Document:

exv10w10

 

Exhibit 10.10

AMENDMENT NO. 1, CONSENT AND WAIVER TO

SUNTRON CORPORATION

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

          Amendment No. 1, Consent and Waiver (this “Amendment”), dated as of March 29, 2005, to the
Second Amended and Restated Credit Agreement, dated as of July 7, 2004 (as amended to the date
hereof, the “Credit Agreement”), among K*TEC Operating Corp. and EFTC Operating Corp., each a
Delaware corporation, as borrowers (each a “Borrower” and collectively, the “Borrowers”), Suntron
Corporation (the “Company”), the Lenders party thereto (the “Lenders”), the Issuers party thereto
(the “Issuers”), Citicorp USA, Inc. as Administrative Agent and Collateral Agent (in such capacity,
the “Administrative Agent”) and Congress Financial Corporation (Western), as Syndication Agent (the
“Syndication Agent”). Capitalized terms used herein but not defined herein are used as defined in
the Credit Agreement.

W I T N E S S E T H:

          WHEREAS, the Company, the Borrowers, the Lenders, the Issuers, the Administrative
Agent and the Syndication Agent are party to the Credit Agreement;

          WHEREAS, the Company has notified the Administrative Agent and the Requisite Lenders
that the Events of Default specified on Schedule A (Events of Default) (the “Specified Events of
Default”) hereto have occurred and are continuing;

          WHEREAS, the Company desires to sell (the “Transaction”) pursuant to the letter of
intent, dated as of March 8, 2005, among Suntron Corporation, as seller, and Continental Poly Bags,
Inc., as buyer, the real property comprising all of commercial reserves “A” and “B” of Sugar Land
Business Park, tracts 130 and 131, slide no. 1356B, F.B.C.P.R. Brown and Belknap League, A-15, Fort
Bend County, Sugar Land, Texas, described therein, and for a purchase price in excess of
$800,000.00, which shall result in a receipt by the Loan Parties of Net Cash Proceeds in an amount
in excess of $725,000.00, which shall result in a prepayment of the Obligations in such amount by
the Loan Parties as required pursuant to Section 2.9 (Mandatory Prepayments) of the Credit
Agreement;

          WHEREAS, the Company has requested that the Administrative Agent and the Requisite
Lenders waive the Specified Events of Default; and

          WHEREAS, the Company, the Borrower, the Administrative Agent and the Syndication
Agent have agreed, subject to certain limitations and conditions set forth below, to (a) waive the
Specified Events of Default for the periods and subject to the conditions set forth herein, (b)
consent to the Transaction and (c) make certain amendments to the Credit Agreement, as more
specifically set forth below;

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

Section 1. Consent and Waiver

          (a) Effective as of the Amendment Effective Date until (and including) April 15, 2005 (the
“Waiver Period”), the Administrative Agent, the Syndication Agent and the

 

 

AMENDMENT NO. 1, CONSENT AND WAIVER TO 

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

SUNTRON CORPORATION

Lenders and Issuers party hereto (constituting the Requisite Lenders) hereby waive the
Specified Events of Default for the Waiver Period.

          (b) The Company shall deliver to the Administrative Agent (with sufficient copies for each of
the Lenders) prior to the end of the Waiver Period, in form satisfactory to it (i) a Form 10-K of
the Company, (ii) an analysis thereof by the management of the Company and (iii) a related
certification by the Company’s Accountants as set forth in Section 6.1(c) (Financial Statements) of
the Credit Agreement. Effective on the later of the Amendment Effective Date and the end of the
Waiver Period, and subject to the prior compliance by the Company with the provisions of the
preceding sentence, the Administrative Agent, the Syndication Agent and the Lenders and Issuers
party hereto (constituting the Requisite Lenders) hereby waive the Specified Events of Default.

          (b) Anything in the Credit Agreement to the contrary notwithstanding, the Administrative
Agent, Syndication Agent and the Lenders and Issuers party hereto (constituting the Requisite
Lenders) hereby consent, to the extent required under the Credit Agreement, to the consummation of
the Transaction (which Transaction, for the avoidance of doubt, shall not be taken into account
when calculating the amount set forth in Section 8.4(f)(i) (Sale of Assets) of the Credit
Agreement) on the terms set forth above.

     Section 2. Amendment

          Effective as of the Amendment Effective Date (as defined below) and subject to the
satisfaction (or due waiver) of the conditions set forth in Section 4 (Amendment to Article VI
(Financial Statements)

(a) Section 6.1 (Financial Statements) of the Credit Agreement shall be amended by inserting a new
clause (j) at the end thereof to read in its entirety as follows:

               (j) Cash Flow Forecasts. No later than the third Business Day of each calendar week
(which calendar week shall be deemed to start on each Sunday), forecasts of cash flow
prepared by management of the Company for the succeeding thirteen week period, certified by
a Responsible Officer.

Conditions Precedent to the Effectiveness of this Amendment) hereof, the Administrative Agent, the
Syndication Agent and the Lenders and Issuers party hereto hereby agree to amend the Credit
Agreement as follows:

          (a) Amendment to Article I (Definitions, Interpretation and Accounting Terms)

                     (i) The following definition is hereby inserted in Section 1.1 (Defined Terms) of the Credit
Agreement in the appropriate place to preserve the alphabetical order of the definitions in such
section:

               “Average Excess Availability” means, with respect to any fiscal month, an amount equal
to (a) the sum of Excess Availability at the close of business on each Business Day during
such fiscal month, divided by (b) the number of Business Days in such fiscal month.

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AMENDMENT NO. 1, CONSENT AND WAIVER TO 

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

SUNTRON CORPORATION

               (ii) The
definition of  “Applicable Margin” in Section 1.1 (Defined Terms) of the Credit
Agreement is hereby amended in its entirety to read as follows:

               “Applicable Margin” means, (a) during the period commencing on the Effective Date and
ending March 28, 2005, with respect to (i) Base Rate Loans, 0.75% per annum and (ii)
Eurodollar Rate Loans, 2.75% per annum and (b) thereafter, with respect to each period set
forth below, a per annum rate equal to the rate set forth below opposite such period and
under the applicable type of Loan:

	 	 	 	 	 	 	 	 	 
	PERIOD	 	BASE RATE LOANS	 	 	EURODOLLAR RATE LOANS	 
	From March 29, 2005 through June 30, 2005
	 	 	1.75%		 	 	3.25%	
	From July 1, 2005 through September 30, 2005
	 	 	2.00%		 	 	3.50%	
	From October 1, 2005 through December 31, 2005
	 	 	2.25%		 	 	3.75%	
	From January 1, 2006 and thereafter
	 	 	2.50%		 	 	4.00%	

               (iii) The
definition of  “Reduced Liquidity Month” in Section 1.1 (Defined Terms) of the
Credit Agreement is hereby amended in its entirety to read as follows:

               “Reduced Liquidity Month” means, (a) in the case of the first two fiscal months of any
fiscal quarter, any fiscal month for which Average Excess Availability for such month
failed to exceed $10,000,000 and (b) in the case of the third fiscal month of any fiscal
quarter, any fiscal month for which Average Excess Availability for such month failed to
exceed $12,500,000.

