrees
that it shall be bound to the Administrative Agent unless it receives a
Termination Notice, under all of the terms, covenants and conditions of the
Property Management Contract, with the same force and effect as if the
Administrative Agent were the owner named in the Property Management Contract
and the Property Manager does hereby agree to (i) attorn to the Administrative
Agent as its property manager, (ii) affirm its obligations under the Property
Management Contract and (iii) make payments of all sums thereafter becoming due
under the Property Management Contract to the Administrative Agent or its
designee; provided that the Administrative Agent shall not be liable under the
Property Management Agreement for any acts or omissions of the Borrower
thereunder, or which accrued prior to the Administrative Agent ‘s acquiring or
succeeding to the interests of the Borrower, but shall, if no Termination Notice
is given, compensate the Property Manager commencing on the date the
Administrative Agent acquires or succeeds to the interest of the Borrower as
hereinabove described for compensation relating to services from and after such
date.  Said attornment, affirmation and agreement is to be effective and
self-operative (without the execution of any further instruments) upon the
Administrative Agent succeeding to the interests of the Borrower under the
Property Management Contract.  The Property Manager agrees to execute and
deliver at any time, and from time to time, upon the request of Borrower or the
Administrative Agent, any instrument or certificate, as the case may be, deemed
to be necessary or appropriate to evidence such attornment.
 
7.           The failure of the Administrative Agent at any time to avail itself
of any rights, title or interest in this Assignment or any of the other Loan
Documents shall not be construed to be a waiver of any of such rights, titles or
interests, but the Administrative Agent shall have full power and authority to
exercise, enforce, perform or protect such rights at anytime or times that it
deems fit, but subject to the other terms and conditions hereof.  To be
effective, any waiver of any of the terms, covenants or conditions hereto must
be in writing and shall be valid only to the extent clearly set forth in such
writing.  This Assignment shall constitute a prior and continuing first lien and
security interest on the Property Management Contract.  No exercise,
enforcement, performance or protective action taken by the Administrative Agent
with respect to any of the rights, titles and interests assigned or granted
herein shall be construed as a cure of an Event of Default.
 
8.           The appointment of a successor to the Property Manager will not
affect any liability of the predecessor Property Manager to the Administrative
Agent, the Borrower or any other Person which liability arose out of acts or
omissions occurring prior to its termination as the Property Manager.
 
9.           The Borrower and the Property Manager each hereby represents that
it has good right and authority to assign all of its right, title and interest
in and to the Property Management Contract and it will not execute in the future
any other assignment of the Property Management Contract without the
Administrative Agent ‘s prior written consent.
 
 
H-2

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

 
10.           The Property Manager hereby agrees that the Property Management
Contract and the rights and benefits (including, without limitation, all fees
and other payments of the Borrower and the Property Manager) thereunder are and
shall be subject and subordinate to the lien of any deed of trust, mortgage,
deed to secure debt or other security agreement (including any renewal,
modification, amendment, consolidation, extension or replacement of any of the
foregoing) now or hereafter encumbering the Property or any portion
thereof.  This subordination is and shall be self-operative and no further
instrument of subordination shall be required to effectuate the provisions of
this section; nonetheless, the Borrower and the Property Manager shall execute
and deliver to the Administrative Agent such instruments as the Administrative
Agent may from time to time request to further evidence and confirm the
subordination effected hereby.
 
11.           The Borrower and the Property Manager each hereby agree, at any
time, and from time to time, upon not less than fifteen (15) days notice from
the other party (the “Requesting Party”), to execute, acknowledge and deliver to
the Requesting Party or to any person designated by the Requesting Party
(including the holder of any mortgage, deed of trust deed to secure debt or
other security agreement affecting the Property or any portion thereof), a
statement in writing certifying that (i) the Property Management Contract has
not been modified, amended, supplemented or superseded (or if there have been
modifications, amendments, supplements or superseding documents, identifying the
same by the date thereof and specifying the nature thereof), (ii) to the best
knowledge of the party giving the certificate (the “Certifying Party”), no
default or event of default exists under the Property Management Contract (or if
any such default or event of default does exist, specifying the same), (iii) to
the best knowledge of the Certifying Party, the Certifying Party does not have
or hold any claim, counterclaim, offset or defense against the Requesting Party
under this Agreement (or if the Certifying Party has or holds any such claim,
counterclaim, offset or defense, specifying the same) and (iv) the dates to
which all sums payable by or to the Certifying Party under the Property
Management Contract have been paid.
 
12.           This Assignment shall continue in full force and effect until (i)
all of the obligations of the Borrower to the Administrative Agent, the Lenders,
the Issuing Bank and the Specified Derivative Providers have been satisfied
including the full payment of all indebtedness secured by any mortgage, deed of
trust, deed to secure debt or other security agreement affecting the Property or
any portion thereof and all of the other Loan Documents, or (ii) earlier release
of the Property to which this Assignment relates, at which time this Assignment
shall terminate and be void and of no effect without the necessity of any
further instrument.
 
13.           The Administrative Agent assumes no obligations or liability of
the Borrower under the Property Management Contract hereby assigned to the
Administrative Agent.
 
14.           Notwithstanding anything to the contrary contained in the Property
Management Contract, the imposition of a mortgage, deed of trust, deed to secure
debt, assignment of rents and leases or other similar security document or the
exercise of remedies under such security agreement by any mortgagee,
beneficiary, grantee, assignee or the Administrative Agent shall not cause the
termination of the Property Management Contract.
 
15.           The Borrower shall cause any and all substitute property managers
to enter into an agreement similar to this Agreement and to comply with the
terms and conditions of the Loan Documents applicable to the Property which are
within the scope of said property manager’s responsibilities thereunder.
 
16.           This Assignment shall be binding upon the Borrower and the
Property Manager, their successors and assigns, and shall be binding upon and
inure to the benefit of the Administrative Agent, its successors and assigns.
 
 
H-3

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

 
17.           By accepting this Assignment, the Administrative Agent shall in no
manner be prejudiced in its right to exercise, enforce, perform or protect any
one or more rights, title, or interests available to it in any of the Loan
Documents or at law or in equity, including (without limitation) its rights to
foreclose the lien of any mortgage, deed of trust deed to secure debt or other
security agreement affecting the Property or any portion thereof granted to it
or to exercise a power of sale, or any other right, title, or interest granted
to it by the terms of any of the Loan Documents or granted to it pursuant to
applicable law or equity -- it being intended that all of such rights, titles,
and interests are cumulative and may be exercised, enforced, performed, or
protected concurrently with or independently of any one or more of such rights,
titles, or interests to the extent deemed advisable by the Administrative Agent
in the exercise of its sole discretion from time to time.
 
18.           THIS ASSIGNMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS EXECUTED, AND TO
BE FULLY PERFORMED IN SUCH STATE.  THE PARTIES HEREBY AGREE THAT THE FEDERAL
DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK OR, AT THE OPTION OF THE
ADMINISTRATIVE AGENT, ANY STATE COURT LOCATED IN NEW YORK COUNTY, NEW YORK SHALL
HAVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THE
PARTIES, PERTAINING DIRECTLY OR INDIRECTLY TO THIS ASSIGNMENT OR ANY OTHER LOAN
DOCUMENT OR TO ANY MATTER ARISING HEREFROM OR THEREFROM.  THE PARTIES EXPRESSLY
SUBMIT AND CONSENT IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR PROCEEDING
COMMENCED IN SUCH COURTS.  THE PARTIES HEREBY WAIVE PERSONAL SERVICE OF THE
SUMMONS AND COMPLAINT, OR OTHER PROCESS OR PAPERS ISSUED THEREIN, AND AGREE THAT
SERVICE OF SUCH SUMMONS AND COMPLAINT, OR OTHER PROCESS OR PAPERS MAY BE MADE BY
REGISTERED OR CERTIFIED MAIL ADDRESSED TO THE SUCH PARTY AT ITS ADDRESS FOR
NOTICES PROVIDED FOR HEREIN.  THE CHOICE OF FORUM SET FORTH IN THIS SECTION
SHALL NOT BE DEEMED TO PRECLUDE THE BRINGING OF ANY ACTION OR THE ENFORCEMENT OF
ANY JUDGMENT OBTAINED IN SUCH FORUM IN ANY OTHER APPROPRIATE JURISDICTION.
 
19.           In the event of any inconsistency or conflict between the terms
and provisions of this Assignment and those of the Property Management Contract,
the terms and provisions of this Assignment shall control.
 
[Signatures begin on next page]
 
 
H-4

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

 
[Signature page to Property Management Contract Assignment]
 
IN WITNESS WHEREOF, the Borrower has caused this Assignment to be executed,
sealed, and delivered as of the ______ day of ___________, 201__.

       
BORROWER:
          [INSERT NAME OF BORROWER]     a                
 
By:
      Name:       Title:            

Consented and agreed to as of        , 201                     PROPERTY MANAGER:
                            [INSERT NAME OF PROPERTY MANAGER], a                
              By:    
Name:
   
Title:
   

 
 
H-5

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

 
 
SCHEDULE 1
 
PROPERTY MANAGEMENT CONTRACT
 
Property Management Contract dated ____________, _____ by and between
_________________________________and _____________________________.
 
 
H-6

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

 
Annex I
 
DESCRIPTIONS OF PROPERTY SUBJECT TO DEED OF TRUST
 
All that certain real property located in the County of _____________, State of
___________, described as follows:
 
[SEE ATTACHED PAGES]
 
 
H-7

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EXHIBIT I
 
FORM OF REVOLVING NOTE
 
 

$     , 201  

 
FOR VALUE RECEIVED, the undersigned, CAPLEASE, LP, a Delaware limited
partnership, PREFCO DIX-NEUF LLC, a Connecticut limited liability company,
PREFCO NINETEEN LIMITED PARTNERSHIP, a Connecticut limited partnership, CLF CANE
RUN MEMBER, LLC, a Delaware limited liability company, CLF CANE RUN LOUISVILLE,
LLC, a Delaware limited liability company, CLF LANDMARK OMAHA LLC, a Delaware
limited liability company, CLF DODGE OMAHA LLC, a Delaware limited liability
company, KDC BUSCH BOULEVARD LLC, a Delaware limited liability company, and CLF
555 N DANIELS WAY LLC, a Delaware limited liability company (each a “Borrower”
and collectively, the “Borrowers”) hereby unconditionally promises to pay to the
order of ___________________________ (the “Lender”), in care of Wells Fargo
Bank, National Association, as Administrative Agent (the “Administrative
Agent”), to Wells Fargo Bank, National Association, Winston-Salem Loan Center,
One West Fourth Street, 3rd Floor, Winston-Salem, North Carolina  27101, or at
such other address as may be specified by the Administrative Agent to the
Borrowers, the principal sum of ___________________ AND ___/100 DOLLARS
($_____________), or such lesser amount as may be the then outstanding and
unpaid balance of all Revolving Loans made by the Lender to the Borrowers
pursuant to, and in accordance with the terms of, the Credit Agreement.
 
