Document:

Exhibit 10.1

    
      

      

    

     

     

    SECURITIES
      PURCHASE AGREEMENT

    

    BY
      AND AMONG

    

    CICERO,
      INC.,

    

    AND

    

    THE
      PURCHASERS LISTED ON SCHEDULE I 

    

    

    DATED
      AS OF FEBRUARY 26, 2007

     

     

    
      

      

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    SECURITIES
      PURCHASE AGREEMENT

     

    THIS
      SECURITIES PURCHASE AGREEMENT (this “Agreement”)
      is
      dated as of February 26, 2007, by and among CICERO, INC., a Delaware corporation
      (the “Company”),
      and
      the various purchasers listed on Schedule I hereto (each referred to herein
      as a
“Purchaser”
and,
      collectively, the "Purchasers").

     

    WHEREAS,
      the Company and the Purchasers are executing and delivering this Agreement
      in
      reliance upon the exemption from securities registration afforded by Rule 506
      under Regulation D as promulgated by the United States Securities and Exchange
      Commission (the “Commission”)
      under
      Section 4(2) of the Securities Act of 1933, as amended (the “Securities
      Act”);
      

     

    WHEREAS,
      subject to the terms and conditions set forth in this Agreement, the Company
      desires to issue and sell to the Purchasers, and the Purchasers desire to
      acquire from the Company, shares
      of
      common stock of the Company, par value $.001 per share (the “Common
      Stock”);
      and

     

    WHEREAS,
      contemporaneously with the execution and delivery of this Agreement, the parties
      hereto are executing and delivering a Registration Rights Agreement
      substantially in the form of Exhibit
      B
      attached
      hereto (the “Registration
      Rights Agreement”)
      pursuant to which the Company has agreed to provide certain registration rights
      under the Securities Act and the rules and regulations promulgated thereunder,
      and applicable state securities laws.

     

    NOW,
      THEREFORE, in consideration of the promises and mutual covenants and agreements
      hereinafter, the Company and the Purchasers hereby agree as follows:

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    ARTICLE
      I.

     

    PURCHASE
      AND SALE

     

    1.1    Purchase
      and Sale.

     

    On
      the
      Closing Date (as defined below), subject to the terms and conditions set forth
      herein, the Company shall issue and sell to each Purchaser and each Purchaser,
      severally and not jointly, shall purchase from the Company the shares
      of
      Common Stock as set forth on Schedule
      I
      (the
      "Shares").
      The
      aggregate purchase price for the Shares purchased by the Purchasers shall be
      $500,000. 

    

    1.2    Closing.

     

    a.    The
      Closing.
      The
      closing (the “Closing”)
      of the
      purchase and sale of the Common Stock shall take place at the offices of the
      Company, 8000 Regency Parkway, Suite 542, Cary, North Carolina 27518,
      immediately following the execution hereof or such later date or different
      location as the parties shall agree, but in no event prior to the date that
      the
      conditions set forth in Section 4.1 have been satisfied or waived by the
      appropriate party (such date of the Closing, the “Closing
      Date”).
      At
      the Closing:

    

    (i)    Each
      Purchaser shall deliver to the Company (1) this Agreement, duly executed by
      such
      Purchaser, (2) the Registration Rights Agreement, duly executed by such
      Purchaser and (3) its portion of the purchase price as set forth next to its
      name on Schedule
      I
      in
      United States dollars in immediately available funds to an account or accounts
      designated in writing by the Company; and

     

    (ii)   The
      Company shall deliver to each Purchaser (1) this Agreement, duly executed by
      the
      Company, (2) the Registration Rights Agreement, duly executed by the Company,
      and (3) a certificate evidencing the number of shares of Common Stock purchased
      by such Purchaser as set forth on Schedule
      I
      hereto,
      registered in the name of such Purchaser.

     

    ARTICLE
      II.

     

    REPRESENTATIONS
      AND WARRANTIES

     

    2.1    Representations
      and Warranties of the Company.
      The
      Company represents and warrants to each of the Purchasers that the statements
      contained in this Section 2.1 are true, correct and complete as of the date
      hereof, and will be true correct and complete as of the Closing Date (unless
      specifically made as of another date), except as specified to the contrary
      in
      the corresponding paragraph of the disclosure schedule prepared by the Company
      accompanying this Agreement (the "Company
      Disclosure Schedules"):
      

     

    a.    Organization
      and Qualification.
      The
      Company duly incorporated, validly existing and in good standing under the
      laws
      of Delaware, with the requisite corporate power and 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    authority
      to own and use its properties and assets and to carry on its business as
      currently conducted. The Company is duly qualified as a foreign corporation
      to
      do business and is in good standing as a foreign corporation in each
      jurisdiction in which the nature of the business conducted or property owned
      by
      it makes such qualification necessary, except where the failure to be so
      qualified or in good standing, as the case may be, would not, individually
      or in
      the aggregate, (x) adversely affect the legality, validity or enforceability
      of
      any of this Agreement or the Transaction Documents (as defined in Section
      2.1(b)) or any of the transactions contemplated hereby or thereby, (y) have
      or
      result in a material adverse effect on the results of operations, assets, or
      financial condition of the Company, taken as a whole or (z) impair the Company’s
      ability to perform fully on a timely basis its obligations under any Transaction
      Document (any of (x), (y) or (z), being a “Material
      Adverse Effect”).
      The
      Company has made available to the Purchaser true and correct copies of the
      Company's Certificate of Incorporation, as amended and as in effect on the
      date
      hereof (the “Certificate
      of Incorporation”),
      and
      the Company's Bylaws, as in effect on the date hereof (the “Bylaws”).

     

    b.    Authorization;
      Enforcement.
      The
      Company has the requisite corporate power and authority to enter into and to
      consummate the transactions contemplated by this Agreement and the Registration
      Rights Agreement (collectively, the “Transaction
      Documents”),
      and
      otherwise to carry out its obligations hereunder and thereunder. The execution
      and delivery of each of this Agreement and the Transaction Documents by the
      Company and the consummation by it of the transactions contemplated hereby
      and
      thereby have been duly authorized by all necessary corporate action by the
      Company. Each of this Agreement and the Transaction Documents has been duly
      executed by the Company and when delivered in accordance with the terms hereof
      will constitute the valid and binding obligation of the Company enforceable
      against the Company in accordance with its terms, except as such enforceability
      may be limited by applicable bankruptcy, insolvency, reorganization, moratorium,
      liquidation or similar laws relating to, or affecting generally the enforcement
      of, creditors’ rights and remedies or by other equitable principles of general
      application and except that rights to indemnification and contribution may
      be
      limited by Federal or state securities laws or public policy relating
      thereto.

     

    c.    Capitalization.
      As of
      the date hereof, the authorized capital stock of the Company is as set forth
      in
Schedule
      2.1(c).
      All of
      such outstanding shares of capital stock have been, or upon issuance will be,
      validly authorized and issued, fully paid and nonassessable. No securities
      of
      the Company are entitled to preemptive or similar rights, and no Person (as
      hereinafter defined) has any right of first refusal, preemptive right, right
      of
      participation, or any similar right to participate in the transactions
      contemplated by the Transaction Documents. Except as a result of the purchase
      and sale of the Shares and those outstanding warrants as identified in Schedule
      2.1(c), there are no outstanding options, warrants, script rights to subscribe
      to, calls or commitments of any character whatsoever relating to, or securities,
      rights or obligations convertible into or exchangeable for, or giving any Person
      any right to subscribe for or acquire, any shares of Common Stock, or contracts,
      commitments, understandings or arrangements by which the Company or any
      subsidiary is or may become bound to issue additional shares of Common Stock,
      or
      securities or rights convertible or exchangeable into shares of Common Stock.
      The issue and sale of the Shares will not obligate the Company to issue shares
      of Common Stock or other securities to any Person (other than the Purchasers)
      and 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    will
      not
      result in a right of any holder of Company securities to adjust the exercise,
      conversion, exchange or reset price under such securities.

     

    d.    Authorization
      and Validity; Issuance of Shares.
      The
      Shares are and will at all times hereafter continue to be duly authorized and
      reserved for issuance and, when issued and paid for in accordance with this
      Agreement and the Transaction Documents, will be validly issued, fully paid
      and
      non-assessable, free and clear of all liens.

     

    e.    No
      Conflicts.
      The
      execution, delivery and performance of this Agreement and each of the
      Transaction Documents by the Company and the consummation by the Company of
      the
      transactions contemplated hereby and thereby do not and will not (i) conflict
      with or violate any provision of the Certificate of Incorporation, Bylaws or
      other organizational documents of the Company, (ii) subject
      to obtaining the consents referred to in Section 2.1(f), conflict with, or
      constitute a default (or an event which with notice or lapse of time or both
      would become a default) under, or give to others any rights of termination,
      amendment, acceleration or cancellation of, any agreement, indenture, patent,
      patent license or instrument (evidencing a Company debt or otherwise) to which
      the Company is a party or by which any property or asset of the Company is
      bound
      or affected, except where such conflict or violation has not resulted or would
      not reasonably be expected to result, individually or in the aggregate, in
      a
      Material Adverse Effect, or (iii) result in a violation of any law, rule,
      regulation, order, judgment, injunction, decree or other restriction of any
      court or governmental authority to which the Company is subject (including
      Federal and state securities laws and regulations and the rules and regulations
      of the principal market or exchange on which the Common Stock is traded or
      listed), or by which any material property or asset of the Company is bound,
      except where such conflict has not resulted or would not reasonably be expected
      to result, individually or in the aggregate, in a Material Adverse
      Effect.

     

    f.    Consents
      and Approvals.
      The
      Company is not required to obtain any consent, waiver, authorization or order
      of, give any notice to, or make any filing or registration with, any court
      or
      other federal, state, local or other governmental authority, regulatory or
      self
      regulatory agency, or other Person in connection with the execution, delivery
      and performance by the Company of this Agreement or the Transaction Documents,
      other than (i) the filing of a registration statement with the Commission,
      which shall be filed in accordance with and in the time periods set forth in
      the
      Registration Rights Agreement, (ii) the application(s) or any letter(s)
      acceptable to the Nasdaq National Market (“Nasdaq”)
      for
      the listing of the Common Stock with Nasdaq (and with any other national
      securities exchange or market on which the Common Stock is then listed), and
      (iii) any filings, notices or registrations under applicable Federal or state
      securities laws (together with the consents, waivers, authorizations, orders,
      notices and filings referred to on Schedule
      2.1(f),
      the
“Required
      Approvals”),
      except where failure to do so has not resulted or would not reasonably result,
      individually, or in the aggregate, in a Material Adverse Effect. “Person”
means
      an individual or corporation, partnership, trust, incorporated or unincorporated
      association, joint venture, limited liability company, joint stock company,
      government (or an agency or subdivision thereof) or other entity of any
      kind.

     

    g.   Litigation;
      Proceedings.
      Except
      as specifically set forth on Schedule
      2.1(g)
      or in
      the SEC Documents (as hereinafter defined), there is no action, suit, notice
      of
      violation, proceeding or investigation pending or, to the knowledge of the
      Company, threatened against or 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    affecting
      the Company or any of its subsidiaries or any of their respective properties
      before or by any court, governmental or administrative agency or regulatory
      authority (Federal, state, county, local or foreign) (collectively, an
“Action”)
      which
      (i) adversely affects or challenges the legality, validity or enforceability
      of
      any of this Agreement or the Transaction Documents or (ii) would reasonably
      be
      expected to, individually or in the aggregate, have a Material Adverse Effect.
      Neither the Company nor any subsidiary, nor, to the knowledge of the Company,
      any officer thereof, is or has been, nor, to the knowledge of the Company,
      any
      director thereof is or has been for the last three years, the subject of any
      Action involving a claim of violation of or liability under federal or state
      securities laws or a claim of breach of fiduciary duty. There has not been,
      and,
      to the knowledge of the Company, there is not pending or contemplated, any
      investigation by the Commission involving the Company or any current or former
      director that was a director of the Company at any time during the last three
      years or officer of the Company. The Commission has not issued any stop order
      or
      other order suspending the effectiveness of any registration statement filed
      by
      the Company or any subsidiary under the Exchange Act or the Securities
      Act.

     

    h.    No
      Default or Violation.
      The
      Company (i) is not in default under or in violation of any indenture, loan
      or
      other credit agreement or any other agreement or instrument to which it is
      a
      party or by which it or any of its properties is bound and which is required
      to
      be included as an exhibit to any SEC Document (as defined in Section 2.1(j))
      or
      will be required to be included as an exhibit to the Company’s next filing under
      either the Securities Act or the Securities Exchange Act of 1934, as amended
      (the “Exchange
      Act”),
      (ii)
      is not in violation of any order of any court, arbitrator or governmental body
      applicable to it, (iii) is not in violation of any statute, rule or regulation
      of any governmental authority to which it is subject, (iv) is not in default
      under or in violation of its Certificate of Incorporation, Bylaws or other
      organizational documents, respectively in the case of (i), (ii) and (iii),
      except where such violations have not resulted or would not reasonably result,
      individually or in the aggregate, in a Material Adverse Effect. 

     

    i.    
Private
      Offering.
      The
      Company and all Persons acting on its behalf have not made, directly or
      indirectly, and will not make, offers or sales of any securities or solicited
      any offers to buy any security under circumstances that would require
      registration of the Common Stock or the issuance of such securities under the
      Securities Act. Subject to the accuracy and completeness of the representations
      and warranties of the Purchasers contained in Section 2.2, the offer, sale
      and
      issuance by the Company to the Purchasers of the Common Stock and is exempt
      from
      the registration requirements of the Securities Act.

     

    j.    
SEC
      Documents; Financial Statements.
      The
      Common Stock of the Company is registered pursuant to Section 12(g) of the
      Exchange Act. Since December 31, 2000, the Company has filed all reports,
      schedules, forms, statements and other documents required to be filed by it,
      with the Commission, pursuant to Section 13, 14 or 15(d) of the Exchange Act
      (the foregoing materials and all exhibits included therein and financial
      statements and schedules thereto and documents (other than exhibits to such
      documents) incorporated by reference therein being collectively referred to
      herein as the “SEC
      Documents”),
      on a
      timely basis or has received a valid extension of such time of filing and has
      filed any such SEC Documents prior to the expiration of any such extension.
      As
      of their respective dates, the SEC Documents complied in all material respects
      with the requirements of the Securities Act and the Exchange Act and the rules
      and regulations of the Commission promulgated thereunder, and 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    none
      of
      the SEC Documents, when filed, contained any untrue statement of a material
      fact
      or omitted to state a material fact required to be stated therein or necessary
      in order to make the statements therein, in light of the circumstances under
      which they were made, not misleading. The financial statements of the Company
      included in the SEC Documents comply in all material respects with applicable
      accounting requirements and the rules and regulations of the Commission with
      respect thereto as in effect at the time of filing. Such financial statements
      have been prepared in accordance with generally accepted accounting principles
      applied on a consistent basis during the periods involved ("GAAP"),
      except as may be otherwise specified in such financial statements or the notes
      thereto, and fairly present in all material respects the financial position
      of
      the Company and its consolidated subsidiaries as of and for the dates thereof
      and the results of operations and cash flows for the periods then ended,
      subject, in the case of unaudited statements, to normal, immaterial, year-end
      audit adjustments.

     

    k.    Material
      Changes.
      Since
      the date of the latest audited financial statements included within the SEC
      Documents, except as specifically disclosed in the SEC Documents, (i) there
      has
      been no event, occurrence or development that has had or that could result
      in a
      Material Adverse Effect, (ii) the Company has not incurred any liabilities
      (contingent or otherwise) other than (A) trade payables and accrued expenses
      incurred in the ordinary course of business consistent with past practice and
      (B) liabilities not required to be reflected in the Company's financial
      statements pursuant to GAAP or required to be disclosed in filings made with
      the
      Commission, (iii) the Company has not altered its method of accounting or the
      identity of its auditors, (iv) the Company has not declared or made any dividend
      or distribution of cash or other property to its stockholders or purchased,
      redeemed or made any agreements to purchase or redeem any shares of its capital
      stock, and (v) the Company has not issued any equity securities to any officer,
      director or affiliate, except pursuant to existing Company stock option plans.
      The Company does not have pending before the Commission any request for
      confidential treatment of information.

     

    l.    Patents
      and Trademarks.
      The
      Company and its subsidiaries have, or have rights to use, all patents, patent
      applications, trademarks, trademark applications, service marks, trade names,
      copyrights, licenses and other similar rights that are necessary or material
      for
      use in connection with their respective businesses as described in the SEC
      Documents and which the failure to so have could have, or reasonably be expected
      to result in, a Material Adverse Effect (collectively, the "Intellectual
      Property Rights").
      Neither the Company nor any subsidiary has received a written notice that the
      Intellectual Property Rights used by the Company or any subsidiary violates
      or
      infringes upon the rights of any Person which if determined adversely to the
      Company would, individually or in the aggregate have a Material Adverse Effect.
      To the knowledge of the Company, all such Intellectual Property Rights are
      enforceable and there is no existing infringement by another Person of any
      of
      the Intellectual Property Rights.

     

    m.   Transactions
      With Affiliates and Employees.
      Except
      as set forth in SEC Documents, none of the officers or directors of the Company
      and, to the knowledge of the Company, none of the employees of the Company
      is
      presently a party to any transaction with the Company or any subsidiary (other
      than for services as employees, officers and directors), including any contract,
      agreement or other arrangement providing for the furnishing of services to
      or
      by, providing for rental of real or personal property to or from, or otherwise
      requiring 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    payments
      to or from any officer, director or such employee or, to the knowledge of the
      Company, any entity in which any officer, director, or any such employee has
      a
      substantial interest or is an officer, director, trustee or
      partner.

     

    n.    Solvency.
      Except
      as set forth in the SEC Documents, based on the financial condition of the
      Company as of the Closing Date, (i) the Company's fair saleable value of its
      assets exceeds the amount that will be required to be paid on or in respect
      of
      the Company's existing debts and other liabilities (including known contingent
      liabilities) as they mature; (ii) the Company's assets do not constitute
      unreasonably small capital to carry on its business for the current fiscal
      year
      as now conducted and as proposed to be conducted including its capital needs
      taking into account the particular capital requirements of the business
      conducted by the Company, and projected capital requirements and capital
      availability thereof; and (iii) the current cash flow of the Company, together
      with the proceeds the Company would receive, were it to liquidate all of its
      assets, after taking into account all anticipated uses of the cash, would be
      sufficient to pay all amounts on or in respect of its debt when such amounts
      are
      required to be paid. The Company does not intend to incur debts beyond its
      ability to pay such debts as they mature (taking into account the timing and
      amounts of cash to be payable on or in respect of its debt).

     

    o.    Listing
      and Maintenance Requirements.
      The
      Company has not, in the two years preceding the date hereof, received notice
      (written or oral) from any exchange or market on which the Common Stock is
      or
      has been listed or quoted to the effect that the Company is not in compliance
      with the listing or maintenance requirements of such exchange or market. The
      Company is, and has no reason to believe that it will not in the foreseeable
      future continue to be, in compliance with all such listing and maintenance
      requirements. The issuance and sale of the Shares hereunder does not contravene
      the rules and regulations of the Nasdaq OTC Market and no approval of the
      shareholders of the Company is required for the Company to issue and deliver
      to
      the Purchasers the number of Shares contemplated by this Agreement.

     

    p.    Registration
      Rights.
      The
      Company has not granted or agreed to grant to any Person any rights (including
      "piggy-back" registration rights) to have any securities of the Company
      registered with the Commission or any other governmental authority that have
      not
      been satisfied except as noted on the Disclosure Schedules.

     

    q.    Broker’s
      Fees.
      No fees
      or commissions or similar payments with respect to the transactions contemplated
      by this Agreement or the Transaction Documents have been paid or will be payable
      by the Company to any third party broker, financial advisor, finder, investment
      banker, or bank. The Purchaser shall have no obligation with respect to any
      fees
      or with respect to any claims made by or on behalf of other Persons for fees
      of
      a type contemplated in this Section 2.1(q) that may be due in connection
      with the transactions contemplated by this Agreement and the Transaction
      Documents. 

     

    2.2    Representations
      and Warranties of the Purchasers.
      Each of
      the Purchasers, severally and not jointly, hereby represents and warrants to
      the
      Company as follows: 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    a.    Organization;
      Authority.
      Such
      Purchaser, as applicable, is a corporation or a limited liability company or
      limited partnership duly formed, validly existing and in good standing under
      the
      laws of the jurisdiction of its incorporation or formation with the requisite
      power and authority, corporate or otherwise, to enter into and to consummate
      the
      transactions contemplated hereby and by this Agreement and the Transaction
      Documents and otherwise to carry out its obligations hereunder and thereunder.
      The purchase by such Purchaser, as applicable, of the shares of Common Stock
      hereunder has been duly authorized by all necessary action on the part of such
      Purchaser. Each of this Agreement and the Transaction Documents has been duly
      executed and delivered by each Purchaser and constitutes the valid and legally
      binding obligation of each Purchaser, enforceable against such Purchaser in
      accordance with its terms, subject to bankruptcy, insolvency, fraudulent
      transfer, reorganization, moratorium and similar laws of general applicability
      relating to or affecting creditors’ rights generally and to general principles
      of equity and except that rights to indemnification and contribution may be
      limited by Federal or state securities laws or public policy relating thereto.
      

     

    b.    Investment
      Intent.
      Such
      Purchaser is acquiring the shares of Common Stock for its own account and not
      with a present view to or for distributing or reselling the shares of Common
      Stock or any part thereof or interest therein in violation of the Securities
      Act. Nothing contained herein shall be deemed a representation or warranty
      by
      such Purchaser to hold the Shares for any period of time. Such Purchaser is
      acquiring the Shares hereunder in the ordinary course of its business. Such
      Purchaser does not have any agreement or understanding, directly or indirectly,
      with any Person to distribute any of the Shares.

     

    c.    Purchaser
      Status.
      At the
      time such Purchaser was offered the Common Stock, and at the Closing Date,
      (i)
      it was and will be an “accredited investor” as defined in Rule 501 under the
      Securities Act and (ii) such Purchaser, either alone or together with its
      representatives, had and will have such knowledge, sophistication and experience
      in business and financial matters so as to be capable of evaluating the merits
      and risks of the prospective investment in the Common Stock. Such Purchaser
      is
      not a registered broker-dealer under Section 15 of the Exchange
      Act.

     

    d.    Reliance.
      Such
      Purchaser understands and acknowledges that (i) the shares of Common Stock
      are
      being offered and sold to the Purchaser without registration under the
      Securities Act in a private placement that is exempt from the registration
      provisions of the Securities Act under Section 4(2) of the Securities Act or
      Regulation D promulgated thereunder and (ii) the availability of such exemption
      depends in part on, and the Company will rely upon the accuracy and truthfulness
      of, the representations set forth in this Section 2.2 and such Purchaser hereby
      consents to such reliance. 

     

    e.    Information.
      Such
      Purchaser and its advisors, if any, have been furnished with all materials
      relating to the business, finances and operations of the Company and materials
      relating to the offer and sale of the Common Stock which have been requested
      by
      such Purchaser or its advisors. Such Purchaser and its advisors, if any, have
      been afforded the opportunity to ask questions of the Company. The Purchaser
      understands that its investment in the Common Stock involves a significant
      degree of risk. Neither such inquiries nor any other investigation conducted
      by
      or on behalf of such Purchaser or its representatives or counsel shall modify,
      amend or affect such Purchaser's right to rely on the truth, accuracy and
      completeness of 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    the
      Company's representations and warranties contained in this Agreement or the
      Transaction Documents.

     

    f.    
Governmental
      Review.
      Such
      Purchaser understands that no United States Federal or state agency or any
      other
      government or governmental agency has passed upon or made any recommendation
      or
      endorsement of the Common Stock.

     

    g.    Residency.
      Such
      Purchaser is a resident of the jurisdiction set forth immediately beside such
      Purchaser’s name on Schedule
      I
      hereto.

     

    The
      Company acknowledges and agrees that the Purchasers make no representations
      or
      warranties with respect to the transactions contemplated hereby other than
      those
      specifically set forth in this Section 2.2.

    

    ARTICLE
      III.

     

    OTHER
      AGREEMENTS 

     

    3.1    Transfer
      Restrictions.

     

    a.    If
      any
      Purchaser should decide to dispose of the Common Stock held by it, such
      Purchaser understands and agrees that it may do so (1) only pursuant to an
      effective registration statement under the Securities Act, (2) pursuant to
      an
      available exemption from the registration requirements of the Securities Act,
      (3) to an affiliate of the Purchaser, or (4) pursuant to Rule 144 promulgated
      under the Securities Act (“Rule 144”). In connection with any transfer of any
      Common Stock other than pursuant to an effective registration statement, Rule
      144, to the Company or to an affiliate of the Purchasers, the Company may
      require the transferor thereof to provide to the Company a written opinion
      of
      counsel experienced in the area of United States securities laws selected by
      the
      transferor, the form and substance of which opinion shall be customary for
      opinions of counsel in comparable transactions and reasonably acceptable to
      the
      Company, to the effect that such transfer does not require registration of
      such
      transferred securities under the Securities Act; provided, however, that if
      the
      Common Stock may be sold pursuant to Rule 144(k), no written opinion of counsel
      shall be required from any Purchaser if such Purchaser provides reasonable
      assurances that such security can be sold pursuant to Rule 144(k).
      Notwithstanding the foregoing, the Company hereby consents to and agrees to
      register any transfer by any Purchaser to an affiliate of such Purchaser,
      provided that the transferee certifies to the Company that it is an “accredited
      investor” as defined in Rule 501(a) under the Securities Act. Any such
      transferee shall agree in writing to be bound by the terms of this Agreement
      and
      the Transaction Documents and
      shall
      have the rights of a Purchaser under this Agreement and the Transaction
      Documents. The Company shall not require an opinion of counsel in connection
      with the transfer of the shares of Common Stock to an affiliate of a Purchaser.
      

     

    b.    The
      Purchasers agree to the imprinting, so long as is required by this Section
      3.1(b), of the following
      legend
      on the Common Stock: 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      THE
        SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED WITH THE SECURITIES
        AND
        EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE
        UPON
        AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED
        (THE
        "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
        TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT
        TO
        AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
        REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
        APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL
        TO
        THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY
        ACCEPTABLE TO THE COMPANY. THESE SECURITIES MAY BE PLEDGED IN CONNECTION
        WITH A
        BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SHARES.

       

    

    The
      Company acknowledges and agrees that a Purchaser may from time to time pledge
      pursuant to a bona fide margin agreement or grant a security interest in some
      or
      all of the shares of Common Stock and if required under the terms of such
      arrangement, such Purchaser may transfer pledged or secured shares of Common
      Stock to the pledgees or secured parties. Such a pledge or transfer would not
      be
      subject to approval of the Company and no legal opinion of the pledgee, secured
      party or pledgor shall be required in connection therewith. Further, no notice
      shall be required of such pledge. At the appropriate Purchaser's expense, the
      Company will execute and deliver such reasonable documentation as a pledgee
      or
      secured party reasonably request in connection with a pledge or transfer of
      the
      shares of Common Stock, including the preparation and filing of any required
      prospectus supplement under Rule 424(b)(3) of the Securities Act or other
      applicable provision of the Securities Act to appropriately amend the list
      of
      selling stockholders thereunder.

     

    Neither
      the Common Stock shall contain the legend set forth above (or any other legend)
      (i) while a registration statement covering the resale of such security is
      effective under the Securities Act, (ii) if in the written opinion of counsel
      to
      the Company experienced in the area of United States securities laws such legend
      is not required under applicable requirements of the Securities Act (including
      judicial interpretations and pronouncements issued by the staff of the
      Commission) or (iii) if such Common Stock may be sold pursuant to Rule 144(k).
      The Company agrees that it will provide any Purchaser, upon request, with a
      certificate or certificates representing shares of Common Stock free from such
      legend at such time as such legend is no longer required hereunder. If such
      certificate or certificates had previously been issued with such a legend or
      any
      other legend, the Company shall, upon request and upon the delivery of the
      legended certificate(s), reissue such certificate or certificates free of any
      legend. The Company agrees that following the effective date of the registration
      statement meeting the requirements set forth in the Registration Rights
      Agreement and covering the resale of the Shares by the Purchasers or at such
      time as such legend is no longer required under this Section 3.1, it will,
      no
      later than three Trading Days (as such term is defined in the Registration
      Rights Agreement) 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    following
      the delivery by a Purchaser to the Company or the Company's transfer agent
      of a
      certificate representing Shares an issued with a restrictive legend, deliver
      or
      cause to be delivered to such Purchaser a certificate representing such Shares
      that is free from all restrictive and other legends. 

     

    When
      the
      Company is required to cause unlegended certificates to replace previously
      issued legended certificates, if unlegended certificates are not delivered
      to a
      Holder within three (3) Business Days of submission by that Holder of legended
      certificate(s) to the Company’s transfer agent together with a representation
      letter in customary form, the Company shall be liable to the Holder for
      liquidated damages in an amount equal to 1.5% of the aggregate purchase price
      of
      the securities evidenced by such certificate(s) for each thirty (30) day period
      (or portion thereof) beyond such three (3) Business Days that the unlegended
      certificates have not been so delivered

     

    3.2    Stop
      Transfer Instruction.
      The
      Company may not make any notation on its records or give instructions to any
      transfer agent of the Company which enlarge the restrictions on transfer set
      forth in Section 3.1.

     

    3.3    Not
      used.

    

    3.4    Furnishing
      of Information.
      As long
      as any Purchaser owns shares of Common Stock, the Company covenants to timely
      file (or obtain extensions in respect thereof and file within the applicable
      grace period) all reports required to be filed by the Company after the date
      hereof pursuant to the Exchange Act. Upon the request of any such Person, the
      Company shall deliver to such Person a written certification of a duly
      authorized officer as to whether it has complied with the preceding sentence.
      As
      long as any Purchaser owns shares of Common Stock if the Company is not required
      to file reports pursuant to such laws, it will prepare and furnish to the
      Purchasers and make publicly available in accordance with Rule 144(c) such
      information as is required for the Purchasers to sell the Shares under Rule
      144.

     

    3.5    Integration.
      The
      Company shall not, and shall use its best efforts to ensure that no affiliate
      of
      the Company shall, sell, offer for sale or solicit offers to buy or otherwise
      negotiate in respect of any security (as defined in Section 2 of the Securities
      Act) that would be integrated with the offer or sale of the shares of Common
      Stock hereunder in a manner that would require the registration under the
      Securities Act of the sale of the shares Common Stock to the Purchasers, or
      that
      would be integrated with the offer or sale of the Shares for purposes of the
      rules and regulations of the Nasdaq National Market, if such integration would
      result in a violation of any such rule or regulation.

     

    3.6    Non-Public
      Information.
      Except
      for information regarding the transaction contemplated by this Agreement and
      the
      Transaction Documents and the terms and conditions hereof and thereof, the
      Company covenants and agrees that neither it nor any other Person acting on
      its
      behalf will provide any Purchaser or its agents or counsel with any information
      that the Company believes constitutes material non-public information, unless
      prior thereto such Purchaser shall have executed a written agreement regarding
      the confidentiality and use of such information. The Company understands and
      confirms that each Purchaser shall be relying on the foregoing representations
      in effecting transactions in securities of the Company. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Notwithstanding
      anything to the contrary herein, no Purchaser shall engage in any trading
      activity in the Company's securities in violation of Regulation M of the
      Exchange Act. 

     

    3.7    Use
      of
      Proceeds.
      The
      Company shall use the net proceeds from the sale of the shares of Common Stock
      hereunder for working capital purposes. The Company shall not use the net
      proceeds from the sale of the shares of Common Stock hereunder to repay any
      of
      its short-term or long-term debt instruments

     

    3.8    Best
      Efforts.
      Each of
      the parties hereto shall use its best efforts to satisfy each of the conditions
      to be satisfied by it as provided in Article IV of this Agreement.

     

    3.9    Subsequent
      Placements. 

     

    a.    From
      the
      date hereof until the Effective Date, the Company will not directly or
      indirectly, offer, sell or grant any option to purchase (or announce any offer,
      sale, grant or any option to purchase) any of its Common Stock or other
      securities which entitle the holder thereof to receive Common Stock, including
      without limitation any debt, preferred stock or other instrument or security
      that is, at any time during its life and under any circumstances, convertible
      into or exchangeable for Common Stock.

     

    b.    The
      restrictions contained in paragraph (a) of this Section shall not apply to:
      (i)
      the granting of options, restricted stock, stock appreciation rights or similar
      instruments to employees, officers, directors and consultants of the Company
      pursuant to any stock option or similar plan duly adopted by the Company or
      to
      the issuance of shares of Common Stock upon exercise of such options or other
      rights, (ii) issuances of shares of Common Stock pursuant to any acquisition
      by
      the Company of the assets or capital stock of a business pursuant to a merger,
      asset sale or other business combination; (iii) issuances of shares of Common
      Stock upon conversion of the Company’s Series A1 Convertible Redeemable
      Preferred Stock (the “Series
      A1 Preferred Stock”)
      (as
      described on Schedule 2.1(c)); 

    

    ARTICLE
      IV.

     

    CONDITIONS

    4.1    Closing.

     

    a.    Conditions
      Precedent to the Obligation of the Company to Sell the Shares of Common
      Stock.
      The
      obligation of the Company to sell the shares of Common Stock is subject to
      the
      satisfaction or waiver by the Company, at or before the Closing Date, of each
      of
      the following conditions: 

     

    (i)    Accuracy
      of the Purchasers’ Representations and Warranties.
      The
      representations and warranties of each Purchaser in this Agreement shall be
      true
      and correct in all material respects as of the date when made and as of the
      Closing Date; 

     

    (ii)   Performance
      by the Purchasers.
      Each
      Purchaser shall have performed, satisfied and complied in all material respects
      with all covenants, agreements and 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    conditions
      required by this Agreement to be performed, satisfied or complied with by such
      Purchaser at or before the Closing Date; and 

     

    (iii)   No
      Injunction.
      No
      statute, rule, regulation, executive order, decree, ruling or injunction shall
      have been enacted, entered, promulgated or endorsed by any court or governmental
      authority of competent jurisdiction which prohibits the consummation of any
      of
      the transactions contemplated by this Agreement or the Transaction
      Documents.

     

    b.    Conditions
      Precedent to the Obligation of the Purchasers to Purchase the Shares of Common
      Stock at the Closing.
      The
      obligation of each Purchaser hereunder to acquire and pay for the shares of
      Common Stock at the Closing is subject to the satisfaction or waiver by
      Purchaser, at or before the Closing Date, of each of the following conditions:
      

     

    (i)    
Accuracy
      of the Company’s Representations and Warranties.
      The
      representations and warranties of the Company set forth in this Agreement shall
      be true and correct in all respects as of the date when made and as of the
      Closing Date; 

     

    (ii)    Performance
      by the Company.
      The
      Company shall have performed, satisfied and complied in all respects with all
      covenants, agreements and conditions required by this Agreement to be performed,
      satisfied or complied with by the Company at or before the Closing Date;

     

    (iii)   No
      Injunction.
      No
      statute, rule, regulation, executive order, decree, ruling or injunction shall
      have been enacted, entered, promulgated or endorsed by any court or governmental
      authority of competent jurisdiction which prohibits the consummation of any
      of
      the transactions contemplated by this Agreement and the Transaction Documents;
      

     

    (iv)   Required
      Approvals.
      All
      Required Approvals shall have been obtained; and

     

    (v)    Shares
      of Common Stock.
      The
      Company shall have duly reserved the number of shares of Common Stock acquired
      by the Purchasers on the Closing Date.

     

    ARTICLE
      V.

     

    INDEMNIFICATION

     

    5.1    Indemnification.
      The
      Company will indemnify and hold the Purchasers and their directors, officers,
      shareholders, partners, employees and agents (each, a "Purchaser
      Party")
      harmless from any and all losses, liabilities, obligations, claims,
      contingencies, damages, costs and expenses, including all judgments, amounts
      paid in settlements, court costs and reasonable attorneys' fees and costs of
      investigation that any such Purchaser Party may suffer or incur as a result
      of
      or relating to (a) any misrepresentation, breach or inaccuracy, or any
      allegation by a third party that, if true, would constitute a breach or
      inaccuracy, of any of the representations, warranties, covenants or agreements
      made by the Company in this Agreement or in the other Transaction Documents;
      or
      (b) any cause of action, suit or claim brought or made against such Purchaser
      Party and solely arising out of or solely resulting from the execution,
      delivery, 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    performance
      or enforcement of this Agreement or any of the other Transaction Documents.
      The
      Company will reimburse such Purchaser for its reasonable legal and other
      expenses (including the cost of any investigation, preparation and travel in
      connection therewith) incurred in connection therewith, as such expenses are
      incurred. Notwithstanding the foregoing, the Company shall not be required
      to
      indemnify any the Purchaser under the terms of this Article V with respect
      to
      any claim or violation for which indemnification is expressly excluded under
      the
      Registration Rights Agreement.

     

    ARTICLE
      VI.

     

    MISCELLANEOUS

     

    6.1    Entire
      Agreement.
      This
      Agreement, together with the Exhibits and Schedules hereto and the Transaction
      Documents contain the entire understanding of the parties with respect to the
      subject matter hereof and supersede all prior agreements and understandings,
      oral or written, with respect to such matters.

     

    6.2    Notices.
      Whenever it is provided herein that any notice, demand, request, consent,
      approval, declaration or other communication shall or may be given to or served
      upon any of the parties by another, or whenever any of the parties desires
      to
      give or serve upon another any such communication with respect to this
      Agreement, each such notice, demand, request, consent, approval, declaration
      or
      other communication shall be in writing and either shall be delivered in person
      with receipt acknowledged or by registered or certified mail, return receipt
      requested, postage prepaid, or by telecopy and confirmed by telecopy answerback
      addressed as follows:

     

    If
      to
      the Company:  

    

    Cicero,
      Inc.

    8000
      Regency Parkway

    Cary,
      North Carolina 27518

    Attn: John
      P.
      Broderick

     

    With
      a Copy to: 

    

    Golenbock
      Eiseman, Assor Bell and Peskoe LLP

    437
      Madison Ave

    New
      York,
      NY 10022

    Attn: Lawrence
      Bell, Esq.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    If
      to
      the Purchasers:
      To the
      address set forth on the counterpart signature page of such Purchaser or at
      such
      other address as may be substituted by notice given as herein provided. The
      giving of any notice required hereunder may be waived in writing by the party
      entitled to receive such notice. Every notice, demand, request, consent,
      approval, declaration or other communication hereunder shall be deemed to have
      been duly given and effective on the earliest of (a) the date of transmission,
      if such notice or communication is delivered via facsimile at the facsimile
      number specified in this Section prior to 6:30 p.m. (New York City time) on
      a
      business day, (b) the next business day after the date of transmission, if
      such
      notice or communication is delivered via facsimile at the facsimile number
      specified in this Section on a day that is not a business day or later than
      6:30
      p.m. (New York City time) on any business day, (c) the business day following
      the date of mailing, if sent by U.S. nationally recognized overnight courier
      service, or (d) upon actual receipt by the party to whom such notice is required
      to be given. As used herein, a “business day” means any day except Saturday,
      Sunday and any day which shall be a federal legal holiday or a day on which
      banking institutions in the State of New York are authorized or required by
      law
      or other governmental action to close.

    

    6.3    Amendments;
      Waivers.
      No
      provision of this Agreement may be waived or amended except in a written
      instrument signed, in the case of an amendment, by both the Company and each
      of
      the Purchasers or, in the case of a waiver, by the party against whom
      enforcement of any such waiver is sought. No waiver of any default with respect
      to any provision, condition or requirement of this Agreement shall be deemed
      to
      be a continuing waiver in the future or a waiver of any other provision,
      condition or requirement hereof, nor shall any delay or omission of either
      party
      to exercise any right hereunder in any manner impair the exercise of any such
      right accruing to it thereafter. 

     

    6.4    Headings.
      The
      headings herein are for convenience only, do not constitute a part of this
      Agreement and shall not be deemed to limit or affect any of the provisions
      hereof.

     

    6.5    References.
      References herein to Sections are to Sections of this Agreement, unless
      otherwise expressly provided.

     

    6.6    Successors
      and Assigns; Assignability.
      Neither
      this Agreement nor any right, remedy, obligation or liability arising hereunder
      or by reason hereof shall be assignable by either the Company or the Purchasers
      without the prior written consent of the other party. In the event that such
      prior written consent is obtained and this Agreement is assigned by either
      party, all covenants contained herein shall bind and inure to the benefit of
      the
      parties hereto and their respective successors and assigns.

     

    6.7    No
      Third-Party Beneficiaries.
      This
      Agreement is intended for the benefit of the parties hereto and their respective
      permitted successors and assigns and is not for the benefit of, nor may any
      provision hereof be enforced by, any other Person. 

     

    6.8    Governing
      Law; Waiver of Jury Trial.
      All
      questions concerning the construction, validity, enforcement and interpretation
      of this Agreement shall be governed by and construed and enforced in accordance
      with the internal laws of the State of Delaware, without regard to the
      principles of conflicts of law thereof. Each party agrees that all proceedings
      concerning the interpretations, enforcement and defense of the transactions
      contemplated by this Agreement and 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    any
      other
      Transaction Documents (whether brought against a party hereto or its respective
      affiliates, directors, officers, shareholders, employees or agents) (each a
      "Proceeding")
      shall
      be commenced exclusively in the state and federal courts sitting in the City
      of
      New York, Borough of Manhattan. Each party hereto hereby irrevocably submits
      to
      the exclusive jurisdiction of the state and federal courts sitting in the City
      of New York, Borough of Manhattan for the adjudication of any dispute hereunder
      or in connection herewith or with any transaction contemplated hereby or
      discussed herein (including with respect to the enforcement of the any of the
      Transaction Documents), and hereby irrevocably waives, and agrees not to assert
      in any Proceeding, any claim that it is not personally subject to the
      jurisdiction of any such court, that such Proceeding is improper. Each party
      hereto hereby irrevocably waives personal service of process and consents to
      process being served in any such Proceeding by mailing a copy thereof via
      registered or certified mail or overnight delivery (with evidence of delivery)
      to such party at the address in effect for notices to it under this Agreement
      and agrees that such service shall constitute good and sufficient service of
      process and notice thereof. Nothing contained herein shall be deemed to limit
      in
      any way any right to serve process in any manner permitted by law. Each party
      hereto hereby irrevocably waives, to the fullest extent permitted by applicable
      law, any and all right to trial by jury in any legal proceeding arising out
      of
      or relating to this Agreement or the transactions contemplated hereby. If either
      party shall commence a Proceeding to enforce any provisions of a Transaction
      Document, then the prevailing party in such Proceeding shall be reimbursed
      by
      the other party for its attorneys fees and other costs and expenses incurred
      with the investigation, preparation and prosecution of such
      Proceeding.

     

    6.9    Survival.
      The
      representations, warranties, agreements and covenants contained herein shall
      survive following the Closing.

     

    6.10         
      Execution.
      This
      Agreement may be executed in two or more counterparts, all of which when taken
      together shall be considered one and the same agreement and shall become
      effective when counterparts have been signed by each party and delivered to
      the
      other party, it being understood that both parties need not sign the same
      counterpart. In the event that any signature is delivered by facsimile
      transmission, such signature shall create a valid and binding obligation of
      the
      party executing (or on whose behalf such signature is executed) with the same
      force and effect as if such facsimile signature page were an original
      thereof.

     

    6.11         
      Not
      used.

     

    6.12         
      Publicity.
      The
      Purchasers shall not issue any press release or make any public disclosure
      regarding the transactions contemplated hereby unless such press release or
      public disclosure is approved by the Company in advance. Notwithstanding the
      foregoing, each of the parties hereto may, in documents required to be filed
      by
      it with the SEC or other regulatory bodies, make such statements with respect
      to
      the transactions contemplated hereby as each may be advised by counsel is
      legally necessary or advisable, and may make such disclosure as it is advised
      by
      its counsel is required by law.

     

    6.13         
      Severability.
      In case
      any one or more of the provisions of this Agreement shall be invalid or
      unenforceable in any respect, the validity and enforceability of the remaining
      terms and provisions of this Agreement shall not in any way be affected or
      impaired thereby and the parties will attempt to agree upon a valid and
      enforceable provision which shall be a reasonable 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    substitute
      therefore, and upon so agreeing, shall incorporate such substitute provision
      in
      this Agreement. 

     

    6.14        
      Further
      Assurances.
      Each
      party shall do and perform, or cause to be done and performed, all such further
      acts and things, and shall execute and deliver all such other agreements,
      certificates, instruments and documents, as the other party may reasonably
      request in order to carry out the intent and accomplish the purposes of this
      Agreement and the consummation of the transactions contemplated
      hereby.

     

    6.15         Replacement
      of Certificates.
      If any
      certificate or instrument evidencing any shares of Common Stock is mutilated,
      lost, stolen or destroyed, the Company shall issue or cause to be issued in
      exchange and substitution for and upon cancellation thereof, or in lieu of
      and
      substitution therefore, a new certificate or instrument, but only upon receipt
      of evidence reasonably satisfactory to the Company of such loss, theft or
      destruction and customary and reasonable indemnity, if requested. The applicants
      for a new certificate or instrument under such circumstances shall also pay
      any
      reasonable third-party costs associated with the issuance of such replacement
      shares.

     

    6.16         Remedies.
      In
      addition to being entitled to exercise all rights provided herein or granted
      by
      law, including recovery of damages, each of the Purchasers and the Company
      will
      be entitled to specific performance under this Agreement or the Transaction
      Documents. The parties agree that monetary damages may not be adequate
      compensation for any loss incurred by reason of any breach of obligations
      described in the foregoing sentence and hereby agrees to waive in any action
      for
      specific performance of any such obligation the defense that a remedy at law
      would be adequate.

     

    6.17        
      Independent
      Nature of Purchasers' Obligations and Rights.
      The
      obligations of each Purchaser under this Agreement or any Transaction Document
      are several and not joint with the obligations of any other Purchaser, and
      no
      Purchaser shall be responsible in any way for the performance of the obligations
      of any other Purchaser under this Agreement or any Transaction Document. Nothing
      contained herein or in any Transaction Document, and no action taken by any
      Purchaser pursuant thereto, shall be deemed to constitute the Purchasers as
      a
      partnership, an association, a joint venture or any other kind of entity, or
      create a presumption that the Purchasers are in any way acting in concert or
      as
      a group with respect to such obligations or the transactions contemplated by
      this Agreement or any the Transaction Document. Each Purchaser shall be entitled
      to independently protect and enforce its rights, including without limitation
      the rights arising out of this Agreement or out of the other Transaction
      Documents, and it shall not be necessary for any other Purchaser to be joined
      as
      an additional party in any proceeding for such purpose.

     

    6.18         
      Fees
      and Expenses.
      Except
      as set forth in the Registration Rights Agreement, and except as provided
      herein, each Party shall pay the fees and expenses of its advisers, accountants
      and other experts.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
      Agreement to be duly executed by their respective authorized persons as of
      the
      day and year first above written.

    

    
      	 	
              CICERO,
                INC.

            	 
	 	 	 	 
	 	 	 	 
	 	
              By:

            	   
	 
	 	 	
              John
                P. Broderick

            	 
	 	 	
              Chief
                Executive Officer

            	 
	 	 	 	 
	 	 	 	 
	 	
              PURCHASERS:

            	 
	 	 	 	 
	 	
              [COUNTERPART
                SIGNATURE PAGES FOLLOW]

            	 

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
      Agreement to be duly executed by their respective authorized persons as of
      the
      day and year first above written.

     

    
      	 	
              PURCHASER

            	 
	 	 	 	 
	 	  
	  
	 
	 	 	
              (Name
                of Purchaser)

            	 
	 	 	 	 
	 	
              By:
                

            	  
	 
	 	 	
              (Signature
                of Purchaser(s))

            	 
	 	 	 	 
	 	
              Name:
                

            	  
	 
	 	 	
              (Name
                of Signatory if Purchaser is an Entity)

            	 
	 	 	 	 
	 	
              Title:
                

            	  
	 
	 	 	
              (if
                Purchaser is an Entity)

            	 

    

    
      	 	
               

            	 	 	 
	 	
              Purchase
                Price:

            	
              $

            	   
	 

    

    

    
      	 	
              Address
                for Notice:

            	 
	 	  
	 
	 	  
	 
	 	  
	 
	 	 	 
	 	
              With
                a copy to:

            	 
	 	  
	 
	 	  
	 
	 	  
	 

    

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
      I

    

    
      	
              Name
                and Address
                of Purchaser

            	 	
              Residence

            	 	 	
              Number
                of Shares of Common Stock at
                Closing Date

            	 	
              Purchase
                Price

            
	 	 	 	 	 	 	 	 	 	 
	
              C.
                Glen Dugdale

              Box
                4550

              Greenville,
                DE 19807

            	 	
              DE

            	 	 	
              111,690

            	 	 	
              $15,000.00

            	 
	 	 	 	 	 	
               

            	 	 	 	 
	
              Queequeg
                Partners, LP

              Jonathan
                Gallen

              299
                Park Avenue

              New
                York, NY 10171

            	 	
              NY

            	 	 	
              169,898

            	 	
               

            	
              $22,813.27

            	 
	 	 	 	 	 	 	 	 	
               

            	 
	
              Ahab
                Partners, LP

              Jonathan
                Gallen

              299
                Park Avenue

              New
                York, NY 10171

            	 	
              NY

            	 	 	
              880,000

            	 	 	
              $118,184.00

            	 
	 	 	 	 	 	 	 	 	
               

            	 
	
              Ahab
                International, Ltd.