          (b) Amendment to Article V (Financial Covenants)

               Clause (c) of Section 5.1 (Minimum EBITDA) of the Credit Agreement shall be amended by
deleting the table set forth therein and inserting the following new table in its place:

	 	 	 	 	 
	APPLICABLE PERIOD	 	MINIMUM EBITDA	 
	Fiscal Year 2004
	 	$	2,000,000	 
	Fiscal Month January 2005
	 	$	2,000,000	 
	Fiscal Month February 2005
	 	$	2,000,000	 
	Fiscal Month March 2005
	 	 	-$2,300,000	 
	Fiscal Month April 2005
	 	 	-$2,500,000	 
	Fiscal Month May 2005
	 	 	-$2,300,000	 
	Fiscal Month June 2005
	 	 	-$1,800,000	 
	Fiscal Month July 2005
	 	 	-$1,200,000	 
	Fiscal Month August 2005
	 	 	-$300,000	 
	Fiscal Month September 2005
	 	$	1,000,000	 
	Fiscal Month October 2005
	 	$	1,500,000	 
	Fiscal Month November 2005
	 	$	1,500,000	 
	Fiscal Month December 2005
	 	$	1,800,000	 
	Fiscal Year 2006 and thereafter
	 	$	2,500,000	 

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AMENDMENT NO. 1, CONSENT AND WAIVER TO 

SECOND AMENDED AND RESTATED CREDIT AGREEMTNT

SUNTRON CORPORATION

     Section 3. Amendment to Article VI (Financial Statements)

          Section 6.1 (Financial Statements) of the Credit Agreement shall be amended by inserting a new
clause (j) at the end thereof to read in its entirety as follows:

               (j) Cash Flow Forecasts. No later than the third Business Day of each calendar week
(which calendar week shall be deemed to start on each Sunday), forecasts of cash flow
prepared by management of the Company for the succeeding thirteen week period, certified by
a Responsible Officer.

     Section 4. Conditions Precedent to the Effectiveness of this Amendment

          This Amendment shall become effective when, and only when, each of the following conditions
precedent shall have been satisfied or waived by the Administrative Agent (the “Amendment Effective
Date”):

          (a) Certain Documents. The Administrative Agent shall have received each of the following,
each dated as of the Amendment Effective Date (unless otherwise agreed by the Administrative
Agent), in form and substance satisfactory to the Administrative Agent and in sufficient copies for
each Lender:

               (i) this Amendment, executed by the Company, each Borrower, the Administrative Agent;
and

               (ii) such additional documentation as the Administrative Agent may reasonably require;

          (b) Corporate and Other Proceedings. All corporate and other proceedings, and all documents,
instruments and other legal matters in connection with the transactions contemplated by this
Amendment shall be satisfactory in all respects to the Administrative Agent;

          (c) No Default or Event of Default. After giving effect to this Amendment, no Default or
Event of Default shall have occurred and be continuing, either on the date hereof or on the
Amendment Effective Date; and

          (d) Fees and Expenses Paid. Each Borrower shall have paid all Obligations due, after giving
effect to this Amendment, on or before the later of the date hereof and the Amendment Effective
Date including, without limitation, the fees set forth in Section 6 (Fees and Expenses) hereof.

     Section 5. Representations and Warranties

          On and as of the date hereof and as of the Amendment Effective Date, after giving effect to
this Amendment, the Company and each Borrower hereby represent and warrant to the Administrative
Agent and each Lender as follows:

          (a) this Amendment has been duly authorized, executed and delivered by the Company and each
Borrower and constitutes a legal, valid and binding obligation of the Company and each Borrower,
enforceable against the Company and each Borrower in accordance with its terms and the Credit
Agreement as amended by this Amendment and constitutes the legal,

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AMENDMENT NO. 1, CONSENT AND WAIVER TO 

SECOND AMENDED AND RESTATED CREDIT AGREEMTNT

SUNTRON CORPORATION

valid and binding obligation of the Company and each Borrower, enforceable against the Company
and each Borrower in accordance with its terms;

          (b) all of the representations and warranties of the Company and each Borrower contained in
Article IV (Representations and Warranties) of the Credit Agreement and in any other Loan Document
are true and correct in all material respects on and as of the date hereof and the Amendment
Effective Date, in each case as if made on and as of such date and except to the extent that such
representations and warranties specifically relate to a specific date, in which case such
representations and warranties shall be true and correct in all material respects as of such
specific date; and

          (c) no Default or Event of Default has occurred and is continuing.

     Section 6. Fees and Expenses

          (a) Each Borrower and each other Loan Party agrees to pay on demand in accordance with the
terms of Section 11.3 (Costs and Expenses) of the Credit Agreement all costs and expenses of the
Administrative Agent in connection with the preparation, reproduction, execution and delivery of
this Amendment and all other Loan Documents entered into in connection herewith (including, without
limitation, the reasonable fees and out-of-pocket expenses of counsel for the Administrative Agent
with respect thereto and all other Loan Documents).

          (b) Each Borrower and each other Loan Party agrees to pay to the Administrative Agent, for the
account of each Lender in accordance with its Ratable Portion, a fee equal to 0.125% of the
aggregate of the Revolving Credit Commitments in effect at the time of payment, which fee (a) shall
be due on the Amendment Effective Date and (b) when paid shall be fully earned and non-refundable.