The Borrowers further agree to pay interest at said office, in like money, on
the unpaid principal amount owing hereunder from time to time on the dates and
at the rates and at the times specified in the Credit Agreement.
 
This Revolving Note is one of the “Revolving Notes” referred to in the Credit
Agreement dated as of June 29, 2012 (as amended, restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”), by and among the
Borrowers, Parent (as defined in the Credit Agreement) the financial
institutions party thereto and their assignees under Section 13.6 thereof, the
Administrative Agent, and the other parties thereto, and is subject to, and
entitled to, all provisions and benefits thereof.  Capitalized terms used herein
and not defined herein shall have the respective meanings given to such terms in
the Credit Agreement.  The Credit Agreement, among other things, (a) provides
for the making of Revolving Loans by the Lender to the Borrowers from time to
time in an aggregate amount not to exceed at any time outstanding the Dollar
amount first above mentioned, (b) permits the prepayment of the Loans by the
Borrowers subject to certain terms and conditions and (c) provides for the
acceleration of the Revolving Loans upon the occurrence of certain specified
events.
 
Each Borrower hereby waives presentment, demand, protest and notice of any
kind.  No failure to exercise, and no delay in exercising any rights hereunder
on the part of the holder hereof shall operate as a waiver of such rights.
 
Time is of the essence for this Note.
 
[This Note is given in replacement of the Revolving Note dated _____ __, 201__,
in the original principal amount of $_______ previously delivered to the Lender
under the Credit Agreement.  THIS NOTE IS NOT INTENDED TO BE, AND SHALL NOT BE
CONSTRUED TO BE, A NOVATION OF ANY OF THE OBLIGATIONS OWING UNDER OR IN
CONNECTION WITH THE OTHER NOTE.]1
 
 
I-1

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

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

 
1
Language to be included in case of an assignment and need to issue a replacement
note to an existing Lender, either because such Lender’s Commitment has
increased or decreased from what it was initially.

 
 
I-2

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

 
[NAME OF BORROWER]
             
 
By:
        Name:         Title:            

 
I-3

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EXHIBIT J
 

TRANSFER AUTHORIZER DESIGNATION
(For Disbursement of Loan Proceeds)

 NEW  REPLACE PREVIOUS DESIGNATION     ADD      CHANGE      DELETE LINE
NUMBER    _____  INITIAL LOAN DISBURSEMENT

The following representatives (“Authorized Representatives”) of of CAPLEASE, LP,
a Delaware limited partnership, PREFCO DIX-NEUF LLC, a Connecticut limited
liability company, PREFCO NINETEEN LIMITED PARTNERSHIP, a Connecticut limited
partnership, CLF CANE RUN MEMBER, LLC, a Delaware limited liability company, CLF
CANE RUN LOUISVILLE, LLC, a Delaware limited liability company, CLF LANDMARK
OMAHA LLC, a Delaware limited liability company, CLF DODGE OMAHA LLC, a Delaware
limited liability company, KDC BUSCH BOULEVARD LLC, a Delaware limited liability
company, and CLF 555 N DANIELS WAY LLC, a Delaware limited liability company
(individually and collectively, "Borrower") are authorized to request the
disbursement of loan proceeds and initiate funds transfers for Loan Number
1005925-0 (“Loan”) in the original principal amount of $100,000,000.00 (“Loan
Amount”) evidenced by that certain Credit Agreement dated June 29, 2012 (“Credit
Agreement”), among the Borrowers, each of the financial institutions initially a
signatory thereto together with their assignees under Section 13.6 thereof
(“Lenders”), Parent (as defined in the Credit Agreement), Wells Fargo Bank,
National Association, as the Administrative Agent for the Lenders
(“Administrative Agent“) and the other parties thereto.  Administrative Agent is
authorized to rely on this Transfer Authorizer Designation form until it has
received a new Transfer Authorizer Designation form signed by Borrower, even in
the event that any or all of the foregoing information may have changed.  The
maximum amount of the initial disbursement of any Loan proceeds (“Initial Loan
Disbursement”) and the maximum amount of each subsequent disbursement of any
Loan proceeds (each a “Subsequent Loan Disbursement”) are set forth below:

 
 
Name
 
Title
Maximum Initial Loan Disbursement
Amount1
Maximum Subsequent Loan Disbursement
Amount1
1.
       
2.
       
3.
       
4.
       
5.
       

 
 
INITIAL LOAN DISBURSEMENT AUTHORIZATION
 
o
Applicable for Wire Transfer.Administrative Agent is hereby authorized to accept
wire transfer instructions for the Initial Loan Disbursement from
_______________ (i.e. specify title/escrow company), which instructions are to
be delivered, via fax, email, or letter, to Administrative Agent.  Said
instructions shall include the Borrower’s Name; Title/Escrow #_____________
and/or Loan #1005925-0; the person/entity to receive the Initial Loan
Disbursement (“Receiving Party”);  the Receiving Party’s full account name;
Receiving Party’s account number at the receiving bank (“Receiving Bank”);
Receiving Bank’s (ABA) routing number; city and state of the Receiving Bank; and
the amount of the Initial Loan Disbursement (not to exceed the Maximum Initial
Loan Disbursement Amount set forth above).

 

 
J-1

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o
Applicable for Deposit into Deposit Account.Administrative Agent is hereby
authorized to accept deposit instructions for the Initial Loan Disbursement from
an Authorized Representative of Borrower to be delivered, via fax, email, or
letter, to Administrative Agent for deposit into deposit account # ____________
(“Deposit Account”) held at ________________.  Said instructions shall include:
the Borrower’s name; Title/Escrow #_____________ and/or Loan #1005925-0; the
Deposit Account name; the Deposit Account number; the ABA routing number of the
bank where the Deposit Account is held; city and state of the bank where the
Deposit Account is held; and the amount of the Initial Loan Disbursement (not to
exceed the Maximum Initial Loan Disbursement Amount.)

 
SUBSEQUENT LOAN DISBURSEMENT AUTHORIZATION
 
o
Not Applicable

 
o
Applicable for Wire Transfer.Administrative Agent is hereby authorized to accept
wire transfer instructions for the Subsequent Loan Disbursement from
________________ (i.e. specify title/escrow company), which instructions are to
be delivered, via fax, email, or letter, to Administrative Agent.  Said
instructions shall include the Borrower’s Name; Title/Escrow #_____________
and/or Loan #1005925-0; the person/entity to receive the Subsequent Loan
Disbursement (“Receiving Party”);  the Receiving Party’s full account name;
Receiving Party’s account number at the receiving bank (“Receiving Bank”);
Receiving Bank’s (ABA) routing number; city and state of the Receiving Bank; and
the amount of the Subsequent Loan Disbursement (not to exceed the Maximum
Subsequent Loan Disbursement Amount set forth above).

 
o
Applicable for Deposit into Deposit Account.Administrative Agent is hereby
authorized to accept deposit instructions for any Subsequent Loan Disbursement
from an Authorized Representative of Borrower to be delivered, via fax, email,
or letter, to Administrative Agent for deposit into deposit account #
____________ (“Deposit Account”) held at ________________.  Said instructions
shall include: the Borrower’s name; Title/Escrow #_____________ (if applicable)
and/or Loan #1005925-0; the Deposit Account name; the Deposit Account number;
the ABA routing number of the bank where the Deposit Account is held; city and
state of the bank where the Deposit Account is held; and the amount of the
Subsequent Loan Disbursement (not to exceed the Maximum Subsequent Loan
Disbursement Amount).

 
Borrower acknowledges and agrees that the acceptance of and disbursement of
funds by Administrative Agent in accordance with the title/escrow company or
Authorized Representative instructions shall be governed by this Transfer
Authorizer Designation form and any other Loan Documents (as defined in the
Credit Agreement).  Administrative Agent shall not be further required to
confirm said disbursement instructions received from title/escrow company or
Authorized Representative with Borrower.  This Transfer Authorizer Designation
form is in effect until the Maturity Date (as defined in the Credit Agreement)
after which time a new authorization request shall be required.  Borrower shall
instruct title/escrow company and/or Authorized Representative, via a separate
letter, to deliver said disbursement instructions in writing, directly to
Administrative Agent at its address set forth in that certain Section of the
Credit Agreement entitled Notices.  Borrower also hereby authorizes
Administrative Agent to attach a copy of the written disbursement instructions
to this Transfer Authorizer Designation form upon receipt of said instructions.
 
 
J-2

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Beneficiary Bank and Account Holder Information

1.      INITIAL LOAN DISBURSEMENT AUTHORIZATION - FOR WIRE TRANSFER
 

Borrower Name:
 
Title/Escrow Number:
 
Loan Number:
 
Transfer/Deposit Funds to (Receiving Party Account Name):
 
Receiving Party Deposit Account Number:
 
Receiving Bank Name, City and State:
 
Receiving Bank Routing (ABA) Number:
Disbursement  Amount (Not to exceed the Maximum Initial Loan Disbursement
Amount):
 
Further Credit Information/Instructions:
   

2.      INITIAL LOAN DISBURSEMENT AUTHORIZATION - FOR DEPOSIT INTO DEPOSIT
ACCOUNT

Borrower Name:
 
Title/Escrow Number:
 
Loan Number:
 
Transfer/Deposit Funds to (Receiving Party Account Name):
 
Receiving Party Deposit Account Number:
 
Receiving Bank Name, City and State:
 
Receiving Bank Routing (ABA) Number:
Disbursement Amount (Not to exceed the Maximum Initial Loan Disbursement
Amount):
 
Further Credit Information/Instructions:
   

 
J-3

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3.
SUBSEQUENT LOAN DISBURSEMENT AUTHORIZATION - FOR WIRE TRANSFER

 
Borrower Name:
 
Title/Escrow Number:
 
Loan Number:
 
Transfer/Deposit Funds to (Receiving Party Account Name):
 
Receiving Party Deposit Account Number:
 
Receiving Bank Name, City and State:
 
Receiving Bank Routing (ABA) Number:
Disbursement Amount (Not to exceed the Maximum Initial Loan Disbursement
Amount):
 
Further Credit Information/Instructions:
   

 
4.
SUBSEQUENT LOAN DISBURSEMENT AUTHORIZATION - FOR DEPOSIT INTO DEPOSIT ACCOUNT

Borrower Name:
 
Title/Escrow Number:
 
Loan Number:
 
Transfer/Deposit Funds to (Receiving Party Account Name):
 
Receiving Party Deposit Account Number:
 
Receiving Bank Name, City and State:
 
Receiving Bank Routing (ABA) Number:
Disbursement Amount (Not to exceed the Maximum Initial Loan Disbursement
Amount):
 
Further Credit Information/Instructions:
   

 1
Neither the Initial Disbursement Amount, nor the Initial Disbursement Amount
together with any Subsequent Disbursement Amounts, shall ever exceed the Loan
Amount.