              Jonathan
                Gallen

              299
                Park Avenue

              New
                York, NY 10171

            	 	
              NY

            	 	 	
              1,120,000

            	 	 	
              $150,416.00

            	 
	 	 	 	 	 	 	 	 	
               

            	 
	
              Maurice
                Wills

              27102
                Woodbrook Road

              Rancho
                Palos Verdes, CA 90275

            	 	
              CA

            	 	 	
              100,000

            	 	 	
              $13,430.00

            	 
	 	 	 	 	 	 	 	 	
               

            	 
	
              Mark
                & Carolyn Landis

              503
                Lake Drive

              Princeton,
                NJ 08540

            	 	
              NJ

            	 	 	
              74,460

            	 	 	
              $10,000.00

            	 
	 	 	 	 	 	
               

            	 	 	
               

            	 
	
              Scott
                Lustgarten

              418
                Hillbrook Road

              Bryn
                Mawr, PA 19010

            	 	
              PA

            	 	 	
              44,676

            	 	
               

            	
              $6,000.00

            	 
	 	 	 	 	 	 	 	 	
               

            	 
	
              Bruce
                D. Miller

              P.O.
                Box 2306

              Nantucket,
                MA 02584

            	 	
              MA

            	 	 	
              148,920

            	 	 	
              $20,000.00

            	 
	 	 	 	 	 	 	 	 	
               

            	 
	
              Richard
                Nager

              44
                Righters Mill Road

              Gladwyne,
                PA 19035

            	 	
              PA

            	 	 	
              29,784

            	 	 	
              $4,000.00

            	 

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              Jonathan
                P. Robinson

              205
                Exeter Road

              Devon,
                PA 19333

            	 	
              PA

            	 	 	
              37,230

            	 	 	
              $5,000.00

            	 
	 	 	 	 	 	 	 	 	
               

            	 
	
              John
                L. Steffens

              65
                East 55th
                Street, 33rd
                Floor

              New
                York, NY 10022

            	 	
              NY

            	 	 	
              1,006,379

            	 	 	
              $135,156.73

            	 

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      A

    

    CICERO
      DISCLOSURE SCHEDULES

    

    These
      Disclosure Schedules are being furnished by Cicero, Inc. (the “Company”),
      dated
      as of February 22, 2007.

    

    No
      reference to or disclosure of any item or matter in these Disclosure Schedules
      shall be construed as an admission or indication that such item or other matter
      is material or that such item or other matter is required to be referred to
      or
      disclosed. The inclusion and discussion of any document, agreement, conflict
      or
      situation in these Disclosure Schedules is not an admission of the
      effectiveness, enforceability, or interpretation of the document, agreement,
      conflict or situation.

    

    Items
      identified on the following Schedules are deemed disclosed for purposes of
      all
      Schedules to which they relate.

    

    These
      Disclosure Schedules do not contain Material Non-Public
      Information.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Schedule
      2.1 (c) Capitalization

    

    Authorized
      and Outstanding Capital Stock

    

    The
      Company's Certificate of Incorporation, as amended on December 29, 2006,
      authorizes the Company to issue 215,000,000 shares of Common Stock, par value
      $0.001 per share, of which 35,150,832 were outstanding as of close of business
      on February 9, 2007 (confirmed with American Stock Transfer and Trust Company).
      An additional 1,763,476 shares of Common Stock are reserved for issuance upon
      the conversion of the Series A1 Preferred Stock. An additional 324,067
shares
      of
      Common Stock are reserved for issuance upon the exercise of the warrants
      described below. 

    

    The
      Company's Certificate of Incorporation authorizes it to issue 10,000,000 shares
      of Preferred Stock, par value $0.001 per share. Of the authorized Preferred
      Stock, the following series have been issued: 

    

    1,763
      shares have been designated Series A1 Convertible Redeemable Preferred Stock,
      all of which were issued January 2007, and all of which are currently
      outstanding; 

     

    Preemptive
      Rights

    

    None.
      

     

    Stock
      Options

    

    As
      of
      January 10, 2007, 110,200 options to purchase Common Stock were outstanding
      under the Company’s Employee and Outside Director Stock Option Plans. The
      Company’s 1997 Plan has approximately 320,000 shares available to grant and the
      Plan expires in 2007. The Company does plan to create a new Employee and Outside
      Director Stock Option Plan.

    

    Warrants

    

    324,067
      shares of Common Stock are reserved for issuance upon the exercise of warrants
      (all are subject to Registration Rights Agreements) as follows: 

    

    
      	
              Warrant
                Holders: 

            	 	
              Granted: 

            	 	
              Remaining:

            	 	
              Exercise
                Price:

            	 
	
              Early
                Adopter Warrants as part of the Senior Reorganization
                Notes

            	 	 	
              201,115

            	 	 	
              201,115

            	 	
              $

            	
              10.00

            	 
	
              Former
                Series D-1 Preferred Stock Purchasers

            	 	 	
              41,581

            	 	 	
              22,931

            	 	
              $

            	
              7.00

            	 
	
              Former
                Series D-2 Preferred Stock Purchasers

            	 	 	
              24,157

            	 	 	
              10,914

            	 	
              $

            	
              20.00

            	 

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    
      	
              Warrant
                Holders: 

            	 	
              Granted: 

            	 	
              Remaining:

            	 	
              Exercise
                Price:

            	 
	
              Former
                Financing Warrants

            	 	 	
              55,3671
                

            	 	 	
              28,095
                

            	 	
              $

            	
              40.00

            	 
	
              Purchasers
                in January 2002 Private Placement

            	 	 	
              4,764

            	 	 	
              2,131
                

            	 	
              $

            	
              60.00

            	 
	
              Purchasers
                in October 2003 Private Placement

            	 	 	
              474

            	 	 	
              445
                

            	 	
              $

            	
              45.00

            	 
	
              Purchasers
                in January 2004 Private Placement

            	 	 	
              33,692
                

            	 	 	
              13,838
                

            	 	
              $

            	
              37.00

            	 
	
              Convertible
                notes

            	 	 	
              18,750
                

            	 	 	
              18,750
                

            	 	
              $

            	
              8.00

            	 
	
              Convertible
                notes

            	 	 	
              20,000

            	 	 	
              20,000
                

            	 	
              $

            	
              10.00

            	 
	
              Convertible
                notes

            	 	 	
              901

            	 	 	
              901

            	 	
              $

            	
              17.00

            	 
	
              Convertible
                notes

            	 	 	
              7,893

            	 	 	
              1,875

            	 	
              $

            	
              32.00

            	 
	
              Former
                Series C Preferred Stock Purchasers. 

            	 	 	
              11,461

            	 	 	
              3,072

            	 	
              $

            	
              38.00

            	 

    

     

    Rights
      to Subscribe

    

    None

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Registration
      Rights Agreements

    

    Registration
      Rights Agreement with Existing Preferred Stockholders.

    

    The
      Company has entered into an amended registration rights agreements to provide
      for the registration of the shares underlying the Series A1 Preferred Stock.
      Such agreement will also provide for the registration of the shares underlying
      warrants or shares of common stock issued in the future pursuant to the terms
      of
      the respective certificates of designation.

     

    Registration
      Rights Agreement with Participants in the January 2002 Private Placement of
      Common Stock and Warrants.

    

    The
      shares of common stock and the shares issuable upon exercise of the related
      warrants are subject to a Registration Rights Agreement and are currently
      registered. Such shares were issued in the Company’s January 2002 private
      placement of common stock and warrants.

    

    Registration
      Rights Agreement with Participants in the October 2003 Private Placement of
      Common Stock and Warrants.

    

    The
      shares of common stock and the shares issuable upon exercise of the related
      warrants are subject to a Registration Rights Agreement and are currently
      registered. Such shares were issued in the Company’s October 2003 private
      placement of common stock and warrants.

    

    Registration
      Rights Agreement with Participants in the January 2004 Private Placement of
      Common Stock and Warrants.

    

    The
      shares of common stock and the shares issuable upon exercise of the related
      warrants are subject to a Registration Rights Agreement and are currently
      registered. Such shares were issued in the Company’s January 2004 private
      placement of common stock and warrants.

    

    Registration
      Rights Agreement with MLBC.

    

    On
      January 3, 2002, the Company entered into a registration rights agreement with
      MLBC, Inc. (“MLBC”),
      an
      affiliate of Merrill Lynch, Pierce, Fenner & Smith Incorporated
      (“Merrill
      Lynch”).
      This
      agreement grants registration rights to MLBC with respect to 1,250 shares of
      Common Stock of the Company ( as adjusted for the reverse stock split) and
      replaces the previous registration rights agreement with Merrill Lynch for
      1,000
      shares of Common Stock of the Company. The Company complied with Merrill Lynch's
      demand to register the original 1,000 shares upon effectiveness of its Form
      S-3
      registration statement, Reg. No. 333-61494 , effective as of June 14, 2001
      and
      as amended by Post-Effective Amendment No. 1, filed October 18, 2001
      (subsequently withdrawn). MLBC subsequently requested that it not be included
      on
      an updated registration statement and withdrew its request to be included.
      Accordingly, MLBC still retains “piggy-back” and demand rights with respect to a
      total of 1,229 shares of Common Stock. The additional 21 shares of Common Stock
      were distributed by MLBC and have been registered for resale in the names of
      the
      transferees.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Registration
      Rights Agreement as Part of the Note and Warrant Offering.

     

    In
      August
      2004, the Company entered into a registration rights agreement with the holders
      of the Senior Reorganization Note and Warrant Offering. The conversion of the
      Notes into Senior Debt and Warrants was contingent and dependent upon the
      Company’s shareholders approving the merger and reorganization
      (“Recapitalization”) of the Company which was completed on November 16, 2006.

     

    Registration
      Rights Agreement as Part of the Convertible Bridge Notes.

     

    As
      part
      of the Term Sheet for Convertible Bridge Note financing, the Company entered
      into a registration rights agreement with the holders of Convertible Bridge
      Notes within 90 days after consummation of the recapitalization.

     

    Registration
      Rights Agreement with Liraz Systems, Ltd.

    

    On
      November 30, 2006, the Company entered into a registration rights agreement
      with
      Liraz Systems, Ltd. (“Liraz”) pursuant to a guaranty agreement between Liraz and
      Bank Hapoalim B.M. This agreement grants registration rights to Liraz with
      respect to certain shares of Common Stock of the Company and a warrant to
      purchase 3,600,000 shares of the Company’s Common Stock issued as part of the
      guaranty extension agreement of the Company’s bank note to Bank Hapoalim NY.

      

    Schedule
      2.1 (f) Consents

     

    None

     

    Schedule
      2.1 (g) Litigation

    

    Various
      lawsuits and claims have been brought against us in the normal course of our
      business. In January 2003, an action was brought against us in the Circuit
      Court
      of Loudon County, Virginia, for a breach of a real estate lease. The case was
      settled in August 2003. Under the terms of the settlement agreement, we agreed
      to assign a note receivable with recourse equal to the unpaid portion of the
      note should the note obligor default on future payments. The unpaid balance
      of
      the note was $545,000, of which the current unpaid principal portion is
      approximately $216,000 and it matures in December 2007. We assessed the
      probability of liability under the recourse provisions using a weighted
      probability cash flow analysis and have recognized a long-term liability in
      the
      amount of $131,000. 

    

    In
      October 2003, we were served with a summons and complaint in Superior Court
      of
      North Carolina regarding unpaid invoices for services rendered by one of our
      subcontractors. The amount in dispute was approximately $200,000 and is included
      in accounts payable. Subsequent to March 31, 2004, we settled this litigation.
      Under the terms of the settlement agreement, we agreed to pay a total of
      $189,000 plus interest over a 19-month period ending November 15, 2005. The
      Company is in the process of negotiating a series of payments for the remaining
      liability of approximately $80,000.

    

    In
      March
      2004, we were served with a summons and complaint in Superior Court of North
      Carolina regarding a security deposit for a sublease in Virginia. The amount
      in
      dispute is approximately $247,000. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    In
      October 2004, we reached a settlement agreement wherein we agreed to pay
      $160,000 over a 36-month period ending October 2007.

    

    In
      August
      2004, we were notified that we were in default under an existing lease agreement
      for office facilities in Princeton, New Jersey. The amount of the default is
      approximately $65,000. Under the terms of the lease agreement, we may be liable
      for future rents should the space remain vacant. We have reached a settlement
      agreement with the landlord which calls for a total payment of $200,000 and
      is
      included in accounts payable, over a 31-month period ending October 2007.

    

    In
      April
      2005, we were notified that Critical Mass Mail, Inc. had filed a claim against
      us for failure to pay certain liabilities under an Asset Purchase Agreement
      dated January 9, 2004. We in turn filed that Critical Mass Mail, Inc. failed
      to
      deliver certain assets and other documents under the same Asset purchase
      agreement. We had already reserved the potential liability under the Agreement
      as part of the asset purchase accounting. On March 1, 2006, Critical Mass Mail
      amended their complaint and is seeking damages of approximately $600,000 for
      our
      failure to timely register the underlying securities issued in the Asset
      Purchase. In December 2006 we settled this litigation. Under the terms of the
      settlement agreement, the Company agreed to pay the sum of $45,000 in monthly
      installments over nine consecutive months beginning on December 1, 2006 and
      to
      issue Critical Mass Mail, Inc. $50,000 value of common shares of Cicero, Inc,
      based on the trailing three day average price for Cicero common stock after
      such
      stock initially trades on the OTC Bulletin Board.

    

    Under
      the
      indemnification clause of the Company’s standard reseller agreements and
      software license agreements, the Company agrees to defend the reseller/licensee
      against third party claims asserting infringement by the Company’s products of
      certain intellectual property rights, which may include patents, copyrights,
      trademarks or trade secrets, and to pay any judgments entered on such claims
      against the reseller/licensee.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    EXHIBIT
      B

    

    REGISTRATION
      RIGHTS AGREEMENT

    

    This
      REGISTRATION RIGHTS AGREEMENT (this “Agreement”),
      dated
      as of February 26, 2007, is entered into by and between CICERO, INC., a Delaware
      corporation (the “Company”),
      and
      _____________________________ (the “Purchaser”).

    

    W
      I T N E S S E T H:

    

    This
      Agreement is made pursuant to that certain Purchase Agreement, dated as of
      the
      date hereof, by and between the Company and the Purchaser (the “Purchase
      Agreement”),
      and
      pursuant to that certain Commitment Agreement, dated as of the date hereof,
      by
      and between the Company and the Purchaser (the “Commitment
      Agreement”)

     

    The
      Company and the Purchaser hereby agree as follows:

    

    1.    
Definitions.
      Unless
      otherwise defined herein, terms defined in the Purchase Agreement and the
      Commitment Agreement are used herein as therein defined, and the following
      shall
      have (unless otherwise provided elsewhere in this Agreement) the following
      respective meanings (such meanings being equally applicable to both the singular
      and plural form of the terms defined):

     

    “Affiliate”
means,
      with respect to any Person, any other Person that directly or indirectly
      controls or is controlled by or under common control with such Person. For
      the
      purposes of this definition, “control,”
when
      used with respect to any Person, means the possession, direct or indirect,
      of
      the power to direct or cause the direction of the management and policies of
      such Person, whether through the ownership of voting securities, by contract
      or
      otherwise, and the terms “affiliated,”
      “controlling”
and
      “controlled”
have
      meanings correlative to the foregoing.

     

    “Agreement”
shall
      mean this Registration Rights Agreement, including all amendments, modifications
      and supplements and any exhibits or schedules to any of the foregoing, and
      shall
      refer to the Agreement as the same may be in effect at the time such reference
      becomes operative.

    

    “Business
      Day”
shall
      mean any day that is not a Saturday, a Sunday or a day on which banks are
      required or permitted to be closed in the State of New York.

    

    “Commission”
shall
      mean the Securities and Exchange Commission or any other federal agency then
      administering the Securities Act and other federal securities laws.

    

    “Holder
      or
Holders”
means
      the holder or holders, as the case may be, from time to time of the Registrable
      Securities.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    “NASD”
shall
      mean the National Association of Securities Dealers, Inc., or any successor
      corporation thereto.

     

    “Registrable
      Securities”
shall
      mean the shares of Common Stock issuable upon conversion of the Convertible
      Bridge Notes and the purchase of common stock.

    

    2.    
Registration.
      As soon
      as practicable following the Closing Date and within ninety (90) days of the
      such date, the Company shall prepare and file with the Commission a Registration
      Statement (the “Registration
      Statement”)
      which
      shall cover all of the Registrable Securities. The Registration Statement shall
      be on Form S-1 or any successor form. The Company shall use its best efforts
      to
      cause the Registration Statement to be declared effective under the Securities
      Act within one hundred eighty (180) days of the Closing Date.

     

    3.     
      Registration
      Procedures.
      Subject
      to the provisions of Section 2, the Company will:

    

    (a)    prepare
      and file with the Commission a Registration Statement with respect to such
      securities and use its best efforts to cause such Registration Statement to
      become and remain effective for a period of time required for the disposition
      of
      such securities by the Holder thereof, but not to exceed two (2)
      years;

     

    (b)    prepare
      and file with the Commission such amendments and supplements to such
      Registration Statement and the prospectus used in connection therewith as may
      be
      necessary to keep such Registration Statement effective and to comply with
      the
      provisions of the Securities Act with respect to the sale or other disposition
      of all securities covered by such Registration Statement until the earlier
      of
      such time as all of such securities have been disposed of in a public offering
      or the expiration of two (2) years;

     

    (c)    furnish
      to each Holder such number of copies of a summary prospectus or other
      prospectus, including a preliminary prospectus, in conformity with the
      requirements of the Securities Act, and such other documents, as such Holder
      may
      reasonably request;

     

    (d)    use
      its
      best efforts to register or qualify the securities covered by such Registration
      Statement under such other securities or blue sky laws of such jurisdictions
      within the United States as each Holder shall reasonably request to the extent
      such registration or qualification is required in such jurisdictions
      (provided,
      however,
      that
      the Company shall not be obligated to qualify as a foreign corporation to do
      business under the laws of any jurisdiction in which it is not then qualified
      or
      to file any general consent to service of process), and do such other reasonable
      acts and things as may be required of it to enable such Holder to consummate
      the
      disposition in such jurisdiction of the securities covered by such Registration
      Statement;

     

    (e)    furnish,
      at the request of any Holder during registration of Registrable Securities
      pursuant to Section 2, on the date that such shares of Registrable Securities
      are delivered to the underwriters for sale pursuant to such registration or,
      if
      such Registrable Securities are not being sold through underwriters, on the
      date
      that the Registration Statement with respect to such shares of Registrable
      Securities becomes effective, (1) an opinion, dated as of such date, of the

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    independent
      counsel representing the Company for the purposes of such registration,
      addressed to the underwriters, if any, and if such Registrable Securities are
      not being sold through underwriters, then to the Holder making such request,
      in
      customary form and covering matters of the type customarily covered in such
      legal opinions; and (2) a comfort letter dated such date, from the
      independent certified public accountants of the Company, addressed to the
      underwriters, if any, and if such Registrable Securities are not being sold
      through underwriters, then to the Holder making such request and, if such
      accountants refuse to deliver such letter to such Holder, then to the Company,
      in a customary form and covering matters of the type customarily covered by
      such
      comfort letters and as the underwriters or such Holder shall reasonably
      request;

     

    (f)    
enter
      into customary agreements (including an underwriting agreement in customary
      form) and take such other actions as are reasonably required in order to
      expedite or facilitate the disposition of such Registrable
      Securities;

     

    (g)    notify
      each Holder as promptly as practicable upon the occurrence of any event as
      a
      result of which the prospectus included in a Registration Statement, as then
      in
      effect, contains an untrue statement of material fact or omits to state a
      material fact required to be stated therein or necessary to make the statements
      therein not misleading in light of the circumstances then existing, and as
      promptly as possible, prepare, file and furnish to such Holder a reasonable
      number of copies of a supplement or an amendment to such prospectus as may
      be
      necessary so that such prospectus does not contain an untrue statement of
      material fact or omits to state a material fact required to be stated therein
      or
      necessary to make the statements therein not misleading in light of the
      circumstances then existing;

     

    (h)    provide
      each Holder and its representatives the opportunity to conduct reasonable
      inquiry of the Company’s financial and other records during normal business
      hours and make available its officers, directors and employees for questions
      regarding information which such Holder may reasonably request in order to
      conduct any due diligence; and

     

    (i)    
otherwise
      use its best efforts to comply with all applicable rules and regulations of
      the
      Commission, and make available to the Holders, as soon as reasonably
      practicable, but not later than eighteen (18) months after the effective date
      of
      the Registration Statement, an earnings statement covering the period of at
      least twelve (12) months beginning with the first full month after the effective
      date of such Registration Statement, which earnings statement shall satisfy
      the
      provisions of Section 11(a) of the Securities Act.

     

    4.    
Expenses.
      All
      expenses incident to the Company’s compliance with the terms of this Agreement,
      including, without limitation, all registration and filing fees, printing
      expenses, fees and disbursements of counsel for the Company, expenses of any
      special audits incident to or required by any such registration and expenses
      of
      complying with the securities or blue sky laws of any jurisdiction pursuant
      to
      Section 3(d), shall be paid by the Company, except that:

     

    (a)    all
      such
      expenses in connection with any amendment or supplement to the Registration
      Statement or prospectus filed more than two (2) years after the effective date
      of 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    such
      Registration Statement because any Holder has not effected the disposition
      of
      the securities requested to be registered shall be paid by such
      Holder;

     

    (b)    the
      Company shall not be liable for any fees, discounts or commissions to any
      underwriter or any fees or disbursements of counsel for any underwriter in
      respect of the securities sold by such Holder; and

     

    (c)    any
      incremental expenses incurred by the Company as a result of the inclusion of
      a
      Holder’s Registrable Securities in an underwritten offering where the Holder or
      any of its Affiliates is an underwriter of the Registrable Securities which
      inclusion of such Holder’s Registrable Securities requires a “qualified
      independent underwriter” under the applicable rules of the NASD shall be paid by
      such Holder.

     

    5.    
Indemnification
      and Contribution.
      (a) In
      the event of any registration of any Registrable Securities under the Securities
      Act pursuant to this Agreement, the Company shall indemnify and hold harmless
      the Holder of such Registrable Securities, such Holder’s directors and officers,
      and each other person (including each underwriter) who participated in the
      offering of such Registrable Securities and each other person, if any, who
      controls such Holder or such participating person within the meaning of the
      Securities Act, against any losses, claims, damages or liabilities, joint or
      several, to which such Holder or any such director or officer or participating
      person or controlling person may become subject under the Securities Act or
      any
      other statute or at common law, insofar as such losses, claims, damages or
      liabilities (or actions in respect thereof) arise out of or are based upon
      (i) any alleged untrue statement of any material fact contained, on the
      effective date thereof, in any Registration Statement under which such
      securities were registered under the Securities Act, any preliminary prospectus
      or final prospectus contained therein, or any amendment or supplement thereto,
      or (ii) any alleged omission to state therein a material fact required to
      be stated therein or necessary to make the statements therein not misleading,
      and shall reimburse such Holder or such director, officer or participating
      person or controlling person for any legal or any other expenses reasonably
      incurred by such Holder or such director, officer or participating person or
      controlling person in connection with investigating or defending any such loss,
      claim, damage, liability or action. Notwithstanding anything to the contrary
      set
      forth in this Section 5(a), the Company shall not be liable to indemnify any
      person in any such case to the extent that any such loss, claim, damage or
      liability arises out of or is based upon (1) any actual or alleged untrue
      statement or actual or alleged omission either (x) made in such Registration
      Statement, preliminary prospectus, prospectus or amendment or supplement in
      reliance upon and in conformity with written information furnished to the
      Company by such Holder specifically for use therein or so furnished for such
      purposes by any underwriter or (y) that had been corrected in a preliminary
      prospectus, prospectus supplement or amendment which had been furnished to
      such
      Holder prior to any distribution of the document alleged to contain the untrue
      statement or omission to offerees or purchasers, (2) any offer or sale of
      Registrable Securities after receipt by such Holder of a Standstill Notice
      under
      Section 3(g) and prior to the delivery of the prospectus supplement or amendment
      contemplated by Section 3(g), or (3) the Holder’s failure to comply with the
      prospectus delivery requirements under the Securities Act or failure to
      distribute its Registrable Securities in a manner consistent with its intended
      plan of distribution as provided to the Company and disclosed in the
      Registration Statement. Notwithstanding the foregoing, the 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Company
      shall not be required to indemnify any person for amounts paid in settlement
      of
      any claim without the prior written consent of the Company, which consent shall
      not be unreasonably withheld. Such indemnity shall remain in full force and
      effect regardless of any investigation made by or on behalf of such Holder
      or
      such director, officer or participating person or controlling person, and shall
      survive the transfer of such securities by such Holder.

     

    (b)    Each
      Holder, by acceptance hereof, agrees to indemnify and hold harmless the Company,
      its directors and officers and each person who participated in such offering
      and
      each other person, if any, who controls the Company within the meaning of the
      Securities Act against any losses, claims, damages or liabilities, joint or
      several, to which the Company or any such director or officer or any such person
      may become subject under the Securities Act or any other statute or at common
      law, insofar as such losses, claims, damages or liabilities (or actions in
      respect thereof) arise out of or are based upon (i) information in writing
      provided to the Company by the Holder specifically for use in the following
      documents and contained, on the effective date thereof, in any Registration
      Statement under which securities were registered under the Securities Act at
      the
      request of the Holder, any preliminary prospectus or final prospectus contained
      therein, or any amendment or supplement thereto, (ii) Holder’s offer or sale of
      Registrable Securities after receipt by such Holder of a Standstill Notice
      under
      Section 3(g) and prior to the delivery of the prospectus supplement or amendment
      contemplated by Section 3(g), (iii) Holder’s failure to comply with the
      prospectus delivery requirements under the Securities Act or failure to
      distribute its Registrable Securities in a manner consistent with its intended
      plan of distribution as provided to the Company and disclosed in the
      Registration Statement, (iv) Holder’s failure to comply with Regulation M under
      the Exchange Act, or (v) Holder’s failure to comply with any rules and
      regulations applicable because the Holder is, or is an Affiliate of, a
      registered broker-dealer. Notwithstanding the provisions of this paragraph
      (b)
      or paragraph (c) below, no Holder shall be required to indemnify any person
      pursuant to this Section 5 or to contribute pursuant to paragraph (c) below
      in
      an amount in excess of the amount of the aggregate net proceeds received by
      such
      Holder in connection with any such registration under the Securities
      Act.

     

    (c)    If
      the
      indemnification provided for in this Section 5 from the indemnifying party
      is
      unavailable to an indemnified party hereunder in respect of any losses, claims,
      damages, liabilities or expenses referred to therein, then the indemnifying
      party, in lieu of indemnifying such indemnified party, shall contribute to
      the
      amount paid or payable by such indemnified party as a result of such losses,
      claims, damages, liabilities or expenses in such proportion as is appropriate
      to
      reflect the relative fault of the indemnifying party and indemnified parties
      in
      connection with the actions which resulted in such losses, claims, damages,
      liabilities or expenses, as well as any other relevant equitable considerations.
      The relative fault of such indemnifying party and indemnified parties shall
      be
      determined by reference to, among other things, whether any action in question,
      including any untrue or alleged untrue statement of a material fact or omission
      or alleged omission to state a material fact, has been made by, or relates
      to
      information supplied by, such indemnifying party or indemnified parties, and
      the
      parties’ relative intent, knowledge, access to information and opportunity to
      correct or prevent such action. The amount paid or payable by a party as a
      result of the losses, claims, damages, 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    liabilities
      and expenses referred to above shall be deemed to include any legal or other
      fees or expenses reasonably incurred by such party in connection with any
      investigation or proceeding.

     

    The
      parties hereto agree that it would not be just and equitable if contribution
      pursuant to this Section 5(c) were determined by pro rata allocation or by
      any
      other method of allocation which does not take account of the equitable
      considerations referred to in the immediately preceding paragraph. No Person
      guilty of fraudulent misrepresentation (within the meaning of Section 11(f)
      of
      the Securities Act) shall be entitled to contribution from any Person who was
      not guilty of such fraudulent misrepresentation.

     

    6.     
      Certain
      Limitations on Registration Rights.
      Notwithstanding the other provisions of this Agreement:

     

    (a)    the
      Company shall not be obligated to register the Registrable Securities of Holders
      if, in the opinion of counsel to the Company reasonably satisfactory to the
      Holder and its counsel (or, if the Holder has engaged an investment banking
      firm, to such investment banking firm and its counsel), the sale or other
      disposition of such Holder’s Registrable Securities, in the manner proposed by
      such Holder (or by such investment banking firm), may be effected without
      registering such Registrable Securities under the Securities Act;

     

    (b)    the
      Company shall not be obligated to register the Registrable Securities of any
      Holder pursuant to Section 2 if the Company has had a registration statement,
      under which the Holder had a right to have its Registrable Securities included
      pursuant to Section 2, declared effective within one hundred and twenty (120)
      days prior to the date of the request pursuant to Section 2; and

     

    (c)    the
      Company shall have the right to delay the filing or effectiveness of the
      registration statement required pursuant to Section 2 hereof during one or
      more
      periods aggregating not more than forty five (45) days in any twelve-month
      period in the event that (i) the Company would, in accordance with the advice
      of
      its counsel, be required to disclose in the prospectus information not otherwise
      then required by law to be publicly disclosed and (ii) in the judgment of the
      Company’s Board of Directors, there is a reasonable likelihood that such
      disclosure would materially and adversely affect any existing or prospective
      material business situation, transaction or negotiation or otherwise materially
      and adversely affect the Company.

     

    7.     
      Selection
      of Managing Underwriters.
      The
      managing underwriter or underwriters for any offering of Registrable Securities
      to be registered pursuant to Section 2 shall be selected by the Holders of
      a
      majority of the shares being so registered and shall be reasonably acceptable
      to
      the Company.

     

    8.     Holder
      Agreements.
      (a) No
      Holder may participate in an underwritten offering provided for hereunder unless
      such Holder (i) agrees to sell the Holder’s Registrable Securities on the basis
      provided in the underwriting arrangements contemplated for such offering as
      reasonably requested by the managing underwriter, (ii) completes and executes
      all questionnaires, powers of attorney, indemnities, underwriting agreements
      and
      other documents reasonably required under the terms of such underwriting
      arrangements as reasonably requested 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    by
      the
      managing underwriter, and (iii) agrees to bear the Holder’s pro rata portion of
      all underwriting discounts and commissions.

     

    (b)    Each
      Holder agrees to comply with Regulation M under the Exchange Act in connection
      with its offer and sale of Registrable Securities.

     

    (c)    Each
      Holder agrees that it will not sell any Registrable Securities registered under
      the Securities Act pursuant to the terms of this Agreement until a Registration
      Statement (and any associated post-effective amendment) relating thereto has
      been declared effective and the Holder has been provided copies of the related
      prospectus, as amended or supplemented to date.

     

    (d)    Each
      Holder agrees to comply with the prospectus delivery requirements of the
      Securities Act as applicable in connection with the sale of Registrable
      Securities registered under the Securities Act pursuant to a Registration
      Statement.

     

    (e)    Each
      Holder agrees that upon receipt of a Standstill Notice pursuant to Section
      3(g),
      the Holder shall immediately discontinue offers and sales of Registrable
      Securities registered under the Securities Act pursuant to any Registration
      Statements covering such Registrable Securities until such Holder receives
      copies of the supplemented or amended prospectus contemplated by Section 3(g)
      or
      notice from the Company that no such supplement or amendment is
      required.

     

    9.    
Miscellaneous.
      

     

    (a)    No
      Inconsistent Agreements.
      The
      Company will not hereafter enter into any agreement with respect to its
      securities which conflicts with the rights granted to the Holders in this
      Agreement. 

     

    (b)    Remedies.
      Each
      Holder, in addition to being entitled to exercise all rights granted by law,
      including recovery of damages, will be entitled to specific performance of
      its
      rights under this Agreement. The Company agrees that monetary damages would
      not
      be adequate compensation for any loss incurred by reason of a breach by it
      of
      the provisions of this Agreement and hereby agrees to waive the defense in
      any
      action for specific performance that a remedy at law would be adequate. In
      any
      action or proceeding brought to enforce any provision of this Agreement or
      where
      any provision hereof is validly asserted as a defense, the successful party
      shall be entitled to recover reasonable attorneys’ fees in addition to any other
      available remedy.

     

    (c)    Amendments
      and Waivers.
      Except
      as otherwise provided herein, the provisions of this Agreement may not be
      amended, modified or supplemented, and waivers or consents to departure from
      the
      provisions hereof may not be given unless the Company has obtained the written
      consent of the Holder.

     

    (d)    Notice
      Generally.
      Any
      notice, demand, request, consent, approval, declaration, delivery or other
      communication hereunder to be made pursuant to the provisions of this Agreement
      shall be sufficiently given or made if in writing and either delivered in person
      with 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    receipt
      acknowledged or sent by registered or certified mail, return receipt requested,
      postage prepaid, or by telecopy and confirmed by telecopy answerback, addressed
      as follows:

     

    
      	 	
              If
                to the Company: 

            	
              Cicero,
                Inc.

            

    

    
      	 	 	
              8000
                Regency Parkway, Suite 542

            

    

    
      	 	 	
              Cary,
                North Carolina 27518

            

    

    
      	 	 	
              Attn:
                John P. Broderick

            

    

    
      	 	 	 

    

    
      	 	
              With
                a Copy to:

            	
              Golenbock
                Eiseman Assor Bell & Peskoe LLP

            

    

    
      	 	 	
              437
                Madison Avenue

            

    

    
      	 	 	
              New
                York, New York 10022

            

    

    
      	 	 	
              Attn:
                Lawrence Bell, Esq.

            

    

    

    If
      to
      the Holders:  To
      the
      address set forth on the counterpart signature page of such Purchaser or at
      such
      other address as may be substituted by notice given as herein provided. The
      giving of any notice required hereunder may be waived in writing by the party
      entitled to receive such notice. Every notice, demand, request, consent,
      approval, declaration, delivery or other communication hereunder shall be deemed
      to have been duly given or served on the date on which personally delivered,
      with receipt acknowledged, telecopied and confirmed by telecopy answerback
      or
      three (3) Business Days after the same shall have been deposited in the United
      States mail.

    

    (e)    Rule
      144.
      With a
      view to making available to the Holders the benefits of Rule 144 under the
      Securities Act (“Rule
      144”)
      and
      any other rule or regulation of the Commission that may at any time permit
      the
      Holder to sell securities of the Company to the public without registration,
      the
      Company agrees that it will:

     

    (i)   make
      and
      keep public information available, as those terms are understood and defined
      in
      Rule 144;

     

    (ii)          file
      with
      the Commission in a timely manner all reports and other documents required
      of
      the Company under the Exchange Act; and

     

    (iii)       
      furnish
      to a Holder, so long as such Holder owns any Registrable Securities, forthwith
      upon request (A) a written statement by the Company, if true, that it has
      complied with the reporting requirements of Rule 144, the Securities Act and
      the
      Exchange Act, (B) a copy of the most recent annual or quarterly report of the
      Company and such other reports and documents so filed by the Company, and (C)
      such other information as may be reasonably requested in availing such Holder
      of
      any rule or regulation of the Commission which permits the selling of any such
      securities without registration.

     

    (f)    
Successors
      and Assigns.
      This
      Agreement shall inure to the benefit of and be binding upon the successors
      and
      assigns of each of the parties hereto including any person to whom Registrable
      Securities are transferred.

     

    (g)    Headings.
      The
      headings in this Agreement are for convenience of reference only and shall
      not
      limit or otherwise affect the meaning hereof.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (h)    Governing
      Law; Jurisdiction.
      This
      Agreement shall be governed by, construed and enforced in accordance with the
      laws of the State of Delaware without giving effect to the conflict of laws
      provisions thereof. Service of process on the parties in any action arising
      out
      of or relating to this Agreement shall be effective if mailed to the parties
      in
      accordance with Section 9(d) hereof. The
      parties hereto waive all right to trial by jury in any action or proceeding
      to
      enforce or defend any rights hereunder. 

     

    (i)    
Severability.
      Wherever possible, each provision of this Agreement shall be interpreted in
      such
      manner as to be effective and valid under applicable law, but if any provision
      of this Agreement shall be prohibited by or invalid under applicable law, such
      provision shall be ineffective to the extent of such prohibition or invalidity,
      without invalidating the remainder of such provision or the remaining provisions
      of this Agreement.

     

    (j)    
Entire
      Agreement.
      This
      Agreement, together with the License Agreement and the Subscription Agreement,
      represents the complete agreement and understanding of the parties hereto in
      respect of the subject matter contained herein and therein. This Agreement
      supersedes all prior agreements and understandings between the parties with
      respect to the subject matter hereof.

     

    (k)    Counterparts.
      This
      Agreement may be executed in any number of counterparts, all of which taken
      together shall be considered one and the same agreement and shall become
      effective when counterparts have been signed by each party and delivered to
      the
      other party, it being understood that both parties need not sign the same
      counterpart. In the event that any signature is delivered by facsimile
      transmission, such signature shall create a valid and binding obligation of
      the
      party executing (or on whose behalf such signature is executed) with the same
      force and effect as if such facsimile signature page were an original
      thereof.

     

    [SIGNATURE
      PAGES ATTACHED HERETO]

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

    

    
      	 	
              CICERO,
                INC.

            	 
	 	 	 	 
	 	 	 	 
	 	
              By:

            	  
	 
	 	 	
              John
                P. Broderick,

            	 
	 	 	
              Chief
                Executive and Financial Officer

            	 
	 	 	 	 
	 	 	 	 
	 	
              PURCHASER:

            	 
	 	 	 	 
	 	 	 	 
	 	
              By:
                

            	 
	 
	 	
              Name:
                

            	 
	 
	 	
              Title:Published
      CUSIP Number:
      __________

    

     

    
      
        

        $211,000,000

        

        

        CREDIT
          AGREEMENT

        

        among

        

        CAPLEASE,
          LP

        as
          Borrower,

        

        CAPITAL
          LEASE FUNDING, INC. AND

        CERTAIN
          DOMESTIC SUBSIDIARIES OF 

        CAPITAL
          LEASE FUNDING, INC.

        FROM
          TIME
          TO TIME PARTY HERETO,

        as
          Guarantors,

        

        THE
          LENDERS PARTY HERETO,

        

        and

        

        WACHOVIA
          BANK, NATIONAL ASSOCIATION,

        as
          Administrative Agent

        

        Dated
          as
          of April 17,
          2007

        

        

        

        
          
            

          

        Prepared
          by:                                                                           

         

         

         

         

                                             
          

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

    

    TABLE
      OF CONTENTS

    
      Page

      

      
        	
                ARTICLE
                  I DEFINITIONS

              	
                1

              
	
                Section
                  1.1

              	
                Defined
                  Terms.

              	
                1

              
	
                Section
                  1.2

              	
                Other
                  Definitional Provisions.

              	
                27

              
	
                Section
                  1.3

              	
                Accounting
                  Terms.

              	
                28

              
	
                Section
                  1.4

              	
                Time
                  References.

              	
                28

              
	
                Section
                  1.5

              	
                Execution
                  of Documents.

              	
                28

              
	 	 	 
	
                ARTICLE
                  II THE LOANS; AMOUNT AND TERMS

              	
                29

              
	
                Section
                  2.1

              	
                [Intentionally
                  Omitted].

              	
                29

              
	
                Section
                  2.2

              	
                Term
                  Loan; Delayed Draw Term Loan.

              	
                29

              
	
                Section
                  2.3

              	
                Election
                  of the Extended Term.

              	
                31

              
	
                Section
                  2.4

              	
                [Intentionally
                  Omitted].

              	
                31

              
	
                Section
                  2.5

              	
                Fees.

              	
                31

              
	
                Section
                  2.6

              	
                Interest
                  Reserve Account.

              	
                32

              
	
                Section
                  2.7

              	
                Prepayments.

              	
                33

              
	
                Section
                  2.8

              	
                Default
                  Rate and Payment Dates.

              	
                34

              
	
                Section
                  2.9

              	
                Conversion
                  Options.

              	
                35

              
	
                Section
                  2.10

              	
                Computation
                  of Interest and Fees; Usury.

              	
                36

              
	
                Section
                  2.11

              	
                Pro
                  Rata Treatment and Payments.

              	
                37

              
	
                Section
                  2.12

              	
                Non-Receipt
                  of Funds by the Administrative Agent.

              	
                39

              
	
                Section
                  2.13

              	
                Inability
                  to Determine Interest Rate.

              	
                40

              
	
                Section
                  2.14

              	
                Yield
                  Protection.

              	
                41

              
	
                Section
                  2.15

              	
                Indemnity;
                  Eurocurrency Liabilities.

              	
                42

              
	
                Section
                  2.16

              	
                Taxes.

              	
                43

              
	 	 	 
	
                ARTICLE
                  III REPRESENTATIONS AND WARRANTIES

              	
                45

              
	
                Section
                  3.1

              	
                Financial
                  Condition.

              	
                45

              
	
                Section
                  3.2

              	
                No
                  Material Adverse Effect; Internal Control Event.

              	
                46

              
	
                Section
                  3.3

              	
                Corporate
                  Existence; Compliance with Law.

              	
                46

              
	
                Section
                  3.4

              	
                Corporate
                  Power; Authorization; Enforceable Obligations.

              	
                46

              
	
                Section
                  3.5

              	
                No
                  Legal Bar; No Default.

              	
                46

              
	
                Section
                  3.6

              	
                No
                  Material Litigation.

              	
                47

              
	
                Section
                  3.7

              	
                Investment
                  Company Act; etc.

              	
                47

              
	
                Section
                  3.8

              	
                Margin
                  Regulations.

              	
                47

              
	
                Section
                  3.9

              	
                ERISA.

              	
                48

              
	
                Section
                  3.10

              	
                Environmental
                  Matters.

              	
                48

              
	
                Section
                  3.11

              	
                Use
                  of Proceeds.

              	
                49

              
	
                Section
                  3.12

              	
                Subsidiaries;
                  Joint Ventures; Partnerships.

              	
                49

              
	
                Section
                  3.13

              	
                Ownership.

              	
                50

              
	
                Section
                  3.14

              	
                Indebtedness.

              	
                50

              
	
                Section
                  3.15

              	
                Taxes.

              	
                50

              
	
                Section
                  3.16

              	
                [Intentionally
                  Omitted].

              	
                50

              
	
                Section
                  3.17

              	
                Solvency.

              	
                50

              
	
                Section
                  3.18

              	
                Investments.

              	
                51

              
	
                Section
                  3.19

              	
                Location
                  of Collateral.

              	
                51

              

      

       

      
        
          
          

        

        
          i

          
            

          

        

        
          
          

        

      

       

      
        	
                Section
                  3.20

              	
                No
                  Burdensome Restrictions.

              	
                51

              
	
                Section
                  3.21

              	
                Brokers’
                  Fees.

              	
                51

              
	
                Section
                  3.22

              	
                Labor
                  Matters.

              	
                51

              
	
                Section
                  3.23

              	
                Accuracy
                  and Completeness of Information.

              	
                52

              
	
                Section
                  3.24

              	
                Material
                  Contracts.

              	
                52

              
	
                Section
                  3.25

              	
                Insurance.

              	
                52

              
	
                Section
                  3.26

              	
                Security
                  Documents.

              	
                52

              
	
                Section
                  3.27

              	
                [Intentionally
                  Omitted].

              	
                53

              
	
                Section
                  3.28

              	
                Classification
                  of Senior Indebtedness.

              	
                53

              
	
                Section
                  3.29

              	
                Anti-Terrorism
                  Laws.

              	
                53

              
	
                Section
                  3.30

              	
                Compliance
                  with OFAC Rules and Regulations.

              	
                53

              
	
                Section
                  3.31

              	
                Compliance
                  with FCPA.

              	
                53

              
	
                Section
                  3.32

              	
                Consent;
                  Governmental Authorizations.

              	
                54

              
	
                Section
                  3.33

              	
                REIT
                  Status.

              	
                54

              
	
                Section
                  3.34

              	
                REIT
                  Election.

              	
                54

              
	
                 

              	 	 
	
                ARTICLE
                  IV CONDITIONS PRECEDENT

              	
                54

              
	
                Section
                  4.1

              	
                Conditions
                  to Closing Date.

              	
                54

              
	
                Section
                  4.2

              	
                Conditions
                  to All Extensions of Credit.

              	
                59

              
	 	 	 
	
                ARTICLE
                  V AFFIRMATIVE COVENANTS

              	
                60

              
	
                Section
                  5.1

              	
                Financial
                  Statements.

              	
                61

              
	
                Section
                  5.2

              	
                Certificates;
                  Other Information.

              	
                62

              
	
                Section
                  5.3

              	
                Payment
                  of Taxes and Other Obligations.

              	
                63

              
	
                Section
                  5.4

              	
                Conduct
                  of Business and Maintenance of Existence.

              	
                63

              
	
                Section
                  5.5

              	
                Maintenance
                  of Property; Insurance.

              	
                63

              
	
                Section
                  5.6

              	
                Inspection
                  of Property; Books and Records; Discussions.

              	
                64

              
	
                Section
                  5.7

              	
                Notices.

              	
                64

              
	
                Section
                  5.8

              	
                Environmental
                  Laws.

              	
                66

              
	
                Section
                  5.9

              	
                Financial
                  Covenant.

              	
                67

              
	
                Section
                  5.10

              	
                Additional
                  Guarantors.

              	
                67

              
	
                Section
                  5.11

              	
                Compliance
                  with Law.

              	
                68

              
	
                Section
                  5.12

              	
                Pledged
                  Assets.

              	
                68

              
	
                Section
                  5.13

              	
                Hedging
                  Agreements.

              	
                69

              
	
                Section
                  5.14

              	
                [Intentionally
                  omitted].

              	
                69

              
	
                Section
                  5.15

              	
                Acquired
                  Properties.

              	
                69

              
	
                Section
                  5.16

              	
                Landlord
                  Waivers.

              	
                69

              
	
                Section
                  5.17

              	
                Federal
                  Assignment of Claims Act.

              	
                69

              
	
                Section
                  5.18

              	
                Enforcement
                  of Documents.

              	
                69

              
	
                Section
                  5.19

              	
                Use
                  of Proceeds.

              	
                70

              
	
                Section
                  5.20

              	
                Maintenance
                  of REIT Status.

              	
                70

              
	
                Section
                  5.21

              	
                Maintenance
                  of Securities Listing.

              	
                70

              
	
                Section
                  5.22

              	
                Borrower
                  as a Wholly Owned Subsidiary.

              	
                70

              
	
                Section
                  5.23

              	
                Additional
                  Collateral.

              	
                70

              
	
                Section
                  5.24

              	
                Further
                  Assurances.

              	
                70

              
	
                Section
                  5.25

              	
                Post-Closing
                  Deliveries.

              	
                71

              

      

       

      
        
          
          

        

        
          ii

          
            

          

        

        
          
          

        

      

       

      
        	
                ARTICLE
                  VI NEGATIVE COVENANTS

              	
                71

              
	
                Section
                  6.1

              	
                Indebtedness.

              	
                71

              
	
                Section
                  6.2

              	
                Liens.

              	
                72

              
	
                Section
                  6.3

              	
                Nature
                  of Business.

              	
                73

              
	
                Section
                  6.4

              	
                Consolidation,
                  Merger, Sale or Purchase of Assets, etc.

              	
                73

              
	
                Section
                  6.5

              	
                Advances,
                  Investments and Loans.

              	
                74

              
	
                Section
                  6.6

              	
                Transactions
                  with Affiliates.

              	
                74

              
	
                Section
                  6.7

              	
                Ownership
                  of Subsidiaries; Restrictions.

              	
                74

              
	
                Section
                  6.8

              	
                Corporate
                  Changes; Material Contracts.

              	
                75

              
	
                Section
                  6.9

              	
                Limitation
                  on Restricted Actions.

              	
                75

              
	
                Section
                  6.10

              	
                Restricted
                  Payments.

              	
                76

              
	
                Section
                  6.11

              	
                Amendment
                  of Subordinated Debt.

              	
                76

              
	
                Section
                  6.12

              	
                Sale
                  Leasebacks.

              	
                76

              
	
                Section
                  6.13

              	
                No
                  Further Negative Pledges.

              	
                76

              
	
                Section
                  6.14

              	
                Account
                  Control Agreements; Additional Bank Accounts.

              	
                77

              
	
                Section
                  6.15

              	
                Delivery
                  of Certain Notices.

              	
                77

              
	
                 

              	 	 
	
                ARTICLE
                  VII EVENTS OF DEFAULT

              	
                77

              
	
                Section
                  7.1

              	
                Events
                  of Default.

              	
                77

              
	
                Section
                  7.2

              	
                Acceleration;
                  Remedies.

              	
                81

              
	
                 

              	 	 
	
                ARTICLE
                  VIII THE ADMINISTRATIVE AGENT

              	
                81

              
	
                Section
                  8.1

              	
                Appointment
                  and Authority.