     Section 7. Release

          In further consideration for the Administrative Agent and the Syndication Agent’s execution of
this Agreement, each Borrower and each other Loan Party hereby release each of the Administrative
Agent, the Syndication Agent, each Lender and each Issuer and their respective Affiliates,
officers, employees, directors, agents and advisors (collectively, the “Releases”) from any and
all claims, demands, liabilities, responsibilities, disputes, causes of action (whether at law or
equity) and obligations of any nature whatsoever, whether liquidated or unliquidated, known or
unknown, matured or unmatured, fixed or contingent that any of the Loan Parties may have against
any Releasee and that arise from or relate to the Obligations, any Collateral, any Loan Document or
any document, dealing or other matter in connection with any of the Loan Documents or the
Collateral, and any third party liable in whole or in part for any of the Obligations, in each case
to the extent arising (a) on or prior to the date hereof or the Amendment Effective Date or (b) out
of, or relating to, actions, dealings or other matters occurring on or prior to the date hereof or
the Amendment Effective Date (including, without limitation, any actions or inactions of any
Releasee prior to the date hereof or the Amendment Effective Date).

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AMENDMENT NO. 1, CONSENT AND WAIVER TO 

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

SUNTRON CORPORATION

     Section 8. Reference to the Effect on the Loan Documents

          (a) As of the Amendment Effective Date, each reference in the Credit Agreement to “this
Agreement,” “hereunder,” “hereof,” “herein,” or words of like import, and each reference in the
other Loan Documents to the Credit Agreement (including, without limitation, by means of words like
“thereunder”, “thereof” and words of like import), shall mean and be a reference to the Credit
Agreement as modified hereby, and this Amendment and the Credit Agreement shall be read together
and construed as a single instrument. Each of the table of contents and lists of Exhibits and
Schedules of the Credit Agreement shall be amended to reflect the changes made in this Amendment as
of the Amendment Effective Date.

          (b) Except as expressly amended hereby, all of the terms and provisions of the Credit
Agreement and all other Loan Documents are and shall remain in full force and effect and are hereby
ratified and confirmed.

          (c) The execution, delivery and effectiveness of this Amendment shall not, except as expressly
provided herein, operate as a waiver of any right, power or remedy of the Lenders, the Issuers, the
Administrative Agent or the Syndication Agent under any of the Loan Documents, nor constitute a
waiver or amendment of any other provision of any of the Loan Documents or for any purpose except
as expressly set forth herein.

          (d) This Amendment is a Loan Document and a failure to comply with the covenants set forth
herein shall constitute an “Event of Default”, as and to the extent provided in Section 9.1(d)(2)
(Events of Default) of the Credit Agreement.

     Section 9. Consents by Guarantors

          Each Guarantor hereby consents to the provisions hereof and agrees that the terms hereof shall
not affect in any way its obligations and liabilities under the Loan Documents (as amended and
otherwise expressly modified hereby), all of which obligations and liabilities shall remain in full
force and effect and each of which is hereby reaffirmed (as amended and otherwise expressly
modified hereby).

     Section 10. Execution in Counterparts

          This Amendment may be executed in any number of counterparts and by different parties in
separate counterparts, each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement. Signature pages may be detached
from multiple separate counterparts and attached to a single counterpart so that all signature
pages are attached to the same document. Delivery of an executed counterpart by telecopy or e-mail
shall be effective as delivery of a manually executed counterpart of this Amendment.

     Section 11. Governing Law

          This Amendment shall be governed by and construed in accordance with the law of the State of
New York.

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AMENDMENT NO. 1, CONSENT AND WAIVER TO 

SECOND AMENDED AND RESTATED CREDIT AGREEMTNT

SUNTRON CORPORATION

     Section 12. Section Titles

          The section titles contained in this Amendment are and shall be without substantive meaning or
content of any kind whatsoever and are not a part of the agreement between the parties hereto,
except when used to reference a section. Any reference to the number of a clause, sub-clause or
subsection of any Loan Document immediately followed by a reference in parenthesis to the title of
the section of such Loan Document containing such clause, sub-clause or subsection is a reference
to such clause, sub-clause or subsection and not to the entire section; provided, however, that, in
case of direct conflict between the reference to the title and the reference to the number of such
section, the reference to the title shall govern absent manifest error. If any reference to the
number of a section (but not to any clause, sub-clause or subsection thereof) of any Loan Document
is followed immediately by a reference in parenthesis to the title of a section of any Loan
Document, the title reference shall govern in case of direct conflict absent manifest error.

     Section 13. Notices

          All communications and notices hereunder shall be given as provided in the Credit Agreement.

     Section 14. Severability

          The fact that any term or provision of this Agreement is held invalid, illegal or
unenforceable as to any person in any situation in any jurisdiction shall not affect the validity,
enforceability or legality of the remaining terms or provisions hereof or the validity,
enforceability or legality of such offending term or provision in any other situation or
jurisdiction or as applied to any person

     Section 15. Successors

          The terms of this Amendment shall be binding upon, and shall inure to the benefit of, the
parties hereto and their respective successors and assigns.

     Section 16. Waiver of Jury Trial

          EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING
WITH RESPECT TO THIS AMENDMENT OR ANY OTHER LOAN DOCUMENT.

[SIGNATURE PAGES FOLLOW]

-7-

 

          In Witness Whereof, the parties hereto have caused this Amendment to be executed
by their respective officers and general partners thereunto duly authorized, as of the date first
written above.

	 	 	 	 	 
	 	 	SUNTRON CORPORATION
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	 
	

	 	 	 	Name: Peter W. Harper

Title:   CFO
	 
	 	 	 	 
	 	 	K*TEC OPERATING CORP., 

      as Borrower
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	 
	

	 	 	 	Name: Peter W. Harper

Title:   CFO
	 
	 	 	 	 
	 	 	EFTC
OPERATING CORP., 
       as Borrower
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	 
	

	 	 	 	Name: Peter W. Harper

Title:   CFO

[SIGNATURE PAGE TO FIRST AMENDMENT TO SUNTRON’S SECOND AMENDED AND RESTATED CREDIT AGREEMENT]

 

 

	 	 	 	 	 
	 	 	CITICORP USA, INC., 

     as Administrative Agent and Lender
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	 
	

	 	 	 	Name: Michael Schadt

Title:   Vice President
	 
	 	 	 	 
	 	 	CITIBANK, N.A.,

      as Issuer
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	 
	

	 	 	 	Name: Michael Schadt

Title:   Vice President

[SIGNATURE PAGE TO FIRST AMENDMENT TO SUNTRON’S SECOND AMENDED AND RESTATED CREDIT AGREEMENT]

 

 