 
J-4

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Date:    , 201                  
[NAME OF BORROWER]
  a_________________________      
By:
      Name:       Title:          

 
 
J-5

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TRANSFER AUTHORIZER DESIGNATION FORM COMPLETION INSTRUCTIONS

If a loan transaction requires a portion and/or all of the loan proceeds be
wired to another financial institution, deposited into a deposit account or if
there is the possibility of initiating a wire transfer or deposit in the future,
completion of the Transfer Authorizer Designation form is required pursuant to
that certain Section entitled Funds Transfer Disbursements of the Credit
Agreement.

Administrative Agent will not transfer any funds unless properly completed and
executed forms have been received.  Funds will only be transmitted to the
beneficiaries designated on the Transfer Authorizer Designation form, as amended
from time to time.  Requests to transfer to any other beneficiary will not be
completed unless Administrative Agent has received a new Transfer Authorizer
Designation form.

Administrative Agent must receive disbursement and transfer requests in
writing.  Verbal requests are not accepted.  Transfer requests will only be
accepted from the individuals designated on the Transfer Authorizer Designation
form; however, Administrative Agent shall not be required to compare signatures
of the requestor to any Administrative Agent documents or other authorizations.

COMPLETING THE TRANSFER AUTHORIZER DESIGNATION FORM
 

§
Check Box Options: Check the appropriate box at top of page (i.e. New/Replace
Previous/Add/Change/Delete/Initial Loan Disbursement)

§
First Paragraph:  In the paragraph that follows, insert Borrower’s name, loan
number and date of Loan Documents.

§
List Names of Transfer Authorizers: Complete line 1, with the name of a person
within your company that will be authorized to request disbursements of loan
proceeds, their corporate title and the maximum dollar amount of the
disbursement they are authorized to approve. Continue to complete additional
lines in this section for all individuals designated as authorizers in
connection with the Loan.

§
Initial Loan Disbursement Authorization: If Borrower requires an Initial Loan
Disbursement, select the applicable Initial Loan Disbursement method (i.e. wire
transfer directly to a title/escrow company or deposit into the Deposit
Account.  Insert the applicable information requested in this section.

If Applicable for Wire Transfer:

 
·
Borrower authorizes Administrative Agent to rely on disbursement instructions
provided directly from the title/escrow company in connection with the wiring of
the Initial Loan Disbursement;

 
·
Borrower must contact title/escrow company and request that specific wiring
instructions be provided directly to Administrative Agent; and

 
·
A copy of written wiring instructions received from title/escrow company will be
attached to original Transfer Authorizer Designation Form.

 
J-6

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§
Subsequent Loan Disbursement Authorization: If Borrower requires Subsequent Loan
Disbursements select the applicable Subsequent Loan Disbursement method (i.e.
wire transfer directly to a title/escrow company or deposit into the Deposit
Account.  Insert the applicable information requested in this section;
otherwise, select “Not Applicable”.

If Applicable for Wire Transfer:

 
·
Borrower authorizes Administrative Agent to rely on disbursement instructions
provided directly from the title/escrow company in connection with the wiring of
the Subsequent Loan Disbursement;

 
·
Borrower must contact title/escrow company and request that specific wiring
instructions be provided directly to Administrative Agent; and

 
·
A copy of written wiring instructions received from title/escrow company will be
attached to original Transfer Authorizer Designation Form.

§
Beneficiary Bank and Account Holder Information:

Enter the following information into (1) Box 1 if Initial Loan Disbursement
applicable for wire transfer, (2) Box 2 if Initial Loan Disbursement applicable
for deposit into the Deposit Account, (3)  Box 3 if Subsequent Loan Disbursement
applicable for wire transfer, and/or (4) Box 4 if Subsequent Loan Disbursement
applicable for deposit into the Deposit Account:

 
·
Borrower Name

 
·
Title/Escrow Number (if applicable)

 
·
Loan Number

 
·
Transfer/Deposit Funds to: Insert the Receiving Party Account Name (i.e.
title/escrow company name or name on the Deposit Account)

 
·
Receiving Party Deposit Account Number: (i.e. title/escrow company account
number at Receiving Bank or Deposit Account number)

 
·
Receiving Bank Name, City and State: Enter the name, City and State of Receiving
Bank

 
·
Receiving Bank Routing/ABA Number

 
·
Disbursement Amount: Enter the maximum amount being wired to Receiving Party or
deposited into the Deposit Account. In the case of an Initial Loan Disbursement,
this amount may vary based on closing date estimates and per diem interest on
existing loan payoffs.  The actual amount of the Initial Loan Disbursement will
be equal to or less than the Maximum Initial Loan Disbursement Amount listed
above.

 
·
Further Credit Information: Enter any Further Credit Information/ Instructions
identifying the account at Receiving Bank referred to in this section.

 
·
NOTE: Neither the Initial Disbursement Amount, nor the Initial Disbursement
Amount together with any Subsequent Disbursement Amounts, shall ever exceed the
Loan Amount.

§
Signature of Transfer Authorizer:  Borrower must sign and date the original
Transfer Authorizer Designation form setting forth representatives approved to
provide disbursement instructions of any Loan proceeds.

 
J-7

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REVISIONS/CHANGES TO TRANSFER AUTHORIZER DESIGNATION FORM

§
In order to revise or change Authorized Representatives or Loan disbursement
instructions, a new Transfer Authorizer Designation form shall be executed by
the party designated on the Transfer Authorizer Designation form by Borrower.

§
The Transfer Authorizer’s name should be printed on the form and dated with a
current date.

 
J-8

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EXHIBIT K
 
FORM OF COMPLIANCE CERTIFICATE
 
Reference is made to the Credit Agreement dated as of June 29, 2012 (as amended,
restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”), by and among CAPLEASE, LP, a Delaware limited partnership, PREFCO
DIX-NEUF LLC, a Connecticut limited liability company, PREFCO NINETEEN LIMITED
PARTNERSHIP, a Connecticut limited partnership, CLF CANE RUN MEMBER, LLC, a
Delaware limited liability company, CLF CANE RUN LOUISVILLE, LLC, a Delaware
limited liability company, CLF LANDMARK OMAHA LLC, a Delaware limited liability
company, CLF DODGE OMAHA LLC, a Delaware limited liability company, KDC BUSCH
BOULEVARD LLC, a Delaware limited liability company, and CLF 555 N DANIELS WAY
LLC, a Delaware limited liability company (each a “Borrower” and collectively,
the “Borrowers”), Parent (as defined in the Credit Agreement), the financial
institutions party thereto and their assignees under Section 13.6 thereof (the
“Lenders”), Wells Fargo Bank, National Association, as Administrative Agent (the
“Administrative Agent”), and the other parties thereto.  Capitalized terms used
herein, and not otherwise defined herein, have their respective meanings given
to them in the Credit Agreement.
 
Pursuant to Section 9.3 of the Credit Agreement, the undersigned hereby
certifies to the Administrative Agent and the Lenders that:
 
1.           (a) The undersigned has reviewed the terms of the Credit Agreement
and has made a review of the transactions, financial condition and other affairs
of the Parent, Borrowers and their respective Subsidiaries as of, and during the
relevant accounting period ending on, _______________, 201__ and (b) such review
has not disclosed the existence during such accounting period, and the
undersigned does not have knowledge of the existence, as of the date hereof, of
any condition or event constituting a Default or Event of Default [except as set
forth on Attachment A hereto, which accurately describes the nature of the
conditions(s) or event(s) that constitute (a) Default(s) or (an) Event(s) of
Default and the actions which the Borrowers (are taking)(are planning to take)
with respect to such condition(s) or event(s)].
 
2.           Schedule 1 attached hereto accurately and completely sets forth the
calculations required to establish compliance with Section 10.1 of the Credit
Agreement on the date of the financial statements for the accounting period set
forth above.
 
3.           As of the date hereof the aggregate outstanding principal amount of
all outstanding Loans, together with the aggregate amount of all Letter of
Credit Liabilities, are less than or equal to the Maximum Loan Availability at
such time.
 
4.           (a) No Default or Event of Default exists, and (b) the
representations and warranties of the Parent, Borrowers and the other Loan
Parties contained in the Credit Agreement and the other Loan Documents are true
and correct in all material respects, except to the extent such representations
or warranties expressly relate solely to an earlier date (in which case such
representations and warranties shall have been true and accurate on and as of
such earlier date) and except for changes in factual circumstances specifically
and expressly permitted under the Credit Agreement or the other Loan Documents.
 
 
K-1

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

 
IN WITNESS WHEREOF, the undersigned has signed this Compliance Certificate on
and as of ___________, 201__.

             
Name:
   
 
 
Title:
Chief Financial Officer  
 
   
 
 

 
K-2

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Schedule 1
 
[ex10-18.jpg]
 
K-3

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[ex10-19.jpg]
 
K-4

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[ex10-110.jpg]
 
K-5

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[ex10-111.jpg]
 
K-6

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

 
EXHIBIT L
 
FORM OF JOINDER AGREEMENT
 
JOINDER AGREEMENT
 
THIS JOINDER AGREEMENT (this “Agreement”), dated as of _______________, 201__,
is entered into by ____________________________, a ________________________ (the
“New Borrower”), and WELLS FARGO BANK, NATIONAL ASSOCIATION, as Administrative
Agent under that certain Credit Agreement, dated as of June 29, 2012 (as the
same may be amended, supplemented or otherwise modified from time to time, the
“Credit Agreement”), among CAPLEASE, LP, a Delaware limited partnership, PREFCO
DIX-NEUF LLC, a Connecticut limited liability company, PREFCO NINETEEN LIMITED
PARTNERSHIP, a Connecticut limited partnership, CLF CANE RUN MEMBER, LLC, a
Delaware limited liability company, CLF CANE RUN LOUISVILLE, LLC, a Delaware
limited liability company, CLF LANDMARK OMAHA LLC, a Delaware limited liability
company, CLF DODGE OMAHA LLC, a Delaware limited liability company, KDC BUSCH
BOULEVARD LLC, a Delaware limited liability company, and CLF 555 N DANIELS WAY
LLC, a Delaware limited liability company (the “Borrowers”, each, a “Borrower”),
Parent (as defined in the Credit Agreement), the Lenders from time to time party
thereto and the Administrative Agent.  All capitalized terms used herein and not
otherwise defined shall have the meanings set forth in the Credit Agreement.
 
New Borrower and the Administrative Agent, for the benefit of the Lenders,
hereby agree as follows:
 
Section 1.         Assumption and Joinder.
 