              	
                81

              
	
                Section
                  8.2

              	
                Nature
                  of Duties.

              	
                81

              
	
                Section
                  8.3

              	
                Exculpatory
                  Provisions.

              	
                82

              
	
                Section
                  8.4

              	
                Reliance
                  by Administrative Agent.

              	
                83

              
	
                Section
                  8.5

              	
                Notice
                  of Default.

              	
                83

              
	
                Section
                  8.6

              	
                Non-Reliance
                  on Administrative Agent and Other Lenders.

              	
                83

              
	
                Section
                  8.7

              	
                Indemnification.

              	
                84

              
	
                Section
                  8.8

              	
                Administrative
                  Agent in Its Individual Capacity.

              	
                84

              
	
                Section
                  8.9

              	
                Successor
                  Administrative Agent.

              	
                84

              
	
                Section
                  8.10

              	
                Other
                  Agents.

              	
                85

              
	
                Section
                  8.11

              	
                Collateral
                  and Guaranty Matters.

              	
                85

              
	 	 	 
	
                ARTICLE
                  IX MISCELLANEOUS

              	
                86

              
	
                Section
                  9.1

              	
                Amendments,
                  Waivers and Release of Collateral.

              	
                86

              
	
                Section
                  9.2

              	
                Notices.

              	
                88

              
	
                Section
                  9.3

              	
                No
                  Waiver; Cumulative Remedies.

              	
                90

              
	
                Section
                  9.4

              	
                Survival
                  of Representations and Warranties.

              	
                90

              
	
                Section
                  9.5

              	
                Payment
                  of Expenses and Taxes; Indemnity.

              	
                90

              
	
                Section
                  9.6

              	
                Successors
                  and Assigns; Participations.

              	
                92

              
	
                Section
                  9.7

              	
                Right
                  of Set off; Sharing of Payments.

              	
                96

              
	
                Section
                  9.8

              	
                Table
                  of Contents and Section Headings.

              	
                97

              
	
                Section
                  9.9

              	
                Counterparts;
                  Integration; Effectiveness; Electronic Execution.

              	
                97

              
	
                Section
                  9.10

              	
                Severability.

              	
                97

              
	
                Section
                  9.11

              	
                Integration.

              	
                97

              
	
                Section
                  9.12

              	
                Governing
                  Law.

              	
                98

              
	
                Section
                  9.13

              	
                Consent
                  to Jurisdiction; Service of Process and Venue.

              	
                98

              

      

       

      
        
          
          

        

        
          iii

          
            

          

        

        
          
          

        

      

       

      
        	
                Section
                  9.14

              	
                Confidentiality.

              	
                99

              
	
                Section
                  9.15

              	
                Acknowledgments.

              	
                99

              
	
                Section
                  9.16

              	
                Waivers
                  of Jury Trial.

              	
                100

              
	
                Section
                  9.17

              	
                Patriot
                  Act Notice.

              	
                100

              
	
                Section
                  9.18

              	
                Resolution
                  of Drafting Ambiguities.

              	
                100

              
	
                Section
                  9.19

              	
                Continuing
                  Agreement.

              	
                101

              
	 	 	 
	
                ARTICLE
                  X GUARANTY

              	
                101

              
	
                Section
                  10.1

              	
                The
                  Guaranty.

              	
                101

              
	
                Section
                  10.2

              	
                Bankruptcy.

              	
                102

              
	
                Section
                  10.3

              	
                Nature
                  of Liability.

              	
                102

              
	
                Section
                  10.4

              	
                Independent
                  Obligation.

              	
                103

              
	
                Section
                  10.5

              	
                Authorization.

              	
                103

              
	
                Section
                  10.6

              	
                Reliance.

              	
                103

              
	
                Section
                  10.7

              	
                Waiver.

              	
                103

              
	
                Section
                  10.8

              	
                Limitation
                  on Enforcement.

              	
                104

              
	
                Section
                  10.9

              	
                Confirmation
                  of Payment.

              	
                105

              

      

       

      
 

      
        
          
          

        

        
          iv

          
            

          

        

        
          
          

        

      

      
 

      
        
          	
                  Schedules

                	 
	 	 
	
                  Schedule
                    1.1(a)

                	
                  Investments

                
	
                  Schedule
                    1.1(b)

                	
                  Liens

                
	
                  Schedule
                    1.1(c)

                	
                  Acquired
                    Properties

                
	
                  Schedule
                    1.1(d)

                	
                  Non-Restricted
                    Collateral 

                
	
                  Schedule
                    3.3

                	
                  Jurisdictions
                    of Organization and Qualification

                
	
                  Schedule
                    3.12

                	
                  Subsidiaries

                
	
                  Schedule
                    3.19(a)

                	
                  Location
                    of Real Property

                
	
                  Schedule
                    3.19(b)

                	
                  Location
                    of Collateral

                
	
                  Schedule
                    3.19(c)

                	
                  Chief
                    Executive Offices

                
	
                  Schedule
                    3.24

                	
                  Material
                    Contracts

                
	
                  Schedule
                    3.25

                	
                  Insurance

                
	
                  Schedule
                    6.1(b)

                	
                  Indebtedness

                
	
                  Schedule
                    6.14

                	
                  Accounts

                
	 	 
	
                  Exhibits

                	 
	 	 
	
                  Exhibit
                    1.1(a)

                	
                  Form
                    of Account Designation Notice

                
	
                  Exhibit
                    1.1(b)

                	
                  Form
                    of Assignment and Assumption

                
	
                  Exhibit
                    1.1(c)

                	
                  Form
                    of Deposit Account Control Agreement

                
	
                  Exhibit
                    1.1(d)

                	
                  Form
                    of Joinder Agreement

                
	
                  Exhibit
                    1.1(e)

                	
                  Form
                    of Notice of Borrowing

                
	
                  Exhibit
                    1.1(f)

                	
                  Form
                    of Notice of Conversion/Extension

                
	
                  Exhibit
                    1.1(g)

                	
                  [Intentionally
                    omitted]

                
	
                  Exhibit
                    1.1(h)

                	
                  Form
                    of Securities Account Control Agreement

                
	
                  Exhibit
                    2.2(a)

                	
                  Form
                    of Funding Indemnity Letter

                
	
                  Exhibit
                    2.2(d)

                	
                  Form
                    of Term Loan Note

                
	
                  Exhibit
                    4.1(a)

                	
                  Form
                    of Lender Consent

                
	
                  Exhibit
                    4.1(b)

                	
                  Form
                    of Officer’s Certificate

                
	
                  Exhibit
                    4.1(d)

                	
                  Form
                    of Landlord Waiver

                
	
                  Exhibit
                    4.1(g)

                	
                  Form
                    of Solvency Certificate

                
	
                  Exhibit
                    4.1(p)

                	
                  Form
                    of Financial Condition Certificate

                
	
                  Exhibit
                    4.1(q)

                	
                  Form
                    of Patriot Act Certificate

                
	
                  Exhibit
                    5.2(b)

                	
                  Form
                    of Officer’s Compliance
                    Certificate

                

        

      

       

      
 

      

      

      
        
          
          

        

        
          v

          
            

          

        

        
          
          

        

      

       

      THIS
        CREDIT AGREEMENT,
        dated
        as of April 17,
        2007
        among CAPLEASE,
        LP
        a
        Delaware limited partnership (the “Borrower”),
        CAPITAL LEASE FUNDING, INC., a Maryland corporation
        (the “Parent”)
        and
        each of those Material Domestic Subsidiaries of the Borrower identified as
        a
“Guarantor” on the signature pages hereto and such other Material Domestic
        Subsidiaries of the Borrower as may from time to time become a party hereto
        (the
        Parent and such Subsidiaries, each a “Guarantor”
and
        collectively, the “Guarantors”),
        the
        several banks and other financial institutions as are, or may from time to
        time
        become parties to this Agreement (each a “Lender”
and,
        collectively, the “Lenders”),
        and
        WACHOVIA BANK, NATIONAL ASSOCIATION, a national banking association, as
        administrative agent for the Lenders hereunder (in such capacity, the
“Administrative
        Agent”).

      

      

      W I T N E S S E TH:

      

      WHEREAS,
        the
        Credit Parties (as hereinafter defined) have requested that the Lenders make
        loans and other financial accommodations to the Credit Parties in an aggregate
        amount of up to $211,000,000, as more particularly described herein;
        and

      

      WHEREAS,
        the
        Lenders have agreed to make such loans and other financial accommodations
        to the
        Credit Parties 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, such parties hereby agree as
        follows:

      

      

      ARTICLE
        I

      

      DEFINITIONS

      

      Section
        1.1 Defined
        Terms.

      

      As
        used
        in this Agreement, terms defined in the preamble to this Agreement have the
        meanings therein indicated, and the following terms have the following
        meanings:

      

      “2006
        Financials”
shall
        mean the financial statements included at Item 8 of the Parent’s Form 10-K filed
        with the SEC for the fiscal year ending December 31, 2006.

      

      “ABR
        Default Rate”
shall
        have the meaning set forth in Section 2.8. 

      

      “Account
        Designation Notice”
shall
        mean the Account Designation Notice dated as of the Closing Date from the
        Borrower to the Administrative Agent in substantially the form attached hereto
        as Exhibit
        1.1(a).

      

      “Acquired
        Company”
shall
        mean, collectively, EntreCap Real Estate III LLC and its
        Subsidiaries.

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      “Acquired
        Properties”
shall
        mean, collectively, the properties set forth in Schedule
        1.1(c)
        to this
        Agreement.

      

      “Acquisition”
shall
        mean the purchase of the outstanding Equity Interest of the Acquired Company
        by
        the Borrower.

      

      “Acquisition
        Documents”
shall
        mean (a)
        that
        certain Membership Interest Purchase Agreement dated as of March 14, 2007
        by and
        among the Borrower, as the purchaser and EntreCap Financial LLC, as the seller,
        (b)
        that
        certain Amendment to the Purchase Agreement dated as of April __, 2007 by
        and
        among the Borrower, as the purchaser and EntreCap Financial LLC, as the seller
        and (c)
        any
        other material agreement, document or instrument executed in connection with
        the
        foregoing, in each case as amended, modified, extended, restated, replaced,
        or
        supplemented from time to time.

      

      “Additional
        Credit Party”
shall
        mean each Person that becomes a Guarantor by execution of a Joinder Agreement
        in
        accordance with Section 5.10.

      

      “Administrative
        Agent”
or
        “Agent”
shall
        have the meaning set forth in the first paragraph of this Agreement and shall
        include any successors in such capacity.

      

      “Administrative
        Questionnaire”
shall
        mean an Administrative Questionnaire in a form supplied by the Administrative
        Agent.

      

      “Affiliate”
shall
        mean, 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.

      

      “Agreement”
or
        “Credit
        Agreement”
shall
        mean this Agreement, as amended, modified, extended, restated, replaced,
        or
        supplemented from time to time in accordance with its terms.

      

      “Alternate
        Base Rate”
shall
        mean, for any day, a rate per annum equal to the greater of (a)
        the
        Prime Rate in effect on such day and (b)
        the
        Federal Funds Effective Rate in effect on such day plus
        1/2
        of
        1%. For purposes hereof: “Prime
        Rate”
shall
        mean, at any time, the rate of interest per annum publicly announced or
        otherwise identified from time to time by Wachovia at its principal office
        in
        Charlotte, North Carolina as its prime rate. Each change in the Prime Rate
        shall
        be effective as of the opening of business on the day such change in the
        Prime
        Rate occurs. The parties hereto acknowledge that the rate announced publicly
        by
        Wachovia as its Prime Rate is an index or base rate and shall not necessarily
        be
        its lowest or best rate charged to its customers or other banks; and
“Federal
        Funds Effective Rate”
shall
        mean, for any day, 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 on the next succeeding Business Day by the Federal
        Reserve Bank of New York, or, if such rate is not so published on the next
        succeeding Business Day, the average of the quotations for the day of such
        transactions received by the Administrative Agent from three federal funds
        brokers of recognized standing selected by it. If for any reason the
        Administrative Agent shall have determined (which determination shall be
        conclusive in the absence of manifest error) that it is unable to ascertain
        the
        Federal Funds Effective Rate, for any reason, including the inability or
        failure
        of the Administrative Agent to obtain sufficient quotations in accordance
        with
        the terms above, the Alternate Base Rate shall be determined without regard
        to
        clause (b) of the first sentence of this definition, as appropriate, until
        the
        circumstances giving rise to such inability no longer exist. Any change in
        the
        Alternate Base Rate due to a change in the Prime Rate or the Federal Funds
        Effective Rate shall be effective on the opening of business on the date
        of such
        change.

      

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

      “Alternate
        Base Rate Loans”
shall
        mean Loans that bear interest at an interest rate based on the Alternate
        Base
        Rate.

      

      “Applicable
        Percentage”
shall
        mean, for any day, the rate per annum equal to 2.50% for the Initial Term
        and
        3.50% for the Extended Term. 

      

      “Approved
        Bank”
shall
        have the meaning set forth in the definition of “Cash Equivalents.”

      

      “Approved
        Mortgage”
shall
        mean any mortgage or deed of trust on any Acquired Property in existence
        as of
        the Closing Date.

      

      “Approved
        Fund”
shall
        mean any Fund that is administered, managed or underwritten by (a)
        a
        Lender, (b)
        an
        Affiliate of a Lender or (c)
        an
        entity or an Affiliate of an entity that administers or manages a
        Lender.

      

      “Asset
        Disposition”
shall
        mean the disposition of any or all of the assets (including, without limitation,
        the Equity Interest of a Subsidiary or any ownership interest in a joint
        venture) of any Credit Party or any Subsidiary to any party other than a
        Credit
        Party (or in the case of a Subsidiary, other than any other Subsidiary) whether
        by sale, lease, transfer or otherwise, in a single transaction or in a series
        of
        transactions. The term “Asset Disposition” shall not include (a)
        any
        Equity Issuance or (b)
        any
        Debt Issuance.

      

      “Assignment
        and Assumption”
shall
        mean an assignment and assumption entered into by a Lender and an Eligible
        Assignee (with the consent of any party whose consent is required by the
        definition of Eligible Assignee and Section 9.6), and accepted by the
        Administrative Agent, in substantially the form of Exhibit
        1.1(b)
        or any
        other form approved by the Administrative Agent.

      

      “Bankruptcy
        Code”
shall
        mean the Bankruptcy Code in Title 11 of the United States Code, as amended,
        modified, succeeded or replaced from time to time.

      

      “Bankruptcy
        Event”
shall
        mean any of the events described in Section 7.1(f).

      

      “Bankruptcy
        Event of Default”
shall
        mean an Event of Default specified in Section 7.1(f).

      

      “Borrower”
shall
        have the meaning set forth in the first paragraph of this
        Agreement.

      

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

      “Borrowing
        Date”
shall
        mean, in respect of any Loan, the date such Loan is made.

      

      “Business”
shall
        have the meaning set forth in Section 3.10.

      

      “Business
        Day”
shall
        mean any day other than a Saturday, Sunday or other day on which commercial
        banks in Charlotte, North Carolina or New York, New York are authorized or
        required by law to close; provided,
        however,
        that
        when used in connection with a rate determination, borrowing or payment in
        respect of a LIBOR Rate Loan, the term “Business Day” shall also exclude any day
        on which banks in London, England are not open for dealings in Dollar deposits
        in the London interbank market.

       

      “Capital
        Lease”
shall
        mean any lease of property, real or personal, the obligations with respect
        to
        which are required to be capitalized on a balance sheet of the lessee in
        accordance with GAAP.

      

      “Capital
        Lease Obligations”
shall
        mean the capitalized lease obligations relating to a Capital Lease determined
        in
        accordance with GAAP.

      

      “Cash
        Equivalents”
shall
        mean (a)
        securities issued or directly and fully guaranteed or insured by the United
        States of America or any agency or instrumentality thereof (provided
        that the
        full faith and credit of the United States of America is pledged in support
        thereof) having maturities of not more than twelve months from the date of
        acquisition (“Government
        Obligations”),
        (b)
        Dollar
        denominated time deposits, certificates of deposit, Eurodollar time deposits
        and
        Eurodollar certificates of deposit of (i)
        any
        domestic commercial bank of recognized standing having capital and surplus
        in
        excess of $250,000,000 or (ii)
        any
        bank whose short-term commercial paper rating at the time of the acquisition
        thereof is at least A-1 or the equivalent thereof from S&P or from Moody’s
        is at least P-1 or the equivalent thereof from Moody’s (any such bank being an
“Approved
        Bank”),
        in
        each case with maturities of not more than 364 days from the date of
        acquisition, (c)
        commercial paper and variable or fixed rate notes issued by any Approved
        Bank
        (or by the parent company thereof) or any variable rate notes issued by,
        or
        guaranteed by any domestic corporation rated A-1 (or the equivalent thereof)
        or
        better by S&P or P-1 (or the equivalent thereof) or better by Moody’s and
        maturing within six months of the date of acquisition, (d)
        repurchase agreements with a bank or trust company (including a Lender) or
        a
        recognized securities dealer having capital and surplus in excess of
        $500,000,000 for direct obligations issued by or fully guaranteed by the
        United
        States of America, (e)
        obligations of any state of the United States or any political subdivision
        thereof for the payment of the principal and redemption price of and interest
        on
        which there shall have been irrevocably deposited Government Obligations
        maturing as to principal and interest at times and in amounts sufficient
        to
        provide such payment, (f)
        auction
        preferred stock rated in the highest short-term credit rating category by
        S&P or Moody’s, (g)
        money
        market accounts subject to Rule 2a-7 of the Exchange Act (“SEC
        Rule 2a-7”)
        which
        consist primarily of cash and cash equivalents set forth in clauses (a) through
        (f) above and of which 95% shall at all times be comprised of First Tier
        Securities (as defined in SEC Rule 2a-7) and any remaining amount shall at
        all
        times be comprised of Second Tier Securities (as defined in SEC Rule 2a-7)
        and
        (h)
        shares
        of any so-called “money market fund,” provided
        that
        such fund is registered under the Investment Company Act of 1940, has net
        assets
        of at least $100,000,000 and has an investment portfolio with an average
        maturity of 365 days or less. 

      

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

      “Change
        in Law”
shall
        mean the occurrence, after the date of this Agreement, of any of the following:
        (a) the adoption or taking effect of any law, rule, regulation or treaty,
        (b) any change in any law, rule, regulation or treaty or in the
        administration, interpretation or application thereof by any Governmental
        Authority or (c) the making or issuance of any request, guideline or
        directive (whether or not having the force of law) by any Governmental
        Authority.

      

      “Change
        of Control”
shall
        mean at any time the occurrence of any of the following events: (a)
        any
“person” or “group” (as such terms are used in Section 13(d) and 14(d) of 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 shall 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 35% or more of the then outstanding
        Voting
        Stock of the Parent; or (b)
        the
        replacement of a majority of the Board of Directors of the Parent over a
        two-year period from the directors who constituted the Board of Directors
        at the
        beginning of such period, and such replacement shall not have been approved
        by a
        vote of at least a majority of the Board of Directors of the Parent,
        respectively, then still in office who either were members of such Board
        of
        Directors at the beginning of such period or whose election as a member of
        such
        Board of Directors was previously so approved.

       

      “Closing
        Date”
shall
        mean the date of this Agreement.

      

      “Closing
        Date Term Loan”
shall
        have the meaning set forth in Section 2.2(a).

      

      “Code”
shall
        mean the Internal Revenue Code of 1986, as amended from time to
        time.

      

      “Collateral”
shall
        mean a collective reference to the collateral which is identified in, and
        at any
        time will be covered by, the Security Documents and any other property or
        assets
        of a Credit Party, whether tangible or intangible and whether real or personal,
        that may from time to time secure the Credit Party Obligations.

      

      “Commitment”
shall
        mean the Term Loan Commitments.

      

      “Commitment
        Percentage”
shall
        mean the Term Loan Commitment Percentage.

      

      “Commitment
        Period”
shall
        mean the period from and including the Closing Date through, but excluding
        the
        date that is five (5) days after the Closing Date.

      

      “Commonly
        Controlled Entity”
shall
        mean an entity, whether or not incorporated, which is under common control
        with
        the Borrower within the meaning of Section 4001(b)(1) of ERISA or is part
        of a
        group which includes the Borrower and which is treated as a single employer
        under Section 414(b) or 414(c) of the Code or, solely for purposes of Section
        412 of the Code to the extent required by such section, Section 414(m) or
        414(o)
        of the Code.

      

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

      “Consolidated”
shall
        mean, when used with reference to financial statements or financial statement
        items of the Borrower and its Subsidiaries or any other Person, such statements
        or items on a consolidated basis in accordance with the consolidation principles
        of GAAP.

      

      “Contractual
        Obligation”
shall
        mean, as to any Person, any provision of any security issued by such Person
        or
        of any contract, agreement, instrument or undertaking to which such Person
        is a
        party or by which it or any of its property is bound.

      

      “Control”
shall
        mean 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.

      

      “Credit
        Documents”
shall
        mean this Agreement, each of the Notes, any Joinder Agreement and the Security
        Documents and all other agreements, documents, certificates and instruments
        delivered to the Administrative Agent or any Lender by any Credit Party in
        connection therewith (other than any agreement, document, certificate or
        instrument related to a Hedging Agreement).

      

      “Credit
        Party”
shall
        mean any of the Borrower or the Guarantors.

      

      “Credit
        Party Obligations”
shall
        mean, without duplication, (a)
        all of
        the obligations, indebtedness and liabilities of the Credit Parties to the
        Lenders and the Administrative Agent, whenever arising, under this Agreement,
        the Notes or any of the other Credit Documents, including principal, interest,
        fees, reimbursements and indemnification obligations and other amounts
        (including, but not limited to, any interest accruing after the occurrence
        of a
        filing of a petition of bankruptcy under the Bankruptcy Code with respect
        to any
        Credit Party, regardless of whether such interest is an allowed claim under
        the
        Bankruptcy Code) and (b)
        all
        liabilities and obligations, whenever arising, owing from any Credit Party
        or
        any of their Subsidiaries to any Hedging Agreement Provider arising under
        any
        Secured Hedging Agreement.

      

      “Debt
        Issuance”
shall
        mean the issuance of any Indebtedness by any Credit Party or any of its
        Subsidiaries (including without limitation the issuing of any Indebtedness
        incurred after the Closing Date with respect to any Acquired Property or
        any
        derivative obligations thereof including the refinancing of any Acquired
        Property), but excluding any Indebtedness of any Credit Party and its
        Subsidiaries that (a) is not related to any Acquired Property or any derivative
        obligations thereof and (b) is permitted to be incurred pursuant to Sections
        6.1(a)-(i) hereof.

      

      “Default”
shall
        mean any of the events specified in Section 7.1, whether or not any requirement
        for the giving of notice or the lapse of time, or both, or any other condition,
        has been satisfied.

      

      “Defaulting
        Lender”
shall
        mean, at any time, any Lender that, at such time (a)
        has
        failed to make a Loan required pursuant to the terms of this Agreement,
        (b)
        has
        failed to pay to the Administrative Agent or any Lender an amount owed by
        such
        Lender pursuant to the terms of this Agreement and such default remains uncured,
        or (c)
        has
        been deemed insolvent or has become subject to a bankruptcy or insolvency
        proceeding or to a receiver, trustee or similar official.

      

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

      “Delayed
        Draw Date”
shall
        mean the date on which Delayed Draw Term Loan is made, if at all.

      

      “Delayed
        Draw Term Loan”
shall
        have the meaning set forth in Section 2.2(e).

      

      “Deposit
        Account Control Agreement”
shall
        mean an agreement, among a Credit Party, a depository institution, and the
        Administrative Agent, which agreement is either substantially in the form
        of
Exhibit 1.1(c)
        or in a
        form acceptable to the Administrative Agent and which provides the
        Administrative Agent with “control” (as such term is used in Article 9 of the
        Uniform Commercial Code) over the deposit account(s) described therein, as
        the
        same may be amended, modified, extended, restated, replaced, or supplemented
        from time to time.

      

      “Dollars”
and
        “$”
shall
        mean dollars in lawful currency of the United States of America.

      

      “Domestic
        Lending Office”
shall
        mean, initially, the office of each Lender designated as such Lender’s Domestic
        Lending Office shown in such Lender’s Administrative Questionnaire; and
        thereafter, such other office of such Lender as such Lender may from time
        to
        time specify to the Administrative Agent and the Borrower as the office of
        such
        Lender at which Alternate Base Rate Loans of such Lender are to be
        made.

      

      “Domestic
        Subsidiary”
shall
        mean any Subsidiary that is organized and existing under the laws of the
        United
        States or any state or commonwealth thereof or under the laws of the District
        of
        Columbia.

      

      “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 (i) the Administrative
        Agent, and (ii) unless an Event of Default has occurred and is continuing,
        the
        Borrower (each such approval not to be unreasonably withheld or delayed);
        provided
        that
        notwithstanding the foregoing, “Eligible Assignee” shall not include the
        Borrower or any of the Borrower’s Affiliates or Subsidiaries.

      

      “Environmental
        Laws”
shall
        mean any and all applicable foreign, federal, state, local or municipal laws,
        rules, orders, regulations, statutes, ordinances, codes, decrees, requirements
        of any Governmental Authority or other Requirement of Law (including common
        law)
        regulating, relating to or imposing liability or standards of conduct concerning
        protection of human health or the environment, as now or may at any time
        be in
        effect during the term of this Agreement.

      

      “Equity
        Interest”
shall
        mean (a)
        in the
        case of a corporation, capital stock, (b)
        in the
        case of an association or business entity, any and all shares, interests,
        participations, rights or other equivalents (however designated) of capital
        stock, (c)
        in the
        case of a partnership, partnership interests (whether general or limited),
        (d)
        in the
        case of a limited liability company, membership interests and (e)
        any
        other interest or participation that confers on a Person the right to receive
        a
        share of the profits and losses of, or distributions of assets of, the issuing
        Person.

      

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

      “Equity
        Issuance”
shall
        mean any issuance by any Credit Party or any Subsidiary to any Person which
        is
        not a Credit Party or a Subsidiary of (a)
        shares
        or interests of its Equity Interest, (b)
        any
        shares or interests of its Equity Interest pursuant to the exercise of options
        or warrants or similar rights, (c)
        any
        shares or interests of its Equity Interest pursuant to the conversion of
        any
        debt securities to equity or (d)
        warrants or options or similar rights that are exercisable or convertible
        into
        shares or interests of its Equity Interest. The term “Equity Issuance” shall not
        include (i)
        any
        Asset Disposition or (ii)
        any
        Debt Issuance.

      

      “ERISA”
shall
        mean the Employee Retirement Income Security Act of 1974, as amended from
        time
        to time.

      

      “Eurodollar
        Reserve Percentage”
shall
        mean for any day, the percentage (expressed as a decimal and rounded upwards,
        if
        necessary, to the next higher 1/100th of 1%) which is in effect for such
        day as
        prescribed by the Board of Governors of the Federal Reserve System (or any
        successor) for determining the maximum reserve requirement (including without
        limitation any basic, supplemental or emergency reserves) in respect of
        Eurocurrency liabilities, as defined in Regulation D of such Board as in
        effect
        from time to time, or any similar category of liabilities for a member bank
        of
        the Federal Reserve System in New York City.

      

      “Event
        of Default”
shall
        mean any of the events specified in Section 7.1; provided,
        however,
        that
        any requirement for the giving of notice or the lapse of time, or both, or
        any
        other condition, has been satisfied.

      

      “Exchange
        Act”
shall
        mean the Securities Exchange Act of 1934, as amended.

      

      “Excluded
        Taxes”
shall
        mean, with respect to the Administrative Agent, any Lender or any other
        recipient of any payment to be made by or on account of any obligation of
        the
        Borrower hereunder, (a) taxes imposed on or measured by its overall net
        income or gross receipts (however denominated), and franchise taxes imposed
        on
        it (in lieu of net income taxes), either (i) by the jurisdiction (or any
        political subdivision thereof) under the laws of which such recipient is
        organized or in which its principal office is located or, in the case of
        any
        Lender, in which its applicable lending office is located, or (ii) as a result
        of a present or former connection between the Administrative Agent or such
        Lender, as applicable, and the jurisdiction of the Governmental Authority
        imposing such tax or any political subdivision or taxing authority thereof
        or
        therein (other than any such connection arising solely from the Administrative
        Agent's or such Lender's having executed, delivered or performed its obligations
        or received a payment under, or enforced, this Agreement or any other Credit
        Document in such jurisdiction), (b) any branch profits taxes imposed by the
        United States of America or any similar tax imposed by any other jurisdiction
        in
        which the Borrower is located and (c) in the case of a Foreign Lender
        (other than an assignee pursuant to a request by the Borrower under Section
        2.18), any withholding tax that is imposed on amounts payable to such Foreign
        Lender at the time such Foreign Lender becomes a party hereto (or designates
        a
        new lending office) or is attributable to such Foreign Lender’s failure or
        inability (other than as a result of a Change in Law) to comply with Section
        2.16, except to the extent that such Foreign Lender (or its assignor, if
        any)
        was entitled, at the time of designation of a new lending office (or
        assignment), to receive additional amounts from the Borrower with respect
        to
        such withholding tax pursuant to Section 2.16. 

      

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

      “Extended
        Maturity Date”
shall
        mean the date that is one hundred thirty-five (135) days after the Closing
        Date.

      

      “Extended
        Term”
shall
        mean the period commencing with, but excluding the Term Loan Maturity Date
        and
        ending with and including the Extended Maturity Date.

      

      “Extension
        Fee”
shall
        have the meaning provided for such term in Section 2.5(c) of this
        Agreement.

      

      “Extension
        of Credit”
shall
        mean, as to any Lender, the making of a Loan by such Lender, any conversion
        of a
        Loan from one Type to another Type, any extension of any Loan. 

      

      “Extraordinary
        Receipt”
means
        any cash received by or paid to or for the account of any Person not in the
        ordinary course of business, including tax refunds, pension plan reversions,
        proceeds of insurance (other than proceeds of business interruption insurance
        to
        the extent such proceeds constitute compensation for lost earnings),
        condemnation awards (and payments in lieu thereof), indemnity payments and
        any
        purchase price adjustments; provided,
        however,
        that an
        Extraordinary Receipt shall not include cash receipts from tax refunds, proceeds
        of insurance, condemnation awards (or payments in lieu thereof) or indemnity
        payments to the extent that such proceeds, awards or payments (a) in respect
        of
        loss or damage to equipment, fixed assets or real property are applied (or
        in
        respect of which expenditures were previously incurred) to replace or repair
        the
        equipment, fixed assets or real property in respect of which such proceeds
        were
        received in accordance with the terms of Section 2.7 or (b) are received
        by any
        Person in respect of any third party claim against such Person and applied
        to
        pay (or to reimburse such Person for its prior payment of) such claim and
        the
        costs and expenses of such Person with respect thereto.

      

      “Factory
        Mutual Property”
shall
        mean that certain Property located at 1301 Atwood Avenue, Johnston, Rhode
        Island.

      

      “FCCR
        Adjusted EBITDA”
shall
        mean for any Person, (i) FCCR EBITDA less
        (ii)
        FCCR Loss Reserves for the applicable period. 

      

      “FCCR
        Capital Expenditures”
shall
        mean for any Person during any period, without duplication, the sum of (1)
        actual expenditures which are capitalized in conformity with GAAP and (ii)
        all
        recurring reserve payments for capital expenditures which are required of
        such
        Person under any other loan documents. 

      

      “FCCR
        Debt Service”
shall
        mean, for any period, the sum of (a) FCCR Interest Expense of the Parent
        and its
        Subsidiaries determined on a consolidated basis for such period, and (b)
        all
        regularly scheduled and required principal payments made with respect to
        Indebtedness of the Parent and its Subsidiaries during such period (other
        than
        principal payments made by Parent and its Subsidiaries on collateralized
        debt
        obligations, repurchase facilities, or other substantially similar
        arrangements), other than any balloon, bullet, margin or similar principal
        payment which repays such Indebtedness in full. FCCR Debt Service shall include
        a proportionate share of items (a) and (b) of all FCCR Unconsolidated
        Affiliates. 

      

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

      “FCCR
        EBITDA”
shall
        mean with respect to a Person for any period: (a) net income (or loss) of
        such
        Person for such period determined on a consolidated basis (prior to any impact
        from minority interests and before deduction of preferred dividends on preferred
        stock, if any, of the Parent), in accordance with GAAP, plus the following
        (but
        only to the extent actually included in determination of such net income
        (loss)): (i) income tax expense; (ii) extraordinary or non-recurring gains
        and
        losses; (iii) depreciation and amortization expense; and (iv) interest expense;
        plus (b) such Person’s pro rata share of EBITDA of its FCCR Unconsolidated
        Affiliates. 

       

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

      

      “FCCR
        Fixed Charges”
shall
        mean for any Person during any period, the sum of (a) FCCR Debt Service,
        (b) all
        FCCR Preferred Dividends, (c) Capital Lease Obligations paid or accrued during
        such period, and (d) FCCR Capital Expenditures (if any). FCCR Fixed Charges
        shall include a proportionate share of items (a), (b) and (c) of all FCCR
        Unconsolidated Affiliates. 

      

      “FCCR
        Indebtedness”
shall
        mean without duplication, all items that would constitute “Indebtedness” as such
        term is defined under GAAP or pursuant to the reporting requirements of Sections
        13 and 15 of the Securities Exchange Act of 1934, as amended, but including
        in
        any event (i) any mandatory redeemable FCCR Equity Interests, any trust
        preferred FCCR Equity Interests (to the extent owned directly or beneficially
        by
        any Credit Party or any of their Subsidiaries) and any contingent liabilities
        and (ii) without duplication, any and all of the Credit Parties’ or any of their
        Affiliates’ obligations under or in connection with FCCR Interest Rate
        Protection Agreements. 

      

      “FCCR
        Interest Expense”
shall
        mean any Person’s total interest expense incurred (in accordance with GAAP),
        including capitalized or accruing interest (but excluding interest funded
        under
        a construction loan), on a consolidated basis plus the Person’s pro rata share
        of FCCR Interest Expense from joint venture Investments and FCCR Unconsolidated
        Affiliates, without duplication for the most recent period. 

      

      “FCCR
        Interest
        Rate Protection Agreement”
shall
        mean any futures contract, options related contract, short sale of US treasury
        securities or any interest rate swap, cap, floor or collar agreement or any
        other similar arrangement providing for protection against fluctuations in
        interest rates or the exchange of nominal interest obligations, either generally
        or under specific contingencies and acceptable to the Administrative Agent.
        

      

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

      “FCCR
        Loss Reserves”
shall
        mean for any period of four trailing quarters, an amount equal to the greater
        of
        $500,000 or actual losses recorded on the Parent’s statement of operations for
        such period. The FCCR Loss Reserves shall be determined on an aggregate basis
        with respect to all assets of the Parent and its Subsidiaries and a
        proportionate share of all assets of all FCCR Unconsolidated Affiliates.
        

      

      “FCCR
        Preferred Dividends”
shall
        mean for any period and without duplication, all FCCR Restricted Payments
        paid
        or accrued during such period on FCCR Preferred Securities issued by the
        Credit
        Parties or their Subsidiaries. FCCR Preferred Dividends shall not include
        dividends or distributions paid or payable (a) solely in FCCR Equity Interests
        (other than mandatory redeemable stock) payable to holders of such class
        of FCCR
        Equity Interests; (b) to the Credit Parties or their Subsidiaries; or (c)
        constituting or resulting in the redemption of FCCR Preferred Securities,
        other
        than scheduled redemptions not constituting balloon, bullet or similar
        redemptions in full. 

      

      “FCCR
        Preferred Securities”
shall
        mean with respect to any Person, FCCR Equity Interests in such Person that
        are
        entitled to preference or priority over any other FCCR Equity Interest in
        such
        Person or the FCCR Indebtedness in respect of any payments on such preferred
        FCCR Equity Interests, including but not limited to, the payment (or accrual)
        of
        dividends or distribution of assets upon liquidation, or both. 

      

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

      

      “FCCR
        Unconsolidated Affiliates”
shall
        mean 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. 

      

      

      “Federal
        Funds Effective Rate”
shall
        have the meaning set forth in the definition of “Alternate Base
        Rate”.

      

      “Fixed
        Charge Coverage Ratio”
shall
        mean for any Person during any period, the FCCR Adjusted EBITDA for such
        period
        divided by the FCCR Fixed Charges for the same period.

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

      “Foreign
        Lender”
shall
        mean any Lender that is organized under the laws of a jurisdiction other
        than
        that in which the 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.

      

      “Foreign
        Subsidiary”
shall
        mean any Subsidiary that is not a Domestic Subsidiary.

      

      “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.

      

      “GAAP”
shall
        mean generally accepted accounting principles in effect in the United States
        of
        America (or, in the case of Foreign Subsidiaries with significant operations
        outside the United States of America, generally accepted accounting principles
        in effect from time to time in their respective jurisdictions of organization
        or
        formation) applied on a consistent basis, subject,
        however,
        in the
        case of determination of compliance with the financial covenants set out
        in
        Section 5.9 to the provisions of Section 1.3.

      

      “Government
        Acts”
shall
        have the meaning set forth in Section 2.17.

      

      “Government
        Obligations”
shall
        have the meaning set forth in the definition of “Cash Equivalents.”

      

      “Governmental
        Authority”
shall
        mean the government of the United States of America or any other nation,
        or of
        any political subdivision thereof, whether state or local, and any agency,
        authority, instrumentality, regulatory body, court, central bank or other
        entity
        exercising executive, legislative, judicial, taxing, regulatory or
        administrative powers or functions of or pertaining to government (including
        any
        supra-national bodies such as the European Union or the European Central
        Bank).

      

      “Guarantor”
shall
        mean the Parent and each Material Domestic Subsidiary of the Borrower from
        time
        to time party hereto.

      

      “Guaranty”
shall
        mean the guaranty of the Guarantors set forth in Article X.

      

      “Guaranty
        Obligations”
shall
        mean, with respect to any Person, without duplication, any obligations of
        such
        Person (other than endorsements in the ordinary course of business of negotiable
        instruments for deposit or collection) guaranteeing or intended to guarantee
        any
        Indebtedness of any other Person in any manner, whether direct or indirect,
        and
        including without limitation any obligation, whether or not contingent,
        (a)
        to
        purchase any such Indebtedness or any property constituting security therefor,
        (b)
        to
        advance or provide funds or other support for the payment or purchase of
        any
        such Indebtedness or to maintain working capital, solvency or other balance
        sheet condition of such other Person (including without limitation keep well
        agreements, maintenance agreements, comfort letters or similar agreements
        or
        arrangements) for the benefit of any holder of Indebtedness of such other
        Person, (c)
        to
        lease or purchase property, securities or services primarily for the purpose
        of
        assuring the holder of such Indebtedness, or (d)
        to
        otherwise assure or hold harmless the holder of such Indebtedness against
        loss
        in respect thereof. The amount of any Guaranty Obligation hereunder shall
        (subject to any limitations set forth therein) be deemed to be an amount
        equal
        to the outstanding principal amount (or maximum principal amount, if larger)
        of
        the Indebtedness in respect of which such Guaranty Obligation is
        made.

      

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

      “Hedging
        Agreement Provider”
shall
        mean any Person that enters into a Secured Hedging Agreement with a Credit
        Party
        or any of its Subsidiaries that is permitted by Section 6.1(e) to the extent
        such Person is a Lender, an Affiliate of a Lender or any other Person that
        was a
        Lender (or an Affiliate of a Lender) at any time (or whose Affiliate has
        ceased
        to be a Lender) under the Credit Agreement; provided,
        in the
        case of a Secured Hedging Agreement with a Person who is no longer a Lender,
        such Person shall be considered a Hedging Agreement Provider only through
        the
        stated maturity date (without extension or renewal) of such Secured Hedging
        Agreement. 

      

      “Hedging
        Agreements”
shall
        mean, with respect to any Person, any agreement entered into to protect such
        Person against fluctuations in interest rates, or currency or raw materials
        values, including, without limitation, any interest rate swap, cap or collar
        agreement or similar arrangement between such Person and one or more
        counterparties, any foreign currency exchange agreement, currency protection
        agreements, commodity purchase or option agreements or other interest or
        exchange rate hedging agreements.

      

      “Incorporation
        Event”
shall
        have the meaning set forth in Section 7.1(d).

      

      “Indebtedness”
shall
        mean, with
        respect to any Person, without duplication, (a)
        all
        obligations of such Person for borrowed money, (b)
        all
        obligations of such Person evidenced by bonds, debentures, notes or similar
        instruments, or upon which interest payments are customarily made, (c)
        all
        obligations of such Person under conditional sale or other title retention
        agreements relating to property purchased by such Person (other than customary
        reservations or retentions of title under agreements with suppliers entered
        into
        in the ordinary course of business), (d)
        all
        obligations (including, without limitation, earnout obligations) of such
        Person
        incurred, issued or assumed as the deferred purchase price of property or
        services purchased by such Person (other than trade debt incurred in the
        ordinary course of business and due within six months of the incurrence thereof)
        which would appear as liabilities on a balance sheet of such Person,
        (e)
        all
        obligations of such Person under take-or-pay or similar arrangements or under
        commodities agreements, (f)
        all
        Indebtedness of others secured by (or for which the holder of such Indebtedness
        has an existing right, contingent or otherwise, to be secured by) any Lien
        on,
        or payable out of the proceeds of production from, property owned or acquired
        by
        such Person, whether or not the obligations secured thereby have been assumed,
        (g)
        all
        Guaranty Obligations of such Person with respect to Indebtedness of another
        Person, (h)
        the
        principal portion of all Capital Lease Obligations plus
        any
        accrued interest thereon, (i)
        all
        obligations of such Person under Hedging Agreements, excluding any portion
        thereof which would be accounted for as interest expense under GAAP,
        (j)
        the
        maximum amount of all letters of credit issued or bankers’ acceptances
        facilities created for the account of such Person and, without duplication,
        all
        drafts drawn thereunder (to the extent unreimbursed), (k)
        all
        preferred Equity Interest (or FCCR Equity Interests, with respect to the
        calculation of the Fixed Charge Coverage Ratio) issued by such Person and
        which
        by the terms thereof could be (at the request of the holders thereof or
        otherwise) subject to mandatory sinking fund payments, redemption or other
        acceleration, (l)
        the
        principal balance outstanding under any synthetic lease, tax retention operating
        lease, off-balance sheet loan or similar off-balance sheet financing product
        plus
        any
        accrued interest thereon,
        (m)
        all
        indebtedness of the type described in clauses (a) through (i) of any partnership
        or unincorporated joint venture in which such Person is a general partner
        or a
        joint venturer and (n)
        obligations of such Person under non-compete agreements.

      

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

      “Indemnified
        Taxes”
means
        Taxes other than Excluded Taxes.

      

      “Indemnitee”
shall
        have the meaning set forth in Section 9.5(b).

      

      “Initial
        Term”
shall
        mean the period from and including the Closing Date to and including the
        Term
        Loan Maturity Date.

      

      “Insolvency”
shall
        mean, with respect to any Multiemployer Plan, the condition that such Plan
        is
        insolvent within the meaning of such term as used in Section 4245 of ERISA.
        

      

      “Interest
        Reserve Account”
shall
        mean that certain deposit account (including without limitation the deposits
        and
        certificates of deposit in such account) held at Wachovia Bank, National
        Association as account number 200032582594 subject
        to a Deposit Account Control Agreement.

      

      “Interest
        Payment Date”
shall
        mean (a)
        as to
        any Alternate Base Rate Loan, the last Business Day of each March, June,
        September and December and on the applicable Maturity Date, (b)
        as to
        any LIBOR Rate Loan, the last day of such Interest Period, each conversion
        date
        that is not the last day of an Interest Period and the applicable Maturity
        Date
        and (c)
        as to
        any Loan which is the subject of a mandatory prepayment required pursuant
        to
        Section 2.7(b), the date on which such mandatory prepayment is due.

      

      “Interest
        Period”
shall
        mean, with respect to any LIBOR Rate Loan,

      

      (a) initially,
        the period commencing on the Borrowing Date or conversion date, as the case
        may
        be, with respect to such LIBOR Rate Loan and ending one month thereafter,
        subject to availability to all applicable Lenders, as selected by the Borrower
        in the Notice of Borrowing or Notice of Conversion given with respect thereto;
        and

      

      (b) thereafter,
        each period commencing on the last day of the immediately preceding Interest
        Period applicable to such LIBOR Rate Loan and ending one month thereafter,
        subject to availability to all applicable Lenders, as selected by the Borrower
        by irrevocable notice to the Administrative Agent not less than three Business
        Days prior to the last day of the then current Interest Period with respect
        thereto; provided
        that the
        foregoing provisions are subject to the following:

      

      (i) if
        any
        Interest Period pertaining to a LIBOR Rate Loan would otherwise end on a
        day
        that is not a Business Day, such Interest Period shall be extended to the
        next
        succeeding Business Day unless the result of such extension would be to carry
        such Interest Period into another calendar month in which event such Interest
        Period shall end on the immediately preceding Business Day;

      

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

      (ii) any
        Interest Period pertaining to a LIBOR Rate Loan that begins on the last Business
        Day of a calendar month (or on a day for which there is no numerically
        corresponding day in the calendar month at the end of such Interest Period)
        shall end on the last Business Day of the relevant calendar month;

      

      (iii) if
        the
        Borrower shall fail to give notice as provided above, the Borrower shall
        be
        deemed to have selected an Alternate Base Rate Loan to replace the affected
        LIBOR Rate Loan;

      

      (iv) no
        Interest Period in respect of any Loan shall extend beyond the applicable
        Maturity Date and, further with regard to the Term Loan, no Interest Period
        shall extend beyond any principal amortization payment date with respect
        to such
        Term Loan unless the portion of such Term Loan consisting of Alternate Base
        Rate
        Loans together with the portion of such Term Loan consisting of LIBOR Rate
        Loans
        with Interest Periods expiring prior to or concurrently with the date such
        principal amortization payment date is due, is at least equal to the amount
        of
        such principal amortization payment due on such date; and

      

      (v) no
        more
        than two (2) LIBOR Rate Loans may be in effect at any time. For purposes
        hereof,
        LIBOR Rate Loans with different Interest Periods shall be considered as separate
        LIBOR Rate Loans, even if they shall begin on the same date and have the
        same
        duration, although borrowings, extensions and conversions may, in accordance
        with the provisions hereof, be combined at the end of existing Interest Periods
        to constitute a new LIBOR Rate Loan with a single Interest Period.

      

      “Internal
        Control Event”
shall
        mean a material weakness in, or fraud that involves management or other
        employees who have a significant role in, any Credit Party’s internal controls
        over financial reporting, in each case as described in the Securities
        Laws.

      

      “Intermediary”
shall
        mean Wachovia Bank, National Association, as holder of the Interest Reserve
        Account.

      

      “Investment”
shall
        mean (a)
        the
        acquisition (whether for cash, property, services, assumption of Indebtedness,
        securities or otherwise) of shares of Equity Interest, other ownership interests
        or other securities of any Person or bonds, notes, debentures or all or
        substantially all of the assets of any Person, (b)
        any
        deposit with, or advance, loan or other extension of credit to, any Person
        (other than deposits made in the ordinary course of business) or (c)
        any
        other capital contribution to or investment in any Person, including, without
        limitation, any Guaranty Obligation (including any support for a letter of
        credit issued on behalf of such Person) incurred for the benefit of such
        Person.

      

      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

      “Joinder
        Agreement”
shall
        mean a Joinder Agreement in substantially the form of Exhibit
        1.1(d),
        executed and delivered by an Additional Credit Party in accordance with the
        provisions of Section 5.10.

      

      “Lender”
shall
        have the meaning set forth in the first paragraph of this Agreement and shall
        include the Term Loan Lenders.

      

      “Lender
        Commitment Letter”
shall
        mean, with respect to any Lender, the letter (or other correspondence) to
        such
        Lender from the Administrative Agent notifying such Lender of its Term Loan
        Commitment Percentage.

      

      “LIBOR”
shall
        mean, for
        any
        LIBOR Rate Loan for any Interest Period therefor, the rate per annum (rounded
        upwards, if necessary, to the nearest 1/100 of 1%) appearing on Telerate
        Page 3750 (or any successor page) as the London interbank offered rate for
        deposits in Dollars at approximately 11:00 A.M.
        (London
        time) two Business Days prior to the first day of such Interest Period for
        a
        term comparable to such Interest Period. If for any reason such rate is not
        available, the term “LIBOR” shall mean, for any LIBOR Rate Loan for any Interest
        Period therefor, the rate per annum (rounded upwards, if necessary, to the
        nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as the London
        interbank offered rate for deposits in Dollars at approximately
        11:00 A.M.
        (London
        time) two (2) Business Days prior to the first day of such Interest Period
        for a
        term comparable to such Interest Period; provided,
        however,
        if more
        than one rate is specified on Reuters Screen LIBO Page, the applicable rate
        shall be the arithmetic mean of all such rates (rounded upwards, if necessary,
        to the nearest 1/100 of 1%). If,
        for
        any reason, neither of such rates is available, then “LIBOR” shall mean the rate
        per annum at which, as determined by the Administrative Agent in accordance
        with
        its customary practices, Dollars in an amount comparable to the Loans then
        requested are being offered to leading banks at approximately 11:00 A.M.
        London
        time, two (2) Business Days prior to the commencement of the applicable Interest
        Period for settlement in immediately available funds by leading banks in
        the
        London interbank market for a period equal to the Interest Period
        selected.