	 	 	 	 	 
	 	 	CONGRESS FINANCIAL CORPORATION

     (Western),

     as Syndication Agent and Lender
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	 
	

	 	 	 	Name: Gary Cassianni

Title:   Vice President

[SIGNATURE PAGE TO FIRST AMENDMENT TO SUNTRON’S SECOND AMENDED AND RESTATED CREDIT AGREEMENT]

 

 

Schedule A

Specified Events of Default

The Company failed to deliver a (i) a Form 10-K of the Company, (ii) an analysis thereof by the
management of the Company and (iii) a related certification by the Company’s Accountants within 90
days after the end of Fiscal Year 2004, as required under Section 6.1(c) (Financial Statements) of
the Credit Agreement.<PAGE>
                                                                    Exhibit 10.9

                            W. P. CAREY & CO., INC.
                              EMPLOYMENT AGREEMENT

     THIS AGREEMENT, made the 7th day of April, 1997 between W. P. Carey & Co.,
Inc. (the "Company"), a New York corporation at 50 Rockefeller Plaza, New York,
NY 10020, and Claude Fernandez ("Executive").

                              W I T N E S S E T H:

     WHEREAS, Executive has been an officer of the Company in which capacity his
services have contributed materially to the successful operation of the
Company's business;

     WHEREAS, the Company wishes to assure itself of the continued availability
of Executive's services, and Executive is willing to give such assurance in
return for the benefits described herein;

     NOW, THEREFORE, intending to be legally bound hereby, the Company hereby
agrees to employ Executive, and Executive hereby agrees to be employed by the
Company upon the following terms and conditions:

     1.   Office and Duties. Executive shall service the Company full time in
such positions and have such titles, duties and power with the Company and its
subsidiaries consistent with Executive's experience and abilities as may from
time to time be determined by the board of directors of the Company (the
"Board"), the Chairman of the Board or the Chief Executive Officer of the
Company. Executive will use his reasonable best energies and abilities and will
devote his full business time, except for vacation time and reasonable periods
of absence due to sickness, personal injury or other disability, to the duties
assigned to him and shall use his best efforts, judgment, skill and energy to
perform such services faithfully and diligently to further the business
interests of the Company, to improve and advance the business and interests of
the Company, to increase shareholder value and otherwise promote the best
interests of the Company's shareholders; provided that nothing contained herein
shall preclude Executive from (i) serving on the board of directors of any
business corporation with the consent of the Board, (ii) serving on the board
of, or working for, any charitable or community organization or (iii) pursuing
his personal financial and legal affairs, so long as such

                                       1
<PAGE>
activities, individually or collectively, do not interfere with the performance
of Executive's duties hereunder.

     2. Term. This Agreement shall be for a term commencing as of the date
hereof (the "Commencement Date") and ending on December 31, 2000 unless sooner
terminated as hereinafter provided. Unless either party elects to terminate
this Agreement at the end of the original or any renewal term by giving the
other party notice of such election at least 90 days before the expiration of
the then current term, this Agreement shall be deemed to have been renewed for
an additional one year period commencing on the day after the expiration of the
then current term. The period during which Executive is employed pursuant to
this Agreement, including any extension thereof in accordance with the
preceding sentence, shall be referred to as the "Employment Period."

     3. Compensation.

     (a) Base Salary. During the Employment Period, Executive shall receive an
annual base salary ("Base Salary") at the same rate as in effect on the date
hereof, which shall be payable in accordance with the Company's generally
applicable payroll practices and policies. The Executive Committee shall
periodically review Executive's Base Salary in light of the salaries paid to
other officers of the Company, the performance of Executive, and Executive's
total compensation from the Company and the Company may, in its discretion,
increase such Base Salary by an amount it determines to be appropriate. Any
such increase shall not reduce or limit any other obligation of the Company
hereunder.

     (b) Incentive Compensation. During the term of the Employment Period,
Executive shall be eligible to participate in the Company's incentive
compensation programs (including, without limitation, any program for the
payment of commission income, disposition fees, and bonuses), as the same may
be amended by the Company from time to time, at a level determined by the
Company's Executive Committee. Without limiting the generality of the
foregoing, Executive shall be entitled to draw, in approximately equal monthly
installments, against such incentive compensation in an annual amount
determined in accordance with the practices and policies of the Company.

     4. Stock Option Grant. Effective as of January 1, 1997, Executive will
receive the grant of an option pursuant to the Company's Stock Appreciation
Rights Plan in respect of 2,000 shares of the Common Stock of the notional
corporation described in such Stock Appreciation Rights Plan, subject to the
terms and conditions of such grant. Executive agrees and acknowledges that his
rights and obligations in respect of such option shall be governed by the terms
and conditions of the Stock Appreciation

                                       2
<PAGE>
Rights Plan, including, without limitation, the provisions thereof relating to
the  proportionate dilution of his interest by the grant, after the effective
date of his award, of awards to other employees under the Stock Appreciation
Rights Plan or the Company's Partnership Equity Plan.

     5.  Partnership Equity Plan. Effective as of January 1, 1989, Executive has
received an award pursuant to the Company's Partnership Equity Plan of 1,000
shares of the Common Stock of the notional corporation described therein.
Effective as of January 1, 1996, Executive has received an additional award
pursuant to the Partnership Equity Plan of 500 shares of the Common Stock of the
notional corporation described therein. Executive agrees and acknowledges that
his rights and obligations in respect of the Equivalent Shares, as defined in
the Partnership Equity Plan, shall be governed by the terms and conditions of
the Partnership Equity Plan, including, without limitation, the provisions
thereof relating to the proportionate dilution of his interest by the grant,
after the effective date of his award, of awards to other employees under the
Stock Appreciation Rights Plan or the Partnership Equity Plan.

     6.  Benefits, Perquisites and Expenses.

     (a) Benefits. During the Employment Period, Executive shall be eligible to
participate in each employee benefit plan sponsored or maintained by the
Company, subject to the generally applicable provisions thereof. Nothing in
this Agreement shall in any way limit the Company's right to amend or terminate
any such plan in its discretion, so long as any such amendment does not impair
the rights of Executive without treating similarly situated executives in a
similar fashion.

     (b) Business Expenses. During the Employment Period, the Company shall pay
or reimburse Executive for all reasonable expenses incurred or paid by
Executive in the performance of Executive's duties hereunder, upon presentation
of expense statements or vouchers and such other information as the Company may
require and in accordance with the generally applicable policies and procedures
of the Company.