(a)           The New Borrower hereby expressly assumes, and hereby agrees to
perform and observe, each and every one of the covenants, rights, promises,
agreements, terms, conditions, obligations, appointments, duties and liabilities
of a “Borrower” under the Credit Agreement and all of the other Loan Documents
applicable to it as a Borrower under the Credit Agreement.  By virtue of the
foregoing, the New Borrower hereby accepts and assumes any liability of a
Borrower related to each representation, warranty, covenant or obligation made
by a Borrower in the Credit Agreement, and hereby expressly affirms, as of the
date hereof, each of such representations, warranties, covenants and
obligations.
 
(b)           All references to the term “Borrower” in the Credit Agreement or
in any document or instrument executed and delivered or furnished, or to be
executed and delivered or furnished, in connection therewith shall be deemed to
be a reference to, and shall include, the New Borrower.
 

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

1
To be modified as applicable.

 
2
To be modified as applicable.

 
 
L-1

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Section 2.         Representations and Warranties.  The New Borrower hereby
represents and warrants to the Administrative Agent and the Lenders as follows:
 
(a)           The New Borrower has the requisite [limited liability company]1 
power and authority to enter into this Agreement and to perform its obligations
hereunder and under the Credit Agreement and any other Loan Document to which it
is a party.  The execution, delivery and performance of this Agreement by the
New Borrower and the performance of its obligations under this Agreement, the
Credit Agreement, and any other Loan Document have been duly authorized by the
[sole member]2 of the New Borrower and no other [limited liability company]3
proceedings on the part of the New Borrower are necessary to authorize the
execution, delivery or performance of this Agreement, the transactions
contemplated hereby or the performance of its obligations under this Agreement,
the Credit Agreement or any other Loan Document.  This Agreement has been duly
executed and delivered by the New Borrower.  This Agreement, the Credit
Agreement and each Loan Document constitutes the legal, valid and binding
obligation of the New Borrower enforceable against it in accordance with its
respective terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization or similar laws affecting creditors’
rights generally and by general principles of equity, whether such
enforceability is considered in a proceeding at law or in equity.
 
(b)           The representations and warranties set forth in the Credit
Agreement are true and correct in all material respects on and as of the date
hereof as such representations and warranties apply to the New Borrower (except
to the extent that any such representations and warranties expressly relate to
an earlier date) with the same force and effect as if made on the date hereof.
 
Section 3.         Security Document.  New Borrower is, simultaneously with the
execution of this Agreement, executing and delivering (i) a Security Document
which encumbers certain real property owned by New Borrower and (ii) such other
documents and instruments as requested by the Administrative Agent in accordance
with the Credit Agreement.  New Borrower acknowledges and agrees that from and
after the date of this Agreement, such real property referred to in item (i) of
the immediately preceding sentence shall be Collateral under the Credit
Agreement.
 
Section 4.         Further Assurances.  At any time and from time to time, upon
the Administrative Agent’s request and at the sole expense of the New Borrower,
the New Borrower will promptly and duly execute and deliver any and all further
instruments and documents and take such further action as the Administrative
Agent reasonably deems necessary to effect the purposes of this Agreement.
 
Section 5.         Binding Effect.  This Agreement shall be binding upon the New
Borrower and shall inure to the benefit of the Administrative Agent and the
other Lenders and their respective successors and assigns.
 
Section 6.         Counterparts.  This Agreement may be executed in any number
of counterparts, each of which when so executed and delivered shall be an
original, but all of which shall constitute one and the same instrument.
 
Section 7.         Governing Law.  This Agreement shall be governed by, and
construed and enforced in accordance with the laws of the State of New York,
except to the extent preempted by federal laws.
 

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

 
3
To be modified as applicable.

 
 
L-2

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Section 8.                      JURY TRIAL WAIVER.  TO THE EXTENT PERMITTED BY
THEN APPLICABLE LAW, EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY
RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (a)
ARISING UNDER THE LOAN DOCUMENTS, INCLUDING, WITHOUT LIMITATION, ANY PRESENT OR
FUTURE MODIFICATION THEREOF OR (b) IN ANY WAY CONNECTED WITH OR RELATED OR
INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO
THE LOAN DOCUMENTS (AS NOW OR HEREAFTER MODIFIED) OR ANY OTHER INSTRUMENT,
DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR THE
TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER SUCH CLAIM, DEMAND,
ACTION OR CAUSE OF ACTION IS NOW EXISTING OR HEREAFTER ARISING, AND WHETHER
SOUNDING IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND
CONSENTS THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A
COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
PARTIES HERETO TO THE WAIVER OF ANY RIGHT THEY MIGHT OTHERWISE HAVE TO TRIAL BY
JURY.
 
[Remainder of page intentionally left blank]
 
 
 
L-3

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IN WITNESS WHEREOF, New Borrower has caused this Agreement to be duly executed
by its respective authorized officer, and the Administrative Agent, for the
benefit of the Lenders, has caused the same to be accepted by its authorized
officer, as of the day and year first above written.
 
“New Borrower”
 
 

         
By:
       
Name:
       
Title:
   
 
 

                                            

 
 
“Administrative Agent”

WELLS FARGO BANK, NATIONAL ASSOCIATION,
     
as Administrative Agent
                         
By:
       
Name:
       
Title:
   
 
 

 
 
L-4

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SCHEDULE 1 – COMMITMENTS
 

Lender
Commitment
Pro Rata Share
WELLS FARGO BANK, NATIONAL ASSOCIATION
$100,000,000.00
100%
TOTALS
$100,000,000.00
100%

 
 

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

 
 
SCHEDULE 1.1(a) – LIST OF LOAN PARTIES
 
 
CAPLEASE, INC., a Maryland corporation
 
CAPLEASE, LP, a Delaware limited partnership
 
PREFCO DIX-NEUF LLC, a Connecticut limited liability company
 
PREFCO NINETEEN LIMITED PARTNERSHIP, a Connecticut limited partnership
 
CLF CANE RUN MEMBER, LLC, a Delaware limited liability company
 
CLF CANE RUN LOUISVILLE, LLC, a Delaware limited liability company
 
CLF LANDMARK OMAHA LLC, a Delaware limited liability company
 
CLF DODGE OMAHA LLC, a Delaware limited liability company
 
KDC BUSCH BOULEVARD LLC, a Delaware limited liability company
 
CLF 555 N DANIELS WAY LLC, a Delaware limited liability company
 
CLF REAL ESTATE LLC, a Delaware limited liability company
 
 
 

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

 
 
SCHEDULE 1.1(b) – KROGER PORTFOLIO
 
 
3651 Peachtree Parkway, Suwanee, GA
 
6678 Covington Hwy., Lithonia, GA
 
136 Belmont Drive, Calhoun, GA
 
400 Peachtree Industrial Blvd., Suwanee, GA
 
302 Brighton Park Blvd., Frankfort, KY
 
540/ 545 Island Fort Road, Madisonville, KY
 
849 North 12th Street, Murray, KY
 
1002 South Broadway, Georgetown, KY
 
1670 Starlite Drive, Owensboro, KY
 
9501 S. Northshore Drive, Knoxville, TN
 
2020 Mallory Lane, Franklin, TN
 
 
 

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

 
 
SCHEDULE 1.1(c) – PERMITTED LIENS
 
 
 
1.
Pledge of membership interests of CLF Cheyenne Tulsa, LLC, a Delaware limited
liability company, pursuant to that certain Membership Interest Pledge Agreement
dated as of July 29, 2011, by One Place, LLC, an Oklahoma limited liability
company, and CLF Cheyenne Tulsa Member, LLC, a Delaware limited liability
company, in favor of BOKF, NA dba Bank of Oklahoma.

 
 
 

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

 
 
SCHEDULE 4.1 – INITIAL BORROWING BASE PROPERTIES
 
3651 Peachtree Parkway, Suwanee, GA
 
6678 Covington Hwy., Lithonia, GA
 
136 Belmont Drive, Calhoun, GA
 
400 Peachtree Industrial Blvd., Suwanee, GA
 
302 Brighton Park Blvd., Frankfort, KY
 
540/ 545 Island Fort Road, Madisonville, KY
 
849 North 12th Street, Murray, KY
 
1002 South Broadway, Georgetown, KY
 
1670 Starlite Drive, Owensboro, KY
 
9501 S. Northshore Drive, Knoxville, TN
 
2020 Mallory Lane, Franklin, TN
 
5060 Cane Run Road, Louisville, KY
 
9394 West Dodge Road, Omaha, NE
 
1299 Farnam Street, Omaha, NE
 
6480 Busch Boulevard, Columbus, OH
 
555 North Daniels Way, Bloomington, IN
 
 
 

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

 
 
SCHEDULE 7.1(b) – OWNERSHIP STRUCTURE
 
 
Part I
     
Subsidiary Name
Type of Entity
Ownership
Purpose
Caplease, LP
DE LP
General Partner:  CLF OP General Partner LLC (1.0%)
Transact any and all lawful business
   
Limited Partners:  CapLease, Inc. (98.8%) and JDA Middletown Limited Partnership
and Timothy Mahoney (0.2%)
CLF OP General Partner, LLC
DE LLC
Sole Member:  CapLease, Inc.
Engage in any and all lawful business
       
Caplease Services Corp.
DE Corp
Caplease Debt Funding, LP, sole member
Transact any and all lawful business: taxable REIT subsidiary
CLF Ridley Park Business Trust
VA Business Trust
100% owned by CapLease, Inc.
Own property located in Ridley Park, PA
CLF VA Ponce LLC
DE LLC
Caplease, LP as sole member
Own property located in Ponce PR
CLF 1000 Milwaukee Avenue LLC
DE LLC
Caplease, LP as sole member
Own property located in Glenview, IL
CLF 555 N Daniels Way LLC
DE LLC
Caplease, LP as sole member
Own property located in Bloomington, IN
CLF Bobs Randolph LLC
DE LLC
Caplease, LP as sole member
Own property located in Randolph, MA
KDC Busch Boulevard LLC
DE LLC
Caplease, LP as sole member
Own property located in Columbus, OH
Columbia Pike I, LLC
DE LLC
Caplease, LP as sole member
Own property located in Silver Spring, MD
CLF Parsippany LLC
DE LLC
Caplease, LP as sole member
Own property located in Whippany, NJ
Caplease Credit LLC
DE LLC
Caplease, LP as sole member
Broad purpose, including guarantor of loans
EVA LLC
DE LLC
CapLease, Inc., as sole member
Shell entity and former owner of CDO notes and preferred shares of Issuer
CapLease Investment Management, LLC
DE LLC
CapLease, Inc., as sole member
KBC loan Collateral Manager
WG-Investors-New Jersey
DE Business Trust
Caplease, LP as sole owner
Shell entity and former owner of property in Pennsauken, NJ
CA Portsmouth Investment Trust
DE Business Trust
Caplease, LP as sole owner
Own property in Portsmouth, VA
CLF Herndon LLC
DE LLC
Caplease, LP, as sole member
Own property located in Herndon VA
CLF Aliso Viejo Business Trust
VA Business Trust
Caplease, LP, as sole shareholder
Own property in Aliso Viejo, CA