      

      “LIBOR
        Lending Office”
shall
        mean, initially, the office(s) of each Lender designated as such Lender’s LIBOR
        Lending Office in such Lender’s Administrative Questionnaire, which such office
        shall be located in the United States; and thereafter, such other office
        of such
        Lender as such Lender may from time to time specify to the Administrative
        Agent
        and the Borrower as the office of such Lender at which the LIBOR Rate Loans
        of
        such Lender are to be made.

      

      “LIBOR
        Rate”
shall
        mean a rate per annum (rounded upwards, if necessary, to the next higher
        1/100th
        of 1%) determined by the Administrative Agent pursuant to the following
        formula:

      

      
        	
                LIBOR
                  Rate = 

              	                          
                LIBOR             
                          
                
	 	1.0  -
                Eurodollar Reserve Percentage
	 	 

      

        “LIBOR
        Rate Loan”
shall
        mean Loans the rate of interest applicable to which is based on the LIBOR
        Rate.

      

      
        
          
          

        

        
          16

          
            

          

        

        
          
          

        

      

      “Lien”
shall
        mean any mortgage, pledge, hypothecation, assignment, deposit arrangement,
        encumbrance, lien (statutory or other), charge or other security interest
        or any
        preference, priority or other security agreement or preferential arrangement
        of
        any kind or nature whatsoever (including, without limitation, any conditional
        sale or other title retention agreement and any Capital Lease having
        substantially the same economic effect as any of the foregoing).

      

      “Loan”
shall
        mean a Term Loan.

      

      “Material
        Adverse Effect”
shall
        mean a material adverse effect on (a)
        the
        business, operations, property, assets, financial condition or prospects
        of the
        Borrower or of the Borrower and its Subsidiaries taken as a whole, (b)
        the
        ability of the Borrower or any Guarantor to perform its obligations, when
        such
        obligations are required to be performed, under this Agreement, any of the
        Notes
        or any other Credit Document or (c)
        the
        validity or enforceability of this Agreement, any of the Notes or any of
        the
        other Credit Documents or the rights or remedies of the Administrative Agent
        or
        the Lenders hereunder or thereunder.

      

      “Material
        Amount Contract”
shall
        mean any contract or other agreement, written or oral, of the Credit Parties
        or
        any of their Subsidiaries involving monetary liability of or to any such
        Person
        in an amount in excess of $5,000,000 per annum and any contract or other
        agreement, written or oral, of the Credit Parties or any of their Subsidiaries
        representing at least $5,000,000 of the total Consolidated revenues of the
        Parent and its Subsidiaries for any fiscal year.

      

      “Material
        Contract”
shall
        mean (a)
        any
        contract or other agreement listed on Schedule 3.24
        or filed
        as an Item 10 Exhibit with the Parent’s filings with the SEC, (b)
        each
        Approved Mortgage, (c)
        the
        Wachovia Repurchase Facility, (d)
        the
        Wachovia Acquisition Facility and (e)
        any
        other contract, agreement, permit or license, written or oral, of the Credit
        Parties or any of their Subsidiaries in which the failure to comply with
        could
        reasonably be expected to have a Material Adverse Effect. 

      

      “Material
        Domestic Subsidiary”
shall
        mean any Domestic Subsidiary of the Parent other than the SPE Affiliates.
        

      

      “Materials
        of Environmental Concern”
shall
        mean any gasoline or petroleum (including crude oil or any extraction thereof)
        or petroleum products or any hazardous or toxic substances, materials or
        wastes,
        defined or regulated as such in or under any Environmental Law, including,
        without limitation, asbestos, perchlorate, polychlorinated biphenyls and
        urea-formaldehyde insulation.

      

      “Maturity
        Date”
shall
        mean the Term Loan Maturity Date or if all of the conditions set forth in
        Section 2.3 of this Agreement have been satisfied, the Extended Maturity
        Date,
        if applicable. 

      

      “Moody’s”
shall
        mean Moody’s Investors Service, Inc.

      

      “Multiemployer
        Plan”
shall
        mean a Plan that is a multiemployer plan as defined in Section 4001(a)(3)
        of
        ERISA.

      

      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

      

      “Net
        Cash Proceeds”
shall
        mean the aggregate cash proceeds received by any Credit Party or any Subsidiary
        in respect of any Asset Disposition, Equity Issuance, Debt Issuance or
        Extraordinary Receipt, net of (a)
        direct
        costs (including, without limitation, legal, accounting and investment banking
        fees, and sales commissions) associated therewith, (b)
        amounts
        held in escrow to be applied as part of the purchase price of any Asset
        Disposition (c)
        taxes
        paid or payable as a result thereof, (d)
        the
        amount of any Indebtedness (other than Indebtedness owed to a Credit Party
        or
        any of their Subsidiaries) permitted by Section 6.1 that is secured by a
        Permitted Lien on the assets sold in an Asset Disposition that is required
        to be
        paid from such aggregate cash proceeds and (e)
        any
        prepayment premium, penalties or costs payable to Persons other than the
        Credit
        Parties and their Subsidiaries in connection with any Debt Issuance with
        respect
        to Indebtedness that is required to be paid from such aggregate cash proceeds
        of
        such Debt Issuance; it being understood that “Net Cash Proceeds” shall include,
        without limitation, any cash received upon the sale or other disposition
        of any
        non-cash consideration received by any Credit Party or any Subsidiary in
        any
        Asset Disposition, Equity Issuance, Debt Issuance or Extraordinary Receipt
        and
        any cash released from escrow as part of the purchase price in connection
        with
        any Asset Disposition.

      

      “Non-Restricted
        Collateral”
shall
        mean that certain Collateral set forth on Schedule
        1.1(d)
        hereto
        that is not subject to the Wachovia Repurchase Facility. 

      

      “Note”
or
        “Notes”
shall
        mean the Term Loan Notes, collectively, separately or individually, as
        appropriate.

      

      “Notice
        of Borrowing”
shall
        mean a request for a Term Loan in form set forth in Exhibit 1.1(e) to this
        Agreement and otherwise acceptable to the Administrative Agent. 

      

      “Notice
        of Conversion/Extension”
shall
        mean the written notice of conversion of a LIBOR Rate Loan to an Alternate
        Base
        Rate Loan or an Alternate Base Rate Loan to a LIBOR Rate Loan, or extension
        of a
        LIBOR Rate Loan, in each case substantially in the form of Exhibit
        1.1(f).

      

      “OFAC”
shall
        mean the U.S. Department of the Treasury’s Office of Foreign Assets
        Control.

      

      “Operating
        Lease”
shall
        mean, as applied to any Person, any lease (including, without limitation,
        leases
        which may be terminated by the lessee at any time) of any property (whether
        real, personal or mixed) which is not a Capital Lease other than any such
        lease
        in which that Person is the lessor.

      

      “Origination
        Fee”
shall
        have the meaning provided for such term in Section 2.5(b) of this
        Agreement.

      

      “Other
        Taxes”
shall
        mean all present or future stamp or documentary taxes or any other excise
        or
        property taxes, charges or similar levies arising from any payment made
        hereunder or under any other Credit Document or from the execution, delivery
        or
        enforcement of, or otherwise with respect to, this Agreement or any other
        Credit
        Document.

      

      
        
          
          

        

        
          18

          
            

          

        

        
          
          

        

      

      “Parent”
has
        the
        meaning assigned to such term in the Recitals of this Agreement.

      

      “Participant”
has
        the
        meaning assigned to such term in clause (d) of Section 9.6.

      

      “Patriot
        Act”
shall
        mean the USA Patriot Act, Title III of Pub. L. 107-56, signed into law October
        26, 2001.

      

      “PBGC”
shall
        mean the Pension Benefit Guaranty Corporation established pursuant to Subtitle
        A
        of Title IV of ERISA.

      

      “Permitted
        Investments”
shall
        mean:

      

      (a) cash
        and
        Cash Equivalents;

      

      (b) Investments
        set forth on Schedule
        1.1(a)
        or in
        the 2006 Financials;

      

      (c) receivables
        owing to the Credit Parties or any of their Subsidiaries or any receivables
        and
        advances to suppliers, in each case if created, acquired or made in the ordinary
        course of business and payable or dischargeable in accordance with customary
        trade terms;

      

      (d) Investments
        in and loans to any Credit Party;

      

      (e) loans
        and
        advances to officers, directors and employees in an aggregate amount not
        to
        exceed $100,000 at any time outstanding; provided
        that
        such loans and advances shall comply with all applicable Requirements of
        Law
        (including Sarbanes-Oxley);

      

      (f) Investments
        (including debt obligations) received in connection with the bankruptcy or
        reorganization of suppliers and customers and in settlement of delinquent
        obligations of, and other disputes with, customers and suppliers arising
        in the
        ordinary course of business;

      

      (g) Investments,
        acquisitions or transactions permitted under Section 6.4(b);

      

      (h) Hedging
        Agreements to the extent permitted hereunder;

      

      (i) Investments
        by Credit Parties in SPE Affiliates in the form of loans (including without
        limitation loans evidenced by A1 and B notes) to such SPE Affiliates that
        are
        secured by Properties; provided (i) that such Investment together with other
        loans on such Property do not exceed the fair market value of such Property
        at
        the time such Investment is made and (ii) no Default or Event of Default
        has
        occurred and is continuing at the time such Investment is made; and

      

      
        
          
          

        

        
          19

          
            

          

        

        
          
          

        

      

      (j) additional
        loan advances and/or Investments of a nature not contemplated by the foregoing
        clauses hereof; provided
        that
        such loans, advances and/or Investments made after the Closing Date pursuant
        to
        this clause shall not exceed an aggregate amount of $5,000,000 at any one
        time
        outstanding.

      

      “Permitted
        Liens”
shall
        mean:

      

      (a) Liens
        created by or otherwise existing under or in connection with this Agreement
        or
        the other Credit Documents in favor of the Administrative Agent on behalf
        of the
        Secured Parties;

      

      (b) Liens
        in
        favor of a Hedging Agreement Provider in connection with a Secured Hedging
        Agreement; provided
        that
        such Liens shall secure the Credit Party Obligations and the obligations
        under
        such Secured Hedging Agreement on a pari passu basis;

      

      (c) Liens
        securing Indebtedness to the extent permitted under Section 6.1(c);

      

      (d) Liens
        for
        taxes, assessments, charges or other governmental levies not yet due or as
        to
        which the period of grace (not to exceed sixty (60) days), if any, related
        thereto has not expired or which are being contested in good faith by
        appropriate proceedings; provided
        that
        adequate reserves with respect thereto are maintained on the books of any
        Credit
        Party or its Subsidiaries, as the case may be, in conformity with
        GAAP;

      

      (e) statutory
        Liens such as carriers’, warehousemen’s, mechanics’, materialmen’s, landlords’,
        repairmen’s or other like Liens arising in the ordinary course of business which
        are not overdue for a period of more than sixty (60) days or which are being
        contested in good faith by appropriate proceedings; provided
        that a
        reserve or other appropriate provision shall have been made therefor (to
        the
        extent required by GAAP) and the aggregate amount of such Liens is less
        than $500,000;
        provided, further, the foregoing proviso shall not apply to the SPE
        Affiliates;

      

      (f) pledges
        or deposits in connection with workers’ compensation, unemployment insurance and
        other social security legislation and deposits securing liability to insurance
        carriers under insurance or self-insurance arrangements in an aggregate amount
        not to exceed $500,000;

      

      (g) deposits
        to secure the performance of bids, trade contracts (other than for borrowed
        money), leases, statutory obligations, surety and appeal bonds, performance
        bonds and other obligations of a like nature incurred in the ordinary course
        of
        business; 

      

      (h) easements,
        rights of way, restrictions and other similar encumbrances affecting real
        property which do not in any case materially detract from the value of the
        property subject thereto or materially interfere with the ordinary conduct
        of
        the business of the applicable Person; 

      

      
        
          
          

        

        
          20

          
            

          

        

        
          
          

        

      

      (i) Liens
        existing on the Closing Date and set forth on Schedule
        1.1(b)
        or with
        respect to the SPE Affiliates, set forth in the 2006 Financials; provided
        that
        (i) no such Lien shall at any time be extended to cover property or assets
        other than the property or assets subject thereto on the Closing Date and
        improvements thereon and (ii) the principal amount of the Indebtedness
        secured by such Lien shall not be extended, renewed, refunded or
        refinanced;

      

      (j) any
        extension, renewal or replacement (or successive extensions, renewals or
        replacements), in whole or in part, of any Lien referred to in this definition
        (other than Liens set forth on Schedule
        1.1(b));
        provided
        that
        such extension, renewal or replacement Lien shall be limited to all or a
        part of
        the property which secured the Lien so extended, renewed or replaced (plus
        improvements on such property);

      

      (k) Liens
        arising in the ordinary course of business by virtue of any contractual,
        statutory or common law provision relating to banker’s Liens, rights of set-off
        or similar rights and remedies covering deposit or securities accounts
        (including funds or other assets credited thereto) or other funds maintained
        with a depository institution or securities intermediary;

      

      (l) any
        zoning, building or similar laws or rights reserved to or vested in any
        Governmental Authority;

      

      (m) restrictions
        on transfers of securities imposed by applicable Securities Laws;

      

      (n) Liens
        arising out of judgments or awards not resulting in an Event of Default;
        provided
        that the
        applicable Credit Party or Subsidiary shall in good faith be prosecuting
        an
        appeal or proceedings for review;

      

      (o) Liens
        on
        the property of a Person existing at the time such Person becomes a Subsidiary
        of a Credit Party in a transaction permitted hereunder securing Indebtedness
        in
        an aggregate principal amount not to exceed $500,000 for all such Persons;
        provided,
        however,
        that
        any such Lien may not extend to any other property of any Credit Party or
        any
        other Subsidiary that is not a Subsidiary of such Person; provided,
        further,
        that
        any such Lien was not created in anticipation of or in connection with the
        transaction or series of transactions pursuant to which such Person became
        a
        Subsidiary of a Credit Party; 

      

      (p)
         any
        interest or title of a lessor, licensor or sublessor under any lease, license
        or
        sublease entered into by any Credit Party or any Subsidiary thereof in the
        ordinary course of its business and covering only the assets so leased, licensed
        or subleased; 

      

      
        
          
          

        

        
          21

          
            

          

        

        
          
          

        

      

      (q) assignments
        of insurance or condemnation proceeds provided to landlords (or their
        mortgagees) pursuant to the terms of any lease and Liens or rights reserved
        in
        any lease for rent or for compliance with the terms of such lease; 

      

      (r) Liens
        created after the Closing Date on the Non-Restricted Collateral to secure
        the
        Wachovia Repurchase Facility;

      

      (s) Liens
        granted by SPE Affiliates securing Indebtedness on investments in Properties
        or
        other real estate assets made in the ordinary course of business to the extent
        permitted under Section 6.1(h); provided,
        that such Lien attaches solely to the property or other real estate asset
        so acquired in such transaction, leases and other contracts related to such
        property or other real estate asset and the rent and other proceeds derived
        from
        such property or other real estate asset; and

      

      (t) additional
        Liens so long as the principal amount of Indebtedness and other obligations
        secured thereby does not exceed $5,000,000 in the aggregate.

      

      “Person”
means
        any natural person, corporation, limited liability company, trust, joint
        venture, association, company, partnership, Governmental Authority or other
        entity.

      

      “Plan”
shall
        mean, as of any date of determination, any employee benefit plan which is
        covered by Title IV of ERISA and in respect of which any Credit Party or
        a
        Commonly Controlled Entity is (or, if such plan were terminated at such time,
        would under Section 4069 of ERISA be deemed to be) an “employer” as defined in
        Section 3(5) of ERISA.

      

      “Pledge
        Agreement”
shall
        mean the Pledge Agreement dated as of the Closing Date executed by the Credit
        Parties in favor of the Administrative Agent, for the benefit of the Secured
        Parties, as the same may from time to time be amended, modified, extended,
        restated, replaced, or supplemented from time to time in accordance with
        the
        terms hereof and thereof.

      

      “Prime
        Rate”
shall
        have the meaning set forth in the definition of Alternate Base
        Rate.

      

      “Pro
        Forma Basis”
shall
        mean, with
        respect to any transaction, that
        such
        transaction shall be deemed to have occurred as of the first day of the
        year-to-date period ending as of the most recent quarter end
        preceding the date of such transaction.

      

      “Properties”
shall
        have the meaning set forth in Section 3.10(a).

      

      “Register”
shall
        have the meaning set forth in Section 9.6(c).

      

      “REIT”
means
        a
        Person qualifying as a “real estate investment trust” under sections 856-859 of
        the Code and the regulations and rulings of the Internal Revenue Service
        issued
        thereunder.

      

      
        
          
          

        

        
          22

          
            

          

        

        
          
          

        

      

      “Related
        Parties”
shall
        mean, 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.

      

      “Reorganization”
shall
        mean, with respect to any Multiemployer Plan, the condition that such Plan
        is in
        reorganization within the meaning of such term as used in Section 4241 of
        ERISA.

      

      “Reportable
        Event”
shall
        mean any of the events set forth in Section 4043(c) of ERISA, other than
        those
        events as to which the thirty-day notice period is waived under PBGC
        Reg. §4043.

      

      “Required
        Lenders”
shall
        mean, as of any date of determination, Lenders holding at least a majority
        of
        the outstanding Term Loan; provided,
        however,
        that if
        any Lender shall be a Defaulting Lender at such time, then there shall be
        excluded from the determination of Required Lenders, the Credit Party
        Obligations owing to such Defaulting Lender and such Defaulting Lender’s
        Commitments.

      

      “Requirement
        of Law”
shall
        mean, as to any Person, the articles or certificate of incorporation an by
        laws
        or other organizational or governing documents of such Person, and each law,
        treaty, rule or regulation or determination of an arbitrator or a court or
        other
        Governmental Authority, in each case applicable to or binding upon such Person
        or any of its property or to which such Person or any of its property is
        subject.

      

      “Responsible
        Officer”
shall
        mean, for any Credit Party, any duly authorized officer thereof and in which
        the
        Administrative Agent has an incumbency certificate indicating such officer
        is a
        duly authorized officer thereof.

      

      “Restricted
        Payment”
shall
        mean (a)
        any
        dividend or other distribution, direct or indirect, on account of any shares
        (or
        equivalent) of any class of Equity Interest of any Credit Party or any of
        its
        Subsidiaries, now or hereafter outstanding, (b)
        any
        redemption, retirement, sinking fund or similar payment, purchase or other
        acquisition for value, direct or indirect, of any shares (or equivalent)
        of any
        class of Equity Interest of any Credit Party or any of its Subsidiaries,
        now or
        hereafter outstanding, (c)
        any
        payment made to retire, or to obtain the surrender of, any outstanding warrants,
        options or other rights to acquire shares of any class of Equity Interest
        of any
        Credit Party or any of its Subsidiaries, now or hereafter outstanding,
        (d)
        any
        payment with respect to any earnout obligation, (e)
        any
        payment or prepayment of principal of, premium, if any, or interest on,
        redemption, purchase, retirement, defeasance, sinking fund or similar payment
        with respect to, any Subordinated Debt of any Credit Party or any of its
        Subsidiaries and (f)
        the
        payment by any Credit Party or any of its Subsidiaries of any management,
        advisory or consulting fee to any Person or the payment of any extraordinary
        salary, bonus or other form of compensation to any Person who is directly
        or
        indirectly a significant partner, shareholder, owner or executive officer
        of any
        such Person, to the extent such extraordinary salary, bonus or other form
        of
        compensation is not included in the corporate overhead of such Credit Party
        or
        such Subsidiary; provided, however, that no occurrence or transaction referred
        to above in this paragraph between or among Credit Parties shall be deemed
        to be
        a Restricted Payment.

      

      
        
          
          

        

        
          23

          
            

          

        

        
          
          

        

      

      “S&P”
shall
        mean Standard & Poor’s Ratings Services, a division of The McGraw Hill
        Companies, Inc.

      

      “Sanctioned
        Country”
shall
        mean a country subject to a sanctions program identified on the list maintained
        by OFAC and made publicly available from time to time.

      

      “Sanctioned
        Person”
shall
        mean (a)
        a
        Person named on the list of “Specially Designated Nationals and Blocked Persons”
maintained by OFAC and made publicly available from time to time, or
        (b)
        (i)
        an
        agency of the government of a Sanctioned Country, (ii)
        an
        organization controlled by a Sanctioned Country, or (iii)
        a
        person resident in a Sanctioned Country, to the extent subject to a sanctions
        program administered by OFAC.

      

      “Sarbanes-Oxley”
shall
        mean the Sarbanes-Oxley Act of 2002.

      

      “SEC”
shall
        mean the Securities and Exchange Commission or any successor Governmental
        Authority.

      

      “Secured
        Hedging Agreement”
shall
        mean any Hedging Agreement between a Credit Party and a Hedging Agreement
        Provider, as amended, modified, extended, restated, replaced, or supplemented
        from time to time.

      

      “Secured
        Hedging Obligations”
shall
        mean, without duplication, all of the obligations, indebtedness and liabilities
        of the Credit Parties to the Hedging Agreement Providers, whenever arising,
        under the Secured Hedging Agreements, including principal, interest, fees,
        premiums, scheduled periodic payments, breakage, termination and other payments,
        reimbursements and indemnification obligations and other amounts (including,
        but
        not limited to, any interest accruing after the occurrence of a filing of
        a
        petition of bankruptcy under the Bankruptcy Code with respect to any Credit
        Party, regardless of whether such interest is an allowed claim under the
        Bankruptcy Code).

      

      “Secured
        Parties”
shall
        mean the Administrative Agent, the Lenders and the Hedging Agreement
        Providers.

      

      “Securities
        Account Control Agreement”
shall
        mean an agreement, among a Credit Party, a securities intermediary, and the
        Administrative Agent, which agreement is either substantially in the form
        of
Exhibit 1.1(h)
        or in a
        form acceptable to the Administrative Agent and which provides the
        Administrative Agent with “control” (as such term is used in Articles 8 and 9 of
        the Uniform Commercial Code) over the securities account(s) described therein,
        as the same may be as amended, modified, extended, restated, replaced, or
        supplemented from time to time.

      

      “Securities
        Act”
shall
        mean the Securities Act of 1933, together with any amendment thereto or
        replacement thereof and any rules or regulations promulgated
        thereunder.

      

      “Securities
        Laws”
shall
        mean the Securities Act, the Exchange Act, Sarbanes-Oxley and the applicable
        accounting and auditing principles, rules, standards and practices promulgated,
        approved or incorporated by the SEC or the Public Company Accounting Oversight
        Board, as each of the foregoing may be amended and in effect on any applicable
        date hereunder.

      

      
        
          
          

        

        
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      “Security
        Agreement”
shall
        mean the Security Agreement dated as of the Closing Date executed by the
        Credit
        Parties in favor of the Administrative Agent, for the benefit of the Secured
        Parties, as amended, modified, extended, restated, replaced, or supplemented
        from time to time in accordance with its terms.

      

      “Security
        Documents”
shall
        mean the Security Agreement, the Pledge Agreement, each Deposit Account Control
        Agreement and all other agreements, documents and instruments relating to,
        arising out of, or in any way connected with any of the foregoing documents
        or
        granting to the Administrative Agent, Liens or security interests to secure,
        inter alia, the Credit Party Obligations whether now or hereafter executed
        and/or filed, each as may be amended from time to time in accordance with
        the
        terms hereof, executed and delivered in connection with the granting, attachment
        and perfection of the Administrative Agent’s security interests and liens
        arising thereunder, including, without limitation, UCC financing
        statements.

      

      “Single
        Employer Plan”
shall
        mean any Plan that is not a Multiemployer Plan.

      

      “SPE
        Affiliate”
shall
        mean a single purpose entity that is a Subsidiary of the Parent or the Borrower
        formed solely for the purposes of owning real estate other than the Acquired
        Properties or financing other real estate assets through a collateralized
        debt
        obligation which Subsidiary shall have such corporate and capital structure,
        and
        have governing documents having such terms and restrictions, as shall be
        consistent with bankruptcy-remote “special-purpose entities” in the form of
        Exhibit C attached to the Wachovia Acquisition Facility or otherwise reasonably
        satisfactory to the Administrative Agent. Notwithstanding the foregoing,
        (a) no
        Subsidiary that owns an Acquired Property shall be an SPE Affiliate and (b)
        SPE
        Affiliates shall not be required to have independent directors, and
“non-consolidation” opinions. 

      

      “Specified
        Event”
shall
        mean (a) a Default or Event of Default arising as a result of either (i)
        any
        nonpayment by any Credit Party or (ii) any Bankruptcy Event, or (b) an
        acceleration of any of the Credit Party Obligations.

      

      “Subordinated
        Debt”
shall
        any Indebtedness incurred by any Credit Party which by its terms is specifically
        subordinated in right of payment to the prior payment of the Credit Party
        Obligations and contains subordination and other terms acceptable to the
        Administrative Agent.

      

      “Subsidiary”
shall
        mean, as to any Person, a corporation, partnership, limited liability company
        or
        other entity of which shares of stock or other ownership interests having
        ordinary voting power (other than stock or such other ownership interests
        having
        such power only by reason of the happening of a contingency) to elect a majority
        of the board of directors or other managers of such corporation, limited
        liability company, partnership or other entity are at the time owned, or
        the
        management of which is otherwise controlled, directly or indirectly through
        one
        or more intermediaries, or both, by such Person. Unless otherwise qualified,
        all
        references to a “Subsidiary” or to “Subsidiaries” in this Agreement shall refer
        to a Subsidiary or Subsidiaries of the Parent.

      

      
        
          
          

        

        
          25

          
            

          

        

        
          
          

        

      

      “Taxes”
shall
        mean all present or future taxes, levies, imposts, duties, deductions,
        withholdings, assessments, fees or other charges imposed by any Governmental
        Authority, including any interest, additions to tax or penalties applicable
        thereto.

      

      “Term
        Loan”
means
        collectively, the Closing Date Term Loan and the Delayed Draw Term Loan,
        unless
        the context otherwise requires, in which case such term shall mean the Closing
        Date Term Loan or the Delayed Draw Term Loan, as applicable. 

      

      “Term
        Loan Commitment”
shall
        mean, with respect to each Term Loan Lender, the commitment of such Term
        Loan
        Lender to make its portion of the Term Loan in a principal amount equal to
        such
        Term Loan Lender’s Term Loan Commitment Percentage of the Term Loan Committed
        Amount.

      

      “Term
        Loan Commitment Percentage”
shall
        mean, for any Term Loan Lender, the percentage identified as its Term Loan
        Commitment Percentage in its Lender Commitment Letter, or in the Assignment
        and
        Assumption pursuant to which such Lender became a Lender hereunder, as such
        percentage may be modified in connection with any assignment made in accordance
        with the provisions of Section 9.6(c).

      

      “Term
        Loan Committed Amount”
shall
        have the meaning set forth in Section 2.2(a).

      

      “Term
        Loan Lender”
shall
        mean a Lender holding a Term Loan Commitment or a portion of the outstanding
        Term Loan.

      

      “Term
        Loan Maturity Date”
shall
        mean the date that is ninety (90) days following the Closing Date.

      

      “Term
        Loan Note”
or
        “Term
        Loan Notes”
shall
        mean the promissory notes of the Borrower (if any) in favor of any of the
        Term
        Loan Lenders evidencing the portion of the Term Loan provided by any such
        Term
        Loan Lender pursuant to Section 2.2(a), individually or collectively, as
        appropriate, as such promissory notes may be amended, modified, extended,
        restated, replaced, or supplemented from time to time.

      

      “Tranche”
shall
        mean the collective reference to (a)
        LIBOR
        Rate Loans whose Interest Periods begin and end on the same day and
        (b)
        Alternate Base Rate Loans made on the same day.

      

      “Transactions”
shall
        mean the closing of this Agreement, the other Credit Documents, the acquisition
        of the Acquired Company and the Acquired Properties and the other transactions
        contemplated hereby to occur in connection with such closing (including,
        without
        limitation, the initial borrowings under the Credit Documents and the payment
        of
        fees and expenses in connection with all of the foregoing).

      

      “Transfer
        Effective Date”
shall
        have the meaning set forth in each Assignment and Assumption.

      

      
        
          
          

        

        
          26

          
            

          

        

        
          
          

        

      

      “Type”
shall
        mean, as to any Loan, its nature as an Alternate Base Rate Loan or LIBOR
        Rate
        Loan, as the case may be.

      

      “UCC”
shall
        mean the Uniform Commercial Code from time to time in effect in any applicable
        jurisdiction.

      

      “Voting
        Stock”
shall
        mean, with respect to any Person, Equity Interest issued by such Person the
        holders of which are ordinarily, in the absence of contingencies, entitled
        to
        vote for the election of directors (or persons performing similar functions)
        of
        such Person, even though the right so to vote may be or have been suspended
        by
        the happening of such a contingency.

      

      “Wachovia”
shall
        mean Wachovia Bank, National Association, a national banking association,
        together with its successors and/or assigns.

      

      “Wachovia
        Acquisition Facility”
shall
        mean collectively, (a) that certain loan facility provided by Wachovia Bank,
        National Association, as the initial lender and the administrative agent
        pursuant to that certain $75,000,000 Revolving Loan Agreement dated as of
        August
        26, 2005 among Wachovia, the Parent, the Borrower and CapLease Services Corp.,
        (b) that certain loan facility provided by Wachovia Investment Holdings,
        LLC, as
        the initial lender and the administrative agent pursuant to that certain
        $25,000,000 Revolving Loan Agreement dated as of August 26, 2005 among Wachovia
        Investment Holdings, LLC, the Parent, the Borrower and CapLease Services
        Corp.,
        and (c) in each case, together with the other Loan Documents as defined in
        such
        agreements as such documents from time to time amended, supplemented or
        otherwise modified.

      

      “Wachovia
        Repurchase Facility”
shall
        mean that certain loan facility provided by Wachovia Bank, National Association
        pursuant to that certain Master Repurchase Agreement among Wachovia, CapLease,
        LP and certain special purpose entity subsidiaries thereof dated as of September
        22, 2004 and the other Repurchase Documents as defined in such Master Repurchase
        Agreement as such documents from time to time amended, supplemented or otherwise
        modified.

      

      Section
        1.2 Other
        Definitional Provisions.

      

      The
        definitions of terms herein shall apply equally to the singular and plural
        forms
        of the terms defined. Whenever the context may require, any pronoun shall
        include the corresponding masculine, feminine and neuter forms. The words
        “include,” “includes” and “including” shall be deemed to be followed by the
        phrase “without limitation.” The word “will” shall be construed to have the same
        meaning and effect as the word “shall.” Unless the context requires otherwise
        (a) any definition of or reference to any agreement, instrument or other
        document herein shall be construed as referring to such agreement, instrument
        or
        other document as from time to time amended, supplemented or otherwise modified
        (subject to any restrictions on such amendments, supplements or modifications
        set forth herein), (b) any reference herein to any Person shall be
        construed to include such Person’s successors and assigns, (c) the words
“herein,” “hereof” and “hereunder,” and words of similar import, shall be
        construed to refer to this Agreement in its entirety and not to any particular
        provision hereof, (d) all references herein to Articles, Sections, Exhibits
        and Schedules shall be construed to refer to Articles and Sections of, and
        Exhibits and Schedules to, this Agreement, (e) any reference to any law or
        regulation herein shall, unless otherwise specified, refer to such law or
        regulation as amended, modified or supplemented from time to time and
        (f) the words “asset” and “property” shall be construed to have the same
        meaning and effect and to refer to any and all tangible and intangible assets
        and properties, including cash, securities, accounts and contract rights.
        

      

      
        
          
          

        

        
          27

          
            

          

        

        
          
          

        

      

      Section
        1.3 Accounting
        Terms.

      

      Unless
        otherwise specified herein, all accounting terms used herein shall be
        interpreted, all accounting determinations hereunder shall be made, and all
        financial statements required to be delivered hereunder shall be prepared
        in
        accordance with GAAP applied on a basis consistent with the most recent audited
        Consolidated financial statements of the Borrower delivered to the Lenders;
        provided
        that, if
        the Borrower shall notify the Administrative Agent that it wishes to amend
        any
        definitions or covenant incorporated in Section 5.9 to eliminate the effect
        of any change in GAAP on the operation of any such definition or provision
        (or
        if the Administrative Agent notifies the Borrower that the Required Lenders
        wish
        to amend any such definition or provision for such purpose), then the Borrower’s
        compliance with such provisions shall be determined on the basis of GAAP
        in
        effect immediately before the relevant change in GAAP became effective, until
        either such notice is withdrawn or such definition or provision is amended
        in a
        manner satisfactory to the Borrower and the Required Lenders.

      

      The
        Borrower shall deliver to the Administrative Agent and each Lender at the
        same
        time as the delivery of any annual or quarterly financial statements given
        in
        accordance with the provisions of Section 5.1, (a)
        a
        description in reasonable detail of any material change in the application
        of
        accounting principles employed in the preparation of such financial statements
        from those applied in the most recently preceding quarterly or annual financial
        statements as to which no objection shall have been made in accordance with
        the
        provisions above and (b)
        a
        reasonable estimate of the effect on the financial statements on account
        of such
        changes in application.

      

      Section 1.4 Time
        References.

      

      Unless
        otherwise specified, all references herein to times of day shall be references
        to Eastern time (daylight or standard, as applicable).

      

      Section 1.5 Execution
        of Documents.

      

      Unless
        otherwise specified, all Credit Documents and all other certificates executed
        in
        connection therewith must be signed by a Responsible Officer.

      

      
        
          
          

        

        
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      ARTICLE
        II

      

      THE
        LOANS; AMOUNT AND TERMS

      

      Section
        2.1 [Intentionally
        Omitted].

      

      Section
        2.2 Term
        Loan; Delayed Draw Term Loan.

      

      (a) Term
        Loan.
        Subject
        to the terms and conditions hereof and in reliance upon the representations
        and
        warranties set forth herein, each Term Loan Lender severally, but not jointly,
        agrees to make available to the Borrower (through the Administrative Agent)
        on
        the Closing Date (and with respect to the Delayed Draw Term Loan, up to one
        other date during the Commitment Period pursuant to Section 2.2(e) and subject
        to the other terms and conditions herein and to the extent the Term Loan
        Committed Amount exceeds the aggregate of the previously advanced Term Loan),
        such Term Loan Lender’s Term Loan Commitment Percentage of a term loan in
        Dollars (the “Closing
        Date Term Loan”)
        in the
        aggregate principal amount set forth in the Notice of Borrowing delivered
        to the
        Administrative Agent, but in no event in excess of TWO HUNDRED ELEVEN MILLION
        DOLLARS ($211,000,000) (the “Term
        Loan Committed Amount”)
        for
        the purposes hereinafter set forth. Upon receipt by the Administrative Agent
        of
        the proceeds of the Closing Date Term Loan, such proceeds will then be made
        available to the Borrower by the Administrative Agent by crediting the account
        of the Borrower on the books of the office of the Administrative Agent specified
        in Section 9.2, or at such other office as the Administrative Agent may
        designate in writing, with the aggregate of such proceeds made available
        to the
        Administrative Agent by the Term Loan Lenders and in like funds as received
        by
        the Administrative Agent (or by crediting such other account(s) as directed
        by
        the Borrower). The Term Loan may consist of Alternate Base Rate Loans or
        LIBOR
        Rate Loans, or a combination thereof, as the Borrower may request; provided,
        however,
        that
        the Term Loan made on the Closing Date or any of the three (3) Business Days
        following the Closing Date, may only consist of Alternate Base Rate Loans
        unless
        the Borrower delivers a funding indemnity letter, substantially in the form
        of
Exhibit
        2.2(a),
        reasonably acceptable to the Administrative Agent not less than three (3)
        Business Days prior to the Closing Date. LIBOR Rate Loans shall be made by
        each
        Term Loan Lender at its LIBOR Lending Office and Alternate Base Rate Loans
        at
        its Domestic Lending Office. Amounts repaid or prepaid on the Term Loan may
        not
        be reborrowed. 

      

      (b) Repayment
        of Term Loan.
        The
        principal amount of the Term Loan shall be repaid on the Maturity Date.

      

      (c) Interest
        on the Term Loan.
        Subject
        to the provisions of Section 2.8, the Term Loan shall bear interest as
        follows:

      

      (i) Alternate
        Base Rate Loans.
        During
        such periods as the Term Loan shall be comprised of Alternate Base Rate Loans,
        each such Alternate Base Rate Loan shall bear interest at a per annum rate
        equal
        to the sum of the Alternate Base Rate plus
        the
        Applicable Percentage; and

      

      
        
          
          

        

        
          29

          
            

          

        

        
          
          

        

      

      (ii) LIBOR
        Rate Loans.
        During
        such periods as the Term Loan shall be comprised of LIBOR Rate Loans, each
        such
        LIBOR Rate Loan shall bear interest at a per annum rate equal to the sum
        of the
        LIBOR Rate plus
        the
        Applicable Percentage.

      

      Interest
        on the Term Loan shall be payable in arrears on each Interest Payment
        Date.

      

      (d) Term
        Loan Notes; Covenant to Pay.
        The
        Borrower’s obligation to pay each Term Loan Lender shall be evidenced by this
        Agreement and, upon such Term Loan Lender’s request, by a duly executed
        promissory note of the Borrower to such Term Loan Lender in substantially
        the
        form of Exhibit
        2.2(d).
        The
        Borrower covenants and agrees to pay the Term Loan in accordance with the
        terms
        of this Agreement.

      

      (e) Delayed
        Draw Term Loan.
        Subject
        to the terms and conditions set forth herein, the Borrower may request up
        to one
        (1) additional funding of the Term Loan during the Commitment Period, but
        only
        to the extent the Term Loan Committed Amount exceeds the aggregate amount
        of the
        Term Loan funded on the Closing Date and subject to the other terms and
        conditions contained or referenced in this Section 2.2(e) (the “Delayed
        Draw Term Loan”).
        Subject to the terms and conditions hereof and in reliance upon the
        representations and warranties set forth herein, each Term Loan Lender
        severally, but not jointly, agrees to make available to the Borrower (through
        the Administrative Agent) on the Delayed Draw Date, such Term Loan Lender’s Term
        Loan Commitment Percentage of a term loan in Dollars in the aggregate principal
        amount set forth in the applicable Notice of Borrowing delivered to the
        Administrative Agent, but in no event in excess of the difference of the
        Term
        Loan Committed Amount less the aggregate amount of the Term Loan funded on
        the
        Closing Date; provided,
        however,
        that
        notwithstanding the foregoing, no Term Lender shall have any obligation to
        make
        any Delayed Draw Term Loan that together with the sum of such Term Lender’s
        Closing Date Term Loan would exceed the product of such Lender’s Term Loan
        Commitment Percentage and the Term Loan Committed Amount. The following terms
        and conditions shall apply to the Delayed Draw Term Loan: (i)
        the
        Delayed Draw Term Loan shall be a Term Loan hereunder and shall constitute
        Credit Party Obligations and will be secured and guaranteed with the other
        Credit Party Obligations on a pari passu basis, (ii)
        no
        Delayed Draw Term Loan shall be made if at the time the Notice of Delivery
        with
        respect thereto is delivered to the Administrative Agent or at the time such
        Delayed Draw Term Loan is supposed to made a Default or Event of Default
        has
        occurred and is continuing; (iii)
        the
        proceeds of the Delayed Draw Term Loan shall be used for the purposes specified
        in Section 3.11; (iv)
        prior
        to or simultaneous with the advance of the Delayed Draw Term Loan, the Borrower
        shall enter into Hedging Agreements to hedge 100% of the amount of the Delayed
        Draw Term Loan in accordance with Section 5.13; (v)
        prior
        to or simultaneous with the advance of the Delayed Draw Term Loan, the Borrower
        shall pay the Origination Fee with respect to the Delayed Draw Term Loan;
        (vi)
        prior
        to or simultaneous with the advance of the Delayed Draw Term Loan, the Borrower
        shall deposit into the Interest Reserve Account the amount required pursuant
        to
        Section 2.6; and (vii)
        the
        conditions to Extensions of Credit in Section 4.2 shall have been
        satisfied.

      

      

      
        
          
          

        

        
          30

          
            

          

        

        
          
          

        

      

      Section
        2.3 Election
        of the Extended Term.

      

      The
        Borrower may elect to extend the Maturity Date to the Extended Maturity Date,
        provided
        (a)
        the
        Borrower gives the Administrative Agent at least fifteen (15) days, but not
        more
        than thirty (30) days prior written notice that the Borrower is electing
        the
        Extended Maturity Date, (b)
        no
        Default or Event of Default shall have occurred and be continuing at the
        time
        such notice is delivered to the Administrative Agent or at the commencement
        of
        the Extended Term, (c)
        the
        Borrower shall have paid to the Administrative Agent the Extension Fee and
        (d)
        the
        Borrower shall have deposited in the Interest Reserve Account the amount
        required pursuant to Section 2.6 of this Agreement with respect to the Extended
        Term. Unless each of the conditions applicable to the effectiveness of the
        Extended Term has been satisfied or expressly waived in writing by the
        Administrative Agent on or prior to the Term Loan Maturity Date, then the
        Maturity Date shall be the Term Loan Maturity Date.

      

       

      Section
        2.4 [Intentionally
        Omitted].

      

      Section
        2.5 Fees.

      

      (a) Closing
        Fee.
        On the
        Closing Date, the Borrower shall pay to the Administrative Agent for the
        pro
        rata benefit of the Lenders, a fully-earned nonrefundable closing fee equal
        to
        $1,055,000.

      

      (b) Origination
        Fees.
        In
        addition to the Closing Fee, payable pursuant to subsection (a) hereof, on
        each
        date a Term Loan is advanced, the Borrower shall pay to the Administrative
        Agent
        for the pro rata benefit of the Lenders, a fully-earned nonrefundable
        origination fee equal to the product of (i) 0.75% and (ii) the aggregate
        amount
        of the Term Loan funded on such date (each an “Origination
        Fee”).
        The
        Origination Fee shall be due and payable on the Closing Date and on each
        date
        thereafter when a Term Loan is advanced.

      

      (c) Extension
        Fee.
        In the
        event the Credit Party Obligations (other than contingent indemnification
        obligations) have not been repaid in full and the Commitments terminated
        on or
        prior to the Term Loan Maturity Date, then on the Term Loan Maturity Date
        the
        Borrower shall pay to the Administrative Agent for the pro rata benefit of
        the
        Lenders, a fully-earned nonrefundable extension fee equal to the product
        of (i)
        0.50% and (ii) the aggregate amount of the Term Loan outstanding on such
        date
        (the “Extension
        Fee”).
        

       

      
        
          
          

        

        
          31

          
            

          

        

        
          
          

        

      

      Section
        2.6 Interest
        Reserve Account.

      

      (a) On
        the
        Closing Date and pursuant to the Security Documents, the Borrower shall pledge
        to the Administrative Agent, for the benefit of the Lenders, as security
        for the
        Credit Party Obligations, by delivery to the Intermediary or by otherwise
        depositing into the Interest Reserve Account, cash in an amount equal to
        the
        product of (i) the aggregate principal amount of the Term Loan advanced on
        the
        Closing Date and (ii) 2.063%. In addition to the deposit on the Closing Date,
        the Borrower shall deposit into the Interest Reserve Account on the date
        of the
        Delayed Draw Term Loan cash in an amount equal to the product of (iii) the
        aggregate principal amount of the Term Loan advanced on such date and (iv)
        2.063%. The Borrower understands and agrees that, notwithstanding the
        establishment of the Interest Reserve Account as herein required, all Term
        Loan
        advances, including any portion thereof that is in the Interest Reserve Account,
        shall be considered drawn and shall bear interest and be payable on the terms
        provided herein. No interest on deposits contained in the Interest Reserve
        Account shall be distributed to the Borrower, except pursuant to Section
        2.6(e).

      

      (b) If
        the
        Borrower elects the Extended Term pursuant to Section 2.3 of this Agreement,
        then on or prior to the Term Loan Maturity Date, the Borrower shall deposit
        in
        the Interest Reserve Account cash in an amount equal to the
        product of (i) the aggregate principal amount of the Term Loan outstanding
        as of
        the Term Loan Maturity Date and (ii) 1.156%.

      

      (c) If
        on any
        date the Administrative Agent determines in its reasonable discretion that
        the
        cash in the Interest Reserve Account is not sufficient to pay the interest
        on
        the Term Loan until the applicable Maturity Date, then the Borrower shall
        deposit into the Interest Reserve Account cash sufficient to pay the interest
        on
        the Term Loan through the Maturity Date within three (3) Business Days of
        the
        Borrower receiving such notice from the Administrative Agent. 

      

      (d) The
        Administrative Agent shall apply from the Interest Reserve Account on each
        Interest Payment Date the amount of interest then due, if the Interest Reserve
        Account balance is sufficient, or, if the balance of the Interest Reserve
        Account is not sufficient to pay the interest then due, the remaining balance
        in
        the Interest Reserve Account shall be applied to the interest then due and
        the
        Administrative Agent shall notify the Borrower of the remaining amount then
        due
        for prompt payment by the Borrower. The amount applied from the Interest
        Reserve
        Account by the Administrative Agent to the interest due from the Borrower
        shall
        be credited to the account of the Borrower, but this shall not otherwise
        affect
        the Borrower’s or any Guarantor’s obligation to pay interest pursuant to this
        Agreement.

      

      (e) Upon
        payment in full of the principal and interest on the Term Loans and all other
        Credit Party Obligations (other
        than contingent obligations of the Credit Parties that survive such payment
        in
        full),
        the
        Administrative Agent shall, upon the written request of the Borrower, cause
        all
        amounts then on deposit in the Interest Reserve Account to be returned to
        the
        Borrower. 

       

      
        
          
          

        

        
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      Section
        2.7 Prepayments.

      

      (a) Optional
        Prepayments.
        The
        Borrower shall have the right to prepay Loans in whole or in part from time
        to
        time; provided,
        however,
        that
        each partial prepayment of a Term Loan shall be in a minimum principal amount
        of
        $2,000,000 (or the remaining outstanding principal amount). The Borrower
        shall
        give three Business Days’ irrevocable notice of prepayment in the case of LIBOR
        Rate Loans and same-day irrevocable notice on any Business Day in the case
        of
        Alternate Base Rate Loans, to the Administrative Agent (which shall notify
        the
        Lenders thereof as soon as practicable). To the extent that the Borrower
        elects to prepay the Term Loans, amounts prepaid under this Section shall
        be applied ratably to the outstanding principal. Within the foregoing
        parameters, prepayments under this Section shall be applied first to Alternate
        Base Rate Loans and then to LIBOR Rate Loans in direct order of Interest
        Period
        maturities. All prepayments under this Section shall be subject to
        Section 2.15, but otherwise without premium or penalty. Interest on the
        principal amount prepaid shall be payable on the next occurring Interest
        Payment
        Date that would have occurred had such loan not been prepaid or, at the request
        of the Administrative Agent, interest on the principal amount prepaid shall
        be
        payable on any date that a prepayment is made hereunder through the date
        of
        prepayment. 

      

      (b) Mandatory
        Prepayments.

      

      (i) Asset
        Dispositions.
        Within
        one (1) Business Day of any Asset Disposition (or related series of Asset
        Dispositions), the Borrower shall prepay the Loans in an aggregate amount
        equal
        to one hundred percent (100%) of the Net Cash Proceeds derived from such
        Asset
        Disposition (or related series of Asset Dispositions) (such prepayment to
        be
        applied as set forth in clause (v)
        below);
        provided, that Net Cash Proceeds that are not related to an Acquired Property,
        any Indebtedness or other obligations secured by an Acquired Property or
        any
        derivative obligations thereof, and are in the aggregate, during the term
        of
        this Agreement, less than $2,000,000 shall not be required to prepay the
        Loans.

      

      (ii) Debt
        Issuances.
        Within
        one (1) Business Day of receipt by any Credit Party or any of its Subsidiaries
        of proceeds from any Debt Issuance, the Borrower shall prepay the Loans in
        an
        aggregate amount equal to one hundred percent (100%) of the Net Cash Proceeds
        of
        such Debt Issuance (such prepayment to be applied as set forth in clause
        (v)
        below);
        provided, that Net Cash Proceeds that are (A) not related to an Acquired
        Property, any Indebtedness or other obligations secured by an Acquired Property
        or any derivative obligations thereof and (B) are either received by an SPE
        Affiliate or in the aggregate, during the term of this Agreement, less than
        $2,000,000 shall not be required to prepay the Loans. 

      

      
        
          
          

        

        
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      (iii) Issuances
        of Equity.
        Within
        one (1) Business Day of receipt by any Credit Party or any of its Subsidiaries
        of proceeds from any Equity Issuance, the Borrower shall prepay the Loans
        in an
        aggregate amount equal to one hundred percent (100%) of the Net Cash Proceeds
        of
        such Equity Issuance (such prepayment to be applied as set forth in clause
        (v)
        below);
        provided, that Net Cash Proceeds that are (A) not related to an Acquired
        Property, any Indebtedness or other obligations secured by an Acquired Property
        or any derivative obligations thereof and (B) are either received by an SPE
        Affiliate or in the aggregate, during the term of this Agreement, less than
        $2,000,000 shall not be required to prepay the Loans. 