     (c) Indemnification. The Company shall indemnify Executive and hold
Executive harmless from and against any claim, loss or cause of action arising
from or out of Executive's performance of services as an officer, director or
Executive of the Company or any of its subsidiaries or in any other capacity in
which Executive serves at the request of the Company on the same basis as it
indemnifies its other officers. If, at any time, the Company has in effect any
policy providing any indemnity to the Company or third parties with respect to
the errors and omissions or other actions of officers or directors, the Company
shall cause Executive's errors, omissions or other actions to be

                                       3
<PAGE>
covered under such policy on the same terms and conditions as apply generally
to all other officers of the Company.

          7.   Termination of Employment.

          a. Early Termination of the Employment Period. Notwithstanding
Paragraph 2, the Employment Period shall end upon the earliest to occur of (i) a
termination of Executive's employment on account of Executive's death, (ii) a
Termination due to Disability, (iii) a Termination for Cause, (iv) a Termination
Without Cause, (v) a Termination for Good Reason or (vi) a Termination due to a
Change of Control.

          b. Benefits Payable Upon Termination. Following the end of the
Employment Period pursuant to Paragraph 7(a), Executive (or, in the event of his
death, his surviving spouse, if any, or his estate) shall be paid the type or
types of compensation determined to be payable in accordance with the following
table at the times established pursuant to Paragraph 7(c):

<Table>
<Caption>
                         Earned              Accrued
                         Basic               Employee            Severance
                     Compensation            Benefits             Benefit
                     ------------            --------            ---------
<S>                  <C>                     <C>                 <C>
Termination            Payable                Payable                Not
due to Death                                                       Payable

Termination            Payable                Payable                Not
due to Disability                                                  Payable

Termination            Payable                Payable                Not
for Cause                                                          Payable

Termination            Payable                Payable              Payable
Without Cause

Termination            Payable                Payable              Payable
with Good
Reason

Termination            Payable                Payable              Payable
due to a Change
of Control
</Table>

                                       4
<PAGE>
          (c)  Timing of Payments. Earned Basic Compensation shall be paid in a
single lump sum as soon as practicable, but in no event more than 30 days
following the end of the Employment Period. Accrued Employee Benefits shall be
payable in accordance with the terms of the plan, policy, practice, program,
contract or agreement under which such benefits have accrued. Severance
Benefits shall be paid at the same time as Executive would have received his
base salary had he continued to be employed and for the period ending on the
first to occur of (i) the first anniversary of Executive's termination of
employment and (ii) the date on which Executive breaches any of the provisions
of Paragraph 8. Notwithstanding the foregoing, the Company may elect, at any
time and in its discretion, to pay Executive the present value of the remaining
Severance Benefits payable hereunder in a single lump sum amount with such
present value to be calculated using a discount rate equal to the one year
Treasury bill rate as quoted in The Wall Street Journal (or in such other
reliable publications as the Independent Committee, in its reasonable
discretion, may determine to rely upon) on the first business day of such year
on which such publication is published.

          (d)  Definitions. For purposes of Paragraph 7 and 8, capitalized terms
have the following meanings:

          "Accrued Employee Benefits" means amounts which are vested or which
Executive is otherwise entitled to receive under the terms of or in accordance
with any plan, policy, practice or program of, or any contract or agreement
with, the Company or any of its subsidiaries, at or subsequently to the date of
his termination without regard to the performance by Executive of further
services or the resolution of a contingency.

          "Carey Affiliated Entities" means (i) the Carey Family, (ii) the
employees of the Company and its affiliates, (iii) any Controlled Entity and
(iv) the Carey Foundation.

          "Carey Family" means William P. Carey, his spouse and lineal
descendants and his brothers and brothers-in-law, sisters and sisters-in-law
and each of their lineal descendants.

          "Change of Control" shall mean a transaction as a result of which the
Carey Affiliated Entities (i) cease to be the beneficial owners of at least 50
percent of the combined voting power of all the outstanding voting securities
of the Company and (ii) are not otherwise in Effective Control of the Company.

          "Controlled Entity" means an entity (other than the Company) in which
William P. Carey, the Company or any other Controlled Entity, directly or
indirectly, owns a substantial equity interest and that is

                                       5
<PAGE>
     (i)   a corporation more than 50 percent of the value of the outstanding
stock of which is owned directly or indirectly by the Carey Family and/or
employees of the Company;

     (ii)  a partnership more than 50 percent of the capital interest or profits
interest in which is owned directly or indirectly by the Carey Family and/or
employees of the Company;

     (iii) a limited liability company more than 50 percent of the ownership
interests in which are owned directly or indirectly by the Carey Family and/or
employees of the Company; or

     (iv)  a trust in which the Carey Family and/or employees of the Company
together have 50 percent or more of the voting power or beneficial ownership
interest.

The Controlled Entities as of September 30, 1996 are listed on Exhibit A
attached hereto. Notwithstanding the foregoing, in no event shall the Carey
Foundation be considered a Controlled Entity.

           "Controlling Shareholder(s)" means the person(s) who, at the relevant
time, hold of record a majority of the shares of the common stock of the
Company.

           "Earned Basic Compensation" means any salary or other compensation
(including without limitation disposition fees) due and payable, but unpaid, for
services rendered to the Company on or prior to the date on which the Employment
Period ends.

           "Effective Control" means the power to elect a majority of the
members of the Board, whether (i) by reason of the ownership of securities
representing more than 50% of the securities entitled to vote for the election
of directors (the "Voting Shares"), or (ii) pursuant to a shareholders
agreement, irrevocable proxy or otherwise controlling the right to vote a
majority of the Voting Shares. Notwithstanding the foregoing, if the Company is
merged with, into or otherwise combined with a Public Corporation or more than
50% of the assets of the Company are transferred to a Public Corporation, the
Carey Affiliated Entities shall be deemed to be in Effective Control of such
Public Corporation if a majority of the directors on the board of directors of
such Public Corporation:

     (x)   at the time of the merger, combination, sale or other transaction,
were either

                                       6
<PAGE>
          (1) officers of the Company or members of the Board or the board of
              directors of an affiliate of the Company immediately prior thereto
              or

          (2) nominated for election to the board of the Public Corporation by
              the members of the Board, the board of directors of a Carey
              Affiliated Entity or the persons who were the Controlling
              Shareholder(s) immediately prior to such transaction with the
              Public Corporation, or

     (y)  at any time following any such transaction, were nominated for
          election or elected by any of the Board, the board of directors of a
          Carey Affiliated Entity or the persons who were the Controlling
          Shareholder(s) immediately prior to such transaction with the Public
          Corporation.