 
 
 

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

 
 
CLF Rapp Irving LP
DE LP
CLF Rapp Irving GP LLC as 1% general partner; Caplease, LP as 99% limited
partner
Own property located in Irving, TX
       
CLF Rapp Irving GP LLC
DE LLC
Caplease, LP, as sole member
Act as GP of CLF Rapp Irving GP LLC whose purpose is to own property located in
Irving, TX
CLF Tollway Plano LP
DE LP
CLF Tollway Plano GP LLC as 1% general partner; Caplease, LP as 99% limited
partner
Own property located in Plano, TX
       
CLF Tollway Plano GP LLC
DE LLC
Caplease, LP, as sole member
Act as GP of CLF Tollway Plano GP LLC whose purpose is to own property located
in Plano, TX
CLF DEA Birmingham LLC
DE LLC
Caplease, LP
Own DEA property located in Birmingham, AL
CLF FBI Birmingham LLC
DE LLC
Caplease, LP
Own FBI property located in Birmingham, AL
CLF EPA Kansas City LLC
DE LLC
CLF EPA Member LLC, as sole member
Own property located in Kansas City, KS
CLF OSHA Sandy LLC
DE LLC
CLF OSHA Member LLC, as sole member
Shell entity and former owner of property located in Sandy, UT
       
CLF SSA Austin LP
DE LP
1% General Partner:  CLF SSA Austin GP
Own property located in Austin, TX
   
99% Limited Partner:  Caplease, LP
 
CLF SSA Austin GP LLC
DE LLC
Member: Caplease, LP
Act as the general partner of CLF SSA Austin LP, whose purpose is to own
property in Austin, TX
KDC Norman Woods Business Trust
VA Business Trust
CapLease, Inc. as sole owner
Own property in Waukegan, IL
CLF 6116 GP LLC
DE LLC
Caplease, LP as sole member
To act as the sole general partner of Capital Property Associates Limited
Partnership, whose purpose is to own and operate property in North Bethesda,
Maryland
       
Capital Property Associates Limited Partnership
MD limited partnership
CLF 6116 GP LLC as 1% general partner; Caplease, LP as 99% limited partner
To own and operate property in North Bethesda, Maryland
       

 
 
 

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

 
 
CLF Sylvan Way LLC
DE LLC
Caplease, LP, as sole member
To own and operate property in Parsippany, New Jersey (Tiffany)
CLF EPA Member LLC
DE LLC
Caplease, LP
To act as the sole member of CLF EPA Kansas City LLC, whose purpose is to own
property in Kansas City, KS
       
CLF OSHA Member LLC
DE LLC
Caplease, LP
To act as the sole member of CLF OSHA Sandy LLC (former owner of property in
Sandy, UT).
CLF Mercer Island LLC
DE LLC
Caplease, LP
To own and operate property in Mercer Island, WA
CLF Electric Road Roanoke LLC
DE LLC
Caplease, LP
To own and operate property in Roanoke, VA
CLF McCullough Drive Charlotte LLC
DE LLC
Caplease, LP
To own and operate property in Charlotte, NC
Caplease Statutory Trust I
Delaware Business Trust
Caplease, LP
Issued December 2005 Trust Preferred
CLF Red Lion Road Philadelphia Business Trust
Virginia Business Trust
CapLease, Inc.
To own and operate real estate in Philadelphia, PA
       
CLF South Monaco Denver LLC
DE LLC
Caplease, LP
To own and operate real estate in Denver, CO
CLF Greenway Drive Lawrence LLC
DE LLC
Caplease, LP
To own and operate real estate in Lawrence, KS
CLF Noria Road Lawrence LLC
DE LLC
Caplease, LP
To own and operate real estate in Lawrence, KS
CLF New Falls Business Trust
Virginia Business Trust
Caplease, LP
To own and operate real estate in Middletown Township, PA
Caplease Debt Funding, LP
DE LP
0.1% General Partner:  CLF OP General Partner LLC
Transact any and all lawful business
   
99.9% Limited Partner:  CapLease, Inc.
 
CLF TW Milwaukee LLC
DE LLC
Caplease, LP
To own and operate real property located in Milwaukee, Wisconsin
CLF Wyomissing Business Trust
VA Business Trust
CapLease, Inc.
Shell entity and former owner of property located in Wyomissing, PA (Cott)
CLF FBI Albany LLC
DE LLC
Caplease, LP
To own and operate real estate in Albany, NY

 
 
 

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

 
 
CLF Fresno Business Trust
VA Business Trust
Caplease, LP
To own and operate real estate in Fresno, CA
CLF Grassmere Nashville LLC
DE LLC
Caplease, LP
To own and operate real estate in Nashville, TN
       
CLF Arlington LP 
DE LP
CLF Arlington GP LLC: 1% general partner
To own and operate real estate in Arlington, TX
   
Caplease LP: 99% limited partner
 
CLF Arlington GP LLC
DE LLC
Caplease, LP
To Act as GP of CLF Arlington LP whose purpose is to own and operate real estate
located in Arlington, TX
       
CLF JCI Florida LLC
DE LLC
Caplease, LP
To own and operate real estate in Largo, FL
       
CLF Simi Valley Business Trust
VA Business Trust
Caplease, LP
To own and operate real estate in Simi Valley, CA (Farmers property)
CLF Galena Simi Business Trust
VA Business Trust
Caplease, LP
Shell entity and former owner of real estate in Simi Valley, CA (McDonalds
adjacent to Farmers property)
       
CLF Yolo County Business Trust
VA Business Trust
Caplease, LP
To own and operate real estate in Woodland, CA
CLF Fort Worth LP
DE LP
CLF Fort Worth GP LLC: 1% general partner
To own and operate real estate in Fort Worth, TX
   
Caplease LP: 99% limited partner
 
CLF Fort Worth GP LLC
DE LLC
Caplease, LP
To Act as GP of CLF Fort Worth LP whose purpose is to own and operate real
estate located in Fort Worth, TX
CLF Holding Company, LLC
DE LLC
Caplease, LP
To act as sole member of CLF Real Estate LLC
CLF Real Estate LLC (formerly known as EntreCap Real Estate III LLC)
DE LLC
CLF Holding Company LLC
To initially own the Entrecap portfolio indirectly through other entities
       
Walters Connecticut Venture Trust
Trust
CLF Real Estate LLC
Shell entity and former owner of property located in Hartford, CT
       
PREFCO II GP LLC
DE LLC
CLF Real Estate LLC
To act as general partner of PREFCO II Limited Partnership
PREFCO II Limited Partnership
CT Limited Partnership
CLF Real Estate LLC (80% limited partner)
To own and operate property located in Johnston, Rhode Island
   
PREFCO II, GP LLC (20% general partner)
 

 
 
 

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

 
 
PREFCO Dix-Neuf LLC
CT LLC
CLF Real Estate LLC
To act as general partner of limited partnership that own  the Kroger stores
locations in KY, TN & GA
PREFCO Nineteen Limited Partnership
CT Limited Partnership
CLF Real Estate LLC (99% limited partner)
To own and operate all the Kroger store locations in KY, TN & GA
   
PREFCO Dix-Neuf LLC (1% general partner)
 
CLF Landmark Omaha LLC
DE LLC
Caplease, LP
To own and operate property in Omaha, Nebraska (Landmark)
CLF Dodge Omaha LLC
DE LLC
Caplease, LP
To own and operate property in Omaha, Nebraska (Dodge)
CLF Fort Wayne LLC
DE LLC
Caplease, LP
To own and operate real property located in Fort Wayne, Indiana (Nestle)
CLF Lathrop  Business Trust
VA Business Trust
Caplease, LP
To own and operate real property located in Lathrop, California (Nestle)
CLF Breinigsville Holding Company LLC
DE LLC
CapLease, Inc.
To act as indirect holding company owning Nestle property in Breinigsville, PA
       
PREFCO Fifteen GP LLC
CT LLC
CLF Breinigsville Holding Company LLC
To act as 0.5% general partner of PREFCO Fifteen Holdings Limited Partnership
PREFCO Fifteen Holdings Limited Partnership
CT Limited Partnership
CLF Breinigsville Holding Company LLC (99.5% Limited partner)
To act as 99.5% beneficiary of CLF Breinigsville Business Trust (owner of Nestle
property in PA)
   
PREFCO Fifteen GP LLC (0.5% general partner)
 
PREFCO Quinze LLC
CT LLC
CLF Breinigsville Holding Company LLC
To act as 0.5% beneficiary of CLF Breinigsville Business Trust (owner of Nestle
property in PA)
CLF Breinigsville Business Trust
VA Business Trust
PREFCO Fifteen Holdings Limited Partnership (99.5% beneficiary); PREFCO Quinze
LLC (0.5% beneficiary)
To own and operate real property located in Breinigsville, Pennsylvania (Nestle)
CapLease 2007-STL LLC
DE LLC
CapLease, Inc.
Issue KBC debt and hold related collateral
CLF Cane Run Member, LLC
DE LLC
Caplease, LP
To act as the sole member of CLF Cane Run Louisville LLC (owner of property in
Louisville, KY).
CLF Cane Run Louisville LLC
DE LLC
CLF Cane Run Member, LLC
To own and operate real property located in Louisville, KY (Michelin)
       

 
 
 

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

 
 
CLF Cooper Franklin LLC
DE LLC
Caplease, LP
To own and operate real property located in Franklin, Indiana (Cooper Tire)
CLF 10777 Clay Road LLC
DE LLC
Caplease, LP
To own and operate real property located in Houston, Texas (AMEC)
CLF Elysian Fields LLC
DE LLC
Caplease, LP
To own and operate real property located in New Orleans, Louisiana (Lowe’s)
CLF Cheyenne Tulsa Member, LLC
DE LLC
Caplease, LP
To act as the sole member of CLF Cheyenne Tulsa, LLC (owner of property in
Tulsa, OK).
CLF Cheyenne Tulsa, LLC
DE LLC
CLF Cheyenne Tulsa Member, LLC: 99%
To construct, then own and operate real property located in Tulsa, OK (Cimarex)
    One Place, LLC: 1%  
Part II
                     
None
     

 
 
 

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

 
 