      

      (iv) Extraordinary
        Receipt.
        Within
        one (1) Business Day of receipt by any Credit Party or any of its Subsidiaries
        of proceeds from any Extraordinary Receipt, the Borrower shall prepay the
        Loans
        in an aggregate amount equal to one hundred percent (100%) of the Net Cash
        Proceeds of such Extraordinary Receipt (such prepayment to be applied as
        set
        forth in clause (v)
        below);
        provided, that Net Cash Proceeds that are not related to an Acquired Property,
        any Indebtedness or other obligations secured by an Acquired Property or
        any
        derivative obligations thereof and are in the aggregate, during the term
        of this
        Agreement, less than $2,000,000 shall not be required to prepay the
        Loans.

      

      (v) Application
        of Mandatory Prepayments.
        All
        amounts required to be paid pursuant to this Section shall be applied as
        follows: (1) first
        to the
        Term Loan, and (2) second
        to any
        other Credit Party Obligations in the order determined by the Administrative
        Agent. Within the parameters of the applications set forth above, prepayments
        shall be applied first to Alternate Base Rate Loans and then to LIBOR Rate
        Loans
        in direct order of Interest Period maturities. All prepayments under this
        Section shall be subject to Section 2.14 and be accompanied by
        interest on the principal amount prepaid through the date of prepayment,
        but
        otherwise without premium or penalty.

      

      (c) Hedging
        Obligations Unaffected.
        Any
        repayment or prepayment made pursuant to this Section shall not affect the
        Borrower’s obligation to continue to make payments under any Secured Hedging
        Agreement, which shall remain in full force and effect notwithstanding such
        repayment or prepayment, subject to the terms of such Secured Hedging
        Agreement.

      

      Section
        2.8 Default
        Rate and Payment Dates.

      

      (a) If
        all or
        a portion of the principal amount of any Loan which is a LIBOR Rate Loan
        shall
        not be paid when due or continued as a LIBOR Rate Loan in accordance with
        the
        provisions of Section 2.9 (whether at the stated maturity, by acceleration
        or
        otherwise), such overdue principal amount of such Loan shall be converted
        to an
        Alternate Base Rate Loan at the end of the Interest Period applicable
        thereto.

      

      
        
          
          

        

        
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      (b) (i)
        If
        all or a portion of the principal amount of any LIBOR Rate Loan shall not
        be
        paid when due, such overdue amount shall bear interest at a rate per annum
        which
        is equal to the rate that would otherwise be applicable thereto plus
        4%,
        until the end of the Interest Period applicable thereto, and thereafter at
        a
        rate per annum which is equal to the Alternate Base Rate plus
        the sum
        of the Applicable Percentage then in effect for Alternate Base Rate Loans
        and 4%
        (the “ABR
        Default Rate”)
        or
        (ii) if any interest payable on the principal amount of any Loan or any fee
        or
        other amount, including the principal amount of any Alternate Base Rate Loan,
        payable hereunder shall not be paid when due (whether at the stated maturity,
        by
        acceleration or otherwise), such overdue amount shall bear interest at a
        rate
        per annum which is equal to the ABR Default Rate, in each case from the date
        of
        such non-payment until such amount is paid in full (after as well as before
        judgment). Upon the occurrence, and during the continuance, of any other
        Event
        of Default hereunder, at the option of the Required Lenders, the principal
        of
        and, to the extent permitted by law, interest on the Loans and any other
        amounts
        owing hereunder or under the other Credit Documents shall bear interest,
        payable
        on demand, at a per annum rate which is (A) in the case of principal, the
        rate
        that would otherwise be applicable thereto plus
        4% or
        (B) in the case of interest, fees or other amounts, the ABR Default Rate
        (after
        as well as before judgment).

      

      (c) Interest
        on each Loan shall be payable in arrears on each Interest Payment Date;
provided
        that
        interest accruing pursuant to paragraph (b) of this Section shall be payable
        from time to time on demand.

      

      Section
        2.9 Conversion
        Options.

      

      (a) The
        Borrower may, in the case of the Term Loan, elect from time to time to convert
        Alternate Base Rate Loans to LIBOR Rate Loans, by delivering a Notice of
        Conversion/Extension to the Administrative Agent at least three Business
        Days
        prior to the proposed date of conversion. In addition, the Borrower may elect
        from time to time to convert all or any portion of a LIBOR Rate Loan to an
        Alternate Base Rate Loan by giving the Administrative Agent irrevocable written
        notice thereof by 11:00 A.M. one (1) Business Day prior to the proposed date
        of
        conversion. If the date upon which an Alternate Base Rate Loan is to be
        converted to a LIBOR Rate Loan is not a Business Day, then such conversion
        shall
        be made on the next succeeding Business Day and during the period from such
        last
        day of an Interest Period to such succeeding Business Day such Loan shall
        bear
        interest as if it were an Alternate Base Rate Loan. LIBOR Rate Loans may
        be
        converted to Alternate Base Rate Loans on any Business Day so long as the
        Borrower pays breakage amounts, if any, as determined by each Lender in the
        event that such conversion occurs on a day other than the last day of the
        applicable Interest Period. If the date upon which a LIBOR Rate Loan is to
        be
        converted to an Alternate Base Rate Loan is not a Business Day, then such
        conversion shall be made on the next succeeding Business Day and during the
        period from such last day of an Interest Period to such succeeding Business
        Day
        such Loan shall bear interest as if it were an Alternate Base Rate Loan.
        All or
        any part of outstanding Alternate Base Rate Loans may be converted as provided
        herein; provided
        that
        (i) no Loan may be converted into a LIBOR Rate Loan when any Default or
        Event of Default has occurred and is continuing and
        (ii) partial
        conversions shall be in an aggregate principal amount of $5,000,000 or a
        whole
        multiple of $1,000,000 in excess thereof. All or any part of outstanding
        LIBOR
        Rate Loans may be converted as provided herein; provided
        that
        partial conversions shall be in an aggregate principal amount of $5,000,000
        or a
        whole multiple of $1,000,000 in excess thereof.

      

      
        
          
          

        

        
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      (b) Any
        LIBOR
        Rate Loans may be continued as such upon the expiration of an Interest Period
        with respect thereto by compliance by the Borrower with the notice provisions
        contained in Section 2.9(a); provided,
        that no
        LIBOR Rate Loan may be continued as such when any Event of Default has occurred
        and is continuing, in which case such Loan shall be automatically converted
        to
        an Alternate Base Rate Loan at the end of the applicable Interest Period
        with
        respect thereto. If the Borrower shall fail to give timely notice of an election
        to continue a LIBOR Rate Loan, or the continuation of LIBOR Rate Loans is
        not
        permitted hereunder, such LIBOR Rate Loans shall be automatically converted
        to
        Alternate Base Rate Loans at the end of the applicable Interest Period with
        respect thereto.

      

      Section
        2.10 Computation
        of Interest and Fees; Usury.

      

      (a) Interest
        payable hereunder with respect to any Alternate Base Rate Loan based on the
        Prime Rate shall be calculated on the basis of a year of 365 days (or 366
        days,
        as applicable) for the actual days elapsed. All other fees, interest and
        all
        other amounts payable hereunder shall be calculated on the basis of a 360-day
        year for the actual days elapsed. The Administrative Agent shall as soon
        as
        practicable notify the Borrower and the Lenders of each determination of
        a LIBOR
        Rate on the Business Day of the determination thereof. Any change in the
        interest rate on a Loan resulting from a change in the Alternate Base Rate
        shall
        become effective as of the opening of business on the day on which such change
        in the Alternate Base Rate shall become effective. The Administrative Agent
        shall as soon as practicable notify the Borrower and the Lenders of the
        effective date and the amount of each such change.

      

      (b) Each
        determination of an interest rate by the Administrative Agent pursuant to
        any
        provision of this Agreement shall be conclusive and binding on the Borrower
        and
        the Lenders in the absence of manifest error. The Administrative Agent shall,
        at
        the request of the Borrower, deliver to the Borrower a statement showing
        the
        computations used by the Administrative Agent in determining any interest
        rate.

      

      
        
          
          

        

        
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      (c) It
        is the
        intent of the Lenders and the Credit Parties to conform to and contract in
        strict compliance with applicable usury law from time to time in effect.
        All
        agreements between the Lenders and the Credit Parties are hereby limited
        by the
        provisions of this subsection which shall override and control all such
        agreements, whether now existing or hereafter arising and whether written
        or
        oral. In no way, nor in any event or contingency (including but not limited
        to
        prepayment or acceleration of the maturity of any Credit Party Obligation),
        shall the interest taken, reserved, contracted for, charged, or received
        under
        this Agreement, under the Notes or otherwise, exceed the maximum nonusurious
        amount permissible under applicable law. If, from any possible construction
        of
        any of the Credit Documents or any other document, interest would otherwise
        be
        payable in excess of the maximum nonusurious amount, any such construction
        shall
        be subject to the provisions of this paragraph and such interest shall be
        automatically reduced to the maximum nonusurious amount permitted under
        applicable law, without the necessity of execution of any amendment or new
        document. If any Lender shall ever receive anything of value which is
        characterized as interest on the Loans under applicable law and which would,
        apart from this provision, be in excess of the maximum nonusurious amount,
        an
        amount equal to the amount which would have been excessive interest shall,
        without penalty, be applied to the reduction of the principal amount owing
        on
        the Loans and not to the payment of interest, or refunded to the Borrower
        or the
        other payor thereof if and to the extent such amount which would have been
        excessive exceeds such unpaid principal amount of the Loans. The right to
        demand
        payment of the Loans or any other Indebtedness evidenced by any of the Credit
        Documents does not include the right to receive any interest which has not
        otherwise accrued on the date of such demand, and the Lenders do not intend
        to
        charge or receive any unearned interest in the event of such demand. All
        interest paid or agreed to be paid to the Lenders with respect to the Loans
        shall, to the extent permitted by applicable law, be amortized, prorated,
        allocated, and spread throughout the full stated term (including any renewal
        or
        extension) of the Loans so that the amount of interest on account of such
        Indebtedness does not exceed the maximum nonusurious amount permitted by
        applicable law.

      

      Section
        2.11 Pro
        Rata Treatment and Payments.

      

      (a) Allocation
        of Payments Prior to Exercise of Remedies.
        Unless
        otherwise required by the terms of this Agreement, each payment under this
        Agreement or any Note shall be applied, first,
        to any
        fees then due and owing by the Borrower pursuant to Section 2.5, second,
        to
        interest then due and owing hereunder and under the Notes of the Borrower
        and,
third,
        to
        principal then due and owing hereunder and under the Notes of the Borrower.
        Each
        payment on account of any fees pursuant to Section 2.5 shall be made pro
        rata in
        accordance with the respective amounts due and owing. Each payment (other
        than
        prepayments) by the Borrower on account of principal of and interest on the
        Term
        Loan, as applicable, shall be applied to such Loans, as applicable, on a
        pro
        rata basis in accordance with the terms of Section 2.7(a) hereof. Each optional
        prepayment on account of principal of the Loans shall be applied in accordance
        with Section 2.7(a). Each mandatory prepayment on account of principal of
        the
        Loans shall be applied in accordance with Section 2.7(b). All payments
        (including prepayments) to be made by the Borrower on account of principal,
        interest and fees shall be made without defense, set-off or counterclaim
        (except
        as provided in Section 2.16(b)) and shall be made to the Administrative Agent
        for the account of the Lenders at the Administrative Agent’s office specified on
        Section 9.2 in Dollars and in immediately available funds not later than
        1:00
        P.M. on the date when due. The Administrative Agent shall distribute such
        payments to the Lenders entitled thereto promptly upon receipt in like funds
        as
        received. If any payment hereunder (other than payments on the LIBOR Rate
        Loans)
        becomes due and payable on a day other than a Business Day, such payment
        shall
        be extended to the next succeeding Business Day, and, with respect to payments
        of principal, interest thereon shall be payable at the then applicable rate
        during such extension. If any payment on a LIBOR Rate Loan becomes due and
        payable on a day other than a Business Day, such payment date shall be extended
        to the next succeeding Business Day unless the result of such extension would
        be
        to extend such payment into another calendar month, in which event such payment
        shall be made on the immediately preceding Business Day.

      

      
        
          
          

        

        
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      (b) Allocation
        of Payments After Exercise of Remedies.
        Notwithstanding any other provisions of this Agreement to the contrary, after
        the exercise of remedies (other than the invocation of default interest pursuant
        to Section 2.8) by the Administrative Agent or the Lenders pursuant to
        Section 7.2 (or after the Commitments shall automatically terminate and the
        Loans (with accrued interest thereon) and all other amounts under the Credit
        Documents shall automatically become due and payable in accordance with the
        terms of such Section), all amounts collected or received by the Administrative
        Agent or any Lender on account of the Credit Party Obligations or any other
        amounts outstanding under any of the Credit Documents or in respect of the
        Collateral shall be paid over or delivered as follows (irrespective of whether
        the following costs, expenses, fees, interest, premiums, scheduled periodic
        payments or Credit Party Obligations are allowed, permitted or recognized
        as a
        claim in any proceeding resulting from the occurrence of a Bankruptcy
        Event):

      

      FIRST,
        to
        the payment of all reasonable out-of-pocket costs and expenses (including
        without limitation reasonable attorneys’ fees) of the Administrative Agent in
        connection with enforcing the rights of the Lenders under the Credit Documents
        and any protective advances made by the Administrative Agent with respect
        to the
        Collateral under or pursuant to the terms of the Security
        Documents;

      

      SECOND,
        to the payment of any fees owed to the Administrative Agent; 

      

      THIRD,
        to
        the payment of all reasonable out-of-pocket costs and expenses (including
        without limitation, reasonable attorneys’ fees) of each of the Lenders in
        connection with enforcing its rights under the Credit Documents or otherwise
        with respect to the Credit Party Obligations owing to such Lender;

      

      FOURTH,
        to the payment of all of the Credit Party Obligations consisting of accrued
        fees
        and interest, and including, with respect to any Secured Hedging Agreement,
        any
        fees, premiums and scheduled periodic payments due under such Secured Hedging
        Agreement and any interest accrued thereon;

      

      FIFTH,
        to
        the payment of the outstanding principal amount of the Credit Party Obligations
        and including with respect to any Secured Hedging Agreement, any breakage,
        termination or other payments due under such Secured Hedging Agreement and
        any
        interest accrued thereon;

      

      
        
          
          

        

        
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      SIXTH,
        to
        all other Credit Party Obligations and other obligations which shall have
        become
        due and payable under the Credit Documents or otherwise and not repaid pursuant
        to clauses “FIRST” through “FIFTH” above; and

      

      SEVENTH,
        to the payment of the surplus, if any, to whoever may be lawfully entitled
        to
        receive such surplus.

      

      In
        carrying out the foregoing, (a) amounts received shall be applied in the
        numerical order provided until exhausted prior to application to the next
        succeeding category;
        and
        (b) each
        of
        the Lenders and any Hedging Agreement Provider shall receive an amount equal
        to
        its pro rata share (based on the proportion that the then outstanding Loans
        held
        by such Lender or the outstanding obligations payable to such Hedging Agreement
        Provider bears to the aggregate then outstanding Loans and obligations payable
        under all Secured Hedging Agreements) of amounts available to be applied
        pursuant to clauses “THIRD”, “FOURTH”, “FIFTH” and “SIXTH” above.
        Notwithstanding the foregoing terms of this Section, only Collateral proceeds
        and payments under the Guaranty (as opposed to ordinary course principal,
        interest and fee payments hereunder) shall be applied to obligations under
        any
        Secured Hedging Agreement.

      

      Section
        2.12 Non-Receipt
        of Funds by the Administrative Agent.

      

      (a)
         Funding
        by Lenders; Presumption by Administrative Agent.
        Unless
        the Administrative Agent shall have received written notice from a Lender
        prior
        to the proposed date of any Extension of Credit that such Lender will not
        make
        available to the Administrative Agent such Lender’s share of such Extension of
        Credit, the Administrative Agent may assume that such Lender has made such
        share
        available on such date in accordance with this Agreement and may, in reliance
        upon such assumption, make available to the Borrower a corresponding amount.
        In
        such event, if a Lender has not in fact made its share of the applicable
        Extension of Credit available to the Administrative Agent, then the applicable
        Lender and the Borrower severally agree to pay to the Administrative Agent
        forthwith on demand such corresponding amount with interest thereon, for
        each
        day from and including the date such amount is made available to the Borrower
        to
        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 Effective 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 Borrower, the interest rate
        applicable to Alternate Base Rate Loans. If the Borrower and such Lender
        shall
        pay such interest to the Administrative Agent for the same or an overlapping
        period, the Administrative Agent shall promptly remit to the Borrower the
        amount
        of such interest paid by the Borrower for such period. If such Lender pays
        its
        share of the applicable Extension of Credit to the Administrative Agent,
        then
        the amount so paid shall constitute such Lender’s Loan included in such
        Extension of Credit. Any payment by the Borrower shall be without prejudice
        to
        any claim the Borrower may have against a Lender that shall have failed to
        make
        such payment to the Administrative Agent.

      

      
        
          
          

        

        
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      (b)
         Payments
        by Borrower; Presumptions by Administrative Agent.
        Unless
        the Administrative Agent shall have received notice from the Borrower prior
        to
        the date on which any payment is due to the Administrative Agent for the
        account
        of the Lenders hereunder that the Borrower will not make such payment, the
        Administrative Agent may assume that the Borrower has made such payment on
        such
        date in accordance herewith and may, in reliance upon such assumption,
        distribute to the Lenders the amount due. In such event, if the Borrower
        has not
        in fact made such payment, then each of the Lenders severally agrees to repay
        to
        the Administrative Agent forthwith on demand the amount so distributed to
        such
        Lender with interest thereon, for each day from and including the date such
        amount is distributed to it to but excluding the date of payment to the
        Administrative Agent, at the greater of the Federal Funds Effective Rate
        and a
        rate determined by the Administrative Agent in accordance with banking industry
        rules on interbank compensation.

      

      A
        notice
        of the Administrative Agent to any Lender or the Borrower with respect to
        any
        amount owing under subsections (a) and (b) of this Section shall be conclusive,
        absent manifest error.

      

      (c) Failure
        to Satisfy Conditions Precedent.
        If any
        Lender makes available to the Administrative Agent funds for any Loan to
        be made
        by such Lender as provided in the foregoing provisions of this Article II,
        and
        such funds are not made available to the Borrower by the Administrative Agent
        because the conditions to the applicable Extension of Credit set forth in
        Article IV are not satisfied or waived in accordance with the terms thereof,
        the
        Administrative Agent shall return such funds (in like funds as received from
        such Lender) to such Lender, without interest.

      

      (d) Obligations
        of Lenders Several.
        The
        obligations of the Lenders hereunder to make Term Loans and to make payments
        pursuant to Section 9.5(c) are several and not joint. The failure of any
        Lender
        to make any Loan, to fund any such participation or to make any such payment
        under Section 9.5(c) on any date required hereunder shall not relieve any
        other
        Lender of its corresponding obligation to do so on such date, and no Lender
        shall be responsible for the failure of any other Lender to so make its Loan,
        to
        purchase its participation or to make its payment under Section
        9.5(c).

      

      (e) Funding
        Source.
        Nothing
        herein shall be deemed to obligate any Lender to obtain the funds for any
        Loan
        in any particular place or manner or to constitute a representation by any
        Lender that it has obtained or will obtain the funds for any Loan in any
        particular place or manner.

      

      Section
        2.13 Inability
        to Determine Interest Rate.

      

      Notwithstanding
        any other provision of this Agreement, if (a) the Administrative Agent
        shall reasonably determine (which determination shall be conclusive and binding
        absent manifest error) that, by reason of circumstances affecting the relevant
        market, reasonable and adequate means do not exist for ascertaining the LIBOR
        Rate for such Interest Period, or (b) the Required Lenders shall reasonably
        determine (which determination shall be conclusive and binding absent manifest
        error) that the LIBOR Rate does not adequately and fairly reflect the cost
        to
        such Lenders of funding LIBOR Rate Loans that the Borrower has requested
        be
        outstanding as a LIBOR Tranche during such Interest Period, the Administrative
        Agent shall forthwith give telephone notice of such determination, confirmed
        in
        writing, to the Borrower, and the Lenders at least two (2) Business Days
        prior
        to the first day of such Interest Period. Unless the Borrower shall have
        notified the Administrative Agent upon receipt of such telephone notice that
        it
        wishes to rescind or modify its request regarding such LIBOR Rate Loans,
        any
        Loans that were requested to be made as LIBOR Rate Loans shall be made as
        Alternate Base Rate Loans and any Loans that were requested to be converted
        into
        or continued as LIBOR Rate Loans shall remain as or be converted into Alternate
        Base Rate Loans. Until any such notice has been withdrawn by the Administrative
        Agent, no further Loans shall be made as, continued as, or converted into,
        LIBOR
        Rate Loans for the Interest Periods so affected.

      

      
        
          
          

        

        
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      Section
        2.14 Yield
        Protection.

      

      (a) Increased
        Costs Generally.
        If any
        Change in Law shall:

      

      (i) impose,
        modify or deem applicable any reserve, special deposit, compulsory loan,
        insurance charge or similar requirement against assets of, deposits with
        or for
        the account of, or credit extended or participated in by, any Lender (except
        any
        reserve requirement reflected in the LIBOR Rate); 

      

      (ii) subject
        any Lender to any tax of any kind whatsoever with respect to this Agreement
        or
        any LIBOR Rate Loan made by it, or change the basis of taxation of payments
        to
        such Lender in respect thereof (except for Indemnified Taxes or Other Taxes
        covered by Section 2.16 and the imposition of, or any change in the rate
        of, any
        Excluded Tax payable by such Lender); or

      

      (iii) impose
        on
        any Lender or the London interbank market any other condition, cost or expense
        affecting this Agreement or LIBOR Rate Loans made by such Lender;

      

      and
        the
        result of any of the foregoing shall be to increase the cost to such Lender
        of
        making or maintaining any LIBOR Rate Loan (or of maintaining its obligation
        to
        make any such Loan), or to reduce the amount of any sum received or receivable
        by such Lender hereunder (whether of principal, interest or any other amount)
        then, upon request of such Lender, the Borrower will pay to such Lender such
        additional amount or amounts as will compensate such Lender for such additional
        costs incurred or reduction suffered.

      

      (b) Capital
        Requirements.
        If any
        Lender determines that any Change in Law affecting such Lender or any lending
        office of such Lender or such Lender’s holding company, if any, regarding
        capital requirements has or would have the effect of reducing the rate of
        return
        on such Lender’s capital or on the capital of such Lender’s holding company, if
        any, as a consequence of this Agreement, the Commitments of such Lender or
        the
        Loans made by, to a level below that which such Lender or such Lender’s holding
        company could have achieved but for such Change in Law (taking into
        consideration such Lender’s policies and the policies of such Lender’s holding
        company with respect to capital adequacy), then from time to time the Borrower
        will pay to such Lender such additional amount or amounts as will compensate
        such Lender or such Lender’s holding company for any such reduction
        suffered.

      

      
        
          
          

        

        
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      (c) Certificates
        for Reimbursement.
        A
        certificate of a Lender setting forth the amount or amounts necessary to
        compensate such Lender or its holding company, as the case may be, as specified
        in paragraph (a) or (b) of this Section and delivered to the Borrower
        shall be conclusive absent manifest error. The Borrower shall pay such Lender
        the amount shown as due on any such certificate within ten (10) days after
        receipt thereof.

      

      (d) Delay
        in Requests.
        Failure
        or delay on the part of any Lender to demand compensation pursuant to this
        Section shall not constitute a waiver of such Lender’s right to demand such
        compensation, provided
        that the
        Borrower shall not be required to compensate a Lender pursuant to this Section
        for any increased costs incurred or reductions suffered, as the case may
        be, to
        the extent that such Lender fails to make a demand for such compensation
        more
        than nine (9) months after becoming aware of such Change in Law giving arise
        to
        such increased costs or reductions.

      

      Section
        2.15 Indemnity;
        Eurocurrency Liabilities.

      

      (a) The
        Credit Parties hereby agree to indemnify each Lender and to hold such Lender
        harmless from any funding loss or expense which such Lender may sustain or
        incur
        as a consequence of
        (a) the failure
        by the Borrower to pay the principal amount of or interest on any Loan by
        such
        Lender in accordance with the terms hereof,
        (b) the
        failure by the Borrower to accept a borrowing after the Borrower has given
        a
        notice in accordance with the terms hereof,
        (c) default
        by the Borrower in making any prepayment after the Borrower has given a notice
        in accordance with the terms hereof, and/or
        (d) the
        making by the Borrower of a prepayment of a Loan, or the conversion thereof,
        on
        a day which is not the last day of the Interest Period with respect thereto,
        in
        each case including, but not limited to, any such loss or expense arising
        from
        interest or fees payable by such Lender to lenders of funds obtained by it
        in
        order to maintain its Loans hereunder. A certificate setting forth in reasonable
        detail as to any additional amounts payable pursuant to this Section submitted
        by any Lender, through the Administrative Agent, to the Borrower (which
        certificate must be delivered to the Administrative Agent within thirty days
        following such default, prepayment or conversion) shall be conclusive in
        the
        absence of manifest error. The agreements in this Section shall survive
        termination of this Agreement and payment of the Credit Party
        Obligations.

      

      (b) The
        Borrower shall pay to each Lender, as long as such Lender shall be required
        to
        maintain reserves under Regulation D with respect to “Eurocurrency liabilities”
within the meaning of Regulation D, or under any similar or successor regulation
        with respect to Eurocurrency liabilities or Eurocurrency funding, additional
        interest on the unpaid principal amount of each LIBOR Loan equal to the actual
        costs of such reserves allocated to such LIBOR Loan by such Lender (as
        determined by such Lender in good faith, which determination shall be
        conclusive), which shall be due and payable on each date on which interest
        is
        payable on such LIBOR Loan, provided the Borrower shall have received at
        least
        fifteen (15) days prior notice (with a copy to the Administrative Agent)
        of such
        additional interest from such Lender. If a Lender fails to give notice fifteen
        (15) days prior to the relevant interest payment date, such additional interest
        shall be due and payable fifteen (15) days from receipt of such
        notice.

      

      
        
          
          

        

        
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      Section
        2.16 Taxes.

      

      (a) Payments
        Free of Taxes.
        Any and
        all payments by or on account of any obligation of the Borrower hereunder
        or
        under any other Credit Document shall be made free and clear of and without
        reduction or withholding for any Indemnified Taxes or Other Taxes, provided
        that if
        the Borrower shall be required by applicable law to deduct any Indemnified
        Taxes
        (including any Other Taxes) from such payments, then (i)
        the sum
        payable shall be increased as necessary so that after making all required
        deductions (including deductions applicable to additional sums payable under
        this Section) the Administrative Agent or Lender, as the case may be, receives
        an amount equal to the sum it would have received had no such deductions
        been
        made, (ii)
        the
        Borrower shall make such deductions and (iii)
        the
        Borrower shall timely pay the full amount deducted to the relevant Governmental
        Authority in accordance with applicable law.

      

      (b) Payment
        of Other Taxes by the Borrower.
        Without
        limiting the provisions of paragraph (a) above, the Borrower shall timely
        pay
        any Other Taxes to the relevant Governmental Authority in accordance with
        applicable law.

      

      (c) Indemnification
        by the Borrower.
        The
        Borrower shall indemnify the Administrative Agent and each Lender, within
        ten
        (10) days after demand therefor, for the full amount of any Indemnified Taxes
        or
        Other Taxes (including Indemnified Taxes or Other Taxes imposed or asserted
        on
        or attributable to amounts payable under this Section) paid by the
        Administrative Agent or such Lender, as the case may be, and any penalties,
        interest and reasonable expenses arising therefrom or with respect thereto,
        whether or not such Indemnified Taxes or Other Taxes were correctly or legally
        imposed or asserted by the relevant Governmental Authority. A certificate
        as to
        the amount of such payment or liability delivered to the Borrower by a Lender
        (with a copy to the Administrative Agent), or by the Administrative Agent
        on its
        own behalf or on behalf of a Lender, shall be conclusive absent manifest
        error.

      

      (d) Evidence
        of Payments.
        As soon
        as practicable after any payment of Indemnified Taxes or Other Taxes by the
        Borrower to a Governmental Authority, the Borrower shall deliver to the
        Administrative Agent the original or a certified copy of a receipt issued
        by
        such Governmental Authority evidencing such payment, a copy of the return
        reporting such payment or other evidence of such payment reasonably satisfactory
        to the Administrative Agent.

      

      
        
          
          

        

        
          43

          
            

          

        

        
          
          

        

      

      (e) Status
        of Lenders.
        Any
        Foreign Lender that is entitled to an exemption from or reduction of withholding
        tax under the law of the jurisdiction in which the Borrower is resident for
        tax
        purposes, or any treaty to which such jurisdiction is a party, with respect
        to
        payments hereunder or under any other Credit Document shall deliver to the
        Borrower (with a copy to the Administrative Agent), at the time or times
        prescribed by applicable law or reasonably requested by the Borrower or the
        Administrative Agent, such properly completed and executed documentation
        prescribed by applicable law as will permit such payments to be made without
        withholding or at a reduced rate of withholding. In addition, any Lender,
        if
        requested by the Borrower or the Administrative Agent, shall deliver such
        other
        documentation prescribed by applicable law or reasonably requested by the
        Borrower or the Administrative Agent as will enable the Borrower or the
        Administrative Agent to determine whether or not such Lender is subject to
        backup withholding or information reporting requirements.

      

      Without
        limiting the generality of the foregoing, in the event that the Borrower
        is
        resident for tax purposes in the United States of America, any Foreign Lender
        shall deliver to the Borrower and the Administrative Agent (in such number
        of
        copies as shall be requested by the recipient) on or prior to the date on
        which
        such Foreign Lender becomes a Lender under this Agreement (and from time
        to time
        thereafter upon the request of the Borrower or the Administrative Agent,
        but
        only if such Foreign Lender is legally entitled to do so), whichever of the
        following is applicable:

      

      (a) duly
        completed copies of Internal Revenue Service Form W-8BEN claiming eligibility
        for benefits of an income tax treaty to which the United States of America
        is a
        party,

      

      (b) duly
        completed copies of Internal Revenue Service Form W-8ECI,

      

      (c) in
        the
        case of a Foreign Lender claiming the benefits of the exemption for portfolio
        interest under section 881(c) of the Code, (i)
        a
        certificate to the effect that such Foreign Lender is not (A)
        a
“bank” within the meaning of section 881(c)(3)(A) of the Code, (B)
        a “10
        percent shareholder” of the Borrower within the meaning of section 881(c)(3)(B)
        of the Code, or (C)
        a
“controlled foreign corporation” described in section 881(c)(3)(C) of the Code
        and (ii)
        duly
        completed copies of Internal Revenue Service Form W-8BEN, or

      

      (d) any
        other
        form prescribed by applicable law as a basis for claiming exemption from
        or a
        reduction in United States Federal withholding tax duly completed together
        with
        such supplementary documentation as may be prescribed by applicable law to
        permit the Borrower to determine the withholding or deduction required to
        be
        made.

      

      
        
          
          

        

        
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      (e) Treatment
        of Certain Refunds.
        If the
        Administrative Agent or a Lender determines, in its sole discretion, that
        it has
        received a refund of any Taxes or Other Taxes as to which it has been
        indemnified by the Borrower or with respect to which the Borrower has paid
        additional amounts pursuant to this Section, it shall give the Borrower written
        notice thereof and pay to the Borrower an amount equal to such refund (but
        only
        to the extent of indemnity payments made, or additional amounts paid, by
        the
        Borrower under this Section with respect to the Taxes or Other Taxes giving
        rise
        to such refund), net of all out-of-pocket expenses of the Administrative
        Agent
        or such Lender, as the case may be, and without interest (other than any
        interest paid by the relevant Governmental Authority with respect to such
        refund), provided
        that the
        Borrower, upon the request of the Administrative Agent or such Lender, agrees
        to
        repay the amount paid over to the Borrower (plus any penalties, interest
        or
        other charges imposed by the relevant Governmental Authority) to the
        Administrative Agent, or such Lender in the event the Administrative Agent
        or
        such Lender is required to repay such refund to such Governmental Authority.
        This paragraph shall not be construed to require the Administrative Agent
        or any
        Lender to make available its tax returns (or any other information relating
        to
        its taxes that it deems confidential) to the Borrower or any other
        Person.

      

      

      ARTICLE
        III

      

      REPRESENTATIONS
        AND WARRANTIES

      

      To
        induce
        the Lenders to enter into this Agreement and to make the Extensions of Credit
        herein provided for, the Credit Parties hereby represent and warrant to the
        Administrative Agent and to each Lender that:

      

      Section
        3.1 Financial
        Condition.

      

      (a) (i) The
        audited Consolidated financial statements of the Parent and its Consolidated
        Subsidiaries for the fiscal year ended December 31, 2006 together with the
        related Consolidated statements of income or operations, equity and cash
        flows
        for the fiscal year ended on such date:

      

      (A) were
        prepared in accordance with GAAP consistently applied throughout the period
        covered thereby, except as otherwise expressly noted therein; 

      

      (B) fairly
        present the financial condition of the Parent and its Subsidiaries, as
        applicable, as of the date thereof and results of operations for the period
        covered thereby; and

      

      (C) show
        all
        material Indebtedness and other liabilities, direct or contingent, of the
        Parent
        and its Subsidiaries as of the date thereof, including liabilities for taxes,
        material commitments and contingent obligations. 

      

      
        
          
          

        

        
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      Section
        3.2 No
        Material Adverse Effect; Internal Control Event.

      

      Since December
        31, 2006 (a) (and, in addition, since delivery of the most recent annual
        audited
        financial statements), there has been no development or event which has had
        or
        could reasonably be expected to have a Material Adverse Effect and (b) no
        Internal Control Event has occurred. 

      

      Section
        3.3 Corporate
        Existence; Compliance with Law.

      

      Each
        of
        the Credit Parties
        (a) is
        duly
        organized, validly existing and in good standing under the laws of the
        jurisdiction of its incorporation, organization or formation,
        (b) has
        the
        requisite power and authority and the legal right to own and operate all
        its
        property, to lease the property it operates as lessee and to conduct the
        business in which it is currently engaged and has taken all actions necessary
        to
        maintain all rights, privileges, licenses and franchises necessary or required
        in the normal conduct of its business,
        (c) is
        duly
        qualified to conduct business and in good standing under the laws of (i)
        the
        jurisdiction of its organization or formation and (ii) each jurisdiction
        where
        its ownership, lease or operation of property or the conduct of its business
        requires such qualification except to the extent that the failure to so qualify
        or be in good standing in any such other jurisdiction could not, individually
        or
        in the aggregate, reasonably be expected to have a material adverse effect
        on
        the business or operations of the Credit Parties and their Subsidiaries in
        such
        jurisdiction and
        (d) is
        in
        compliance with all Requirements of Law, organizational documents, government
        permits and government licenses except to the extent such non-compliance
        could
        not, individually or in the aggregate, reasonably be expected to have a Material
        Adverse Effect. The jurisdictions in which the Credit Parties are organized
        and
        qualified to do business are described on Schedule
        3.3
        or in
        the 2006 Financials. The Borrower shall update Schedule
        3.3
        from
        time to time, in accordance with Section 5.2, to add Additional Credit
        Parties.

      

      Section
        3.4 Corporate
        Power; Authorization; Enforceable Obligations.

      

      Each
        of
        the Credit Parties has full power and authority and the legal right to make,
        deliver and perform the Credit Documents to which it is party and has taken
        all
        necessary limited liability company, partnership or corporate action to
        authorize the execution, delivery and performance by it of the Credit Documents
        to which it is party. Each Credit Document to which it is a party has been
        duly
        executed and delivered on behalf of each Credit Party. Each Credit Document
        to
        which it is a party constitutes a legal, valid and binding obligation of
        each
        Credit Party, enforceable against such Credit Party in accordance with its
        terms, except as enforceability may be limited by applicable bankruptcy,
        insolvency, reorganization, moratorium or similar laws affecting the enforcement
        of creditors’ rights generally and by general equitable principles (whether
        enforcement is sought by proceedings in equity or at law).

      

      Section
        3.5 No
        Legal Bar; No Default.

      

      The
        execution, delivery and performance by each Credit Party of the Credit Documents
        to which such Credit Party is a party, the borrowings thereunder and the
        use of
        the proceeds of the Loans (a) will not violate any Requirement of Law or
        any Contractual Obligation of any Credit Party (except those as to which
        waivers
        or consents have been obtained and except any violation which could not
        reasonably be expected to have a Material Adverse Effect), (b) will not
        conflict with, result in a breach of or constitute a default under the articles
        of incorporation, bylaws, articles of organization, operating agreement or
        other
        organization documents of the Credit Parties or any material agreement or
        other
        material instrument to which such Person is a party or by which any of its
        properties may be bound or any approval or consent from any Governmental
        Authority relating to such Person, except any violation which could not
        reasonably be expected to have a Material Adverse Effect, and (b)
        will
        not result in, or require, the creation or imposition of any Lien on any
        Credit
        Party’s properties or revenues pursuant to any Requirement of Law or Contractual
        Obligation other than the Liens arising under or contemplated in connection
        with
        the Credit Documents or Permitted Liens. No Credit Party is in default under
        or
        with respect to any of its Contractual Obligations in any material respect.
        No
        Default or Event of Default has occurred and is continuing.

      

      
        
          
          

        

        
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      Section
        3.6 No
        Material Litigation.

      

      No
        litigation, investigation, claim, criminal prosecution, civil investigative
        demand, imposition of criminal or civil fines and penalties, or any other
        proceeding of or before any arbitrator or Governmental Authority is pending
        or,
        to the best knowledge of the Credit Parties, threatened by or against any
        Credit
        Party or any of its Subsidiaries or against any of its or their respective
        properties or revenues
        (a) with
        respect to the Credit Documents or any Extension of Credit or any of the
        transactions contemplated hereby, or
        (b) which
        could reasonably be expected to have a Material Adverse Effect. No permanent
        injunction, temporary restraining order or similar decree has been issued
        against any Credit Party or any of its Subsidiaries which could reasonably
        be
        expected to have a Material Adverse Effect.

      

      Section
        3.7 Investment
        Company Act; etc.

      

      No
        Credit
        Party is an “investment company”, or a company “controlled” by an “investment
        company”, within the meaning of the Investment Company Act of 1940, as amended.
        No Credit Party is a subject to regulation under the Federal Power Act, the
        Interstate Commerce Act, or any federal or state statute or regulation limiting
        its ability to incur the Credit Party Obligations.

      

      Section
        3.8 Margin
        Regulations.

      

      No
        part
        of the proceeds of any Extension of Credit hereunder will be used directly
        or
        indirectly for any purpose that violates, or that would require any Lender
        to
        make any filings in accordance with, the provisions of Regulation T, U
        or X of the Board of Governors of the Federal Reserve System as now and
        from time to time hereafter in effect. The Credit Parties and their Subsidiaries
        (a) are not engaged, principally or as one of their important activities,
        in the
        business of extending credit for the purpose of “purchasing” or “carrying”
“margin stock” within the respective meanings of each of such terms under
        Regulation U and (b) taken as a group do not own “margin stock” except as
        identified in the financial statements referred to in Section 3.1 or
        delivered pursuant to Section 5.1 and the aggregate value of all “margin stock”
owned by the Credit Parties and their Subsidiaries taken as a group does
        not
        exceed 25% of the value of their assets.

      

      
        
          
          

        

        
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      Section
        3.9 ERISA.

      

      Neither
        a
        Reportable Event nor an “accumulated funding deficiency” (within the meaning of
        Section 412 of the Code or Section 302 of ERISA) has occurred during
        the five-year period prior to the date on which this representation is made
        or
        deemed made with respect to any Plan, and each Plan has complied in all material
        respects with the applicable provisions of ERISA and the Code. No termination
        of
        a Single Employer Plan has occurred resulting in any liability that has remained
        underfunded, and no Lien in favor of the PBGC or a Plan has arisen, during
        such
        five-year period. The present value of all accrued benefits under each Single
        Employer Plan (based on those assumptions used to fund such Plans) did not,
        as
        of the last annual valuation date prior to the date on which this representation
        is made or deemed made, exceed the value of the assets of such Plan allocable
        to
        such accrued benefits. Neither any Credit Party nor any Commonly Controlled
        Entity is currently subject to any liability for a complete or partial
        withdrawal from a Multiemployer Plan.

      

      Section
        3.10 Environmental
        Matters.

      

      (a) Except
        as
        could not be reasonably be expected to have a Material Adverse Effect, the
        facilities and properties owned, leased or operated by the Credit Parties
        or any
        of their Subsidiaries (the “Properties”)
        do not
        contain any Materials of Environmental Concern in amounts or concentrations
        which (i) constitute a violation of, or
        (ii) could
        reasonably be expected to give rise to liability on behalf of any Credit
        Party
        under, any Environmental Law.

      

      (b) Except
        as
        could not be reasonably be expected to have a Material Adverse Effect, the
        Properties and all operations of the Credit Parties and/or their Subsidiaries
        at
        the Properties are in compliance with all applicable Environmental Laws,
        and
        there is no contamination at, under or about the Properties or violation
        of any
        Environmental Law with respect to the Properties or the business operated
        by the
        Credit Parties or any of their Subsidiaries (the “Business”).

      

      (c) Except
        as
        could not be reasonably be expected to have a Material Adverse Effect, neither
        the Credit Parties nor their Subsidiaries have received any written or actual
        notice of violation, alleged violation, non-compliance, liability or potential
        liability on behalf of any Credit Party with respect to Environmental Laws
        regarding any of the Properties or the Business, nor do the Credit Parties
        or
        their Subsidiaries have knowledge that any such notice will be received or
        is
        being threatened.

      

      (d) Except
        as
        could not be reasonably be expected to have a Material Adverse Effect, materials
        of Environmental Concern have not been transported or disposed of from the
        Properties in violation of, or in a manner or to a location that could
        reasonably be expected to give rise to liability on behalf of any Credit
        Party
        under any Environmental Law, and no Materials of Environmental Concern have
        been
        generated, treated, stored or disposed of at, on or under any of the Properties
        in violation of, or in a manner that could reasonably be expected to give
        rise
        to liability on behalf of any Credit Party under, any applicable Environmental
        Law.

      

      
        
          
          

        

        
          48

          
            

          

        

        
          
          

        

      

      (e) Except
        as
        could not be reasonably be expected to have a Material Adverse Effect, no
        judicial proceeding or governmental or administrative action is pending or,
        to
        the actual knowledge of the Credit Parties and their Subsidiaries, threatened,
        under any Environmental Law to which any Credit Party or any Subsidiary is
        or is
        expected to be named as a party with respect to the Properties or the Business,
        nor are there any consent decrees or other decrees, consent orders,
        administrative orders or other orders, or other administrative or judicial
        requirements outstanding under any Environmental Law with respect to the
        Properties or the Business.

      

      (f) Except
        as
        could not be reasonably be expected to have a Material Adverse Effect, there
        has
        been no release or threat of release of Materials of Environmental Concern
        at or
        from the Properties, or arising from or related to the operations of any
        Credit
        Party or any Subsidiary in connection with the Properties or otherwise in
        connection with the Business, in violation of or in amounts or in a manner
        that
        could reasonably be expected to give rise to liability on behalf of any Credit
        Party under Environmental Laws.

      

      Section
        3.11 Use
        of Proceeds.

      

      The
        proceeds of the Extensions of Credit shall be used by the Borrower solely
        (a) to consummate the Acquisition, (b) to pay any costs, fees and
        expenses associated with the Acquisition and this Agreement, (c) for
        funding the Interest Reserve Account in accordance with Section 2.6 and the
        costs related to the Hedging Agreements in accordance with Section 5.13,
        (d) to
        repay up to $15,000,000 of Indebtedness pursuant to the Wachovia Repurchase
        Facility and (e) to purchase the Factory Mutual Property, pay costs related
        thereto and defease the mortgages encumbering the Factory Mutual Property
        and
        pay the fees and expenses related thereto. 

      

      Section
        3.12 Subsidiaries;
        Joint Ventures; Partnerships.

      

      Set
        forth
        on Schedule 3.12
        is a
        complete and accurate list of all Subsidiaries, joint ventures and partnerships
        of the Credit Parties. Information on the attached Schedule includes the
        following: (a) the number of shares of each class of Equity Interest or
        other equity interests of each Subsidiary outstanding; (b) the number and
        percentage of outstanding shares of each class of Equity Interest owned by
        the
        Borrower or any of its Subsidiaries; and (c) the number and effect, if
        exercised, of all outstanding options, warrants, rights of conversion or
        purchase and similar rights. The outstanding Equity Interest of all such
        Subsidiaries is validly issued, fully paid and non-assessable and is owned
        free
        and clear of all Liens (other than those arising under or contemplated in
        connection with the Credit Documents). There are no outstanding subscriptions,
        options, warrants, calls, rights or other agreements or commitments (other
        than
        stock options granted to employees or directors and directors’ qualifying
        shares) of any nature relating to any Equity Interest of the Borrower or
        any
        Subsidiary, except as contemplated in connection with the Credit Documents.
        The
        Borrower shall update Schedule
        3.12
        from
        time to time, in accordance with Section 5.2, by providing a replacement
        Schedule
        3.12
        to the
        Administrative Agent.

      

      
        
          
          

        

        
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      Section
        3.13 Ownership.

      

      Each
        of
        the Credit Parties and its Subsidiaries is the owner of, and has good and
        marketable title to or a valid leasehold interest in, all of its respective
        assets, which, together with assets leased or licensed by the Credit Parties
        and
        their Subsidiaries, represents all assets in the aggregate material to the
        conduct of the business of the Credit Parties and their Subsidiaries, and
        (after
        giving effect to the Transactions) none of such assets is subject to any
        Lien
        other than Permitted Liens. To the extent any Credit Party or any of their
        Subsidiaries are lessees, each Credit Party and its Subsidiaries enjoys peaceful
        and undisturbed possession under all of its leases and all such leases are
        valid
        and subsisting and in full force and effect. 

      

      Section
        3.14 Indebtedness.

      

      Except
        as
        otherwise permitted under Section 6.1, the Credit Parties and their Subsidiaries
        have no Indebtedness.

      

      Section
        3.15 Taxes.

      

      Each
        of
        the Credit Parties and its Subsidiaries has filed, or caused to be filed,
        all
        income tax returns and all other material tax returns (federal, state, local
        and
        foreign) required to be filed and paid (a) all amounts of taxes shown thereon
        to
        be due (including interest and penalties) and (b) all other taxes, fees,
        assessments and other governmental charges (including mortgage recording
        taxes,
        documentary stamp taxes and intangibles taxes) owing by it, except for such
        taxes (i) that are not yet delinquent or (ii) that are being contested in
        good
        faith and by proper proceedings, and against which adequate reserves are
        being
        maintained in accordance with GAAP. None of the Credit Parties or their
        Subsidiaries is aware as of the Closing Date of any proposed tax assessments
        against it or any of its Subsidiaries.

      

      Section
        3.16 [Intentionally
        Omitted].

      

      Section
        3.17 Solvency.

      

      After
        giving effect to the Transactions, (a)
        each of
        the Credit Parties is solvent and is able to pay its debts and other
        liabilities, contingent obligations and other commitments as they mature
        in the
        normal course of business, and (b)
        the
        fair saleable value of the assets of the Credit Parties, on a consolidated
        basis, measured on a going concern basis, exceeds all probable liabilities,
        including those to be incurred pursuant to this Agreement. After giving effect
        to the Transactions, none of the Credit Parties (i)
        has
        unreasonably small capital in relation to the business in which it is or
        proposes to be engaged or (ii)
        has
        incurred, or believes that it will incur debts beyond its ability to pay
        such
        debts as they become due. In executing the Credit Documents and consummating
        the
        Transactions, none of the Credit Parties intends to hinder, delay or defraud
        either present or future creditors or other Persons to which one or more
        of the
        Credit Parties is or will become indebted. 

      

      
        
          
          

        

        
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      Section
        3.18 Investments.

      

      All
        Investments of each of the Credit Parties and its Subsidiaries are Permitted
        Investments.

      

      Section
        3.19 Location
        of Collateral.

      

      Set
        forth
        on Schedule 3.19(a)
        is a
        list of all Acquired Properties and set forth on either Schedule 3.19(a)
        or in
        the 2006 Financials is a list all of the other Properties of the Credit Parties
        and their Subsidiaries as of the Closing Date with city and state where located.
        Set forth on Schedule
        3.19(b)
        is a
        list of all locations where any material portion of the tangible personal
        property Collateral (excluding inventory in transit or on temporary display
        at a
        customer location) is located as of the Closing Date, including county and
        state
        where located. Set forth on Schedule 3.19(c)
        is the
        state of incorporation or organization, the chief executive office, the
        principal place of business, the federal tax identification number and
        organization identification number of each of the Credit Parties (and, if
        requested by the Administrative Agent, their Subsidiaries) as of the Closing
        Date. 

      

      Section
        3.20 No
        Burdensome Restrictions.