          "Independent Committee" shall mean the committee initially comprised
of George Stoddard, Charles Townsend and Warren Wintrub and as it may
thereafter be constituted from time to time in accordance with this provision.
If any member of the initial Independent Committee (or any successor thereto
appointed in accordance with this provision) ceases to a member of the
Independent Committee for whatever reason, the successor to such person on the
Independent Committee shall be appointed by the Controlling Shareholders from
the members of the Board or the boards of directors of the Company's
affiliates, subject to the approval of such appointment by the then remaining
members of the Independent Committee, provided, however, that no member of the
Independent Committee shall be a member of the Carey Family. The Controlling
Shareholders shall have the right to remove any member of the Independent
Committee from office at any time such person is no longer a member of the
Board or of the board of directors of any of the Carey Affiliated Entities.

          "Public Corporation" means a company with at least one series of
securities registered under Section 12 of the Securities Exchange Act of 1934,
as amended.

          "Severance Benefits" means monthly payments until the earliest of the
following dates:

     (i)  the first anniversary of Executive's termination of employment and

     (ii) the date the Company's obligation to pay Severance Benefits ceases as
          a result of Executive's breach any of the provisions of Paragraph 8;

                                       7
<PAGE>

in an amount equal to the sum of (x) the Executive's monthly base salary as in
effect immediately prior to his termination of employment and (y) an amount
equal to one-twelfth of any commissions, disposition fees, and other incentive
payments (including bonuses) paid to the Executive during the 12 month period
ended as of the last calendar month ended immediately prior to such termination
of employment. The amount payable as Severance Benefits, however, shall be
reduced by an amount equal to 75 percent of each dollar paid to the Executive
for services, whether as an employee, consultant or otherwise, during the period
Severance Benefits are payable.

     "Termination for Cause" means a termination of Executive's employment by
the Company as a result of Executive's

     (i)   dishonesty or disloyalty;

     (ii)  refusal to perform his duties in good faith or otherwise fail to
           carry out the express and lawful instructions of the Chairman, Chief
           Executive Officer or the Board;

     (iii) gross negligence or wilful and intentional misconduct;

     (iv)  engaging in conduct constituting a felony or other crime involving
           moral turpitude;

     (v)   alcohol or drug addiction, provided that, to the extent required
           thereunder, any termination as a result of such addiction may only
           occur after the Company shall have attempted to make reasonable
           accommodations (or shall have determined that no such reasonable
           accommodation is possible under the circumstances) pursuant to the
           Americans with Disabilities Act of 1990, as amended;

     (vi)  breach of his fiduciary duties to the Company or its shareholders
           including, without limitation, the Controlling Shareholder(s); or

     (vii) any other material violation by Executive of the terms and conditions
           of this Agreement or any agreement between the Company and such
           Executive.

Notwithstanding the foregoing, (x) in the case of subclause (i), (ii) or (vi),
any determination as to whether an Executive has been disloyal or dishonest,
refused to perform his duties or breached his fiduciary duties shall be made by
the Independent Committee and (y) in the case of subclauses (iii) and (vii), the
Company shall not have

                                       8
<PAGE>

the right to terminate an Executive's employment in a Termination for Cause if
the alleged action or omission by the Executive either (A) has not resulted and
is not reasonably expected to result in material harm to the business,
operations or reputation of the Company or (B) was undertaken or omitted by
Executive in good faith after consultation with his supervisor and in a manner
which was understood to be consistent with the course of action determined
following such consultation, which in either case shall be determined by the
Independent Committee prior to a Change of Control and (z) following any Change
of Control, subclauses (i), (ii), and (vi) shall automatically be deleted from
the definition of a Termination for Cause, without any further action by the
Company or the Executive. In making any determination hereunder, the Independent
Committee shall take into consideration the materiality and relevance to the
Company of Executive's action or conduct, and such determination shall be final
and binding on Executive and the Company.

     "Termination due to a Change of Control" means the Executive's voluntary
termination of employment prior to the first anniversary of a Change of Control
of the Company upon written notice delivered not less than ten business days
prior to the effective date of Participant's termination of employment.

     "Termination due to Disability" means a termination of Executive's
employment by the Company because Executive has been incapable of substantially
fulfilling the positions, duties, responsibilities and obligations set forth in
this Agreement because of physical, mental or emotional incapacity resulting
from injury, sickness or disease for a period of (i) at least four consecutive
months or (ii) more than six months in any twelve month period. Any question as
to the existence, extent or potentiality of Executive's disability upon which
Executive and the Company cannot agree shall be determined by a qualified,
independent physician selected by the Independent Committee. The determination
of any such physician shall be final and conclusive for all purposes of this
Agreement.

     "Termination with Good Reason" means, prior to a Change of Control, any
termination of Executive's employment on account of a material breach by the
Company of any of its material obligations to Executive hereunder. Following a
Change of Control, "Termination with Good Reason" shall mean a termination of
employment by Executive within 90 days following (i) a material adverse change
in Executive's duties and responsibilities as an Executive; (ii) a reduction in
Executive's base salary (other than a proportionate adjustment applicable
generally to similarly situated Company Executives); or (iii) the relocation of
Executive's principal place of business to a location more than thirty-five
miles outside of Manhattan; provided that a termination following a Change of
Control shall not be treated as a Termination with Good Reason if Executive
shall have consented in writing to the occurrence of the event giving rise to
the claim of

                                      9
<PAGE>

Termination with Good Reason. A Termination for Good Reason must be effected by
a written notice from Executive setting forth in detail the conduct alleged to
be the basis for such termination, provided that, prior to the occurrence of a
Change of Control, Executive shall not have the right to terminate his
employment hereunder pursuant to a Termination with Good Reason (i) if, within
the ten-business day period following receipt of Executive's written notice, the
Company shall have cured the conduct alleged to have caused the material breach
and (ii) unless Executive actually terminates employment within 30 days
following the end of the Company's cure period. Notwithstanding the foregoing,
if the Company disputes whether a breach has occurred, or whether any breach is
material, the Independent Committee shall decide, in good faith, whether the
alleged conduct by the Company entitles Executive to quit pursuant to a
Termination with Good Reason and the time period referred to in subclause (ii)
in the immediately preceding sentence shall not end earlier than 10 days
following the date on which the Independent Committee notifies Executive of its
decision. Prior to the occurrence of a Change of Control, the determination by
the Independent Committee as to Executive's eligibility for a "Termination with
Good Reason" shall be final and binding on Executive and the Company.