SCHEDULE 7.1(f) – PROPERTIES
 
Tenant
Address
Location
Occupancy Status
Status of Completion
Abbott Laboratories
6480 Busch Blvd
Columbus, OH
100%
Completed
Abbott Laboratories
1850 Norman Drive North
Waukegan, IL
100%
Completed
Aetna Life Insurance Company
1333-1385 East Shaw Avenue
Fresno, CA
100%
Completed
Allstate Insurance Company
401 McCullogh Drive
Charlotte, NC
100%
Completed
Allstate Insurance Company
1819 Electric Road (aka State hwy. 419)
Roanoke, VA
100%
Completed
AMEC plc
10777 Clay Rd.
Houston, TX
100%
Completed
Aon Corporation
1000 Milwaukee Avenue
Glenview, IL
100%
Completed
Baxter International, Inc.
555 North Daniels Way
Bloomington, IN
100%
Completed
Bunge North America, Inc.
6700 Snowden Road
Fort Worth, TX
100%
Completed
Cadbury Holdings Limited
945 Route 10
Hanover Township, NJ
100%
Completed
Capital One Financial Corporation
3905 N. Dallas Parkway
Plano, TX
100%
Completed
Choice Hotels International, Inc.
10720, 10750 & 10770 Columbia Pike
Silver Spring, MD
100%
Completed
Cimarex Energy Company
206 S. Cheyenne
Tulsa, OK
0%
Under Development
Cooper Tire & Rubber Company
500 Bartram Parkway
Franklin, IN
100%
Completed
County of Yolo, California
25 North Cottonwood Street
Woodland, CA
100%
Completed
Crozer - Keystone Health System
8 & 10 Morton Ave
Ridley Park, PA
100%
Completed
CVS Corporation
100 Mazzeo Drive
Randolph, MA
100%
Completed
Exelis, Inc.
12975 Worldgate Drive
Herndon, VA
100%
Completed
Farmers Group, Inc.
3039-3041 Cochran St.
Simi Valley, CA
100%
Completed
Farmers New World Life Insurance Company
3003 77th Ave SE
Mercer Island, WA
100%
Completed
General Motors Financial Company, Inc.
4001 Embarcadero Drive
Arlington, TX
100%
Completed
Invesco Holding Co. Ltd
4340, 4346 & 4350 South Monaco St.
Denver, CO
100%
Completed
Johnson Controls, Inc.
6750 Bryan Dairy Road
Pinellas Park, FL
100%
Completed
Koninklijke Ahold, N.V.
4001 New Falls Road
Levittown, PA
100%
Completed
The Kroger Co.
3651 Peachtree Parkway
 Suwanee, GA
100%
Completed
The Kroger Co.
6678 Covington Hwy.
Lithonia, GA
100%
Completed
The Kroger Co.
136 West Belmont Dr.
Calhoun, GA
100%
Completed
The Kroger Co.
400 Peachtree Industrial Blvd.
Suwanee, GA
100%
Completed

 
 
 

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

 
 
The Kroger Co.
302 Brighton Park Blvd.
Frankfort, KY
100%
Completed
The Kroger Co.
540/545 Island Fort Road
Madisonville, KY
100%
Completed
The Kroger Co.
840 North 12th St.
Murray, KY
100%
Completed
The Kroger Co.
1002 South Broadway
Georgetown, KY
100%
Completed
The Kroger Co.
1670 Starlite Drive
Owensboro, KY
100%
Completed
The Kroger Co.
9501 Northshore DR.
Knoxville, TN
100%
Completed
The Kroger Co.
2020 Mallory Ln
 Franklin, TN
100%
Completed
Lowes Companies, Inc.
26501 Aliso Creek Road
Aliso Viejo, CA
98%
Completed
Lowes Companies, Inc.
2401/2501 Elysian Fields Ave
New Orleans, LA
100%
Completed
Michelin North America, Inc.
5600 Cane Run Rd
Louisville, KY
100%
Completed
Multi-tenant (currently vacant)
1301 Atwood Avenue
Johnston, RI
0%
Completed
Multi-tenant (Dodge building)
9394 West Dodge Road
Omaha, NE
99%
Completed
Multi-tenant (Landmark building)
1299 Farnam St.
Omaha, NE
68%
Completed
Nestle Holdings, Inc.
555 Nestle Way
Breinigsville, PA
100%
Completed
Nestle Holdings, Inc.
2909 Pleasant Center Road
Fort Wayne, IN
100%
Completed
Nestle Holdings, Inc.
2 Nestle Way
Lathrop, CA
100%
Completed
Omnicom Group, Inc.
1660 North Westridge Circle
Irving, TX
100%
Completed
Pearson Plc.
3833 Greenway Drive and 2201 Noria Blvd.
Lawrence, KS
100%
Completed
Tiffany & Co
15 Sylvan Way
Parsippany, NJ
100%
Completed
Time Warner Entertainment Company
1320 North Dr. Martin Luther King Jr. Drive
Milwaukee, WI
100%
Completed
TJX Companies, Inc.
2760 Red Lion Road
Philadelphia, PA
100%
Completed
T-Mobile USA, Inc.
695 Grassmere Park
Nashville, TN
100%
Completed
United States Government (FBI)
200 McCarty Avenue
Albany, NY
100%
Completed
United States Government (SSA)
1029 Camino La Costa
Austin, TX
100%
Completed
United States Government (DEA)
1003 17th St. North
Birmingham, AL
100%
Completed
United States Government (FBI)
1100 18th Street North
Birmingham, AL
100%
Completed
United States Government (EPA)
300 Minnesota Ave
Kansas City, KS
100%
Completed
United States Government (NIH)
6116 Executive Blvd
Bethesda, MD
100%
Completed
United States Government (VA)
Lot 37, Santiago De los Caballeros Avenue
Ponce, PR
100%
Completed
Walgreen Co.
700 Frederick Boulevard
Portsmouth, VA
100%
Completed

 
 
 

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

 
 
SCHEDULE 7.1(g) – INDEBTEDNESS AND GUARANTIES
 
 
Part I - Indebtedness
   
Type
Description of Collateral
Carrying Value of Debt as of March 31, 2012 (in thousands; sums may not foot due
to rounding)
Mortgages on real estate investments
Abbott Laboratories, Waukegan, IL
$14,344.00
 
Aetna Life Insurance Company, Fresno, CA
$16,043.00
 
Allstate Insurance Company, Charlotte, NC
$19,372.00
 
Allstate Insurance Company, Roanoke, VA
$20,625.00
 
AMEC plc, Houston, TX
$16,498.00
 
Aon Corporation, Glenview, IL
$58,843.00
 
Bunge North America, Inc., Fort Worth, TX
$6,262.00
 
Cadbury Holdings Limited, Whippany, NJ
$32,382.00
 
Cadbury Holdings Limited, Whippany, NJ
$1,605.00
 
Capital One Financial Corporation, Plano, TX
$19,201.00
 
Choice Hotels International, Inc., Silver Spring, MD
$26,336.00
 
Cooper Tire & Rubber Company, Franklin, IN
$17,606.00
 
County of Yolo, California, Woodland, CA
$10,332.00
 
Crozer-Keystone Health System, Ridley Park, PA
$2,892.00
 
CVS Corporation, Randolph, MA
$7,521.00
 
Farmers Group, Inc., Simi Valley, CA
$25,620.00
 
Farmers New World Life Insurance Company, Mercer Island, WA
$29,801.00
 
General Motors Financial Company, Inc., Arlington, TX
$26,327.00
 
Invesco Holding Co. Ltd., Denver, CO
$43,700.00
 
ITT Corporation, Herndon, VA
$39,595.00
 
ITT Corporation, Herndon, VA
$2,813.00
 
Johnson Controls, Inc., Largo, FL
$16,200.00
 
Koninklijke Ahold, N.V., Levittown, PA
$13,762.00
 
Lowes Companies, Inc., Aliso Viejo, CA
$41,145.00
 
Lowes Companies, Inc., New Orleans, LA
$9,179.00
 
Lowes Companies, Inc., New Orleans, LA
$8,066.00
 
Lowes Companies, Inc., New Orleans, LA
$475.00
 
Nestle Holdings, Inc., Breinigsville, PA; Fort Wayne, IN; and Lathrop, CA
$117,000.00
 
Omnicom Group, Inc., Irving, TX
$12,391.00
 
Pearson Plc., Lawrence, KS
$15,563.00
 
Tiffany & Co., Parsippany, NJ
$57,275.00

 
 
 

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

 
 

 
Time Warner Entertainment Company, L.P., Milwaukee, WI
$17,500.00
 
Time Warner Entertainment Company, L.P., Milwaukee, WI
$2,334.00
 
Time Warner Entertainment Company, L.P., Milwaukee, WI
$2,155.00
 
TJX Companies, Inc., Philadelphia, PA
$68,663.00
 
T-Mobile USA, Inc., Nashville, TN
$10,568.00
 
United States Government (DEA), Birmingham, AL
$10,879.00
 
United States Government (EPA), Kansas City, KS
$19,018.00
 
United States Government (FBI), Albany, NY
$10,137.00
 
United States Government (FBI), Birmingham, AL
$18,161.00
 
United States Government (NIH), N. Bethesda, MD
$57,505.00
 
United States Government (SSA), Austin, TX
$5,197.00
 
United States Government (VA), Ponce, PR
$3,977.00
 
Walgreen Co., Portsmouth, VA
$2,536.00
 
 Total
$957,407.00
     
Wells Fargo Repurchase Line of Credit
Loans Held for Investment
$1,528.00
 
Intercompany mortgage loans on CapLease properties
$64,713.00
 
Commercial mortgage-backed securities
$2,158.00
 
Owned property
$0.00
 
Total
$68,399.00
     
Secured Term Loan
Loans Held for Investment
$18,279.00
 
Intercompany mortgage loans on CapLease properties
$22,770.00
 
Commercial mortgage-backed securities
$42,032.00
 
Total
$83,081.00
     
Convertible Senior Notes
None
$34,678.00
     
Other Long-term debt (trust preferred securities)
None
$30,930.00

 
 
 

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

 
 
Part II - Total Liabilities (Excluding Indebtedness)
       
Type
Description of Collateral
Carrying Value of Liabilities as of March 31, 2012 (in thousands; sums may not
foot due to rounding)
     
Accounts payable and other liabilities
Accounts payable and other liabilities
$3,602.00
 
Accrued interest
$5,289.00
 
Accrued expenses
$2,356.00
 
Deferred rental income
$6,397.00
 
Unearned rental income
$4,727.00
 
Total
$22,371.00
     
Dividends and distributions payable
Dividends and distributions payable
$5,977.00
     
Total Liabilities (excluding Indebtedness)
Total
$28,348.00

 
 

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

 
 
SCHEDULE 7.1(h) – MATERIAL CONTRACTS
 
Property
Name of Agreement
Parties (Landlord, Optionee First)
Date
       
Abbott Property
       
Office Lease Agreement
Between KDC Busch Boulevard, LLC and Abbott Laboratories
November 5, 2004
       
Baxter Property
       
Lease Agreement
Between CLF 555 N Daniels Way (as successor to Koll Development Company) and
Baxter Healthcare Corporation
November 14, 2003
 
First Amendment to Lease Agreement
Between CLF 555 N Daniels Way (as successor to Koll Development Company) and
Baxter Healthcare Corporation
June 1, 2004
 
Second Amendment to Lease Agreement
Between CLF 555 N Daniels Way (as successor to Koll Development Company) and
Baxter Healthcare Corporation
July 30, 2004
       