      

      None
        of
        the Credit Parties or their Subsidiaries is a party to any agreement or
        instrument or subject to any other obligation or any charter or corporate
        restriction or any provision of any applicable law, rule or regulation which,
        individually or in the aggregate, could reasonably be expected to have a
        Material Adverse Effect.

      

      Section
        3.21 Brokers’
        Fees.

      

      None
        of
        the Credit Parties or their Subsidiaries has any obligation to any Person
        other
        than Wachovia and its Affiliates in respect of any finder’s, broker’s,
        investment banking or other similar fee in connection with any of the
        transactions contemplated under the Credit Documents other than the closing
        and
        other fees payable pursuant to this Agreement.

      

      Section
        3.22 Labor
        Matters.

      

      There
        are
        no collective bargaining agreements or Multiemployer Plans covering the
        employees of the Credit Parties or any of their Subsidiaries as of the Closing
        Date, and none of the Credit Parties or their Subsidiaries (a) has suffered
        any strikes, walkouts, work stoppages or other material labor difficulty
        within
        the last five years, or
        (b) has
        knowledge of any potential or pending strike, walkout or work stoppage. No
        unfair labor practice complaint is pending against any Credit Party or any
        of
        its Subsidiaries. There are no strikes, walkouts, work stoppages or other
        material labor difficulty pending or threatened against any Credit
        Party.

      

      
        
          
          

        

        
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      Section
        3.23 Accuracy
        and Completeness of Information.

      

      All
        factual information heretofore, contemporaneously or hereafter furnished
        by or
        on behalf of any Credit Party or any of its Subsidiaries to the Administrative
        Agent or any Lender for purposes of or in connection with this Agreement,
        any
        other Credit Document, the Acquisition Documents or the Approved Mortgages
        or
        any transaction contemplated hereby or thereby, is or will be true and accurate
        in all material respects and not incomplete by omitting to state any material
        fact necessary to make such information not misleading. There is no fact
        now
        known to any Credit Party or any of its Subsidiaries which, individually
        or in
        the aggregate, has, or could reasonably be expected to have, a Material Adverse
        Effect, which fact has not been set forth herein, in the financial statements
        of
        the Borrower and its Subsidiaries furnished to the Administrative Agent and
        the
        Lenders, or in any certificate, opinion or other written statement made or
        furnished by any Credit Party to the Administrative Agent and the
        Lenders.

      

      Section
        3.24 Material
        Contracts.

      

      Schedule
        3.24
        sets
        forth a complete and accurate list of all Material Contracts of the Credit
        Parties and their Subsidiaries in effect as of the Closing Date, including
        the
        date such Material Contract was filed with the SEC, to the extent applicable.
        Each Material Contract is, and after giving effect to the Transactions will
        be,
        in full force and effect in accordance with the terms thereof. To the extent
        requested by the Administrative Agent, the Credit Parties have delivered
        to the
        Administrative Agent a true and complete copy of each Material Contract.
        Schedule
        3.24
        shall be
        updated from time to time, in accordance with Section 5.2 by the Borrower
        to
        include new Material Contracts by giving written notice thereof to the
        Administrative Agent.

      

      Section
        3.25 Insurance.

      

      The
        general liability insurance coverage of the
        Credit
        Parties as of the Closing Date is
        outlined as to carrier, policy number, expiration date, type and amount on
        Schedule
        3.25
        and such
        insurance coverage complies with the requirements set forth in Section 5.5(b).
        Schedule
        3.25
        shall be
        updated from time to time, in accordance with Section 5.2 by the Borrower
        to
        include similar additional insurance coverage.

      

      Section
        3.26 Security
        Documents.

      

      The
        Security Documents create valid security interests in, and Liens on, the
        Collateral purported to be covered thereby. Except as set forth in the Security
        Documents, such security interests and Liens are currently (or will be, upon
        (a)
        the filing of appropriate financing statements with the Secretary of State
        of
        the state of incorporation or organization for each Credit Party, in favor
        of
        the Administrative Agent, on behalf of the Lenders, and (b) the
        Administrative Agent obtaining Control (as defined in the Security Agreement)
        or
        possession over those items of Collateral in which a security interest is
        perfected through Control or possession) perfected security interests and
        Liens,
        prior to all other Liens other than Permitted Liens.

      

      
        
          
          

        

        
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      Section
        3.27 [Intentionally
        Omitted].

      

      

      Section
        3.28 Classification
        of Senior Indebtedness.

      

      The
        Credit Party Obligations constitute “Senior Indebtedness”, “Designated Senior
        Indebtedness” or any similar designation under and as defined in any agreement
        governing any Subordinated Debt and the subordination provisions set forth
        in
        each such agreement are legally valid and enforceable against the parties
        thereto.

      

      Section
        3.29 Anti-Terrorism
        Laws.

      

      Neither
        any Credit Party nor any of its Subsidiaries is an “enemy” or an “ally of the
        enemy” within the meaning of Section 2 of the Trading with the Enemy Act of the
        United States of America (50 U.S.C. App. §§ 1 et
        seq.),
        as
        amended. Neither any Credit Party nor any or its Subsidiaries is in violation
        of
        (a) the Trading with the Enemy Act, as amended, (b) any of the foreign assets
        control regulations of the United States Treasury Department (31 CFR, Subtitle
        B, Chapter V, as amended) or any enabling legislation or executive order
        relating thereto or (c) the Patriot Act. None of the Credit Parties (i) is
        a
        blocked person described in Section 1 of the Anti-Terrorism Order or (ii)
        to the
        best of its knowledge, engages in any dealings or transactions, or is otherwise
        associated, with any such blocked person.

      

      Section
        3.30 Compliance
        with OFAC Rules and Regulations.

      

      None
        of
        the Credit Parties or their Subsidiaries or their respective Affiliates
        (a) is a Sanctioned Person, (b) has more than 15% of its assets in
        Sanctioned Countries, or (c) derives more than 15% of its operating income
        from investments in, or transactions with Sanctioned Persons or Sanctioned
        Countries. No part of the proceeds of any Extension of Credit hereunder will
        be
        used directly or indirectly to fund any operations in, finance any investments
        or activities in or make any payments to, a Sanctioned Person or a Sanctioned
        Country.

      

      Section
        3.31 Compliance
        with FCPA.

      

      Each
        of
        the Credit Parties and their Subsidiaries is in compliance with the Foreign
        Corrupt Practices Act, 15 U.S.C. §§ 78dd-1, et
        seq.,
        and any
        foreign counterpart thereto. None of the Credit Parties or their Subsidiaries
        has made a payment, offering, or promise to pay, or authorized the payment
        of,
        money or anything of value (a) in order to assist in obtaining or retaining
        business for or with, or directing business to, any foreign official, foreign
        political party, party official or candidate for foreign political office,
        (b) to a foreign official, foreign political party or party official or any
        candidate for foreign political office, and (c) with the intent to induce
        the recipient to misuse his or her official position to direct business
        wrongfully to such Credit Party or its Subsidiary or to any other Person,
        in
        violation of the Foreign Corrupt Practices Act, 15 U.S.C. §§ 78dd-1,
et
        seq. 

      

      
        
          
          

        

        
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      Section
        3.32 Consent;
        Governmental Authorizations.

      

      No
        approval, consent or authorization of, filing with, notice to or other act
        by or
        in respect of, any Governmental Authority or any other Person is required
        in
        connection with acceptance of Extensions of Credit by the Borrower or the
        making
        of the Guaranty hereunder or with the execution, delivery or performance
        of any
        Credit Document by the Credit Parties (other than those which have been
        obtained) or with the validity or enforceability of any Credit Document against
        the Credit Parties
        (except
        such filings as are necessary in connection with the perfection of the Liens
        created by such Credit Documents).

      

      Section
        3.33 REIT
        Status.

      

      Each
        Credit Party and each Subsidiary of any Credit Party is in compliance in
        all
        material respects with all statutes, regulations, rules and orders applicable
        to
        the Credit Parties or such Subsidiary of all Governmental Authorities,
        including, without limitation, §§856-860 of the Code, compliance with which is
        required to preserve the Parent’s status as a REIT.

      

      Section
        3.34 REIT
        Election.

      

      The
        Parent (a)
        has
        made an election pursuant to Section 856 of the Code to qualify as a REIT,
        (b)
        has satisfied and continues to satisfy all of the requirements under §§ 856-859
        of the Code and the regulations and rulings issued thereunder which must
        be
        satisfied for the Parent to maintain its status as a REIT, and (c) is in
        compliance in all material respects with all Code sections applicable to
        REITs
        generally and the regulations and rulings issued thereunder.

      

      ARTICLE
        IV

      

      CONDITIONS
        PRECEDENT

      

      Section
        4.1 Conditions
        to Closing Date.

      

      This
        Agreement shall become effective upon, and the obligation of each Lender
        to make
        the Term Loan on the Closing Date is subject to, the satisfaction of the
        following conditions precedent:

      

      (a) Execution
        of Credit Agreement; Credit Documents and Lender Consents.
        The
        Administrative Agent shall have received (i) counterparts of this
        Agreement, executed by a duly authorized officer of each party hereto,
        (ii)  for the account of each Term Loan Lender requesting a promissory
        note, a Term Loan Note, (iii) counterparts of the Security Agreement and
        the Pledge Agreement, in each case conforming to the requirements of this
        Agreement and executed by duly authorized officers of the Credit Parties
        or
        other Person, as applicable, (iv) counterparts of any other Credit
        Document, executed by the duly authorized officers of the parties thereto
        and
        (v) executed consents, in the form of Exhibit
        4.1(a),
        from
        each Lender authorizing the Administrative Agent to enter this Credit Agreement
        on their behalf.

      

      
        
          
          

        

        
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      (b) Authority
        Documents.
        The
        Administrative Agent shall have received the following:

      

      (i) Articles
        of Incorporation/Charter Documents.
        Original certified articles of incorporation or other charter documents,
        as
        applicable, of each Credit Party certified (A) by an officer of such Credit
        Party (pursuant to an officer’s certificate in substantially the form of
Exhibit
        4.1(b)
        attached
        hereto) as of the Closing Date to be true and correct and in force and effect
        as
        of such date, and (B) to be true and complete as of a recent date by the
        appropriate Governmental Authority of the state of its incorporation or
        organization, as applicable.

      

      (ii) Resolutions.
        Copies
        of resolutions of the board of directors or comparable managing body of each
        Credit Party approving and adopting the Credit Documents, the transactions
        contemplated therein and authorizing execution and delivery thereof, certified
        by an officer of such Credit Party (pursuant to an officer’s certificate in
        substantially the form of Exhibit
        4.1(b)
        attached
        hereto) as of the Closing Date to be true and correct and in force and effect
        as
        of such date.

      

      (iii) Bylaws/Operating
        Agreement.
        A copy
        of the bylaws or comparable operating agreement of each Credit Party certified
        by an officer of such Credit Party (pursuant to an officer’s certificate in
        substantially the form of Exhibit
        4.1(b)
        attached
        hereto) as of the Closing Date to be true and correct and in force and effect
        as
        of such date.

      

      (iv) Good
        Standing.
        Original certificates of good standing, existence or its equivalent with
        respect
        to each Credit Party certified as of a recent date by the appropriate
        Governmental Authorities of the state of incorporation or organization and
        each
        other state in which the failure to so qualify and be in good standing could
        reasonably be expected to have a Material Adverse Effect.

      

      (v) Incumbency.
        An
        incumbency certificate of each Credit Party certified by an officer (pursuant
        to
        an officer’s certificate in substantially the form of Exhibit
        4.1(b)
        attached
        hereto) to be true and correct as of the Closing Date.

      

      (c) Legal
        Opinion of Counsel.
        The
        Administrative Agent shall have received an opinion or opinions (including,
        if
        requested by the Administrative Agent, local counsel opinions) of counsel
        for
        the Credit Parties (including the Acquired Company), dated the Closing Date
        and
        addressed to the Administrative Agent and the Lenders, in form and substance
        acceptable to the Administrative Agent which shall include, without limitation,
        opinions with respect to the due organization and valid existence of each
        Credit
        Party (including the Acquired Company), opinions as to perfection of the
        Liens
        granted to the Administrative Agent pursuant to the Security Documents and
        opinions as to the non-contravention of the Credit Parties’ (including the
        Acquired Company’s) organizational documents and certain Material Contracts to
        be mutually agreed upon by the Administrative Agent and the Credit Parties.
        

      

      
        
          
          

        

        
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      (d) Personal
        Property Collateral.
        The
        Administrative Agent shall have received, in form and substance satisfactory
        to
        the Administrative Agent:

      

      (i) (A) searches
        of UCC filings in the jurisdiction of incorporation or formation, as applicable,
        of each Credit Party and each jurisdiction where any Collateral is located
        or
        where a filing would need to be made in order to perfect the Administrative
        Agent’s security interest in the Collateral, copies of the financing statements
        on file in such jurisdictions and evidence that no Liens exist other than
        Permitted Liens and (B) tax lien, judgment and pending litigation
        searches;

      

      (ii) [Intentionally
        omitted]; 

      

      (iii) completed
        UCC financing statements for each appropriate jurisdiction as is necessary,
        in
        the Administrative Agent’s sole discretion, to perfect the Administrative
        Agent’s security interest in the Collateral;

      

      (iv) with
        respect to the stock or membership certificates, if any, evidencing the Equity
        Interest pledged to the Administrative Agent pursuant to the Pledge Agreement,
        together with undated stock or transfer powers, duly executed in
        blank;

      

      (v) duly
        executed consents as are necessary, in the Administrative Agent’s sole
        discretion, to perfect the Lenders’ security interest in the Collateral;

      

      (vi) in
        the
        case of any tangible personal property Collateral located at premises leased
        by
        a Credit Party and set forth on Schedule
        3.19(a)
        or in
        the 2006 Financials such estoppel letters, consents and waivers from the
        landlords of such real property to the extent the Borrower is able to secure
        such letters, consents and waivers after using commercially reasonable efforts
        (such letters, consents and waivers shall be in form and substance satisfactory
        to the Administrative Agent, it being acknowledged and agreed that any landlord
        waiver in the form of Exhibit
        4.1(d)
        is
        satisfactory to the Administrative Agent), provided, however, the Credit
        Parties
        shall not be required to schedule office equipment located in their New York
        office or attempt to obtain a landlord waiver with respect thereto;
 

      

      (vii) all
        instruments and chattel paper in the possession of any of the Credit Parties,
        together with allonges or assignments as may be necessary or appropriate
        to
        perfect the Administrative Agent’s and the Lenders’ security interest in the
        Collateral;

      

      (viii) Deposit
        Account Control Agreements satisfactory to the Administrative Agent with
        respect
        to the Interest Reserve Account and all other deposit accounts other than
        payroll accounts; and

      

      
        
          
          

        

        
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      (ix) Securities
        Account Control Agreements satisfactory to the Administrative Agent with
        respect
        to each securities account, except payroll accounts and to the extent otherwise
        determined by the Administrative Agent. 

      

      (e) Acquired
        Properties.
        There
        shall be no Liens encumbering any of the Acquired Properties other than Liens
        shown on the title insurance for the Acquired Properties that are acceptable
        to
        the Administrative Agent. The Borrower shall deliver to the Administrative
        Agent
        lender estoppels in substantially the form attached to the Purchase Agreement,
        which shall include the outstanding principal balance of the applicable Approved
        Mortgage and such other information required by the Administrative
        Agent.

      

      (f) Liability,
        Casualty, Property and Business Interruption Insurance.
        The
        Administrative Agent shall have received certificates and endorsements of
        insurance evidencing liability, casualty, property and business interruption
        insurance meeting the requirements set forth herein or in the Security
        Documents. The Administrative Agent shall be named (i)
        as
        lender’s loss payee, as its interest may appear, with respect to any such
        insurance providing coverage in respect of any Collateral and (ii)
        as
        additional insured, as its interest may appear, with respect to any such
        insurance providing liability coverage with respect to any Credit Party,
        and the
        Borrower will use its commercially reasonable efforts to have each provider
        of
        any such insurance agree, by endorsement upon the policy or policies issued
        by
        it or by independent instruments to be furnished to the Administrative Agent,
        (A) that it will give the Administrative Agent thirty (30) days prior written
        notice before any such policy or policies shall be altered or cancelled,
        and (B)
        that such policies shall provide that no act or default of the Credit Parties
        or
        any of their Subsidiaries or any other Person shall affect the rights of
        the
        Administrative Agent or the Lenders under such policy or policies.

      

      (g) Solvency
        Certificate.
        The
        Administrative Agent shall have received an officer’s certificate prepared by
        the chief financial officer of the Parent as to the financial condition,
        solvency and related matters of the Credit Parties and their Subsidiaries,
        after
        giving effect to the initial borrowings under the Credit Documents, in
        substantially the form of Exhibit
        4.1(g)
        hereto.

      

      (h) Account
        Designation Notice.
        The
        Administrative Agent shall have received the executed Account Designation
        Notice
        in the form of Exhibit
        1.1(a)
        hereto.

      

      (i) Notice
        of Borrowing.
        The
        Administrative Agent shall have received a Notice of Borrowing with respect
        to
        the Loans to be made on the Closing Date.

      

      (j) Consents.
        The
        Administrative Agent shall have received evidence that all boards of directors,
        governmental, shareholder and material third party consents and approvals
        necessary in connection with the Transactions have been obtained and all
        applicable waiting periods have expired without any action being taken by
        any
        authority that could restrain, prevent or impose any material adverse conditions
        on such transactions or that could seek or threaten any of the foregoing.
        

      

      
        
          
          

        

        
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      (k) Compliance
        with Laws.
        The
        financings and other Transactions contemplated hereby shall not result in
        a
        violation by any Credit Party or any of their Subsidiaries of any applicable
        laws and regulations (including all applicable securities and banking laws,
        rules and regulations).

      

      (l) Bankruptcy.
        There
        shall be no bankruptcy or insolvency proceedings pending with respect to
        any
        Credit Party or any Subsidiary thereof.

      

      (m) [Intentionally
        Omitted];

      

      (n) Financial
        Statements.
        The
        Administrative Agent and the Lenders shall have received copies of the financial
        statements referred to in Section 3.1.

      

      (o) No
        Material Adverse Change.
        Since December
        31, 2006 (a) (and, in addition, since delivery of the most recent annual
        audited
        financial statements), there shall have been no material adverse change in
        the
        business, properties, prospects, operations or condition (financial or
        otherwise) of the Borrower or any of its Subsidiaries and there shall not
        have
        occurred any material disruption or material adverse change in the financial,
        banking or capital markets (including the loan syndication market) that has
        impaired or would impair the ability to syndicate the facilities. 

      

      (p) Financial
        Condition Certificate.
        The
        Administrative Agent shall have received a certificate or certificates executed
        by a Responsible Officer of the Parent as of the Closing Date, substantially
        in
        the form of Exhibit
        4.1(p)
        stating
        that (i) there does not exist any pending or ongoing, action, suit,
        investigation, litigation or proceeding in any court or before any other
        Governmental Authority to which any Credit Party or any of their Subsidiaries
        is
        a party (A) affecting this Agreement or the other Credit Documents, that
        has not been settled, dismissed, vacated, discharged or terminated prior
        to the
        Closing Date or (B) that purports to affect any Credit Party or any of its
        Subsidiaries, or any transaction contemplated by the Credit Documents, which
        action, suit, investigation, litigation or proceeding could reasonably be
        expected to have a Material Adverse Effect, that has not been settled,
        dismissed, vacated, discharged or terminated prior to the Closing Date,
        (ii) immediately
        after giving effect to this Agreement, the other Credit Documents, and all
        the
        Transactions contemplated to occur on such date, (A) no
        Default or Event of Default exists, (B) all
        representations and warranties contained herein and in the other Credit
        Documents are true and correct, and (C) the
        Credit Parties are in pro forma compliance with the financial covenant set
        forth
        in Section 5.9 (as evidenced through detailed calculations of such
        financial covenants on a schedule to such certificate) and (D)
        no
        violation has occurred pursuant to any Approved Mortgages or any other
        Indebtedness document to which any Acquired Company is party and (iii) each
        of
        the other conditions precedent in Section 4.1 have been satisfied, except
        to the
        extent the satisfaction of any such condition has been waived in writing
        by the
        Administrative Agent or is subject to the judgment or discretion of the
        Administrative Agent or any Lender.

      

      
        
          
          

        

        
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      (q) Patriot
        Act Certificate.
        At
        least one (1) Business Day prior to the Closing Date, the
        Administrative Agent shall have received a certificate satisfactory thereto,
        substantially in the form of Exhibit
        4.1(q),
        for
        benefit of itself and the Lenders, provided by the Borrower that sets forth
        information required by the Patriot Act including, without limitation, the
        identity of the Credit Parties, the name and address of the Credit Parties
        and
        other information that will allow the Administrative Agent or any Lender,
        as
        applicable, to identify the Credit Parties in accordance with the Patriot
        Act.

      

      (r) Material
        Contracts.
        To the
        extent requested in writing by the Administrative Agent, the Administrative
        Agent shall have received true and complete copies, certified by an officer
        of
        the Borrower as true and complete, of such Material Contracts, together with
        all
        exhibits and schedules, excluding the Approved Mortgages, the Wachovia
        Repurchase Facility and the Wachovia Acquisition Facility.

      

      (s) [Intentionally
        omitted.]

      

      (t) Fees
        and Expenses.
        The
        Administrative Agent and the Lenders shall have received all fees and expenses,
        if any, owing pursuant to Section 2.5. 

      

      (u) Amendment
        and Waiver.
        The
        Administrative Agent shall have received a fully executed and effective
        amendment issued pursuant to the Wachovia Repurchase Facility and waiver
        issued
        pursuant to the Wachovia Acquisition Facility, each in form and substance
        acceptable to the Administrative Agent.

      

      (v) Additional
        Matters.
        All
        other documents and legal matters in connection with the transactions
        contemplated by this Agreement shall be reasonably satisfactory in form and
        substance to the Administrative Agent and its counsel.

      

      Section
        4.2 Conditions
        to All Extensions of Credit.

      

      The
        obligation of each Lender to make any Extension of Credit hereunder is subject
        to the satisfaction of the following conditions precedent on the date of
        making
        such Extension of Credit:

      

      (a) Representations
        and Warranties.
        The
        representations and warranties made by the Credit Parties herein, in the
        Security Documents and which are contained in any certificate furnished at
        any
        time under or in connection herewith shall (i) with respect to representations
        and warranties that contain a materiality qualification, be
        true
        and correct and (ii) with respect to representations and warranties that
        do not
        contain a materiality qualification, be true and correct in all material
        respects, in each case on and as of the date of such Extension of Credit
        as if
        made on and as of such date except for any representation or warranty made
        as of
        an earlier date, which representation and warranty shall remain true and
        correct
        as of such earlier date.

      

      (b) No
        Default or Event of Default.
        No
        Default or Event of Default shall have occurred and be continuing on such
        date
        or after giving effect to the Extension of Credit to be made on such date
        unless
        such Default or Event of Default shall have been waived in accordance with
        this
        Agreement.

      

      
        
          
          

        

        
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      (c) Change
        in Condition.
        The
        Lenders shall have determined, in their reasonable good faith discretion
        that no
        event, circumstance or condition has occurred with respect to the Credit
        Parties, their Subsidiaries, the Collateral that would or could reasonably
        be
        expected to have an adverse effect on the Collateral, the Acquired Properties
        or
        could reasonably be expected to have a Material Adverse Effect.

      

      (d) Notice
        of Borrowing.
        The
        Borrower shall have delivered a completed and executed Notice of Borrowing
        to
        the Administrative Agent.

      

      (e) Payment
        of the Origination Fee. Administrative Agent shall have received the Origination
        Fee pursuant to Section 2.5(b).

      

      (f) Funding
        of Interest Reserve Account.
        The
        Borrower shall have deposited in the Interest Reserve Account the amount
        required pursuant to Section 2.6 of this Agreement with respect to the requested
        Extension of Credit.

      

      (g) Acquisition
        Documents.
        With
        respect to the Delayed Draw Term Loan only, (i) the Administrative Agent
        shall
        have reviewed and approved in its sole discretion all of the
        Acquisition Documents,
        (ii) there shall not have been any material modification, amendment, supplement
        or waiver to the Acquisition
        Documents
        adverse to the Credit Parties, the Administrative Agent or the Lenders (such
        determination to be in the sole judgment of the Administrative Agent) from
        the
        forms thereof which were delivered to the Administrative Agent prior to the
        Closing Date without the prior written consent of the Administrative Agent,
        such
        consent not to be unreasonably withheld or delayed, (iii) the
        Acquisition shall
        have been consummated in accordance with the terms of the Acquisition
        Documents,
        and (iv) the Administrative Agent shall have received from the Borrower a
        true
        and complete copy of each Acquisition Document
        as originally executed and delivered, together with all exhibits and schedules
        thereto.

      

      Each
        request for an Extension of Credit and each acceptance by the Borrower of
        any
        such Extension of Credit shall be deemed to constitute representations and
        warranties by the Credit Parties as of the date of such Extension of Credit
        that
        the conditions set forth above in paragraphs (a) through (f), as applicable,
        have been satisfied.

      

      

      ARTICLE
        V

      

      AFFIRMATIVE
        COVENANTS

      

      Each
        of
        the Credit Parties hereby covenants and agrees that on the Closing Date,
        and
        thereafter (a)
        for so
        long as this Agreement is in effect, (b)
        until
        the Commitments have terminated, and (c)
        until
        no Note remains outstanding and unpaid and the Credit Party Obligations and
        all
        other amounts owing to the Administrative Agent or any Lender hereunder are
        paid
        in full, such Credit Party shall, and shall cause each of their Subsidiaries
        (other than in the case of Sections 5.1 or 5.2 hereof), to:

      

      
        
          
          

        

        
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      Section
        5.1 Financial
        Statements.

      

      Furnish
        to the Administrative Agent and each of the Lenders:

      

      (a) Annual
        Financial Statements.
        As soon
        as available and in any event no later than the earlier of (i) to the extent
        applicable, five (5) days following the date the Parent delivers, or if earlier,
        was required by the SEC to deliver, its Form 10-K for each fiscal year of
        the
        Parent and (ii) ninety (90) days after the end of each fiscal year of the
        Parent, a copy of the Consolidated balance
        sheet of the Parent and its Consolidated Subsidiaries as at the end of such
        fiscal year and the related Consolidated statements of income and changes
        in
        shareholders’ equity and of cash flows of the Parent and its Consolidated
        Subsidiaries for such year, which shall be audited by a firm of independent
        certified public accountants of nationally recognized standing, setting forth
        in
        each case in comparative form the figures for the previous year, reported
        on
        without a “going concern” or like qualification or exception, or qualification
        indicating that the scope of the audit was inadequate to permit such independent
        certified public accountants to certify such financial statements without
        such
        qualification; and

      

      (b) Quarterly
        Financial Statements.
        As soon
        as available and in any event no later than the earlier of (i) to the extent
        applicable, five (5) days following the date the Parent delivers, or if earlier,
        was required by the SEC to deliver its Form 10-Q for any fiscal quarter of
        the
        Parent and (ii) forty-five (45) days after the end of each fiscal quarter
        of the
        Parent, a copy of the Consolidated balance sheet of the Parent and its
        Consolidated Subsidiaries as at the end of such period and related Consolidated
        statements of income and changes in shareholders’ equity and of cash flows for
        the Parent and its Consolidated Subsidiaries for such quarterly period and
        for
        the portion of the fiscal year ending with such period, in each case setting
        forth in comparative form Consolidated figures for the corresponding period
        or
        periods of the preceding fiscal year (subject to normal recurring year-end
        audit
        adjustments); 

      

      all
        such
        financial statements to be complete and correct in all material respects
        (subject, in the case of interim statements, to normal recurring year-end
        audit
        adjustments) and to be prepared in reasonable detail and, in the case of
        the
        annual, quarterly financial statements provided in accordance with
        subsections (a) and (b) above, in accordance with GAAP applied consistently
        throughout the periods reflected therein and further accompanied by a
        description of, and an estimation of the effect on the financial statements
        on
        account of, a change, if any, in the application of accounting principles
        as
        provided in Section 1.3.

      

      Notwithstanding
        the foregoing, financial statements and reports required to be delivered
        pursuant to the foregoing provisions of this Section may be delivered
        electronically and if so, shall be deemed to have been delivered on the date
        on
        which the Administrative Agent receives such reports from the Borrower through
        electronic mail; provided
        that,
        upon the Administrative Agent’s request, the Borrower shall provide paper copies
        of any documents required hereby to the Administrative Agent.

      

      
        
          
          

        

        
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      Section
        5.2 Certificates;
        Other Information.

      

      Furnish
        to the Administrative Agent and each of the Lenders:

      

      (a) concurrently
        with the delivery of the financial statements referred to in Section 5.1(a)
        above, a certificate of the independent certified public accountants reporting
        on such financial statements stating that in making the examination necessary
        therefor no knowledge was obtained of any Default or Event of Default, except
        as
        specified in such certificate;

      

      (b) concurrently
        with the delivery of the financial statements referred to in Sections 5.1(a)
        and
        5.1(b) above, a certificate of a Responsible Officer substantially in the
        form
        of Exhibit
        5.2(b)
        (i) stating that (A) such financial statements present fairly the
        financial position of the Parent and its Subsidiaries for the periods indicated
        in conformity with GAAP applied on a consistent basis, (B) each of the
        Credit Parties during such period observed or performed all of its covenants
        and
        other agreements, and satisfied every condition, contained in this Agreement
        to
        be observed, performed or satisfied by it, and (C) such Responsible Officer
        has obtained no knowledge of any Default or Event of Default except as specified
        in such certificate and such certificate shall include the calculations in
        reasonable detail required to indicate compliance with Section 5.9 as of
        the last day of such period and (ii) demonstrating compliance with the covenants
        set forth in Section 5.9 of this Agreement; 

      

      (c) concurrently
        with or prior to the delivery of the financial statements referred to in
        Sections 5.1(a) and 5.1(b) above, (i) an updated copy of Schedule
        3.3,
        in the
        event any information has materially changed, and Schedule
        3.12
        if the
        Parent or any of its Subsidiaries has formed or acquired a new Subsidiary
        since
        the Closing Date or since such Schedule was last updated, as applicable,
        (ii) an updated copy of Schedule
        3.24
        if any
        new Material Contract has been entered into since the Closing Date or since
        Schedule
        3.24
        was last
        updated, as applicable, together with a copy of each new Material Contract,
        and
        (iii) an updated copy of Schedule
        6.14
        if any
        Credit Party opens, maintains or otherwise has any checking, savings or other
        account (including securities accounts) not set forth on Schedule
        6.14;
        

      

      (d) promptly
        upon their becoming available, (i) copies of all reports (other than those
        provided pursuant to Section 5.1 and those which are of a promotional
        nature) and other financial information which the Parent of Borrower sends
        to
        its shareholders, (ii) copies (or if filed with the SEC, written notice to
        the Administrative Agent of such filing) of all reports and all registration
        statements and prospectuses, if any, which the Parent or Borrower may make
        to,
        or file with, the SEC (or any successor or analogous Governmental Authority)
        or
        any securities exchange or other private regulatory authority, (iii) all
        material regulatory reports and (iv) all press releases made available by
        any of the Credit Parties to the public concerning material developments
        in the
        business of any of the Credit Parties;

      

      
        
          
          

        

        
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      (e) within
        ninety (90) days after the end of each fiscal year of the Parent and its
        Consolidated Subsidiaries, and as may periodically be requested by the
        Administrative Agent, a certificate containing information including a
        calculation of all dividends, Asset Dispositions, Debt Issuances, and Equity
        Issuances that were made during the prior fiscal year and amounts received
        in
        connection with any Extraordinary Receipt during the prior fiscal year (or
        such
        other period requested by the Administrative Agent);

      

      (f) promptly
        upon receipt thereof, a copy or summary of any other report, or “management
        letter” or similar report submitted by independent accountants to the
        Parent
        or any
        of its Subsidiaries
        in
        connection with any annual, interim or special audit of the books of such
        Person; and

      

      (g) promptly,
        such additional financial and other information as the Administrative Agent,
        on
        behalf of any Lender, may from time to time reasonably request.

      

      Section
        5.3 Payment
        of Taxes and Other Obligations.

      

      Pay,
        discharge or otherwise satisfy at or before maturity or before they become
        delinquent, as the case may be, subject, where applicable, to specified grace
        periods, (a) all of its taxes (Federal, state, local and any other taxes)
        and
        (b) all of its other obligations and liabilities of whatever nature in
        accordance with industry practice, unless being contested in good faith and
        subject to adequate reserves in accordance with GAAP and (c) any additional
        costs that are imposed as a result of any failure to so pay, discharge or
        otherwise satisfy such taxes, obligations and liabilities, except when the
        amount or validity of any such taxes, obligations and liabilities is currently
        being contested in good faith by appropriate proceedings and reserves, if
        applicable, in conformity with GAAP with respect thereto have been provided
        on
        the books of the Credit Parties.

      

      Section
        5.4 Conduct
        of Business and Maintenance of Existence.

      

      Continue
        to engage in business of the same general type as now conducted by it on the
        Closing Date and preserve, renew and keep in full force and effect its corporate
        or other formative existence and good standing, take all reasonable action
        to
        maintain all rights, privileges and franchises necessary in the normal conduct
        of its business and to comply in all material respects with all contractual
        obligations and Requirements of Law. 

      

      Section
        5.5 Maintenance
        of Property; Insurance.

      

      (a) Keep
        all
        material property useful and necessary in its business in good working order
        and
        condition (ordinary wear and tear and obsolescence excepted).

      

      
        
          
          

        

        
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      (b) Maintain
        with financially sound and reputable insurance companies liability, casualty,
        property and business interruption insurance (including, without limitation,
        insurance with respect to its tangible Collateral) in at least such amounts
        and
        against at least such risks as are usually insured against in the same general
        area by companies engaged in the same or a similar business; and furnish
        to the
        Administrative Agent, upon the request of the Administrative Agent, full
        information as to the insurance carried. The Administrative Agent shall be
        named
        (i)
        as
        Lender’s loss payee, as its interest may appear with respect to any property
        insurance on any Collateral, and (ii)
        as
        additional insured, as its interest may appear, with respect to any liability
        insurance maintained by a Credit Party, and the Borrower will use its
        commercially reasonable efforts to have each provider of any such insurance
        agree, by endorsement upon the policy or policies issued by it or by independent
        instruments to be furnished to the Administrative Agent, (A) that it will
        give
        the Administrative Agent thirty (30) days prior written notice before any
        such
        policy or policies shall be altered or cancelled, and (B) that such policies
        shall provide that no act or default of the Credit Parties or any of their
        Subsidiaries or any other Person shall affect the rights of the Administrative
        Agent or the Lenders under such policy or policies. 

      

      (c) In
        case
        of any material loss, damage to or destruction of the Collateral of any Credit
        Party or any part thereof, such Credit Party shall promptly give written
        notice
        thereof to the Administrative Agent generally describing the nature and extent
        of such damage or destruction. In case of any such material loss, damage
        to or
        destruction of the Collateral of any Credit Party or any part thereof, if
        required by the Administrative Agent or the Required Lenders, such Credit
        Party
        (whether or not the insurance proceeds, if any, received on account of such
        damage or destruction shall be sufficient for that purpose), at such Credit
        Party’s cost and expense, will promptly repair or replace the Collateral of such
        Credit Party so lost, damaged or destroyed.

      

      Section
        5.6 Inspection
        of Property; Books and Records; Discussions.

      

      Keep
        proper books, records and accounts in which full, true and correct entries
        in
        conformity with GAAP and all Requirements of Law shall be made of all dealings
        and transactions in relation to its businesses and activities; and permit,
        during regular business hours and upon reasonable notice by the Administrative
        Agent or any Lender, the Administrative Agent or any Lender to visit and
        inspect
        any of its properties and examine and make abstracts from any of its books
        and
        records at any reasonable time and as often as may reasonably be desired,
        and to
        discuss the business, operations, properties, financial conditions and other
        conditions of the Credit Parties and their Subsidiaries with officers and
        employees of the Credit Parties and their Subsidiaries and with its independent
        certified public accountants.

      

      Section
        5.7 Notices.

      

      Give
        notice in writing to the Administrative Agent (which shall promptly transmit
        such notice to each Lender):

      

      
        
          
          

        

        
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      (a) promptly,
        but in any event within two (2) Business Days after any Credit Party knows
        thereof, the occurrence of any Default or Event of Default;

      

      (b) promptly,
        any default or event of default under any Contractual Obligation of any Credit
        Party or any of its Subsidiaries which, individually or in the aggregate,
        could
        reasonably be expected to have a Material Adverse Effect or involve a monetary
        claim in excess of $5,000,000;

      

      (c) promptly,
        any litigation, or any investigation or proceeding known or threatened to
        any
        Credit Party (i)
        affecting any Credit Party or any of its Subsidiaries which, individually
        or in
        the aggregate, could reasonably be expected to have a Material Adverse Effect
        or
        involve a monetary claim in excess of $5,000,000 or involving injunctions
        or
        requesting injunctive relief by or against any Credit Party or any Subsidiary
        of
        any Credit Party, (ii)
        affecting or with respect to this Agreement, any other Credit Document or
        any
        security interest or Lien created thereunder, (iii)
        involving an environmental claim or potential liability under Environmental
        Laws
        which could reasonably be expected to have, individually or in the aggregate,
        a
        Material Adverse Effect, or (iv)
        by any
        Governmental Authority relating to the Parent or any Subsidiary thereof and
        alleging fraud, deception or willful misconduct by such Person;

      

      (d) of
        any
        labor controversy that has resulted in, or threatens to result in, a strike
        or
        other work action against any Credit Party which could reasonably be expected
        to
        have a Material Adverse Effect;

      

      (e) of
        any
        attachment, judgment, lien, levy or order exceeding $5,000,000 that may be
        assessed against or threatened against any Credit Party other than Permitted
        Liens;

      

      (f) as
        soon
        as possible and in any event within thirty (30) days
        after
        any Credit Party knows or has reason to know thereof: (i) the occurrence or
        expected occurrence of any Reportable Event with respect to any Plan, a failure
        to make any required contribution to a Plan, the creation of any Lien in
        favor
        of the PBGC (other than a Permitted Lien) or a Plan or any withdrawal from,
        or
        the termination, Reorganization or Insolvency of, any Multiemployer Plan
        or
        (ii) the institution of proceedings or the taking of any other action by
        the PBGC or any Credit Party, any Commonly Controlled Entity or any
        Multiemployer Plan, with respect to the withdrawal from, or the terminating,
        Reorganization or Insolvency of, any Plan; 

      

      (g) promptly
        after becoming aware of the occurrence of any Internal Control
        Event;

      

      (h) as
        soon
        as possible and in any event within ten (10) days prior to creating a
        Material Domestic Subsidiary, notice of the creation of such Material Domestic
        Subsidiary;

      

      
        
          
          

        

        
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      (i) promptly,
        any notice of any violation received by any Credit Party from any Governmental
        Authority including, without limitation, any notice of violation of
        Environmental Laws; 

      

      (j) promptly,
        any notice of a change in senior management, a disposition of material assets
        of
        the Credit Parties;

      

      (k) simultaneous
        with the distribution of the following by a Credit Party to other third parties:
        (i) management reports, (ii) filings with the SEC, (iii) filings with the
        stock
        exchange where such Credit Party is listed or is seeking listing and (iv)
        reports and other information distributed to stockholders generally;

      

      (l) promptly,
        any other development or event which could reasonably be expected to have
        a
        Material Adverse Effect; and

      

      (m) promptly,
        upon request by the Administrative Agent or any Lender, such other information
        regarding the business, assets, liabilities, financial condition, results
        of
        operations or business prospects of the Credit Parties or any of their
        Subsidiaries as may be reasonably requested from time to time.

      

      Each
        notice pursuant to this Section shall be accompanied by a statement of a
        Responsible Officer setting forth details of the occurrence referred to therein
        and stating what action the Credit Parties propose to take with respect thereto.
        In the case of any notice of a Default or Event of Default, the Borrower
        shall
        specify that such notice is a Default or Event of Default notice on the face
        thereof.

      

      Section
        5.8 Environmental
        Laws.

      

      (a) Comply
        in
        all material respects with, and will use commercially reasonable efforts
        to
        cause compliance (including enforcement of lease provisions when appropriate
        in
        the applicable lessor’s reasonable judgment) in all material respects by all
        tenants and subtenants, if any, with, all applicable Environmental Laws and
        obtain and comply in all material respects with and maintain, and will use
        commercially reasonable efforts (including enforcement of lease provisions
        when
        appropriate in the applicable lessor’s reasonable judgment) to cause all tenants
        and subtenants obtain and comply in all material respects with and maintain,
        any
        and all licenses, approvals, notifications, registrations or permits required
        by
        applicable Environmental Laws;

      

      (b) Conduct
        and complete all investigations, studies, sampling and testing, and all
        remedial, removal and other actions required under Environmental Laws and
        promptly comply in all material respects with all lawful orders and directives
        of all Governmental Authorities regarding Environmental Laws except to the
        extent that the same are being contested in good faith by appropriate
        proceedings; and

      

      
        
          
          

        

        
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      (c) Defend,
        indemnify and hold harmless the Administrative Agent and the Lenders, and
        their
        respective employees, agents, officers and directors and affiliates, from
        and
        against any and all claims, demands, penalties, fines, liabilities, settlements,
        damages, costs and expenses of whatever kind or nature known or unknown,
        contingent or otherwise, arising out of, or in any way relating to the violation
        of, noncompliance with or liability under, any Environmental Law applicable
        to
        the operations of the Credit Parties or any of their Subsidiaries or the
        Properties, or any orders, requirements or demands of Governmental Authorities
        related thereto, including, without limitation, reasonable attorney’s and
        consultant’s fees, investigation and laboratory fees, response costs, court
        costs and litigation expenses, except to the extent that any of the foregoing
        arise out of the gross negligence or willful misconduct of the party seeking
        indemnification therefor. The agreements in this paragraph shall survive
        repayment of the Credit Party Obligations and all other amounts payable
        hereunder and termination of the Commitments and the Credit
        Documents.

      

      Section
        5.9 Financial
        Covenant.

      

      At
        all
        times, comply with the following financial covenant:

      

      (a) Fixed
        Charge Coverage Ratio.
        The
        Fixed
        Charge Coverage Ratio for the Parent, its Consolidated Subsidiaries and the
        FCCR
        Unconsolidated Affiliates (to the extent specified in the definitions related
        to
        the calculation of the Fixed Charge Coverage Ratio), for the trailing
        twelve-month period shall be greater than or equal to 1.25 to 1.00, at all
        times. The Fixed Charge Coverage Ratio shall be reported quarterly on the
        Officer’s Compliance Certificate, or more often if requested by the
        Administrative Agent. 

       

      Notwithstanding
        the above, the parties hereto acknowledge and agree that, for purposes of
        all
        calculations made in determining compliance for any applicable period with
        the
        financial covenants set forth in this Section 5.9, (i) after any Asset
        Disposition permitted by Sections 6.4(a)
        (i), (vi) or (vii),
        (A) income statement items, cash flow statement items and other balance
        sheet items (whether positive or negative) attributable to the property or
        assets disposed of shall be excluded in such calculations to the extent relating
        to such applicable period, subject to adjustments mutually acceptable to
        the
        Borrower and the Administrative Agent (after consultation with the Lenders)
        and
        (B) Indebtedness that is repaid with the proceeds of such Asset Disposition
        shall be excluded from such calculations and deemed to have been repaid as
        of
        the first day of such applicable period
        and (ii)
        if less than 100% of the Equity Interests of any Consolidated Subsidiary
        are
        owned, directly or indirectly, by the Parent, then only the
        Parent’s pro rata share of the financial attributes (income statement items,
        cash flow statement items and other balance sheet items (whether positive
        or
        negative)) attributable to such Subsidiary shall be included in calculating
        compliance with such covenant. 

      

      Section
        5.10 Additional
        Guarantors.

      

      The
        Credit Parties will cause each of their Material Domestic Subsidiaries, whether
        newly formed, after acquired or otherwise existing to promptly (and in any
        event
        within thirty (30) days after such Material Domestic Subsidiary is formed
        or
        acquired (or such longer period of time as agreed to by the Administrative
        Agent
        in its reasonable discretion)) become a Guarantor hereunder by way of execution
        of a Joinder Agreement. In connection therewith, the Credit Parties shall
        give
        notice to the Administrative Agent not less than ten (10) days prior to
        creating a Material Domestic Subsidiary (or such shorter period of time as
        agreed to by the Administrative Agent in its reasonable discretion), or
        acquiring the Equity Interest of any other Person. The Credit Party Obligations
        shall be secured by, among other things, a first priority perfected security
        interest in the Collateral of such new Guarantor and a pledge of 100% of
        the
        Equity Interest of such new Guarantor and its Domestic Subsidiaries and 65%
        (or
        such higher percentage that would not result in material adverse tax
        consequences for such new Guarantor) of the voting Equity Interest and 100%
        of
        the non-voting Equity Interest of its first-tier Foreign Subsidiaries. In
        connection with the foregoing, the Credit Parties shall deliver to the
        Administrative Agent, with respect to each new Guarantor to the extent
        applicable, substantially the same documentation required pursuant to Sections
        4.1(a) - (d), (f) and 5.12 and such other documents or agreements as the
        Administrative Agent may reasonably request.

      

      
        
          
          

        

        
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      Section
        5.11 Compliance
        with Law.

      

      (a) Comply
        with all Requirements of Law and orders (including Environmental Laws), and
        all
        applicable restrictions imposed by all Governmental Authorities, applicable
        to
        it and its Property if noncompliance with any such Requirements of Law, order
        or
        restriction could reasonably be expected to have, individually or in the
        aggregate, a Material Adverse Effect.

      

      (b) Comply
        in
        all material respects with all Contractual Obligations.

      

      Section
        5.12 Pledged
        Assets.

      

      (a) Each
        Credit Party will cause Equity Interests held or owned by such Credit Party
        (other than Equity Interests in any SPE Affiliate) to be pledged to the
        Administrative Agent in accordance with the Pledge Agreement.

      

      (b) Each
        Credit Party will cause all of its tangible and intangible personal property
        now
        owned or hereafter acquired to be subject at all times to a first priority,
        perfected Lien (subject in each case to Permitted Liens) in favor of the
        Administrative Agent pursuant to the terms and conditions of the Security
        Documents or such other security documents as the Administrative Agent shall
        reasonably request. Each Credit Party shall, and shall cause each of its
        Subsidiaries to, adhere to the covenants set forth in the Security
        Documents.

      

      (c) [Intentionally
        Omitted].

      

      (d) Each
        Credit Party shall timely and fully pay and perform its obligations under
        all
        leases and other agreements with respect to each leased location or public
        warehouse where any Collateral is or may be located.

      

      
        
          
          

        

        
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      Section
        5.13 Hedging
        Agreements.

      

      As
        of the
        Closing Date and at all times thereafter cause 100% of the aggregate Term
        Loan
        then outstanding, and projected to be outstanding, to be hedged pursuant
        to
        Hedging Agreements for a period ending on or after the Term Loan Maturity
        Date
        and with respect to the Extended Term, the Extended Maturity Date with a
        counterparty and on terms acceptable to the Administrative Agent. Such Hedging
        Agreements shall be for the benefit of the Administrative Agent and shall
        cap
        the one-month LIBOR Rate at 5.75% per annum.

      

      Section
        5.14 [Intentionally
        omitted].

      

      Section
        5.15 Acquired
        Properties.

      

      The
        Acquired Properties shall remain unencumbered by any Lien other than Liens
        shown
        on the title insurance for the Acquired Properties that existed as of the
        Closing Date, except for Liens incurred pursuant to Indebtedness expressly
        permitted herein and so long as the proceeds thereof are used to prepay the
        Term
        Loans pursuant to Section 2.7. 

      

      Section
        5.16 Landlord
        Waivers.

      

      In
        the
        case of any tangible personal property Collateral located at premises leased
        by
        a Credit Party with a value in excess of $1,000,000, the Credit Parties will
        provide the Administrative Agent with such estoppel letters, consents and
        waivers from the landlords on
        such
        real property to the extent (a)
        requested by the Administrative Agent and (b)
        the
        Borrower is able to secure such letters, consents and waivers after using
        commercially reasonable efforts (such letters, consents and waivers shall
        be in
        form and substance satisfactory to the Administrative Agent, it being
        acknowledged and agreed that any landlord waiver in the form of Exhibit
        4.1(d)
        is
        satisfactory to the Administrative Agent). 

      

      Section
        5.17 Federal
        Assignment of Claims Act.

      

      The
        Borrower will execute all documents necessary to comply with the Federal
        Assignment of Claims Act and comparable state law with respect to the accounts
        arising from any Material Contract or Material Amount Contract with any
        Governmental Authority and such other contracts with Governmental Authorities
        as
        reasonably required by the Administrative Agent (to the extent not already
        delivered to the Administrative Agent), in each case within sixty
        (60) days
        (or such
        extended period of time as agreed to by the Administrative Agent) after entering
        into such Material Government Contract or, with respect to any other Government
        Contract, after the Administrative Agent requires such documents with respect
        to
        such Government Contract, such documents to be held in escrow by the
        Administrative Agent in accordance with the terms of Section 5(b)
        of
        the
        Security Agreement. 