     "Termination Without Cause" means any termination by the Company of
Executive's employment with the Company other than (i) a Termination due to
Disability, (ii) a Termination due to death or (iii) a Termination for Cause.

     (e) Full Discharge of Company Obligations. The amounts payable to Executive
pursuant to this Paragraph 7 following termination of his employment (including
amounts payable with respect to Accrued Employee Benefits) shall be in full and
complete satisfaction of Executive's rights under this Agreement and any other
claims he may have in respect of his employment by the Company or any of its
subsidiaries. Such amounts shall constitute liquidated damages with respect to
any and all such rights and claims and, upon Executive's receipt of such
amounts, the Company shall be released and discharged from any and all liability
to Executive in connection with this Agreement or otherwise in connection with
Executive's employment with the Company and its subsidiaries. Nothing contained
in this paragraph shall be construed as limiting Executive's claims against the
Company or any of its subsidiaries with respect to non-employment related torts.

     8.   Non-Competition, Confidential Information, Etc.

     (a) Noncompetition. During the term of this Agreement, as the same may be
renewed and extended, and for a period of

                                       10
<PAGE>
     (i) 18 months following the termination of Executive's employment for any
     reason other than a Termination with Good Reason, a Termination Without
     Cause or a Termination due to Disability, or

     (ii) 12 months following the termination of Executive's employment due to
     the expiration of the term of this Agreement due to Executive's election
     not to renew the term hereof, a Termination with Good Reason or a
     Termination Without Cause,

Executive shall not, without the written consent of the Company, directly or
indirectly, as a stockholder owning beneficially or of record more than 5% of
the outstanding shares of any class of stock of any issuer, or as an officer,
director, employee, partner, consultant, joint venturer, proprietor, or
otherwise, engage in or become interested in any Competing Business in the
United States or in any other jurisdiction in which the Company is actively
engaged in business or with respect to which, at the time of Executive's action
(or, if Executive is not an employee of the Company at such time, the date his
employment with the Company terminated), the Company had taken material steps
toward becoming actively engaged in such business. For purpose of this
Agreement, the term "Competing Business" shall mean any business which is
engaged in (i) the business of structuring, obtaining the financing for, or
otherwise implementing or facilitating long-term financing of corporate property
using leasing arrangements ("Leasing Transactions") or (ii) any other business
activity of a type and kind that, at the relevant time, is conducted by the
Company and which accounts for ten percent (10%) or more of either the Company's
gross revenues or net after tax income ("Other Material Activities"); provided
that nothing in this Agreement shall preclude Executive from providing services
to any Competing Business so long as such services do not relate, directly or
indirectly, to Leasing Transactions or Other Material Activities. Without
limiting the generality of the foregoing, Executive acknowledges and agrees that
the Company is engaged in business in each state of the United States, and each
possession of the United States. Notwithstanding the foregoing, following a
Change of Control, (i) if Executive terminates his employment in a Termination
for Good Reason or is terminated by his employer other than in a Termination for
Cause, all restrictions imposed on Executive pursuant to this paragraph shall
cease to be effective at the date of his termination of employment and (ii) the
only activities that will be treated as Other Material Activities shall be those
business activities, if any, that, immediately prior to the Change of Control
were Other Material Activities, and at the time of the alleged competitive
activity, are Other Material Activities for the Company. The Company and
Executive acknowledge and agree that the provisions of this Paragraph 8(a) are
intended to protect the legitimate business interests of the Company and not to
restrain the ability of Executive to obtain gainful employment. The Company
agrees that this Paragraph 8(a) should not be interpreted to preclude Executive
from raising capital or seeking to

                                       11
<PAGE>
structure financial transactions in respect of investments of a type or nature
not undertaken by the Company and its affiliates, even if such other investments
compete for investment funds from the same sources of funds as the Company looks
to for its transactions (e.g., this Paragraph 8(a) will not preclude Executive
from participating in the structure, financing or implementation of a venture
capital fund or mezzanine debt fund, even if the potential investors in such
funds include some or all of the same persons or entities as would generally
invest in a transaction sponsored or promoted by the Company).

     (b) Confidential Information. During the term of this Agreement and at all
times thereafter, Executive shall not, without the written consent of the
Company, use for his personal benefit, or disclose, communicate or divulge to,
or use for any company other than the Company or its subsidiaries or affiliates,
any Confidential Information (as defined below) that had been made known to
Executive or learned or acquired by Executive while in the employ of Company or
its subsidiaries or affiliates, unless such information has become public other
than by reason of Executive's breach of this covenant. Confidential Information
shall mean

      (i)    information not in the public domain (or in the public domain
             as a result of a breach by Executive or another executive of the
             Company who is also bound by a similar confidentiality clause)
             regarding the business methods, business policies, procedures,
             techniques, research or developments projects or results, trade
             secrets, or other processes of or developed by the Company;

      (ii)   any names and addresses of customers or clients or any data on
             or relating to past, present or prospective customers or clients
             not in the public domain (or in the public domain as a result of a
             breach by Executive or another executive of the Company who is also
             bound by a similar confidentiality clause); and

      (iii)  any other material information not in the public domain (or in
             the public domain as a result of a breach by Executive or another
             executive of the Company who is also bound by a similar
             confidentiality clause) relating to or dealing with the business
             operations or activities of the Company which has been designated
             by the Company as confidential or which, if disclosed to any third
             party, would result in a material adverse effect to the Company.

                                       12
<PAGE>

     (c) Company Property. Promptly following Executive's termination of
employment, Executive shall return to the Company all property of the Company,
and all copies thereof in Executive's possession or under his control.

     (d) Nonsolicitation of Employees. Executive agrees that for a period of two
years after the termination of his employment with the Company, he will not and
will not assist or encourage any other person to (i) employ, hire, engage or be
associated (as a shareholder, partner, employee, consultant or in a similar
capacity) with any employee or other person connected with the Company who
rendered services as a professional, including, without limitation, all persons
who provide direct and substantial services with respect to Leasing Transactions
or Other Material Activities (the "Restricted Employees"), at the time of such
termination or during any part of the six months (three months, in the case of
any employee who was not also an officer of the Company) preceding such
termination of employment, (ii) induce any Restricted Employees to leave the
employ of the Company or any of its affiliates, or (iii) solicit the employment
of any Restricted Employees on his own behalf or on behalf of any other business
enterprise.