Dodge Property
       
Office Lease
Between CLF DODGE OMAHA LLC and Chastain-Otis, Inc.
July 1, 2010
 
Office Lease
Between CLF DODGE OMAHA LLC and COSENTRY.NET, LLC
June 30, 2010
 
First Amendment to Office Lease
Between CLF DODGE OMAHA LLC and COSENTRY.NET, LLC
December 15, 2010
 
Office Lease
Between CLF DODGE OMAHA LLC and DEX MEDIA, INC.
June 11, 2010
 
LEASE AGREEMENT
BETWEEN CLF DODGE OMAHA LLC AND HAYNEEDLE INC.
September 3, 2010
 
FIRST AMENDMENT TO LEASE
Between CLF DODGE OMAHA LLC and HAYNEEDLE, INC.
March 9, 2011
 
MODIFICATION OF FIRST AMENDMENT TO LEASE
Between CLF DODGE OMAHA LLC and HAYNEEDLE, INC.
May 23, 2011
 
OFFICE LEASE
Between CLF DODGE OMAHA LLC. and The Maids International, Inc.
February 21, 2011
 
OFFICE LEASE
Between CLF DODGE OMAHA LLC. and UNION PACIFIC RAILROAD COMPANY
June 11, 2010
 
OPTION AND SUBORDINATION AGREEMENT
Between CLF Dodge Omaha LLC (as successor to PREFCO XI LIMITED PARTNERSHIP) and
THE NEBRASKA-RELCO LIMITED PARTNERSHIP TRUST
December 30, 1992

 
 
 

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

 
 

 
TRIPARTITE AGREEMENT
Between CLF Dodge Omaha LLC (as successor to PREFCO XI LIMITED PARTNERSHIP), U S
WEST, INC., and THE NEBRASKA-RELCO LIMITED PARTNERSHIP TRUST (remainderman)
December 30, 1992
 
AGREEMENT OF GROUND LEASE
Between THE NEBRASKA-RELCO LIMITED PARTNERSHIP TRUST and CLF DODGE OMAHA LLC
June 30, 2010
 
Management Agreement
CLF Dodge Omaha LLC and The MEGA Corporation
November 10, 2009
 
Management Agreement (extension)
CLF Dodge Omaha LLC and The MEGA Corporation
January 11, 2010
       
Kroger Portfolio
     
1002 S. Broadway, Georgetown KY
AMENDED AND RESTATED LEASE
Between PREFCO NINETEEN LIMITED PARTNERSHIP and THE KROGER CO.
June 27, 2007
 
OPTION AND SUBORDINATION AGREEMENT
Between THE CHASE MANHATTAN BANK, AS TRUSTEE, AND FRANK GRIPPO, AS INDIVIDUAL
TRUSTEE, OF THE KCRI TRUST and PREFCO NINETEEN LIMITED PARTNERSHIP (as successor
to PREFCO XIX Limited Partnership)
December 24, 1996
 
TRIPARTITE AGREEMENT
Between PREFCO NINETEEN LIMITED PARTNERSHIP (as successor to PREFCO XIX Limited
Partnership), THE KROGER CO, AND THE CHASE MANHATTAN BANK, AS TRUSTEE, AND FRANK
GRIPPO, AS INDIVIDUAL TRUSTEE, OF THE KCRI TRUST  (remainderman)
December 24, 1996
       
136 W. Belmont Dr., Calhoun GA
AMENDED AND RESTATED LEASE
Between PREFCO NINETEEN LIMITED PARTNERSHIP and THE KROGER CO.
June 27, 2007
 
OPTION AND SUBORDINATION AGREEMENT
Between THE CHASE MANHATTAN BANK, AS TRUSTEE, AND FRANK GRIPPO, AS INDIVIDUAL
TRUSTEE, OF THE KCRI TRUST and PREFCO NINETEEN LIMITED PARTNERSHIP (as successor
to PREFCO XIX Limited Partnership)
December 24, 1996
 
TRIPARTITE AGREEMENT
Between PREFCO NINETEEN LIMITED PARTNERSHIP (as successor to PREFCO XIX Limited
Partnership), THE KROGER CO, AND THE CHASE MANHATTAN BANK, AS TRUSTEE, AND FRANK
GRIPPO, AS INDIVIDUAL TRUSTEE, OF THE KCRI TRUST  (remainderman)
December 24, 1996
       
1670 Starlite Dr., Owensboro KY
AMENDED AND RESTATED LEASE
Between PREFCO NINETEEN LIMITED PARTNERSHIP and THE KROGER CO.
June 27, 2007

 
 
 

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

 
 

 
OPTION AND SUBORDINATION AGREEMENT
Between THE CHASE MANHATTAN BANK, AS TRUSTEE, AND FRANK GRIPPO, AS INDIVIDUAL
TRUSTEE, OF THE KCRI TRUST and PREFCO NINETEEN LIMITED PARTNERSHIP (as successor
to PREFCO XIX Limited Partnership)
December 24, 1996
 
TRIPARTITE AGREEMENT
Between PREFCO NINETEEN LIMITED PARTNERSHIP (as successor to PREFCO XIX Limited
Partnership), THE KROGER CO, AND THE CHASE MANHATTAN BANK, AS TRUSTEE, AND FRANK
GRIPPO, AS INDIVIDUAL TRUSTEE, OF THE KCRI TRUST  (remainderman)
December 24, 1996
       
 2020 Mallory Lane, Franklin TN
AMENDED AND RESTATED LEASE
Between PREFCO NINETEEN LIMITED PARTNERSHIP and THE KROGER CO.
June 27, 2007
 
OPTION AND SUBORDINATION AGREEMENT
Between THE CHASE MANHATTAN BANK, AS TRUSTEE, AND FRANK GRIPPO, AS INDIVIDUAL
TRUSTEE, OF THE KCRI TRUST and PREFCO NINETEEN LIMITED PARTNERSHIP (as successor
to PREFCO XIX Limited Partnership)
December 24, 1996
 
TRIPARTITE AGREEMENT
Between PREFCO NINETEEN LIMITED PARTNERSHIP (as successor to PREFCO XIX Limited
Partnership), THE KROGER CO, AND THE CHASE MANHATTAN BANK, AS TRUSTEE, AND FRANK
GRIPPO, AS INDIVIDUAL TRUSTEE, OF THE KCRI TRUST  (remainderman)
December 24, 1996
       
302 Brighton Park Blvd, Frankfort KY
AMENDED AND RESTATED LEASE
Between PREFCO NINETEEN LIMITED PARTNERSHIP and THE KROGER CO.
June 27, 2007
 
AMENDMENT TO LEASE (at Frankfort, KY)
Between PREFCO NINETEEN LIMITED PARTNERSHIP and THE KROGER CO.
March 5, 2008
 
OPTION AND SUBORDINATION AGREEMENT
Between THE CHASE MANHATTAN BANK, AS TRUSTEE, AND FRANK GRIPPO, AS INDIVIDUAL
TRUSTEE, OF THE KCRI TRUST and PREFCO NINETEEN LIMITED PARTNERSHIP (as successor
to PREFCO XIX Limited Partnership)
December 24, 1996
 
AMENDMENT TO OPTION AND SUBORDINATION AGREEMENT ( at Frankfort, KY)
Between PREFCO NINETEEN LIMITED PARTNERSHIP (as successor to PREFCO XIX Limited
Partnership), THE KROGER CO, AND THE BANK OF NEW YORK TRUST COMPANY, N.A., AS
TRUSTEE, AND FRANK GRIPPO, AS INDIVIDUAL TRUSTEE, OF THE KCRI
TRUST  (remainderman)
March 5, 2008

 
 
 

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

 
 

 
TRIPARTITE AGREEMENT
Between PREFCO NINETEEN LIMITED PARTNERSHIP (as successor to PREFCO XIX Limited
Partnership), THE KROGER CO, AND THE CHASE MANHATTAN BANK, AS TRUSTEE, AND FRANK
GRIPPO, AS INDIVIDUAL TRUSTEE, OF THE KCRI TRUST  (remainderman)
December 24, 1996
 
AMENDMENT TO TRIPARTITE AGREEMENT  ( at Frankfort, KY)
Between THE KROGER CO., PREFCO NINETEEN LIMITED PARTNERSHIP (as successor to
PREFCO XIX Limited Partnership), and THE BANK OF NEW YORK TRUST COMPANY, N.A.,
AS TRUSTEE, AND FRANK GRIPPO, AS INDIVIDUAL TRUSTEE, OF THE KCRI TRUST
(remainderman)
March 5, 2008
       
 3651 Peachtree Parkway, Suwanee GA
AMENDED AND RESTATED LEASE
Between PREFCO NINETEEN LIMITED PARTNERSHIP and THE KROGER CO.
June 27, 2007
 
OPTION AND SUBORDINATION AGREEMENT
Between THE CHASE MANHATTAN BANK, AS TRUSTEE, AND FRANK GRIPPO, AS INDIVIDUAL
TRUSTEE, OF THE KCRI TRUST and PREFCO NINETEEN LIMITED PARTNERSHIP (as successor
to PREFCO XIX Limited Partnership)
December 24, 1996
 
TRIPARTITE AGREEMENT
Between PREFCO NINETEEN LIMITED PARTNERSHIP (as successor to PREFCO XIX Limited
Partnership), THE KROGER CO, AND THE CHASE MANHATTAN BANK, AS TRUSTEE, AND FRANK
GRIPPO, AS INDIVIDUAL TRUSTEE, OF THE KCRI TRUST  (remainderman)
December 24, 1996
       
 400 Peachtree Industrial Blvd, Suwanee GA
AMENDED AND RESTATED LEASE
Between PREFCO NINETEEN LIMITED PARTNERSHIP and THE KROGER CO.
June 27, 2007
 
OPTION AND SUBORDINATION AGREEMENT
Between THE CHASE MANHATTAN BANK, AS TRUSTEE, AND FRANK GRIPPO, AS INDIVIDUAL
TRUSTEE, OF THE KCRI TRUST and PREFCO NINETEEN LIMITED PARTNERSHIP (as successor
to PREFCO XIX Limited Partnership)
December 24, 1996
 
TRIPARTITE AGREEMENT
Between PREFCO NINETEEN LIMITED PARTNERSHIP (as successor to PREFCO XIX Limited
Partnership), THE KROGER CO, AND THE CHASE MANHATTAN BANK, AS TRUSTEE, AND FRANK
GRIPPO, AS INDIVIDUAL TRUSTEE, OF THE KCRI TRUST  (remainderman)
December 24, 1996
       
 540 Island Fort Rd, Madisonville KY
AMENDED AND RESTATED LEASE
Between PREFCO NINETEEN LIMITED PARTNERSHIP and THE KROGER CO.
June 27, 2007

 
 
 

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

 
 