      

      Section
        5.18 Enforcement
        of Documents.

      

      Enforce
        all of their rights (a) under the Acquisition Documents including, but not
        limited to, all indemnification rights, (b) pursuant to the leases on the
        Acquired Properties (including but not limited to maintenance of the property,
        maintenance of adequate insurance for casualty, liability and business
        interruption and payment of taxes, assessments and fees related to such
        property) and in each case, pursue all remedies available to it with diligence
        and in good faith in connection with the enforcement of any such rights,
        except
        where failure to do so could not reasonably be expect to have a Material
        Adverse
        Effect. 

      

      
        
          
          

        

        
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      Section
        5.19 Use
        of Proceeds.

      

      All
        proceeds from the Term Loan shall be used only as permitted by Section
        3.11.

      

      Section
        5.20 Maintenance
        of REIT Status.

      

      Take
        all
        action necessary to maintain the Parent’s status under §§856 et seq. of the Code
        as a REIT.

      

      Section
        5.21 Maintenance
        of Securities Listing.

      

      Take
        all
        action necessary to maintain the Parent’s status as a listed company in good
        standing under the rules of the New York Stock Exchange.

      

      Section
        5.22 Borrower
        as a Wholly Owned Subsidiary.

      

      Take
        all
        action necessary to cause the Parent to own 95% of the Equity Interests in
        the
        Borrower.

      

      Section
        5.23 Additional
        Collateral. 

      

      Cause
        the
        entire rated capital structure of the collateralized debt obligation facility
        to
        be certificated and to cause all such certificates retained by any Credit
        Party
        and any other retained interest, including without limitation any Equity
        Interest therein, to be pledged as collateral for the Credit Party Obligations
        pursuant to documents acceptable to the Administrative Agent and such
        certificates shall promptly be delivered to the Administrative
        Agent.

      

      Section
        5.24 Further
        Assurances.

      

      (a) Public/Private
        Designation.
        Borrower will cooperate with the Administrative Agent in connection with
        the
        publication of certain materials and/or information provided by or on behalf
        of
        the Borrower to the Administrative Agent and Lenders (collectively,
“Information
        Materials”)
        pursuant to this Article V and will
        designate Information Materials (i)
        that
        are either available to the public or not material with respect to the Borrower
        and its Subsidiaries
        or any of their respective securities for purposes of United States federal
        and
        state securities laws, as “Public
        Information”
and
        (ii)
        that
        are not Public Information as “Private
        Information”.
        

      

      
        
          
          

        

        
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      (b) Further
        Assurances.
        Upon
        the reasonable request of the Administrative Agent, promptly perform or cause
        to
        be performed any and all acts and execute or cause to be executed any and
        all
        documents for filing under the provisions of the Uniform Commercial Code
        or any
        other Requirement of Law which are necessary or advisable to maintain in
        favor
        of the Administrative Agent, for the benefit of the Secured Parties, Liens
        on
        the Collateral that are duly perfected in accordance with the requirements
        of,
        or the obligations of the Credit Parties under, the Credit Documents and
        all
        applicable Requirements of Law.

      

      Section
        5.25 Post-Closing
        Deliveries.

      

      Within
        thirty (30) days after the Acquisition, cause all Equity Interests in EntreCap
        Real Estate III LLC (or its successor entity) to be certificated and treated
        as
        a security governed by Article 8 of the UCC and shall deliver such certificates
        to the Administrative Agent along with executed stock powers therefor in
        the
        form contemplated in the Pledge Agreement. On or prior to the first date
        upon
        which Wells Fargo Bank, N.A. or any of its Affiliates holds any property
        of any
        Credit Party that is not subject to a custodial agreement or other control
        agreement that secures the Credit Party Obligations, cause such holder of
        such
        property to enter into a custodial agreement or control agreement in form
        and
        substance reasonably acceptable to the Administrative Agent or deliver such
        property to the Administrative Agent or its designee.

      

      

      ARTICLE
        VI

      

      NEGATIVE
        COVENANTS

      

      Each
        of
        the Credit Parties hereby covenants and agrees that on the Closing Date,
        and
        thereafter (a)
        for so
        long as this Agreement is in effect, (b)
        until
        the Commitments have terminated and (c)
        until
        no Note remains outstanding and unpaid and the Credit Party Obligations and
        all
        other amounts owing to the Administrative Agent or any Lender hereunder are
        paid
        in full, that:

      

      Section
        6.1 Indebtedness.

      

      No
        Credit
        Party will, nor will it permit any Subsidiary to, contract, create, incur,
        assume or permit to exist any Indebtedness, except:

      

      (a) Indebtedness
        arising or existing under this Agreement and the other Credit
        Documents;

      

      (b) Indebtedness
        of the Credit Parties and their Subsidiaries existing as of the Closing Date
        as
        referenced in the financial statements referenced in Section 3.1 (or set
        out more specifically in Schedule 6.1(b)
        hereto)
        including without limitation the Wachovia Repurchase Facility and the Wachovia
        Acquisition Facility and any renewals, refinancings or extensions thereof
        in a
        principal amount not in excess of that outstanding as of the date of such
        renewal, refinancing or extension;

      

      
        
          
          

        

        
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      (c) Indebtedness
        of the Credit Parties and their Subsidiaries incurred after the Closing Date
        in
        the ordinary course of business pursuant to the Wachovia Repurchase Facility
        (including borrowings against the Non-Restricted Collateral) or the Wachovia
        Acquisition Facility;

      

      (d) Unsecured
        intercompany Indebtedness among the Credit Parties; provided
        that any
        such Indebtedness shall be (i) fully subordinated to the Credit Party
        Obligations hereunder on terms reasonably satisfactory to the Administrative
        Agent and (ii) to the extent required by the Administrative Agent,
        evidenced by promissory notes which shall be pledged to the Administrative
        Agent
        as Collateral for the Credit Party Obligations; 

      

      (e) Indebtedness
        and obligations owing under Secured Hedging Agreements and other Hedging
        Agreements entered into in order to manage existing or anticipated interest
        rate, exchange rate or commodity price risks and not for speculative purposes;
        

      

      (f)  [Intentionally
        omitted];

      

      (g) Guaranty
        Obligations in respect of Indebtedness of a Credit Party to the extent such
        Indebtedness is permitted to exist or be incurred pursuant to this Section;
        and

      

      (h) nonrecourse
        Indebtedness (provided such Indebtedness may be full recourse or subject
        to
        repurchase to the extent such recourse or repurchase obligations are limited
        to
        fraud, misapplication of funds, environmental indemnities, failure to pay
        taxes,
        waste or such other usual and customary full recourse or repurchase provisions
        under such type of Indebtedness) of an SPE Affiliate consisting of Indebtedness
        either (i) incurred in the ordinary course of business to finance or refinance
        all or a portion of the purchase price or cost of construction of an asset
        (including through A1 and B notes); provided
        that
        such Indebtedness when incurred shall not exceed the fair market value of
        such
        asset as determined by a appraisal meeting the requirements of FIRREA or
        (ii)
        incurred in connection with a collateralized debt obligation transaction
        so long
        as the net proceeds from such Indebtedness incurred pursuant to this subsection
        (ii) shall be used to first repay the applicable obligations pursuant to
        the
        Wachovia Repurchase Facility and then to repay the Term Loan in accordance
        with
        Section 2.7(b);

      

      (i) other
        unsecured Indebtedness of Credit Parties which does not exceed $3,000,000
        in the
        aggregate at any time outstanding. 

      

      Section
        6.2 Liens.

      

      The
        Credit Parties will not, nor will they permit any Subsidiary to, contract,
        create, incur, assume or permit to exist any Lien with respect to any of
        their
        respective property or assets of any kind (whether real or personal, tangible
        or
        intangible), whether now owned or hereafter acquired, except for Permitted
        Liens. Notwithstanding the foregoing, if a Credit Party shall grant a Lien
        on
        any of its assets in violation of this Section, then it shall be deemed to
        have
        simultaneously granted an equal and ratable Lien on any such assets in favor
        of
        the Administrative Agent for the ratable benefit of the Lenders and the Hedging
        Agreement Providers, to the extent such Lien has not already been granted
        to the
        Administrative Agent. 

      

      
        
          
          

        

        
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      Section
        6.3 Nature
        of Business.

      

      No
        Credit
        Party will, nor will it permit any Subsidiary to, alter the character of
        its
        business in any material respect from that conducted as of the Closing
        Date.

      

      Section
        6.4 Consolidation,
        Merger, Sale or Purchase of Assets, etc.

      

      The
        Credit Parties will not, nor will they permit any Subsidiary to,

      

      (a) dissolve,
        liquidate or wind up its affairs, or sell, transfer, lease or otherwise dispose
        of its property or assets or agree to do so at a future time, except the
        following, without duplication, shall be expressly permitted:

      

      (i) (A) the
        sale,
        transfer, lease or other disposition of property, plant, equipment or other
        assets for fair market value, in the ordinary course of business (other than
        any
        Collateral and the Acquired Properties) so long as the proceeds thereof are
        used
        to reduce the Term Loan in accordance with Section 2.7(b) and
        (B) the
        conversion of cash into Cash Equivalents and Cash Equivalents into
        cash;

      

      (ii) Extraordinary
        Receipts for which such Credit Party or such Subsidiary has received any
        cash
        insurance proceeds or condemnation or expropriation award with respect to
        such
        property or assets to the extent Net Cash Proceeds from such Extraordinary
        Receipt related to any Collateral are used to make mandatory prepayments
        pursuant to Section 2.7(b)(iv);

      

      (iii) the
        sale,
        lease, transfer or other disposition of machinery, parts and equipment no
        longer
        used or useful in the conduct of the business of the Credit Parties or any
        of
        their Subsidiaries;

      

      (iv) the
        sale,
        lease or transfer of property or assets from one Credit Party to another
        Credit
        Party or from one Subsidiary that is not a Credit Party to another Subsidiary;
        

      

      (v) the
        termination of any Hedging Agreement other than a Hedging Agreement required
        pursuant to Section 5.13; and

       

      (vi) in
        addition to subsection (iv) above, the sale, lease or transfer of property
        or
        assets from any Subsidiary to any other Subsidiary for the purpose of entering
        into a collateralized debt obligation financing that is otherwise permitted
        pursuant to this Agreement, provided that net proceeds from such financing
        shall
        be used to first repay the applicable obligations pursuant to the Wachovia
        Repurchase Facility and then to repay the Term Loan in accordance with Section
        2.7(b); 

       

      
        
          
          

        

        
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                provided
                  that (A) with respect to clauses (i)(A), (ii), (iii) and
                  (vi) above, at least 75% of the consideration received therefor
                  by the
                  Credit Parties or any such Subsidiary shall be in the form of cash
                  or Cash
                  Equivalents and (B) with respect to clauses (i), (iv), (v) and
                  (vi) above,
                  no Default or Event of Default shall exist or shall result therefrom;
                  provided,
                  further,
                  that with respect to sales of assets permitted hereunder only,
                  the
                  Administrative Agent shall be entitled, without the consent of
                  any Lender,
                  to release its Liens relating to the particular assets sold;
                  or

              

      

      

      (b) (i) purchase,
        lease or otherwise acquire (in a single transaction or a series of related
        transactions) the property or assets of any Person, other than, except as
        otherwise limited or prohibited herein, purchases or other acquisitions of
        real
        estate and real estate related assets (including derivatives thereof) in
        the
        ordinary course of business and consistent with the Parent’s past practices, or
        (ii) enter into any transaction of merger or consolidation, except for
        (A)  Investments or acquisitions permitted pursuant to Section 6.5 so
        long as the Credit Party subject to such merger or consolidation is the
        surviving entity, (B) (y) the merger or consolidation of a Subsidiary that
        is
        not a Credit Party with and into a Credit Party; provided
        that
        such Credit Party will be the surviving entity and (z) the merger or
        consolidation of a Credit Party with and into another Credit Party; provided
        that if
        the Borrower is a party thereto, the Borrower will be the surviving corporation,
        and (C) the merger or consolidation of a Subsidiary that is not a Credit
        Party
        with and into another Subsidiary that is not a Credit Party.

      

      Section
        6.5 Advances,
        Investments and Loans.

      

      The
        Credit Parties will not, nor will they permit any Subsidiary to, make any
        Investment except for Permitted Investments.

      

      Section
        6.6 Transactions
        with Affiliates.

      

      The
        Credit Parties will not, nor will they permit any Subsidiary to, enter into
        any
        transaction or series of transactions, whether or not in the ordinary course
        of
        business, with any officer, director, shareholder or Affiliate other than
        (i) on
        terms and conditions substantially as favorable as would be obtainable in
        a
        comparable arm’s-length transaction with a Person other than an officer,
        director, shareholder or Affiliate or (ii) transactions between Credit Parties
        and Subsidiaries pursuant to nonrecourse A1 and B note financing structures
        that
        are otherwise permitted pursuant to the Credit Documents.

      

      Section
        6.7 Ownership
        of Subsidiaries; Restrictions.

      

      The
        Credit Parties will not, nor will they permit any Subsidiary to, create,
        form or
        acquire any Subsidiaries, except for (a) Material Domestic Subsidiaries that
        are
        joined as Additional Credit Parties as required by the terms hereof and (b)
        SPE
        Affiliates in the ordinary course of business consistent with Parent’s past
        practices, which SPE Affiliates shall not be required to be Guarantors
        hereunder. The Credit Parties will not sell, transfer, pledge or otherwise
        dispose of any Equity Interest or other equity interests in any of their
        Subsidiaries, nor will they permit any of their Subsidiaries to issue, sell,
        transfer, pledge or otherwise dispose of any of their Equity Interest or
        other
        equity interests, except in a transaction permitted by Section 6.4 or in an
        Equity Issuance by the Parent (i)
        for
        fair market value (including issuances pursuant to the Parent’s Dividend
        Reinvestment and Direct Stock Purchase Plan) in accordance with the other
        terms
        of this Agreement and provided the net proceeds, if any, shall be used to
        prepay
        the Term Loans in accordance with Section 2.7(b)(iii) and (ii)
        issuances by the Parent pursuant to its 2004 Stock Incentive Plan in the
        ordinary course of business consistent with past practices. 

      

      
        
          
          

        

        
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      Section
        6.8 Corporate
        Changes; Material Contracts.

      

      No
        Credit
        Party will, nor will it permit any of its Subsidiaries to, (a) change its
        fiscal
        year, (b) amend, modify or change its articles of incorporation, certificate
        of
        designation (or corporate charter or other similar organizational document)
        operating agreement or bylaws (or other similar document) in any respect
        materially adverse
        to the interests of the Lenders without the prior written consent of the
        Required Lenders; provided
        that no
        Credit Party shall (i) alter its legal existence or, in one transaction or
        a
        series of transactions, merge into or consolidate with any other entity,
        or sell
        all or substantially all of its assets, (ii) change its state of incorporation
        or organization, or (iii) change its registered legal name, without providing
        thirty (30) days prior written notice to the Administrative Agent and without
        filing (or confirming that the Administrative Agent has filed) such financing
        statements and amendments to any previously filed financing statements as
        the
        Administrative Agent may require, (c) amend,
        modify, cancel or terminate or fail to renew or extend or permit the amendment,
        modification, cancellation or termination of any of its Material Contracts
        in
        any respect materially adverse
        to the interests of the Lenders without the prior written consent of the
        Required Lenders, (d) change its state of incorporation, organization or
        formation without the consent of the Administrative Agent or have more than
        one
        state of incorporation, organization or formation or (e) change
        its accounting method (except in accordance with GAAP)
        in any
        manner adverse to the interests of the Lenders without the prior written
        consent
        of the Required Lenders.

      

      Section
        6.9 Limitation
        on Restricted Actions.

      

      The
        Credit Parties will not, nor will they permit any Subsidiary to, directly
        or
        indirectly, create or otherwise cause or suffer to exist or become effective
        any
        encumbrance or restriction on the ability of any such Person to
        (a) pay
        dividends or make any other distributions to any Credit Party on its Equity
        Interest or with respect to any other interest or participation in, or measured
        by, its profits,
        (b) pay
        any
        Indebtedness or other obligation owed to any Credit Party,
        (c) make
        loans or advances to any Credit Party,
        (d) sell,
        lease or transfer any of its properties or assets to any Credit Party,
        or
        (e) act
        as a
        Guarantor and pledge its assets pursuant to the Credit Documents or any
        renewals, refinancings, exchanges, refundings or extension thereof, except
        (in
        respect of any of the matters referred to in clauses (a)-(d) above) for
        such encumbrances or restrictions existing under or by reason of (i) this
        Agreement and the other Credit Documents, (ii) applicable law, (iii) any
        document or instrument governing Indebtedness incurred pursuant to
        Section 6.1(c), provided
        that any
        such restriction contained therein relates only to the asset or assets
        constructed or acquired in connection therewith, (iv) the Wachovia Repurchase
        Facility or the Wachovia Acquisition Facility; or
        (v) any
        Permitted Lien or any document or instrument governing any Permitted Lien;
        provided
        that any
        such restriction contained therein relates only to the asset or assets subject
        to such Permitted Lien.

      

      
        
          
          

        

        
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      Section
        6.10 Restricted
        Payments.

      

      The
        Credit Parties will not, nor will they permit any Subsidiary to, directly
        or
        indirectly, declare, order, make or set apart any sum for or pay any Restricted
        Payment so long as any Default or Event of Default has occurred and is
        continuing or would be caused by such Restricted Payment; except the following
        so long as no Specified Event has occurred or is continuing or would be caused
        thereby, (a)
        to make
        dividends payable solely in the same class of Equity Interest of such Person,
        and (b)
        to make
        dividends or other distributions payable to the Credit Parties (directly
        or
        indirectly through their Subsidiaries); provided,
        notwithstanding the exceptions in the foregoing (a)-(b), no Restricted Payment
        described in the foregoing (a)-(b) may be made in the event any Default or
        Event
        of Default has occurred and is continuing. Notwithstanding the foregoing,
        nothing herein shall be deemed to prohibit (x) any dividends or other
        distributions by the Parent necessary to retain its status as a REIT or to
        meet
        the distribution requirements of Section 857 of the Internal Revenue Code,
        or
        (y) any distributions by any Subsidiary to the Parent necessary
        to allow the Parent to maintain its status as a REIT or to meet the distribution
        requirements of Section 857 of the Internal Revenue Code.

      

      Section
        6.11 Amendment
        of Subordinated Debt.

      

      The
        Credit Parties will not, nor will they permit any Subsidiary to, without
        the
        prior written consent of the Required Lenders, amend, modify, waive or extend
        or
        permit the amendment, modification, waiver or extension of any term of any
        document governing or relating to any Subordinated Debt in a manner that
        is
        adverse to the interests of the Lenders.

      

      Section
        6.12 Sale
        Leasebacks.

      

      The
        Credit Parties will not, nor will they permit any Subsidiary to, directly
        or
        indirectly, become or remain liable as lessee or as guarantor or other surety
        with respect to any lease, whether an Operating Lease or a Capital Lease,
        of any
        property (whether real, personal or mixed), whether now owned or hereafter
        acquired,
        (a) which
        any
        Credit Party or any Subsidiary has sold or transferred or is to sell or transfer
        to a Person which is not a Credit Party or a Subsidiary or
        (b) which
        any
        Credit Party or any Subsidiary intends to use for substantially the same
        purpose
        as any other property which has been sold or is to be sold or transferred
        by a
        Credit Party or a Subsidiary to another Person which is not a Credit Party
        or a
        Subsidiary in connection with such lease.

      

      Section
        6.13 No
        Further Negative Pledges.

      

      The
        Credit Parties will not, nor will they permit any Subsidiary to, enter into,
        assume or become subject to any agreement prohibiting or otherwise restricting
        the creation or assumption of any Lien upon any of their properties or assets,
        whether now owned or hereafter acquired, or requiring the grant of any security
        for such obligation if security is given for some other obligation, except
        (a)
        pursuant to this Agreement and the other Credit Documents, (b) pursuant to
        any document or instrument governing Indebtedness incurred pursuant to
        Section 6.1(c); provided
        that any
        such restriction contained therein relates only to the asset or assets
        constructed or acquired in connection therewith, and (c) in connection with
        any
        Permitted Lien or any document or instrument governing any Permitted Lien;
        provided
        that any
        such restriction contained therein relates only to the asset or assets subject
        to such Permitted Lien.

      

      
        
          
          

        

        
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      Section
        6.14 Account
        Control Agreements; Additional Bank Accounts.

      

      Set
        forth
        on Schedule
        6.14
        is a
        complete and accurate list of all checking, savings or other accounts (including
        securities accounts) of the Credit Parties at any bank or other financial
        institution, or any other account where money is or may be deposited or
        maintained with any Person. Each of the Credit Parties will not, nor will
        it
        permit any Subsidiary to, open,
        maintain or otherwise have any checking, savings or other accounts (including
        securities accounts) at any bank or other financial institution, or any other
        account where money is or may be deposited or maintained with any Person,
        other
        than (a)
        the
        accounts set forth on Schedule
        6.14
        and
        designated as unrestricted accounts; provided
        that the
        balance on any such account does not exceed $100,000 and the aggregate balance
        in all such accounts does not exceed $500,000, (b)
        deposit
        accounts that are subject to a Deposit Account Control Agreement, (c)
        securities accounts that are subject to a Securities Account Control Agreement,
        (d)
        deposit
        accounts established solely as payroll and other zero balance accounts and
        (e)
        deposit
        accounts, so long as at any time the balance in any such account does not
        exceed
        $100,000 and the aggregate balance in all such accounts does not exceed
        $500,000.

      

      Section
        6.15 Delivery
        of Certain Notices.

      

      The
        Credit Parties will not, nor will they permit any Subsidiary to fail to provide
        to the Administrative Agent copies of notices received from the holders of
        the
        Approved Mortgages or under the leases of the Acquired Properties within
        three
        (3) Business Days of such notice being delivered to any Credit Party or any
        of
        their Subsidiaries

      

      

      ARTICLE
        VII

      

      EVENTS
        OF DEFAULT

      

      Section
        7.1 Events
        of Default.

      

      An
        Event
        of Default shall exist upon the occurrence of any of the following specified
        events (each an “Event
        of Default”):

      

      (a) Payment.
        (i) The
        Borrower shall fail to pay any principal on any Loan or Note when due (whether
        at maturity, by reason of acceleration or otherwise) in accordance with the
        terms hereof or thereof; or (ii) the Borrower shall fail to pay any interest
        on
        any Loan or any fee or other amount payable hereunder when due (whether at
        maturity, by reason of acceleration or otherwise) in accordance with the
        terms
        hereof and such failure shall continue unremedied for three (3) days;
        or
        (iii) or any Guarantor shall fail to pay on the Guaranty in respect of any
        of
        the foregoing or in respect of any other Guaranty Obligations hereunder (after
        giving effect to the grace period in clause (ii)); or

      

      
        
          
          

        

        
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      (b) Misrepresentation.
        Any
        representation or warranty made or deemed made herein, in the Security Documents
        or in any of the other Credit Documents or which is contained in any
        certificate, document or financial or other statement furnished at any time
        under or in connection with this Agreement shall prove (i) with respect to
        representations and warranties that contain a materiality qualification to
        have
        been incorrect, false or misleading on or as of the date made or deemed made
        or
        (ii) with respect to representations and warranties that do not contain a
        materiality qualification, to have been incorrect, false or misleading in
        a
        material respect on or as of the date made or deemed made; or

      

      (c) Covenant
        Default.
        (i) Any
        Credit Party shall fail to perform, comply with or observe any term, covenant
        or
        agreement applicable to it contained in Sections 2.6, 4.2(f), 5.1 (other
        than
        5.1(d), (f) and (g)), 5.2, 5.4, 5.7 (other than 5.7(d), (f), (k), (l) and
        (m),
        5.9, 5.11, 5.13, 5.24
        or
        Article VI hereof; (ii) any Credit Party shall fail to perform, comply with
        or
        observe any term, covenant or agreement applicable to it contained in Sections
        5.1(d), (f) or (g) or 5.7(d), (f), (k), (l) or (m) and such breach or failure
        to
        comply is not cured within three (3) days of its occurrence or (iii) any
        Credit
        Party shall fail to comply with any other covenant contained in this Agreement
        or the other Credit Documents or any other agreement, document or instrument
        among any Credit Party, the Administrative Agent and the Lenders or executed
        by
        any Credit Party in favor of the Administrative Agent or the Lenders (other
        than
        as described in Sections 7.1(a) or 7.1(c)(i) above), and such breach or failure
        to comply is not cured within thirty (30) days of the earlier of any Responsible
        Officer obtaining knowledge of such breach or failure to comply and receipt
        of
        notice from the Administrative Agent or any Lender by any Credit Party regarding
        such breach or failure to comply; or 

      

      (d) Indebtedness
        Cross-Default.
        (i)
        Any
        event of default has occurred, regardless of whether such has been waived,
        pursuant to Section 6.01(d) of the Wachovia Acquisition Facility. In the
        event
        such provision or any term or provision referenced therein is amended or
        modified (excluding amendments or modifications consented to by the
        Administrative Agent) or if the Wachovia Acquisition Facility is no longer
        outstanding for any reason (each an “Incorporation
        Event”),
        then
        the event of default in Section 6.01(d) of the Wachovia Acquisition Facility
        shall be deemed to be incorporated herein as if set out fully herein in the
        form
        in effect immediately prior to the occurrence of the Incorporation Event
        together with the terms and other provisions referenced therein, mutatis
        mutandis
        or
        (ii)
        any
        Credit Party shall breach or default any Secured Hedging Agreement, the Wachovia
        Repurchase Facility or the Wachovia Acquisition Facility; or

      

      
        
          
          

        

        
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      (e) Other
        Cross-Defaults.
        The
        occurrence of any of the following events: (i)
        any
        event
        of default has occurred, regardless of whether such has been waived, pursuant
        to
        Section 6.01(e) of the Wachovia Acquisition Facility. In the event such
        provision or any term or provision referenced therein is amended or modified
        (excluding amendments or modifications consented to by the Administrative
        Agent)
        or if any Incorporation Event occurs, then the event of default in Section
        6.01(e) of the Wachovia Acquisition Facility shall be deemed to be incorporated
        herein as if set out fully herein in the form in effect immediately prior
        to the
        occurrence of the Incorporation Event together with the terms and other
        provisions referenced therein, mutatis
        mutandis,
        (ii)
        the
        Credit Parties or any of their Subsidiaries shall be debarred or suspended
        from
        contracting with any Governmental Authority, (iii)
        a
        notice of debarment or suspension shall have been issued to or received by
        the
        Parent, the Borrower or any Subsidiary thereof, (iv)
        an
        investigation by any Governmental Authority relating to the Parent, the Borrower
        or any Subsidiary thereof and involving fraud, deception or willful misconduct
        shall have been commenced in connection with any Government Contract, any
        other
        Material Contract or any Material Amount Contract or the Parent’s or the
        Borrower’s or any Subsidiary’s activities with respect thereto, or (v)
        the
        actual termination of a Government Contract, any other Material Contract
        or
        Material Amount Contract or due to alleged fraud, deception or willful
        misconduct; or

      

      (f) Bankruptcy
        Default.
        (i) A Credit Party or any of its Subsidiaries shall commence any case,
        proceeding or other action (A) under any existing or future law of any
        jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
        reorganization or relief of debtors, seeking to have an order for relief
        entered
        with respect to it, or seeking to adjudicate it a bankrupt or insolvent,
        or
        seeking reorganization, arrangement, adjustment, winding-up, liquidation,
        dissolution, composition or other relief with respect to it or its debts,
        or (B)
        seeking appointment of a receiver, trustee, custodian, conservator or other
        similar official for it or for all or any substantial part of its assets,
        or a
        Credit Party or any of its Subsidiaries shall make a general assignment for
        the
        benefit of its creditors; or (ii) there shall be commenced against a Credit
        Party or any of its Subsidiaries any case, proceeding or other action of
        a
        nature referred to in clause (i) above which (A) results in the entry of an
        order for relief or any such adjudication or appointment or (B) remains
        undismissed, undischarged or unbonded for a period of 60 days;
        or (iii) there
        shall be commenced against a Credit Party or any of its Subsidiaries any
        case,
        proceeding or other action seeking issuance of a warrant of attachment,
        execution, distraint or similar process against all or any substantial part
        of
        their assets which results in the entry of an order for any such relief which
        shall not have been vacated, discharged, or stayed or bonded pending appeal
        within 60 days
        from the
        entry thereof; or
        (iv) a Credit Party or
        any of
        its Subsidiaries shall take any action in furtherance of, or indicating its
        consent to, approval of, or acquiescence in, any of the acts set forth in
        clause (i), (ii), or (iii) above; or (v) a
        Credit Party or any of its Subsidiaries shall generally not, or shall be
        unable
        to, or shall admit in writing their inability to, pay its debts as they become
        due; or

      

      (g) Judgment
        Default.
        One or
        more judgments or decrees shall be entered against a Credit Party or any
        of its
        Subsidiaries involving in the aggregate a liability (to the extent not covered
        by insurance) of $5,000,000 or more and all such judgments or decrees shall
        not
        have been paid and satisfied, vacated, discharged, stayed or bonded pending
        appeal within 10 Business
        Days
        from the
        entry thereof or any injunction, temporary restraining order or similar decree
        shall be issued against a Credit Party or any of its Subsidiaries that,
        individually or in the aggregate, could reasonably be expected to result
        in a
        Material Adverse Effect; or

      

      
        
          
          

        

        
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      (h) ERISA
        Default.
        (i) Any Person shall engage in any “prohibited transaction” (as defined in
        Section 406 of ERISA or Section 4975 of the Code) involving any Plan,
        (ii) any “accumulated funding deficiency” (as defined in Section 302
        of ERISA), whether or not waived, shall exist with respect to any Plan or
        any
        Lien in favor of the PBGC or a Plan (other than a Permitted Lien) shall arise
        on
        the assets of the Credit Parties or any Commonly Controlled Entity, (iii) a
        Reportable Event shall occur with respect to, or proceedings shall commence
        to
        have a trustee appointed, or a trustee shall be appointed, to administer
        or to
        terminate, any Single Employer Plan, which Reportable Event or commencement
        of
        proceedings or appointment of a trustee is, in the reasonable opinion of
        the
        Required Lenders, likely to result in the termination of such Plan for purposes
        of Title IV of ERISA,
        (iv) any
        Single Employer Plan shall terminate for purposes of Title IV of
        ERISA, (v) a
        Credit Party, any of its Subsidiaries or any Commonly Controlled Entity shall,
        or in the reasonable opinion of the Required Lenders is likely to, incur
        any
        liability in connection with a withdrawal from, or the Insolvency or
        Reorganization of, any Multiemployer Plan or (vi) any
        other
        similar event or condition shall occur or exist with respect to a Plan;
        or

      

      (i) Change
        of Control.
        There
        shall occur a Change of Control; or

      

      (j) Invalidity
        of Guaranty.
        At any
        time after the execution and delivery thereof, the Guaranty, for any reason
        other than the satisfaction in full of all Credit Party Obligations, shall
        cease
        to be in full force and effect (other than in accordance with its terms)
        or
        shall be declared to be null and void, or  any
        Credit Party shall contest the validity, enforceability, perfection or priority
        of the Guaranty, any Credit Document, or any Lien granted thereunder in writing
        or deny in writing that it has any further liability, including with respect
        to
        future advances by the Lenders, under any Credit Document to which it is
        a
        party; or

      

      (k) Invalidity
        of Credit Documents.
        Any
        other Credit Document shall fail to be in full force and effect or to give
        the
        Administrative Agent and/or the Lenders the security interests, liens, rights,
        powers, priority and privileges purported to be created thereby (except as
        such
        documents may be terminated or no longer in force and effect in accordance
        with
        the terms thereof, other than those indemnities and provisions which by their
        terms shall survive) or any Lien shall fail to be a first priority, perfected
        Lien on a material portion of the Collateral; or

      

      (l) Subordinated
        Debt.
        The
        subordination provisions contained under any Subordinated Debt shall cease
        to be
        in full force and effect or shall cease to give the Lenders the rights, powers
        and privileges purported to be created thereby; or

      

      
        
          
          

        

        
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      (m) Uninsured
        Loss.
        Any
        uninsured damage to or loss, theft or destruction of any assets of the Credit
        Parties or any of their Subsidiaries shall occur that is in excess of
        $5,000,000.

      

      Section
        7.2 Acceleration;
        Remedies.

      

      Upon
        the
        occurrence and during the continuance of an Event of Default, then, and in
        any
        such event,
        (a) if
        such
        event is a Bankruptcy Event of Default, automatically the Commitments shall
        immediately terminate and the Loans (with accrued interest thereon), and
        all
        other amounts under the Credit Documents shall immediately become due and
        payable, and
        (b) if
        such
        event is any other Event of Default, any or all of the following actions
        may be
        taken: (i) with the written consent of the Required Lenders, the
        Administrative Agent may, or upon the written request of the Required Lenders,
        the Administrative Agent shall, declare the Commitments to be terminated
        forthwith, whereupon the Commitments shall immediately terminate; and/or
        (ii)
        with the written consent of the Required Lenders, the Administrative Agent
        may,
        or upon the written request of the Required Lenders, the Administrative Agent
        shall, exercise such other rights and remedies as provided under the Credit
        Documents and under applicable law.

      

      

      ARTICLE
        VIII

      

      THE
        ADMINISTRATIVE AGENT

      

      Section
        8.1 Appointment
        and Authority.

      

      Each
        of
        the Lenders hereby irrevocably appoints Wachovia to act on its behalf as
        the
        Administrative Agent hereunder and under the other Credit Documents and
        authorizes the Administrative Agent to take such actions on its behalf and
        to
        exercise such powers as are delegated to the Administrative Agent by the
        terms
        hereof or thereof, together with such actions and powers as are reasonably
        incidental thereto. The provisions of this Article are solely for the benefit
        of
        the Administrative Agent and the Lenders, and neither the Borrower nor any
        other
        Credit Party shall have rights as a third party beneficiary of any of such
        provisions.

      

      Section
        8.2 Nature
        of Duties.

      

      Anything
        herein to the contrary notwithstanding, none of the arrangers or agents listed
        on the cover page hereof shall have any powers, duties or responsibilities
        under
        this Agreement or any of the other Credit Documents, except in its capacity,
        as
        applicable, as the Administrative Agent or a Lender hereunder.

      

      The
        Administrative Agent may perform any and all of its duties and exercise its
        rights and powers hereunder or under any other Credit Document by or through
        any
        one or more sub-agents appointed by the Administrative Agent. The Administrative
        Agent and any such sub-agent may perform any and all of its duties and exercise
        its rights and powers by or through their respective Related Parties. The
        exculpatory provisions of this Article shall apply to any such sub-agent
        and to
        the Related Parties of the Administrative Agent and any such sub-agent, and
        shall apply to their respective activities in connection with the syndication
        of
        the credit facilities provided for herein as well as activities as
        Administrative Agent.

      

      
        
          
          

        

        
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      Section
        8.3 Exculpatory
        Provisions.

      

      The
        Administrative Agent shall not have any duties or obligations except those
        expressly set forth herein and in the other Credit Documents. Without limiting
        the generality of the foregoing, the Administrative Agent:

      

      (a) shall
        not
        be subject to any fiduciary or other implied duties, regardless of whether
        a
        Default has occurred and is continuing;

      

      (b) shall
        not
        have any duty to take any discretionary action or exercise any discretionary
        powers, except discretionary rights and powers expressly contemplated hereby
        or
        by the other Credit Documents that the Administrative Agent is required to
        exercise as directed in writing by the Required Lenders (or such other number
        or
        percentage of the Lenders as shall be expressly provided for herein or in
        the
        other Credit Documents), provided
        that the
        Administrative Agent shall not be required to take any action that, in its
        opinion or the opinion of its counsel, may expose the Administrative Agent
        to
        liability or that is contrary to any Credit Document or applicable law;
        and

      

      (c) shall
        not, except as expressly set forth herein and in the other Credit Documents,
        have any duty to disclose, and shall not be liable for the failure to disclose,
        any information relating to the Borrower or any of its Affiliates that is
        communicated to or obtained by the Person serving as the Administrative Agent
        or
        any of its Affiliates in any capacity.

      

      The
        Administrative Agent shall not be liable for any action taken or not taken
        by it
        (i) with the consent or at the request of the Required Lenders (or such
        other number or percentage of the Lenders as shall be necessary, or as the
        Administrative Agent shall believe in good faith shall be necessary, under
        the
        circumstances as provided in Sections 9.1 and 7.2) or (ii) in the
        absence of its own gross negligence or willful misconduct. The Administrative
        Agent shall be deemed not to have knowledge of any Default unless and until
        notice describing such Default is given to the Administrative Agent by the
        Borrower or a Lender.

      

      The
        Administrative Agent shall not be responsible for or have any duty to ascertain
        or inquire into (i)
        any
        statement, warranty or representation made in or in connection with this
        Agreement or any other Credit Document, (ii)
        the
        contents of any certificate, report or other document delivered hereunder
        or
        thereunder or in connection herewith or therewith, (iii)
        the
        performance or observance of any of the covenants, agreements or other terms
        or
        conditions set forth herein or therein or the occurrence of any Default,
        (iv)
        the
        validity, enforceability, effectiveness or genuineness of this Agreement,
        any
        other Credit Document or any other agreement, instrument or document or
        (v)
        the
        satisfaction of any condition set forth in Article IV or elsewhere herein,
        other than to confirm receipt of items expressly required to be delivered
        to the
        Administrative Agent.

      

      
        
          
          

        

        
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      Section
        8.4 Reliance
        by Administrative Agent.

      

      The
        Administrative Agent shall be entitled to rely upon, and shall not incur
        any
        liability for relying upon, any notice, request, certificate, consent,
        statement, instrument, document or other writing (including any electronic
        message, Internet or intranet website posting or other distribution) believed
        by
        it to be genuine and to have been signed, sent or otherwise authenticated
        by the
        proper Person. The Administrative Agent also may rely upon any statement
        made to
        it orally or by telephone and believed by it to have been made by the proper
        Person, and shall not incur any liability for relying thereon. In determining
        compliance with any condition hereunder to the making of a Loan, that by
        its
        terms must be fulfilled to the satisfaction of a Lender, the Administrative
        Agent may presume that such condition is satisfactory to such Lender unless
        the
        Administrative Agent shall have received notice to the contrary from such
        Lender
        prior to the making of such Loan. The Administrative Agent may consult with
        legal counsel (who may be counsel for the Borrower), independent accountants
        and
        other experts selected by it, and shall not be liable for any action taken
        or
        not taken by it in accordance with the advice of any such counsel, accountants
        or experts.

       

      Section
        8.5 Notice
        of Default.

      

      The
        Administrative Agent shall not be deemed to have knowledge or notice of the
        occurrence of any Default or Event of Default hereunder unless the
        Administrative Agent has received written notice from a Lender or the Borrower
        referring to this Agreement, describing such Default or Event of Default
        and
        stating that such notice is a “notice of default”. In the event that the
        Administrative Agent receives such a notice, the Administrative Agent shall
        give
        prompt notice thereof to the Lenders. The Administrative Agent shall take
        such
        action with respect to such Default or Event of Default as shall be reasonably
        directed by the Required Lenders; provided,
        however,
        that
        unless and until the Administrative Agent shall have received such directions,
        the Administrative Agent may (but shall not be obligated to) take such action,
        or refrain from taking such action, with respect to such Default or Event
        of
        Default as it shall deem advisable in the best interests of the Lenders except
        to the extent that this Agreement expressly requires that such action be
        taken,
        or not taken, only with the consent or upon the authorization of the Required
        Lenders, or all of the Lenders, as the case may be.

      

      Section
        8.6 Non-Reliance
        on Administrative Agent and Other Lenders.

      

      Each
        Lender expressly acknowledges that neither the Administrative Agent nor any
        of
        its officers, directors, employees, agents, attorneys-in-fact or affiliates
        has
        made any representation or warranty to it and that no act by the Administrative
        Agent hereinafter taken, including any review of the affairs of any Credit
        Party, shall be deemed to constitute any representation or warranty by the
        Administrative Agent to any Lender. Each Lender acknowledges that it has,
        independently and without reliance upon the Administrative Agent or any other
        Lender or any of their Related Parties and based on such documents and
        information as it has deemed appropriate, made its own credit analysis and
        decision to enter into this Agreement. Each Lender also acknowledges that
        it
        will, independently and without reliance upon the Administrative Agent or
        any
        other Lender or any of their Related Parties and based on such documents
        and
        information as it shall from time to time deem appropriate, continue to make
        its
        own decisions in taking or not taking action under or based upon this Agreement,
        any other Credit Document or any related agreement or any document furnished
        hereunder or thereunder.

      

      
        
          
          

        

        
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      Section
        8.7 Indemnification.

      

      The
        Lenders agree to indemnify the Administrative Agent in its capacity hereunder
        and their Affiliates and its respective officers, directors, agents and
        employees (to the extent not reimbursed by the Borrower and without limiting
        the
        obligation of the Borrower to do so), ratably according to their respective
        Commitment Percentages in effect on the date on which indemnification is
        sought
        under this Section, from and against any and all liabilities, obligations,
        losses, damages, penalties, actions, judgments, suits, costs, expenses or
        disbursements of any kind whatsoever which may at any time (including, without
        limitation, at any time following the payment of the Credit Party Obligations)
        be imposed on, incurred by or asserted against any such indemnitee in any
        way
        relating to or arising out of any Credit Document or any documents contemplated
        by or referred to herein or therein or the transactions contemplated hereby
        or
        thereby or any action taken or omitted by any such indemnitee under or in
        connection with any of the foregoing; provided,
        however,
        that no
        Lender shall be liable for the payment of any portion of such liabilities,
        obligations, losses, damages, penalties, actions, judgments, suits, costs,
        expenses or disbursements to the extent resulting from such indemnitee’s gross
        negligence or willful misconduct, as determined by a court of competent
        jurisdiction. The agreements in this Section shall survive the termination
        of
        this Agreement and payment of the Notes and all other amounts payable
        hereunder.

      

      Section
        8.8 Administrative
        Agent in Its Individual Capacity.

      

      The
        Person serving as the Administrative Agent hereunder shall have the same
        rights
        and powers in its capacity as a Lender as any other Lender and may exercise
        the
        same as though it were not the Administrative Agent and the term “Lender” or
“Lenders” shall, unless otherwise expressly indicated or unless the context
        otherwise requires, include the Person serving as the Administrative Agent
        hereunder in its individual capacity. Such Person and its Affiliates may
        accept
        deposits from, lend money to, act as the financial advisor or in any other
        advisory capacity for and generally engage in any kind of business with the
        Borrower or any Subsidiary or other Affiliate thereof as if such Person were
        not
        the Administrative Agent hereunder and without any duty to account therefor
        to
        the Lenders.

      

      
        
          
          

        

        
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      Section
        8.9 Successor
        Administrative Agent.

      

      The
        Administrative Agent may at any time give notice of its resignation to the
        Lenders and the Borrower. Upon receipt of any such notice of resignation,
        the
        Required Lenders shall have the right, in consultation with the Borrower,
        to
        appoint a successor, or an Affiliate of any such bank. If no such successor
        shall have been so appointed by the Required Lenders and shall have accepted
        such appointment within thirty (30) days after the retiring Administrative
        Agent gives notice of its resignation, then the retiring Administrative Agent
        may on behalf of the Lenders, appoint a successor Administrative Agent meeting
        the qualifications set forth above provided that if the Administrative Agent
        shall notify the Borrower and the Lenders that no qualifying Person has accepted
        such appointment, then such resignation shall nonetheless become effective
        in
        accordance with such notice and (a)
        the
        retiring Administrative Agent shall be discharged from its duties and
        obligations hereunder and under the other Credit Documents (except that in
        the
        case of any Collateral held by the Administrative Agent on behalf of the
        Lenders
        under any of the Credit Documents, the retiring Administrative Agent shall
        continue to hold such Collateral until such time as a successor Administrative
        Agent is appointed) and (2) all payments, communications and determinations
        provided to be made by, to or through the Administrative Agent shall instead
        be
        made by or to each Lender directly, until such time as the Required Lenders
        appoint a successor Administrative Agent as provided for above in this
        paragraph. Upon the acceptance of a successor’s appointment as Administrative
        Agent hereunder, such successor shall succeed to and become vested with all
        of
        the rights, powers, privileges and duties of the retiring (or retired)
        Administrative Agent, and the retiring Administrative Agent shall be discharged
        from all of its duties and obligations hereunder or under the other Credit
        Documents (if not already discharged therefrom as provided above in this
        paragraph). The fees payable by the Borrower to a successor Administrative
        Agent
        shall be the same as those payable to its predecessor unless otherwise agreed
        between the Borrower and such successor. After the retiring Administrative
        Agent’s resignation hereunder and under the other Credit Documents, the
        provisions of this Article and Section 9.5 shall
        continue in effect for the benefit of such retiring Administrative Agent,
        its
        sub-agents and their respective Related Parties in respect of any actions
        taken
        or omitted to be taken by any of them while the retiring Administrative Agent
        was acting as Administrative Agent.

      

      Section
        8.10 Other
        Agents.

      

      None
        of
        the Lenders or other Persons identified on the facing page or signature pages
        of
        this Agreement as a “syndication agent,” “documentation agent,” “co-agent,”
“joint book runner” or “joint lead arranger” shall have any right, power,
        obligation, liability, responsibility or duty under this Agreement other
        than,
        in the case of such Lenders, those applicable to all Lenders as such. Without
        limiting the foregoing, none of the Lenders or other Persons so identified
        shall
        have or be deemed to have any fiduciary relationship with any Lender. Each
        Lender acknowledges that it has not relied, and will not rely, on any of
        the
        Lenders or other Persons so identified in deciding to enter into this Agreement
        or in taking or not taking action hereunder.

      

      Section
        8.11 Collateral
        and Guaranty Matters.

      

      (a) The
        Lenders irrevocably authorize and direct the Administrative Agent:

      

      (i) to
        release any Lien on any Property granted to or held by the Administrative
        Agent
        under any Credit Document (i) upon
        termination of the Term
        Commitments and payment in full of all Credit Party Obligations (other than
        contingent indemnification obligations), (ii) that
        is
        transferred or to be transferred as part of or in connection with any sale
        or
        other disposition permitted under Section 6.4, or (iii) subject
        to Section 9.1, if approved, authorized or ratified in writing by the
        Required Lenders;

      

      (ii) to
        subordinate any Lien on any Property granted to or held by the such Agent
        under
        any Credit Document to the holder of any Lien on such Property that is permitted
        described under clause (c) of the definition of Permitted Lien and permitted
        by
        Section 6.2; and

      

      (iii) to
        release any Guarantor from its obligations under the applicable Guaranty
        if such
        Person ceases to be a Guarantor as a result of a transaction permitted
        hereunder.

      

      
        
          
          

        

        
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      (b) In
        connection with a termination or release pursuant to this Section, the
        Administrative Agent shall promptly execute and deliver to the applicable
        Credit
        Party, at the Borrower’s expense, all documents that the applicable Credit Party
        shall reasonably request to evidence such termination or release. Upon request
        by the Administrative Agent at any time, the Required Lenders will confirm
        in
        writing such Agent’s authority to release or subordinate its interest in
        particular types or items of Property, or to release any Guarantor from its
        obligations under the Guaranty pursuant to this Section.

      

      

      ARTICLE
        IX

      

      MISCELLANEOUS

      

      Section
        9.1 Amendments,
        Waivers and Release of Collateral.