     (e) Injunctive Relief. Executive agrees and acknowledges that the remedies
at law for any breach by him of the provisions of this Paragraph 8 will be
inadequate and that the Company shall be entitled to obtain injunctive relief
against him from a court of competent jurisdiction in the event of any such
breach. If any such court of competent jurisdiction shall determine that the
restrictions contained in this Paragraph 8 are unreasonable as to time or
geographical area, such court shall reform said restrictions to the extent
necessary in the opinion of such court to make them reasonable and enforceable.

     9.  Miscellaneous.

     (a) Indulgences, Etc. Neither the failure nor any delay on the part of
either party to exercise any right, remedy, power or privilege under this
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, remedy, power or privilege preclude any other or further
exercise of the same or of any other right, remedy, power or privilege, nor
shall any waiver of any right, remedy, power or privilege with respect to any
occurrence be construed as a waiver of such right, remedy, power or privilege
with respect to any other occurrence.

     (b) Controlling Law. This Agreement and all questions relating to its
validity, interpretation, performance and enforcement shall be governed by and
construed in accordance with the laws of the State of New York notwithstanding
any conflicting choice-of-law provisions.

                                       13
<PAGE>
     (c) Notices.  All notices, requests, demands and other communications
required or permitted under this Agreement and the transactions contemplated
herein shall be in writing and shall be deemed to have been given when
delivered in person or when deposited in the United States mail in a postpaid
envelope by registered or certified mail, return receipt requested or by
24-hour courier service.

     (d) Binding Effect.  This Agreement shall be binding on, and shall inure
to the benefit of, the Company and any person or entity that succeeds to the
interest of the Company (regardless of whether such succession does or does not
occur by operation of law) by reason of the sale of all or a portion of the
Company's stock, a merger, consolidation or reorganization involving the
Company or a sale of the assets of the business of the Company in which
Executive performs a majority of his services, unless the Company otherwise
elects in writing to retain responsibility for the duties and obligations of
the Company (and the benefits conveyed to the Company) under this Agreement.
This Agreement shall also inure to the benefit of Executive's heirs, executors,
administrators and legal representatives.

     (e) Assignment. Except as provided under Paragraph (d), neither this
Agreement nor any of the rights of obligations hereunder shall be assigned or
delegated by any party hereto without the prior written consent of the other
party.

     (f) Execution in Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original as against the
party whose signature appears thereon, and both of which shall together
constitute one and the same instrument. This Agreement shall become binding
when one or more counterparts hereof, individually or taken together, shall
bear the signatures of all of the parties reflected hereon as the signatories.

     (g) Severability; Reformation. In the event that one or more of the
provisions of this Agreement shall become invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the remaining
provisions contained herein shall not be affected thereby. In the event any of
Paragraph 8(a), (b), (c) or (d) is not enforceable in accordance with its
terms, Executive and the Company agree that such Paragraph shall be reformed to
make such Paragraph enforceable in a manner which provides the Company the
maximum rights permitted at law.

     (h) Entire Agreement.  This Agreement contains the entire understanding
among the parties hereto with respect to the subject matter hereof, and
supersedes all prior and contemporaneous agreements and understandings,
inducements or conditions, express or implied, oral or written, except as
herein contained. The express terms hereof control and supersede any course of
performance and/or usage of the trade inconsistent

                                       14
<PAGE>
with any of the terms hereof. This Agreement may not be modified or amended
other than by an agreement in writing.

     (i)  Shareholder Rights.  Whenever in this Agreement reference is made to
the interests of the Company's shareholders and there exists or may exist a
conflict in the interests of such shareholders, the Independent Committee shall
determine the action or conduct that is in the interests of shareholders.

     (j)  Paragraph Headings.  The paragraph headings in this Agreement are for
convenience only; they form no part of this Agreement and shall not affect its
interpretation.

     (k)  Gender, Etc.  Words used herein, regardless of the number and gender
specifically used, shall be deemed construed to include any other number,
singular or plural, and any other gender, masculine, feminine or neuter, as the
context requires.

     (l)  Number of Days.  In computing the number of days for purposes of this
Agreement, all days shall be counted, including Saturdays, Sundays and
holidays; provided, however, that if the final day of any time period falls on
a Saturday, Sunday or holiday, then the final day shall be deemed to be the
next day which is not a Saturday, Sunday or holiday.

     (m)  Prevailing Parties.  Following a Change of Control, any party which
prevails in a lawsuit pertaining to the enforcement or interpretation of any
provision of this Plan shall be entitled to recover all reasonable attorney's
fees incurred by such party with respect to the lawsuit, in addition to any
other remedies to which the party is entitled under the law, from the opposing
party to such lawsuit.

     (n)  Independent Committee.  The terms of this Agreement shall be
interpreted by the Independent Committee. The Independent Committee shall keep
records of actions taken at its meetings. Two members of the Independent
Committee shall constitute a quorum at any meeting, and the acts of a majority
of the members present at any meeting at which a quorum is present, or acts
approved in writing by a majority of the Independent Committee, shall be the
acts of the Independent Committee. When determining whether an Executive's
employment may be terminated by the Company in a Termination for Cause or by
the Executive in a Termination with Good Reason, the Independent Committee
shall provide the Executive an opportunity to be heard on such issue, and shall
render its decision in writing within 60 days of being presented with the
question. Prior to the occurrence of a Change of Control, any action

                                       15
<PAGE>
taken by the Independent Committee with respect to the interpretation of this
Agreement shall be final, conclusive and binding.

     IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered on the date first above written.

                                        W.P. CAREY & CO., INC.

                                        By /s/ W.P. Carey
                                           --------------------------------

                                           /s/ Claude Fernandez
                                           --------------------------------
                                           Executive

                                       16
<PAGE>
                                   Exhibit A

CONTROLLED ENTITIES

Carey Corporate Property, Inc.

Seventh Carey Corporate Property, Inc.

Eighth Carey Corporate Property, Inc.

Ninth Carey Corporate Property, Inc.

Carey Fiduciary Advisors, Inc.

Carey Property Advisors, L.P.

Carey Financial Corporation

W.P. Carey Advisors, Inc.

Carey Fairview Corporation

W.P. Carey Advisors, L.P.

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