 
OPTION AND SUBORDINATION AGREEMENT
Between THE CHASE MANHATTAN BANK, AS TRUSTEE, AND FRANK GRIPPO, AS INDIVIDUAL
TRUSTEE, OF THE KCRI TRUST and PREFCO NINETEEN LIMITED PARTNERSHIP (as successor
to PREFCO XIX Limited Partnership)
December 24, 1996
 
TRIPARTITE AGREEMENT
Between PREFCO NINETEEN LIMITED PARTNERSHIP (as successor to PREFCO XIX Limited
Partnership), THE KROGER CO, AND THE CHASE MANHATTAN BANK, AS TRUSTEE, AND FRANK
GRIPPO, AS INDIVIDUAL TRUSTEE, OF THE KCRI TRUST  (remainderman)
December 24, 1996
       
6678 Covington Hwy, Lithonia GA
AMENDED AND RESTATED LEASE
Between PREFCO NINETEEN LIMITED PARTNERSHIP and THE KROGER CO.
June 27, 2007
 
OPTION AND SUBORDINATION AGREEMENT
Between THE CHASE MANHATTAN BANK, AS TRUSTEE, AND FRANK GRIPPO, AS INDIVIDUAL
TRUSTEE, OF THE KCRI TRUST and PREFCO NINETEEN LIMITED PARTNERSHIP (as successor
to PREFCO XIX Limited Partnership)
December 24, 1996
 
TRIPARTITE AGREEMENT
Between PREFCO NINETEEN LIMITED PARTNERSHIP (as successor to PREFCO XIX Limited
Partnership), THE KROGER CO, AND THE CHASE MANHATTAN BANK, AS TRUSTEE, AND FRANK
GRIPPO, AS INDIVIDUAL TRUSTEE, OF THE KCRI TRUST  (remainderman)
December 24, 1996
       
 808 N. 12th St., Murray KY
AMENDED AND RESTATED LEASE
Between PREFCO NINETEEN LIMITED PARTNERSHIP and THE KROGER CO.
June 27, 2007
 
OPTION AND SUBORDINATION AGREEMENT
Between THE CHASE MANHATTAN BANK, AS TRUSTEE, AND FRANK GRIPPO, AS INDIVIDUAL
TRUSTEE, OF THE KCRI TRUST and PREFCO NINETEEN LIMITED PARTNERSHIP (as successor
to PREFCO XIX Limited Partnership)
December 24, 1996
 
TRIPARTITE AGREEMENT
Between PREFCO NINETEEN LIMITED PARTNERSHIP (as successor to PREFCO XIX Limited
Partnership), THE KROGER CO, AND THE CHASE MANHATTAN BANK, AS TRUSTEE, AND FRANK
GRIPPO, AS INDIVIDUAL TRUSTEE, OF THE KCRI TRUST  (remainderman)
December 24, 1996
       
 9501 Northshore Drive, Knoxville TN
AMENDED AND RESTATED LEASE
Between PREFCO NINETEEN LIMITED PARTNERSHIP and THE KROGER CO.
June 27, 2007

 
 
 

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

 
 

 
OPTION AND SUBORDINATION AGREEMENT
Between THE CHASE MANHATTAN BANK, AS TRUSTEE, AND FRANK GRIPPO, AS INDIVIDUAL
TRUSTEE, OF THE KCRI TRUST and PREFCO NINETEEN LIMITED PARTNERSHIP (as successor
to PREFCO XIX Limited Partnership)
December 24, 1996
 
TRIPARTITE AGREEMENT
Between PREFCO NINETEEN LIMITED PARTNERSHIP (as successor to PREFCO XIX Limited
Partnership), THE KROGER CO, AND THE CHASE MANHATTAN BANK, AS TRUSTEE, AND FRANK
GRIPPO, AS INDIVIDUAL TRUSTEE, OF THE KCRI TRUST  (remainderman)
December 24, 1996
       
Landmark Property
       
1200 LANDMARK CENTER RETAIL LEASE
Between CLF Landmark Omaha LLC and Benson Grind
December 1, 2011
 
TELECOMMUNICATIONS FACILITIES LICENSE AGREEMENT
Between CLF Landmark Omaha LLC and Cogent Communications, Inc
April 14, 2010
 
1200 LANDMARK CENTER LEASE
Between CLF Landmark Omaha (as successor to QWEST CORPORATION) and JMMS, INC.
September 29, 2008
 
1200 LANDMARK CENTER OFFICE LEASE
 Between CLF LANDMARK OMAHA LLC and ADESTA, LLC
June 30, 2010
 
Storage Space Lease
Between CLF LANDMARK OMAHA LLC and ADESTA, LLC
June 30, 2010
 
1200 LANDMARK CENTER OFFICE LEASE
Between CLF LANDMARK OMAHA LLC and BAILEY LAUERMAN & ASSOCIATES, INC.
July 1, 2010
 
FIRST SUPPLEMENT TO LEASE
Between CLF LANDMARK OMAHA LLC and BAILEY LAUERMAN & ASSOCIATES, INC.
April 6, 2011
 
1200 LANDMARK CENTER OFFICE LEASE
Between CLF Landmark Omaha LLC and Booz Allen Hamilton Inc.
July 1, 2010
 
AMENDED AND RESTATED 1200 LANDMARK CENTER OFFICE LEASE
Between CLF LANDMARK OMAHA LLC and JACOBS ENGINEERING GROUP INC.
July 1, 2010
 
1200 LANDMARK CENTER OFFICE LEASE
Between CLF LANDMARK OMAHA LLC and RSM MCGLADREY, INC.
June 23, 2010
 
1200 LANDMARK CENTER OFFICE LEASE
Between CLF LANDMARK OMAHA LLC and PRAETORIAN INSURANCE COMPANY
May 1, 2010

 
 
 

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

 
 

 
U.S. GOVERNMENT LEASE FOR REAL PROPERTY
Between CLF Landmark Omaha LLC and Railroad Retirement Bd (GSA)
July 1, 2010
 
SUPPLEMENTAL LEASE AGREEMENT
Between CLF Landmark Omaha LLC and UNITED STATES OF AMERICA
February 24, 2011
 
1200 LANDMARK CENTER OFFICE LEASE
Between CLF LANDMARK OMAHA LLC and  WELCH LAW FIRM, P.C.
July 1, 2010
 
1200 LANDMARK CENTER OFFICE LEASE
Between  CLF LANDMARK OMAHA LLC and LIBERTY MUTUAL INSURANCE COMPANY
February 1, 2012
 
LEASE
Between CLF LANDMARK OMAHA, LLC and OLD MARKET ROJA, LLC.
April 12, 2010
 
FIRST AMENDMENT TO LEASE
Between CLF LANDMARK OMAHA, LLC and OLD MARKET ROJA, LLC.
June 13, 2012
 
 
1200 LANDMARK CENTER OFFICE LEASE
Between CLF LANDMARK OMAHA LLC and PACIFIC LIFE INSURANCE COMPANY
July __, 2009
 
FIRST AMENDMENT TO 1200 LANDMARK CENTER OFFICE LEASE
Between CLF LANDMARK OMAHA LLC and PACIFIC LIFE INSURANCE COMPANY
July 1, 2010
 
SECOND AMENDMENT TO 1200 LANDMARK CENTER OFFICE LEASE
Between CLF LANDMARK OMAHA LLC and PACIFIC LIFE INSURANCE COMPANY
February 13, 2012
 
RESTAURANT LEASE
Between CLF LANDMARK OMAHA, LLC, and PARLIAMENT PUB INC.
December 1, 2011
 
1200 LANDMARK CENTER OFFICE LEASE
Between CLF Landmark Omaha LLC and Stinson Morrison Hecker
April 6, 2010
 
1200 LANDMARK CENTER RETAIL LEASE
Between CLD Landmark Omaha LLC, and Susie's Baskets, Inc.
April 20, 2011
 
OPTION AND SUBORDINATION AGREEMENT
Between CLF Landmark Omaha LLC(As successor to PREFCO XI LIMITED PARTNERSHIP)
and THE NEBRASKA-RELCO LIMITED PARTNERSHIP TRUST
December 30, 1992
 
TRIPARTITE AGREEMENT
Between  CLF Landmark Omaha LLC (As successor to PREFCO XI LIMITED PARTNERSHIP),
U S WEST, INC., and THE NEBRASKA-RELCO LIMITED PARTNERSHIP TRUST (remainderman)
December 30, 1992
 
AGREEMENT OF GROUND LEASE
Between THE NEBRASKA-RELCO LIMITED PARTNERSHIP TRUST and CLF LANDMARK OMAHA LLC
June 30, 2010

 
 
 

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

 
 

 
COMMERCIAL REAL ESTATE LISTING CONTRACT FOR LEASE
Between THE LUND COMPANY and CLF Landmark Omaha, LLC
November 17, 2009
 
Listing Extension
Between THE LUND COMPANY and CLF Landmark Omaha, LLC
November 10, 2011
 
PROPERTY MANAGEMENT AGREEMENT
Between CLF Landmark Omaha, LLC and The Lund Company
December 23, 2009
       
Michelin Property
       
BUILD-TO-SUIT LEASE
Between CLF CANE RUN LOUISVILLE, LLC and MICHELIN NORTH AMERICA, INC.
August 13, 2010
 
LEASE AMENDMENT AND COMMENCEMENT DATE CERTIFICATE
Between CLF CANE RUN LOUISVILLE, LLC and MICHELIN NORTH AMERICA, INC.
May 25, 2011

 
 

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

 
 
SCHEDULE 7.1(i) – LITIGATION
 
None.
 
 
 

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

 
 
SCHEDULE 7.1(s) – AFFILIATE TRANSACTIONS
 
None.
 
 
 

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

 
 
SCHEDULE 10.10 – LEASE TERMS
 
LANDMARK BUILDING - APPROVED MINIMUM LEASE TERMS

Office Space

Lease Term:  5 Years

Free Rent:  None

Rental Rate:  $17.00/SF

Rent Escalations:  2% per annum

TI/SF for New Leases:  $20.00/SF

TI/SF for Renewals:  $5.00/SF

Leasing Commission for New Leases:  6%

Leasing Commission for Renewals:  3%

Expense Structure:   Full Service Gross

Retail & Restaurant Space

Lease Term:  3 Years

Free Rent:  None

Rental Rate:  $12.00/SF

Rent Escalations:  None

TI/SF for New Leases:  $4.00/SF

TI/SF for Renewals:  $2.00/SF

Leasing Commission for New Leases:  6%

Leasing Commission for Renewals:  3%

Expense Structure:   Triple Net

 
 

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

 
 
DODGE BUILDING - APPROVED MINIMUM LEASE TERMS

Office Space

Lease Term:  5 Years

Free Rent:  None

Rental Rate:  $19.00/SF

Rent Escalations:  2% per annum

TI/SF for New Leases:  $15.00/SF

TI/SF for Renewals:  $5.00/SF

Leasing Commission for New Leases:  6%

Leasing Commission for Renewals:  3%

Expense Structure:   Full Service Gross