      

      Neither
        this Agreement nor any of the other Credit Documents, nor any terms hereof
        or
        thereof may be amended, modified, extended, restated, replaced, or supplemented
        (by amendment, waiver, consent or otherwise) except in accordance with the
        provisions of this Section nor may Collateral be released except as specifically
        provided herein or in the Security Documents or in accordance with the
        provisions of this Section. The Required Lenders may or, with the written
        consent of the Required Lenders, the Administrative Agent may, from time
        to
        time, (a) enter into with the Borrower written amendments, supplements or
        modifications hereto and to the other Credit Documents for the purpose of
        adding
        any provisions to this Agreement or the other Credit Documents or changing
        in
        any manner the rights of the Lenders or of the Borrower hereunder or thereunder
        or
        (b) waive
        or
        consent to the departure from, on such terms and conditions as the Required
        Lenders may specify in such instrument, any of the requirements of this
        Agreement or the other Credit Documents or any Default or Event of Default
        and
        its consequences; provided,
        however,
        that no
        such amendment, supplement, modification, release, waiver or consent
        shall:

      

      (i) reduce
        the amount or extend the scheduled date of maturity of any Loan or Note or
        any
        installment thereon, or reduce the stated rate of any interest or fee payable
        hereunder (except in connection with a waiver of interest at the increased
        post-default rate set forth in Section 2.8 which shall be determined by a
        vote
        of the Required Lenders) or extend the scheduled date of any payment thereof
        or
        increase the amount or extend the expiration date of any Lender’s Commitment, in
        each case without the written consent of each Lender directly affected thereby;
        provided
        that, it
        is understood and agreed that (A) no waiver, reduction or deferral of a
        mandatory prepayment required pursuant to Section 2.7(b), nor any amendment
        of
        Section 2.7(b) or the definitions of Asset Disposition, Debt Issuance, Equity
        Issuance or Extraordinary Receipt, shall constitute a reduction of the amount
        of, or an extension of the scheduled date of, the scheduled date of maturity
        of,
        or any installment of, any Loan or Note, (B) any reduction in the stated
        rate of
        interest on the Term Loan shall only require the written consent of each
        Lender
        holding a portion of the outstanding Term Loan; or 

      

      
        
          
          

        

        
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      (ii) amend,
        modify or waive any provision of this Section or reduce the percentage specified
        in the definition of Required Lenders, without the written consent of all
        the
        Lenders; or 

      

      (iii) release
        the Borrower or all or substantially all of the Guarantors from obligations
        under the Guaranty, without the written consent of all of the Lenders and
        Hedging Agreement Providers; or

      

      (iv) release
        all or substantially all of the Collateral without the written consent of
        all of
        the Lenders and Hedging Agreement Providers; or 

      

      (v) subordinate
        the Loans to any other Indebtedness without the written consent of all of
        the
        Lenders; or

      

      (vi) permit
        the Borrower to assign or transfer any of its rights or obligations under
        this
        Agreement or other Credit Documents without the written consent of all of
        the
        Lenders; or

      

      (vii) amend,
        modify or waive any provision of the Credit Documents requiring consent,
        approval or request of the Required Lenders or all Lenders without the written
        consent of the Required Lenders or all the Lenders as appropriate;
        or

      

      (viii) amend,
        modify or waive the order in which Credit Party Obligations are paid or in
        a
        manner that would alter the pro rata sharing of payments by and among the
        Lenders in Section 2.11(b) without the written consent of each Lender and
        each Hedging Agreement Provider directly affected thereby; or

      

      (ix) amend,
        modify or waive any provision of Article VIII without the written consent
        of the
        then Administrative Agent; or

      

      (x) amend
        or
        modify the definition of Credit Party Obligations to delete or exclude any
        obligation or liability described therein without the written consent of
        each
        Lender and each Hedging Agreement directly affected thereby; or

      

      
        
          
          

        

        
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      (xi) amend
        the
        definitions of “Hedging Agreement,” “Secured Hedging Agreement,” or “Hedging
        Agreement Provider” without the consent of any Hedging Agreement Provider that
        would be adversely affected thereby.

      

      provided,
        further,
        that no
        amendment, waiver or consent affecting the rights or duties of the
        Administrative Agent under any Credit Document shall in any event be effective,
        unless in writing and signed by the Administrative Agent in addition to the
        Lenders required hereinabove to take such action.

      

      Any
        such
        waiver, any such amendment, supplement or modification and any such release
        shall apply equally to each of the Lenders and shall be binding upon the
        Borrower, the other Credit Parties, the Lenders, the Administrative Agent
        and
        all future holders of the Notes. In the case of any waiver, the Borrower,
        the
        other Credit Parties, the Lenders and the Administrative Agent shall be restored
        to their former position and rights hereunder and under the outstanding Loans
        and Notes and other Credit Documents, and any Default or Event of Default
        waived
        shall be deemed to be cured and not continuing; but no such waiver shall
        extend
        to any subsequent or other Default or Event of Default, or impair any right
        consequent thereon. 

      

      Notwithstanding
        any of the foregoing to the contrary, the consent of the Borrower and the
        other
        Credit Parties shall not be required for any amendment, modification or waiver
        of the provisions of Article VIII (other than the provisions of Section 8.9)
        which does not increase the obligations of any of the Credit Parties under
        the
        Credit Documents. 

      

      Notwithstanding
        the fact that the consent of all the Lenders is required in certain
        circumstances as set forth above, (a) each Lender is entitled to vote as
        such Lender sees fit on any bankruptcy reorganization plan that affects the
        Loans, and each Lender acknowledges that the provisions of Section 1126(c)
        of
        the Bankruptcy Code supersedes the unanimous consent provisions set forth
        herein
        and (b) the Required Lenders may consent to allow a Credit Party to use
        cash collateral in the context of a bankruptcy or insolvency
        proceeding.

      

      Section
        9.2 Notices.

      

      (a) Notices
        Generally.
        Except
        in the case of notices and other communications expressly permitted to be
        given
        by telephone (and except as provided in paragraph (b) below), all notices
        and
        other communications provided for herein shall be in writing and shall be
        delivered by hand or overnight courier service, mailed by certified or
        registered mail or sent by telecopier as follows:

       

      (i)
         If
        to the
        Borrower or any other Credit Party:

      

      c/o
        CapLease, LP

      1065
        Avenue of the Americas

      New
        York,
        New York 10018

      Attention:
        General Counsel

      Telephone:
        (212) 217-6300

      Fax:
        (212) 217-6301

      

      
        
          
          

        

        
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      (ii) If
        to the
        Administrative Agent: 

      

      Wachovia
        Bank, National Association, as Administrative Agent

      

      Wachovia
        Bank, National Association

      301
        South
        College Street, 6th
        Floor

      Charlotte,
        North Carolina 28288-0174

      Attention:
         Jack
        Altmeyer 

      Telephone:
         (704)
        715-8122

      Fax:
         (704)
        715-0065

      

      (iii) if
        to a
        Lender, to it at its address (or telecopier number) set forth in its
        Administrative Questionnaire.

      

      Notices
        sent by hand or overnight courier service, or mailed by certified or registered
        mail, shall be deemed to have been given when received; notices sent by
        telecopier shall be deemed to have been given when sent (except that, if
        not
        given during normal business hours for the recipient, shall be deemed to
        have
        been given at the opening of business on the next business day for the
        recipient). Notices delivered through electronic communications to the extent
        provided in paragraph (b) below, shall be effective as provided in said
        paragraph (b).

      

      (b) Electronic
        Communications.
        Notices
        and other communications to the Lenders hereunder may be delivered or furnished
        by electronic communication (including e-mail and Internet or intranet websites)
        pursuant to procedures approved by the Administrative Agent, provided
        that the
        foregoing shall not apply to notices to any Lender pursuant to Article II
        if
        such Lender has notified the Administrative Agent that it is incapable of
        receiving notices under such Article by electronic communication. The
        Administrative Agent or the Borrower may, in its discretion, agree to accept
        notices and other communications to it hereunder by electronic communications
        pursuant to procedures approved by it, provided
        that
        approval of such procedures may be limited to particular notices or
        communications.

      

      Unless
        the Administrative Agent otherwise prescribes, (i) notices and other
        communications sent to an e-mail address shall be deemed received upon the
        sender’s receipt of an acknowledgement from the intended recipient (such as by
        the “return receipt requested” function, as available, return e-mail or other
        written acknowledgement), provided
        that if
        such notice or other communication is not sent during the normal business
        hours
        of the recipient, such notice or communication shall be deemed to have been
        sent
        at the opening of business on the next business day for the recipient, and
        (ii) notices or communications posted to an Internet or intranet website
        shall be deemed received upon the deemed receipt by the intended recipient
        at
        its e-mail address as described in the foregoing clause (i) of notification
        that such notice or communication is available and identifying the website
        address therefor.

      

      
        
          
          

        

        
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      (c) Change
        of Address, Etc.
        Any
        party hereto may change its address or telecopier number for notices and
        other
        communications hereunder by notice to the other parties hereto. 

      

      Section
        9.3 No
        Waiver; Cumulative Remedies.

      

      No
        failure to exercise and no delay in exercising, on the part of the
        Administrative Agent or any Lender, any right, remedy, power or privilege
        hereunder shall operate as a waiver thereof; nor shall any single or partial
        exercise of any right, remedy, power or privilege hereunder preclude any
        other
        or further exercise thereof or the exercise of any other right, remedy, power
        or
        privilege. The rights, remedies, powers and privileges herein provided are
        cumulative and not exclusive of any rights, remedies, powers and privileges
        provided by law.

      

      Section
        9.4 Survival
        of Representations and Warranties.

      

      All
        representations and warranties made hereunder and in any document, certificate
        or statement delivered pursuant hereto or in connection herewith shall survive
        the execution and delivery of this Agreement and the Notes and the making
        of the
        Loans; provided
        that all
        such representations and warranties shall terminate on the date upon which
        the
        Commitments have been terminated and all amounts owing hereunder and under
        any
        Notes have been paid in full.

      

      Section
        9.5 Payment
        of Expenses and Taxes; Indemnity.

      

      (a) Costs
        and Expenses.
        The
        Borrower and each Guarantor, jointly and severally, shall pay (i)
        all
        reasonable out-of-pocket expenses incurred by the Administrative Agent and
        its
        Affiliates (including the reasonable fees, charges and disbursements of counsel
        for the Administrative Agent), and shall pay all fees and time charges and
        disbursements for attorneys who may be employees of the Administrative Agent,
        in
        connection with the syndication of the credit facilities provided for herein,
        the preparation, negotiation, execution, delivery and administration of this
        Agreement and the other Credit Documents or any amendments, modifications
        or
        waivers of the provisions hereof or thereof (whether or not the transactions
        contemplated hereby or thereby shall be consummated) and (ii)
        all
        out-of-pocket expenses incurred by the Administrative Agent or any Lender
        (including the fees, charges and disbursements of any counsel for the
        Administrative Agent or any Lender), and shall pay all fees and time charges
        for
        attorneys who may be employees of the Administrative Agent or any Lender,
        in
        connection with the enforcement or protection of its rights (A)
        in
        connection with this Agreement and the other Credit Documents, including
        its
        rights under this Section, or (B)
        in
        connection with the Loans made, including all such out-of-pocket expenses
        incurred during any workout, restructuring or negotiations in respect of
        such
        Loans. The Administrative Agent agrees that its reasonable out-of-pocket
        expenses due from the Credit Parties with respect to this Agreement and the
        Credit Documents arising from the Administrative Agent’s preparation, execution,
        delivery and administration of, and any waiver or modification (whether or
        not
        effective) to the Credit Documents shall not exceed $75,000. For the avoidance
        of doubt, the foregoing limit on expenses shall not include the reasonable
        fees,
        expenses, disbursements and other changes of Administrative Agent’s counsel, any
        costs, expenses or other amounts related to enforcement of this Agreement
        or any
        other Credit Document (including without limitation any actions taken or
        costs
        incurred after the occurrence of any Default or Event of Default) or any
        third
        party fees or expenses, including without limitation amounts related to due
        diligence with respect to the Credit Parties, their Subsidiaries, any of
        their
        assets or any other information, services or reports requested by the
        Administrative Agent.

      

      
        
          
          

        

        
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      (b) Indemnification
        by the Borrower.
        The
        Borrower and each Guarantor, jointly and severally, shall indemnify the
        Administrative Agent (and any sub-agent thereof), each Lender and each Related
        Party of any of the foregoing Persons (each such Person being called an
“Indemnitee”)
        against, and hold each Indemnitee harmless from, any and all losses, claims,
        damages, liabilities and related expenses (including the fees, charges and
        disbursements of any counsel for any Indemnitee), and shall indemnify and
        hold
        harmless each Indemnitee from all fees and time charges and disbursements
        for
        attorneys who may be employees of any Indemnitee, incurred by any Indemnitee
        or
        asserted against any Indemnitee by any third party or by the Borrower or
        any
        other Credit Party arising out of, in connection with, or as a result of
        (i)
        the
        execution or delivery of this Agreement, any other Credit Document or any
        agreement or instrument contemplated hereby or thereby, the performance by
        the
        parties hereto of their respective obligations hereunder or thereunder or
        the
        consummation of the transactions contemplated hereby or thereby, (ii)
        any
        Loan or the use or proposed use of the proceeds therefrom, (iii)
        any
        actual or alleged presence or release of Materials of Environmental Concern
        on
        or from any property owned or operated by the Borrower or any of its
        Subsidiaries, or any liability under Environmental Law related in any way
        to the
        Borrower or any of its Subsidiaries, or (iv)
        any
        actual or prospective claim, litigation, investigation or proceeding relating
        to
        any of the foregoing, whether based on contract, tort or any other theory,
        whether brought by a third party or by the Borrower or any other Credit Party,
        and regardless of whether any Indemnitee is a party thereto, provided
        that
        such indemnity shall not, as to any Indemnitee, be available to the extent
        that
        such losses, claims, damages, liabilities or related expenses (A)
        are
        determined by a court of competent jurisdiction by final and nonappealable
        judgment to have resulted from the gross negligence or willful misconduct
        of
        such Indemnitee or (B)
        result
        from a claim brought by the Borrower or any other Credit Party against an
        Indemnitee for breach in bad faith of such Indemnitee’s obligations hereunder or
        under any other Credit Document, if the Borrower or such Credit Party has
        obtained a final and nonappealable judgment in its favor on such claim as
        determined by a court of competent jurisdiction. Any Indemnitee shall endeavor
        to give the Borrower prompt written notice of any third party claims against
        Indemnitee for which Indemnitee expects to seek indemnification hereunder
        and
        the Borrower and Indemnitee shall cooperate with respect to the defense of
        such
        claim, provided, however, Indemnitee’s failure to promptly deliver notice of
        such third party claim shall in not affect the Borrower’s obligation to
        indemnify Indemnitee. 

      

      (c) Reimbursement
        by Lenders.
        To the
        extent that the Borrower for any reason fails to indefeasibly pay any amount
        required under paragraph (a) or (b) of this Section to be paid by it
        to the Administrative Agent (or any sub-agent thereof) or any Related Party
        of
        any of the foregoing, each Lender severally agrees to pay to the Administrative
        Agent (or any such sub-agent) or such Related Party, as the case may be,
        such
        Lender’s Commitment Percentage (determined as of the time that the applicable
        unreimbursed expense or indemnity payment is sought) of such unpaid amount,
        provided
        that the
        unreimbursed expense or indemnified loss, claim, damage, liability or related
        expense, as the case may be, was incurred by or asserted against the
        Administrative Agent (or any such sub-agent) in its capacity as such, or
        against
        any Related Party of any of the foregoing acting for the Administrative Agent
        (or any such sub-agent) in connection with such capacity. The obligations
        of the
        Lenders under this paragraph (c) are subject to the provisions of
        Section 2.12.

      

      
        
          
          

        

        
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      (d) Waiver
        of Consequential Damages, Etc.
        To the
        fullest extent permitted by applicable law, the Borrower shall not assert,
        and
        hereby waives, any claim against any Indemnitee, on any theory of liability,
        for
        special, indirect, consequential or punitive damages (as opposed to direct
        or
        actual damages) arising out of, in connection with, or as a result of, this
        Agreement, any other Credit Document or any agreement or instrument contemplated
        hereby, the transactions contemplated hereby or thereby, any Loan or the
        use of
        the proceeds thereof. No Indemnitee referred to in paragraph (b) above shall
        be
        liable for any damages arising from the use by unintended recipients of any
        information or other materials distributed by it through telecommunications,
        electronic or other information transmission systems in connection with this
        Agreement or the other Credit Documents or the transactions contemplated
        hereby
        or thereby.

      

      (e) Payments.
        All
        amounts due under this Section shall be payable promptly/not later than five
        (5)
        days after demand therefor.

      

      Section
        9.6 Successors
        and Assigns; Participations.

      

      (a) Successors
        and Assigns Generally.
        The
        provisions of this Agreement shall be binding upon and inure to the benefit
        of
        the parties hereto and their respective successors and assigns permitted
        hereby,
        except that neither the Borrower nor any other Credit 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 assignee in accordance with the provisions of paragraph (b) of
        this
        Section, (ii) by way of participation in accordance with the provisions of
        paragraph (d) of this Section or (iii) by way of pledge or assignment of
        a
        security interest subject to the restrictions of paragraph (f) of this Section
        (and 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 paragraph (d) of this Section and, to the extent expressly
        contemplated hereby, the Related Parties of each 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 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 the assigning Lender’s
        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 paragraph (b)(i)(A) of this Section, the aggregate
        amount
        of the Commitment (which for this purpose includes Loans outstanding thereunder)
        or, if the applicable 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 $1,000,000, in the case of any assignment in respect of a revolving
        facility, or $1,000,000, in the case of any assignment in respect of a term
        facility, unless each of the Administrative Agent and, so long as no Event
        of
        Default has occurred and is continuing, the Borrower otherwise consents (each
        such consent not to be unreasonably withheld or delayed). 

      

      (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 Commitment assigned, except that this clause (ii) shall
        not
        prohibit any Lender from assigning all or a portion of its rights and
        obligations among separate Tranches on a non-pro rata basis.

      

      (iii) Required
        Consents.
        No
        consent shall be required for any assignment except to the extent required
        by
        paragraph (b)(i)(B) of this Section and, in addition:

      

      (A) the
        consent of the Borrower (such consent not to be unreasonably withheld or
        delayed) shall be required unless (x) an Event of Default has occurred and
        is
        continuing at the time of such assignment or (y) such assignment is to a
        Lender,
        an Affiliate of a Lender or an Approved Fund; 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 Term
        Loan
        Commitment to a Person who is not a Lender, an Affiliate of a Lender or an
        Approved Fund.

      

      
        
          
          

        

        
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      (iv) Assignment
        and Assumption.
        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
        $3,500, and the assignee, if it is not a Lender, shall deliver to the
        Administrative Agent an Administrative Questionnaire.

      

      (v) No
        Assignment to Borrower.
        No such
        assignment shall be made to the Borrower or any of the Borrower’s Affiliates or
        Subsidiaries.

      

      (vi) No
        Assignment to Natural Persons.
        No such
        assignment shall be made to a natural person.

      

      Subject
        to acceptance and recording thereof by the Administrative Agent pursuant
        to
        paragraph (c) of this Section, 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 2.14 and 9.5 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 paragraph (d) of this
        Section.

      

      (c) Register.
        The
        Administrative Agent, acting solely for this purpose as an agent of the
        Borrower, shall maintain at one of its offices in Charlotte, North Carolina
        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 Borrower, 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 Borrower and any Lender,
        at
        any reasonable time and from time to time upon reasonable prior
        notice.

      

      (d) Participations.
        Any
        Lender may at any time, without the consent of, or notice to, the Borrower
        or
        the Administrative Agent, sell participations to any Person (other than a
        natural person or the Borrower or any of the Borrower’s 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 Borrower, the
        Administrative Agent and the Lenders shall continue to deal solely and directly
        with such Lender in connection with such Lender’s rights and obligations under
        this Agreement. 

      

      
        
          
          

        

        
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      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 any amendment, modification or waiver
        that
        affects such Participant. Subject to paragraph (e) of this Section, the Borrower
        agrees that each Participant shall be entitled to the benefits of Sections
        2.14
        and 2.15 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 law, each Participant also shall be entitled to the benefits of
        Section 9.7 as
        though
        it were a Lender, provided such Participant agrees to be subject to Section
        2.11 as
        though
        it were a Lender.

      

      (e) Limitations
        upon Participant Rights.
        A
        Participant shall not be entitled to receive any greater payment under Sections
        2.14 and 2.16 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 Borrower’s 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 2.16 unless the Borrower is
        notified of the participation sold to such Participant and such Participant
        agrees, for the benefit of the Borrower, to comply with Section 2.16 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) Cooperation
        of Credit Parties.
        Each of
        the Credit Parties shall use its commercially reasonable efforts to assist
        the
        Lenders in participating, syndicating, rating or securitizing all or any
        portion
        of the Term Loans, including without limitation creating senior subordinate
        notes or other structures reasonably requested by the Lenders. 

      

      
        
          
          

        

        
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      Section
        9.7 Right
        of Set-off; Sharing of Payments.

       

      (a) If
        an
        Event of Default shall have occurred and be continuing, each Lender and each
        of
        their respective Affiliates is hereby authorized at any time and from time
        to
        time, to the fullest extent permitted by applicable law, to set off and apply
        any and all deposits (general or special, time or demand, provisional or
        final,
        in whatever currency) at any time held and other obligations (in whatever
        currency) at any time owing by such Lender or any such Affiliate to or for
        the
        credit or the account of the Borrower or any other Credit Party against any
        and
        all of the obligations of the Borrower or such Credit Party now or hereafter
        existing under this Agreement or any other Credit Document to such Lender,
        irrespective of whether or not such Lender shall have made any demand under
        this
        Agreement or any other Credit Document and although such obligations of the
        Borrower or such Credit Party may be contingent or unmatured or are owed
        to a
        branch or office of such Lender different from the branch or office holding
        such
        deposit or obligated on such indebtedness. The rights of each Lender and
        their
        respective Affiliates under this Section are in addition to other rights
        and
        remedies (including other rights of setoff) that such Lender or their respective
        Affiliates may have. Each Lender agrees to notify the Borrower and the
        Administrative Agent promptly after any such setoff and application,
provided
        that the
        failure to give such notice shall not affect the validity of such setoff
        and
        application.

       

      (b) If
        any
        Lender shall, by exercising any right of setoff or counterclaim or otherwise,
        obtain payment in respect of any principal of or interest on any of its Loans
        or
        other obligations hereunder resulting in such Lender’s receiving payment of a
        proportion of the aggregate amount of its Loans and accrued interest thereon
        or
        other such obligations greater than its pro rata
        share
        thereof as provided herein, then the Lender receiving such greater proportion
        shall (i)
        notify
        the Administrative Agent of such fact, and (ii)
        purchase (for cash at face value) participations in the Loans and such other
        obligations of the other Lenders, or make such other adjustments as shall
        be
        equitable, so that the benefit of all such payments shall be shared by the
        Lenders ratably in accordance with the aggregate amount of principal of and
        accrued interest on their respective Loans and other amounts owing them,
        provided
        that:

      

      (i) if
        any
        such participations are purchased and all or any portion of the payment giving
        rise thereto is recovered, such participations shall be rescinded and the
        purchase price restored to the extent of such recovery, without interest;
        and

      

      (ii) the
        provisions of this paragraph shall not be construed to apply to (A) any
        payment made by the Borrower pursuant to and in accordance with the express
        terms of this Agreement or (B)
        any
        payment obtained by a Lender as consideration for the assignment of or sale
        of a
        participation in any of its Loans to any assignee or participant, other than
        to
        the Borrower or any Subsidiary thereof (as to which the provisions of this
        paragraph shall apply).

      

      (c) Each
        Credit Party consents to the foregoing and agrees, to the extent it may
        effectively do so under applicable law, that any Lender acquiring a
        participation pursuant to the foregoing arrangements may exercise against
        each
        Credit Party rights of setoff and counterclaim with respect to such
        participation as fully as if such Lender were a direct creditor of each Credit
        Party in the amount of such participation.

      

      
        
          
          

        

        
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      Section
        9.8 Table
        of Contents and Section Headings.

      

      The
        table
        of contents and the Section and subsection headings herein are intended for
        convenience only and shall be ignored in construing this Agreement.

      

      Section
        9.9 Counterparts;
        Integration; Effectiveness; Electronic Execution.

      

      (a) Counterparts;
        Integration; Effectiveness.
        This
        Agreement may be executed in counterparts (and by different parties hereto
        in
        different counterparts), each of which shall constitute an original, but
        all of
        which when taken together shall constitute a single contract. This Agreement
        and
        the other Credit Documents, and any separate letter agreements with respect
        to
        fees payable to the Administrative Agent, constitute the entire contract
        among
        the parties relating to the subject matter hereof and supersede any and all
        previous agreements and understandings, oral or written, relating to the
        subject
        matter hereof. Except as provided in Section 4.1, this Agreement shall become
        effective when it shall have been executed by the Administrative Agent and
        when
        the Administrative Agent shall have received counterparts hereof that, when
        taken together, bear the signatures of each of the other parties hereto.
        Delivery of an executed counterpart of a signature page of this Agreement
        by
        telecopy or email shall be effective as delivery of a manually executed
        counterpart of this Agreement.

      

      (b)
        Electronic
        Execution of Assignments.
        The
        words “execution,” “signed,” “signature,” and words of like import in any
        Assignment and Assumption shall be deemed to include electronic signatures
        or
        the keeping of records in electronic form, each of which shall be of the
        same
        legal effect, validity or enforceability as a manually executed signature
        or the
        use of a paper-based recordkeeping system, as the case may be, to the extent
        and
        as provided for in any applicable law, including the Federal Electronic
        Signatures in Global and National Commerce Act, the New York State Electronic
        Signatures and Records Act, or any other similar state laws based on the
        Uniform
        Electronic Transactions Act.

      

      Section
        9.10 Severability.

      

      Any
        provision of this Agreement which is prohibited or unenforceable in any
        jurisdiction shall, as to such jurisdiction, be ineffective to the extent
        of
        such prohibition or unenforceability without invalidating the remaining
        provisions hereof, and any such prohibition or unenforceability in any
        jurisdiction shall not invalidate or render unenforceable such provision
        in any
        other jurisdiction.

      

      Section
        9.11 Integration.

      

      This
        Agreement and the other Credit Documents represent the agreement of the
        Borrower, the other Credit Parties, the Administrative Agent and the Lenders
        with respect to the subject matter hereof, and there are no promises,
        undertakings, representations or warranties by the Administrative Agent,
        the
        Borrower, the other Credit Parties, or any Lender relative to the subject
        matter
        hereof not expressly set forth or referred to herein or therein.

      

      
        
          
          

        

        
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      Section
        9.12 Governing
        Law.

      

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

      

      Section
        9.13 Consent
        to Jurisdiction; Service of Process and Venue.

      

      (a) Consent
        to Jurisdiction.
        The
        Borrower and each other Credit Party irrevocably and unconditionally submits,
        for itself and its property, to the nonexclusive jurisdiction of the courts
        of
        the State of North Carolina sitting in Mecklenburg County and of the United
        States District Court of the Western District of North Carolina and any
        appellate court from any thereof, in any action or proceeding arising out
        of or
        relating to this Agreement or any other Credit Document, or for recognition
        or
        enforcement of any judgment, and each of the parties hereto irrevocably and
        unconditionally agrees that all claims in respect of any such action or
        proceeding may be heard and determined in such North Carolina sitting 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 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 Credit Document shall affect any
        right
        that the Administrative Agent, any Lender may otherwise have to bring any
        action
        or proceeding relating to this Agreement or any other Credit Document against
        the Borrower or any other Credit Party or its properties in the courts of
        any
        jurisdiction.

      

      (b) Service
        of Process.
        Each
        party hereto irrevocably consents to service of process in the manner provided
        for notices in Section 9.2. Nothing in this Agreement will affect the right
        of
        any party hereto to serve process in any other manner permitted by applicable
        law.

      

      (c) Venue.
        The
        Borrower and each other Credit Party irrevocably and unconditionally waives,
        to
        the fullest extent permitted by applicable law, any objection that it may
        now or
        hereafter have to the laying of venue of any action or proceeding arising
        out of
        or relating to this Agreement or any other Credit Document in any court referred
        to in paragraph (b) of this Section. Each of the parties hereto hereby
        irrevocably waives, to the fullest extent permitted by applicable law, the
        defense of an inconvenient forum to the maintenance of such action or proceeding
        in any such court.

      

      Section
        9.14 Confidentiality.

      

      
        
          
          

        

        
          98

          
            

          

        

        
          
          

        

      

      Each
        of
        the Administrative Agent and the Lenders agrees to maintain the confidentiality
        of the Information (as defined below), except that Information may be disclosed
        (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), (b) to the extent requested by any regulatory
        authority purporting to have jurisdiction over it (including any self-regulatory
        authority, such as the National Association of Insurance Commissioners),
        (c) to
        the extent required by applicable laws or regulations or by any subpoena
        or
        similar legal process, (d) to any other party hereto, (e) in connection with
        the
        exercise of any remedies hereunder, under any other Credit Document or Secured
        Hedging Agreement or any action or proceeding relating to this Agreement,
        any
        other Credit Document or Secured Hedging Agreement or the enforcement of
        rights
        hereunder or thereunder, (f) subject to an agreement containing provisions
        substantially the same as those of this Section, to any assignee of or
        Participant in, or any prospective assignee of or Participant in, any of
        its
        rights or obligations under this Agreement, (g) (i) any actual or prospective
        counterparty (or its advisors) to any swap or derivative transaction relating
        to
        the Borrower and its obligations, (ii)
        an
        investor or prospective investor in securities issued by an Approved Fund
        that
        also agrees that Information shall be used solely for the purpose of evaluating
        an investment in such securities issued by the Approved Fund, (iii) a
        trustee, collateral manager, servicer, backup servicer, noteholder or secured
        party in connection with the administration, servicing and reporting on the
        assets serving as collateral for securities issued by an Approved Fund, or
        (iv) a nationally recognized rating agency that requires access to
        information regarding the Credit Parties, the Loans and Credit Documents
        in
        connection with ratings issued in respect of securities issued by an Approved
        Fund (in each case, 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), (h)
        with
        the consent of the Borrower or (i) to the extent such Information (x) becomes
        publicly available other than as a result of a breach of this Section or
        (y)
        becomes available to the Administrative Agent, any Lender or any of their
        respective Affiliates on a nonconfidential basis from a source other than
        the
        Borrower.

      

      For
        purposes of this Section, “Information”
means
        all information received from the Borrower or any of its Subsidiaries relating
        to the Borrower or any of its Subsidiaries or any of their respective
        businesses, other than any such information that is available to the
        Administrative Agent or any Lender on a nonconfidential basis prior to
        disclosure by the Borrower or any of its Subsidiaries, provided
        that, in
        the case of information received from the Borrower or any of its Subsidiaries
        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
        9.15 Acknowledgments.

      

      The
        Borrower and the other Credit Parties each hereby acknowledges
        that:

      

      (a) it
        has
        been advised by counsel in the negotiation, execution and delivery of each
        Credit Document;

      

      (b) neither
        the Administrative Agent nor any Lender has any fiduciary relationship with
        or
        duty to the Borrower or any other Credit Party arising out of or in connection
        with this Agreement and the relationship between the Administrative Agent
        and
        the Lenders, on one hand, and the Borrower and the other Credit Parties,
        on the
        other hand, in connection herewith is solely that of debtor and creditor;
        and

      

      
        
          
          

        

        
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      (c) no
        joint
        venture exists among the Lenders or among the Borrower or the other Credit
        Parties and the Lenders.

      

      Section
        9.16 Waivers
        of Jury Trial.

      

      EACH
        PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
        APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING
        DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY
        OTHER
        CREDIT DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER
        BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO
        (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON
        HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT,
        IN
        THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
        (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO
        ENTER INTO THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS BY, AMONG OTHER
        THINGS,
        THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

      

      

      Section
        9.17 Patriot
        Act Notice. 

      

      Each
        Lender and the Administrative Agent (for itself and not on behalf of any
        other
        party) hereby notifies the Borrower that, pursuant to the requirements of
        the
        Patriot Act, it is required to obtain, verify and record information that
        identifies the Borrower and the other Credit Parties, which information includes
        the name and address of the Borrower and the other Credit Parties and other
        information that will allow such Lender or the Administrative Agent, as
        applicable, to identify the Borrower and the other Credit Parties in accordance
        with the Patriot Act.

      

      Section
        9.18 Resolution
        of Drafting Ambiguities.

      

      Each
        Credit Party acknowledges and agrees that it was represented by counsel in
        connection with the execution and delivery of this Agreement and the other
        Credit Documents to which it is a party, that it and its counsel reviewed
        and
        participated in the preparation and negotiation hereof and thereof and that
        any
        rule of construction to the effect that ambiguities are to be resolved against
        the drafting party shall not be employed in the interpretation hereof or
        thereof.

      

      
        
          
          

        

        
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      Section
        9.19 Continuing
        Agreement.

      

      This
        Credit Agreement shall be a continuing agreement and shall remain in full
        force
        and effect until all Loans, interest, fees and other Credit Party Obligations
        (other than those obligations that expressly survive the termination of this
        Credit Agreement) have been paid in full and all Commitments have been
        terminated. Upon termination, the Credit Parties shall have no further
        obligations (other than those obligations that expressly survive the termination
        of this Credit Agreement) under the Credit Documents and the Administrative
        Agent shall, at the request and expense of the Borrower, deliver all the
        Collateral in its possession to the Borrower and release all Liens on the
        Collateral; provided
        that
        should any payment, in whole or in part, of the Credit Party Obligations
        be
        rescinded or otherwise required to be restored or returned by the Administrative
        Agent or any Lender, whether as a result of any proceedings in bankruptcy
        or
        reorganization or otherwise, then the Credit Documents shall automatically
        be
        reinstated and all Liens of the Administrative Agent shall reattach to the
        Collateral and all amounts required to be restored or returned and all costs
        and
        expenses incurred by the Administrative Agent or any Lender in connection
        therewith shall be deemed included as part of the Credit Party
        Obligations.

      

      

      ARTICLE
        X

      

      GUARANTY

      

      Section
        10.1 The
        Guaranty.

      

      In
        order
        to induce the Lenders to enter into this Agreement and any Hedging Agreement
        Provider to enter into any Secured Hedging Agreement and to extend credit
        hereunder and thereunder and in recognition of the direct benefits to be
        received by the Guarantors from the Extensions of Credit hereunder and any
        Secured Hedging Agreement, each of the Guarantors hereby agrees with the
        Administrative Agent, the Lenders and the Hedging Agreement Providers as
        follows: each Guarantor hereby unconditionally and irrevocably jointly and
        severally guarantees as primary obligor and not merely as surety the full
        and
        prompt payment when due, whether upon maturity, by acceleration or otherwise,
        of
        any and all Credit Party Obligations. If
        any or
        all of the indebtedness becomes due and payable hereunder or under any Secured
        Hedging Agreement, each Guarantor unconditionally promises to pay such
        indebtedness to the Administrative Agent, the Lenders, the Hedging Agreement
        Providers, or their respective order, or demand, together with any and all
        reasonable expenses which may be incurred by the Administrative Agent or
        the
        Lenders in collecting any of the Credit Party Obligations. The Guaranty set
        forth in this Article X
        is a
        guaranty of timely payment and not of collection. The word “indebtedness” is
        used in this Article X
        in its
        most comprehensive sense and includes any and all advances, debts, obligations
        and liabilities of the Borrower, including specifically all Credit Party
        Obligations, arising in connection with this Agreement, the other Credit
        Documents or any Secured Hedging Agreement, in each case, heretofore, now,
        or
        hereafter made, incurred or created, whether voluntarily or involuntarily,
        absolute or contingent, liquidated or unliquidated, determined or undetermined,
        whether or not such indebtedness is from time to time reduced, or extinguished
        and thereafter increased or incurred, whether the Borrower may be liable
        individually or jointly with others, whether or not recovery upon such
        indebtedness may be or hereafter become barred by any statute of limitations,
        and whether or not such indebtedness may be or hereafter become otherwise
        unenforceable.

      

      
        
          
          

        

        
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      Notwithstanding
        any provision to the contrary contained herein or in any other of the Credit
        Documents, to the extent the obligations of a Guarantor shall be adjudicated
        to
        be invalid or unenforceable for any reason (including, without limitation,
        because of any applicable state or federal law relating to fraudulent
        conveyances or transfers) then the obligations of each such Guarantor hereunder
        shall be limited to the maximum amount that is permissible under applicable
        law
        (whether federal or state and including, without limitation, the Bankruptcy
        Code).

      

      Section
        10.2 Bankruptcy.

      

      Additionally,
        each of the Guarantors unconditionally and irrevocably guarantees jointly
        and
        severally the payment of any and all Credit Party Obligations of the Borrower
        to
        the Lenders and any Hedging Agreement Provider whether or not due or payable
        by
        the Borrower upon the occurrence of any Bankruptcy Event and unconditionally
        promises to pay such Credit Party Obligations to the Administrative Agent
        for
        the account of the Lenders and to any such Hedging Agreement Provider, or
        order,
        on demand, in lawful money of the United States. Each of the Guarantors further
        agrees that to the extent that the Borrower or a Guarantor shall make a payment
        or a transfer of an interest in any property to the Administrative Agent,
        any
        Lender or any Hedging Agreement Provider, which payment or transfer or any
        part
        thereof is subsequently invalidated, declared to be fraudulent or preferential,
        or otherwise is avoided, and/or required to be repaid to the Borrower or
        a
        Guarantor, the estate
        of
        the Borrower or a Guarantor, 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 avoidance or repayment, the obligation or part thereof intended
        to be satisfied shall be revived and continued in full force and effect as
        if
        said payment had not been made.

      

      Section
        10.3 Nature
        of Liability.

      

      The
        liability of each Guarantor hereunder is exclusive and independent of any
        security for or other guaranty of the Credit Party Obligations of the Borrower
        whether executed by any such Guarantor, any other guarantor or by any other
        party, and no Guarantor’s liability hereunder shall be affected or impaired by
        (a) any direction as to application of payment by the Borrower or by any
        other party, or (b) any other continuing or other guaranty, undertaking or
        maximum liability of a guarantor or of any other party as to the Credit Party
        Obligations of the Borrower, or (c) any payment on or in reduction of any
        such other guaranty or undertaking, or (d) any dissolution, termination or
        increase, decrease or change in personnel by the Borrower, or (e) any
        payment made to the Administrative Agent, the Lenders or any Hedging Agreement
        Provider on the Credit Party Obligations which the Administrative Agent,
        such
        Lenders or such Hedging Agreement Provider repay the Borrower pursuant to
        court
        order in any bankruptcy, reorganization, arrangement, moratorium or other
        debtor
        relief proceeding, and each of the Guarantors waives any right to the deferral
        or modification of its obligations hereunder by reason of any such
        proceeding.

      

      
        
          
          

        

        
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      Section
        10.4 Independent
        Obligation.

      

      The
        obligations of each Guarantor hereunder are independent of the obligations
        of
        any other Guarantor or the Borrower, and a separate action or actions may
        be
        brought and prosecuted against each Guarantor whether or not action is brought
        against any other Guarantor or the Borrower and whether or not any other
        Guarantor or the Borrower is joined in any such action or actions.

      

      Section
        10.5 Authorization.

      

      Each
        of
        the Guarantors authorizes the Administrative Agent, each Lender and each
        Hedging
        Agreement Provider without notice or demand (except as shall be required
        by
        applicable statute and cannot be waived), and without affecting or impairing
        its
        liability hereunder, from time to time to (a) renew, compromise, extend,
        increase, accelerate or otherwise change the time for payment of, or otherwise
        change the terms of the Credit Party Obligations or any part thereof in
        accordance with this Agreement and any Secured Hedging Agreement, as applicable,
        including any increase or decrease of the rate of interest thereon, (b) take
        and
        hold security from any Guarantor or any other party for the payment of this
        Guaranty or the Credit Party Obligations and exchange, enforce waive and
        release
        any such security, (c) apply such security and direct the order or manner
        of
        sale thereof as the Administrative Agent and the Lenders in their discretion
        may
        determine, (d) release or substitute any one or more endorsers, Guarantors,
        the
        Borrower or other obligors and (e) to the extent otherwise permitted herein,
        release or substitute any Collateral.

      

      Section
        10.6 Reliance.

      

      It
        is not
        necessary for the Administrative Agent, the Lenders or any Hedging Agreement
        Provider to inquire into the capacity or powers of the Borrower or the officers,
        directors, members, partners or agents acting or purporting to act on its
        behalf, and any Credit Party Obligations made or created in reliance upon
        the
        professed exercise of such powers shall be guaranteed hereunder.

      

      Section
        10.7 Waiver.

      

      (a) Each
        of
        the Guarantors waives any right (except as shall be required by applicable
        statute and cannot be waived) to require the Administrative Agent, any Lender
        or
        any Hedging Agreement Provider to (i) proceed against the Borrower, any other
        guarantor or any other party, (ii) proceed against or exhaust any security
        held
        from the Borrower, any other guarantor or any other party, or (iii) pursue
        any
        other remedy in the Administrative Agent’s, any Lender’s or any Hedging
        Agreement Provider’s power whatsoever. Each of the Guarantors waives any defense
        based on or arising out of any defense of the Borrower, any other guarantor
        or
        any other party other than payment in full of the Credit Party Obligations
        (other than contingent indemnity obligations), including without limitation
        any
        defense based on or arising out of the disability of the Borrower, any other
        guarantor or any other party, or the unenforceability of the Credit Party
        Obligations or any part thereof from any cause, or the cessation from any
        cause
        of the liability of the Borrower other than payment in full of the Credit
        Party
        Obligations. The Administrative Agent may, at its election, foreclose on
        any
        security held by the Administrative Agent by one or more judicial or nonjudicial
        sales (to the extent such sale is permitted by applicable law), or exercise
        any
        other right or remedy the Administrative Agent or any Lender may have against
        the Borrower or any other party, or any security, without affecting or impairing
        in any way the liability of any Guarantor hereunder except to the extent
        the
        Credit Party Obligations have been paid in full and the Commitments have
        been
        terminated. Each of the Guarantors waives any defense arising out of any
        such
        election by the Administrative Agent or any of the Lenders, even though such
        election operates to impair or extinguish any right of reimbursement or
        subrogation or other right or remedy of the Guarantors against the Borrower
        or
        any other party or any security.

      

      
        
          
          

        

        
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      (b) Each
        of
        the Guarantors waives all presentments, demands for performance, protests
        and
        notices, including without limitation notices of nonperformance, notice of
        protest, notices of dishonor, notices of acceptance of this Guaranty, and
        notices of the existence, creation or incurring of new or additional Credit
        Party Obligations. Each Guarantor assumes all responsibility for being and
        keeping itself informed of the Borrower’s financial condition and assets, and of
        all other circumstances bearing upon the risk of nonpayment of the Credit
        Party
        Obligations and the nature, scope and extent of the risks which such Guarantor
        assumes and incurs hereunder, and agrees that neither the Administrative
        Agent
        nor any Lender shall have any duty to advise such Guarantor of information
        known
        to it regarding such circumstances or risks.

      

      (c) Each
        of
        the Guarantors hereby agrees it will not exercise any rights of subrogation
        which it may at any time otherwise have as a result of this Guaranty (whether
        contractual, under Section 509 of the U.S. Bankruptcy Code, or otherwise)
        to the
        claims of the Lenders or any Hedging Agreement Provider against the Borrower
        or
        any other guarantor of the Credit Party Obligations of the Borrower owing
        to the
        Lenders or such Hedging Agreement Provider (collectively, the “Other
        Parties”)
        and
        all contractual, statutory or common law rights of reimbursement, contribution
        or indemnity from any Other Party which it may at any time otherwise have
        as a
        result of this Guaranty until such time as the Credit Party Obligations shall
        have been paid in full and the Commitments have been terminated. Each of
        the
        Guarantors hereby further agrees not to exercise any right to enforce any
        other
        remedy which the Administrative Agent, the Lenders or any Hedging Agreement
        Provider now have or may hereafter have against any Other Party, any endorser
        or
        any other guarantor of all or any part of the Credit Party Obligations of
        the
        Borrower and any benefit of, and any right to participate in, any security
        or
        collateral given to or for the benefit of the Lenders and/or the Hedging
        Agreement Providers to secure payment of the Credit Party Obligations of
        the
        Borrower until such time as the Credit Party Obligations (other than contingent
        indemnity obligations) shall have been paid in full and the Commitments have
        been terminated.

      

      Section
        10.8 Limitation
        on Enforcement.

      

      The
        Lenders and the Hedging Agreement Providers agree that this Guaranty may
        be
        enforced only by the action of the Administrative Agent acting upon the
        instructions of the Required Lenders or such Hedging Agreement Provider (only
        with respect to obligations under the applicable Secured Hedging Agreement)
        and
        that no Lender or Hedging Agreement Provider shall have any right individually
        to seek to enforce or to enforce this Guaranty, it being understood and agreed
        that such rights and remedies may be exercised by the Administrative Agent
        for
        the benefit of the Lenders under the terms of this Agreement and for the
        benefit
        of any Hedging Agreement Provider under any Secured Hedging Agreement. The
        Lenders and the Hedging Agreement Providers further agree that this Guaranty
        may
        not be enforced against any director, officer, employee or stockholder of
        the
        Guarantors.

      

      
        
          
          

        

        
          104

          
            

          

        

        
          
          

        

         

        Section
          10.9 Confirmation
          of Payment.

      

      

      The
        Administrative Agent and the Lenders will, upon request after payment of
        the
        Credit Party Obligations which are the subject of this Guaranty and termination
        of the Commitments relating thereto, confirm to the Borrower, the Guarantors
        or
        any other Person that such indebtedness and obligations have been paid and
        the
        Commitments relating thereto terminated, subject to the provisions of Section
        10.2.

      

      [Signature
        Pages Follow]

      
        
          
          

        

        
          105

          
            

          

        

        
          
          

        

      

      IN
        WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
        executed and delivered by its proper and duly authorized officers as of the
        day
        and year first above written.

      

       

      
        	BORROWER:	
                CAPLEASE, LP

                 

                 

                
                  
                    By:
                      CLF OP General Partner LLC,

                    its
                      general partner

                    

                    By:
                      Capital Lease Funding, Inc.,

                    its
                      sole member

                    

                    

                    By:
                       /s/
                      Robert C. Blanz   

                    Name:
                       
                      Robert C. Blanz   

                    Title:
                       Senior
                      Vice President 

                  

                

                 

                 

                 

              

         

      (signature
        pages continue)

      

      
        
          
          

        

        
          106

          
            

          

        

        
          
          

        

      

       

      
        
          	GUARANTORS: 	
                  CAPITAL LEASE FUNDING,
                    INC.,

                   

                   

                  
                    By:
                       /s/
                      Robert C. Blanz   

                    Name:
                       
                      Robert C. Blanz   

                    Title:
                       Senior
                      Vice President   

                  

                   

                   

                   

                

        

      

       

       

      

      

      

      (signature
        pages continue)

      

      
        
          
          

        

        
          107

          
            

          

        

        
          
          

        

      

       

      CAPLEASE
        SERVICES CORP.

      

      

      By:
         /s/
        Robert C. Blanz   

      Name:
         
        Robert C. Blanz   

      Title:
         Senior
        Vice President   

      

      (signature
        pages continue)

      

      
        
          
          

        

        
          108

          
            

          

        

        
          
          

        

      

       

      CAPLEASE
        DEBT FUNDING, LP

       

      By:
        CLF
        OP General Partner LLC,

      its
        general partner

      

      By:
        Capital Lease Funding, Inc.,

      its
        sole
        member

      

      

      By:
         /s/
        Robert C. Blanz   

      Name:
         
        Robert C. Blanz   

      Title:
         Senior
        Vice President   

      

      (signature
        pages continue)

      

      
        
          
          

        

        
          109

          
            

          

        

        
          
          

        

      

       

      CAPLEASE
        INVESTMENT MANAGEMENT LLC

      

      By:
        Capital Lease Funding, Inc.,

      its
        sole
        member

      

      

      By:
         /s/
        Robert C. Blanz   

      Name:
         Robert
        C. Blanz   

      Title:
         Senior
        Vice President   

      

      (signature
        pages continue)

       

      
        
          
          

        

        
          110

          
            

          

        

        
          
          

        

      

      
 

      CLF
        OP GENERAL PARTNER LLC

      

      By:
        Capital Lease Funding, Inc.,

      its
        sole
        member

      

      

      By:
         /s/
        Robert C. Blanz   

      Name:
         Robert
        C. Blanz   

      Title:
         Senior
        Vice President   

      

      (signature
        pages continue)

       

      
        
          
          

        

        
          111

          
            

          

        

        
          
          

        

      

      
 

      CAPLEASE
        CREDIT LLC

      

      By:
        CapLease, LP,

      its
        sole
        member

      

      By:
        CLF
        OP General Partner LLC,

      its
        general partner

      

      By:
        Capital Lease Funding, Inc.,

      its
        sole
        member

      

      

      By:
         /s/
        Robert C. Blanz   

      Name:
          Robert
        C. Blanz  

      Title:
          Senior
        Vice President  

      

      (signature
        pages continue)

       

      
        
          
          

        

        
          112

          
            

          

        

        
          
          

        

      

      
 

      EVA
        LLC

      

      By:
        CLF
        Real Estate LLC,

      its
        sole
        member

      

      By:
        CapLease, LP,

      its
        sole
        member

      

      By:
        CLF
        OP General Partner LLC,

      its
        general partner

      

      By:
        Capital Lease Funding, Inc.,

      its
        sole
        member

      

      

      By:
         /s/
        Robert C. Blanz   

      Name:
         
        Robert C. Blanz   

      Title:
         Senior
        Vice President   

      

      (signature
        pages continue)

       

      
        
          
          

        

        
          113

          
            

          

        

        
          
          

        

      

      
 

      CLF
        HOLDING COMPANY LLC

      

      By:
        CapLease, LP,

      its
        sole
        member

      

      By:
        CLF
        OP General Partner LLC,

      its
        general partner

      

      By:
        Capital Lease Funding, Inc.,

      its
        sole
        member

      

      

      By:
         /s/
        Robert C. Blanz   

      Name:
         
        Robert C. Blanz   

      Title:
         Senior
        Vice President   

      

      (signature
        pages continue)

       

      
        
          
          

        

        
          114

          
            

          

        

        
          
          

        

      

      
 

      ADMINISTRATIVE
        AGENT

      AND
        LENDER: 

      WACHOVIA
        BANK, NATIONAL 

      ASSOCIATION,
        as
        Administrative Agent on 
behalf of the Lenders and as a Lender

      

      

      By:
         /s/
        Edwin W. Blee   

      Name:
         
        Edwin
        W. Blee   

      Title:
         Vice
        President    

      

      

      (signature
        pages end)

      

      

      

      
        
          
          

        

        
          115

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